Building science technology and innovation capacity for development
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Building science technology and innovation capacity for development

Building Science, Technology, and InnovationCapacity for Development

Alfred Watkins

S&T Program Coordinator

HDNED

Presentation to STI Thematic Group

October 18, 2005


Plan of presentation

Plan of Presentation

  • S&T Capacity Building: The International Agenda

  • Why Is S&T Capacity Building Important?

  • What Do We Mean by S&T Capacity?

  • How Do Countries Build S&T Capacity? / What Has the Bank Done to Help?

  • The Way Forward: Future Agenda


S t capacity building the international agenda

S&T Capacity Building: The International Agenda


Convergence of views

Convergence of Views

  • UN MDG Taskforce

  • Blair Commission

  • Inter-Academy Council

  • Many Government leaders (Mauritius, Rwanda, Tanzania, Mozambique, Kazakhstan, Madagascar, Vietnam)

    all agree that S&T capacity building is essential for growth and poverty reduction and that the World Bank must do more, and do it more effectively, to support indigenous S&T capacity building efforts


Building science technology and innovation capacity for development

Science and technology, including ICT, are vital for

the achievement of the development goals We

therefore commit to:Assist developing countries in

their efforts to promote and develop national strategies

for human resources and science and technology,

which are primary drivers of national capacity building

for development

Draft Communique from UN Summit, September 14, 2005


Building science technology and innovation capacity for development

The World Bank has only had modest activities in

promoting technological innovation in development.

The first step would be for the World Bank to integrate

technological considerations more fully into

their operations.

Blair Commission Report


World bank perspective

World Bank Perspective

  • S&T Vision Paper presented to Board

  • Wolfensohn

  • Wolfowitz

    also agree with this assessment of the importance of S&T capacity building


Building science technology and innovation capacity for development

First of all, I think that sense of assuming responsibility

[by developing country governments] is really critical.

We often talk about building institutions or building

capacity. And my feeling is that sort of suggests you

can come in like an outside contractor and bring

some bricks and mortar and you construct capacity.

It doesn't work that way. You grow it. Its got to be

indigenous. It's got to have indigenous roots.

You can fertilize it. You can water it. You can rip

the weeds out, which I think is part of fighting

corruption. Or you can help people do it. But

they need to do it themselves.

Paul Wolfowitz on capacity building at his first Town Hall Meeting


Why is s t capacity building important

Why Is S&T Capacity Building Important?


S t seems to be the answer but what are the questions

S&T Seems to be the Answer,But What are the Questions?

  • Why is S&T important, even for the poorest countries?

  • How can S&T help to achieve the MDGs?

  • How can S&T capacity help to increase wealth, improve productivity and alleviate poverty?

  • What do we mean by S&T capacity building?

  • What is the role of the World Bank in supporting this capacity building agenda?


Why is s t important even or especially for poorest countries

Why is S&T important, even (or especially) for poorest countries?


Critical lessons

Critical Lessons

  • Investing in S&T capacity is not a luxury for the rich; it is an absolute necessity for poor countries that wish to become richer there is no choice

  • The time to start investing and building capacity is when you are poor

  • Countries at different stages of development, and employing different learning strategies, need to invest in different aspects of S&T capacity plugging in, catching up, innovating: different tasks and challenges for different stages of development


There is no choice the world is moving fast with or without you

There is No Choice: The world is moving fastwith or without you!

  • Increasing globalization: reduction of transportation & communication costs, increasing global information, increasingly mobile FDI.

