Innovation Processes in Developing Countries

Specificities and Policy Issues for Inclusive Development

Judith Sutz, Universidad de la República, Uruguay

EULAKS Summer School

“The role of social sciences in the construction of knowledge based

societies: Latin American and European perspectives”

The role of social sciences in the construction of knowledge based

societies ¿Which social sciences? Knowledge based societies: what do we

mean by that? Knowledge based societies or capitalist

knowledge based societies: does this distinction make sense?

Some prefere “learning economies” or “learning societies”: what do we think?

Sessions outline A combination of approaches to innovation and

to development A historical view Looking into innovation and into national

innovation systems from the South Some key questions regarding innovation in

developing countries “Development”: what are we talking about? Innovation and social inclusiveness Innovation policies for inclusive development

The evolutionary thinking approach posit that:

Innovation can be seen as problem-solving; Problem-solving is a complex and uncertain

process; it is heavily context dependent; There is not a sharp line dividing the

capabilities for choosing techniques from those for operating techniques;

Imitation requires the same type of capabilities than innovation when there is only a spare set of clues available regarding the solution to be recreated.

The development thinking approach suggests that:

Development depends not so much on findingoptimal combination of productive factors andresources as on using resources that are hidden,scattered or badly utilized;

Backward and forward linkages play afundamental role: linkages induce innovation;

Development is best seen as an expansion ofpeople's capabilities.

The national systems of innovation approach

Explicitly acknowledges the political as well asinstitutional and cultural aspects of innovation processes; Stresses the importance of interactions between actorsand organizations; Takes into account multiple actors with differentroles, allowing to go beyond the dichotomy "state ormarket", making room for more "bottom-up"and associative networks; Highlights user-producer interactions, assigning animportant role to usually neglected actors asworkers or users

The three approaches, taken together, converge to an actor-centred perspective of innovation and development, its bedrock being the "importance of agency: seeing people as agents rather than patients)"as Amartya Sen put it.

This is particularly useful to study innovation in developing countries

Innovation is somehow related to knowledge?

If yes, some exploration must be done on the

production of knowledge, on how it has

evolved, and if something can be said relating

knowledge, innovation and divergence in the

patterns of development

Following Mokyr’s The gifts of Athena,knowledge can be clasified as

Ω (propositional knowledge, episteme): “what” about natural phenomena and regularities

λ (prescriptive knowledge, techne): “how” to adapt means to a well-defined end

A main observation: λ based on Ω can be extended and find new

applications λ by its own is condemned to advance by trial

and error

λ by its own is how things were until around 1850 everywhere

λ based on Ω (and Ω driven by questionsmade by λ) in a systematic way has beencalled the wedding of science and the usefularts (David Noble)

It started around 1850 in some of the countries thatwe now call developed or central and tended toconcentrate there through the international division of labour

Ωλ

λ Ω

Circa 1850: the consolidation of divergence

Gross Industrial Production 1750-1913 (UK 1900= 100)

Developed countries France Germany UK USA Third World China World

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1750 1800 1830 1860 1880 1900 1913

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Third World

Questions

What kind of indicators can we use as a proxy to the state of the wedding of science to the useful arts?

Where can we find those indicators?

Let’s give a look to the current situation...

Countries HE gross enrolment ratio

Researchers (FTE) per million inhabitants

R&D/ GDP

% total expenses in R&D by firms

% total R&D execution by firms

Researchers working in business firms (% of total researchers)

Researchers (per 1000 total employed)

Denmark 80 5.277 2,43 59,5 64,7 64,8 10,2 Finland 93 7.681 3,45 68,2 72,3 56,6 16,6 France 56 3.491 2,11 52,4 63,2 55,7 8,2 Japan 57 8.840 3,39 77,1 77,2 66,2 11,1 UK 59 3.695 1,78 45,2 61,7 44,7 5,8 Germany …. 3.386 2,53 68,1 70,0 63,5 7,2 Sweden 79 6.139 3,73 65,7 72,7 73,2 12,6 USA 82 4.671 2,62 66,4 71,9 79,2 9,6 Canada … 3.922 1,94 47,8 54,4 63,6 7,7 S. Korea 93 2.044 3,23 75,4 77,3 72,2 8,7 Brazil 25 461 1.02 …. ….. 23,8 1,0 Argentina 66 895 0.49 29,3 30,3 15,9 …..

Slow evolution ofeducational growth figures

Access to Access tosecondary tertiaryeducation education1985-1995 1985-1995

L.A.C. 6.4 1.5HongKongKoreaSingapore 14 9.2ChinaMalasyaThailand

In 2001

% world GDP % world population

% world spending on R%D

% world number of researchers

Developed countries

61.1 22.3 84.4 71.6

Developing countries

38.9 77.7 15.6 28.4

Latin America 9.2 8.9 3.1 6.7

Researchers Spending by Spending on R&D Spending on R&D per million researcher as % GDP per capita Developed Developed Developed Developed countries countries countries countries 3033 124 2,2 377 World World World World 946 105 1.6 100 Latin Developing Developing Latin America countries countries America 715 58 0.6 34 Developing Latin Latin Developing countries America America countries 347 48 0.5 20

Some people say that the problem is not just numbers but “culture”: the “South” would be less science and

technologically oriented than the “North”Is that true?

