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Science, Technology and Innovation (STI) and Development
Michael Lim Policy Review Section Science, Technology and ICT
Branch UNCTAD-DTL Geneva 5 April 2011 Outline Technology and
economic growth Science, technology and innovation (STI) Innovation
systems National policies for developing STI National and global
challenges The Global Distribution of Knowledge (from UNCTAD LDCR
2007) The Global Distribution of Poverty (from UNCTAD LDCR 2007)
Economic growth and income trends: 3 big issues to explain
There is huge variation in per capita income across countries. Why?
There is huge variation in growth across countries. Why? Global
growth was close to zero until about 1500, rose slightly until
about 1800, and has accelerated since Growth patterns varied by
region and country (and this continues). Why? Technology and
economic growth (1)
Output (Y) is a function of capital (K), labour (L) and technology
(T) Y=f(K, L, T)or Output (Y) is a function of physical capital
(Kp), human capital (Kh), labour (L), and technology (T) Y=f(Kp,
Kh, L, T) In standard neoclassical growth theory Y =T*f(Kp, Kh, L)
with technology (T) exogenous (external) ie T=f(?) T is unexplained
Kp=f(Kpt, It) It is new investment in physical capital Kh=f(Kht,
Iht) Iht new investment in education and training and health
L=f(Lt, grL) grL is population growth Technology and economic
growth (2)
Economic growth is directly a function of Kp, Kh and improved
technologies. Controversy over the relative importance of each.
Additional growth determinants: Initial conditions; institutions
and incentive structures; geography; national policies; perhaps
culture. Technology as a source of growth
Since about 1770 technological development has been a major source
of global economic growth. The Industrial Revolution in England ( )
was a notable spur to growth and the start of intensive application
of STI to economic production. What is technology? Technology is
knowledge applied to the production of goods or services. Different
forms: - physical machinery -production processes -software -tacit
knowledge What is innovation? Broad definition: The introduction of
new or improved products, or of new or improved processes and
organizational methods in the design, production and distribution
of goods and services. Invention: 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. Types
of innovation All along the production value chain: production,
design, distribution and marketing. Technological (related to the
introduction of new technologies) or non-technological
(organizational, managerial or institutional). Incremental (through
small improvements), radical (through major breakthroughs) or
revolutionary (a fundamentally important new technology is
created). Is STI important? Innovative Capabilities and Income(from
UNCTAD LDCR 2007) STI applications 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. STI
applications: -improving productivity in manufacturing, agriculture
and services -preventing food crises (starvation) -increasing value
added, diversifying production -mitigating/adapting to climate
change -developing new energy sources renewable energy -water
management -public services (health, education) -addressing disease
epidemics -organizing mega-cities (smart urban planning) -early
warning systems for natural disasters (tsunamis, hurricanes)
-slowing desertification etc. 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 STI capabilities: what
are they? (1)
Scientific, technological and innovative capabilities. Broad
definition add capabilities in engineering, other technical
capabilities, entrepreneurship, management and organizational
capabilities. STI capabilities vary by country, industry and
enterprise. STI capabilities: What are they? (2)
Scientific capabilities the ability to learn, understand and apply
scientific knowledge and skills to solve problems. Engineering
capabilities the ability to learn, understand and apply engineering
knowledge and skills to solve problems. Technological capabilities
the ability to learn, understand and master the use of existing
(both traditional and recent) technologies to solve problems;the
ability to produce new technologies. Innovative capabilities the
ability to innovate. Technological learning by enterprises (firms
and farmers most importantly) is important for technological
development of a country. Linear models of innovation A National
system of innovation (from Arnold and Bell (2001))
Framework conditions Financial environment Taxation and incentives
Propensity for innovation and entrepreneurship Trust Mobility
Education, Literacy Demand Consumers (final demand) Producers
(intermediate demand) Business system Companies Farms Healthcare,
etc Education and research system Professional education and
training Higher research Public sector Intermediate Organizations
Research institutes Brokers, etc Infrastructure Banking, venture
capital IPR and information system Innovation and business support
system Standards and norms National policies for STI development
(2)
STI policy (S&T policy, innovation policy, S&T/innovation
strategies) Education and training policies Trade policies Foreign
direct investment (FDI) and TNC policies Intellectual property (IP)
policies Technology transfer policies S&T infrastructure
policies Financial sector policies Macroeconomic policies
Industrial policies 19 National policies for STI development
(3)
Physical infrastructure policies (esp. energy, physical clusters
(science parks, S&T 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 (IT in Penang, Malaysia)
Developing STI indicators to aid policymaking 20 TECHNOLOGY
IMPROVEMENT & MONITORING SIGNIFICANT ADAPTATION
Stages of technology development by innovation effort(from UNCTAD,
WIR 2005) FRONTIER INNOVATION TECHNOLOGY IMPROVEMENT &
MONITORING SIGNIFICANT ADAPTATION BASIC PRODUCTION 21 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. 22
National and global challenges
Natural resource depletion Food crises malnutrition, starvation
Climate change Energy challenge fossil fuels and RETs Growth,
employment and natural resource sustainability Malthusian trap? STI
and climate change STI role in adaptation and mitigation (green
economy) Many activities/industries (energy, transport, agriculture
etc) Diffuse existing environmentally sound technologies (ToT)
(UNFCCC) - RETs Develop (and diffuse) new technologies Capacity
building (for technology absorption) in some countries Building
innovative capabilities for CC STI and climate change (2)
Dichotomy of commercial interest versus public good (reduced GhG
emissions) Issue of IPRs Issue of financing ToT and capacity
building Post-global crisis (2008-9) stimulus plans and STI for CC
Conclusions Strong STI capabilities, human capital and innovation
systems, and easy access to foreign technologies, are important for
growth and development, social welfare and facing environmental
challenges. National policy action critical to support each of them
for optimal growth and development impact. STI policies should
ideally be a coherent part of a countrys national development
policy and strategy (including PRSPs in LDCs). There are many
challenges; STI badly needed Discussion issues What is the purpose
of science: Conquer nature? Help mankind? Is technology always
good? Is innovation always good? Do all countries innovate? Can STI
prevent a Malthusian trap? Do we have the wisdom to manage
technologies? End