Some conclusions of the BRICS Project, summarized from the book ‘Development Challenges in BRICS: Inequality and National Innovation Systems’organized by Maria Clara Soares, Mario Scerri and Rasigan Maharajh (forthcoming)

Pretoria, March 2012

Development Challenges in BRICS: Inequality and National Innovation

Systems

BRICS PROJECT Inequality and National Innovation Systems

Background

Our efforts aimed to contribute to a better understanding of the dynamic inter-relations between innovation systems and inequality, building on the experience of the BRICS.

We adopted the broad view of the national systems of innovation (NSI) approach, proceeding from a co-evolutionary perspective.

Our belief is that improving the comprehension of the relationship between innovation systems and inequality may allow for: the evaluation of different options for configuring

technological and institutional change, and for opening up the possibility for policies that promote

development alternatives which normatively aspire towards greater equality and social cohesion

Concept of inequality: multi-dimensional character (beyond the mere income dimension; manifested through increasingly complex forms)

BRICS PROJECT Inequality and National Innovation Systems

The analysis of the co-evolution between innovation system and inequality tried to identify how (and whether) the diverse elements of the BRICS NSIs and inequality mutually reinforce each other.

Co-evolution perspective: high degrees of endemic inequality shaping the evolution of

national systems of innovation. innovation systems reinforcing/undermining inequalities.

Change in Inequality Levels in BRICS early 1990s versus late 2000s (Gini Coefficient of Household Income)

0,0 0,1 0,2 0,3 0,4 0,5 0,6 0,7 0,8

India

China

Russian Federation

Brazil

South Africa

Late 2000s (↘)

Early 1990s

Source: OECD-EU Database on Emerging Economies and World Bank Development Indicators Database (2011)

Co-evolution: Inequality ► NSI

The origins of the current patterns and rates of inequality differs across BRICS systems:

South Africa: apartheid; India: discrimination on the basis of caste, religion, ethnicity or gender; Brazil: concentration of land and of political power; Russia: URSS collapse and extreme laissez faire variety of capitalism, dismantling soviet welfare system; China: accelerated evolution of a distinctly variety of capitalism widening gaps between rural and urban populations.

Despite these differences, the study showed that inequality is a peculiar trait of BRICS countries comprising a key factor for understanding both the configuration and the dynamic of their national innovation systems.

Co-evolution: Inequality ► NSI

Significant enduring inequalities severely restrict NSI development and compromise its long term dynamic limiting the broad based human capital & human capabilities (supply side), domestic systems of consumption (demand side), etc.

The structural nature of inequality in BRICS countries establishes it as an informal institution within the web which makes up their NSI.

Co-Evolution: NSI ► Inequality

The nature of the co-evolution of the NSI and inequality is obviously different for the five BRICS economies given their specificities.

It was seen that innovation systems can affect inequalities in different ways and through distinct paths, which are influenced by national conditions and shaped by public policy.

Despite the specificities, the common conclusion is that in the absence of appropriate policy measures, the evolution of NSIs in the BRICS - especially within the post-eighties context of market liberalisation - tended to reproduce, reinforce and even intensify structural inequalities.

Some policy findings

Distinct strategies for technological change may lead to different outcomes in distributive terms, thus either aggravating or mitigating inequality.

Mutual self-reinforcing mechanisms between innovation system and inequality (especially given long historical reinforcement) in BRICS forms the basis for a path dependent vicious circle of innovation.

This path dependency almost inevitably require State intervention to break vicious cycle.

Advancing the understanding of the inter-relations between innovation and inequality may be helpful to find ways to shape the evolution of NSIs so that they reduce rather than increase inequalities.

Inequalities need to be taken explicitly into account in the development & innovation strategies of BRICS countries.

Research Questions

Project findings raised challenging research questions, among others:

Innovation is fundamental to economic performance as it helps to widen competitiveness. But how to make innovation also serve the purpose of social inclusion?

How to induce the direction of innovations recognizing the role of business as an agent of innovation, but simultaneously pointing to a pattern of innovation that enable articulating the social and economic spheres endogenously?

Which policy instruments should be used to stimulate demand for social innovation, assure the generation and diffusion of the solutions, and promote the accumulation of knowledge and production capabilities in a wide range of production sectors supportive to fulfilling social needs?

Research Questions

How to orient the transformation of productive structures rooted in a specific territorial dimension in a way that they favor the improving of livelihoods and social inclusion?

How to capture the specific characteristics, interactions, learning processes and the dynamics of inclusive innovation systems that usually stay ‘bellow the radar’ of public policy lenses?

How local innovation systems based on high levels of informality can contribute to improving livelihoods and achieving the goals of a more inclusive development?

How to transform marginal innovative activities into inclusive innovation systems with wider socio-economic impact? What kinds of networks and partnerships are needed? What role could governments play?

Thank you!

Broad set of questionsQuestions linked how to better understand

social inclusive innovation processes that already exists but stays below the radar of public lenses