Post on 17-Jan-2016
Building STI CapacityBuilding STI Capacityfor Competitivenessfor Competitiveness
Alfred WatkinsAlfred WatkinsWorld Bank World Bank
Science and Technology Science and Technology Program CoordinatorProgram Coordinator
Cairo, EgyptCairo, EgyptMarch 11, 2008March 11, 2008
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Two Roads
• Ignorance, unskilled labor, low value added goods and services
• Knowledge, skilled labor, value added-knowledge intensive goods and services
Anubha: Let’s make this a picture with two roads. We can discuss on Monday
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There is No Choice:The World is Moving Fast…
With or Without You!
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Underlying Philosophy
• Investing in S&T capacity is not a luxury suitable only for developed countries; it is an absolute necessity for middle income countries that want to innovate, get richer, and avoid falling behind
• In today’s rapidly changing global economy, the critical economic development issue is no longer whether to build STI capacity but what type of capacity to build and how to build it
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Why Worry About All This?
0
2
4
6
8
10
12
14
1960 1965 1970 1975 1980 1985 1990 1995 2000
Knowledge makes the Difference between Poverty and Wealth...
Rep. of Korea
Ghana
Thousands of constant 1995 US dollars
Difference attributed to knowledge
Difference due to physical and human capital
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Difference Attributable to Difference Attributable to KnowledgeKnowledge
• What kind of knowledge?
• Where do you get it?
• How do you find it?
• How do you learn to use it?
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Dimensions of STI Capacity
National (and local) government capacity to
formulate and implement coherent S&T programs
and policies
Enterprise capacity to utilize knowledge to
innovate and produce higher value added, globally competitive goods and services
Education, vocational training, and R&D
institutes
Technologically and scientifically skilled workforce trained to work with modern equipment and production processes
National (and local) government capacity to
formulate and implement coherent S&T programs
and policies
Enterprise capacity to utilize knowledge to
innovate and produce higher value added, globally competitive goods and services
Education, vocational training, and R&D
institutes
Technologically and scientifically skilled workforce trained to work with modern equipment and production processes
Import, adapt, and adopt knowledge produced
outside the country
Produce and use new knowledge via R&D
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Competitiveness and Sustainable Development are the Competitiveness and Sustainable Development are the Objectives;Objectives;
Education, Innovation, and PSD Education, Innovation, and PSD Are The Means to Achieve These ObjectivesAre The Means to Achieve These Objectives
Education
PrivateSector
DevelopmentInnovation
Competitiveness
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The Pieces Must Fit TogetherThe Pieces Must Fit Together
PSD
Innovation
Education
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Acquisition
Assimilation
Improvement
Creation
Where Do You Start?: East Asia Capacity Building Model
Developing
Country
Newly-Industrializing
Country
Advanced
Country
Imitation internalization generationSTI Capacity Focus
DevelopmentStages
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Korea R&D (% of GDP) 1963-2003
Source: Korea Science and Technology Policy Institute; WDI, 2007
0
0.5
1
1.5
2
2.5
3
1963 1970 1980 1990 2003
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Korea Patent Trends (1965-2006)
0
1000
2000
3000
4000
5000
6000
7000
1965
1967
1969
1971
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
Source: United States Patent and Trademark Office (USPTO), 2007
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A Good Business Climate Is Necessary But Not Sufficient
Barriers to technology absorption and diffusion
Cap
acity
for
tec
hnol
ogy
abso
rptio
n an
d di
ffus
ion
High Barriers Low Capacity
High Barriers High Capacity
Low Barriers High Capacity
Low Barriers Low Capacity
Source: Adapted from RAND
Sub Saharan Africa
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High Tech Does Not Always Equal High Income
Philippines
India
Fiji Colombia
Chile
Argentina
Brazil
Indonesia
China
Pakistan
Malaysia
Thailand
Sri Lanka
Costa Rica
Vietnam
CambodiaB'desh
Mexico
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
0 10 20 30 40 50 60 70
Hi Tech (% of Manufacturing Exports)
GD
P P
er
Ca
pit
a (
Co
nta
nt
US
D)
Source: World Development Indicators, 2007
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It’s Not What You Produce But How You Produce It
That Determines Growth and Prosperity
Finland
Hi Tech22%
Medium Tech 30% Low Tech
10%
Resource Based 38%
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Manufacturing Value-Added Per Capita (Constant US Dollar)
Source: UNIDO, 2005
0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000
Bangaldesh
India
Pakistan
Sri Lanka
Philippines
Indonesia
Thailand
Malaysia
Korea
United States
Singapore
Finland
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Agriculture Value-Added Per Worker (Constant US Dollar)
0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000
Nepal
Timor-Leste
Vietnam
Cambodia
Bangladesh
India
Indonesia
Thailand
Pakistan
Sri Lanka
Mongolia
Philippines
Malaysia
Korea
Finland
United States
Singapore
Source: World Development Indicators, 2007
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Export Structure of Forest Cluster in Latvia and Finland, 2000
0
5
10
15
20
25Sa
w &
Othe
r Mills
,Pla
ning
Conta
iners
& Bo
xes
Furn
itures
& Fix
tures
Pulp
ofwo
od,
pape
r &pa
perb
oard
Me
tal &
Woo
dwo
rking
Mach
inery
Spec
ialIn
dustr
ialMa
chine
ry
Elec
trica
lIn
dustr
ialMa
chine
ry
Labor-intensive Technology-driven
Latvia
Finland
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How can we help countries build How can we help countries build the STI capacity they need to the STI capacity they need to
increase value added and generate increase value added and generate wealth?wealth?
