This chapter reviews Science, Technology, Innovation and Capacity-Building efforts under the Addis Ababa Action Agenda with a focus on trends in research and development (R&D), environmentally sound technologies (ESTs), Internet access, and official development assistance. It highlights the impact of rising R&D spending and global EST trade on technological progress, noting persistent income disparities, as well as the rapid expansion of Internet access alongside significant connectivity gaps, particularly in least developed countries. The chapter underscores the importance of international support for digital infrastructure and capacity building for sustainable development, highlighting the transformative potential of renewable energy, artificial intelligence, climate technology and other emerging areas that could reduce costs of a sustainable transition. Finally, it reviews the importance of data privacy, cybersecurity and equitable digital access for building resilient systems globally.
Global Outlook on Financing for Sustainable Development 2025
Abstract
Key trends
Research and development (R&D) expenditure as a proportion of gross domestic product (GDP) has risen globally since 2015 but has flatlined in developing countries.
Global R&D expenditure as a proportion of GDP rose by 12% since 2015 and 25% since 2000, reaching 1.93% in 2021. However, in countries most in need, the R&D share has remained flat since 2000, and in many, it declined in 2021 since GDP grew faster than R&D spending, particularly in the recovery period after the COVID-19 crisis (Figure 8.1).
Source: Authors’ calculations based on UN (2024[1]), Progress Towards the Sustainable Development Goals - Report of the Secretary-General: Statistical Annex I and II, https://unstats.un.org/sdgs/files/report/2024/E_2024_54_Statistical_Annex_I_and_II.pdf.
Trade in tracked environmentally sound technologies (ESTs) has increased globally but decreased in least developed countries (LDCs).
Global trade in ESTs, which are technologies traded that are deemed environmentally sound according to specific sectors,1 totalled USD 2.36 trillion in 2020, an increase of 5% from USD 2.25 trillion in 2015. However, for LDCs, trade in ESTs declined by 43% from USD 15.28 billion in 2015 to USD 8.78 billion in 2020 (Figure 8.2).
Source: Authors’ calculations based on UN (2024[1]), Progress Towards the Sustainable Development Goals - Report of the Secretary-General: Statistical Annex I and II, https://unstats.un.org/sdgs/files/report/2024/E_2024_54_Statistical_Annex_I_and_II.pdf.
The share of the world population using the Internet significantly increased since 2015.
Globally, the proportion of people using the Internet increased from 40% to 67% between 2015 and 2023, or by nearly 70% (Figure 8.3). In LDCs, the growth rate was significantly higher, with a threefold increase, from 11% to 35%, in the share of individuals using the Internet increasing2 (UN, 2024[1]).
Despite the rapid increase in the share of the population using the Internet in countries most in need, universal connectivity remains a distant goal in both LDCs and landlocked developing countries, where only 35% and 39% of the population, respectively, were online in 2023. In small island developing states, two-thirds of the population were online, in line with the global average.
Source: Authors based on UN (2024[1]), Progress Towards the Sustainable Development Goals - Report of the Secretary-General: Statistical Annex I and II, https://unstats.un.org/sdgs/files/report/2024/E_2024_54_Statistical_Annex_I_and_II.pdf.
Key performance indicators
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Total official development assistance (ODA) disbursements to science, technology and innovation (STI) increased from USD 7.69 billion in 2015 to USD 9.33 billion in 2022, reflecting 21.33% growth over this period (OECD, 2024[2]).. |
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The global coverage of at least a 3G mobile network for the population notably rose from 78% to 95% between 2015 and 2023, approaching universal access. Coverage in LDCs also grew significantly from 53.2% to 82.0% over the same period. |
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Fixed broadband subscriptions steadily increased at an average annual growth rate of 6.4% between 2015 and 2023, reaching a global proportion of 19 subscriptions per 100 inhabitants in 2023 from 11 per 100 inhabitants in 2015. Progress has been faster in LDCs, with 1.8 subscriptions per 100 inhabitants in 2023, more than doubling from 0.8 in 2015. |
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The contribution of medium- and high-tech manufacturing value added to total value added has remained stable globally, accounting for 46.2% in 2021, 46.3% in 2015 and 45.8% in 2000. In LDCs, however, the contribution to total value added decreased to 8.4% in 2021 from 9.1% in 2015 and 14.5% in 2000 (UN, 2024[3]). |
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Note: Selected quantifiable commitments. Annex Table 8.A.1 contains the full list.
