UN Commission on Science and Technology for Development

Transcription

1 UNITED NATIONS CONFERENCE ON TRADE AND DEVELOPMENT UN Commission on Science and Technology for Development Panel on Science, technology and engineering for innovation and capacity-building in education and research Kuala Lumpur, Malaysia November 2007 UNCLEARED, UNEDITED DRAFT NOT TO BE CITED Prepared by the UNCTAD Secretariat 1

2 Table of Contents Table of Contents...2 Executive Summary Science, Technology and Innovation (STI) Capacity-Building & Development 4 2. National Innovation Systems Measuring STI Capacity in Developing Countries Inputs R&D Expenditures Venture Capital R&D Personnel Tertiary Enrolments in Science and Engineering Outputs Scientific Publications Patents Licensing Policy Options for building STI and engineering capacity National Agenda for STI Capacity-Building Identifying national STI capacity-building goals and priorities Providing Financial Incentives for Innovation Assessing, Strengthening, and Creating STI Institutions Creating local S&T Career Opportunities Effective Governance of Innovation Establishing and Encouraging Multi-Sector Innovation Linkages Educating a S&T-Literate Labor Force Regional Agenda for STI Capacity-Building International Agenda for STI Capacity Building Providing Knowledge-Based Aid Making S&T information available to the developing world Encouraging International Scientific and Technological Networks Questions for Discussion References...18 List of Figures Figure 1 Major components of a National Innovation System...5 Figure 2 Selected Technological Capabilities for Least Developed Countries (LDCs), Other Developing Countries (ODCs) and high-income countries...7 List of Tables Table 1 Measuring Selected Inputs and Outputs to the Innovation System...6 List of Boxes Box 1 Malaysia industry-wide cess...10 Box 2 Venezuelan Brokerage Houses Financing Innovation...10 Box 3 Korean Government Support of Innovation...10 Box 4 Gávea Angels - Developing a Network of Angels in Brazil...11 Box 5 Japan's Angel Tax...11 Box 6 Ghanaian University supporting community development...12 Box 7 Technology Transfer in Kumasi, Ghana...13 Box 8 US promoting scientific literacy in primary and secondary school

3 Box 9 East African Biotechnology Research Consortium...15 Box 10 Southeast Asian Regional Training Centre in Biotechnology...15 Box 11 Indian Institutes of Technology as Knowledge Aid...15 Box 12 International Aid for Brazilian innovation...16 Box 13 Publicly available biological databases...17 Box 14 South-South Cooperation...17 Executive Summary Science, technology, and innovation (STI) capacity-building can be a powerful tool in the alleviation of poverty through the creation of employment opportunities, growth of indigenous firms, and increases in agricultural productivity. STI capacity-building is also central in facilitating the achievement of the Millennium Development Goals (MDGs). The concept of an innovation system is a helpful way for countries to think about how to build the requisite STI capacities to strengthen their economies. In the innovation systems model, the ability of an enterprise to engage in innovation depends not only on its access to knowledge or technology from research institutes or technology centers, but also on many other institutional factors. Based on the various institutions, actors, and linkages in the innovation system, it is possible to identify critical capacities needed for economic development. One way to assess the strengths and weaknesses of an innovation system for policy is to measure some of the inputs and outputs of the innovation system. The Knowledge Assessment Methodology (KAM) is a useful way to compare Least Developed Countries (LDCs) and Other Developing Countries (ODCs) with the developed countries in selected indicators related to the innovation system. Overall, the developing world lags the OECD countries in virtually all innovation indicators. Policies for STI capacity-building should not be limited to technology transfer and pure scientific research but should focus on proactive technological learning by domestic firms, as well as commercial innovation. Policy-makers need to find the right balance between the creation of new knowledge via investments in R&D capacity and building the capacity to absorb, adapt and adopt existing knowledge to address bottlenecks. Specific STI policies at the national level include: identifying national STI capacity building goals and priorities; providing financial incentives for innovation; assessing, strengthening, and creating STI institutions; creating local S&T career opportunities; effectively governing innovation; establishing and encouraging multi-sector innovation linkages; educating an S&T literate labor force; and engaging the media on STI issues. The regional STI capacity-building agenda should focus on developing regional research and education networks. The international agenda should seek to facilitate the availability of knowledge-based aid and S&T information to the developing world as well as encouraging international scientific and technological networks. 3

