Universities, Competitiveness and the National Innovation System Alfred Watkins S&T Program...

Universities, Competitiveness and Universities, Competitiveness and the National Innovation Systemthe National Innovation System

Alfred WatkinsAlfred WatkinsS&T Program CoordinatorS&T Program Coordinator

Education DepartmentEducation DepartmentHuman Development NetworkHuman Development Network

Regional Higher Education ConferenceStrategic Choices for Higher Education Reform

Kuala Lumpur, MalaysiaDecember 3-5, 2007

2

Plan of Presentation

1. Innovation and Competitiveness – The role of Higher Education (and basic, secondary, vocational, technical and life-long learning)

2. Benchmarking Exercise

3

Universities, Competitiveness and the National Innovation System

• National goals are to accelerate growth, reduce poverty, achieve the MDGs, and improve the competitiveness of local industry, thereby creating higher wage, higher-skilled jobs that generate rising standards of living for all

• In today’s global economy, tertiary education and innovation are indispensable tools for achieving those goals

4

Innovation, Competitiveness Innovation, Competitiveness and and

Higher EducationHigher Education

5

Growth and Poverty Reduction are the Objectives;Growth and Poverty Reduction are the Objectives;Education, Innovation, and PSD Education, Innovation, and PSD

Are Means to Achieve These ObjectivesAre Means to Achieve These Objectives

HigherEducation

PrivateSector

DevelopmentInnovation

Growth and Poverty

Reduction

6

The Pieces Must Fit TogetherThe Pieces Must Fit Together

PSD

Innovation

Higher Education

7

Why Worry About All This?

0

2

4

6

8

10

12

14

1960 1965 1970 1975 1980 1985 1990 1995 2000

K n o w le d g e m a k e s th e D if fe re n c e b e tw e e n P o v e r ty a n d W e a lth . . .

R e p . o f K o r e a

G h a n a

T h o u s a n d s o f c o n s t a n t 1 9 9 5 U S d o lla r s

D if fe r e n c e a t t r ib u t e d t o k n o w le d g e

D if fe r e n c e d u e to p h y s ic a l a n d h u m a n c a p it a l

8

WHAT KIND OF WHAT KIND OF KNOWLEDGE?KNOWLEDGE?

WHERE DO YOU GET IT?WHERE DO YOU GET IT?

HOW DO YOU FIND IT?HOW DO YOU FIND IT?

9

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

10

Capacity Building Occurs at Different Levels of the Economy

• National policy organizations

• S&T organizations -- -- universities, R&D institutes

• Enterprises – both users of knowledge and creators of new knowledge

• Labor Force

11

National Technological LearningNational Technological LearningS&T learning

capacityS&T learning opportunities

Knowledge generation

capacity

Capital imports

Inward FDI

S&T co-operation

+Knowledge absorption capacity

Education

R&D

Licensing

Diaspora and Expats

Internet Export

Customers

12

Groups of Firms According to Technological Capability

High

Low

Awareness of the need to change Low High

Type 1 Firms ‘ Don ’ t know that they don ’ t know ’

Type 2 Firms ‘ Know they don ’ t know,

but don ’ t know what ’

Type 3 Firms ‘ Know what, but not

always where and how ’

Type 4 Firms High capability and absorptive capacity

Awareness of What and How to Change

13

Getting the Balance Right is Important!

14

BENCHMARKINGBENCHMARKING

(CURRENT BENCHMARK (CURRENT BENCHMARK RANKING RANKING

IS NOT DESTINY!!)IS NOT DESTINY!!)

15

Benchmarked Countries• Bangladesh• Cambodia • Fiji • India• Indonesia• Malaysia • Mongolia • Nepal• Pakistan • Philippines • Sri Lanka • Timor-Leste • Thailand and • Vietnam

16

Rankings on indices differ significantlyUNCTAD

(117 countries)

UNIDO(87 countries)

Competitiveness (131 countries)

Bangladesh 106 56 107

Cambodia - - 110

India 83 40 48

Indonesia 87 38 54

Korea 19 10 11

Malaysia 60 15 21

Mongolia 69 - 101

Nepal - 69 114

Pakistan 100 49 92

Philippines 64 25 71

Sri Lanka 79 62 79

Singapore 26 1 7

Thailand 54 23 28

Timor-Leste - - 127

Vietnam 82 - 68

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Different Benchmarking Indices Measure Different Dimensions of Innovation

Capacity and Competitiveness• UNCTAD’s Innovation Capability Index—underlying technological capacity with a focus on inputs to innovation (education and R&D)

• UNIDO’s Competitive Industrial Performance Index—revealed technological capacity in industry with a focus on manufacturing competitiveness

