World Bank identifies 3 strategic transitions for countries to break the middle-income trap

The World Bank’s 2024 World Development Report highlights the challenges faced by 108 middle-income countries (MICs) aiming to escape the middle-income trap.

To reach high-income status, these nations must shift from a simple investment strategy (“1i”) to integrating investment with foreign technology adoption (“2i”), and eventually to innovation-driven growth (“3i”).

South Korea exemplifies this model, evolving from low-income in 1960 to high-income by 2023.

However, only 34 MICs have made this transition over the past three decades, indicating that most struggle to sustain and accelerate growth through investment, technology, and innovation.