2013 cambridge policy directions for innovation in lebanon’s industrial sector,omar bizri sti...

transcript

04/09/2023 1

Policy directions for innovation in Lebanon’s

industrial sectorOmar Bizri

Consultant for the Lebanese Council for Scientific Research (NCSR)

How-to of Innovation, Technology and Entrepreneurship

Cambridge, June 20-21, 2013

Objectives

This presentation will:- briefly report the results of a recent survey of industrial enterprises in Lebanon conducted by NCSR with support by the World bank during 2012-2013; - enumerate some of the main challenges facing innovation in Lebanon;- present a set of policy directives aimed at ensuring that Lebanon’s enterprises are transformed into innovation driven entities within a viable national innovation system.

Innovation in the Arab countries

0 10,000 20,000 30,000 40,000 50,000 60,000 70,0000

R² = 0.650248757677498

R² = 0.878363186089661

Values of the KAM innivation index vs. GDP per capita for all countries for whaich data is available (blue), the Arab countries (red) and country groups (green)

GDP per capita in PPP Dollars (2007)

Source: World Bank KAM Database Aug 2011

QatarUAE

KuwaitLebanon

Bahrain

The Survey and its findings

The survey covered 479 enterprises; Included 66 main sections and around 140 questions; Most firms answered most questions. Fairly representative in terms of subsectors & firm

sizes; Generated quite a few questions. So, in many ways it was well worth doing!

Lebanon’s industrial enterprises are mostly small / micro …

10 to 50

1 to 1039%

less than 158%

Percentages of firms making sales within in-dicated brackets (US$ millions)

Lebanese industrial enterprises are relatively youthful!

Prior to 1950

1950-1959 1960-1969 1970-1979 1980-1989 1990-1999 2000-2009 2010-20110

Institution building over the period 1950-present and prior to 1950 (76% est. since 1980)

Other characteristics of the industrial sector in Lebanon

Predominance of family businesses, 13% of firms employing

more than 60 workers (.. conservative, outdated decision making …);

Limited foreign investments and partnerships (… limited access to innovative inputs …).

Areas of specialisation (subsectors)

Food products16%

Printing and publshing14%

Textile and garments12%

Plastics and rubber8%

Chemicals8%

Metal products and industrial eqpt.20%

Software development and computer services

Other industries14%

Distribution of surveyed enterprises across sub-sectors/segments

Areas of specialisation (2)

Four sub-sectors make up 62% of total* • metal products and industrial equipment (20%); • food products 16%;• printing and publishing 14%;

• textiles and garments 12%.

* In terms of numbers rather than sales)

Lebanon Gulf countries

Other Arab

countries

Africa Europe United States

Other countries

Countries and continents in which firms’ products were sold

Track record of Lebanon’s industrial enterprises*

Industrial exports per capita doubling between 2000 and 2007, from $600 million to $1.25 billion.

As a percentage of GDP, industrial exports rose from 14 per cent in 2000 to 25 per cent in 2007.

*Figures from sources other than the Survey.

Awareness of the need for product and process innovations

In answer to the question “ Do you believe that there is need to change anything in your products or production processes?”

29 per cent of the firms covered by the Survey did indeed believe there was need for considerable changes; 25 per cent believed there was need for small or limited changes;

46 per cent of all responding firms indicated they did NOT feel any changes in their products or production process were needed.

New or significantly improved products introduced during 2010-2011 (1)

A sizeable proportion of firms, 45 per cent of the total firms surveyed, introduced a number of new or significantly improved products, during 2010-2011.

While 30 per cent of the total, indicated that they had introduced new or significantly improved services.

(Four new products or services per firm)

New or significantly improved products & processes introduced during 2010-2011 (2)

- 24 per cent of responding firms, reported undertaking activities aimed at introducing product or process innovations that were abandoned during 2010 – 2011.

- 29 per cent, reported development of product or process innovations that were still on-going by the end of 2011.

Maximum and minimum values for spending on R&D by enterprises taking part in the survey (in US dollars)

Minimum value Maximum value Std. deviation0

200,000

400,000

600,000

800,000

1,000,000

2010 2011

through firm's own abil-ities

mainly by other en-terprises/inst-itutions

with other enterprises/inst-itu-

tions14%

Modalities utilised by innovative firms in de-veloping new products.

(From total of 216 responding firms)

Were new product innovations achieved with foreign/national clients/providers or no one, during 2010-2011?

58 per cent of firms were able to introduce product innovations in cooperation with national clients and providers, which also indicates that significant innovation capabilities are nationally accessible.

A significant number of firms relied on foreign partners or providers. It might be expected that involvement of foreign partners and technology providers would be expected to bring in innovative techniques.

