Technology and Innovation - A Catalyst for Development

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1 2017/ISOM/SYM/004 Session 1 Technology and Innovation - A Catalyst for Development Submitted by: Papua New Guinea Symposium on APEC 2018 Priorities Port Moresby, Papua New Guinea 5 December 2017

2 Technology & Innovation A Catalyst for Development Professor Teatulohi Matainaho Chairman and CEO PNG Science & Technology Council 1

3 Technology plays a critical role in transforming societies and economies through enhancing efficiency, connectivity and access to resources and services. Innovation and Technology for Sustainable Development, (2017), United Nations 2

4 Innovation has long been recognized as an important driver of economic growth. innovation leads to new and improved products and services, higher productivity, and lower prices. Atkinson, R.D, McKay, A.S, (2007), Digital Prosperity: Understanding the Economic Benefits of the Information Technology Revolution 3

5 UN Sustainable Development Goal 9 Industry, Innovation and Infrastructure: Build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation. Sustainable Development Agenda 2030, (2016), United Nations 4

6 As a result, economies that have consistently high levels of innovation also tend to have high levels of growth. Atkinson, R.D, McKay, A.S, (2007), Digital Prosperity: Understanding the Economic Benefits of the Information Technology Revolution 5

7 Overview 1. The Role of Technology and Innovation 2. The Digital Age 3. Challenges for Economic Growth 4. Way Forward 6

8 The Role of Technology and Innovation 7

9 The Role of Technology and Innovation Provides solutions to Human Needs Addressed through Development Science and Knowledge Contributes toward Applied through Trade and Economy Technology and Innovation Influences the nature of Products and Services Influences the nature of 8

10 The Role of Technology and Innovation 1784 Mechanical Loom Industry 1.0 Mechanical Production Hydro Power Steam Power

11 The Role of Technology and Innovation 1784 Mechanical Loom 1870 Assembly Line Industry 1.0 Mechanical Production Industry 2.0 Mass Production Hydro Power Steam Power Electricity Assembly Line

12 The Role of Technology and Innovation 1784 Mechanical Loom 1870 Assembly Line 1969 Programmable Logic Controller Industry 1.0 Mechanical Production Industry 2.0 Mass Production Industry 3.0 Automation Hydro Power Steam Power Electricity Assembly Line Electronics Computers ICT Internet

13 The Role of Technology and Innovation 1784 Mechanical Loom 1870 Assembly Line 1969 Programmable Logic Controller 2000s? Industry 1.0 Industry 2.0 Industry 3.0 Industry 4.0 Mechanical Production Mass Production Automation Cyber-Physical Systems Hydro Power Steam Power Electricity Assembly Line Electronics Computers ICT Internet Internet of Things Big Data Cloud Computing Artificial Intelligence

14 The Digital Age 13

15 Industry 4.0 Ecosystem Morris Hosseini, (2015) What will the future look like under Industry 4.0 and digital transformation in the healthcare space?, Roland Berger Strategy Consultants 14

16 Potential of Radical Innovation for Developing Countries Mobile Internet Knowledge work automation Internet of things Cloud Advanced robotics Autonomous vehicles Next generation genomics Energy storage 3-D printing Advanced materials Advanced oil and gas exploration and recovery Renewable energy *According to the Industrial Development Report UNIDO 15

17 Impact of Technology and Innovation on Economic Growth DIFFUSION OF TECHNOLOGICAL KNOWLEDGE LONG-CYCLE TECHNOLOGY MEDIUM-CYCLE TECHNOLOGY SHORT-CYCLE TECHNOLOGY 1. Technological learning 2. Well-educated workforce 3. Selective FDI 4. Value adding to Natural Materials 5. Technical cooperation 1. High Technology Demand 2. Industry Up-scaling 3. Product Assembling and Repackaging 4. Product Diversification 1. Heavy R&D Investments by the Public and Private sector, 2. Government support for SME s 3. ICT Capability 4. Technological institutions 5. Upgrade In Export Clusters 6. Next Generation Products Low Growth Medium Growth High Growth ECONOMIC GROWTH

