UNESCO Science Report · • Companies are developing frugal innovation (next slide). UNESCO...

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UNESCO Science Report (2015) Science governance: trends and challenges for emerging economies Susan Schneegans Editor-in-Chief, UNESCO Science Report [email protected]

Transcript of UNESCO Science Report · • Companies are developing frugal innovation (next slide). UNESCO...

UNESCO Science Report (2015)

Science governance: trends and challenges for

emerging economies

Susan Schneegans

Editor-in-Chief, UNESCO Science Report

[email protected]

UNESCO Science Report (2015)

Global trends: never before has the world investedso much in research

Investment in research rose faster (+30.5%) than global GDP (+20.1%)

between 2007 and 2013, despite the debt crisis

Why?

• In industrial countries hit by debt crisis (Japan, EU, USA…), public commitment faltered but firms maintained, or augmented, their own research spending to conjugate the crisis.

• Developing countries rich in natural resources used the commodities boom to raise their own public commitment to research(e.g. Argentina, Brazil, Malaysia, Mexico, Ethiopia, Kenya).

• China maintained its strong demand for raw materials, nurturing developing economies. The Chinese public and private sectorsraised their investment in research.

UNESCO Science Report

Strong growth in research spending by Chinese and Indian enterprises between 2001 et 2011.

Figure: Global shares of business research spending, 2001–2011

(%),

Calculated in Purchasing Power Parity US dollars

UNESCO Science Report (2015)Figure: World shares for

G20: GDP, researchspending, researchers and

scientific publications, 2009 and 2013

Shares up: China, Rep. Korea, India

Shares down: Canada, EU, Japan, USA

Stable: Argentina, Brazil, Mexico, South Africa, Turkey

UNESCO Science Report (2015)Patents are still dominated by the EU, Japan and USA (83%)

but China and the Republic of Korea are taking a bigger slice of the pie

What are triadicpatents?

The same inventorapplies to the threemain patent offices (EU, Japan and USA)

at the same timefor a patent to protect their

invention

UNESCO Science Report (2015)Little of foreign direct investment in research went to Africa and Latin America over 2001-2011

1.1%Share of beneficiaries in Africa for design, development and testing projects

11.3% Share of beneficiaries in Latin America for design, development and testing projects

30.3% Share of beneficiaries in China and India for design, development and testing projects

UNESCO Science Report (2015)

Innovation is present in countries of all income levels

but many entreprises innovate without conducting anyresearch.

Four types of innovator:

Product innovators: Argentina, Costa Rica (research

hubs of IBM, Intel, etc.), Rep. Korea

Organizational innovators: Argentina, Costa Rica, Malaysia

Process innovators: Brazil, India, Rep. Korea, South Africa

Marketing innovators: India, Malaysia, Turkey

• Few innovators: Mexico and Russia.

What type of innovationis taking place in emerging economies?

UNESCO Science Report (2015)

What type of innovation is taking place in emerging economies?

Most manufacturing firms active in innovation purchasing machines, equipment and software.

They may also purchase licenses or patents.

In Brazil, Russian Fed. And India, fewer than halfconduct research (figure). During the commoditiesboom, both Brazilian and Russian entreprises preferredto import modern technologies rather than developthese themselves.

UNESCO Science Report (2015)Why so little innovation in Brazil?

An exception to the rule: Natura Cosméticos uses plant extracts in its new products: exchanges withAmazonian communities and partners withEmbrapa (Brazilian Enterprise for Agricultural Research) and Federal University of Santa Catarina.

High cost of doing business: heavy bureaucracy, lack of modern infrastructure, etc.

Protectionism: import substitution policy has protecteddomestic market but discouraged nnovation in absence of competition.

Recent policies have favoured fossil energy: government investment in offshore oil and gas exploration and low pricing policy petrol at the pump have undercut development of renewable sources

Lack of university-enterprise ties: only 7% of innovative enterprises consider universities as key source of information, yet most research conducted by academia.

UNESCO Science Report (2015)

Challenges and trends in Brazil

• In the IBGE’s latest innovation survey, all firms (public and private) reported a drop in innovation activity between 2008 and 2011.

• Industry has been affected by the 2008 global crisis and worsening economic situation in Brazil since 2011.

• As Brazil’s sectoral funds tax business to fund research in key industrial sectors and business revenue is down, these sectoral funds have less to invest in research.

UNESCO Science Report (2015)

Why the decline in investment in the Russian Federation?

Could the oil curse be to blame?

• The commodities boom encouragedimports of advanced technologies and discouraged Russian businesses from investing in innovation: business spending is down from 33% to 28% of research funding (2000-2013).

• Since 2008, the government has oriented public funding of research more towards the needs of industry.

UNESCO Science Report (2015)Challenges and trends in India

• Government main employer of researchers (46% + 11% in academia) and main funder of research (60%), compared to 35% for industry and 4% for academia. Defense accounts for 32% of government outlay, so initiative with Chamber of Commerce and Industry since 2013 to create commercial channel for defencetechnologies.

• India needs to broaden its innovation culture to develop its manufacturing sector: pharma, automotive and IT account for more than half of business research expenditure (figure).

• Companies are developing frugal innovation (next slide).

UNESCO Science Report (2015)The rise of frugal innovation in India

• One in five Indians lives beneath poverty line: 270 million potentialconsumers!

