Presentation Transcript

1. Transforming Georgia into innovation hub and knowledge led economy: challenges and opportunities

   Georgia Innovation Week April 24, 2014 Angela Prigozhina Country Sector Coordinator in South Caucasus Private and Financial Sector Development World Bank
2. Global Innovation is Concentrated in a Small Number of Nations Around the World United States Average U.S. patents per 1 million population, 2006-2008 Taiwan Japan Finland Switzerland Israel Sweden Germany South Korea Canada Singapore Denmark Netherlands UK Austria Belgium Australia Norway France Hong Kong Italy Spain India China South Africa CAGR of US-registered patents, 1998 to 2008 10,000 patents = Source: USPTO (2008), EIU (2008)
3. Even with similar initial innovation rates, regions can diverge dramatically in producing world-class technology…
4. R&D investments in 2010, % of sales http://www.chemistryviews.org/details/ezine/1395735/Industrial_RD_Investment.html
5. R&D top 1400 firms focus by sectors and regions
6. Global R&D Flows, 2007 Top 1000 firms spend 55% of their R&D budget outside home countries Source: Booz & company
7. Global R&D flow Top 1000 firms have 55% of their R&D spending outside the home country MNC R&D sites outside the home countries increased 6% during 2003-2007 (with 83% growth in China and India) MNC R&D jobs outside home countries increased 22% (with China and India 91% growth) Main drivers of R&D import: Lower costs Access to talent (skilled scientists, mathematicians, engineers, doctors) and its importance at every stage of the innovation value chain — from ideation to research to product development and testing; countries are developing niche markets with special skills (automotive engineering in India, electronics in China) Market proximity and insight (close to markets and clients, especially for bulky products)
8. Georgia Innovation Rankings http://www.globalinnovationindex.org. http://www.innovationfordevelopmentreport.org/ici.html
9. Patent applications filed under PCT, 2011 http://stats.oecd.org/Index.aspx?DatasetCode=PATS_IPC
10. R&D & innovation investments http://beyondthe.eu/sketching-ukrainian-innovation-system-rd-investment/
11. Georgia needs structural transformation High unemployment and poverty, combined with low productivity and export competitiveness – high need for 2nd generation reforms to support structural changes and support shift from low middle income to higher middle income economy Georgia EU10 Source: The World Bank
12. Georgia’s neglected resources Georgia has potential to become more innovative, sophisticated and competitive in exports and thus support new quality growth! EPO Applications, residents - Georgia and selected countries WIPO Patent Applications by Top Fields of Technology – Georgia (1997-2011) GOOD patenting activity: Georgia’s performance is similar to comparator countries (Latvia and Slovakia). SOLID Expertise: The top fields of technology, according to filed WIPO patents: Pharmaceuticals, Food, Chemistry, Special machines and Engines STRONG Foreign Collaboration: A significant portion of patents are granted to non-residents, an indication that foreign collaboration is driving a substantial portion of patenting. PRESENCE of innovative firms: 76% of Georgian firms primarily focus on process innovation (76% of respondents) and 34% on products innovation STRONG SCIENTIFIC FUNDAMENTALS: R&D institutional legacy, math, chemistry, physics and engineering skills EXISTING RESOURCE BASE AND Innovation value chain (from idea to testing): natural resources (strategic minerals deposits, hydro, wind and solar energy resources, forest, wood, agricultural land and phyto materials)
13. Georgia ignored its capacity while other countries were restoring & strengthening it High-technology exports are products with high R&D intensity, such as in aerospace, computers, pharmaceuticals, scientific instruments, and electrical machinery. GEORGIA Information and communication technology goods & services’ exports include telecommunications, audio and video, computer and related equipment; electronic components; other information and communication technology goods and software GEORGIA
14. Innovation is key for jobs and competitiveness Georgia innovative SMEs create more jobs and growth; business entry is easy Firms average annual employment growth, % Firms average annual sales growth, % Firms average annual labor productivity growth, % New business entry density, 2012
15. Agro/food processing Biomedical/pharma/cosmetics Chemical/agrochemical Alternative energy New materials Nanotechnology, micro & nano electronics Mining and natural resources processing technologies, tools and construction materials Creative industries, high tech/ IT, hydro & industrial engineering and other services Other manufacturing (incl. electric machines, crafts/boats, military equipment etc) Georgia’s innovation potential Georgia’s R&D commercialization potential (based on R&D investments and capacity, patents, structure of exports) Georgia exports (above 1% of exports in 2013)
16. Innovation policy and culture to be boosted Rustaveli Foundation Financing Mln GEL R&D investments, % of GDP Higher Education Enrollment, # of students change 2012/2008 Scientific journals/articles, 2009 Source: The World Bank, World Development Indicators
17. Fostering technological modernization and innovation Israel, Finland, Germany, USA, India, Estonia China, South Korea, Belarus, Ukraine Japan, Singapore, Chile, China, Poland