Should countries focus on building Should countries focus on building capacity to create new knowledge capacity to create new knowledge
or utilize existing knowledge?or utilize existing knowledge?
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Middle Income Countries:Challenges and Opportunities
• Starting Point: MICs had an initial competitive advantage based on trade preferences, available natural resources, and prior abundance of low wage, unskilled labor
• But rising wages and higher standards of living are leading to a loss of competitive advantage – need to move from (i) cheap labor to (ii) skilled labor and innovation (iii) producing higher value added, skill intensive goods and services
• How can late-comers catch up?• Existing laws, institutions, business practices are
not designed to address these issues
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Moving from Ideas to Actions: IP Review
• In collaboration with WIPO and other IP experts, (i) review IP legislation, rules, and regulations and (ii) recommend changes, based on international best practice, to ensure that they support innovation, economic development, and technology commercialization Who owns IP generated by government research grants Who has the right to commercialize this IP How are proceeds divided between government, research institute,
and scientists? Do rules and regulations foster cooperation with industry and
international partners (both industry and research institutes) Do they foster SME start-ups and clusters, in line with EU proposals Develop capacity to search for and exploit knowledge contained in
national patent data bases – expired and current patents
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Moving from Ideas to Actions:Governance of Research Institutes
• Lessons of experience from Colciencias, Fundacion Chile, Malaysian Palm Oil Research Institute
How do they combine research excellence agenda with technology upgrading and international competitiveness objectives of industry?
How do they support the national innovation and competitiveness agenda by diffusing results of patent data base searches and research findings to local industry
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Research Institute Governance Agenda (cont.)
Review rules, regulations, and current practices and recommend possible changes, based on international best practice, regarding ability of research institutes (and university-based researchers) to generate their own financial resources by entering into commercial contracts with industry, commercializing research results, etc.
Review government funding mechanisms and align them with relevant international best practice lessons of experience – change incentives by changing funding mechanisms
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Moving from Ideas to Action:Need Assessment and Action Plan
Start with two or three sectorsEach Needs Assessment would ask the following three
questions:What is the country’s current capacity to meet the
competitiveness and innovation needs of this sector (research institutes, technical and vocational training capacity, university research and teaching capacity, enterprise support programs, etc.
What capacity would the country need – immediately and in the medium term – to ensure the viable development of this sector and the creation of higher paying, more skill intensive jobs
What is a feasible and reasonable strategy for improving the existing capacity and building additional required capacity
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Capacity building action plan programs might include proposals to…
Strengthen multi-disciplinary research teams in research institutes and universities addressing high priority problems in that sector
New funding mechanisms to encourage research in priority areas identified by the private sector and other stakeholders
Develop patent search capacity relevant to that sector Establish programs to transfer research and patent
search information to private sector, including new and existing SMEs
Proposals to encourage SME spin-offs resulting from patent search and R&D programs, leading to formation of clusters
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Capacity Building Action Plan Proposals (2)
Support for SME spin-offs at all points along the value chain
Proposals for enhanced technical, vocational and university training programs relevant to the needs of that sector
Proposals to incorporate existing research, teaching and business assets into these activities
Visiting professors and researchers, including where appropriate, retired industrial experts to provide short-term, on-the-job training
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Catch-up Vehicles
• FDI• Attracting FDI is not enough: it is only a starting
point. A country has two choices -- either to be a passive recipient and see enclaves emerge, or build local industrial and technological capacity
• Some strategies that countries have used:– supplier development programs to help local SMEs
become qualified suppliers to the multinationals– technology and knowledge transfer programs --
encouraging TNCs to license technologies to local companies and train local workers.
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Catch-up Vehicles
• Public Research Systems – Public research systems can help local enterprises
adapt and adopt the technology which they needed to become globally competitive. Example: GRIs in Korea, ERCs in China
– They can give technical support to local companies by identifying foreign technologies, teaching local firms how to use them, negotiating technology licenses with foreign companies, providing testing services, training services
– But often public research infrastructure is too inflexible and not designed to do this. They need reforms to make them more market-oriented, profitable, agile
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Catch-up Vehicles
• More specialized technology transfer institutions – Industry-focused research centers are good agents
for technology transfer. Example: ICIPC, Colombia
– They can attract private funding for technology transfer activities
– Other (non-research) institutes can also be successful technology transfer institutions. They help local companies identify and acquire foreign technologies. example: Fundacion Chile
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Catch-up Vehicles
• Universities
– University-industry linkage can accelerate technology upgrading in industry
– Needs dedicated linkage programs; won't happen automatically
– Needs industry associations to be successful
– Benefits both industry and university (technology upgrading and curriculum upgrading)
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Catch-up Vehicles• Innovation Funds
– matching grants to help SMEs add value to their products and be more innovative (example from Nicaragua)
– Gives incentives to SMEs to collaborate with research centers and especially with universities, this building university-industry linkages
– Grants can support following activities by SMEs: 1) technological innovations 2) organizational innovations 3) market development activities
– They also encourage university collaborators to establish technology service centers to provide training and consulting services to SMEs
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THANK YOU
Alfred Watkins
Science and Technology Program Coordinator
Awatkins@worldbank.org
www.worldbank.org/sti