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Science, Technology and Innovation (STI), Growth and Development: the basic ideas

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Title: Science, Technology and Innovation (STI), Growth and Development: the basic ideas


1
Science, Technology and Innovation (STI), Growth
and Development the basic ideas
  • Michael Lim
  • (michael.lim_at_unctad.org)
  • Policy Review Section
  • Science, Technology and ICT Branch
  • UNCTAD-DTL
  • Virtual Institute
  • University of Dar-es-Salaam study tour
  • 23 February 2010
  • Geneva, Switzerland

2
Outline
  • Technology and economic growth
  • Science, technology and innovation (STI)
  • Innovation systems
  • National policies for STI development
  • Conclusions on STI
  • STI and agriculture

3
The Global Distribution of Knowledge(from
UNCTAD LDCR 2007)
4
The Global Distribution of Poverty (from UNCTAD
LDCR 2007)
5
Technology and economic growth (1)
  • Economic growth is directly a function of Kp, Kh
    and improved technologies.
  • Some controversy over the relative importance of
    each of the three.
  • Additional growth determinants Initial
    conditions institutions and incentive
    structures geography national policies perhaps
    culture.

6
Technology and economic growth (2)
  • Different views on technology and innovation
    exist.
  • Neoclassical Technology is exogenous, but drives
    productivity of labour and capital.
  • Marx technology-driven economy and social
    relations.
  • Schumpeter creative destruction, competition and
    new firm entry create innovation.
  • Endogenous growth theory increasing returns from
    knowledge accumulation through development of
    technology and human capital.
  • Evolutionary economics learning required for
    technological progress, cumulative learning, path
    dependency.
  • Innovations systems theory technology and
    innovation are endogenous, depend on a complex,
    dynamic system.

7
What is technology?
  • Technology is knowledge applied to the production
    of goods or services.
  • Different forms
  • -physical machinery
  • -production processes
  • -software
  • -tacit knowledge

8
What is innovation?There are many definitions
  • The introduction for the first time by an
    organization (or person) of a novel product or
    process that is new to the world.
  • Invention U.S. Patent Law a new, useful
    process, machine, improvement, etc., that did not
    exist previously and that is recognized as the
    product of some unique intuition or genius, as
    distinguished from ordinary mechanical skill or
    craftsmanship.
  • Broad definition The introduction of new or
    improved products, processes and organizational
    methods in the design, production and
    distribution of goods and services.

9
Is STI important?Innovative Capabilities and
Income (from UNCTAD LDCR 2007)
10
Why STI is important
  • Building strong STI capabilities, accessing
    foreign technologies and building strong national
    systems of innovation are important for economic
    growth, social welfare and addressing
    environmental challenges.
  • Applications improving productivity in
    manufacturing, agriculture and services,
    increasing value added locally, diversifying
    production, building infrastructure, conserving
    water in agriculture, improving public services
    (health, education), addressing disease
    epidemics, organizing mega-cities (smart urban
    planning), adapting to climate change, developing
    new energy sources, reducing carbon emmissions,
    building early warning systems for natural
    disasters (tsunamis, hurricanes), adapting
    buildings for earthquake prone zones, slowing
    desertification, etc.

11
Channels of international technology transfer
  • entry and operation of foreign enterprises
    (includes FDI and non-FDI)
  • joint ventures or strategic partnerships
  • the movement of staff between foreign and
    domestic enterprises
  • domestic enterprises forming linkages with TNCs
  • domestic enterprises investing in (or buying)
    foreign enterprises
  • imports of machinery
  • Study through reverse engineering and imitation
  • licensing agreements
  • technical cooperation activities
  • accessing technology from technical publications,
    journals or patent databases

12
Innovation systems
  • (1) Linear approach Science-push and market-pull
    models
  • -Science-push basic and applied science (RD)
    leads to Innovation
  • -Market-pull Market needs lead to RD and then
    to innovation
  • (2) Systems approach Innovation is created
    within a complex, dynamic system

13
A National system of innovation(from Arnold and
Bell (2001))
14
An agricultural innovation system (from
Spielman and Birner (2008), adapted from Arnold
and Bell (2001)).
15
How to build STI capabilities and innovation
systems?
  • (1) Strong STI capabilities, human capital and
    innovation systems may not develop on their own,
    or may develop only very slowly. National
    policies can help accelerate the process.
  • (2) National policymakers develop a realistic and
    coherent national STI policy/ strategy in light
    of national circumstances, priorities and goals,
    then integrate the STI strategy in their overall
    development strategy.

