Unique and Global Development Policy
Unique and Global Development Policy is a set of policies policy that promote social and economic leapfrogging and includes inter alia: physical infrastructure, regulation, tax policy and trading agreements. This policy focuses on two areas:
Exploiting Strong Global Trends – strong global trends are social and geographical trends with substantive long term economic potential. Unique and global development policy aims to identify these trends on time, develop the right capabilities in order to produce economic value, implement these capabilities on a large scale, and ultimately abandon the trend as it loses momentum. Prominent global trends today include, for example global warming, the rise of China and India, transformation to green energy and aging of the western societies.
Exploiting Unique Assets – each country has assets or burdens that are special to it and cannot be copied. Often, these unique assets stem from a nation's unique challenges and constitute the country's relative advantage in the global arena. For example, Israel's heavy security burden was transformed into a unique growth engine when spillovers from the military industry helped in the early 90's to form a successful ICT industry in Israel.
Leapfrogging requires exploiting a strong global trend and quickly transforming the composition of the national product – most countries that experienced social and economic leapfrogging exploited strong economic trends that accelerated the pace of economy and products' change. This change included abandoning unprofitable products and industries and adopting or developing new ones to replace them.
The private sector alone cannot lead a rapid change in the products' composition – the private sector is generally risk adverse and is driven by the rational of profit making. The private sector usually avoids investing in new products and markets unless there is public infrastructure to support it. Therefore, the private sector tends to develop in an incremental way based on its existing capabilities. For example, a flower grower will not make new investments to access new distant market without the existence of an adequate aerial infrastructure.
In order to leapfrog there is a need for a policy that promotes fast changes in the product's composition – countries that leapt managed to accelerate the pace of change [that naturally take place in a market]. In order to, the private and public sectors should build mechanisms that can regulate the execution of these changes rapidly. A Unique and Global Development Policy that focuses on the interface between the public and the private sector, is an example of such an essential mechanism.