The Dynamic Relation between Technology Adoption, Technology Innovation, Human Capital and Economy: Comparison of Lower-Middle-Income Countries

Abstract

The advent of technologies has stimulated the economic growth of western countries, however, some Asian and African countries are among the Lower Middle Income Countries due to lack of technology adoption and digitally skilled human capital. The use of technologies produces digital competent human capital stock that accelerates economic growth. The prime goal of this article is to explore dynamics of technology adoption, technology innovation, human capital and skill development for Lower Middle Income Countries region over the period 2000-2016 by Generalised Method of Moments and cross sectional dependence. New technology adoption, technology innovation and human capital & skill development indices are formulated. The empirical findings indicate that human capital development & skill and investment have positive linkage with Lower Middle Income Countries economic growth while technology adoption and innovation have different linkage across the Lower Middle Income Countries regions. The panel error correction method was applied to estimate short run dynamics and convergence rate. The fully modified ordinary least square was applied to authenticate whether the long run estimates are consistent and valid for policy implications. The findings propose policy implications for advance technology adoption and innovation with the focus on human capital development & skill and investment in Lower Middle Income Countries region.