National Clients

No One Foreign Clients

Foreign providers

National providers

Other0

Patterns of cooperation in the introduction of process innovations N

Innovation in manufacturing and auxiliary processes

Summary of firm's responses regarding new or significantly improved production processes (pale blue) and auxiliary activities (cerulean blue)

introduced during 2010-2011 New methods were introduced No new methods were introduced

Cooperation in the introduction of new products and services (total of 119 enterprises)

ALI15%

Chambers of Comm. & Indy.24%

Berytech11%

Kafalat28%

Lebanese Univ. & Res. Cen-tres3%

Foreign Univ. & Res. Cen-tres8%

Other institutions11%

Distribution of instances of cooperation in the introduction of new products and services across Lebanese and foreign

institutions

Sources of information on technology

Answering the question:“During the years 2010 and 2011, how significant was the factor ‘Lack of information on technology’ in hampering your innovation activities or projects or influencing a decision not to innovate?”

Around 77 per cent, did not view lack of information regarding new technologies and the market an obstacle in acquiring innovative inputs.

Only 8 per cent of surveyed enterprises considered ‘lack of information on technology’ of high or medium importance.

Figures on instances of cooperation in introducing product and process innovations indicate that:

significant capabilities exist in both product and process innovation within the country AND in certain cases within the industrial firm itself. a considerable proportion of firms have succeeded in establishing links with both national and foreign clients and providers.

a miniscule role is played by both national and foreign research facilities and universities in cooperative activities aimed at product and process innovations.

Some further comments …

Only 47 per cent of the total number of enterprises surveyed were members of the Association of Lebanese Industrialists (ALI)!

So ALI may not be truly representative of the widest desirable range of enterprises.

Institutions such as Berytech and Kafalat (established a little more than a decade ago) seem to be doing very well in support of activities aimed at introducing innovative products and processes.

BdL plays a crucial role in support of Kafalat and other innovative ventures

Part II

Many challenges stand out.

Some are related to overall structure of the economic / political system!

But, let’s focus on more specific issues:

Prominent challenges

High costs of production (energy paramount!);Limited control on the application of standards and norms in the sector (poor quality often limits ability to penetrate

foreign markets);

Limited range of products and process technologies;

Inadequate support by government as well as technical and research institutions established with the express purpose of aiding the industrial sector.

Part III

A vital question is in need of in-depth consideration:

How grand / modest should Lebanon’s goals be?Are we simply seeking to enhance links between research centres, universities, on the one hand and industrial enterprises, on the other, or do we wish to transform the country into an innovation-driven economy?

Lebanon ... Has the potential for playing a much larger role than many think possible.

Just consider what its enterprises have done, with little or no support from various quarters:

Exports per capita doubling between 2000 and 2007, from $600 million to $1.25 billion.

As a percentage of GDP, exports rose from 14 per cent in 2000 to 25 per cent in 2007.

Lebanon’s industrial sector is reported as having:

enhanced its sophistication by around 36 per cent.

introduced over 100 new products between 2000 and 2008, including some with significant innovative inputs, such as ceramics, glass pigments, self-adhesive plates, paper board, watches, among other goods.

In Short

Transforming Lebanon into a Levant or Middle Eastern Tiger is possible, given sound policies and adequate support.

The way ahead …

R&D by all means! But also look at non-R&D innovations, i.e. in areas that are not necessarily related to frontier science and technology inputs: assembling available innovative inputs, adopting new management, purchasing,

marketing and distribution procedures;

Create a better business environment through policy, legislative, institutional changes.

Need a spedcialised national body to champion and monitor innovation, set policy goals, promote specific initiatives, evaluate progress … .

To move ahead … Looking only at the supply side is never a good option!

Doing what we are doing well even better is a good start!

Facing up to international competition will open up opportunities that will eventually pay!

Identifying priorities through considering the global rather than merely the national and regional scenes;

Encourage alliances with overseas partners;

Not easy but doable!

The Future will be far brighter for Lebanon IF:

Trade procedures are simplified, emphasising the export trade, through new technology;

Support is provided for innovation by SMEs in selected priority / breakthrough sub-sectors;

Clustering is encouraged for greater profitability;

Greater participation is ensured by the private sector in building viable innovation infrastructures;

Enterprises are enabled to break into global production networks;

The national innovation system is radically overhauled!

Thank You

The Future will be far brighter if:(3)

Better links and networking schemes are forged with Lebanon’s expatriate community active in promoting science, technology and innovation;

Greater involvement is ensured in international research programs and intra-regional collaborative ventures;

Collaboration and networking modalities between higher education and research centres, on the one hand, and private enterprises and their associations, on the other, is radically overhauled;

Better access is ensured to foreign technology, know-how, skills, organizational and management practices;

A set of key environmental issues are tackled.

