Information Technology in the Learning Economy: Challenges for Developing Countries

Abstract

This chapter develops an analytical framework for understanding how learning and capability formation can foster industrial upgrading, with special emphasis on the spread of information technology. Under what conditions can developing countries use IT to improve their learning capabilities? Based on case studies, we examine how the unequal diffusion of IT affects access to tacit knowledge for local actors in developing countries.

We compare two stylized models - the Japanese versus the American. The American model emphasizes market selection, competition and the role of financial markets as ways of promoting learning, whereas the Japanese model emphasizes cooperation, social cohesion and longer-term social relationships. We conclude that developing countries need to develop their own hybrid forms of institutions which combine the advantages of both models in a way that reflects their needs and capabilities.

Keywords: information technology as an enablere of learning, challenges for developing countries, US versus Japanese innovation model