Transcript Active FDI-dependent learning

Grouping Countries by
National Models of
Technological Learning
Tatyana P. Soubbotina
Consultant, S&T Program
HDNED
Presentation to STI Thematic Group
November 10, 2005
[email protected]
1
Practical Questions:
1. Should the WB develop some
standard guidelines on S&T
assistance to client countries?
2. Should these guidelines be
customized for groups of developing
countries with similar STI capacitybuilding needs?
3. Should the WB rely on one of the
existing classifications of countries
by S&T capacity or develop some
new approach?
2
Composite Indices of S&T
Capacity:
• UNDP – Technology Achievement Index
• UNIDO – Competitive Industrial Performance
Index
• WEF – National Innovative Capacity Index
• WB – Knowledge Economy Index
• UNCTAD –Innovation Capability Index
• Francisco Sagasti – S&T Capacity Index
3
UNDP – Technology Achievement
Index
Human
skills
Mean years of
schooling
+
Tertiary
enrolment in
science, math
and
engineering
Diffusion of Diffusion of Creation of
old
new
technology
innovations innovations
Electricity
consumption
per capita
+
Telephones
per capita
Internet hosts
per capita
+
High- and
medium-tech
exports as %
of total
exports
Patents
granted per
capita
+
Receipts of
royalty and
license fees
from abroad
per capita
4
UNIDO - Competitive Industrial
Performance Index
1. Manufacturing value added (MVA)
per capita
2. Manufactured exports per capita
3. Share of medium and high-tech activities
in MVA
4. Share of medium and high-tech products
in manufactured exports
5
WEF – National Innovative
Capacity Index
1. Share of scientists and engineers in
population
2. Innovation policy
3. Cluster innovation environment
4. Innovation linkages
5. Operations and strategy
6
WB – Knowledge Economy Index
Economic
incentive &
institutional
regime
Education
and human
resources
Innovation
system
ICT infrastructure
Tariff & nontariff barriers
Adult literacy
rate
Number of
researchers in
R&D
Telephones per
1,000
population
Regulatory
quality
Secondary
enrolment rate
Patent
applications
granted by
USPTO
Computers per
1,000
population
Rule of law
Tertiary
enrolment rate
S&T journal
articles
Internet users
per 1,000
population
7
UNCTAD –Innovation Capability
Index
Human capital
Index
Technological Activity
index
Literacy rate
as % of population X 1
R&D personnel
per million population
Secondary school
enrolment
as % of age group X 2
US patents granted
per million population
Tertiary enrolment
as % of age group X 3
Scientific publications
per million population
8
F. Sagasti – S&T Capacity Index
SCIENCE
TECHNOLOGY
PRODUCTION
Internal capacity:
R&D expenditure
as % of GDP
Number of
scientists &
engineers per
million people
High-tech exports
as % of total
exports
External linkages:
Number of
scientific
publications
(in log.)
Number of patent
applications by
residents and nonresidents (in log.)
Infrastructure,
communications,
and technology
index
9
Different S&T indices can be used
depending on the task
Because they all have different focuses:
• UNCTAD – underlying technological capacity (focus on
inputs – education and R&D)
• UNIDO – revealed technological capacity in industry
only (focus on manufacturing competitiveness)
• UNDP – revealed technological capacity across the
economy (focus on broad diffusion of old and new
technologies)
• WEF – institutional and policy environment for
innovation
• WB KAM – the advantage is in its flexibility,
select indicators at your own risk!
10
Considerations in selecting S&T capacity indicators
• Select input or output indicators depending on whether you want to
measure technological effort or technological achievement , underlying
(potential) technological capacity or revealed S&T capacity.
• Absolute size of inputs can matter no less than input intensity because
of economies of scale and critical mass effect (e.g. Number of researchers
or Total R&D expenditure vs. their shares in population and GDP)
• Some indicators reflect present-time capacity, others reflect expected
but still uncertain future capacity (e.g. Mean years of education of adults
vs. Secondary and tertiary enrolment rates)
• Indicators of knowledge sales (e.g. Share of high-tech exports or
Receipts of royalty and license fees) reflect quality of knowledge rather
than just its quantity (e.g. as reflected by Share of high-tech industries
in MVA or Number of patent applications).
• However, exports indicators should be compared to similar MVA
indicators, because fast improvement in exports often reflects enclave
FDI activities rather than national S&T capacity growth.