4 1. Science, Technology and Innovation (STI) Capacity-Building & Development There is wide consensus that technological innovation is a driver and critical source of sustainable economic growth in the new millennium. According to New Growth Theory, knowledge applied in the process of innovation is a non-rival good that is not limited by the laws of scarcity. Investment in knowledge therefore generates increasing returns through the creation of new markets. Unlike other production factors such as land, labor and capital, knowledge can be used by many simultaneously without losing value (Romer 1990). Applying technological advances in tandem with entrepreneurial approaches to the provision of goods and services can help transform scientific and technological advances into more productive economic activities. With the requisite market structures and regulatory environment in place, innovation can serve as the sine qua non of economic growth (OECD 2007). No longer seen as the luxury of the wealthy countries, building capacity in Science, Technology and Innovation (STI) is a necessity for poor countries that wish to become richer (World Bank 2007). 1 Innovation has played a critical role in the economic success of today s advanced and recently industrialized countries, so developing countries must understand not only how to procure capital, but also how to build the capacity to innovate (UN Millennium Project 2005). Using new industrial technologies is not simple. Technological effort is necessary even to use imported technologies, because new technologies cannot be passively absorbed and used at best practice levels without conscious effort to access, master, adapt and improve on imported technologies (Lall, 1992). A significant part of this effort needs formal Research and Development (R&D), but much of this effort resides in informal production engineering and quality management. As the industrial sector matures, innovation (the creation of new products and processes) becomes vitally important for competitiveness. Developing countries need both kinds of technological effort to promote sustainable economic growth. STI capacity-building can be a powerful tool in the alleviation of poverty through the creation of employment opportunities, growth of indigenous firms, and increases in agricultural productivity (Lazonick 2007; UNCTAD Secretariat 2004; UN Millennium Project 2005). STI capacity-building is also central in facilitating the achievement of the Millennium Development Goals (MDGs) (UNCTAD Secretariat 2004). Moreover, science and technology can help tackle the challenges associated with population growth and urbanization, climate change, deforestation, and the loss of biodiversity (UNCTAD Secretariat 2004; UN Millennium Project 2005; World Bank 2007). 2. National Innovation Systems If technological progress can drive overall improvements in living standards, it is also clear that many countries and peoples have been excluded from the benefits of technological innovation (Conceição et al. 2003). How and why have scientific 1 For more information on the role of engineering and infrastructure in science, technology, and innovation capacity-building for education and research, please see the Background Paper on "Critical connections between infrastructure and science and technology: policy lessons for capacity building." 4

5 advancements failed the developing world and what is required to put science, technology, and innovation at the service of development? A great place to start is in improving our understanding of technology and how it can contribute to economic growth. Technology is more than physical technology and equipment; it is a knowledge system. Innovation takes place in a social and institutional environment that mediates its contribution to socioeconomic progress. The concept of "systems of innovation" is an interesting conceptual framework for thinking about the knowledge system in which innovation occurs. Figure 1 Major components of a National Innovation System Source: UNCTAD (2007); Arnold & Bell (2001) A "national innovation system" (NIS) has been defined as "a set of distinct institutions which jointly and individually contributes to the development and diffusion of new technologies and which provides the framework within which governments form and implement policies to influence the innovation process. As such, it is a system of interconnected institutions to create, store and transfer the knowledge, skills and artifacts which define new technologies" (Metcalfe 1995). 5

6 Figure 1 illustrates the concept of the innovation system, sketching all the actors and activities in the economy which are necessary for industrial and commercial innovation to take place and to lead to economic development (Arnold & Bell 2001). The stronger the NIS, the more effective is technological activity and the greater the returns to a given amount of spending on technology. Several countries have used the NIS concept to formulate their innovation strategies, systematically addressing each link in the system to ensure that it supports other links. In the innovation systems model, the ability of an enterprise to engage in innovation depends not only on its access to knowledge or technology from research institutes or technology centers, but also on many other institutional factors. These factors include access to finance (e.g., banking, venture capital); adequate human resources; availability of basic physical infrastructure (i.e., electricity, ICT, transport); firm-level capabilities; inter-firm linkages and collaboration; general business services and innovation support; demand conditions; and framework conditions (i.e., investment climate, culture of entrepreneurship, and basic literacy). Therefore, innovation is not concentrated within any single institution, but operates within and among the interactions of the various actors in the innovation system (UNCTAD 2007). 3. Measuring STI Capacity in Developing Countries One way to assess the strengths and weaknesses of an innovation system for policy is to measure some of the inputs and outputs of the innovation system. Some of the inputs are related to the finance of innovation (R&D expenditures and venture capital) as well as the human resources to engage in scientific and technological innovation (R&D personnel and tertiary enrolment in S&T fields). Some of the outputs are related to the creation of knowledge (S&T publications and patents) as well as the access to and transfer of technical knowledge (licensing). Though these inputs and outputs are not comprehensive in assessing the strengths of the innovation system, they can provide useful analysis for policy makers in developing innovation strategies for development. In Table 1 below, these inputs and outputs are highlighted with a brief description of their significance for the strength of the overall innovation system. Table 1 Measuring Selected Inputs and Outputs to the Innovation System Measure Significance R&D Indicates ability to master and use new Expenditures technologies Venture Capital Shows strength of the market for high-risk capital R&D Personnel Indicates capacity to conduct R&D Tertiary Shows how many scientifically trained workers Enrollment and the capacity to conduct R&D S&T Represents knowledge base on which Publications technological activities depend Patents Measures domestic inventive activity Licensing Represents channels for accessing the international pool of technical knowledge Inputs Outputs The Knowledge Assessment Methodology (KAM) created by the World Bank is a useful way to compare Least Developed Countries (LDCs) and Other Developing Countries (ODCs) with the developed countries in the various indicators noted 6

