UNESCO Science Report (2015)
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1 Science governance: trends and challenges for emerging economies Susan Schneegans Editor-in-Chief, UNESCO Science Report
2 Global trends: never before has the world invested so much in research Investment in research rose faster (+30.5%) than global GDP (+20.1%) between 2007 and 2013, despite the debt crisis Why? In industrial countries hit by debt crisis (Japan, EU, USA ), public commitment faltered but firms maintained, or augmented, their own research spending to conjugate the crisis. Developing countries rich in natural resources used the commodities boom to raise their own public commitment to research (e.g. Argentina, Brazil, Malaysia, Mexico, Ethiopia, Kenya). China maintained its strong demand for raw materials, nurturing developing economies. The Chinese public and private sectors raised their investment in research.
3 UNESCO Science Report Strong growth in research spending by Chinese and Indian enterprises between 2001 et Figure: Global shares of business research spending, (%), Calculated in Purchasing Power Parity US dollars
4 Figure: World shares for G20: GDP, research spending, researchers and scientific publications, 2009 and 2013 Shares up: China, Rep. Korea, India Shares down: Canada, EU, Japan, USA Stable: Argentina, Brazil, Mexico, South Africa, Turkey
5 Patents are still dominated by the EU, Japan and USA (83%) but China and the Republic of Korea are taking a bigger slice of the pie What are triadic patents? The same inventor applies to the three main patent offices (EU, Japan and USA) at the same time for a patent to protect their invention
6 Little of foreign direct investment in research went to Africa and Latin America over % Share of beneficiaries in Africa for design, development and testing projects 11.3% Share of beneficiaries in Latin America for design, development and testing projects 30.3% Share of beneficiaries in China and India for design, development and testing projects
7 What type of innovation is taking place in emerging economies? Innovation is present in countries of all income levels but many entreprises innovate without conducting any research. Four types of innovator: Product innovators: Argentina, Costa Rica (research hubs of IBM, Intel, etc.), Rep. Korea Organizational innovators: Argentina, Costa Rica, Malaysia Process innovators: Brazil, India, Rep. Korea, South Africa Marketing innovators: India, Malaysia, Turkey Few innovators: Mexico and Russia.
8 What type of innovation is taking place in emerging economies? Most manufacturing firms active in innovation purchasing machines, equipment and software. They may also purchase licenses or patents. In Brazil, Russian Fed. And India, fewer than half conduct research (figure). During the commodities boom, both Brazilian and Russian entreprises preferred to import modern technologies rather than develop these themselves.
9 Why so little innovation in Brazil? High cost of doing business: heavy bureaucracy, lack of modern infrastructure, etc. Protectionism: import substitution policy has protected domestic market but discouraged nnovation in absence of competition. Recent policies have favoured fossil energy: government investment in offshore oil and gas exploration and low pricing policy petrol at the pump have undercut development of renewable sources Lack of university-enterprise ties: only 7% of innovative enterprises consider universities as key source of information, yet most research conducted by academia. An exception to the rule: Natura Cosméticos uses plant extracts in its new products: exchanges with Amazonian communities and partners with Embrapa (Brazilian Enterprise for Agricultural Research) and Federal University of Santa Catarina.
10 Challenges and trends in Brazil In the IBGE s latest innovation survey, all firms (public and private) reported a drop in innovation activity between 2008 and Industry has been affected by the 2008 global crisis and worsening economic situation in Brazil since As Brazil s sectoral funds tax business to fund research in key industrial sectors and business revenue is down, these sectoral funds have less to invest in research.
11 Why the decline in investment in the Russian Federation? Could the oil curse be to blame? The commodities boom encouraged imports of advanced technologies and discouraged Russian businesses from investing in innovation: business spending is down from 33% to 28% of research funding ( ). Since 2008, the government has oriented public funding of research more towards the needs of industry.
12 Challenges and trends in India Government main employer of researchers (46% + 11% in academia) and main funder of research (60%), compared to 35% for industry and 4% for academia. Defense accounts for 32% of government outlay, so initiative with Chamber of Commerce and Industry since 2013 to create commercial channel for defence technologies. India needs to broaden its innovation culture to develop its manufacturing sector: pharma, automotive and IT account for more than half of business research expenditure (figure). Companies are developing frugal innovation (next slide).
