Knowledge-Building, Strong National Policies Essential For Development, Authors Say

The widening gap in scientific and technological capabilities between some developing countries suffering persistent poverty and rich industrialised countries brings to question why some countries are catching up with richer countries, while others are not. Two key factors for success and innovation are knowledge building and the role of the state as a facilitator, according to UN officials.

The views were put forth in a book launched at a side event to the 13th United Nations Commission on Science and Technology for Development in late May. The roundtable, organised by the International Centre for Trade and Sustainable Development (ICTSD) on 20 May, aimed to prompt discussions on the results of the book and their relevance for policy discussions on innovation in international fora.

The authors found that rich countries built strong institutions as a complement to their production systems. That allowed them to build up strong production and the exportation of high quality goods and services, a path followed by emerging economies. However, poor countries continued to produce raw materials for the richer countries. Central to the production activities of all countries that became rich is a set of industrial and innovation policies, they said.

The book entitled “Latecomer Development: Innovation and Knowledge for Economic Growth” is authored by Banji Oyelaran-Oyeyinka, director of the Monitoring & Research Division of the United Nations Human Settlements Programme, and Padmashree Gehl Sampath, economic affairs officer in the Policy and Capacity Building Branch of the UN Conference on Trade and Development (UNCTAD).

“Latecomer” countries are defined in the book as countries that are late in developing, and which do not innovate at the “global frontier,” which is occupied by the top industrialised countries. Latecomer countries are still innovating but at their own level, the authors said.

Latecomer countries need industrial and innovation policies that shift attention from commodities to development of productive capacities, said Oyelaran-Oyeyinka. Innovation is not research and development, it is about knowledge that countries acquire, he said.

The book is based on a macro analysis of 79 countries and micro surveys in different sectors and countries. The surveys spanned over seven years and included sectors such as new technologies, Information and communication technologies, software, biotechnology, electronics, pharmaceuticals, agriculture and textiles.

The book “is about catching up,” the authors said. Sustainable development is only achieved when economic growth rates are steadily accompanied by learning and knowledge accumulation.

They identified four domains of knowledge: A domain largely science-based with scientists and engineering R&D; a design and engineering domain involving systematic engineering and scientific specification of products, processes, and systems including computer hardware and software; the modern production and manufacturing domain with engineers as well; and finally, an informal or traditional domain, found in poorer countries, which characterises the developing environment, where the main actors are artisans and craft persons.

There is a close connection between knowledge generation and Gross Domestic Product for the frontier and fast follower countries, the authors said. One of the determining factors is the policy and institutional capacity. Policy itself is a learning process, they said. Countries which succeeded went through several stages of policy learning.

Innovation is not about R&D but the use of knowledge and its application. Innovation capacity is about fostering the integration of all economic and non-economic actors in order to bring about synergies in products, processes and organisational structures, for example health and access to medicines, ICTs and knowledge capacity. The book calls for simultaneous efforts by all actors and across a wide range of policy areas.

Several speakers were invited to comment on the book, which is published by Routledge and is available at an academic rate. Pedro Roffe, intellectual property senior fellow from ICTSD, asked what the book’s conclusions meant for policy deliberation. The knowledge economy is discussed in several fora in Geneva, he said. He asked whether the two factors of success described in the book – institution and technology capacities – should be the focus of international discussions.

For Taffere Tesfachew, chief of the Office of the Secretary General at UNCTAD, the book rightly emphasises the critical role of the state. Innovation will not happen “if you just leave it to the market,” he said.

The book methodology deserves praise, said Sacha Wunsch-Vincent, senior economic officer in the Division of the Chief Economist at the World Intellectual Property Organization. However, he had some reservation about indexing and clustering countries into sealed groups supposed to move linearly towards the global frontier. He called for caution in the index and the need for relative perspective.

According to Wunsch-Vincent, intellectual property is not at the core of the book, and “I would also be first to agree that it IP is just one of many different infrastructures to stimulate innovation but it is an important one,” he said, adding “we need to work collectively to identify to which extend and in which scenarios IP actually benefits innovation. “

According to Gehl Sampath, the issue is the role of the state. The state has an essential role as a facilitator, not only of national policies but also in the balance between international and national policies. Innovation and knowledge in latecomer countries come from different key factors, and local partners are of prime importance.

The UN Commission on Science and Technology for Development is a commission of the Economic and Social Council (ECOSOC). According to UNCTAD, the Commission was established in 1992 and provides ECOSOC with advice on issues related to science and technology notably through policy recommendations. In 2006, the Commission was mandated by ECOSOC to “serve as the focal point in the system-wide follow up to the implementation of the outcomes of the World Summit on the Information Society.” The commission meets every year for one week in Geneva.