7 above(chen & Dahlman 2005). KAM benchmarks the technological capabilities of individual countries using standard measures of science, technology and communication activities. Figure 2 below shows a basic scorecard as a spider diagram for a group of LDCs, ODCs and developed economies. Each variable in these charts is normalized on a scale of 0 to 10 relative to the country groups included in the comparison, with higher values denoting better technological capabilities. This chart shows the vast differences in the performance of the LDCs compared with the developed and other developing countries (Knell 2007). Overall, the developing world lags the OECD countries in virtually all innovation indicators. In the discussion below, the specific inputs and output indicators are analyzed according to the KAM data as well as their significance for innovation capacity-building. Figure 2 Selected Technological Capabilities for Least Developed Countries (LDCs), Other Developing Countries (ODCs) and high-income countries Source: Knell (2007); UNCTAD (2007), based on the World Bank's Knowledge Assessment Methodology database Inputs R&D Expenditures The intensity of R&D may provide an indication of abilities to master and use new technologies. R&D expenditures in both LDCs and other developing countries are very low, when compared with OECD countries. Gross expenditure on R&D in 2003 (or the latest available year) was 0.2 per cent of GDP in the LDCs and 0.3 per cent of GDP in other developing countries, compared with 2.2 per cent of GDP in OECD countries (UNCTAD 2006). Although it is has not been possible to demonstrate a direct link between R&D investment and national Gross Domestic Product (GDP), a 7

8 growing level of investment in R&D is generally correlated with improved GDP/- growth outcomes (IAC 2004; de Ferranti et al. 2003) Venture Capital Since innovation is a risky endeavor that many firms and other institutions cannot afford to engage in alone, appropriate financial institutional infrastructure must be in place to foster business development and technological innovation. Banking and financial reforms, capital markets (e.g., venture capital), and financial incentives from the government can all play a role in creating the financial capacity to make businesses and the economy more innovative (Juma & Serageldin 2007; OECD 2007). However, because as domestic financial systems are usually weak in developing countries, their availability of venture capital is also limited (UNCTAD 2007) R&D Personnel Domestic human resource development and indigenous technological capabilities are essential for indigenous R&D, as well as the effective utilization of imported technology. Increasing R&D personnel implies increased capacity to conduct R&D and may imply increased R&D output. Based on the scorecard, one of the widest disparities appears in the number of R&D researchers per million population (Knell 2007). The number of R&D researchers and scientists in the LDCs in 2003 (or the nearest latest available year) are just 27 per cent of the level in other developing countries and 2 per cent of the level in OECD countries Tertiary Enrolments in Science and Engineering Increasing tertiary enrolments implies increased quantity and scientific quality of human capital and thus an increased greater capacity to conduct R&D. Unfortunately, enrolments in tertiary technical subjects in developing countries is also very low. In recent years, only 6 per cent of the population aged in LDCs were enrolled in tertiary education, compared with 23 per cent in other developing countries and 57 per cent in high-income OECD countries. Within tertiary enrolment, the share of enrolments in science and agriculture in LDCs is at approximately the same levels as in other developing countries and OECD countries. However, the share of engineering enrolments within tertiary enrolment is just over half the level in other developing countries (UNCTAD 2006). 3.2 Outputs Scientific Publications Scientific publications are representative indicators of the knowledge base on which technological activities depend (UNCTAD 2005). During the period , only 0.1 per cent of scientific and technical journal articles in physics, biology, chemistry, mathematics, clinical medicine, biomedical research, engineering and technology and earth and space sciences originated in LDCs (UNCTAD 2006). The world's scientific and technological landscape underwent a marked change in the 1990s. Between 1995 and 1999, the importance of North America in the index of scientific publications declined by 10 per cent, while that of Europe rose by 5 per cent. Industrial Asia (including Japan) increased its share by 16 per cent, China experienced high growth (65 per cent increase), and the share of Latin America, too, grew significantly (by 37 per cent). On the other hand, the countries in transition, sub-saharan Africa and India 8

9 saw their shares decline by 24 per cent, 15 per cent and 6 per cent respectively (UNESCO 2005) Patents The number of patents registered by the residents of a country provides some measure of the success of expenditures in science and technology and specifically R&D. Patent registrations are a critical measure of domestic inventive activity in a country (de Ferranti et al. 2003). One of the widest disparities appearing in the technological capability scorecard is the number of patent applications (Knell 2007). Patent statistics show that between 1991 and 2004, only 20 US patents were granted to citizens of LDCs, compared with 14,824 to citizens of other developing countries and 1.8 million to citizens of OECD countries (UNCTAD 2006) Licensing Licensing involves the contractual transfer of knowledge between firms and thus represents a channel for accessing the international pool of technical knowledge. It is also related to the income level and technological sophistication of economies (de Ferranti et al. 2003; UNCTAD 2007). In tandem with other indicators, royalty and license fee payments in developing countries are extremely low, with only 7 per cent of the domestic firms in LDCs licensing foreign technology (UNCTAD 2006). Limited licensing activity is expected in the early stages of technological catch-up, where it is typically more relevant only in the later stages (UNCTAD 2007). 4. Policy Options for building STI and engineering capacity STI policies can be developed, with reference to the national innovation system (UNCTAD 2007; UNESCO 2005). STI policies should not be limited to technology transfer and pure scientific research. Rather, they should focus on proactive technological learning by domestic firms, as well as commercial innovation (UNCTAD 2007). Policy-makers need to find the right balance between the creation of new knowledge via investments in R&D capacity and building the capacity to absorb, adapt and adopt existing knowledge to address bottlenecks (World Bank 2007). Policies should also help stimulate the supply and demand for technology, lubricate the links between supply and demand, and address the overall business environment (UNCTAD 2007). Other STI policy tools include S&T human resource development, public S&T infrastructure, fiscal policies establishing incentives for investment in innovation and other innovation incentive mechanisms (UNCTAD 2007). The following section highlights national, regional, and international policies for building STI capacity. 4.1 National Agenda for STI Capacity-Building Identifying national STI capacity-building goals and priorities Governments need to develop a national S&T strategy that specifies priorities for research and development addressing national needs in areas such as agriculture, health, industrial development and the environment. These S&T strategies should be developed by the national government in full consultation with the country s science, engineering, and medical academies, and other scientific organizations (IAC 2004). 9