Radical revision of Lebanon’s science, technology and innovation policy is required.

Comprehensive national industrial policy with clear cut implementation strategies, benchmarking and progress evaluation modalities has to be formulated.

Planners and policy makers will have to get together with the doers with the former listening more attentively listen to the latter!

Urgent Tasks

Further Reference Material

Networked Readiness Index Table (1); Networked Readiness Index (NRI): ICT use and technology adoption by business enterprises index values and world rankings

CountryOverall NRI index value;

ranking

Firm-level technology adoption

Capacity for innovation

PCT patents per million of population

Extent of business

Internet use

Extent of staff training

Impact of ICT on new

services and products

ICT PCT Patents per

million of population

Impact of ICT on new

organizationalmodels

Knowledge-intensive jobs

as per centage of workforce

Bahrain 4.98 (27) 5.7 (20) 2.4 (117) 2.1 (51) 5.5 (40) 5.0 (11) 5.2 (30) 0.1 (71) 4.6 (42) 20.7 (68)

Qatar 5.10 (28) 6.0 (7) 5.0 (11) 1.3 (61) 5.9 (19) 4.7 (24) 5.4 (18) 0.3 (54) 5.4 (6) 24.2 (55)

UAE 5.07 (30) 5.9 (16) 3.8 (32) 4.5 (44) 5.5 (36) 4.7 (25) 5.4 (15) 1.2 (41) 5.1 (21) 36.1 (30)

Saudi Arabia 4.82 (34) 5.7 (23) 4.3 (21) 2.1 (48) 5.3 (45) 4.6 (28) 5.1 (33) 0.7 (47) 5.2 (18) 22.9 (59)

Oman 4.48 (40) 5.2 (49) 3.2 (57) 0.4 (78) 5.4 (42) 4.3 (42) 4.8 (47) 0.0 (82) 4.5 (44) 24.3 (54)

Jordan 4.2 (47) 5.4 (37) 2.7 (92) 0.5 (75) 4.9 (76) 3.5 (103) 4.5 (67) 0.2 (60) 4.2 (67) na (-)

Tunisia 4.12 (50) 5.1 (50) 3.4 (44) 0.8 (68) 4.8 (82) 4.4 (38) 4.8 (50) 0.2 (65) 4.6 (41) na (-)

Kuwait 3.94 (62) 5.4 (39) 2.8 (90) 0.4 (82) 4.7 (91) 3.5 (102) 3.6 (120) 0.3 (55) 3.5 (114) 18.7 (78)

Egypt 3.78 (79) 4.7 (78) 2.8 (83) 0.6 (73) 4.6 (96) 3.0 (131) 4.2 (86) 0.1 (78) 4.1 (74) 30.3 (43)

Morocco 3.64 (91) 4.7 (74) 2.6 (108) 0.6 (74) 4.5 (102) 3.9 (74) 3.8 (113) 0.2 (64) 3.6 (102) 6.8 (104)

Lebanon 3.53 (95) 4.8 (68) 2.6 (106) 0.9 (67) 4.7 (90) 3.6 (98) 3.6 (125) 0.4 (51) 3.1 (128) 31.9 (40)

Syria 2.85 (129) 4.8 (70) 2.1 (134) 0.4 (80) 3.8 (132) 2.6 (140) 2.9 (139) 0.0 (81) 2.7 (137) 15.5 (90)

Yemen 2.63 (141) 4.0 (123) 1.5 (142) 0.0 (105) 3.6 (137) 2.9 (135) 2.2 (142) 0.0 (96) 2.6 (139) 17.0 (86)

Source: The United Nations Economic and Social Commission for Western Asia (UN-ESCWA). Information presented in this table quotes the Global Information Technology Report published by the World Economic Forum and INSEAD 2013. Contents of this table were downloaded on 16th May, 2013 from: http://css.escwa.org.lb/ictd/2094/1.pdf.Its contents tally with the Networked Readiness tables published on the Internet at:http://www3.weforum.org/docs/GITR/2013/GITR_OverallRankings_2013.pdf

Networked Readiness Index Lebanon’s scores

Lebanon’s NRI rankings:106th position among the countries included in the WEF

report, and 8th position in comparison with the thirteen Arab

countries included in table (1).

With regard to business competitiveness among countries across the world Lebanon’s ranking is:

95th and with only Syria and Yemen trailing behind;11th among the thirteen Arab countries for which NRI

values and world rankings are reported.