  • Rapid pace of technological change and innovation:Half life of technology is getting shorter. Keep up or fall behind these are the only options

  • Increasing competition: driven by trade liberalization and increasingly larger players (e.g., China, Korea, India) plus laggards that want to catch up Vietnam, Mozambique, Rwanda

  • Networking and disintegration of production


Typical value chain

Typical Value Chain

Expertise

Significant outsourcing

R&D/Technology Manufacturing/Operations Sales & Marketing

14


Building science technology and innovation capacity for development

Differentiation

Global Brand

Innovation Advantage Slope

Differentiated

Profit Margin

Commodity


Building science technology and innovation capacity for development

Multi Nationals

First tier

Second tier

Third tier

Nature of relationship

Close family

Partner

Inter dependency

High trust

Relationship based

Nature of relationship

Cousin

Provider

Dependency

Medium trust

Specification based

Nature of relationship

No ties

Servant

dominated

No trust

Price based


High tech is not the only or best route to prosperity and competitiveness

High Tech Is Not the Only (or Best) Route to Prosperity and Competitiveness!!


What do we mean by s t capacity

What Do We Mean by S&T Capacity?

Parable of the blind men and the elephant. Every perspective is correct,but each provides only a partial view of reality


Five dimensions of s t capacity

Five Dimensions of S&T Capacity


Capacity building occurs at different levels of the economy

Capacity Building Occurs at Different Levels of the Economy

  • National policy institutions

  • S&T organizations -- -- universities, public and private R&D institutes/technology diffusion institutions

  • Enterprises both users of knowledge and creators of new knowledge

  • Labor Force


S t capacity building strategic policy options

S&T Capacity Building: Strategic Policy Options

  • Creation of new knowledge vs. import adaptation, diffusion, and adoption of knowledge created elsewhere

  • Enhance supply of knowledge vs. stimulate demand for knowledge

  • Hardware vs. software

  • Horizontal policies vs. vertical policies


S t capacity building

S&T Capacity Building


S t capacity building1

S&T Capacity Building

  • Linkages

  • Technology consortia

  • Mobility schemes

  • Matching grants


How do countries build s t capacity what has the bank done to help

How Do Countries Build S&T Capacity? / What Has the Bank Done to Help?


Linear s t capacity building model

Linear S&T Capacity Building Model

Basic

Science

Applied

Research

Development

Production

Marketing


Building science technology and innovation capacity for development

East Asia Capacity Building Model: A Different Approach

Creation

Improvement

Assimilation

Acquisition

S&T & R&D

Stages

Imitation

internalization

generating

Developing

Country

Newly-Industrializing

Country

Advanced

Country

Development

Stages


Growth of science and technology community in korea

Growth of Science and Technology Community in Korea

1963

1970

1980

1990

2002

4

33

428

4,676

14,433

GERD (US$, Million)

97 : 3

71 : 29

64 : 36

19 : 81

26 : 74

Govt vs. Private

0.25*

0.38*

0.77*

1.87

2.53

R&D / GDP

5,628

18,434

70,503

189,888

(FTE: 141, 917)

Researcher (Persons)

Source: Ministry of Science and Technology

* R&D / GNP


Overseas patents of korea

Overseas Patents of Korea

U.S.A. Patent Registration: No Growth in Applications until the Late Development Stage

1990

1993

1995

1998

1999

2000

2001

224

765

1,166

3,267

3,568

3,331

3,546

Number

17

11

8

6

7

8

8

Rank


Levels of innovation

Frontier Innovation

Technology

Improvement

and Monitoring

Significant Adaptation

Basic Production use technology

Levels of Innovation


Building science technology and innovation capacity for development

R&D

Science

Development

and Creation

Design &

Engineering

Technician & Craft

Skills & Capabilities

Science

Use, Operation

and Maintenance

Basic Operators

Skills and Capabilities

(These all need human capacity.)