10 Technological innovation does not always mean pushing the frontiers of knowledge. The nature of innovation varies greatly between countries and activities according to their technological complexity, and can often mean the adaptation and use of existing technologies. Based on a country's level of technological sophistication, its national S&T capacitybuilding strategy should build upon its existing capacity. In rich countries, firms often innovate by pushing the knowledge frontier further. They have fundamentally different strategies and S&T processes from developing countries, where innovation primarily takes place through firms learning to master, adapt and improve technologies that already exist in more technologically advanced countries. The central issue is not acquisition of the capability to invent products and processes. Rather, policies to promote technological change in developing countries should be concerned with learning about and learning to master ways of doing things that are used in more technologically-advanced countries (UNCTAD 2007) Providing Financial Incentives for Innovation A national strategic policy to promote R&D through the provision of "sectoral" funds should be established for the conducting of research in selected S&T areas of economic interest to the nation (IAC 2004). Governments can encourage firm-level innovation through the provision of grants, loans or venture capital for the establishment of in-house research units and/or the hiring of S&T talent (UNESCO 2005; IAC 2004). Box 1 Malaysia industry-wide cess One way to target sector-specific technological needs is to introduce an industry-wide cess. Malaysia has imposed cesses on rubber, palm oil, and timber to fund the Rubber Research Institute, the Palm Oil Research Institute, and the Forestry Research Institute. A cess on tea helps fund research on and marketing of tea in Sri Lanka. Hong Kong (China), Malaysia, and Singapore have all established construction industry development boards. Funding for the boards comes from a compulsory cess on all construction contracts. The revenue is used to build capacity and promote innovations in construction materials and techniques. Source: UN Millennium Project (2005) Box 2 Venezuelan Brokerage Houses Financing Innovation In Venezuela, brokerage houses are connecting entrepreneurs with investors. The Venezuelan angel investing community is very low key, making it difficult to discern who would contribute to early seed-stage funding of ventures. And the Venezuelan stock exchanges have played a limited role in financing the private sector. These factors have created a unique role for brokerage firms to play in Venezuela s investment community. Source: Vainrub (2005) Box 3 Korean Government Support of Innovation The Korean government directly supported private sector R&D through various instruments, including tax-exempt funds, R&D tax credits, and research related human capital. As a result of Korea s support over the course of two decades, private sector funding has skyrocketed from 20% (with 80% public funding) to more than 80%. Source: Oyelaran-Oyeyinka (2006) 10

11 Box 4 Gávea Angels - Developing a Network of Angels in Brazil As one of the first formal angel investing groups in Latin America, Gávea Angels brings together Brazilian investors with the goal of expanding seed capital for the Rio de Janeiro metropolitan region. Gávea Angels was founded in December 2002 as a product of research and the local innovation system that was currently developing. It matches investors with entrepreneurs, though it is not responsible for investor returns nor does it oversee individual investment decisions. Prospective companies for Gávea Angels undergo an multi-stage selection process, including evaluations of executive briefs, revision meetings, presentations, and indepth examinations by the Gávea Angels operating committee. Successful companies work with the executive manager to prepare a presentation for the Angel Forum. Once three companies have made it to this stage, they participate in the forum in hopes of attracting potential (groups of) investors. Once investing groups are developed, Gávea Angels allows the investors and entrepreneurs to map out their own investment processes. By 2005, 150 entrepreneurs have been consulted, 52 investment propoals evaluated, 13 companies presented at Angel Forums, four companies passed duediligence, and one company received funding. Gávea Angels is aiming to increase its deal flow by partnering with leading incubators and venture capital firms to get proposal they rejected. In this way, the group links with the greater venture capital chain and can provide early-stage assistance after which venture capitalists provide a viable exit strategy for the angels. They are looking to expand their pool of investors through awareness campaigns to recent corporate retirees of large firms. Other planned initiatives include angel investment representation in state and local governments or co-investment policy and the development of a regional seed-capital fund. Source: Didier et al. (2005) Box 5 Japan's Angel Tax Japan has been interested in developing angel investing for its national innovation system. In light of the fact that the country had US$6 trillion in low-interest savings accounts, they aimed to provide tax incentives for angel investing. The Angel Tax was introduced in 1997, providing capital gains tax relief on profits realized from venture investments, allowing for a deduction on capital gains of capital loss on a carry-over basis for up to three years. During the fiscal year of 2000, more back-end incentives were added, notably the taxation of only one-fourth of real capital gains from venturerelated stock transfers. The government introduced front-end incentives in 2003, where angel investments could be deducted from taxable capital gain in the same year from other stock transfers. Source: Botelho (2005) Assessing, Strengthening, and Creating STI Institutions STI institutions should be assessed, strengthened and reformed. Improved governance of universities and research institutes can be facilitated through various incentives, including: competitive grants, project funding as opposed to institutional block grants, targeted funding for research linked to social and economic needs, and the creation of centers or networks of S&T excellence that concentrate S&T expertise and foster multidisciplinary research (OECD 2007; IAC 2004). "Institutional instruments" can also be created to help indigenous firms improve links with the technological frontier, 11

