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Geneva 2013

National Voluntary Presentation (NVP). ”Science, Technology and Innovation, and the potential of culture for promoting sustainable development and achieving the Millennium Development Goals”. Annual Ministerial Review United N a tions Economic and Social Council - ECOSOC. Geneva 2013.

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Geneva 2013

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  1. National Voluntary Presentation (NVP) ”Science, Technology and Innovation, and the potential of culture for promoting sustainable development and achieving the Millennium Development Goals” Annual Ministerial Review United Nations Economic and Social Council - ECOSOC Geneva 2013 Gladys Triveño Chan Jan Minister of Production of Peru

  2. CONTENTS • Economic context of Peru – Relationship between poverty, industry and innovation. • Context of the Science, Technology and Innovation (STI) in Peru • Instruments available for the development of STI • The future

  3. CONTENTS • Economic context of Peru – Relationship between poverty, industry and innovation. • Context of the Science, Technology and Innovation (STI) in Peru • Instruments available for the development of STI • The future

  4. ECONOMIC CONTEXT Between 2000 and 2012, the GDP grew at an average annual rate of 5.8%, representing an increase of GDP per capita of 70.1%. This growth was driven by private investment, primarily in the mining sector, as well as by the dynamism of the export sector in a context of trade liberalization and well handled macroeconomics. These elements strengthened the domestic markets, which was reflected in a greater number of shopping centers and residential projects. EVOLUTION OF GPD 2000-2012 (US$) Source: BCRP

  5. ECONOMIC CONTEXT • This growth allowed the significant reduction of total poverty from 58.7% in 2004 to 25.8% in 2012. EVOLUTION OF TOTAL POVERTY 2004-2012 (% OF THE TOTAL POPULATION) • Source: INEI- Encuesta Nacional de Hogares (ENAHO) 2004-2012

  6. ECONOMIC CONTEXT Despite this growth, the share of industry as part of GDP has not grown at the same rate, having stalled its share between 13% and 14% in recent years. This is an industry which is highly concentrated in consumer goods, with low levels of sophistication. INDUSTRY SHARE AS PART OF GDP Fuente: BCRP, INEI Source: BCRP

  7. RELATIONSHIP BETWEEN POVERTY AND INDUSTRY • Less industrialized countries are those with higher levels of poverty, and vice versa. 1/ UNIDO (2010) 2/ World Bank (2009)

  8. RELATIONSHIP BETWEEN POVERTY AND INDUSTRY • Less industrialized regions of Peru are also the poorest: Apurímac, Huancavelica, Cajamarca, Huánuco, Ayacucho. POVERTY SHARE AND INDUSTRY EMPLOYMENT IN PERUVIAN REGIONS IndustryEmployment Share (%) Poverty Share (%) • Source: BCRP, INEI- Encuesta Nacional de Hogares (ENAHO) 2004-2012

  9. CONTENTS • Economic context of Peru – Relationship between poverty, industry and innovation. • Context of the Science, Technology and Innovation (STI) in Peru • Instruments available for the development of STI • The future

  10. RELATIONSHIP BETWEEN INDUSTRY AND INNOVATION Intensityof R&D Expenditure(%) Fuente: BID 2010 y Encuesta Nacional de Innovación en la Industria Manufacturera 2012 • Source: IADB 2010, Encuesta Nacional de Innovación en la Industria Manufacturera In Peru, the industry invests only 0.1% of its sales in R & D, which is reflected in a low number of patents filed by residents: 116 invention patents and 54 utility models in 2012. In Brazil, more than 4,000 patent applications are filed each year, while in countries like Japan this number is over the 300,000 applications. From global experience, it is well known that a sustainable industrialization process has one of its basis in technological innovation.

  11. GLOBAL COMPETITIVENESS INDEX 2012-2013 While the "global competitiveness index" ranks Peru at position 61 out of 144 countries (upper half), in the innovation pillar, the country is ranked at 117, i.e. the lowest quintile. Source: Global CompetitivenessIndexReport 2012-2013

  12. STI INDICATORS The low level of innovation is evident from the following indicators: • Investment in R & D is very poor: Peru invests only 0.14% of its GDP in R&D, while the Latin American average is 0.5% and the OECD countries average is 2.2%. • Main Investment in R & D is not carried out by the private sector. Investment in R&D is carried out mainly by universities, the public sector and NGOs (> 70%) with a low degree of linkage to industry. In the rest of Latin America, this investment is mainly performed by the private sector (55% on average). • The trade balance of knowledge is clearly insufficient. While exports based on primary products and natural resources in Peru have grown to 80% of total exports in the last 20 years, in countries like Colombia and New Zealand - also abundant in natural resources- this figure went from 82% and 86%, to 65% and 75%, respectively, with exports increasing in technological content.

