SCIENCE AND TECHNOLOGY IN THE LAC AND THE KOREAN TECHNOLOGY FUND1... · SCIENCE AND TECHNOLOGY IN...
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Transcript of SCIENCE AND TECHNOLOGY IN THE LAC AND THE KOREAN TECHNOLOGY FUND1... · SCIENCE AND TECHNOLOGY IN...
SCIENCE AND TECHNOLOGY IN THE LAC AND THE KOREAN TECHNOLOGY FUND
HYUNGHWAN JOOSenior Advisor for Technology and Innovation
Inter-American Development Bank
November 27-28 – Santiago, Chile
Hyunghwan Joo November 27-28, 2006 2
OUTLINE
● Main Trends in S&T in LAC
● Policy Challenges for LAC
● IDB’s Strategy for S&T
● Salient Features of the KTF� Eligibility
� Approval procedure
Hyunghwan Joo November 27-28, 2006 3
KOREAKOREAKOREAKOREA
● Area - 99,600 km²
● Population - 48 million
● GDP - US$ 788 bn(10th)
● Per capita income -$16,191(05)
● Trade vol. - $ 546bn(12th)
● Literacy – 98%
Hyunghwan Joo November 27-28, 2006 4
Transformation of the Korean EconomyTransformation of the Korean Economy
Per Capita GNI(US$)
16,191
Six “Five-Year Economic Development Plans”
200519801962 1970 1995
5,000
10,000
67 87
11,432
7,355
1953 19901945
100(1964)
1,000(1977)
1998
Big Take-offIndependence
(1945)Korean War(1950~53)
OECD(1996)
Fin. Crisis(1997)
Hyunghwan Joo November 27-28, 2006 5
Developing countries will likely remain mired in poverty unless they can do what developed countries have done to achieve sustainable growth : incorporate science, technology and innovation into their economic strategies.
UN Millennium Project Taskforce on Science & Technology and Innovation, 2 005
Hyunghwan Joo November 27-28, 2006 6
● Low investment in knowledge, particularly in R&D
� Countries in LAC spend 0.6% of GDP on R&D
Total R&D ($12 b.) < Korea ($16 b., 2.6%), US ($282 b., 2.7%)
� R&D intensity has either decreased or leveled off(except for Brazil (1.1%), T&T, Mexico)
● Predominance of public sector in R&D spending
� Public to Private ratio: 3 : 7 (OECD), 7 : 3 (LAC)
� The share of business R&D funding has declined
Main Trends (LAC)
Hyunghwan Joo November 27-28, 2006 7
● Low linkage b/w university, PRIs and industry� The public research is biased toward basic research
Curiosity-driven rather than market-driven or problem-oriented
� Lack of “innovation culture” in firms & channel for demand articulation
● Shortage of researchers� Researchers per 1000 persons: 6~10 (OECD) vs. 0.7 (LAC)
● Low IT penetration rate� Low PC penetration, limited broadband connectivity, high access cost
⇒⇒⇒⇒ Low patentingGrowing technology gapLow competitiveness
Main Trends (LAC)
Hyunghwan Joo November 27-28, 2006 8
TFP Has Not Been a Source of Growth for LAC Countries...
Annual TFP Growth
F : BID-RES. (*) et al World Bank, 2002-2
-1.5
-1
-0.5
0
0.5
1
1.5
OECD
1970-79
1980-89
1990-99LAC
Anual TFP growth
LAC
OECD East Asia
Main Trends (LAC)
Hyunghwan Joo November 27-28, 2006 9
30 %60 ~ 75 %Private Sector in
R&D
15%50 ~ 70%Internet Users
0.7 (Argentina 1.6)
6 ~ 10Researchers
per 1000
0.6%(Brazil 1.0%)
2 ~ 3 %R&D as % of
GDP
LACOECD countries
Main Trends (LAC): Comparative Snapshot
Hyunghwan Joo November 27-28, 2006 10
Policy Challenges (LAC)
● Mainstreaming innovation policy� Treat innovation as a strategic issue in development planning� Links to strategic economic and social directions
● Institutional development� Effective S&T policy framework (including reliable database) � Improve framework conditions
(Competition (service), FDI, Financing (SME, tech start-ups), IPRs)
Supply issues (funding/manpower) + Increasing demand for innovation by firms & ensuring closer PP linkag e
Hyunghwan Joo November 27-28, 2006 11
● Public-Private linkage
� Stimulate R&D investment by industry� Policy mix (grants, loans, guarantees / tax incentives) � Strategic PP partnerships for research
� Greater stakeholder involvement in PRIs’ agenda setting
● Human resources development� Access & quality (secondary/tertiary + vocational training)
� Focus on 21 st century skills (IT, Science & Math, English)
� Enhance mobility b/w public and private institutions � Attract foreign talent and return migration of expatriates
● IT infrastructure
Policy Challenges (LAC)
Hyunghwan Joo November 27-28, 2006 12
● There is no “one size fits all” model� Strategies depend on initial conditions & resources� Need to look beyond regional models : cross modelingIT development: Korean, Scandinavian, Irish, Indian , US models
● Develop indigenous absorptive capacity� Build with acquisition, adaptation, improvement, innovation� Distinguish among objectives at different stages – this is a multi-
generation process
● Create competitive advantage� Chile: salmon, Korea/Taiwan: electronics, Ireland/India: software
Policy Challenges (LAC): Paths to Innovation
Hyunghwan Joo November 27-28, 2006 13
● Commitment of IDB leadership to strengthening Bank activities in the S&T and innovation area
● New Organizational Setup
� Establishment of the new Sub-Department in charge of S&T, ICT and education