12 links with markets (and sophisticated users), supply-needed skills, services and other inputs and links with the other actors in the innovation system (Fagerberg & Godinho 2005). Box 6 Ghanaian University supporting community development The government of Ghana established the University for Development Studies (UDS) in the northern region in The aim of the university is to bring academic work to support community development in northern Ghana (Brong-Ahafo, Northern, Upper East and Upper West Regions). The pedagogical approach emphasizes practice-oriented, community-based, problemsolving, gender-sensitive and interactive learning. It aims to address local socioeconomic imbalances through focused education, research and service. The curricula stress community involvement and community dialogue, extension and practical tools of inquiry. Students are required to internalize the importance of local knowledge and to find effective ways of combining it with science. The curricula also include participatory rural appraisal, participatory technology development, and communication methodologies that seek to strengthen the involvement of the poor in development efforts. An important component of the emphasis on addressing sustainable development is the field practical program. Under this program, the third trimester of the academic calendar, eight weeks, is exclusively for fieldwork. Students live and work in rural communities. Along with the local people, they identify development goals and opportunities and design ways of attaining them. The impact of this innovative training approach is already apparent, with the majority of UDS graduates continuing to work in rural communities. Source: Kaburise (2003) Other African universities are provide great models as well. South Africa s Stellenbosch University offers a shining example of how to adjust curricula to the needs of research and development (R&D) organizations. It was the first university in the world to design and launch a micro-satellite as part of its training. In Uganda, Makerere University has developed new teaching approaches that allow students to solve public health problems in their communities as part of their training. Similar approaches should be adopted by students in other technical fields. For example, engineering students should spend part of their time solving local problems in fields such as infrastructure development and maintenance Creating local S&T Career Opportunities Government agencies, multinational companies and local firms should make use of the local educated labor force, absorbing those who have not gone abroad and eventually attracting back a portion of those who have (Lazonick 2007). Targeted government initiatives in sectors such as education, research and health can have an immediate impact in retaining local talent (UNCTAD 2007). To spur locally-needed S&T activities, developing country governments can consider temporary special working conditions for their best talent, whether formed at centers of excellence abroad or at home (IAC 2004; UNCTAD 2007) 12

13 The international mobility of skilled people is one of the key mechanisms for the transition of technological capability across countries. To use this mechanism effectively, countries need to design institutions that enable them to use the skills of their nationals wherever they live. Such institutional arrangements need to rely on a commitment to international cooperation and partnerships. Taiwan, for example, set the trend for inviting expatriate scientists and engineers home to participate in key R&D projects for national development. Today, these countries are looking at opportunities for R&D partnerships around the world and are not restricted to facilities at home Effective Governance of Innovation The key to developing the government's capacity in relation to STI issues is to develop such capacity through policy practice (UNCTAD 2007). Since innovation policies often require efforts from many Ministries and government agencies at the national and sub-national levels, policy co-ordination is essential to avoid duplication and ensure coherent policies at different levels (OECD 2007). Good governance of STI issues may require organizational restructuring within government (UNCTAD 2007). One way to effectively guide STI policy issues is through the creation and promotion of mechanisms for scientific advice. Informed and reliable counsel can be obtained from specially appointed committees of experts, standing multidisciplinary advisory bodies, or independent institutions such as merit-based academies of science, engineering and medicine (IAC 2004). Advice should be delivered through transparent and systematic processes that combine technical knowledge with wider consultations, based on democratic practices (UN Millennium Project 2005) Establishing and Encouraging Multi-Sector Innovation Linkages Government both national and local must play a central role in creating publicprivate research partnerships for addressing research areas of potential local benefit (IAC 2004). Effort is needed to boost exchanges of tacit knowledge between the public and private sectors through the movement of human resources and technology from universities and research institutes to local firms (OECD 2007). Specific means of encouraging multi-sector linkages include: consultative services provided by national or regional research institutions; cooperative partnerships between local citizens and research institutions; empowerment of social entrepreneurs for supplying products and services significantly below market prices; and the establishment of "information kiosks" (IAC 2004). Box 7 Technology Transfer in Kumasi, Ghana The Intermediate Technology Transfer Unit (ITTU), established by the Faculty of Engineering at the University of Science and Technology, Kumasi under the Technology Consultancy Centre (TCC), transfers and diffuses appropriate technologies to businesses in Kumasi s industrial areas. ITTU convenes workshops in metal machining, plant construction, (non)ferrous metal founding, and woodworking for the promotion of basic light engineering industries and the development of secondary industries based on these products. Following successful technology transfer and diffusion, ITTU moves onto to other products developed within the Unit or the university that can satisfy industrial demand. Source: Bamiro (2004) 13

