More Value at Upstream Layer in Technology Pyramid

Technology is the leader of the entrepreneurial world. And he’s running with the constitution. Unlike the traditional political structure, this constitution consists of algorithms written by engineers, scientists, etc., not members of Congress and politicians.

Global competition is basically what the best technical team can write better; in this case, algorithms that consist of patents, technical processes, tools, etc. The more a nation seeks to innovate, the more it improves this constitution.

Economists have shown a link between the Knowledge Economics Index (KEI), productivity and living standards. Each country’s goal is to improve its KEI. This requires a good education, an economic regime and other variables that help improve technological capabilities.

The era of natural resources dominating world trade and industry is over. Now it is important to create knowledge and apply it. Some nations will create, others – only consume. But wealth is concentrated in the creation phase, and countries that focus on consumption without creating technology will not prosper.

Even with the abundance of natural resources, which in many cases consumer countries cannot cope with on their own without knowledge partners, this trajectory of limited national wealth will not change without the creation of technology.

On this basis, I share two levels at which countries use and compete with technology, both upstream and downstream levels. It is similar to a bunk pyramid, where the bottom adrift is at the bottom and the ascendant is at the top. What happens here is that some countries are focused on the lower level, while others combine both the lower and upper levels.

The most developed countries combine both levels in search of international competitiveness. They provide a forward-looking plan for technology development and plan to take advantage of them. They create and develop things and in the 21st century are classified as knowledge-based economies. Technological continuity and continuity are planned in these countries.

For other countries that are mainly developing, they are mainly competing in the technological pyramid of the underlying layer. They don’t have the know-how to create things and sell intellectual property technology. The nations are driven not by technology, but by raw materials. They are prone to trade shocks and are generally not economically dynamic. They are unable to create wealth through technology and participate in the pyramid as consumers or see-throughs.

Let me illustrate Nigeria, where they speak the oil language. The oil industry has processing and marketing sectors. While exploration and production are focused on crude oil exploration, refining is engaged in marketing and marketing.

The money goes to the extractive sector, and that’s a big reason why we’ve concentrated our foreign partners there. This is where the knowledge that is used in industry is created. I am careful to say that Nigeria cannot use this product without the assistance of partners in Nigeria in the exploration of this crude oil. Verdict: Oil will be and there will be no tangible economic benefits.

This will follow a model when villages have water, but no experience in drilling to use water for cooking and drinking. This is the problem of fixing the national strategy downstream. There’s a lack of ingenuity.

In Africa and in many developing countries where ICT has been introduced, they rarely know that they are more valuable than what ICT gives them. ICT has certainly helped many developing countries improve their business processes, tools and people. They are so encouraged by the power of ever-increasing communication. They enjoy the wonders of email, the Internet, mobile phone and more. This experience is mainly related to the marketing, distribution and installation of these ICT systems.

There, economists repeatedly point to the innovations that ICT has brought to the economy. I agree, ICT is created for innovation in many areas. However, the good news is that the pyramid has more possibilities when you move up the layer. Because we don’t create technology, our technical and economic benefits are limited, and that won’t change until we climb higher in the pyramid.

While this point can be illustrated with any technology, I will use ICT because they are common and familiar to people. I have already illustrated the situation in the oil industry, where many developing countries depend on developed countries’ oil refining technologies for oil production. Even if they develop distribution technologies, the idea of an upstream flow will prevail. Countries earn more money for licensing exploration and production technologies than for recycling.

Going back to ICT, the top level involves the development of computer systems, mobile phones, routers, device drivers and all other infrastructure that makes possible a revolution in ICT. Instead of importing the latest cell phones, we will be thinking about how to design them. In 80% of developing countries that use mobile technology, less than 2% of technologies are developed and manufactured there.

Yes, there are companies that distribute and sell these gadgets and get a marginal profit. They can import a laptop from China for $500 and sell it to their customers for $650. Because the entry barrier is so low, the margin is low. Everyone sells, and there are shops for everyone. These are tech companies in their country because they can download software, set up networks and manage a laptop.

Compare that to giants like Intel and AMD, which capture and recycle a piece of sand (silica). After all, this piece of sand for $1 could be sold for $3,000 because of the knowledge needed to convert sand into a microprocessor. It is knowledge and the best that is in the human imagination and creativity. It uses technology at the top level, and that’s its value.

Leave a Reply

Your email address will not be published. Required fields are marked *

Previous post The Technology of Nations