Innovation Processes in Developing Countries

Specificities and Policy Issues for Inclusive Development

Third session

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”

Some issues left half-baked yesterday Is equality in some places always the result of

inequality in other places? Which is the right unit of analysis for “places”: countries, regions, localities, networks?

In terms of equality, innovation is usually seen as part of the solution, but it can be also part of the problem:

“…diffusion researchers …have been specially inattentive to the issue of how the socio-economic benefits of innovations are distributed within a social system. When the issue of inequality has been investigated, we often find that the diffusion of innovations widens the socio-economic gap between the higher an the lower status segment of a system” (Rogers)

BLAST and GALA Two approaches to development (Amartya Sen, 1997)

“There exist, on the one hand, approaches that see development as a ‘fierce’ process, with a moral that invokes ‘Blood, Sweat and Tears’ (to use Winston Churchill’s rousing phrase)”:

the BLAST view of development.

A contrasting view sees “development as essentially a ‘friendly’ process, with a focus on people’s helping each other and themselves, and with being able ‘to get by with a little help from their friends’ (to apply a phrase from the Beatles)”: “Getting by, with A Little Assistance”:

the GALA view of development.

About innovation policies and its specificities in developing countries

On “de-learning” processes Why are knowledge and innovation policies

so weak in real terms? Which innovation for which development? Innovation policies as social policies; social

policies as innovation policies What are the strenghts able to support

change?

Policies to avoid de-learning processes

Gardening policies Connecting efforts and institutions (making the

“NIS” work!) Providing mechanisms for civil society control Building long-terms views of development Making room for diversity in terms of

profitability (Finland and its electronic industry)

Why are knowledge and innovation policies so weak in real terms?

Are they really so weak? Indicators, please

If we agree that knowledge and innovation policies are generally weak in developing

countries, why is that? Because such policies lack legitimacy?

Why is that? Perhaps for lack of real demand?

Extracts from recent literature (1)

“The Latin American and Caribbean production pattern on the one hand, induces private sector and enterprises to express a meager demand for knowledge, and on the other hand, leads domestic agents to mostly seek outward oriented linkages, privileging foreign companies and research laboratories that already have sound reputation and worldwide recognized experience in effective and effi cient S&T efforts. Thus a mismatch ensues between demand side needs and supply side offerings, hampering policies’ impact.” (Cimoli et al, 2009: 12) Remember the Sabato triangle!

Extracts from recent literature (2)

“Innovation in the developing world is constrained not on the supply side but in the demand side. That is, it is not the lack of trained scientists and engineers, absence of R&D labs, or inadequate protection of intellectual propriety that restricts the innovations that are needed to restructure low-income economies. Innovation is undercut instead by lack of demand from its potential users in the real economy –the entrepreneurs. And the demand for innovation is low in turn because entrepreneurs perceive new activities to be of low profitability.” Rodrik (2007: 101)

Why is the demand side of innovation policies so important?

“Imagine trying to cut a piece of paper with just one blade of a pair of scissors. It’s near impossible. Yet that is what we try to do with innovation policy. (...) Innovations are the product of the creative interaction of supply and demand. However, in focusing on how to increase the supply of innovative businesses, policymakers have lost sight of the importance of demand.” (Georghiou, 2007:1, 2)

What happens when a strong demand for some type of innovation is present

in a given society? Can you give an example of that situation

for any country? Can you give an example of that situation

for your own country? Can you give examples of fields of social

life where strong demands for innovation have succeed in setting the public agenda for research and innovation? Where?

And the contrary? Where?

Which innovation for which development?

If we agree that knowledge production and innovation are social processes, then they reflect to some extent social choices (and the way social sciences and the humanities help to express them)

Innovation policies would be different if development is seen as: Economic growth Economic development Human development (UNDP) Development as freedom (Amartya Sen) Inclusive development

Is it necessary to choose between those diverse ways of understanding

development? BLAST type of reasoning would say YES, and

stick to economic growth. But...“If our paramount interest is in the lives that people

can lead—the freedom they have to lead minimally decent lives—then it cannot but be a mistake to concentrate exclusively only on one or other of the means to such freedom. We must look at impoverished lives, and not just at depleted wallets. (Sen, 2000:3)”

GALA type of reasoning would allow for a more plural exploration

Development as freedom leads us to the need to embedd innovation policies

and social concerns: INCLUSIVE DEVELOPMENT

WHY? Pragmatic reasons Because this view allows us to recognize

that inequality matters for innovation (inequality leads to lack of trust, lack of trust rises transaction costs, high transaction costs hamper innovation)

Because we need strong sources of legitimization, and that means that

We need a strong and sustainable source of demand for knoweldge and innovation

From where can such a demand come from? What if we answer “from social policies”?

Health Housing Nutrition SanitationAll these are huge sources of demand for new

knowledge and innovationThey enjoy great legitimacy after the defeat of

the recipes of trickle-down from economic growth

To profit from this legitimacy we need to embed innovation policies with social

policies

What does this mean?

Need for a different perspective regarding innovation policies in developing countries

Need for social policies to look at themselves as innovation demanders and, due to that, as makers of innovation policies

New markets will be created around “useful innovations” (Lundvall, 1985)

A virtuous circle of knowledge, innovation an more equality will be started

There is no need to “buy” this perspective at the price

of excluding others The point is not to exclude this perspective,

to give it a chance to prove its goods This is what we mean by innovation

policies that take into account some of the specificities of developing countries

To build inclusive development by means of knowledge and innovation goes to the

heart of what is worth terming a “knoewledge society”

Gracias por una gran oportunidad para pensar juntos!

Judith Sutzjsutz@csic.edu.uy