STI Strategies for development

DS 102 Module 2 STI By H. Makundi

Needed policies
Innovation is important for growth and industrial competitiveness and thus for catching-up Its about generating knowledge and applying to the firms context New to the world or new to the firm? (Learning from
elsewhere is possible)

Two Models of learning: STI (Science, Technology and Innovation) and the DUI (Doing, Using and Interacting)

Governments intervention
Produce basic social entitlements (Defence, socio services, parks, public R&D) Maintain order in the market (rules of contract,
liability, and suppressing opportunistic behaviour)

Taxation, emission caps and other economic instruments Quotas, Regulations and standards Public ownerships e.g ports and railways Public Procurement Public policy & Strategy (Facilitating STI)
How about Government failure?

The role of governments

supporting innovators through appropriate incentives and mechanisms, removing obstacles to innovative initiatives, establishing responsive research structures, forming a creative and receptive population through appropriate educational systems.

Government as a Gardener
prepare the ground so that plants can grow (Training and education, infrastructure) water the plants (finance, other supports to innovators) remove the weeds and pests (competition, deregulation, standardization) Fertilize the soil (research, information, procurement)

Stimulating Pro-poor Innovations

A multi-stakeholder social learning process that generates new knowledge, puts it to use, and expands the capabilities and opportunities of the poor (Berdegu 2005) Cheap sustainable Technologies and innovations targeting the poor and Socially marginalized (agricultural,
rural services, energy, universal ICT services)

Supporting public R&D and universities socio services Encouraging private sector to support the poor (CSR, PPP etc) Open innovation/user led innovation/grassroot innovations

Technical Support to Innovators

Marketing & Internationalization (legal assistance, accounting
& Taxation assistance, Outward FDI, Marketing info)

Technology extension services (Patenting, licencing, diagnosing,

exhibiting, benchmarking)

Standards, testing & Quality Control services (calibration,

compliance, certification, centres of excellency)

Organizational Management assistance (Incubation services,

logistics, productivity)

Information & Communication Services ( Data storage,

cloud computing, communication strategy, ICT infrastructure)

Bridging institutions & Firms (Clusters and networks eg ERB,

TCCIA, CTI, TFA)

Financial Support to Innovators

Public Venture Capital funds (Demonstrating the markets to FI) Procurement (equalization factor, negative lists etc) Export credit guarantees & insurance to protect from the risks of non-payment Angel InvestmentsCritical know how and capital also seed capital & proof of concept funds

Regulatory Framework
The Bayh-Dole act situation TRIPS and the paragraph six of the Doha declaration on public health Cartagena biosafety protocol and biotech Regulatory and legal systems for registration/formalization of small firms Trade policy for local innovation eg quotas, local content req, tax, subsidies, anti dumping, (next module)

Education & Skills building

Quality & Relevance of education Cognitive, academic, and technical skills Problem solving learning Creativity promoting learning, social & Interpersonal skills Innovation management skills Skills building for SMEs/entrepreneurs From brain drain to brain circulation (Philippines, India Mexico & China)

Strengthening the R&D base

Globally almost 1 trillion spent (2% of the GDP) annually with over 60% by business Tanzania highly on public sector (0.25% of GDP)
Less GOVERD more BERD? R&D subsidies?

No priority areas in place (Foresight/reflexivity),

emphasis req. on areas of comparative advantage eg agri

R&D for adaptation, building the absorptive capacity & DUI Emerging areas (Nanotech, biotech)

Building Innovation sites

Tech& Business incubators (DTBI, TEMDO SIDO)
Special Economic Zones (% of export Madagascar 80, Philippines 78), tax exemptions, accelerated depreciation
Horizontal & Vertical linkages (Shenzhen, Masan)

Science Parks (Zhongguancun, Cambridge, TEKEL)

Physical infrastructure, services, expertize, financial services, technology

Clusters (Milan, Bangalore, Hollywood, Keko, Mwenge)