Enhancing Science Technology and Innovation for Development Opportunities in South Eastern Europe Sara E. Farley Science and Technology Strategist World Bank Ljubljana, Slovenia September 28-29, 2006

To be Discussed… 1.A framework for support to Science, Technology, & Innovation (STI) for development 2.Directions for support to STI in South Eastern Europe (SEE) 3.Challenges and next steps

Creating a Strategic Vision Four policy pillars essential for NIS strengthening: Human resources development Stimulation of demand for knowledge in the private sector Public support for STI-led growth Strengthening of ICT and infrastructure

Policy Work: Knowledge for Development (K4D) Initiatives The web-based tool provides an assessment of a country’s knowledge economy: Uses a set of 80 structural and qualitative variables to benchmark an economy’s knowledge performance Includes 128 countries (90 developing economies) Used to conduct analytic work and policy dialogue (e.g. China, Vietnam, Korea, Russia, Mexico, India, etc.)

Knowledge Assessment Methodologies for ECA

Knowledge Assessment Methodologies in ECA Cont’d

Key STI Challenges Facing SEE Countries Little private sector participation in innovation (competing on natural resources and low wages) Weak innovation/technology absorption in firms Low political priority to STI, limited funding Neglect of STI systems and extensive brain drain Marginal position of the region vis-à-vis EU

Lessons Learned from Donor Support to STI Difficulties due to prevailing structure and incentives Most donors have no single home for STI, rather many actors working across networks and regions with very little coordination Segmentation and duplication of efforts Previous lack of holistic framework for STI capacity building (i.e., NIS framework) Complexity of administration and knowledge bottlenecks

Directions for Support to STI in South Eastern Europe

Modes of STI Support to SEE 1. Support for research infrastructure 2. Capacity building for FP participation 3. STI policy articulation and priority setting 4. Establishing quality indicators and benchmarking STI capacity 5. Improving quality and relevance of tertiary education (UG and research degrees) 6. Fostering good governance and institution building in STI 7. Partnering with regional networks

More Avenues for Support… 8. Scoping exercises to determine availability and improve likelihood of eliciting donor support for STI 9. Restructuring universities to meet Bologna requirements and improve S&T education 10. Fostering academia-industry linkages

World Bank S&T Lending Between 1980 and 2004, $8.6 billion to S&T activities; $343 million average annual lending for S&T 9% of projects over the past 25 years provided some support for S&T Annual average = 26 S&T projects: 5 major, 21 minor The Agriculture-Rural Development Sector provided more support for S&T than all other sectors combined 42 of 75 major non-agr S&T loans went to only 7 countries (Korea, China, Brazil, India, Indonesia, Chile, Mexico)

World Bank STI Support: Case Study Brazil MSI and PADCT The Brazil PADCT (Plano de Apoio ao Desenvolvimento Científico e Tecnológico) Projects, Background: 1982: Low level of foreign reserves Exporting raw materials and importing manufactured products made from those materials at substantial value added Brazilian Ministry of Planning wanted program to increase value added of mineral and biomass resources

Brazil’s MSI and Lessons Learned MSI => PADCT III in 2001 Shared aims: both PADCT and MSI concentrated resources on country’s best researchers 17 MSI Institutes established in research areas relevant to social and economic development Extensive involvement of S&T community in MSI/PADCT planning and implementation = broad acceptance and trust in fairness of resource allocation for research Successful institutionalization of peer review process with effective mechanisms for avoidance of conflicts of interest

STI Capacity Building: Turkey Technology Development Project Challenges: low industrial quality, highly labor- intensive products, limited growth, low competitiveness US$ 155 million, TDP Objectives: Improve Turkish technology infrastructure and services (e.g., MSTQ, IPR harmonization) Restructure public R&D Institutions (Marmara) Stimulation of private sector participation in research Formation of venture capital and technology parks (Technology Development Foundation of Turkey)

Focus on Quality and Linkages: Croatia S&T Project Challenges: Weak linkages between research and industry and between Croatian scientists abroad and at home; Unfulfilled ambitions of competitive NIS US$ 40 million, Project Objectives: Strengthen and restructure R&D institutions (more applied research at Brodarski Institute and others) Increase firms’ ability to use, adapt, and commercialize technology Joint projects with Croatians abroad (Unity Through Knowledge Fund)

Advantages of a Regional Approach in SEE “Cohesion” as an EU imperative Shared history and history of Yugoslav-EC cooperation Limitations due to small size of countries’ innovation systems International nature of increasing proportion of scientific and research endeavors Access to expertise, funding, institutions abroad => science beyond the nation-state = 3

Challenges and Opportunities for the Bank and its Partners

To the Future: Working Better, Working Together The World Bank and its partners must respond to three STI challenges: Working cross-sectorally to build synergies Working at the regional level Leveraging our global partnershipx for enhanced provision of global public goods

Getting Started on Reform and Engaging with Donors Engaging the business community, to understand the demand for innovation and sources of your country’s competitiveness Putting STI into IPA and Development Strategy, and Poverty Reduction Strategy documents Fostering national and regional STI champions Increasing multi-sectoral STI interventions in health, agriculture, education, environment, etc. Utilizing “knowledge diffusion agents” in national level projects Generating “STI for economic change and competitiveness” analyses for Ministries of Finance and Economy

“The emergence of global science changes the scale, scope and processes of the governance of science.” “We need a new framework for the governance of 21 st century science. The new approach uncouples science from national prestige and ties it more firmly to collaboration, merit and openness. It scales research to the needs of science rather than the interests of the funder.” Caroline Wagner, “Science Policy Beyond the Nation State, Nations, Knowledge and Networks in the 21 st Century.” Forthcoming. Brookings

Thank you. Sara E.Farley The World Bank