1. Building STI Capacity for Sustainable Development and Poverty Reduction Alfred Watkins World Bank S&T Program Coordinator Presentation to the AAAS Meetings Boston, MA February 17, 2008

2. 2 OVERVIEW: Basic Approach and Stylized Facts

3. 3 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

4. 4 Why Worry About All This?

5. 5 Difference Attributable to Knowledge 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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7. 7 Acquisition Assimilation Improvement Creation Where Do You Start?: East Asia Capacity Building Model Developing Country Newly-Industrializing Country Advanced Country Imitationinternalizationgeneration STI Capacity Focus Development Stages

8. 8 Korea R&D (% of GDP) 1963-2003 Source: Korea Science and Technology Policy Institute; WDI, 2007

9. 9 Korea Patent Trends (1965-2006) Source: United States Patent and Trademark Office (USPTO), 2007

10. 10 Removing Barriers is Necessary But Does Not Automatically Build STI Capacity Barriers to technology absorption and diffusion Capacity for technology absorption and diffusion High Barriers Low Capacity High Barriers High Capacity Low Barriers High Capacity Low Barriers Low Capacity Source: Adapted from RAND Sub Saharan Africa

11. 11 Groups of Firms According to Technological Capability

12. 12 National Technological Learning S&T learning capacity S&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

13. 13 High Tech Does Not Always Equal High Income Source: World Development Indicators, 2007

14. 14 GDP per capita in 2006 (constant 2000 US$)

15. 15 Export Structure by Technology Category Producing “what” vs. producing “how”

16. 16 Manufacturing Value-Added Per Capita (Constant US Dollar) Source: UNIDO, 2005

17. 17 Agriculture Value-Added Per Worker (Constant US Dollar) Source: World Development Indicators, 2007

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21. 21 RECENT ACTIVITIES

22. 22 How can we help countries build the STI capacity they need to increase value added and generate wealth? Should countries focus on building capacity to create new knowledge or utilize existing knowledge?

23. 23 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

24. 24 STI Capacity Building and Mr. Zoellick’s Six Themes Goal: Sustainable Inclusive Globalization STI Program touches on many of these themes Low Income Countries Middle Income Countries Arab World Global Public Goods Knowledge Sharing Fragile States

25. 25 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

26. 26 Low Income Countries (2) Ongoing Activities: STI Needs Assessments and Action Plans  Pilot programs in Rwanda, Ghana, Mozambique and Uganda  Rwanda book has been published  Rwanda 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

27. 27 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

28. 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.

29. 29 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 for packaging 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)

30. 30 Capacity building is needed at all skill levels R&D Design & Engineering Technician & Craft Skills & Capabilities Basic Operators Skills 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 Hydrology Construction and Masonry Civil Engineering; Construction, masonry (for tanks, reservoirs, pipes) Chemistry, Microbiology, Public Health, Environmental Science, Laboratory Assistance

31. 31 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 services Information from market research and from buyers Farmers and Outgrowers Farmers and Outgrowers

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33. 33 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

34. 34 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

35. 35 Knowledge Sharing: Current and Potential Activities Global Forum on STI Capacity Building -- www.worldbank.org/stiglobalforum www.worldbank.org/stiglobalforum  Reducing poverty and achieving MDGs  Adding value to natural resources  Technology upgrading and catch up strategies  R&D  Proceedings available in March 2008 STI capacity building tool kits Book on technology diffusion institutions and programs Networking opportunities

36. 36 Network Programs, Needs, and Resources Development Partner – World Bank STI Capacity Building Programs G-8, OECD, BRICS Capacity Building Resources Developing country STI Capacity Building Needs

37. 37 Network Types Intra- Regional BRICS --- Africa G-8, OECD vis. a vis Africa

38. 38 Network Objectives Training Africans (In Africa? In network partner institutions?) Technology Diffusion Building Faculty Capacity at African Universities Joint R&D Programs

39. 39 Networking About Networks Carnegie Corporation Regional Initiative in Science and Education www.ias.edu/sig and ten click on RISE for further detailswww.ias.edu/sig 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 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

40. 40 THANK YOU Alfred Watkins Science and Technology Program Coordinator Awatkins@worldbank.org www.worldbank.org/sti