Following last year's report, which highlighted the role of productive capacities for economic and social development, the 2007 report looks more closely at selected capacities, including: knowledge accumulation, technological learning and the ability to innovate.

The report presents evidence showing that the transfer of technology via international trade, foreign direct investment and intellectual property licensing does not contribute to the narrowing of the so-called 'knowledge divide'. As a result, economic adjustment, labour mobility and re-specialisation will remain impeded in the absence of technological learning, and innovation capacity building. The report therefore proposes four key areas that should be addressed by national governments and development agencies alike:

* The integration of science, technology and innovation policies into development and poverty reduction strategies of LDCs
* The fine tuning of IPR regimes and the greater use of flexibilities in the TRIPS agreement
* Tackling the persistent effects of migration, in particular the 'brain drain' and how to transform this trend into a 'brain gain'
* The use of so-called 'knowledge aid' (technical assistance and capacity building) to support learning and innovation in LDCs.


In a departure from previous years, this report has been split in two: the trends will be published in November, which means that the analytical part, published in July, is much shorter.