Building STI Capacity for Building STI Capacity for Sustainable Development and Sustainable Development and

Poverty ReductionPoverty Reduction

Alfred WatkinsAlfred Watkins

World Bank S&T Program CoordinatorWorld Bank S&T Program Coordinator

Presentation to the AAAS MeetingsPresentation to the AAAS Meetings

Boston, MABoston, MA

February 17, 2008February 17, 2008

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OVERVIEW: OVERVIEW: Basic Approach Basic Approach

and and Stylized FactsStylized Facts

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Underlying Philosophy

• 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

• The time to start investing and building STI capacity is when you are poor

• In today’s rapidly changing global economy, the critical economic development issue is no longer whether countries should build STI capacity but what type of capacity to build and how to build it, given each country’s economic constraints and starting point

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Why Worry About All This?

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2

4

6

8

10

12

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1960 1965 1970 1975 1980 1985 1990 1995 2000

Knowledge makes the Difference between Poverty and Wealth...

Rep. of Korea

Ghana

Thousands of constant 1995 US dollars

Difference attributed to knowledge

Difference due to physical and human capital

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Difference Attributable to Difference Attributable to KnowledgeKnowledge

• What kind of knowledge?

• Where do you get it?

• How do you find it?

• How do you learn to use it?

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Dimensions of STI Capacity

National (and local) government capacity to

formulate and implement coherent S&T programs

and policies

Enterprise capacity to utilize knowledge to

innovate and produce higher value added, globally competitive goods and services

Education, vocational training, and R&D

institutes

Technologically and scientifically skilled workforce trained to work with modern equipment and production processes

National (and local) government capacity to

formulate and implement coherent S&T programs

and policies

Enterprise capacity to utilize knowledge to

innovate and produce higher value added, globally competitive goods and services

Education, vocational training, and R&D

institutes

Technologically and scientifically skilled workforce trained to work with modern equipment and production processes

Import, adapt, and adopt knowledge produced

outside the country

Produce and use new knowledge via R&D

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Acquisition

Assimilation

Improvement

Creation

Where Do You Start?: East Asia Capacity Building Model

Developing

Country

Newly-Industrializing

Country

Advanced

Country

Imitation internalization generationSTI Capacity Focus

DevelopmentStages

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Korea R&D (% of GDP) 1963-2003

Source: Korea Science and Technology Policy Institute; WDI, 2007

0

0.5

1

1.5

2

2.5

3

1963 1970 1980 1990 2003

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Korea Patent Trends (1965-2006)

0

1000

2000

3000

4000

5000

6000

7000

1965

1967

1969

1971

1973

1975

1977

1979

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

Source: United States Patent and Trademark Office (USPTO), 2007

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Removing Barriers is Necessary But Does Not Automatically Build STI Capacity

Barriers to technology absorption and diffusion

Cap

acity

for

tec

hnol

ogy

abso

rptio

n an

d di

ffus

ion

High Barriers Low Capacity

High Barriers High Capacity

Low Barriers High Capacity

Low Barriers Low Capacity

Source: Adapted from RAND

Sub Saharan Africa

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Groups of Firms According to Technological Capability

High

Low

Awareness of the need to change Low High

Type 1 Firms ‘ Don ’ t know that they don ’ t know ’

Type 2 Firms ‘ Know they don ’ t know,

but don ’ t know what ’

Type 3 Firms ‘ Know what, but not

always where and how ’

Type 4 Firms High capability and absorptive capacity

Awareness of What and How to Change

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National Technological LearningNational Technological LearningS&T learning

capacityS&T learning opportunities

Knowledge generation

capacity

Capital imports

Inward FDI

S&T Networks

+Knowledge absorption capacity

Education

R&D

Licensing

Diaspora and Expats

Internet Export

Customers

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High Tech Does Not Always Equal High Income

Philippines

India

Fiji Colombia

Chile

Argentina

Brazil

Indonesia

China

Pakistan

Malaysia

Thailand

Sri Lanka

Costa Rica

Vietnam

CambodiaB'desh

Mexico

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

0 10 20 30 40 50 60 70

Hi Tech (% of Manufacturing Exports)

GD

P P

er

Ca

pit

a (

Co

nta

nt

US

D)

Source: World Development Indicators, 2007

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GDP per capita in 2006 (constant 2000 US$)