13 The rise of frugal innovation in India One in five Indians lives beneath poverty line: 270 million potential consumers! Frugal innovation by Indian companies, examples: Nano: low-cost passenger car developed by Tata, original model cost about US$2,000 (photo) Gramateller: banknote distributor for rural areas, low energy consumption, powered by solar energy, (partnership between Vortex company and Indian Institute of Technology in Madras); Chotukool: portable refrigerator powered by batteries, 35 litre capacity (developed by Godrej company and distributed in rural areas by the Indian postal service). What is frugal innovation? An innovation which costs little to produce on a large scale that targets a market of poor consumers who are often unconnected to the electricity grid
14 Challenges and trends in China China is on track to devote 2.5% of GDP to research by 2020 (see figure) but companies are still reliant on foreign core technologies, despite massive public investment in science. Enterprises fund three-quarters of research (BERD) in China. China only devotes 5% of its research budget to basic research, compared to about 17% in the EU, USA, Rep. Korea and Russia. Could this be holding China back in terms of new knowledge creation?
15 Challenges and trends in South Africa In 2012, South Africa invested in more new FDI projects in Africa than any other country in the world. Also, the Department of Science and Technology has entered into 21 formal bilateral agreements with other African countries since Private sector investment in research fell from 0.50% to 0.32% of GDP between 2008 and Despite rising public sector investment, overall research funding dropped from 0.89% to 0.73% of GDP. The government launched a Sector-Specific Innovation Fund in 2013 to help raise the country s research effort to at least 1% of GDP. The fund supports industrial research through a cofunding arrangement.
16 Challenges and trends in Rep. Korea Dilemma: country s catch-up technology development model no longer suited to global markets Plans to revitalize manufacturing by: making country more entrepreneurial and creative; Strengthening ties between basic sciences and business at new International Science Business Belt (Korea s Silicon Valley), with National Institute for Basic Science on site; spending more on basic research: from 13% to 18% of total research spending; spending more than anyone on all research: 5% of GDP by 2017 (4.2% in 2013); doubling investment in green technology between 2008 and 2012.
17 Challenges and trends in Malaysia Most committed country to research within Organization of Islamic Cooperation: 1.30% of GDP in Plans to reduce reliance on industrial research by foreign multinationals by developing endogenous innovation, through research universities and research grants in basic and applied research (for both domestic firms and foreign multinationals). Needs to help companies translate research grants into viable commercial products. Plans to attract 200,000 students by 2020 (56,000+ in 2012) to train a more highly skilled workforce. Malaysia one of 10 countries hosting 89% of international PhD students in science and engineering (see figure).
18 Challenges and trends in Turkey Second-most committed country to research within Organization of Islamic Cooperation: 1.01% of GDP in Strategic Vision 2023 (2008) fixed a 3% target for research spending, which will be hard to reach by A rapidly expanding pool of enterprises specializing in relatively low-tech manufactured goods: textiles, food, plastic and metal goods, etc. Recent growth in manufacturing has been driven by technology use more than by the development of new technologies. Slower integration into European Union value chains, in recent years, and the technological upgrading that this integration entails. Test drive in 2013 of a solar-powered car developed by Istanbul Technical University
19 Foreign multinationals: to what extent do they foster innovation in emerging economies? They can foster the rise of innovation in host countries: By creating research hubs and thereby encouraging knowledge transfer. By working with the host government to improve professional training, as in Malaysia. Some entreprises from emerging economies are buying foreign entreprises to acquire patents and highly qualified personnel overnight. Examples: in 2014, Motherson Sumi Systems Ltd (Inde) a racheté Stoneridge Harness Inc (États-Unis); in 2017, the public enterprise of China National Chemical Corp (ChemChina) purchased Swiss company Syngenta for US$43 billion. By acquiring Syngenta s chemical product catalogue and seeds patented by Syngenta, China hopes to improve its agricultural productivity.
20 The presence of foreign multinationals can distort patent data. In India, six out of 10 patents are now in IT, one in ten in pharma (figure); Most IT companies are foreign, whereas most pharmaceutical companies are Indian; IT patents : 7% go to Indian firms and 93% to foreign firms based in India.
21 The presence of foreign multinationals can distort data on high-tech exports. Malaysia, Singapore, Thailand and Vietnam host numerous multinationals and dominate high-tech exports in this part of the world, above all in electronics: 80% of these high-tech products. But, often, these products are simply assembled in the host country for export, without any innovation taking place, as in Vietnam.
22 Increasingly common: joint technology development between emerging economies Russo-Chinese treaty (2001) has framed about 40 collaborative projects, including: Since 2003, joint Russo-Chinese technoparks in the Chinese cities of Harbin, Changchun and Yantai, among others, with plans to manufacture military and civil aircraft, space vehicles, gas turbines, etc., and to produce Russian technologies on a grand scale. In 2014, the State University of Moscow, Russian Venture Company and Chinese construction company Chzhoda signed un agreement to develop technologies for smart homes and intelligent cities. What are smart cities? They use information technology to improve public services.
23 Thank you Susan Schneegans Editor-in-Chief, UNESCO Science Report
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