Resource mobilisation potential
Increasing Internet access to 75% of the population in developing countries would increase these countries’ GDP by USD 2 trillion and create 140 million new jobs (Broom, 2023[4]).
Boosting women's participation in the science, technology, engineering and mathematics, or STEM, field could increase women's cumulative earnings by USD 299 billion over the next ten years (Tilghman, 2017[5]; Sayed, 2023[6]).
Progress is being made towards universal and affordable access to the Internet by 2030
To bridge the digital divide, digital connectivity must be enhanced globally.3 Approximately 67% of the world’s population, or 5.4 billion people, were online in 2023, a nearly 50% increase since 2015 that was accelerated by the COVID-19 pandemic. Significant progress has also been made in expanding mobile network coverage. The global population coverage of at least a 3G mobile network increased from 78% in 2015 to 95% in 2023, nearing universal access. Coverage also grew substantially, from 53.2% to 82.0%, in LDCs over the same period. However, there is a significant digital infrastructure investment gap, with approximately USD 428 billion per year required to connect the remaining 3 billion people aged ten and older who are not online to broadband Internet by 2030 (International Telecommunication Union, 2020[7]).
Support to strengthen country-driven capacity building has increased
In 2022, development finance for capacity building and national planning reached USD 54.9 billion, a 50% increase over 2015, with significant support directed towards the public administration, health and financial policy sectors. Support to health policies and administration in developing countries increased by 26% to USD 6.5 billion, primarily in response to the COVID-19 pandemic. Knowledge sharing is central to South-South and triangular co-operation modalities. From 2019 to 2022, South-South co-operation activities grew by 64%, though the total volume decreased from USD 12.8 billion to USD 10.4 billion. Triangular co-operation activities also rose substantially from USD 84.23 million in 2019 to USD 424.82 million in 2022, a 268% increase.
International flows in support of STI have increased, due in part to increased funding of medical research and COVID-19 control
Total ODA disbursements to STI increased from USD 7.69 billion in 2015 to USD 9.33 billion in 2022, representing growth of 21.33% over this period (OECD, 2024[2]). Since 2015, ODA to STI as a proportion of total ODA has generally increased, ranging from a share of about 0.9% in 2015 to a peak of roughly 1.6% in 2018, then stabilising at 1.2% to 1.4% from 2019 to 2021. However, estimates of ODA in support of STI vary as there is no internationally agreed methodology. For example, another OECD study found that total development finance supporting STI, including concessional and non-concessional financing from official providers and private philanthropy, averaged USD 14 billion annually between 2010 and 2016.
Among STI-related sectors, substantial portions of ODA consistently supported research and/or scientific institutions and medical research, with each accounting for approximately 0.2% to 0.5% over 2015-22. In 2022, total net ODA for basic health and medical research reached USD 21.1 billion, more than double the USD 10.5 billion in ODA allocated in 2015. COVID-19 response accounted for a significant share, or 42%, ODA for basic health care, with USD 8.8 billion dedicated to control and USD 1.6 billion specifically as COVID-19 vaccines donated by ODA providers. The Access to COVID-19 Tools Accelerator (ACT-A) and its COVID-19 Vaccines Global Access, or COVAX, facility played crucial roles in distributing vaccines to low- and middle-income countries, although vaccine nationalism and delayed agreements limited the timely delivery of doses. By October 2022, only 25% of the population in low-income countries had received at least one vaccine dose in stark contrast to 72% in high-income countries. ODA disbursements from OECD DAC countries to developing countries in the information and communications technology sector more than tripled, from USD 68.9 million in 2015 to USD 246.0 million in 2022. Among other research categories, fishery research and educational research consistently received smaller ODA shares to the sector of less than 0.1% each from 2015 to 2021 (OECD, 2024[2]).
The concentration of innovation and investment stifles technological progress in developing countries
Innovation activity has been highly concentrated in a few countries, with the top ten countries accounting for at least 87% of global patent applications. This concentration is even more pronounced in specific sectors: 90% of patenting activity in smart manufacturing occurs in just ten countries, and industrial firms from just seven countries represent 90% of all patenting activity in green technology (UN, 2024[8]). Additionally, there is a significant imbalance in health research funding, with developing countries bearing 90% of the world’s disease burden but receiving only 10% of such related research funding (Sarewitz and Pielke, 2007[9]).