Enterprise demand for technology

Enterprise Demand for Technology

  • Category 1: Demand for existing specifications, equipment, and know-how new machines

  • Category 2: Demand for new designs and systems, generated by engineering and other services, but based on existing technology new processes

  • Category 3: R&D to create new technology new inventions


Nine dimensions of firm technological capability

Nine dimensions of Firm Technological Capability

Source: Korea: How Firms Use Knowledge, Part A Firm Level Innovation in the Korean Economy, World Bank processed, 2002


Building science technology and innovation capacity for development

Groups of Firms According to Technological Capability


Building science technology and innovation capacity for development

  • Everyone can get the same technology. But that doesnt mean they can make an advanced product

    Samsungs Perspective, Business Week, June 16, 2003


Emerging issue

Emerging Issue

Need to take an inventory of skill requirements, technology demand, and enterprise capacity and improve all dimensions.

Bank needs to take the lead encourage countries to think systematically about these issues


Lessons learned from world bank operations 1

Lessons Learned From World Bank Operations (1)

  • Sustained long-term engagement is required to build both S&T capacity and industrial development capability

  • Specific investment loans rather than budget support -- hands-on rather than arms-length

  • Focused (vertical) interventions in specific sectors to help local firms build capacity to absorb and adapt existing technology

  • Many projects (e.g. Korean Institute of Electronics Technology) supported institution-building and strengthened institutes that transferred existing knowledge into local economy.


Lessons learned from world bank operations 2

Lessons Learned From World Bank Operations (2)

  • Comparative advantage is created not given -- e.g., salmon in Chile, electronics in Korea and Taiwan.

  • World Bank projects and interventions were grounded in each country's own S&T and industrial strategy. PW on capacity building

  • Explicit learning strategies (learning-by-doing, learning-by-interacting) in targeted areas are as important as general regulatory framework

  • Developing human capital is an essential pre-requisite for S&T capacity building. Nothing else is possible without human capital


Conclusions and challenges 1

Conclusions and Challenges (1)

  • Ability to produce new knowledge (R&D) is important, but ability to absorb and utilize existing knowledge may be even more important at early stages of development National Systems of Economic Learning and Technology Diffusion. This aspect of capacity building needs to move higher onto the World Bank and international development agenda

  • Absorptive capacity of enterprises and labor force must be developed spillovers (from FDI) arent automatic --e.g., enclaves

  • S&T capacity building policies should be devised within the context of an overall industrial development strategy not separately


Conclusions and challenges 2

Conclusions and Challenges (2)

  • Policy options shouldnt be limited by todays relative factor prices. Singapore 1965 vs. Singapore today.

  • Getting basics right rule of law, business climate, etc. -- is absolutely necessary but not sufficient

  • Goal of universal primary education should be complemented by expanded access to vocational, secondary and tertiary education

  • Building one excellent institution vs. competition among existing institutions


Conclusions and challenges 3

Conclusions and Challenges (3)

  • A critical challenge is increasing the effective demand for R&D by developing enterprise capacity to innovate and utilize knowledge

  • Tension between expanding the supply of skilled workers and the private sectors demand for skilled workers chicken and egg / brain drain vs. skill shortage, Vietnam (supply with limited demand) vs. Thailand or Malaysia (demand with limited supply)

  • How firms learn and from whom is a key issue -- also how they innovate. Put this in a slide. competitors, suppliers, PRIs, universities, etc.

  • Freer trade and attracting FDI is necessary but not sufficient spillovers wont occur without accompanying capacity building efforts


Conclusions and challenges 4

Conclusions and Challenges (4)

  • Increased spending on education and/or R&D will not improve economic performance if there are poor linkages between research institutes and education sector on the one hand and enterprise sector on the other Russia, Latvia, Vietnam, Bangladesh, etc. Linkages, quality and relevance are critical

  • Need for focus and realism dont spread resources too thin; develop a few niche areas; todays comparative advantage vs. tomorrows needs; existing strengths vs. new competencies comparative advantage must be created

  • Long term vs. short term need for political commitment since it takes time (> ten years) for capacity building to affect economic development and poverty


The way forward future agenda

The Way Forward: Future Agenda


Trends in world bank lending for s t capacity building

Trends in World Bank Lending for S&T Capacity Building

  • Between 1980 and 2004, $8.6 billion to S&T activities; $343 million average annual lending for S&T