14 4.1.7 Educating a S&T-Literate Labor Force Investments in educating the labor force is a key foundation for economic development (Lazonick 2007). Building human capacity in STI is a long-term process that starts with a review of educational systems and the identification of opportunities for aligning the mandates of existing institutions with development goals (UN Millennium Project 2005). All four Asian Tigers, namely the Republic of Korea, Taiwan, Province of China, Singapore and Hong Kong (China) have heavily invested in all levels of formal education and even outpaced the OECD countries in human capital formation as measured by the science and technology enrolments in the tertiary education as percentage of population. Studies also show that science education should be strengthened at the earliest level in educational systems. Special emphasis should be paid for science and technology related studies in tertiary level. Science and technology must be mainstreamed within the national education system and S&T literacy and culture can be imparted in ways that capture the interest and imagination of young learners. S&T literacy and educational initiatives should also ensure ethnic, gender, and cultural diversity (IAC 2004). Box 8 US promoting scientific literacy in primary and secondary school An example of a successful initiative promoting science in the primary and secondary level curricula is the U.S. National Science Resources Center (NSRC) Science Education Reform. The NSRC, formed in 1985 by the Smithsonian Institution and the U.S. National Academy of Science, National Academy of Engineering and Institute of Medicine, was created to improve the learning and teaching of the sciences for students 5-18 across the country s school districts. The NSRC s science education reform model is based on: (1) hands-on, inquiry-centered investigations; (2) associated reading, reflection, discussion, analysis, and communication; (3) the linkage of students newly acquired concepts and skills to their everyday lives; and (4) integration of science with other areas of study. The NSRC included practicing scientists and engineers in the process, thus complementing this effort to improve the teachers skills. By 2004, 369 U.S. school districts were implementing this new vision for science teaching and learning, serving more than 6.8 million students in kindergarten through grade 8 (approximately 25 percent of the nation s schoolchildren). The NSRC model has since been emulated in Sweden, Mexico, and Canada. Source: IAC (2004) Engaging the Media on Science and Technology The nation's media can assume responsibility for educating the public on S&T-related issues. The media should seek out the best S&T sources for their articles and programs, especially on issues relating to public policy (IAC 2004). 4.2 Regional Agenda for STI Capacity-Building Developing countries can sponsor world-class research and education through regional networks. The national research nodes of the networks could become recognized centers of excellence, helping to strengthen S&T capacities among lessdeveloped partners. 14

15 Box 9 East African Biotechnology Research Consortium The mission of the BIO-EARN (East African Regional Program and Research Network for Biotechnology, Biosafety, and Biotechnology Policy Development) Programme is to build capacity in biotechnology in Ethiopia, Kenya, Tanzania and Uganda and promote appropriate research and related policies. The programme aims to use biotechnology in a sustainable manner in order to help improve livelihoods, ensure food security and safeguard the environment. Over the last five years, the programme has worked towards building capacity in order to make use of and work towards overcoming the challenges of modern biotechnology and biosafety as well as towards promoting appropriate related policies under local conditions in the region. It has been able to distinguish itself so far in combining several aspects of biotechnology development within one programme. Source: In particular, regional initiatives leading to doctoral degrees, postdoctoral programs and fellowships for graduate students (masters and doctoral degrees) should be promoted (IAC 2004). Regional networks can also establish links with the member countries private sectors (IAC 2004). Regional economic communities can also establish regional infrastructure to support S&T activities. Box 10 Southeast Asian Regional Training Centre in Biotechnology In 2004, the Southeast Asian Regional Training Centre in Biotechnology was established by collaborating research institutes in the Asian region and international organizations engaged in capacity building. It was agreed that such a Regional Training Centre in Biotechnology is needed and that Thailand, through its National Centre for Genetic Engineering and Biotechnology (BIOTEC) was in a good position to spearhead this initiative. At this stage, the Regional Training Centre is operated as an independent program under BIOTEC, to allow flexibility and ease in forming partnerships with various cooperative agencies. In addition to organizing its own training program, the Regional Training Centre would serves as a strategic partner to other organizations to co-organize capacity building activities. Source: UNU-IAS (2007) 4.3 International Agenda for STI Capacity Building Providing Knowledge-Based Aid The international community can consider STI capacity-building as a particular form of knowledge aid. Aid for STI should support the development of productive capacities through building up domestic knowledge resources and domestic knowledge systems and the development of governmental capacities to design and implement STI policies. Box 11 Indian Institutes of Technology as Knowledge Aid The Indian Institutes of Technology is a great example of international collaboration in building national capacity. Modeled after technical institutions from Germany, Russia, UK, and USA, five institutions of national importance were established in the early 1950s. Each institute was funded by a separate country and staffed by top faculty from India and the sponsoring country. As a result, IIT enjoys international prominence in various technical fields. Source: Society (2000) 15

