A new metrics of technology upgrading: the Central And East European countries in a comparative perspective

We explore the issues of measurement of technology upgrading of the economies moving from middle to high income status. In particular, our focus is on the Central and Eastern European economies (CEE) within the context of sample of 42 economies. Central and Eastern European countries (CEECs) are largely middle-income economies but it is not certain whether they have achieved a threshold of technological capability required for catching up to high-income economies status. In exploring this issue we apply theoretically relevant and empirically grounded middle level conceptual and statistical framework based on three dimensions: intensity and breadth of technological upgrading, and technology and knowledge exchange. As an outcome we construct composite indicator of technology upgrading based on 35 indicators which reflects different drivers and patterns of technology upgrading of countries at different income levels. Based on simple statistical analysis we show that the middle income trap is present in all dimensions of technology upgrading but their importances vary across different dimensions. A trap seems to be higher for dimensions of ‘breadth’ of technology upgrading than for index of ‘intensity’ of technology upgrading. We explore in detail positioning of the CEE economies in the broader comparative context