The Internet, mobile phones, vaccines, and high-yielding grains were all invented by rich-country researchers and exported to poorer ones, where they have improved—and saved—many lives. Of course, new technologies do harm as well as good: consider motor vehicles, which symbolize gridlock and pollution as much as freedom in dense and growing cities such as Bangkok and Nairobi.
The CDI rewards polices that support the creation and dissemination of innovations of value to developing countries. It rewards government subsidies for research and development (R&D), whether delivered through spending or tax breaks, but discounts military R&D by half. Countries are marked down for policies on intellectual property rights that can inhibit the international flow of innovations. These take the form of patent laws that advance the interests of those who produce innovations too much at the expense of those who use them. US trade negotiators, for example, have pushed for developing countries to agree never to force the immediate licensing of a patent even when it would serve a compelling public interest, such as an HIV/AIDS drug which could be used more if produced by low-cost local manufacturers.
South Korea, Denmark, and France finish at the top, thanks to government expenditure on R&D worth around 1 percent of their national income. Although Finnish government contributes to R&D with the highest share among the CDI countries, its tax subsidy rate is among the lowest. By contrast, Spain has the second-highest tax subsidy rate for business R&D, but spends less overall on R&D as a share of GDP. Poland, Slovakia, Greece and Hungary spend the lowest shares of GDP on R&D (less than 0.4 percent). Many European countries (particularly Sweden and Germany) lose points for promoting compulsory licensing bans and pushing for the incorporation of “TRIPS-Plus” measures—which restrict the flow of innovations to developing countries—into bilateral free trade agreements.
For more on technology, explore the Making Markets for Vaccines initiative and related experts.