11
Country rankings on 3 indices differ
quite radically
UNCTAD
UNIDO
UNDP
(117 countries)
(87 countries)
(72 countries)
China
72
37
45
Russia
23
44
-
Malaysia
67
22
30
Mexico
59
23
32
Philippines
60
25
44
Singapore
30
1
10
1
7
3
Sweden
12
All of these groupings focus on
S&T levels achieved or expected to be achieved
by various countries, but fail to account for:
•Different speed of S&T progress, and
•Different sources of S&T progress.
That is what grouping countries by
models of S&T learning
can add
13
Concept of
“National technological learning”
National technological learning is the process of
creating or acquiring from foreign sources of
new (for this particular learner)
S&T knowledge & skills,
as well as
adapting, disseminating, and using those for
improving the technological structure of
national production and exports.
14
National technological learning
occurs at all levels
and implies acquiring different kind of
knowledge & skills, e.g. at the level of
• national labor force – science, math, &
engineering education & training + life-long learning,
• enterprises & firms – learning to innovate by
absorbing foreign and investing in own new
technologies,
• governments – learning to receive expert advice,
develop S&T strategies and create enabling &
stimulating conditions for national technological
progress.
15
Factors of
national technological learning
S&T learning
capacity
Knowledge
generation
capacity
+
S&T learning
opportunities
S&T cooperation
Knowledge
absorption
capacity
Licensing
R&D
Internet
Capital
imports
Inward
FDI
Education
16
“Crystals of S&T Learning” graphical/statistical illustrations
17
“Crystals of S&T Learning” graphical/statistical illustrations
•
Human capital accumulated / human capability for S&T
learning (see indicators 11, 12, 1),
•
The most accessible opportunities for learning from foreign
sources created by capital goods imports and FDI
(indicators 9, 10),
•
The more demanding opportunities for learning from
domestic and foreign sources through domestic R&D
(indicators 2, 3),
•
The most demanding opportunities for learning through
knowledge markets and international S&T cooperation
(indicators 4, 5, 6),
•
Success in using S&T knowledge for improving
technological structures of a country’s MVA and
manufactured exports (indicators 7, 8).
18
‘Crystals’ can ‘grow’, but only
in the right (learning) environment
Slow Learning Bangladesh
12 Average years of schooling of
adults
11 Internet users per 1.000 people
10 Inward FDI as % of gross capital
formation
9 Imports of machinery and transport
equipment as % of total imports
8 Share of high- and medium-tech
industries in exports
1
0.5
0
1 Brain retention
2 Reasearchers in R&D per million
population
3 Total (public and private)
expenditure on R&D as % of GDP
4 Royalty and license fees payments
per capita
Fast Learning Sweden
7 Share of high- and medium-tech
5 Receipts of royalties and licence
12 A v e ra ge ye a rs o f s c ho o ling
industries in MVA
fees per capita
o f a dult s
6 International outsourcing of R&D
11 Int e rne t us e rs pe r 1.0 0 0
1 B ra in re t e nt io n
(domestic ownership of foreign-made
pe o ple
inventions as % of all inventions
10 Inwa rd F D I a s % o f gro s s
2 R e s e a rc he rs in R &D pe r
owned by residents)
c a pit a l f o rm a t io n
m illio n po pula t io n
1
0.5
9 Im po rt s o f m a c hine ry a nd
t ra ns po rt e quipm e nt a s % o f
t o t a l im po rt s
8 S ha re o f high- a nd m e dium t e c h indus t rie s in e xpo rt s
0
3 T o t a l ( public a nd priv a t e )
e xpe ndit ure o n R &D a s % o f
GD P
4 R o ya lt y a nd lic e ns e f e e s
pa ym e nt s pe r c a pit a
7 S ha re o f high- a nd m e dium 5 R e c e ipt s o f ro ya lt ie s a nd
t e c h indus t rie s in M V A
lic e nc e f e e s pe r c a pit a
6 Int e rna t io na l o ut s o urc ing o f
R &D ( do m e s t ic o wne rs hip o f
f o re ign- m a de inv e nt io ns a s % o f
a ll inv e nt io ns o wne d by
19
6 models of
national technological learning:
• Traditionalist slow learning,
• Passive FDI-dependent,
• Active FDI-dependent,
• Autonomous,
• Creative-isolated,
• Creative-cooperative.