• WEF’s Global Competitive Index—to see how institutions, innovation, education, etc. contribute to competitiveness

• World Bank’s Knowledge Economy Index (KEI)—knowledge economy readiness with focus on innovation and education

World Bank’s Doing Business Indicators—how conducive the business environment is for enterprises

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Global Competitiveness Rankings– Out of 131 Countries

Source: The Global Competitiveness Report 2007

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Knowledge Economy IndexKnowledge Economy Index

East Asia and P acific

Korea

Malaysia

ThailandP hilippines

Sri LankaMongolia

IndonesiaVietnam

South Asia

P akistan

Nepal

Bangladesh

Lao P DR

India

0

1

2

3

4

5

6

7

8

9

0 1 2 3 4 5 6 7 8 9

1995

Mos

t Rec

ent

Source: Knowledge Economy Index 2007, World Bank

20

0

5

10Econ. Incentive Regime

Innovation

Education

Information Infrastructure

most recent 1995

Knowledge Economy Index

EDUCATION:- Adult literacy rate- Secondary Enrollment- Tertiary Enrollment

INFORMATION INFR.:-Tel. Lines per 1000 people- Computers per 1000 people- Internet hosts per 10,000 people

ECON. INCENTIVE REGIME:-Tariff & Non-tariff barriers-Property Rights-Regulation

INNOVATION:-Researchers in R&D- Manuf. Trade as % of GDP- Scient. & Tech. Pub. per million people

Source: WBI KAM

21

0

5

10GDP grow th (%)

Human Development Index

Tariff & nontariff barriers

Property Rights

Regulation

Researchers in R&D

Manuf. Trade as % of GDP

Scientif ic and technical journal articles permillion people

Adult literacy rate (% age 15 and above)

Secondary Enrollment

Tertiary enrollment

Telephone per 1000 (mainlines + mobile)

Computers per 1,000 persons

Internet hosts per 10,000 people

1995 Most Recent Data

Basic KE Scorecard

LATVIASource: WBI KAM

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Human Capital for Knowledge EconomyKorea

0

5

10Adult Literacy Rate

Gross TertiaryEnrollment

Gross SecondaryEnrollment

P rof. and Tech.Workers as % of

Labor ForceQuality of Science

and MathEducation

Quality ofManagement

Schools

Brain Drain

Extent of StaffTraining

Malaysia

0

5






and MathEducation


Schools

Brain Drain


Vietnam

0

5

10

Adult LiteracyRate





and MathEducation


Schools

Brain Drain


Nepal

0

5






and MathEducation


Schools

Brain Drain


23

Human Capital for Knowledge Economy-IIPakistan

0

5

10

Adult LiteracyRate





and MathEducation


Schools

Brain Drain


Philippines

0

5





Labor Force

Quality of Scienceand Math

Education


Schools

Brain Drain


Indonesia

0

5






and MathEducation


Schools

Brain Drain


Thailand

0

5





Labor Force

Quality of Scienceand Math

Education


Schools

Brain Drain


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UNCTAD –Innovation Capability Index

Human capital

Index

Technological Activity index

Literacy rate

as % of population X 1

R&D personnel

per million population

Secondary school enrolment

as % of age group X 2

US patents granted


Tertiary enrolment

as % of age group X 3

Scientific publications


25Source: UNCTAD World Investment Report 2005; Rankings out of 117 countries

UNCTAD –Innovation Capability Index

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Patents, Journals, Researchers in R&D

0500

1,0001,5002,0002,5003,0003,5004,0004,500

Patents Granted by USPTO, avg 2001-05 Technical J ournal Articles/Mil. people, 2003

Researchers in R&D / Mil. People, 2004

0

0.5

1

1.5

2

2.5

3

Latest 1999

Investment in R&D (% of GDP)

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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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UNIDO - Competitive Industrial Performance Index

1. Manufacturing value added (MVA)

per capita

2. Manufactured exports per capita

3. Share of medium and high-tech activities

in MVA

4. Share of medium and high-tech products

in manufactured exports

30Source: UNIDO Industrial Development Report 2004; Rankings out of 93 countries

UNIDO - Competitive Industrial Performance Index

31

High Tech Not Automatically Equal to 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

32

GDP per capita in 2006 (constant 2000 US$)

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

Nepal

Timor

-Les

te

Cambo

dia

Bangla

desh

Mon

golia

Vietn

am

Pakist

anIn

dia

Indo

nesia

Sri La

nka

Philip

pines Fiji

Thailand

Mala

ysia

Korea

33

Export Structure by Technology CategoryProducing “what” vs. producing “how”

Finland

Hi Tech22%

Medium Tech 30% Low Tech

10%

Resource Based 38%

34

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

35

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

36

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

39

Ease of Doing Business Rankings

Source: Doing Business Report, 2007

40

Doing Business-Top 30 Performers in 2007

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Regional trends in rankingsAverage rank, ease of doing business