16 In particular, knowledge aid supporting physical infrastructure projects should all include components to develop domestic design and engineering capabilities (UNCTAD 2007). Wealthy countries can also provide financial support and collaboration for creating centers of excellence in developing nations. Bilateral scientific and technological agreements between developed and developing countries can allow for participation by scientists and engineers from developing countries (IAC 2004). Box 12 International Aid for Brazilian innovation In Brazil the Ministry of Science and Technology s Program to Support Scientific and Technological Development, funded by the World Bank, and the federal innovationfinancing agency, FINEP, provide credit for innovation. The Bank-sponsored program includes two subprojects, a support program, which finances technological sector entities, such as QSTM (quality, standards, testing, and metrology) institutes, and a technology management and competitiveness program, which supports pilot partnerships between firms and research institutes. FINEP offers integral support credit for all stages of a technological innovation business plan, from design to licensing or purchase of technology, training, technical assistance, and initial working capital. It even offers pre-investment credit for engineering consultancy or quality management plans for environmental, technological, and product quality (IADB (Inter-American Development Bank) 2001). Provision of this support, especially to small and medium-size enterprises, has been instrumental in leveling the playing field for companies that lack the size and financial capability to venture into financially risky areas. Source: IADB (2001) and UN Millennium Project (2005) Making S&T information available to the developing world International agencies and organizations can provide funding and expert support for libraries to maintain electronic gateways for the sharing of digital information among researchers, teachers and learners. Major hubs in the developing world can also be organized for sharing digital information with research institutions in the industrialized world. Developed countries can also share experiences and information with developing nations about the benefits and risks of new technologies. United Nations agencies and regional intergovernmental organizations can partner with the developing world to identify national S&T priorities strategies through financial support and expert consultation (IAC 2004). Through the Science, Technology and Innovation Policy Reviews (STIPs), UNCTAD is helping developing countries identify and adjust their policies and institutions in order to support the technological transformation, capacity-building and innovation of their enterprises. The World Bank's Knowledge for Development (K4D) Program is providing policy advice to client countries on four Knowledge Economy pillars: economic and institutional regime, education, innovation, and Information and Communication Technologies (ICTs) to help them make the transition to a Knowledge Economy. These agencies are encouraged to continue using international and regional meetings, forums, and workshops to disseminate best practices on innovation-based development to the developing world. 16

17 Box 13 Publicly available biological databases Several biological databases have been established as public resources available to all over the Internet. GenBank is a massive online database of all publicly available gene sequencing. The database, which is maintained by the National Center for Biotechnology Information of the U.S. National Institutes of Health, can be accessed free of charge over the Internet. GenBank exchanges data daily with the DNA Data Bank of Japan and the European Molecular Biology Laboratory. SWISS-PROT is a protein sequence database developed by the Swiss Institute of Bioinformatics and the European Bioinformatics Institute. The Molecular Modeling Database, maintained by the National Center for Biotechnology Information, contains three-dimensional biomolecular structures, including information on biological function and the evolutionary history of large molecules. Source: UN Millennium Project (2005) Encouraging International Scientific and Technological Networks Countries can cooperate with others in North-South and South-South networks sponsoring world-class research and education. These networks should be given enduring support by academic, governmental, intergovernmental, and private organizations. UNCTAD's Network Centres of Excellence identifies and mobilizes outstanding scientific and technological institutions in the developing world as regional hubs of learning and training for developing country scientists and engineers. The training courses focus on new and emerging technologies, such as biotechnologies and ICTs, with over 100 scientists from the developing world undergoing capacity-building through the program. ITU's Centers of Excellence Program is establishing regional partnership networks in four general program areas related to information and communication technologies: human resources development, infrastructure development, application of new technologies, and assistance to countries in special need. Box 14 South-South Cooperation Science ministers from Brazil, India, and South Africa have been working together to identify areas for trilateral cooperation over nanotechnology and efforts to prevent and treat HIV/AIDS. Their first meeting was held in October 2004, as part of the India- Brazil-South Africa trilateral commission. The meeting followed a meeting of the three countries foreign ministers in Brasilia in That session identified science, technology, and innovation as one of the key areas for trilateral cooperation. The partnership was inspired by the low level of investment in research on tropical challenges. This is the first major effort to promote cooperation with a focus on emerging technologies. It is likely that the collaboration will inspire other countries to want to join the group or seek to benefit from the results of the alliance. It is possible that industrial countries will seek to be party to this important initiative, at least indirectly. Source: UN Millennium Project (2005) 17