Global innovation trends tracked by the World Intellectual Property Organization in its 2023 Global Innovation Index suggest that investment in innovation produced mixed results in 2022. The number of scientific publications, R&D, venture capital deals and patents continued to grow, for instance, but at a slower pace than the exceptional increases observed in 2021. The contribution of medium- and high-tech manufacturing value added to total value added has remained stable globally, accounting for 46.2% in 2021, 46.3% in 2015 and 45.8% in 2000. In LDCs, however, the contribution to total value added decreased to 8.4% in 2021 from 9.1% in 2015 and 14.5% in 2000 (UN, 2024[1]).
An enhanced enabling environment and more strategic use of intellectual property rights could further unlock innovation, boost trade, attract investment and promote technological upgrading
Intellectual property rights have the potential to be a game changer for developing countries, including LDCs. In Cambodia, for example, the registration of premium pepper originating from the city of Kampot as a geographic indication helped farmers more than triple their incomes since 2010. Likewise, in Ethiopia, trademarking has contributed to a 275% increase in coffee exports since the early 2000s. However, an innovation gap persists: In LDCs, the average annual number of applications for trademarks was 2 197 between 2017 and 2021, far below the global average of 26 034 and the average of 24 789 in other developing countries. Annual applications in LDCs for patents and utility models, both of which protect inventors’ rights, totalled just 55 and 24, respectively, over the same period. LDCs, which often rank at the bottom of the Global Innovation Index, also have the lowest level of productive capacities and readiness to harness frontier technology (UNCTAD, 2024[10]).
The gender gap in global Internet usage persists despite progress towards parity
In 2022, 63% of women globally used the Internet compared with 69% of men. The gap was even wider in lower-income countries, where only 21% of women were online compared with 32% of men. In 2023, 65% of women and 70% of men worldwide used the Internet. The gender parity score worldwide, which indicates parity at between 0.98 and 1.02, has improved from 0.90 in 2019 to 0.92 in 2023. This score does not fully capture the extent of the divide since women, who make up about half of the global population, make up an increasing percentage of people who are offline; the gap between women and men not using the Internet stood at 17% in 2023, up from 11% in 2019 (International Telecommunication Union, 2023[11]).
Countries most in need, particularly LDCs, still struggle to narrow the costly digital divide
The Doha Programme of Action for the Least Developed Countries for the Decade 2022-31 highlights STI alongside structural transformation as crucial for overcoming economic, social and environmental challenges facing LDCs. In LDCs, 18% of the population still lack access to 3G mobile broadband, and fixed broadband penetration remains low at just 1.8 subscriptions per 100 inhabitants in 2023 (UN, 2024[1]). The cost of broadband access in LDCs exceeds the affordability target set by the Broadband Commission for Sustainable Development (International Telecommunication Union, 2023[12]). Despite a more than threefold increase in digital connectivity from 11% to 35% between 2015 and 2023, universal access remains a distant goal in LDCs.
Efforts to improve digital infrastructure face numerous challenges including frequent Internet shutdowns due to political and security issues as well as unreliable power systems and other infrastructure shortcomings. There also are significant barriers related to usability, cost-effective technology and financial constraints (Walko, 2022[13]). Of the 32 LDCs assessed on the Global Innovation Index, 21 are in the bottom quartile, evidence of a persistent lag in innovation and adoption of new technologies. Limited infrastructure, insufficient financial and technical resources, and inadequate investment in education, skills development and STI R&D further contribute to the gap.
International mechanisms established to facilitate technology transfer to countries most in need struggle to secure funding
The United Nations (UN) technology facilitation mechanism (TFM) was established by the Addis Ababa Action Agenda in 2015. The TFM consists of four key elements: the UN Interagency Task Team on STI for the SDGs; the 10-Member Group of High-level Representatives; the annual Multi-stakeholder Forum on STI for the SDGs; and the TFM 2030 Connect online platform, which serves as a central hub for accessing information on existing STI initiatives, mechanisms and programmes (UN, 2022[14]). The TFM also supports the development of STI roadmaps. Six pilot countries (Ethiopia, Ghana, India, Kenya, Serbia and Ukraine) and two international partners (the European Union and Japan) have participated in the first phase of the programme since 2019.
The UN General Assembly agreed to establish the Technology Bank for LDCs on 23 December 2016 (UN, 2017[15]). To date, the government of Türkiye is the sole volunteer donor of the Technology Bank and provides USD 1.7 million annually, an amount that covered only 60% of staff costs in 2023 (UN, 2022[16]).