20
Traditionalist slow S&T learning
• Relying mostly on traditional technologies,
• low S&T learning capacity,
• minimal S&T learning opportunities,
• low international competitiveness,
• high risk of further economic marginalization,
• most urgent need of international S&T
assistance.
21
‘Crystals’ of
sample Slow-Learning Countries
22
Passive FDI-dependent learning
• passively relying on FDI to bring in new
technologies,
• low S&T learning capacity,
• no or week government technological
strategy,
• limited opportunities for technological
learning,
• high risk of losing in economic competition
with poorer, lower-wage countries.
23
Active FDI-dependent learning
• relatively high S&T learning capacity,
• active government strategy aimed at
building national human capital and
accelerating national technological learning
from FDI,
• active targeting of the most beneficial FDI,
• much wider opportunities for technological
learning from FDI,
• lower risk of losing in economic competition
with lower-wage but lower-skill countries.
24
Crystals of sample
Passive and Active FDI-dependent
learners
25
Autonomous S&T learning
• High S&T learning capacity and favorable
international environment,
• active government strategy aimed at building
national human capital and accelerating national
technological learning via open sources, foreign
consultants, contract manufacturing, licensing,
copying & re-engineering, own R&D, even
outward FDI,
• minimal reliance on FDI or international S&T
cooperation,
26
• aspiring to compete with technological leaders.
Creative-cooperative S&T learning
• Capacity for both, generating and absorbing
S&T knowledge among the highest in the world,
• global technological leadership in at least some
niches of the global economy,
• active government S&T strategy directly linked
to global competitiveness strategy,
• extensive R&D and efficient NIS,
• active participation in and control over
international S&T cooperation,
• the fastest S&T learning.
27
Creative-isolated S&T learning
• High S&T learning capacity, but unfavorable
international environment or isolationism,
• limited opportunities for S&T learning from
foreign sources,
• aspiring to produce most of the needed
technologies inside the country,
• low international competitiveness of high-tech
industries,
• high risk of lagging further behind in
technological and economic development.
28
Sample crystals of
Autonomous, Creative-Cooperative,
& Creative-Isolated learners
29
‘Rules’ of national
technological learning
• National S&T learning requires a certain minimal
stock of human capital and a favorable economic &
institutional ‘learning environment’.
• Government S&T policies and international aid should
target both prerequisites.
• Different models of S&T learning can be also seen as
consecutive stages in the same country’s development
(‘crystals’ are growing from 9 a.m. to 6 p.m.).
• But there are some policy choices, e.g. active FDIdependent vs. autonomous and creative-isolated
strategies.
•The higher a country’s underlying S&T capacity, the
broader its choice of S&T learning strategies.
30
‘Tree’ of
national technological learning
Human capital
accumulation
Creativecooperative
Autonomous
Active
FDIdependent
Aid
supported
Slow
learning
Creativeisolated
Passive
FDIdependent
Time
31
5 major learning paths:
1. From slow-learning traditionalism to passive
and active FDI-dependent learning,
2. From passive FDI-dependent to active FDIdependent or autonomous,
3. From active FDI-dependent to more
autonomous or creative-cooperative,
4. From autonomous to creative-cooperative,
5. From creative-isolated to creative-cooperative
learning.
