Transcript Document 7142101

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?
• 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
2
S&T Capacity Building:
The International Agenda
3
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
4
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
5
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
6
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
7
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
8
Why Is S&T Capacity Building
Important?
9
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?
10
Why is S&T important, even (or especially) for
poorest countries?
Thousands of constant 1995 US dollars
S&T Capacity makes the Difference
between Poverty and Wealth...
14
Rep. of Korea
12
10
8
Difference
attributed to
knowledge
6
Difference
4
due to
physical
2
and human
Ghana
0
capital
1960 1965 1970 1975 1980 1985 1990 1995 2000
11
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
12
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
13
Expertise
Typical Value Chain
Significant ‘outsourcing’
R&D/Technology
Manufacturing/Operations
Sales & Marketing
14
14
Differentiation
Global Brand
Differentiated
Commodity
Profit Margin
15
Multi
Nationals
First tier
Second tier
Third tier
Nature of
relationship
Nature of
relationship
Nature of
relationship
Close family
Cousin
No ties
Partner
Provider
Servant
Inter
dependency
Dependency
dominated
Medium trust
No trust
Specification
based
Price based
High trust
Relationship
based
16
High-technology exports (% of manufactured exports)
High Tech Is Not the Only (or Best)
Route to Prosperity and
Competitiveness!!
75
Philippines
60
Malaysia
45
Thailand
30
China
Mexico
Indonesia
15
Brazil
Argentina Colombia
Vietnam
Chile
India
Sri Lanka PakistanBangladesh
0
0.00
20.00
40.00
60.00
80.00
100.00
Manufactures exports (% of merchandise exports)
17
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
Five Dimensions of S&T Capacity
•National (and local)
government capacity to
formulate and
implement coherent
S&T programs and
policies
Produce new
knowledge in
universities and
research institutes via
R&D
Import, adapt, and
adopt knowledge
produced outside the
country – “act locally,
think globally”
Enterprise capacity to
utilize modern
equipment to produce
higher value added,
globally competitive
goods and services
Technologically and
scientifically skilled
workforce trained to
work with modern
equipment and
production processes
19
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
20
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
21
S&T Capacity Building
National Policy Making
• Fundacion Chile, MOST,
• Technology diffusion institutions
• Technology Foresight
S&T Capacities in Universities
and R&D Institutes
Enterprises
• R&D vs. ERC
• Centers of Excellence
Labor Force
• Vocational training, secondary ed.
• Skills Development Centers
• Life-long learning
Education Sector
• Primary education
• Secondary education
• Higher education
• In-house research
• Supplier development
• Innovation capacity improvement
22
S&T Capacity Building
Scientific research
Supply
• MSI Centers of Excellence
• Instrumentation Centers
• Higher Education projects/ESW
Technology adoption,
adaptation, and diffusion
• Engineering Research Centers
• Technology Transfer and
Diffusion Institutes
Linkages
• Technology consortia
• Mobility schemes
• Matching grants
Demand • Tax incentives for in-house research • Modernization of industrial firms
• Industrial labs
• Grant programs for industrial
research
• Agriculture technology projects
• Industrial credit lines
23
How Do Countries Build S&T
Capacity? / What Has the Bank
Done to Help?
24
Linear S&T Capacity Building
Model
Basic
Science
Applied
Research
Development
Production
Marketing
25
East Asia Capacity Building Model: A Different Approach
Creation
Improvement
Assimilation
Acquisition
S&T & R&D
Stages
Imitation
internalization
generating
Development
Stages
Developing
Newly-Industrializing
Advanced
Country
Country
Country
26
Growth of Science and Technology
Community in Korea
1963
1970
1980
1990
2002
4
33
428
4,676
14,433
Gov’t vs. Private
97 : 3
71 : 29
64 : 36
19 : 81
26 : 74
R&D / GDP
0.25*
0.38*
0.77*
1.87
2.53
5,628
18,434
70,503
GERD (US$, Million)
Researcher (Persons)
189,888
(FTE: 141, 917)
Source: Ministry of Science and Technology
* R&D / GNP
27
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
Number
224
765
1,166
3,267
3,568
3,331
3,546
Rank
17
11
8
6
7
8
8
28
Levels of Innovation
Frontier Innovation
Technology
Improvement
and Monitoring
Significant Adaptation
Basic Production – use technology
29
Science
Development
and Creation
R&D
Design &
Engineering
Technician & Craft
Skills & Capabilities
Science
Use, Operation
and Maintenance
Basic Operators
Skills and Capabilities
(These all need human capacity.)
30
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
31
Nine dimensions of Firm
Technological Capability
Awareness
Linkages
Learn
Implement
Search
Core competence
Strategy
Acquire
Best practice model
Source:
4
3
2
1
0
Assess/select
Company x profile
Korea: How Firms Use Knowledge, Part A – Firm Level Innovation in the Korean Economy,
World Bank processed, 2002
32
Groups of Firms According to
Technological Capability
High
Type 4 Firms
High capability and
absorptive capacity
Type 3 Firms
‘Know what, but not
always where and how’
Awareness
of What
and How
to Change
Low
Type 2 Firms
‘Know they don’t know,
but don’t know what’
Type 1 Firms
‘Don’t know that
they don’t know’
Low
Awareness of the
need to change
High
33
• “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
34
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
35
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 institutionbuilding and strengthened institutes that
transferred existing knowledge into local
economy.
36
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 prerequisite for S&T capacity building. Nothing else
is possible without human capital
37
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
38
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
39
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
40
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
41
The Way Forward: Future
Agenda
42
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)
43
Capacity building is important and the
Bank is being asked to do more, but
the Bank has recently been doing less
Projects Providing Major Support for S&T, FY80-04
1800
1600
1400
1200
1000
800
600
400
200
0
FY80
82
84
86
88
90
92
94
96
98
00
02
04
44
Capacity building is important and the Bank
is being asked to do more, but the Bank has
recently been doing less (2)
Figure 4: Projects Providing Minor Support for S&T, FY80-04
$ million
7,000
6,000
5,000
4,000
3,000
2,000
1,000
FY80
83
86
89
Minor S&T costs
92
95
Non-S&T costs
98
01
04
45
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
46
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
47
Initial Work Program
• Organizational
• Operational
• Analytical
48
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,
49
etc.
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?
50
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 ?
51
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.
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53
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