Why Everyone Loves a Shortcut… Until They Get Hopelessly Lost

The road to development is paved with good innovations, to paraphrase a proverb. But if we want that road to become a path to success (and not fill up with potholes overnight), it will need a lot more than a quick tech tweak. It will need deep foundations and strong guardrails, all backed up by dedicated maintenance. In the real world, that means investing more in the institutions, coordination and capabilities that enable innovation. 

That is the premise of this month’s OFQ special feature, drafted by scholars from the University of Johannesburg, South Africa and Delft University of Technology, the Netherlands. In a series of essays, they explain how new technologies are routinely bolted onto projects in the hope of turbocharging development – and how they often stall because the supporting structures are too weak or politicized to drive real progress. All of which is happening across various sectors. 

In agriculture, we see how new digital platforms hold the tempting promise of higher yields and bigger profits; but how many farmers struggle to benefit when firms, researchers and support services fail to coordinate; or worse, are left in limbo when new parties come to power. Progress is possible when innovations are readily accessible, genuinely useful and funded to last. 

On energy, we see that solar and wind projects are expanding apace worldwide; but how most developing countries are still heavily reliant on imported technologies. To break free of this “path dependency” and make renewable energy a viable route to development, investments should be channeled into training and local manufacturing, while giving communities a voice in deciding policies. 

The financial sector also needs to resist the primal urge to expand for expansion’s sake. We see how many developing countries settle for short-term, foreign‑currency loans that will never fit their long-term industrial development needs. More is not better if it perpetuates a mismatch. A sounder approach is to structure finance that manages risk, promotes long-term investment and supports the broader industrial goals of the nation in question. 

Digging deeper, in an article by our Senior Economist Angus Downie, we see (from page 18) why certain financial innovations succeed in some parts of the world more than others. Be it real-time payments, digital ID or parametric insurance, fintech can broaden access and reduce vulnerabilities when combined with strong institutions and sound regulation. 

Meanwhile, Jason Slater from UNIDO argues that AI can help countries clear traditional hurdles by guiding farmers, improving logistics and supporting manufacturing. But again, without decent digital infrastructure, skilled workers and strong governance, AI may fail like so many other “technological solutions.” Worse still, it may even widen divides. One recommendation is to give tailored AI training via UNIDO Centers of Excellence, of which there are more than 20 worldwide. 

Across all these articles, the same message rings clear: Technological innovations must go hand in hand with institutional investments that last beyond political cycles; governments need to invest in skills and local ownership; and finance needs to align with long-term goals. We see where systems are strong, innovation can accelerate inclusive growth and transformational development. But equally, where systems are weak, even the best innovations will struggle to bring meaningful change. 

Elsewhere we cover a recent mission to Senegal, where our delegation witnessed climate action on the ground; namely, how the country is managing its water resources amid the seesaw effects of deluge and drought. We also take a deep dive into renewable energy, with our book review of Here Comes the Sun: A Last Chance for the Climate and a Fresh Chance for Civilization by journalist and environmentalist Bill McKibben. It may be too late to stop global warming, he writes, but the global rollout of solar panels may restart civilization on saner ground. Simply put: “An energy source that gets cheaper the more you use it marks a turning point in industrial history.” 

We wish you an innovative read.