32
Prioritization Table of Policies for Transitioning
from Non-learning Traditionalism to
Passive/Active FDI-dependent S&T Learning
Most important/1st
priorities
(for short- as well as longterm returns)
Important/2nd priorities
(foundations for mediumterm returns)
Not yet as important/3rd
priorities
(foundations for longterm returns)
1. Human resources
development:
- Primary and secondary education
(S&T literacy)
- S&T tertiary education relevant
to local needs
- Measures to retain tertiary
graduates
- Measures to attract skilled
expatriates
1. Preparing to build national
S&T institutional
infrastructure:
- Public-private dialog to begin
defining national S&T priorities
and plans
- Developing mechanisms for
local funding of S&T activities of
local relevance
- Helping establishment of local
S&T institutions
- Learning to scan international
environment for available
technologies relevant to local
needs
1. Fiscal and credit measures to
stimulate innovation at firm
level
2. Trade openness
2. Intellectual property rights
protection
3. Reducing bureaucratic
impediments
- Promoting S&T awareness
among government officials
and business leaders
2. Creating stable
macroeconomic environment
3. Encouraging trust and
building social capital
4. Providing physical
infrastructure for S&T
advancement:
- Reliable energy provision
- Transportation
- Modern communications
3. Competition policies
4. Control for safety and
ethical application of new
technologies
33
Prioritization Table of Policies for Transitioning
from
Passive to Active FDI-dependent S&T Learning
Most important/1 st
priorities
(for short- as well as longterm returns)
1. Building national
institutional infrastructure for
S&T:
- Defining national S&T
priorities and plans
- Domestic and foreign funding
of S&T activities in accordance
with national S&T priorities and
plans
Important/2 nd priorities
(foundations for mediumterm returns)
Not yet as important/3 rd
priorities
(foundations for long-term
returns)
1. Establishing S&T forecasting
centers
1. Purchasing of foreign
technologies and technological
services
2. Fiscal and credit measures to
stimulate innovation at firm
level
2. Cluster-related policies to
link technology and production
- Creating networks of local
S&T institutions for
scanning available foreign
technologies and broad
dissemination of findings
(access to information and
training opportunities)
2. Human resources
development:
- Continuing to improve S&T
literacy and tertiary education
- Upgrading skills of
national workforce
- Adding post-graduate stage of
S&T education relevant to local
needs
- Continuing with policies to
retain high-level professionals
and attract skilled expatriates
34
How to help the majority of
slow-learning countries?
• What should be the main features of
international aid-supported S&T learning?
• What can be learned from previous
international aid projects with S&T
components?
• What should be the role of the World Bank
in these countries?
35
‘Crystals’ assessment –
Modified indicators for SSA
36
The advantages
of S&T Learning Models approach
compared to any S&T capacity indices are
that it
1. Looks forward, helps predict future
difficulties,
2. Allows for diversity of learning paths,
3. Underlines the importance of policy
choices made by developing countries
themselves.
37
“First of all, I think that sense of assuming responsibility
[by developing country governments] is really critical.
We often talk about building institutions or building
capacity. And my feeling is that sort of suggests you
can come in like an outside contractor and bring
some bricks and mortar and you construct capacity.
It doesn't work that way. You grow it. Its got to be
indigenous. It's got to have indigenous roots.
You can fertilize it. You can water it. You can rip
the weeds out, which I think is part of fighting
corruption. Or you can help people do it. But
they need to do it themselves.”
Paul Wolfowitz on ‘capacity building’ vs. ‘capacity growing’
at his first Town Hall Meeting in the World Bank, 2005.
38
School teachers and university professors
know the advantages of
active teaching and learning methods.
Should the World Bank aim to help
all client countries turn into
active learners
of modern science and technology?
39
Models of S&T Learning
approach is an alternative to
• Regional models of development –
e.g. East Asian vs. Latin American
• “High-tech” model vs. low-tech
“Latin” model
40
“High-tech” success stories are
obviously too different to be treated
as one model
Source: W.F. Maloney. 2005. Patterns of Innovation.
Innovation Policies II Regional Study, World Bank.
41
Further improvements to ‘crystals’
indicators are needed, e.g.
• A brain drain/brain gain statistics instead
of ‘brain retention’ survey results
• Taking into account strong economies of
scale and ‘critical mass’ effect in R&D
• A better indicator of benefits from
participation in cross-border R&D
cooperation
• Building data bases for historical and
sub-national crystals of S&T learning
42
Practical application of
‘crystals’ assessment
• Is the country’s S&T learning likely to be fast
enough compared to its major competitors?
• Is national S&T learning constrained mainly by
the lack of human capital or the lack of learning
opportunities?
• Which additional learning opportunities could be
available but are currently underused?
• How successful is this country in using its S&T
capacity for improving technological structure of its
production and exports?
43
‘Crystals’ assessment –
Mauritius
Mauritius
12 Average years of schooling of
adults
11 Internet users per 1000 people
10 Inward FDI as % of gross capital
formation
9 Imports of machinery and
transport equipment as % of total
imports
0.5
0.4
0.3
0.2
0.1
0
1 Brain Retention
2 Researchers in R&D per million
population
3 Total (public and private)
expenditure on R&D as % of GDP
8 Share of high- and medium-tech
industries in manufactured exports
4 Royalty and license fees payments
per capita
7 Share of high- and medium-tech
industries in MVA
5 Receits of royalty and license fees
per capita
6 National Participation in crossborder R&D
44
‘Crystals’ assessment –
Malaysia
45
Is there a need in an on-line
interactive data base and an
automatic graphing tool?
