Innovation and Competitiveness:
Download
1 / 32

- PowerPoint PPT Presentation


  • 350 Views
  • Uploaded on

Innovation and Competitiveness: A WBI Perspective Carl Dahlman ECA Innovation and Competitiveness Workshop World Bank Institute. February 18,2004. Structure of Presentation. Knowledge and Growth in Historical Perspective The Knowledge Revolution Implications for Developing Countries

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about '' - Jims


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
Slide1 l.jpg

Innovation and Competitiveness:A WBI PerspectiveCarl DahlmanECA Innovation and Competitiveness WorkshopWorld Bank Institute

February 18,2004


Structure of presentation l.jpg
Structure of Presentation

  • Knowledge and Growth in Historical Perspective

  • The Knowledge Revolution

  • Implications for Developing Countries

  • High Growth Performance and Knowledge Strategies

  • Benchmarking the World Knowledge Economy

  • Innovation in Developing Countries

  • Challenges to Developing Countries

  • Challenges to World Bank

©Knowledge for Development, WBI


Slide3 l.jpg

World GDP/Capita and Population

©Knowledge for Development, WBI



Gdp capita growth korea vs ghana l.jpg
GDP/Capita Growth: Korea vs Ghana

©Knowledge for Development, WBI


Puzzle and challenge l.jpg
Puzzle and Challenge

  • Puzzle: If it is so obvious that the effective use of knowledge is such an essential element of development,mwhy hasn’t it made a central focus of development strategy and advice?

  • Challenge: What do we need to do to bring it to the mainstream and how can we prepare Bank to provide relevant advice.


New growth patterns l.jpg
New Growth Patterns

  • In last decade there has been renewed interest in growth because:

    • Micro level evidence of increasing importance of new technologies

      • ICT revolution

      • Increased share of high tech products in exports

      • Managerial and organizational changes

    • Macro level evidence of changes of patterns and nature of growth among OECD countries

      • Surprisingly strong growth of US economy 1995-2002

      • Reversal of trend towards convergence of per capita income among OECD countries.

  • This has lead to focus on “new economy” to understand what is going on


The knowledge revolution and the new economy l.jpg
The Knowledge Revolution and “The New Economy”

  • Ability to create, access and use knowledge is becoming fundamental determinant of global competitiveness

  • Seven key elements of “Knowledge Revolution”

    • Increased codification of knowledge and development of new technologies

    • Closer links with science base/increased rate of innovation/shorter product life cycles

    • Increased importance of education & up-skilling of labor force, and life-long learning

    • Investment in Intangibles (R&D,education, software) greater than half of machinery & equipment investments in OECD.

©Knowledge for Development, WBI


The knowledge revolution 2 l.jpg
The Knowledge Revolution -2

  • Greater value added now comes from investment in intangibles such as branding, marketing, distribution, information management

  • Innovation and productivity increase more important in competitiveness & GDP growth

  • Increased Globalization and Competition

    • Trade/GDP from 38% in 1990 to 52% in 1999

    • Value added by TNCs 27% of global GDP

  • Bottom Line: Constant Change and Competition Implies Need for Constant Restructuring and Upgrading

  • ©Knowledge for Development, WBI


    Changing structure of manufactured exports toward high tech products in oecd l.jpg
    Changing Structure of Manufactured Exports Toward High Tech. Products in OECD

    • High technology industries increased from 18.8% in 1990 to 25.3% in 1999

    • Medium high technology industries increased from 38.7% to 39.1%

    • Medium low technology industries decreased from 17.9% to 14.1% and

    • Low technology industries decreased from 24.3% to 21.3%

      Therefore roughly 2/3rds of manufactured exports from the OECD countries is high or medium technology


    Implications for developing countries l.jpg
    Implications for Developing Countries Products in OECD

    • The knowledge revolution is being led by the industrialized countries

    • Developing countries run risk of being left further behind.

    • There is also trend towards rising inequality with-in both developed and developing countries

    • Developing countries need to develop explicit strategies to take advantage of knowledge revolution to improve their competitiveness

      • Improve performance of traditional sectors

      • Leapfrog technologies

      • Develop new sectors

      • Address problems of increasing internal inequalities


    Slide13 l.jpg

    Eight Fastest Growing Economies Products in OECD

    (constant 1995 US$)

    ©Knowledge for Development, WBI


    Few countries have sustained high growth rates over long periods l.jpg
    Few Countries Have Sustained High Growth Rates over Long Periods

    • Most of these countries are or were until recently developing countries

    • They have followed successful knowledge strategies

    • Key elements of those strategies, in addition to appropriate macroeconomic management and good economic incentive regimes have been:

      • Massively tapping into global knowledge

      • Investing strongly in education

      • And now investing heavily in ICT


    To help developing countries to this the world bank has knowledge for development program l.jpg
    To Help Developing Countries to this the World Bank has Knowledge for Development Program

    • Policy Forums, Policy Conferences, Seminars, and Training on K4D

    • Policy Services on K4D, ranging from full fledged reports to customized policy notes

    • KAM Web-based tool on country knowledge assessments (do-it-yourself analysis) www1.worldbank.org/gdln/kam.htm

    • K4D Community of Practice www.K4DCommunity.org


    Framework for using k4d four key functional areas l.jpg
    Framework for Using K4D: Knowledge for Development ProgramFour Key Functional Areas

    • Economic incentive and institutional regime that provides incentives for the efficient use of existing and new knowledge and the flourishing of entrepreneurship

    • Educated, creative and skilled people

    • Dynamic information infrastructure

    • Effective national innovation system

    ©Knowledge for Development, WBI


    Kam methodology l.jpg
    KAM Methodology Knowledge for Development Program

    • KAM: 76 structural/qualitative variables to benchmark performance on 4 pillars

    • Variables normalized from 0 (worst) to 10 (best) for 121 countries

    • www1.worldbank.org/gdln/kam.htm

    • Basic scorecard for 14 variables at two points in time, 1995 and 2002

    • Aggregate knowledge economy index (KEI)

    • Will illustrate with quick analysis of Slovakia

    ©Knowledge for Development, WBI


    Slide18 l.jpg

    Armenia Knowledge for Development Program

    • INNOVATION:

    • Researchers in R&D / mil pop

    • Patents granted by USPTO / mil

    • Scient. & Tech.

