But we now know that technology is less likely to converge than capital. Innovation shows increasing returns to scale, meaning that regions with advanced technologies are best placed to innovate further. But as with nuclear reactions, a critical mass of ideas and technology is needed first. Also, the incentive to innovate depends on the size of the market. The first relies on universities and public laboratories, the second on private, profit-driven firms.
Successful innovation requires academia, government and industry to work in harness.
The Internet is a familiar case in point. In developing countries, fruitful interaction of this kind is unheard of. Few governments even have a science adviser. The results are depressing. Of course, the technological capacity of an economy depends not just on its own innovations, but on its capacity to adopt the technologies produced elsewhere.