The global economy is in a "synergistic recovery", so is the pace of convergence between the developing and developed economies still going on?
Brookings Institution, Turkey, Vice President of Finance Ministry former minister Kemal Dervis in published last month in the world economy BBS website in an article discussed this topic.
In the 1990s, according to the standards, per capita growth of developing economies overall began to surpass the developed countries, many optimists think that these two sets of economy's output and income will eventually converge.
From 1990 to 2007, the per capita annual growth rate of developing countries was 2.5 percentage points higher than that of developed economies, and the gap widened to 3.5 percentage points between 2000 and 2007.
While not all developing economies have been catching up during this period, many small economies have failed to make good progress, but overall, the structure of the world economy has changed. The Asian economies were overtaking India at a rapid pace, driven by a large and dynamic India and more China.
In the wake of the global financial crisis in 2007, this dynamic in the world economy has changed. At first, the convergence showed a momentum of acceleration, with growth in developed economies stagnating and developing economies' per capita growth rates expanding to four percentage points.
But in 2013-16, many emerging economies slowed, particularly in Latin America, where Brazil experienced a recession in 2015 and 2016, while the U.S. economy began to recover.
Does this mean that the synergies between developing and developed economies are over?
Dervis think, the answer depends on developing economies can find new and more advanced source of growth.
In the past, the key engines of convergence between the two groups were manufacturing. Developing countries have benefited from the abundant cheap Labour, acquired the skills and institutions of advanced countries and applied them.
But Dervis quoted at Harvard University's Kennedy School of Government, according to the view of international political economics professor Dani Rodrik simple imitation type pursued source of growth has been running out. The fruit that can be easily picked up in manufacturing has been plucked, and in services it is harder to catch up on technology, which now accounts for a bigger share of total value added.
Moreover, today's cutting-edge technologies - such as robotics, artificial intelligence and bioengineering - are more complex than industrial machines and may therefore be harder to replicate. In addition, as smart machines will increasingly fill low-wage jobs, the cost advantage of developing countries will be greatly reduced.
But professor of Economics at the Massachusetts Institute of Technology application Darren Asimo gutzon Daron Acemoglu and an assistant professor at Boston university, Pascual Restrepo, studies suggest that these technologies, especially automation and artificial intelligence, the influence of actually is more subtle.
They believe that total output is a function of traditional labor, traditional capital, and the capital that can be accomplished without labor. Conventional Labour and capital enhancement, or Labour substitution, would increase output, but the latter would also lead to lower labour demand and lower wages. On the contrary, productivity growth, the deepening of automation, and the creation of new tasks will increase labor demand and push up wages.
Of course, to make robots and AI appear in the value chain of developing countries, including those that rely on cutting-edge technology, there needs to be minimal specialized skills and infrastructure. But for emerging economies, the difficulty and cost of deploying new technologies and tasks may not be higher than in developed countries.
In this respect, much depends on the type of complementary labour. The usual assumption is that highly skilled labor is important for AI applications. This may be true in some cases, but in others it may be the opposite. For example, the replacement of sex technology by the new Labour force can make the work that lacked skilled labor become feasible. Thus, full automation will lead to a greater share of some economic activity in developing countries.
Dervis, points out that another shape technology upgrade process factors in developing countries is the world's companies willing to invest. Global market structure and pricing will determine the distribution of benefits to a certain extent. At the same time, the efficiency of learning regulatory lessons will be the same, including how to design rules to attract investors, gain important links in the value chain, and gain a large share of innovation. Countries that can learn quickly may grow faster than developed economies, even in high-tech sectors.
Dervis think that for many countries and industries, surpassing still have considerable space in the field of traditional, this process may continue to promote economic growth. But that will not be enough to drive real growth convergence.
Therefore, Dervis points out that developing countries need relatively efficient deployment of new technology, at the same time considering the skills of the labour market and regulatory role. It is not easy, and we may never return to the "golden age" of 2007. But new technologies should not block convergence, even if they may slow convergence.