18. Innovation front runners Israel Supportive innovation ecosystem for all stages: Entrepreneurship-incubation-acceleration-growth-generic pre competition-investment Developed private financial services and instruments Strong R&D commercialization and International Cooperation Highest rate of pubic R&D per capita 2nd largest number of PhD and scientists after Australia All top high tech firms have business in Israel (Intel (7200 staff), HP (6000 staff), Cisco (1500), Marvel Technology (1600), Micron (1300) 35%+ of the Industrial Export in High Tech Highest number of start-ups per capita Higher VC funds attraction than France and Germany combined Finland Large and continued public investments in skills and education Strong linkages between business, academia and public support aimed at commercial success Efficient innovation ecosystem, with sound public institutions and efficient M&E system (Finpro (export development); Invest in Finland (inclusion of foreign investments); the Finnish Tourism Board; TEKES (support for innovative projects) Ireland According to the World Competitiveness Report 2012 Ireland is…. 1st for availability of skilled labour 2nd for adaptability of companies to market changes 2nd in terms of attractiveness for foreign investors 2nd for overall productivity & efficiency 3rd for labour productivity 3rd in the world for the number of patents in force 4th for helpful corporate taxes 6th for percentage of population with 3rd level education 8th for Innovative Capacity of firms Singapore Strong longer term vision, policy sustainability and coordination Trade reform accompanied by sound FDI attraction strategy and smart industrial polies Long term focus on education and skills – education hub (universities and TVET) Developed holistic innovation ecosystem & public support (3.5% of GDP by 2015) Strong legal and IPR system Global transport and transition hub, financial hub, education hub, chemical production and industrial hub Necessity is the mother of invention! EMEA Headquarters EMEA Headquarters EMEA Headquarters
19. Enterprise development, export & innovation promotion World-Class R&D Policy analysis and advice Focused FDI attraction Irish Competitiveness = Innovation + Industrial Policy/Smart Specialization (€808m Budget) Irish Competitiveness Council
20. ICT & Innovation Council Investors Council Mentors’ Group Georgian State Military Scientific - Technical and R&D Center “DELTA” the Open Society Institute OSGF CRDF The Academy for Agricultural Sciences Business Development Centers and regional SME/agro support centers ICT lab in Technology university I. Beritashvili Center of Experimental Biomedicine Other universities Tbilisi State University INTAS Lugar Center - The Central Public Health Reference Laboratory National Intellectual Property Center - Sakpatenti Ilia State University Batumi Business Incubator USAID-Israel-CDR Georgian Technical University Georgia Technology Transfer Center TVET, Excellence and Training centers National Centre of Manuscripts Georgian Research & Development Foundation The National Academy of Science IT garage Rustaveli National Science Foundation Tbilisi State Medical University Batumi State University ISTC International R&Ds Other innovation & SME infrastructure (science and high tech parks, fabrication labs etc) Business Environment and SME and export support Financial Sector Infrastructure and Services Other R&D centers GRDF Donor funded SME support programs and infrastructure
21. R&D and investment prioritization – selectivity for revealed comparative advantage… Source: Cluster policy and smart specilalization, OECD, Patent database, February 2012
22. OECD cluster support and specialization patterns
23. R&D support programs in place No R&D Commercialization Focus– R&D should help people and economy(cost reduction, product diversification and competitiveness, health, climate, energy safety, food safety, bio system, smart cities, education, smart technologies etc) Need SCALING, DEMONSTRATION AND IMPACT ASSESSMENT Strong partnership and coordination between all the stakeholders encouraged
24. Policy agenda Enhancing business environment (property rights and IPR, competition, rule of law) Investing in knowledge (technical and higher education, business and academia partnerships, curricular and academia performance management reform, skills transfer (import/export of skills and training programs), excellence and R&D centers Fostering innovative entrepreneurship & SMEs for jobs, innovative thinking, competition and productivity growth (technology absorption, skills development, knowledge spillovers, networking, business partnerships, SME clusters, access to information) Developing financial markets and instruments, promoting inward R&D and capital intensive investments Supporting R&D commercialization to improve quality of life and support economic growth Promote global partnerships and SME internationalization Attracting R&D-intensive FDI: The policy framework
25. Both Innovative Capacity and Entrepreneurial Capacity Reflect Investments, Policy and Norms Innovation-Capacity Entrepreneurship-Capacity
26. Georgia IPR – key for R&D intensive FDI Source: Athey and Stern, 2013, MIT
27. WEF 2013 Costa Rica exports’ transformation 2004-2010 COSTA RICA: KEY REFORMS Continuous public investment in education & skills Trade reform and FTA with key partners Tax Reform to foster FDI and R&D Investment targeting strategy – Intel and other high tech investors
28. R&D location marketing in selected EU countries Georgia – creative minds, smart solutions and life! http://www.oecd.org/investment/globalforum/40310856.pdf
29. Georgia Innovation Growth Model Investors Georgia Socio-Economic Development Strategy 2020 Innovation Strategy Education Strategy Smart Specialization & Export Strategy Finance and FDI Strategy Academia Private Sector Financial Institutions Civil society/ NGOs Regional authorities Georgian Development Bank
30. დიდი მადლობა!ThANK YOU! To make your bright future tomorrow invest in it today!