How major economies learn from others to transform themselves
China can learn from other major economies as it is mapping out its 12th five-year plan on accelerating the transformation of the nation's economic development pattern.Post-war Germany was quickly rebuilt and emerged as one of the world's biggest economies.
Brazil, a regional power, became one of the fastest growing economies 10 years after the financial storm that stalled its growth in the 1990s.
These are just cases of how some of the world's economies, both developing and developed, learned from others to transform themselves.
TECHNOLOGY INNOVATION
In modern history, technological innovation played a key role in a country's strength. Britain led the first industrial revolution with the use of steam engines in the 1860s to become "the empire on which the sun never sets." The United States and Germany later took over to lead the second industrial revolution covering electricity, combustion engines and aircraft.
Starting from the middle of the 20th century, the United States went on to lead a third technological revolution as well as financial innovations, propelling itself to the status of the world's only superpower.
Innovation in science and technology has always been held as key to the future development of U.S. economy, says an official from the U.S. Department of Commerce.
Three-quarters of the new products and services since World War II owed their births to industrial and technological innovations. Statistics also show the average salary of workers employed in innovation sectors in 1990-2007 was 2.5 times higher than national average of all workers.
In Germany, manufacturing, technology and policy support for small- and medium-sized enterprises were the pillars of its economic transformation.
"Made in Germany" gradually became a symbol of quality after World War II. Now manufacturing contributes 23 percent of the gross domestic product, compared with an average of 17 percent for high-income countries, and Germany had been the world's leading exporter for decades, according to a World Bank report.
NEW MODELS, REFORMS
The German economy was catapulted to overtake France and Britain in the middle of the 20th century partly thanks to an economic model different from the laisser-faire capitalism of Britain and the United States.
The model of social market economy adopted by Germany combined private enterprises with measures of government regulation in an attempt to establish fair competition, low inflation, low levels of unemployment, quality working conditions, and social welfare. It transformed and reshaped the whole social and economic system of post-War Germany.
Japan also owed its economic success and steady economic growth in the 1970s and 1980s to reforms and adjustments of its industrial structure.
It also stepped up technological innovation and started outsourcing thereafter to consolidate its competitive edge in energy and environment technologies and electrical appliances as trade frictions with other developed economies grew.
SOCIAL SECURITY IN GROWTH
The German government worked to prevent social inequality and income gaps through interventions and the setup of a sound social security system.
Germany launched reforms to shake up its pension system, health insurance and unemployment benefits, with the German parliament passing a series of laws and decrees on social security. The well-established social security system also contributed to the stability needed for economic growth.
As an important innovation, Germany encouraged and give employees the right to be involved in certain corporate decisions. They also encouraged employees to hold stocks in the companies they work for.
In Brazil, the ruling Workers' Party adopted a series of economic policies in favor of the poor, such as the Zero Hunger program.
Under the program, Brazil established the Ministry of Social Development and Hunger Eradication (MSDHE) to provide social relief and subsistence allowances to elders aged 65 or above and the disabled, and offer food to the poor.
How major economies learn from others to transform themselves
</p> The MSDHE had a record-high budget of 12 billion U.S. dollars in 2009. Brazil's Institute for Studies on Labor and Society said nearly 3,000 Brazilians were pulled out of poverty in 2004-2008, cutting the nation's poverty rate from 33.2 percent to 22.9 percent.
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