Notable efforts have been invested in technology transfer for climate. Technology-related climate development finance grew substantially from USD 13.3 billion in 2015 to USD 28.6 billion in 2019. During this period, the proportion of climate-related activities with a technology transfer component increased from 27% to 36% and mitigation-related technology transfer comprised 69% of the total technology-related climate development finance. The primary sectors targeted were energy, transport and storage, and agriculture. Debt instruments were the most frequently used financial tools for climate technology transfer projects, accounting for 68% of total development finance resources, while grants represented 30% and equity investments 2% of such tools (UNEP; OECD, 2022[17]).
Renewable energy and climate technologies can help developing countries transition towards more circular and greener economies
Technological advances have significantly reduced the costs of some renewable energies, making them competitive with fossil fuels. For example, the cost of solar photovoltaic technology, which was 710% higher than that of fossil fuels in 2010, became 29% cheaper than the least expensive fossil fuel option by 2022 (UN, 2024[8]). Global trade in ESTs, which have the potential to significantly improve environmental performance relative to other technologies, increased but total trade of ESTs in LDCs dropped over the same period. The Global Environment Facility (GEF) remains the largest public sector funding source for transferring ESTs, with a record USD 5.33 billion pledged by 29 donor governments for its eighth replenishment cycle (2022-26) – a 30% increase over the previous cycle (Global Environment Facility, 2022[18]). Technology transfer has been a major component in most adaptation projects the GEF has carried out in LDCs, addressing climate resilience in diverse fields such as water management, disaster risk management, food security and agriculture, coastal management, and infrastructure development.
A shared digital future: generative artificial intelligence, data privacy and safety
The artificial intelligence (AI) market could add USD 15.7 trillion to the world economy by 2030, with the greatest economic gains of 27% in China (PwC, 2017[19]). For developing countries, the AI market presents opportunities in precision agriculture, medical diagnostics, teacher support and virtual tutoring, and efficient use of water and energy (Thapa, 2024[20]).
An analysis of 14 OECD countries indicates that the share of online vacancies requiring AI skills increased by 33% between 2019 and 2022 (Borgonovi et al., 2023[21]). Over 2000-21, nearly half of the 438 619 AI-related publications issued were published in just three countries: China, the United Kingdom and the United States (UNCTAD, 2023[22]). Many countries, especially the least developed ones, have been left behind, often confined to the role of being data providers (UNCTAD, 2023[23]). AI technology, however, present high-level risks, including the amplification of misinformation, increased harmful bias and discrimination, privacy breaches, and data governance risks at various levels (OECD, 2024[24]). The Global Digital Compact, adopted at the Summit of the Future with the aim of addressing such risks, is an initiative to establish common principles for a secure, open and inclusive digital future (UN, 2024[25]). It is expected to tackle issues such as digital connectivity, Internet fragmentation, data protection and the application of human rights in the online sphere.
Cybersecurity risks could cause disruption to financing for sustainable development
Cyberattacks are almost twice as frequent as they were before the COVID-19 pandemic. While most reported losses from these attacks are relatively minor, averaging about USD 500 000, the potential for severe losses (of up to USD 2.5 billion) and systemic disruption has grown significantly (IMF, 2024[26]). Cyberattacks against the financial sector in particular could threaten economic stability by eroding confidence in the financial system, disrupting critical services or causing spillovers to other institutions. However, cybersecurity policy frameworks, especially in developing countries, are often insufficient. For example, only about half of the countries surveyed recently by the International Monetary Fund reported having a national financial sector-focused cybersecurity strategy or dedicated cybersecurity regulations (IMF, 2024[27]).
Note: The data points are mainly drawn from the UN’s Sustainable Development Goals Extended Report 2024 and its statistical annexes. Trend data in are in constant USD 2015 prices unless otherwise indicated.
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← 1. EST sectors include air pollution control, wastewater management, solid and hazardous waste management, renewable energy, environmentally preferable products, water supply and sanitation, energy storage and distribution, and land and water protection and remediation. For more information, see https://unstats.un.org/sdgs/metadata/files/Metadata-17-07-01.pdf.
← 2. The source for these figures is the authors based on https://unstats.un.org/sdgs/files/report/2024/E_2024_54_Statistical_Annex_I_and_II.pdf.
← 3. SDG target 9.c is to “significantly increase access to information and communications technology and strive to provide universal and affordable access to the Internet in least developed countries by 2020”.