The least developed countries (LDCs) are a group of countries (presently 50 States) that have been officially identified by the United Nations as "least developed" in the light of their low income, weak human assets, and high economic vulnerability. UNCTAD, in past LDC Reports, has taken the view that the key to sustained economic growth and poverty reduction in LDCs is the development of productive capacities and related creation of productive employment. The Least Developed Countries Report 2007 corroborates this view by focusing on knowledge accumulation, technological learning and the ability to innovate as vital processes toward genuine productive capacity development in these countries.
Knowledge is becoming more and more important in the global sphere of competition and production. In this context, there is a danger that LDCs will be increasingly marginalized if they do not enhance the knowledge content of their economies and achieve economic diversification through learning and innovation. The Report shows that the current pattern of technology flows to LDCs through international trade, foreign direct investment and intellectual property licensing does not contribute to narrowing the knowledge divide. Sustained economic growth and poverty reduction are not likely to take place in countries where viable economic re-specialization would remain impossible in the absence of significant progress in technological learning and innovation capacity-building.
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