  13. STI INDICATORS • University-industry collaboration is low In Peru, only 11% of manufacturing firms, were associated with universities in the 2009-2011 period to carry out innovation activities. Only 2.2% were related to public research institutes. • The personnel in industry is not necessarily suitable for innovation Only 1.5% of the staff have graduate studies, mainly in management functions, but not in innovation-related functions. Only 18% are skilled technicians, and a majority of 60, are workers with only secondary education • Percentge of patent applications filed by residents is extremely low There is no culture of protection and appropriation of innovation. Patent applications filed by residents per 100,000 inhabitants is 0.3 on average, while, for example, in Brazil this indicator is bordering 3 and in the U.S. is over 50 patent applications.

  14. STI IN PERU However, there are some improvements • Patent applications 1/ filed by residents 1/ (2000-2012) • Main indexed scientific pulbications (2000-2010) • Source: RICYT • Source: INDECOPI • 1/ Includes invention patents and utility models

  15. STI IN PERU • Impact of innovation activities in the firm (2009-2011) • Percentages of industry firms that carried out innovation activities (2009-2011) Toimproveproductsquality Tomaintainmarket share Toincreaseproductivity Toimprovemarket share Totakeadvantages of personnelcapacity Toimproveenviromental, healthor safety conditions To reduce labourcosts Toaccomplishnationalregulationsorstandards Toincreaseflexibility of production To reduce the input comsumption Toaccess new marketsabroad Toincreaseproductcatalogues To reduce energycomsuption Toaccomplishinternationalregulationsorstarndards Others Firms (%) Carriedoutinnovationactivities Didnotcarryoutinnovationactivities • Source: PRODUCE, INEI, BID- Encuesta de Innovación en la Industria Manufacturera 2012

  16. CONTENTS • Economic context of Peru – Relationship between poverty, industry and innovation. • Context of the Science, Technology and Innovation (STI) in Peru • Instruments available for the development of STI • The future

  17. RELEVANT POLICIES Other relevant policies to support STI policies: • Against malnutrition: social programs for reduction of malnutrition, investing in new generations with better opportunities. • Basic Education: New Public Educator Act improves quality primary and secondary education. • Higher Education: Scholarship Program 18, works as a catalyst for greater opportunities for youth. • Incorporation of researchers into the public career:Creation of the "scientists’" family as a category of officials in the public career within the Civil Service Law. • Repatriation of researchers:Repatriation of professional researchers living abroad with the aim of hiring them to work in Public Research Institutes.

  18. PLANS AND POLICIES • National Agreement – State Policy N° 20- (2002) • Includes STI axis: • National Competitiveness Agenda (2012-2013) • National Plan of Science, Technology and Innovation 2006-2021 • They propose: • a) To increase the state support for STI through increased budget, tax incentives and other forms of financing. • b) Human capital formation and increasing number of researchers through STI education, graduate fellowships abroad, and training at technician level. • c) Technology transfer, support for innovative projects, and dissemination of intellectual property. • d) Meeting the social and economic demands at national and regional levels. Prioritization of areas of comparative advantage and leadership. Production chain. Building technology infrastructure and ICT development. • e) Environmental Sustainability. • National Plan of Inclusive Industrial Development • Strategic Plan of the Ministry of Production (2012-2016)

  19. FUNDING Framework Fund for Innovation, Science and Technology (FOMITEC) of the Ministry of Production and National Council of Science, Technology and Innovation (CONCYTEC): US$ 115 Million (2013 -onwards) National Fund for Science, Technology and Innovation (FONDECYT) of the National Council of Science, Technology and Innovation (CONCYTEC): US$ 38 million (2013 -onwards) The State has made available STI funding to firms and universities, doubling in 2013 the funds available in the last decade. Science and Technology Program Peru-IADB (FINCYT II) - Presidency of the Council of Ministers: US$ 100 million (2013- onwards) • Available Funds Research and Development Fund for Competitiveness (FIDECOM) - Ministry of Production: US$ 77 million (2009 - onwards) Competitiveness and Innovation Program for Peruvian Agriculture (INCAGRO) - Ministry of Agriculture: US$ 60 million (2001-2009) US$ 426 MILLONES Science and Technology Program Peru-IADB (FINCYT I) - Presidency of the Council of Ministers: US$ 36 million (2007-2012) • Time

