The middle-income trap: World development report 2024/ World Bank.

"Middle-income countries are in a race against time. Since the 1990s, many of them have done well enough to escape low-income levels and eradicate extreme poverty. However, many of them aspire to reach high-income status within the next two or three decades. But their prospects of achieving that goal have worsened during the last decade. With rising debt and aging populations at home, growing protectionism in advanced economies, and escalating pressures to speed up the energy transition, today's middle-income economies are growing into ever tighter spaces. World Development Report 2024 identifies pathways for emerging market economies to avoid what has become known and feared as the 'middle-income trap.' Using Schumpeterian growth analysis, the Report points to the need for not one but two transitions during middle income. The first is to transition from a '1I' strategy--accelerating investment--to a '2I' strategy focusing both on investment and infusion, where a country brings technologies from abroad and diffuses them domestically. Once a country has succeeded in doing this, it can switch to a '3I' strategy, increasing attention to innovation and pushing the frontiers outwards. Success in each transition will depend on how well societies juggle the forces of creation, preservation, and destruction--that is, how well they encourage enterprises by disciplining incumbency, how well they develop talent by rewarding merit, and how well they capitalize on crises to alter policies and institutions that are no longer suited for the purposes they were once designed to serve. In doing so, middle-income economies will need to focus not only on firm size but also on the value added of firms, not only on inequality but also on socioeconomic mobility, and not only on energy sources but also on emissions intensity. While the road ahead is not easy for these economies, with the right policies in place, their prospects for growth are within reach"--