Strengthening and modernizing intellectual property administration system related to patents, trademarks, copyright, etc., which includes patent information services, trademarks registration, and patent offices, and the enforcement of copyright law in developing countries and awareness/training programs in this respect will benefit the scientific and industrial communities in developing countries which in turn will increase the growth rate of the economy.
Sponsorship of trademarks will help the general public identifying the owner of goods in the market as also the availability of goods and services in the market and can protect people against false practices.
Government subsidies in basic science will help reduce the cost of research and the development of new products. This would encourage the budding entrepreneurs in the country to come up with innovative products and designs that can succeed in the marketplace. If the government actively monitors the business cycle of these home-grown industries by keeping barriers of entry and regulation of import these industries can survive better in the global marketplace and improve the GDP of the country. The development of infrastructures, science, and R&D is important for the economic growth of a country.
Government has to allow the flow of scientific datasets.
As noted by Reichman and Samuelson “basic science needs abundant, unrestricted flows of raw data at prices it can afford. The evidence suggests, indeed, that “efficient” use of data is a concept antithetical to basic science”. (Reichman and Samuelson 1997).
The business cycle or economic cycle refers to the fluctuations of economic activity about its long-term growth trend, and in other terms is the rise and fall of the economy, maintaining neutrality between supply and demand. The Government plays an important role and can influence expansions and contraction of the business cycle by alteration in the monetary and fiscal policy, by increasing the interest rates it can reduce the economic activity, and when the government wishes to stimulate economic activity, it can do so by reducing interest rates. A rise in the government budget deficit stimulates economic activity, whereas a decreasing deficit controls it.
The government could curb a recession by either increasing or decreasing taxes or by government spending. When the economy is stagnant or in recession the government can intervene by injecting funds into the market through any of the sectors. Thus government intervention in the business cycle can help economic growth in a developing country.
The savings ratio of a developing country has a direct impact on that country’s growth rate. An increase in savings will lead to an increase in investment and capital accumulation. Apart from taxations and insurance contributions and the like, savings are necessarily a voluntary action by individuals and companies. For savings to happen they should have the capacity to save. And if they have the capacity, they should also have the willingness to save. The capacity to save depends on how much a person earns (per capita income), what is the growth rate of that income, and how this income is consumed (distribution of income).
The willingness to save depends on the returns that a person can expect (rate of interest etc.), the access and availability of financial institutions, and range of investment opportunities, and the rate of inflation. Among the developing countries themselves, different patterns are emerging as far as per capita saving is concerned. In theory, however, countries with higher growth rates are expected to have higher personal savings ratios than countries with lower growth rates. The saving tendency in people gets into positive ratio only during their active, working life. In their youth and the retirement period, they are negative savings.
This means that the savings ratio will then tend to rise with the rate of growth of income. This is mainly because the higher the growth rate, the greater the gap between the target levels of consumption of the current generation of working households and the dis-saving of retired people from a less prosperous generation. To improve the savings level of individuals in developing countries a combination of all these factors has to happen.
The habit of saving has to be cultivated with a broad level of awareness. The income/expense ratio should increase so that they have some left for saving. The government could influence the consumption expenses by subsidizing the necessities. The poor also need to be informed and awareness has to be spread regarding the interest rates and the availability of various savings schemes.