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

Nepal

Timor

-Les

te

Cambo

dia

Bangla

desh

Mon

golia

Vietn

am

Pakist

anIn

dia

Indo

nesia

Sri La

nka

Philip

pines Fiji

Thailand

Mala

ysia

Korea

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Export Structure by Technology CategoryProducing “what” vs. producing “how”

Finland

Hi Tech22%

Medium Tech 30% Low Tech

10%

Resource Based 38%

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Manufacturing Value-Added Per Capita (Constant US Dollar)

Source: UNIDO, 2005

0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000

Bangaldesh

India

Pakistan

Sri Lanka

Philippines

Indonesia

Thailand

Malaysia

Korea

United States

Singapore

Finland

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Agriculture Value-Added Per Worker (Constant US Dollar)

0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000

Nepal

Timor-Leste

Vietnam

Cambodia

Bangladesh

India

Indonesia

Thailand

Pakistan

Sri Lanka

Mongolia

Philippines

Malaysia

Korea

Finland

United States

Singapore

Source: World Development Indicators, 2007

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Export Structure of Forest Cluster in Latvia and Finland, 2000

0

5

10

15

20

25Sa

w &

Othe

r Mills

,Pla

ning

Conta

iners

& Bo

xes

Furn

itures

& Fix

tures

Pulp

ofwo

od,

pape

r &pa

perb

oard

Me

tal &

Woo

dwo

rking

Mach

inery

Spec

ialIn

dustr

ialMa

chine

ry

Elec

trica

lIn

dustr

ialMa

chine

ry

Labor-intensive Technology-driven

Latvia

Finland

 

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RECENT ACTIVITIESRECENT ACTIVITIES

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How can we help countries build How can we help countries build the STI capacity they need to the STI capacity they need to

increase value added and generate increase value added and generate wealth?wealth?

Should countries focus on building Should countries focus on building capacity to create new knowledge capacity to create new knowledge

or utilize existing knowledge?or utilize existing knowledge?

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Main Finding

Much of the science, engineering, and technical knowledge needed to achieve these objectives already exists outside Rwanda and is widely used outside Rwanda. Unfortunately, this knowledge is not being applied in Rwanda to solve Rwanda’s problems. The STI capacity building challenge, therefore, is to train farmers, entrepreneurs, engineers, technicians, scientists and teachers to find the appropriate knowledge, import it, adapt it to local conditions, and use it to solve local problems and produce and market higher value, more knowledge intensive goods and services

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STI Capacity Building and Mr. Zoellick’s Six Themes

Goal: Sustainable Inclusive GlobalizationSTI Program touches on many of these themes

• Low Income Countries• Middle Income Countries• Arab World• Global Public Goods• Knowledge Sharing• Fragile States

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Low Income Countries (1)

• Basic Approach: Technical solutions to most problems facing low income countries are already known and widely utilized around the world. Unfortunately, most people and institutions in low income countries do not have the STI capacity needed to utilize this knowledge to solve problems in their own countries

• Challenge: Create the necessary capacity, starting from generally low initial capacity levels

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Low Income Countries (2)

• Ongoing Activities: STI Needs Assessments and Action PlansPilot programs in Rwanda, Ghana, Mozambique and

UgandaRwanda book has been publishedRwanda issues: clean drinking water, food

processing, development and diffusion of appropriate technology, adding value to natural resources, geothermal and geological sciences, diffusion of agricultural R&D

Ghana – non-traditional mfg. exports, value added agriculture, herbal medicines

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Low Income Countries (3)

• Need Assessment issues: survey existing capacity, understand what new capacity is needed, action plan for building the additional capacity

• Complements ongoing World Bank work in agriculture, infrastructure, energy, education, PSD, etc.

• Next Steps: Implementation projects, tool kits

STI Capacity Building: A Cross Cutting Issue

STI needs assessment focuses on solving a problem (ex: food processing capacity building) and probes across multiple silos

to identify capacity needs.

Higher Education and TVET

Private Sector Development

R&D

Standards & Quality

Infrastructure

Agriculture & Rural Dev.

