RESEARCH AND DEVELOPMENT TO CROSSOVER MIDDLE INCOME TRAP: A COMPARISION OF TURKEY AND S. KOREA

Abstract

Technological innovations have a special place among determinants of sustained, and stable economic growth, and the need for growth which is one of the main priorities of every countries regardless of income level, especially the developing ones. Structural transformation towards information society, and transition to high-income are closely connected with capacity and ability of improving and using and new technologies. Imported technologies might satisfy short run needs, yet foreign dependence brings different problems. Attention and allocated resources for research and development to improve technology in middle-income countries are not sufficient. Therefore, these countries usually fall into middle income trap as producers and exporters of low or medium technology, and low value added goods. In order to overcome this problem, approaches are needed to transfer more resources to R & D and improve competitive position in medium- and high technology based areas. Summarizing the importance of R&D and technology to avoid middle income trap theoretically, this study evaluates the case of Turkey as a middle income country for some time and South Korea as a successful example of rising per capita income with emphasis on, and allocated resources in R&D