  20. NORMATIVE INSTRUMENTS Legal and institutional framework for the promotion of STI activities and consolidation of a national STI system: • Legislative Decree No. 1124, amending the Law on Income Tax, and allowing the deduction of expenditure on R&D (2012) • Law No. 29987,"Act declaring of national interest the promotion of science, innovation and technology through public-private partnerships" (2012) • Law No. 30018,"Law on the Promotion of the Use of Patent Information to Promote the Transfer of Innovation and Technology" (2013) • Supreme Decree No. 067-2012-PCM, which ascribes the National Council for Science, Technology and Technological Innovation (CONCYTEC) to the Presidency of the Council of Ministers - PCM (2012) • Ministerial Resolution No. 343-2012-PRODUCE, Rules of Organization and Functions of the Ministry of Production, whereby the Department of Innovation, Technology Transfer and Business Services is created and assigned to the Vice Ministry of MSE and Industry (2012) • Technical Standards for R&D Management: Technological Surveillance Systems (2012); Requirements Management R & D (2011); Requirements of an R + D (2009); Terminology of R & D (2009)

  21. ARTICULATION INSTRUMENTS Industrial Technological Innovation Committee-CINTECIN (Chaired by the National Confederation of Private Business-CONFIEP and assisted by the Ministry of Production) ARTICULATION National Program for Strengthening Innovation for Competitiveness (Chaired by CONCYTEC, and comprised more than 16 public and private institutions) • PUBLIC – PRIVATE Sinergy Business-ECI Scientific Meeting (Chaired by Academia) Working Group of the National Competitiveness Agenda 2012-2013 (Led by the Ministry of Economy and Finance, consists of more than 10 public and private institutions) Improved funding conditions for innovation projects when the firm is associated with a university or research institute. FIDECOM Instruments (PIPEA, PIPEI) and FINCYT instruments (PITEA, PITEI) • Triple Helix

  22. SUPPORT INSTRUMENTS Centers for Technological Innovation CITE • LORETO: • CITEfrutas tropicales • CITEforestal • SAN MARTIN: • CITE Cacao • They become a technology support tool for industrial development and the generation of added value. • CITE Act No. 27267 (2000) • Three public CITE: CITEvid, CITEccal, CITEmadera • 13 private CITE: Agrobusiness, logistics, software, design and apparel, textile-camels, food, forest, tropical fruits, cocoa. • PIURA: • CITE Agroindustrial • UCAYALI: • CITE Madera • LIMA: • CITE Madera • CITE Ccal • CITE Logística • CITE Software • CITE Confección • TACNA: • CITE Agroindustrial • ICA: • CITE Vid • AREQUIPA: • CITEconfecciones • CITEagrondustrial • CITEtextil camélidos • CITEagroalimentario

  23. SUPPORT INSTRUMENTS Reseach Public Institutes - IPI Natural Resource Exploration and Exploitation Industrial Research IMPARPE INGEMMENT • National Institute of Agrarian Innovation (INIA) • Peruvian Sea Institute (IMARPE) • Research Institute of the Amazonia of Peru (IIAP) • Peruvian Institute of Nuclear Energy (IPEN) • National Institute of Health (NIH) • National Institute for Research and Training in Telecommunications (INICTEL) • Geological, Mining and Metallurgical Institute (INGEMMET) • National Geographic Institute (IGN) • Geophysical Institute of Peru (IGP) • National Commission for Aerospace Research and Development (CONIDA) INIA ITP IIAP IGN CONIDA INICTEL INS IPEN IGP Infrastructure and Institutes for knowledge generation Security and Health

  24. SUPPORT INSTRUMENTS The Technological Institute for the Production- ITP • Created in 2012, it contributes to the increase of competitiveness of the productive sector through innovation promotion and technology transfer to firms. It incorporates 3 public CITE. • It has four specialized divisions that generate knowledge and technology. • It proposes innovation with added value approach for the industry. • Fisheries and aquaculture • Leather and footwear • VID/ Agroindustry • Wood

  25. SUPPORT INSTRUMENTS Instruments of theNational Plan for Inclusive Industrial Development Sustainibility

  26. SUPPORT INSTRUMENTS Instruments to be implemented by the National Plan for Inclusive Industrial Development Quality Institute It includes national services of metrology, acreditation and technical standars TO GUARANTY AN ADEQUATE TECHNOLOGICAL AND SCIENTIFIC SUPPORT INFRASTRUCTURE FOR THE DEVELOPMENTE OF STI AND OF AN INCLUSIVE INDUSTRY • New Network of Scientific and Techonological Parks • It includes the design and implementation of 50 Parks in PPP, within the implementation process of the National Plan of Inclusive Industrial Development • New Network of Technology Transfer Centers CETT • It includes the design and implementation of 50 CETTs in PPP, within the implementation process of the National Plan of Inclusive Industrial Development

  27. CONTENTS • Economic context of Peru – Relationship between poverty, industry and innovation. • Context of the Science, Technology and Innovation (STI) in Peru • Instruments available for the development of STI • The future

  28. FOR THE STI DEVELOPMENT Institutions / Sustainibility

  29. FOR THE INDUSTRIAL DEVELOPMENT Institutions / Sustainibility

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