R&D Spending

Country Spending by private enterprise(Rank among 127 countries) 1

Government spending as percentage of

GDP(2006)2

Oman 33 -

Tunisia 36 1.03

Qatar 40 -

Saudi Arabia 45 -

UAE 53 -

Morocco 62 0.75

Egypt 69 0.2*

Kuwait 70 0.2*

Jordan 74 0.34

Algeria 89 -

Syria 101 -

Bahrain 106 -

Libya 117 -

Lebanon3 - 0.2

Sudan - 0.3

1. Dutta S. & I. Mia, 2007; World Economic Forum, The Global Information Technology Report 2007-2009 ; 2. World Bank, 2008; Knowledge Assessment Methodology – KAM; 3. National Centre for Scientific Research (Lebanon)

Patenting Activity

Rank among 127 surveyed countries 3

Annual average of patents

granted during 2002-20062

Patents granted during 2005-2006 1

Saudi Arabia 49 14.8 37

UAE 41 4.6 11

Egypt 82 5.6 11

Kuwait 35 5.6 10

Syria 69 0.8 3

Oman 86 0.2 1

Jordan 67 1.4 1

Bahrain 86 0 0

Qatar 39 0.4 -

Algeria 83 0.4 -

Tunis 66 0.6 -

Morocco 77 0.8 -

Lebanon - 2.8 -1- USPTO; 2- KAM 2008; 3- World Economic Forum, The Global Information: Technology Report 2007-2008

Information and Communications Technologies

عرضحزمةالنفاذإلىشبكةاإلنترنتالدوليةفيالدولالعربيةومجموعاتمنتقاةمندولالعالم الشكل (6-4)؛

سمةلنلكتة(ب

مةحزالضعر

KAM 2008 ،البنكالدولي تقييمالمعرفة؛ المصدر: قاعدةمعطياتمنهج

Information and Communications Technologies

( بالدوالر الشكل (6-5)؛سلةأسعارالنفاذإلىاإلنترنت (شهريا/لمجموعاتمنتقاةمنالدول حسبزمرمداخيلها في بعضالدولالعربية وللعالمو

دانسوال

انياريتمو

تييبوج

ينحرالب

بمغرال

تكويال

ديةسعو

الطرق

مانع-

ريةسو

تاراإلما

ستون

دنألرا

منالي

انلبن

ائرجزال

صرم

ضخفالمنخلالد

المالع

نىألدسطا

متولالدخال

ليالعاخلالد

لىألعسطا

متولالدخال

الردوبال/ رياشه

ترنإلنتىاإلفاذالن

KAM 2008 ،البنكالدولي المصدر: قاعدةمعطياتمنهجتقييمالمعرفة؛

Information and Communications Technologies take to extra slides

استهالكالورقواستخداماإلنترنتفيدولالعالموبعضالدولالعربية الشكل (6-11)؛

R2 = 0.7715

R2 = 0.6853

0 50 100 150 200 250 300 350

( بالكيلوغرامات ? معدلاستهالكالورق (للفردسنويا

سمة

فنلأل

لكت

رنإلنت

يادمستخ

مددع

http://www.swivel.com/data_sets/columns/1000512:الموقع

The Future will be far brighter for

Lebanon IF: (2)

Arab Research Institutions

Ranking of Arab countries in terms of quality of their research institutions

Source: Dutta S. and I. Mia, 2007; World Economic Forum, The Global Information Technology Report 2007-2008

CountryRank among 127 surveyed

countriesRank of within Arab countries

Tunisia 36 1

Oman 38 2

Qatar 45 3

Kuwait 46 4

Saudi Arabia 52 5

Jordan 59 6

UAE 66 7

Morocco 79 8

Syria 89 9

Egypt 90 10

Algeria 91 11

Bahrain 113 12

Turkey 49 --

Malaysia 17 --

Innovation

Variation of Innovation Index with GDP/Cap; World trend and trend for selected Arab countries and country groups

(Source: KAM 2008)

R2 = 0.816

R2 = 0.261

0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000

GDP/Cap (PPP US$, 2005)

Lebanon

Jordan

Bahrain

OmanTunisia

Kuw ait

QatarSaudi Arabia

Algeria

Information and Communications Technologies take to extra slides

Computers per 1,000 People and Internet Users per 1,000 People, 2005 vs. Gross Tertiary Enrollment Rate

R2 = 0.2253

0 10 20 30 40 50 60 70 80 90 100

Gross Tertiary Enrollment Rate, 2005

Patterns of cooperation that went into the development of new products

National Clients

Foreign Clients

No One Foreign providers

National providers

Other0

2013 cambridge policy directions for innovation in lebanon’s industrial sector,omar bizri sti...

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