(Sakiko Fukuda-Parr,Harvard University and UNDP)

We can accept that, in general terms, developing countries have a structural

problem related to knowledge production and innovation

How should we think about this issue?

STI issues need to be thought with our own heads

“To conceive ourselves only as research assistants,as gatherers of data that is afterwards processed bytheoretical people in the North, is equivalent toexporting raw material with low value added...

From the importing point of view, this subordinaterole corresponds to the mechanic application of theories already elaborated in the North.”(Guillermo O’Donnel, 2004, speech at the receptionof the Kalman SilvertAward, of the Latin American Studies Association)

To ellaborate theory and concepts in the South isvery important for well-conceived STI policy in

developing countries

A brief digressionIn 1926, while Einstein and Heisenbergdiscussed in Berlin about the “nature of reality”,shaked by the hypothesis of quantum mechanics,Einstein told the 24 year old theoretical phycisistthat “it is the theory that decides what we canobserve”.

Just think about that: which theories will allow us to properly observe knowledge production andinnovation in developing countries?

An early L.A. (1968) contribution to the discussion on STI for development and STI

policies: the “Sabato Triangle”Government i) For development purposes, it is i) For development purposes, it is

more more important the strength ofimportant the strength ofthe sides the sides of the traingleof the trainglethan the strength of each than the strength of each vertexvertexInternal linkages are keyInternal linkages are key

Business AcademiaFirms ii) If the sides are weakii) If the sides are weak,, each each

vertex tries to find strong links vertex tries to find strong links with external oneswith external onesLinkages are further weakened

Why linkages are so important: remarks from Albert Hirshman

“The linkages capture much of the developmentstory (because) development is essentially the recordof how one things leads to another, and the linkagesare that record.” “A linkage exists whenever an ongoing activitygives raise to economic or other pressures that leadto the taking up of a new activity”

Hirschman, A.O. (1981), Essays in Trespassing. Economics to Politicsand Beyond, Cambridge University Press, Cambridge.

Consequences of weak linkages for academia: brain drain in present days

12% of all people with academic degrees in sciencesand engineering in the USA came from developingcountries, a proportion that grows with postgraduatelevel.

50 % of all migrants to the developed world comingfrom South America and 75% of those coming fromSub-Saharan Africa have tertiary education

One out of four researchers of the South work in theNorth

But, why brain drain does not recede?

National catastrophes (for instance dictatorships,like those in L.A. in the sixties and seventies) High demand in some developed countries Anti-brain drain policies in countries with highlevels of skilled population abroad (South Korea,China, India)

Hypothesis: the most important source of actualbrain drain is the lack of opportunites to live acreative life at home, to become an agent, not apatient, as Amartya Sen says.

It has been said (Lundvall and Johnson) that:

If knowledge is the most important resource, then

Learning is the most important social process

But, what implies learning?

Learning implies a double movement

To enhance capabilities: Development “is best seen as an expansion of people’s ‘capabilities’.” (Sen, 1984)

To open opportunities to apply capabilities creatively

Where are we, in L.A., and in the developing world in general, regarding

these two issues?

A possible proxy

Proxy for capabilities: enrolment in higher education

Proxy for opportunities: the proportion of wealth invested in R&D (R&D/GDP)

With two variables it is possible to fix a point in a map: where are the

different countries located in such a map today?

México? India? Finland? Denmark? South Korea? France? USA?

Venezuela? Brazil? Uruguay? Spain? Chile? Argentina? UK?

>2.5% Sweden South KoreaJapan USA

Finland2 - 2.5% Germany France

Denmark Netherlands1.5 - 2% Belgium

R&D/GDPCanadaUK

1 - 1.5% ItalyNorway

0.8 - 0.9% Brazil Spain

Chile0.5 - 0.8% Colombia

>2.5% Sweden South KoreaJapan USA

Finland2 - 2.5% Germany France

Denmark Netherlands1.5 - 2% Belgium

R&D/GDPCanadaUK

1 - 1.5% ItalyNorway

0.8 - 0.9% Brazil Spain

Chile0.5 - 0.8% Colombia

MexicoVenezuela

<0.5% Uruguay Argentina

< 15%- - - - - - >50%

Enrolment in higher education

What can we tell from such a map?

That between the developed countries and the developing countries there is a divide: a learning divide

That this divide can be crossed in a relatively short period

That to be able to cross the learning divide “learning by studying” and “learning by solving”, both, must be fostered

A visible trend: the widening of the “enrolment gap” in tertiary education

between developed and developing countries (WB, 2002)

Gross Enrollment in Tertiary Education 1970-97

By income group

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1970 1980 1985 1990 1992 1995 1997

A not so visible trend: the difficulties that developing countries face to use

creatively the knowledge and innovation capabilities they have

This is a key challenge

It is not newIt is related to the entire realm of social

sciencesWe need to think deeply over this problem