22

76 77

87

96

107

136

High income: OECD Europe & Central Asia East Asia & Pacific Latin America & Caribbean Middle East & North Africa South Asia Sub-Saharan Africa

High income OECD

Latin America &

Caribbean

East Asia & Pacific

MiddleEast &

North Africa

Eastern Europe

& Central Asia

South Asia Sub Saharan Africa

42

Lessons to Learn from Neighbors: Best and Worst Performers on Ten Indicators of Doing Business

IndicatorHighest Ranking Performer in the Group

Lowest RankingPerformer in the Group

Starting a Business Sri Lanka (Rank 44) Cambodia (Rank 159)

Dealing with license Vietnam (Rank 25) Cambodia (Rank 159)

Employing Workers Malaysia (Rank 38) Nepal (Rank 150)

Registering Property Mongolia (Rank 16) Bangladesh (Rank 167)

Getting Credit Malaysia (Rank 3) Cambodia (174)

Protecting Investors Malaysia (Rank 4) Vietnam (Rank 170)

Paying Taxes Cambodia (Rank 16) India (Rank 158)

Trading Across Border Malaysia (Rank 46) Mongolia (Rank 162)

Enforcing Contracts Mongolia (Rank 41) Bangladesh (Rank 174)

Closing a Business Pakistan (Rank 46) Indonesia (Rank 136)

Excludes Korea and Singapore

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“Crystals of S&T Learning” -graphical/statistical illustrations

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“Crystals of S&T Learning” -graphical/statistical illustrations

• The most accessible, passive opportunities for learning from foreign sources created by capital goods imports and FDI (indicators 9, 10)

• Human capital accumulated / human capability for S&T learning (see indicators 11, 12, 1)

• The more demanding opportunities for learning from domestic and foreign sources through domestic R&D (indicators 2, 3)

• The most demanding opportunities for learning through knowledge markets and international S&T cooperation (indicators 4, 5, 6)

• Success in using S&T knowledge for improving technological structures of a country’s MVA and manufactured exports (indicators 7, 8).

45

‘Crystals’ can ‘grow’, but only

in the right (learning) environment

Fast Learning Sweden

0

0.5

1

12 Average years of schoolingof adults

1 Brain retention

2 Researchers in R&D permillion population

3 Total (public and private)expenditure on R&D as % of

GDP

4 Royalty and license feespayments per capita

5 Receipts of royalties andlicence fees per capita

6 International outsourcing ofR&D (domestic ownership of

foreign-made inventions as % ofall inventions owned by

7 Share of high- and medium-tech industries in MVA

8 Share of high- and medium-tech industries in exports

9 Imports of machinery andtransport equipment as % of

total imports

10 Inward FDI as % of grosscapital formation

11 Internet users per 1.000people

Slow Learning Bangladesh

0

0.5

1

12 Average years of schooling ofadults

1 Brain retention

2 Reasearchers in R&D per millionpopulation

3 Total (public and private)expenditure on R&D as % of GDP

4 Royalty and license fees paymentsper capita

5 Receipts of royalties and licencefees per capita

6 International outsourcing of R&D(domestic ownership of foreign-made

inventions as % of all inventionsowned by residents)

7 Share of high- and medium-techindustries in MVA

8 Share of high- and medium-techindustries in exports

9 Imports of machinery and transportequipment as % of total imports

10 Inward FDI as % of gross capitalformation

11 Internet users per 1.000 people

46

6 models of

national technological learning:

• Traditionalist slow learning,

• Passive FDI-dependent,

• Active FDI-dependent,

• Autonomous,

• Creative-isolated,

• Creative-cooperative.

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Passive FDI-dependent learning

• passively relying on FDI to bring in new technologies,

• low S&T learning capacity,

• no or weak government technological strategy,

• limited opportunities for technological learning,

• high risk of losing in economic competition with poorer, lower-wage countries.

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Active FDI-dependent learning

• relatively high S&T learning capacity,

• active government strategy aimed at building national human capital and accelerating national technological learning from FDI,

• active targeting of the most beneficial FDI,

• much wider opportunities for technological learning from FDI,

• lower risk of losing in economic competition with lower-wage but lower-skill countries.

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Crystals of sample

Passive and Active FDI-dependent learners

50

‘Crystals’ assessment –

Malaysia

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THANK YOU

Alfred Watkins

Science and Technology Program Coordinator

[email protected]

www.worldbank.org/stiglobalforum

mailto:[email protected]

http://www.worldbank.org/stiglobalforum

Universities, Competitiveness and the National Innovation System Alfred Watkins S&T Program...

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