18 Challenges for Economic Growth 1. Technology Gap 2. Twenty-First Century Skills & Artificial Intelligence 3. Sustainability 17

19 1. Technological Gap CONNECTIVITY GROWTH STRUCTURAL REFORM Technology Infrastructure Internet Of Things/Sensors Financial/Blockchain Technology Internet Economy Integrated Supply Chain New and improved product and systems Frugal, Social and Disruptive Innovation Discovery of New Markets Technology Learning and Adoption R&D Scientific Discovery Science and Technology Policy Innovation Systems Innovation fund Competitiveness Policy Manufacturing Infrastructure SME policies ICT policies 18

20 Bridging the Technological Gap AGRICULTURE example India s Biotechnology Industry (Source: Biotechnology industry in India) Indian agriculture sector accounts for 18 per cent of India's gross domestic product (GDP) and provides employment to 50% of the countries workforce. Agricultural exports constitute a fifth of the total exports of the country. India is among the top 12 biotech destinations in the world and ranks third in the Asia-Pacific region The Indian biotech industry holds about 2 per cent share of the global biotech industry. 19

21 2. Twenty-First Century Skills & Artificial Intelligence CONNECTIVITY GROWTH STRUCTURAL REFORMS People-to-People (Labor Mobility) Data Sharing, Knowledge Exchange Scientific Collaboration Technology and Skills Transfer AI Interface Talent and Skills Acquisition Use of Diaspora Arrangements Machine Learning Coding Active Labor Market and Social Insurance Policies Technology Institutions 20

22 Bridging the Skills Gap 21 st CENTURY SKILLS example Investment in Technological Learning as in the case of most Asia-regional economies CONNECTIVITY STRUCTURAL REFORMS Use of Computers to enhance skills, increase productivity, overcome supply/demand, overcome skills mismatch and structural unemployment Disruptive Technologies create a shift from existing skills to new sets of skills (Data Science Analytic Skills) 21

23 3. Sustainability CONNECTIVITY GROWTH STRUCTURAL REFORM Service Delivery Global Value Chains Renewable Resources Green Networks and markets Public Awareness and Social License/Public trust Social Inclusion Traditional Knowledge application Bio-economy, Green Technologies and Clean Energy Green Growth Green Infrastructure Carbon Offset( REDD+) Diffusion of Low Carbon Technologies Waste Management 22

24 Enhancing Sustainability ENERGY example Case of Energy Sector in Sri Lanka( Source: Gunatilake.H, Pamakanthi.D. (2008)Economics of Energy Conservation A case study, Asian Development Bank) CONNECTIVITY STRUCTURAL REFORMS Use of Low Carbon Technology ( Lighting) in the electricity Sector to conserve energy and increase Energy Savings. Increased Energy savings, Long Term Economic Growth AGRICULTURE example Growing Crops in the Desert with use of agricultural technology- Plants engineered to survive drought conditions (Source:. Ramey.K, (November 12,2012) Technology and Society- Impact on Society. http\\: 23

25 Way Forward 24

26 APEC Regional Trend Analysis IMPACT OF TECHNOLOGY ON EMPLOYMENT AND THE ECONOMY Digital technology expected to increase productivity and Economic Growth However, technology can lead to a decrease in employment opportunities based on current skills Requires shift in the development of new employment skills Rethinking Skills Development in the Digital Age APEC Policy Support Unit November 2016 Decline in Labor Share is an indicator of decreasing Inclusion Globalization and Technology Change are the major causes for decline in Labor Share Impact of Globalization and Technological Change are Skillsmismatch and Structural Unemployment Declining Labour Share and the Challenge of Inclusion APEC Policy Support Unit November

27 KNOWLEDGE-BASED ECONOMY Creating Tradable Services and Technology Exchange Research & Development Biotechnology Technology Transfer Green Technologies Sustainability Traditional & Local Knowledge BRIDGING THE GAP Innovation AI and Automation Skills Development Value Adding Social License/Public trust Green Jobs Next Generation Technologies RESOURCE-BASED ECONOMY Leverage for Resource Rich Economies 26

28 THANK YOU 27

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