The Least Developed Countries (LDCs) must give more attention to technological progress as a source of economic growth, which requires a more radical rupture from past structural adjustment policies.
The UNCTAD report for LDCs 2007 emphasises if LDCs ignore the need for adopting of policies to promote technological progress as a basic source of income growth they are likely to be increasingly marginalised within the global economy.
Speaking about why technological learning and innovation, matter for LCDs, the report whose thrust is 'Knowledge, Technical Learning and Innovation for Development', says that an important pillar in this respect is that the productive capacities should develop through three closely interrelated processes; capital accumulation, technological progress and structural change.
Interestingly, Pakistan's PRSP program acknowledges the effectiveness of knowledge based economy but there are no references how R&D and innovations become an essential part of PRSP.
The report states that the focus of policies should be to stimulate technological catch up with the rest of the world. Moreover the focus of these policies should be pro-active technological learning by domestic enterprises rather than on conventionally understood technological transfer and on commercial innovation than on pure scientific research. Industrial R&D is a critical aspect of economic growth.