� High level S&T advisory Group to the President● New Financing Tool : Korean Technology Fund
� Created by a contribution of US$ 50 million from Korea
� Increase the flow of technical assistance
IDB’s Strategy: New framework for S&T
Hyunghwan Joo November 27-28, 2006 14
IDB’s Strategy: New Strategic Directions
● Mainstreaming S&TI into country dev’t strategies
� Through country dialogues & policy assessments, raise the awareness and identify policy priorities & funding requirements
� Employ convening power to stimulate dialogue among country policy makers and share best practices �Regional policy dialogue on S&T
● Institution Building� Institutional & governance reforms of the STI system
�Priority setting/Public funding/Autonomy & Accountability of PRIs
� Adapt regulatory conditions to innovation requirements� IPR, Competition, environmental and consumer regulations…
● Human resources development� Foster a skilled workforce at post secondary technical levels
� Engineering & technical training /curricula design & accreditation
Hyunghwan Joo November 27-28, 2006 15
● Technological Infrastructure� ICT: e-applications, Public-private partnership facility in ICT � Establish and disseminate standards, metrology, IPR � Promote technology transfer and diffusion mechanisms
● Public-private linkage� Innovation cluster development, technology consortia, strategic
programs addressing social needs � Health, energy, housing, disaster prevention, digital divide …
● Promote innovation in the private sector � Notably in SMEs, and in the context of innovation cluster
� Support for the development of ICT-based portal for SMEs access to technology information
� Design / implement financing mechanism to support innovations� Assessment and improvement of incentive systems and support
instruments (tax/fiscal incentives, funds, guarantees….)
IDB’s Response: Strategic Directions
Hyunghwan Joo November 27-28, 2006 16
IDB’s Strategy: New strategic Directions
<Approach: Systematic/Evolutionary approach > ● Differentiated approach
� Based on needs of a particular country, considering diversity in terms of economic and institutional development
� Strengthening NIS in more developed countries vs. technological infrastructure (metrology, standard, IPRs…) and capacity building in less developed ones
● Regional approach� Pool knowledge and S&TI capacity for large scale projects
�Regional large scale technological projects, training programs � Develop common best practices
�Harmonization and training of IPR regime
� Development of a regional information system to monitor STI for performance
Hyunghwan Joo November 27-28, 2006 17
● Korea’s contribution of $ 200 million in 2005
● IDB : $ 50 million KTF (two-tranches: $25 mil. in ‘05 + $ 25 mil. in ‘08)
$ 50 million Poverty Reduction Fund
● IIC : $ 40 million SME Development Fund
● MIF: $ 60 million replenishment
KTF : Background
Hyunghwan Joo November 27-28, 2006 18
● Supports technical cooperation projects� Small-scale e-application projects
● Non-reimbursable
● 100% untied
● No project ceilings
● Proposals of $100,000 or more : donor approval
KTF : Salient Features
Hyunghwan Joo November 27-28, 2006 19
● To support activities that promote S&T and innovation capacity of the countries in the region
● To enhance the Bank ’s competence in the S&TI area
Develop the portfolio of the Bank’s ST&I loan & TC
Enhance the countries’ capacity to generateS&T and technological innovation policies and projects
KTF : Purpose
Hyunghwan Joo November 27-28, 2006 20
● All borrowing member countries� Public institutions (federal / state/local governments)
� Private organizations that are eligible to receive TC fund(e.g., private firms, industry organizations, educational institutions, NGOs)
● Regional + Sub-regional organizations composed of borrowing member countries
● All Bank Units● Supports demand driven activities + Bank-sponsored
activities� Finances collaborative proposals b/w Bank Units + b/w the Bank &
other organizations Promotes intra- / inter-institutional collaborations
KTF : Eligibility - Grant Recipients -
Hyunghwan Joo November 27-28, 2006 21
● Activities that strengthen S&T and related innovation capacity building
� e.g.) (pre) feasibility studies, policy assessments, sector analysis, institution building and strengthening, strategy and policy making, regulatory frameworks and human resources development
� In case of economic and sector work, more specific/action oriented assessments or analyses are preferred
● Activities that promote IT infrastructure and related e-applications� e.g.) e-government, e-health, e-education, e-business…
KTF: Eligibility – Eligible Activities -
Hyunghwan Joo November 27-28, 2006 22
● Activities that identify and disseminate best practices for S&T and innovation capacity
� e.g.) workshops, conferences, seminars, publication of papers, development of a regional S&T data (statistical) base
� 2007 workshops: Financing technological innovations, Strengthening S&T policy framework, Promoting university-industry partnership, Sustaining rural connectivity…