  • 9% of projects over the past 25 years provided some support for S&T

    • But only 2% of projects principally supported S&T

    • Annual average = 26 S&T projects: 5 major, 21 minor

  • The Agriculture-Rural Development Sector provided more support for S&T than all other sectors combined

  • 42 of 75 major non-ag S&T loans went to 7 countries (Korea, China, Brazil, India, Indonesia, Chile, Mexico)


Building science technology and innovation capacity for development

Capacity building is important and the Bank is being asked to do more, but the Bank has recently been doing less


Building science technology and innovation capacity for development

Capacity building is important and the Bank is being asked to do more, but the Bank has recently been doing less (2)


Issues for the world bank

Issues for the World Bank

  • No operational home for STI.

  • Sectoral silos, e.g., Kazakhstan, Bangladesh, Vietnam

  • No unified framework to incorporate S&T into operations in all sectors

  • Most PRSPs and CASs dont mention S&T; those that do give it cursory attention; Bank-IMF instructions for PRSPs do not refer to S&T

  • Many Country Directors and country economists are unsure how to respond to requests for assistance Is it in the CAS; is it a priority? Is it relevant? Does it divert resources from poverty reduction?

  • Limited country budgets especially in smaller countries. Leads to large omnibus projects, especially for budget support, while experience shows the need for a larger number of smaller projects.

  • Critical mass in individual countries vs. regional projects e.g., AIST

  • Staff are unfamiliar with S&T issues; limited delivery capacity


Next steps for world bank

Next Steps for World Bank

  • World Bank leadership in global S&T capacity building

  • Work cross-sectorally

  • Incorporate S&T into CSPs, PRSPs, and CEMs e.g., Mozambique, Vietnam (CG)

  • Integrate S&T capacity building into high priority sectors, such as health, agriculture, water, PSD, tertiary education

  • Work at the (international) regional level

  • Forge strong strategic alliances with external partners


Initial work program

Initial Work Program

  • Organizational

  • Operational

  • Analytical


Organizational

Organizational

  • S&T Program Coordinator position established

  • Internal Advisory Group

  • Inter-sectoral thematic group

    • BBLs: AIST, Capacity Building, Learning Strategies, IK, Reverse Pharmacology, pro-poor innovations

  • Web site an open source learning tool

  • Establish closer working relationships with sectoral anchor units and regions where existing relationships are still personal and ad hoc

  • Forge closer alliances with external partners

  • Cross support to help TTLs integrate S&T into CASs, PRSPs, environment and health projects, PSD projects, etc.


Operational support

Operational Support

  • Operational (projects, ESW, TA) activities in Kazakhstan, Latvia, Viet Nam, Mauritius, Bangladesh, Malaysia, Mozambique, Rwanda

  • Capacity building workshops for TTLs/managers and government officials?


Analytical

Analytical

  • Typology of countries: (i) based on learning strategies, (ii) template for assessing S&T capacity and (iii) menu of options suitable for each group available for informal internal discussion with thematic group

  • Review of recent trends in World Bank lending for S&T -- completed

  • Review of World Bank lending for S&T capacity building in China, India, Korea, Mexico and Brazil ongoing

  • Global Forum on S&T Capacity Building organized around Spring meetings?

    • Audience donors, NGOs, government officials, Bank

  • Regional (or sectoral) S&T seminars?

  • Review of DFID S&T strategy

  • Report on pro-poor S&T initiatives?

  • Higher Education/S&T/ICT strategy for Africa ?


Parable of the lion and the zebra

Parable of the Lion and the Zebra

  • Lion only has to run faster than the slowest zebra to survive and prosper

  • Zebra has to run faster than the fastest lion!!

    To accelerate growth, achieve the MDGs, and reduce poverty, our clients have to build their capacity to run much faster.


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