    • Publications / mil pop.

    • ECON. INCENTIVE REGIME:

    • Tariff & Non-tariff barriers

    • Rule of Law

    • Regulatory Quality

    • INFORMATION INFR.:

    • Tel. Lines per 1,000 people

    • Computers per 1,000 people

    • Internet users per 10,000 people

    • EDUCATION:

    • Adult literacy rate

    • Secondary Enrollment

    • Tertiary Enrollment

    Armenia

    ©Knowledge for Development, WBI


    Slide19 l.jpg

    ECA & the World: Knowledge Economy Index Knowledge for Development Program

    ©Knowledge for Development, WBI


    Slide20 l.jpg

    ECA & the World: Innovation Knowledge for Development Program

    ©Knowledge for Development, WBI


    Slide21 l.jpg

    ECA & the World: Innovation Knowledge for Development Program(absolute values)

    ©Knowledge for Development, WBI


    New area of focus innovation policy and strategy l.jpg
    New Area of Focus: Innovation Policy and Strategy Knowledge for Development Program

    • Conceptual framework for innovation in context of developing countries

    • Benchmarking countries in terms of their knowledge capabilities

    • Developing policy toolkit for policy advice in different archetypes of countries


    Conceptual framework for innovation in developing countries l.jpg
    Conceptual Framework for Innovation in Developing Countries Knowledge for Development Program

    • Innovation in developing countries should be understood broadly as something new to the local environment

    • Therefore distinguish two broad types of innovation

      • Local improvements through adoption of existing foreign technology

      • Development of technologies new to world


    Innovation in developing countries l.jpg
    Innovation in Developing Countries Knowledge for Development Program

    • In developing countries the first type is the most relevant, the second is more rare, except for the most advanced developing countries

      • Developing countries will get a bigger economic impact from raising average local practice to best world practice than from creation of their own new knowledge

      • They will also get a bigger impact from raising average local practice to best local practice, therefore the tremendous importance of domestic diffusion


    Sources of domestic innovation l.jpg
    Sources of Domestic Innovation Knowledge for Development Program

    • Imports of capital goods, components, products or services

    • Products and services brought to and produced in country by foreign investors

    • Copying or reverse engineering of foreign products and services

    • Technological efforts of domestic or foreign firms, not all of which is based on formal R&D


    Bias towards formal r d efforts l.jpg
    Bias Towards Formal R&D Efforts Knowledge for Development Program

    • Policy makers in developing countries tend to focus on formal R&D and on publicly funded research efforts

    • They tend to focus on glamorous high technology sectors

    • They tend to focus on industry, to a lesser extent on agriculture, and very little on services

    • They also tend to focus on R&D inputs and outputs, not so much on entrepreneurship and management


    Challenges l.jpg
    Challenges Knowledge for Development Program

    • But, as noted earlier, focus of policymakers are not the most important elements of the innovation system in developing countries

      • R&D not the main source of innovation

      • High tech sectors are tiny part of developing economies

      • Service sector is largest share of economic activity

      • Successfully applying knowledge requires entrepreneurship, management, organizations,and also depends on economic and institutional regime

    • Need a better conceptual framework and policy tool kit that

      • differentiates across countries

      • Provides made to measure policy advice and specific project design


    Benchmarking countries in terms of knowledge capabilities l.jpg
    Benchmarking Countries in Terms of Knowledge Capabilities Knowledge for Development Program

    • Education and skills

    • Acquiring Knowledge

    • Creating Knowledge

    • Disseminating Knowledge

    • Applying Knowledge


    Differentiated strategies l.jpg
    Differentiated Strategies Knowledge for Development Program


    National innovation system l.jpg
    National Innovation System Knowledge for Development Program

    • Needs to include not just R&D institutions and universities, but most critically firms and other knowledge institutions

    • Needs to include attention to the broader economic incentive and institutional regime, education and skills, and ICT-hence our K4D framework


    Challenges to developing countries l.jpg
    Challenges to Developing Countries Knowledge for Development Program

    • Finding advantageous ways to plug into and compete successfully in the global system

      • Getting into global value chains

      • Moving up these value chains

    • Taking advantage of global knowledge to improve welfare

      • Preventive health

      • Agriculture

    • Developing differentiated advantages

      • Building on local resources

      • Building on culture and other intangibles

      • Strengthening non-traded services


    Challenges to world bank l.jpg
    Challenges to World Bank Knowledge for Development Program

    • How to strengthen analytical capability on innovation and growth

    • How to integrate this element into mainstream of Bank work: CAS, PRSPs, etc

    • How to learn from our experience and tha of others to design appropriate policy recommendations and project interventions for countries with different endowments and at different levels of development

    • How to develop appropriate skill mix and incentive mechanisms break down internal silos to be able to deliver on these complex projects.

    • How to break down the silos in our clients


    ad