18 5. Questions for Discussion 1. How much innovation and technology upgrading is taking place today in each country? What are the specific barriers to increased innovation and technology upgrading in each country? 2. What institutional building efforts and high priority policy reforms e.g., in scientific and engineering institutions, in the financial sector, in reducing administrative barriers and making it easier to establish new business -- are required to eliminate or reduce these obstacles to innovation? 3. Should countries focus initially on creating new knowledge or absorbing existing knowledge? If the initial focus is on absorbing existing knowledge, at what stage in the development process should countries begin to focus on R&D capacity? 4. Is it sufficient for countries to boost training and education programs the supply side of the equation -- or do they also need to place some emphasis on boosting private sector demand via technology upgrading and innovation policies? 5. Especially in those parts of the world with large numbers of neighboring countries, it may not be feasible in a short term or desirable to establish similar S&T institutions in each and every neighboring country. Instead, would a more coordinated regional approach be preferable? 6. How can STI capacity building help to reverse the brain drain? What strategies and policies would help each country to engage more effectively with its Diaspora and encourage members of this community to return to the country? 6. References Arnold, Erik, and Martin Bell Some new ideas about research for development. In Partnerships at the leading edge: A Danish vision for knowledge, research and development, Report of the Commission on Development-Related Research, Copenhagen, Denmark: DANIDA/Ministry of Foreign Affairs. Bamiro, Olufemi A University-industry partnership in the innovation process: Cases from Nigeria and Ghana. In Innovation systems and innovative clusters in Africa. Proceedings of the Regional Conference, February, 2004, Bagamoyo, Tanzania, ed. Burton L.M. Mwamila, Lena Trojer, Bitrina Diyamett, and Abraham K. Temu, Botelho, Antonio José Junqueira Angel investing initiatives and best practices from Asia and Europe. In An executive briefing on angel investing in Latin America, ed. Elizabeth F. O'Halloran, Peter L. Rodriguez, and Felipe Vergara, Charlottesville, VA: Batten Institute at the Darden Graduate School of Business. Chen, Derek H. C., and Carl J. Dahlman The knowledge economy, the KAM methodology and World Bank operations. Washington, D.C.: The World Bank. Conceição, Pedro, Manuel V. Heitor, and Francisco Veloso. 2003b. Infrastructures, incentives, and institutions: Fostering distributed knowledge bases for the learning society. Technological Forecasting & Social Change 70, no. 7, September:

19 de Ferranti, David, Guillermo E. Perry, Indermit Gill, J. Luis Guasch, William F. Maloney, Carolina Sánchez-Páramo, and Norbert Schady Closing the gap in education and technology. World Bank Latin American and Caribbean Studies. Washington, D.C.: The World Bank. Didier, Daniela, Ernesto Teixeira Weber, and José Antônio Pimenta-Bueno Gávea Angels: The birth of an angel group in Rio de Janeiro. In An executive briefing on angel investing in Latin America, ed. Elizabeth F. O'Halloran, Peter L. Rodriguez, and Felipe Vergara, Charlottesville, VA: Batten Institute at the Darden Graduate School of Business. Fagerberg, Jan, and Manuel M. Godinho Innovation and catching-up. In The Oxford handbook of innovation, ed. Jan Fagerberg, David C. Mowery, and Richard R. Nelson, Oxford ; New York: Oxford University Press. IAC Inventing a better future: A strategy for building worldwide capacities in science and technology. Amsterdam, The Netherlands: InterAcademy Council (IAC). IADB (Inter-American Development Bank) IPES 2001: Competitiveness: The business of growth. Washington, D.C.: IADB. Imbs, Jean, and Romain Wacziarg Stages of diversification. The American Economic Review 93, no. 1, March: Juma, Calestous, and Ismail Serageldin, Lead authors Freedom to innovate: Biotechnology in Africa's development. A report of the High-Level African Panel on Modern Biotechnology. Addis Ababa; Pretoria: African Union (AU) and the New Partnership for Africa's Development (NEPAD). Kaburise, John B. K New variations on the African Development University: The UDS experience with developing an alternative approach to tertiary education. Paper presented at the Regional Training Conference on Improving Tertiary Education in Sub-Saharan Africa: Things That Work! Accra, Ghana. Knell, Mark Uneven technological accumulation and growth in the Least Developed Countries. Background Paper No. 11 for UNCTAD's Least Developed Countries Report Geneva: United Nations Conference on Trade and Development. Lall, S. (1992) Technological capabilities and industrialization, World Development, 20(2): Lazonick, William Entrepreneurship, innovation, and development. Paper prepared for United Nations University World Institute for Development Economics Research (UNU-WIDER). Metcalfe, Stan The economic foundations of technology policy: Equilibrium and evolutionary perspectives. In Handbook of the economics of innovation and technological change, ed. Paul Stoneman. Blackwell Handbooks in Economics, Oxford, UK; Cambridge, Mass.: Blackwell. Mytelka, Lynn K From clusters to innovation systems in traditional industries. In Industrial clusters and innovation systems in Africa: Institutions, markets, and policy, edited by Banji Oyelaran-Oyeyinka and Dorothy McCormick, Tokyo, Japan: United Nations University Press. OECD Innovation and growth: Rationale for an innovation strategy. Directorate for Science, Technology, and Industry. Paris, France: Organisation for Economic Co-operation and Development (OECD). Oyelaran-Oyeyinka, Banji Learning to compete in African industry : Institutions and technology in development. Aldershot, England ; Burlington, VT: Ashgate. 19