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Cross-Cutting Nature of STI Capacity Building

Building Capacity in

Food Processing

Industry

Infrastructure (develop transportation for

perishable goods; power for processing units and cold storage)

Standards and Quality Assurance

(develop capacity for testing, certification and compliance)

Private Sector and Industrial Development

(streamline informal food processing units)

Agriculture and Rural Sector Development

(develop cottage industry forpackaging material from fiber crops)

Education and Human Resource Development(develop higher education, TVET,

on-the-job training)

Business Regulatory Environment (improve ease of doing business,

trade freedom, FDI incentives)

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Capacity building is needed at all skill levels

R&D

Design &Engineering

Technician & CraftSkills &

Capabilities

Basic OperatorsSkills and Capabilities

Hydrological Analysis of Surface and Underground

Water

Watershed Conservation and Pollution Control

Well Boring and Pumping Underground Water

Harvesting Rainwater Run-offs from Roofs and Fields

Water Storage & Distribution Infrastructure

Water Purification and Water Quality Control

Skill Levels Required Tasks Required Skills

Hydrology, Geology, Limnology, Geochemistry, GIS and Remote Sensing

Environmental Engineering, Chemistry, Soil Science, Geology

groundwater engineering, Construction, Masonry, Pump operation, maintenance

Geology and HydrologyConstruction and Masonry

Civil Engineering; Construction, masonry (for tanks, reservoirs, pipes)

Chemistry, Microbiology, Public Health, Environmental Science, Laboratory Assistance

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Enterprise-based model of STI Capacity Building: PPP Options

Entrepreneur(Diaspora, FDI, Expat, Local, NGO)

Market(Local, Regional, Global)

Uses and invests in well-trained manpower through•On-the-job-training•Vocation schools•Universities

Strives for product and process innovation through•Technology Searching•Technology Acquisition•Technology Adaptation

Meets Standards and Quality through •Engineering•Production techniques •Field and lab testing

Produces Saleable products and servicesInformation from market research and from buyers

Farmers and Outgrowers

Farmers and Outgrowers

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Middle Income Countries (1)

• Starting Point: MICs had an initial competitive advantage based on trade preferences, prior abundance of low wage, unskilled labor

• But rising wages and higher standards of living are leading to a loss of competitive advantage – need to move from (i) cheap labor to (ii) skilled labor and innovation (iii) producing higher value added, skill intensive goods and services

• How can late-comers catch up?• Existing laws, institutions, business practices are

not designed to address these issues

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Middle Income Countries Work currently underway in several countries and could be

extended Review IP Legislation to ensure it fosters and supports

innovation and technology diffusion Review governance structures for research institutes – do they

work in a financially sustainable way on economically relevant innovation issues? Do they combine first rate R&D with technology search and diffusion?

Emphasis on technology diffusion capacity and technology upgrading of local industry – SME spin-offs, cluster and supplier development

Prepare needs assessments and action plans for relevant sectors where FDI and/or significant domestic investment is taking root.

Work in collaboration with local industry and foreign investors Identify relevant lessons of experience/international best practice

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Knowledge Sharing: Current and Potential Activities

• Global Forum on STI Capacity Building -- www.worldbank.org/stiglobalforum Reducing poverty and achieving MDGsAdding value to natural resourcesTechnology upgrading and catch up strategiesR&DProceedings available in March 2008

• STI capacity building tool kits • Book on technology diffusion institutions and

programs • Networking opportunities

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Network Programs, Needs, and Network Programs, Needs, and ResourcesResources

Development Partner – World Bank STI Capacity Building Programs

G-8, OECD, BRICS Capacity Building Resources

Developing country STI Capacity Building Needs

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Network TypesNetwork Types

Intra-Regional

BRICS --- Africa G-8, OECD

vis. a vis Africa

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Network ObjectivesNetwork Objectives

Training Africans (In Africa? In network partner institutions?)

Technology Diffusion

Building Faculty Capacity at African Universities

Joint R&D Programs

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Networking About Networks

• Carnegie Corporation Regional Initiative in Science and Education www.ias.edu/sig and ten click on RISE for further details

• Independent networking proposals/inquiries from various universities in US, Asia and Europe

• The US National Science Board draft report entitled, "International Science and Engineering Partnerships: A Priority for US Foreign Policy and Our Nation's Innovation Enterprise." http://www.nsf.gov/nsb/publications/2007/draft_isep_nsb0710.pdf

• US AID report entitled, "The Fundamental Role of Science and Technology in International Development: An Imperative for the US Agency for International Development."

• World Bank-JICA Workshop – Networking for Change: STI and Higher Education in the Global Economy, Tokyo, February 1, 2008

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THANK YOU

Alfred Watkins

Science and Technology Program Coordinator

Awatkins@worldbank.org

www.worldbank.org/sti