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Innovative Asia: Advancing the Knowledge-Based Economy - Country Case Studies for the People's Republic of China, India, Indonesia, and Kazakhstan

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Knowledge and innovation are widely acknowledged as key drivers of growth and economic development. The economies of Asia and the Pacific have been steadily growing in prominence in terms of share of global gross domestic product (GDP), which increased from 21% in 1980 to 38% in 2012, but they need to pursue knowledge-based economic development to sustain their high rates of growth. The share of developing Asia in global GDP has also risen sharply from 8% to 26% in the same period, and is expected to reach 30% by 2017 (IMF 2012). The Asia 2050 report of the Asian Development Bank (ADB) projects that if Asia continues to grow on its recent trajectory, it could account for 52% of global GDP by 2050 in purchasing power parity (PPP) terms (ADB 2011). However, the Asia 2050 report concludes that an “Asian Century” is by no means preordained: Asia’s continued ascent is predicated upon the ability of the region’s economies to transform themselves effectively into knowledge-based economies (KBEs). Pursuing a development process driven by effective creation, dissemination, and application of knowledge will be necessary to turn the growth potential into reality. This report argues that it is absolutely essential for emerging economies in Asia to transition into KBEs to sustain their economic development, while preparing effectively for the future challenges of an increasingly connected global economy. In fact, pursuing KBE development could help emerging economies effectively position themselves better to capitalize on market opportunities by using their unique endowments and strengths. The times are opportune for Asia to accelerate KBE development. Emerging economies in Asia need to have new models of growth and development to maintain the robust rates of growth experienced in recent times. Structural policy reforms are required to ensure productivity growth. Reforms are also needed for economic upgrading to move the region’s economies up the global value chains of more sophisticated products and services. Countries need become competitive in technology-intensive sectors. This report presents the case studies for four countries at the middle-income level—People’s Republic of China, India, Indonesia, and Kazakhstan—in their KBE approaches and identifies a range of policies and initiatives they need to consider to make a transition to high-income levels.

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Asia; development; knowledge-based economies; KBEs; China; India; Indonesia; Kazakhstan


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Required Publisher Statement: This article was first published by the Asian Development Bank (

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