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Industrial development and economic growth: …
295 Industrial development and economic growth :Implications for poverty reduction and incomeinequalityMatleena Kniivil *1. IntroductionThe share of poor people in the global population has declined during recentdecades. According to Chen and Ravallion (2004), one-third of the popula-tion of the world lived in poverty in 1981, whereas the share was 18 per centin 2001. The decline is largely due to rapid economic growth in population-rich countries like China and India. There are, however, remarkable differ-ences between countries and between regions in the developing world. Someregions and countries, notably in East Asia, are rapidly catching up to indus-trialized countries. Others, especially in Sub-Saharan Africa, are lagging farbehind and the share of poor people in the population has even increased insome countries.
Industrial development and economic growth 297 remain unchanged (see e.g. Arrow 1962). As R&D activities in developing countries are relatively limited and countries are far from the technological
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