16
National policies for STI development (1)
  • STI policy (ST policy, innovation policy,
    ST/innovation strategies)
  • Education and training policies
  • Trade policies
  • Foreign direct investment (FDI) and TNC policies
  • Intellectual property (IP) policies
  • Technology transfer policies
  • ST infrastructure policies
  • Financial sector policies
  • Macroeconomic policies
  • Industrial policies

16
17
National policies for STI development (2)
  • Physical infrastructure policies (esp. energy,
    physical clusters (science parks, ST parks, ICT
    parks)
  • Migration policies (skilled migrants and brain
    circulation)
  • MSME policies
  • Policies to support technology start-ups
  • Policies to link SMEs to value chains
  • Entrepreneurship policies
  • Competition policies
  • Metrology, standardization, testing and quality
    (MSTQ) policies
  • Government procurement policies
  • Cluster policies
  • Developing STI indicators to aid policymaking

17
18
Typology of STI policy goals at different stages
of development
  • Distant technological laggard countries (early
    stage).
  • Technological laggard countries (later stage).
  • Near technological frontier countries.
  • At the technological frontier countries.

18
19
Challenges for national STI policy-making in
developing countries
  • 1. No one size fits all or best model and more
    than one path (and strategy) possible to
    technological development.
  • 2. No blueprint for building innovation systems.
  • 3. Country circumstances vary (initial
    conditions, natural endowments, institutions and
    incentive structures, geography, size, culture,
    leading industries, human capital, policymaking
    ability).
  • 4. Little experience in applying IS to developing
    countries.
  • 5. Often have incomplete innovation systems that
    function poorly.
  • 6. Policies should target medium- and long-term
    results, and require both political leadership
    and clear policy goals.
  • 7. Innovation systems are complex and require
    skill to analyse.
  • 8. They often lack STI indicators.
  • 9. Reduced policy space, in part due to various
    bilateral, regional and multilateral agreements
    (on trade, investment, IP etc.). Some policies no
    longer possible.
  • 10. STI policies must adapt over time to changing
    conditions and requires policymaking skill.

19
20
Conclusions on STI
  • National STI policies matter for growth and
    development in all countries.
  • There is controversy over the role of STI,
    interpreting different country experiences, the
    role of the state.
  • All countries should think about STI development
    in the context of their specific circumstances,
    priorities and goals.
  • There is no single best model, no blueprint to
    follow and more than one possible path to
    technological development.
  • Inaction on STI by policymakers will be costly
    for a country.

20
21
Global food crisis 2007-08 causes
  • Growing global food demand
  • Poor harvests is some countries
  • Financial speculation in food commodities
  • Biofuels competing for food crop land
  • Lack of investment in agriculture
  • Lack of productivity growth in agriculture in
    Africa
  • Withdrawal of many farmers in developing
    countries
  • Low income of affected people and countries
  • Climate change and reduced arable land a current
    and imminent threat

21
22
Global food crisis solutions
  • Increased agricultural productivity
  • Higher investment in agriculture in developing
    countries
  • Improved rural infrastructure in developing
    countries
  • Land reform where needed
  • Public support for smallholder farmers
  • Improved AIS and STI capabilities for smallholder
    farmers

22
23
Role of STI in developing country agriculture
increasing productivity
  • Increased RD and more farmer-centered RD
  • Improved innovation capabilities of farmers
  • Institutional innovations to assist farmers
    better
  • Improved extension services
  • Access to fertilizer, superior seeds, smart
    irrigation
  • Matching best technology packages to specific
    African agro-ecological conditions
  • New, improved technologies needed (biotech
    solutions?)

23
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