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Building Science, Technology, and Innovation Capacity for Development. Alfred Watkins S&T Program Coordinator HDNED Presentation to STI Thematic Group October 18, 2005. Plan of Presentation. S&T Capacity Building: The International Agenda Why Is S&T Capacity Building Important?

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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
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

slide5

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

slide6

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

slide8

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

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?
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 fast…with 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

slide15

Differentiation

Global Brand

Innovation Advantage Slope

Differentiated

Profit Margin

Commodity

slide16

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

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

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 building1
S&T Capacity Building
  • Linkages
  • Technology consortia
  • Mobility schemes
  • Matching grants
linear s t capacity building model
Linear S&T Capacity Building Model

Basic

Science

Applied

Research

Development

Production

Marketing

slide26

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

Gov’t 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
slide30

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

slide34
“Everyone can get the same technology. But that doesn’t mean they can make an advanced product”

“Samsung’s 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 arm’s-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) aren’t 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 shouldn’t be limited by today’s 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 sector’s 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 won’t 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 – don’t spread resources too thin; develop a few niche areas; today’s comparative advantage vs. tomorrow’s 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
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)
slide44
Capacity building is important and the Bank is being asked to do more, but the Bank has recently been doing less
slide45
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 don’t 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 CEM’s – 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.