KTF : Eligibility – Eligible Activities -
Hyunghwan Joo November 27-28, 2006 23
● Particular emphasis will be given to :<country>
� Lower income countries + Countries with a weaker S&T capacity
<sector> � e-applications
� Industrial development with strong technology and innovation components
� through adoption & diffusion of new technology such as IT, BT…
� Promotion of technological innovations in SMEs
� S&TI Institution building & strengthening
� Training (in the areas of science, engineering, IT and for SMEs)
KTF : Eligibility – Emphasis for Funding -
Hyunghwan Joo November 27-28, 2006 24
● Impact on S&TI capacity and performance● Sustainability● Additionality in terms of financing and approach● Consistency with the Bank’s strategy and priorities
� in the country / on S&TI
● Contribution to Bank effectiveness� enhanced lending, quality technical support, and potential to
replication
● Others:� Legal/technical competence of the requesting organization� Plans to monitor & evaluate projects (indicators and outcomes)
KTF : Proposal Characteristics (quality)
Hyunghwan Joo November 27-28, 2006 25
● The approval process follows the Bank TC guidelines with the following exceptions:
● Proposal may be submitted at any time of the year
● In-country organizations must provide a non-objection letter from their respective governments �submit proposals through local Bank offices
● The Manager of the proposing Dep. will submit the proposal to the KTF manager (SDS/EST)
KTF : Approval Procedure
Hyunghwan Joo November 27-28, 2006 26
● The KTF manager will screen the proposal for its compliance with eligibility criteria
● Proposals of $100,000 or more are forwarded to the Donor for approval
● The CRG will review the Plan of Operation for approval
● A completion report should be prepared within six months from the project completion date
KTF : Approval Procedure
Hyunghwan Joo November 27-28, 2006 27
Preparation
of Proposal
Preparation
of Proposal
Eligibility Screening(all projects)
Eligibility Screening(all projects)
Review & Approval(donor, CRG)(> $100K)
Review & Approval(donor, CRG)(> $100K)
ImplementationImplementationMonitoringMonitoringCompletion(Report)
Completion(Report)
< Overview of Approval Procedure >
Hyunghwan Joo November 27-28, 2006 28
Thank youHyunghwan JOO
Senior Advisor for Technology and Innovation &Korean Technology Fund Program Coordinator
Inter-American Development Bank
Hyunghwan Joo November 27-28, 2006 29
Appendix: IT industrial Development (Korea)
● At the initial stage, the government played a leading role as an enabler or a facilitator
● Put in place an effective policy framework� Laws & Master Plan: Informatization Promotion Act(‘95), Cyber
Korea 21(‘99)� Funding mechanism: Informatization Promotion Fund � Propelling Institutions: MIC and NCA
● <Supply push>� Expand telephone & broadband network� Invest in human resources & critical technology (such as TDX,
CDMA through PPP)
� Promote IT Venture
Hyunghwan Joo November 27-28, 2006 30
● <Demand pull>� Liberalization and competition in telecom/broadband market encourage
telecoms to main low tariffs via a reduction in cost
� Provide low cost PC, free broadband access to all primary & secondary schools, internet training for 10 mil. people for 3 yrs
� e-government projects
● Slogan to spread an IT culture: Media Campaign “Although our industrialization lagged, our digitalization will not”
● Approach: Strategic & focused
� Which area to target: HW or SW� If SW, which niche market to target: business applications/solutions, on-line
game, e-gov’t, computer animation…� Business model: Global penetration, outsourcing(India), near sourcing(Mexico)
� Roadmap with a proper sequencing and pacing of core measures is key
Appendix: IT industrial Development (Korea)
Hyunghwan Joo November 27-28, 2006 31
● Salient features :� Project ceiling: US$ 500,000� non-reimbursable� 100% untied� All proposals exceeding US $100,000 should obtain an
approval from the donor
IIC SME TF: Salient Features
Hyunghwan Joo November 27-28, 2006 32
● Purpose :� To promote private SME development through an IIC mission
support
● Project eligibility :� Accounting, legal and environmental consulting services for
SMEs� Feasibility study and project identification � New financing mechanism development� Best practice and training activities � SME capacity building and business environment enhancing
activities (e.g., through IT)
IIC SME TF: Purpose & Eligibility
Hyunghwan Joo November 27-28, 2006 33
● Qualitative criteria� In line with an IIC’s business plan � In support of a new business initiative � Enhance synergies with the IDB and the MIF
● On-going and future projects� FINPYME (SME diagnosis program)� Family corporate governance training � Local currency bond issuing project � SME consulting project (accounting improvement & legal advice
for small loan, renewable energy project)
IIC SME TF: Criteria & On-going Projects