(similar to KAM)
46
‘Crystals’ for further discussion:
Creative-cooperative leaders
USA
12 Average years of schooling of
adults
11 Internet users per 1.000
1
1 Brain retention
people
10 Inward FDI as % of gross
capital formation
9 Imports of machinery and
transport equipment as % of total
imports
8 Share of high- and medium-tech
industries in exports
0.5
0
2 Researchers in R&D per million
population
3 Total (public and private)
expenditure on R&D as % of GDP
4 Royalty and license fees
payments per capita
United Kingdom
12 Average years of schooling of
7 Share of high- and medium-tech
5 Receipts of royalties and
adults
industries in MVA
licence fees per capita
1
6 International outsourcing of
11 Internet users per 1.000 people
1 Brain retention
0.8
R&D (domestic ownership of
foreign-made inventions as % of
10 Inw ard FDI as % of gross capital
2 Researchers in R&D per m illion
0.6
form ation
population
all inventions owned by residents)
0.4
0.2
0
9 Im ports of m achinery and
transport equipm ent as % of total
im ports
8 Share of high- and m edium -tech
industries in exports
7 Share of high- and m edium -tech
industries in MVA
3 Total (public and private)
expenditure on R&D as % of GDP
4 Royalty and license fees paym ents
per capita
5 Receipts of royalties and licence
fees per capita
6 International outsourcing of R&D
(dom estic ow nership of foreignm ade inventions as % of all
inventions ow ned by residents)
47
‘Crystals’ for further discussion:
high-income Slow learners
Italy
12. Average years of schooling of
adults
11. Internet users per 1000 people
10. Inw ard FDI as % of gross capital
form ation
9. Im ports of m achinery and
transport equipm ent as % of total
im ports
8. Share of high- and m edium -tech
industries in m anufactured exports
7. Share of high- and m edium -tech
industries in MVA
1
0.8
0.6
0.4
0.2
0
1. Brain retention
2. Researchers in R&D per m illion
people
3. Total R&D expenditure % of GDP
Spain
4. Royalty and license fees paym ents
per capita
5. Receipts of royalty and license
fees per capita
6. Foreign inventions controlled by
residents
12. Average years of schooling of
adults
11. Internet users per 1000 people
10. Inw ard FDI as % of gross capital
form ation
9. Im ports of m achinery and
transport equipm ent as % of total
im ports
8. Share of high- and m edium -tech
industries in m anufactured exports
7. Share of high- and m edium -tech
industries in MVA
1
0.8
0.6
0.4
0.2
0
1. Brain retention
2. Researchers in R&D per m illion
people
3. Total R&D expenditure % of GDP
4. Royalty and license fees paym ents
per capita
5. Receipts of royalty and license
fees per capita
6. Foreign inventions controlled by
residents
48
‘Crystals’ for further discussion:
former Creative-isolated learners
India
12. Average years of schooling of
adults
11. Internet users per 1000
people
1
0.8
1. Brain retention
0.6
10. Inward FDI as % of gross
capital formation
2. Researchers in R&D per million
people
0.4
0.2
9. Imports of machinery and
transport equipment as % of total
imports
3. Total R&D expenditure % of
GDP
0
8. Share of high- and mediumtech industries in manufactured
exports
4. Royalty and license fees
payments per capita
7. Share of high- and mediumtech industries in MVA
Brazil
5. Receipts of royalty and license
fees per capita
6. Foreign inventions controlled by
residents
12. Average years of schooling of
adults
11. Internet users per 1000 people
1
1. Brain retention
0.8
0.6
0.4
0.2
0
10. Inw ard FDI as % of gross capital
form ation
9. Im ports of m achinery and transport
equipm ent as % of total im ports
2. Researchers in R&D per m illion
people
3. Total R&D expenditure % of GDP
8. Share of high- and m edium -tech
industries in m anufactured exports
4. Royalty and license fees paym ents
per capita
7. Share of high- and m edium -tech
industries in MVA
5. Receipts of royalty and license fees
per capita
6. Foreign inventions controlled by
residents
49