• Frugal innovation by Indian companies, examples:

Nano: low-cost passenger car developed by Tata, original model cost about US$2,000 (photo)

Gramateller: banknote distributor for rural areas, low energy consumption, powered by solarenergy, (partnership between Vortex company and Indian Institute of Technology in Madras);

Chotukool: portable refrigerator powered by batteries, 35 litre capacity (developed by Godrejcompany and distributed in rural areas by the Indian postal service).

What is frugal innovation?

An innovation whichcosts little to produceon a large scale thattargets a market of

poor consumers whoare often unconnectedto the electricity grid

UNESCO Science Report (2015)

Challenges and trends in China

• China is on track to devote 2.5% of GDP to research by 2020 (see figure) but companies are still reliant on foreign core technologies, despite massive public investment in science.

• Enterprises fund three-quarters of research (BERD) in China.

• China only devotes 5% of its research budget to basic research, compared to about 17% in the EU, USA, Rep. Korea and Russia. Could this be holding China back in terms of new knowledge creation?

UNESCO Science Report (2015)Challenges and trends in South Africa

• In 2012, South Africa invested in more new FDI projects in Africa than any other country in the world. Also, the Department of Science and Technology has entered into 21 formal bilateral agreements with other African countries since 1997.

• Private sector investment in research fell from 0.50% to 0.32% of GDP between 2008 and 2012. Despite rising public sector investment, overall research funding dropped from 0.89% to 0.73% of GDP.

• The government launched a Sector-Specific Innovation Fund in 2013 to help raise the country’s research effort to at least 1% of GDP. The fund supports industrial research through a co-funding arrangement.

UNESCO Science Report (2015)Challenges and trends in Rep. Korea

Plans to revitalize manufacturing by:

• making country more entrepreneurial and creative;

• Strengthening ties between basic sciences and business at new International Science Business Belt (Korea’s Silicon Valley), withNational Institute for Basic Science on site;

• spending more on basic research: from 13% to 18% of total research spending;

• spending more than anyone on all research: 5% of GDP by 2017 (4.2% in 2013);

• doubling investment in green technology between 2008 and 2012.

Dilemma: country’s ‘catch-up technology’ development model no longer suited to global markets

UNESCO Science Report (2015)Challenges and trends in Malaysia

• Most committed country to research within Organization of Islamic Cooperation: 1.30% of GDP in 2015.

• Plans to reduce reliance on industrial research by foreign multinationals by developing endogenous innovation, through research universities and research grants in basic and applied research (for both domestic firms and foreign multinationals).

• Needs to help companies translate research grants into viable commercial products.

• Plans to attract 200,000 students by 2020 (56,000+ in 2012) to train a more highly skilled workforce. Malaysia one of 10 countries hosting 89% of international PhD students in science and engineering (see figure).

UNESCO Science Report (2015)Challenges and trends in Turkey

• Second-most committed country to research within Organizationof Islamic Cooperation: 1.01% of GDP in 2014.

• Strategic Vision 2023 (2008) fixed a 3% target for research spending, which will be hard to reach by 2023.

• A rapidly expanding pool of enterprises specializing in relatively low-tech manufactured goods: textiles, food, plastic and metal goods, etc.

• Recent growth in manufacturing has been driven by technology use more than by the development of new technologies.

• Slower integration into European Union value chains, in recent years, and the technological upgrading that this integration entails.

Test drive in 2013 of a solar-powered car developed by Istanbul Technical University

UNESCO Science Report (2015)Foreign multinationals: to what extent do they

foster innovation in emerging economies?

They can foster the rise of innovation in host countries:

• By creating research hubs and thereby encouraging knowledge transfer.• By working with the host government to improve professional training, as in Malaysia.

Some entreprises from emerging economies are buying foreign entreprises to acquire patents and highly qualified personnel overnight. Examples:

• in 2014, Motherson Sumi Systems Ltd (Inde) a racheté Stoneridge Harness Inc (États-Unis);

• in 2017, the public enterprise of China National Chemical Corp (ChemChina) purchased Swisscompany Syngenta for US$43 billion. By acquiring Syngenta’s chemical product catalogue

and seeds patented by Syngenta, China hopes to improve its agricultural productivity.

UNESCO Science Report (2015)

• In India, six out of 10 patents are nowin IT, one in ten in pharma (figure);

• IT patents : 7% go to Indian firms and 93% to foreign firms based in India.

The presence of foreign multinationals can distort patent data.

• Most IT companies are foreign, whereas most pharmaceuticalcompanies are Indian;

UNESCO Science Report (2015)

Malaysia, Singapore, Thailand and Vietnam host numerous multinationals and dominatehigh-tech exports in this part of the world, above all in electronics: 80% of these high-tech products.

But, often, these products are simplyassembled in the host country for export, without any innovation taking place, as in Vietnam.

The presence of foreign multinationalscan distort data on high-tech exports.

UNESCO Science Report (2015)

Increasingly common: joint technologydevelopment between emerging economies

Russo-Chinese treaty (2001) has framed about 40 collaborative projects, including:

• Since 2003, joint Russo-Chinese technoparks in the Chinese cities of Harbin, Changchun and Yantai, among others, with plans to manufacture military and civil aircraft, space vehicles, gas turbines, etc., and to produce Russian technologies on a grand scale.

• In 2014, the State University of Moscow, Russian Venture Company and Chineseconstruction company Chzhoda signed un agreement to develop technologies for smart homes and intelligent cities.

What are smart cities?

They use information technology to improve

public services.

UNESCO Science Report (2015)

Thank you

Susan Schneegans

Editor-in-Chief, UNESCO Science Report

[email protected]