Innovation and Development - Essay Example

Science, Technology, Government and Society Does a developing country need an innovation policy If yes why and in what ways might that policy differ from policies in established industrialized countries Make one or two examples by question. There is no doubt that the developing countries need innovation policies. This answer seems to be logical, but the reason it's not so obvious. There are many institutions worldwide that are devoted to looking for solutions that can reduce poverty drastically in the planet. This is the case of the United Nations. The path to a widespread development is not easy in any way. The United Nations do their best to find solutions, but the causes behind poverty and lack of development are very complex. A logical solution lies in improving the education level in the developing countries. But there are many obstacles to a real climate of development in those countries. One big issue is political corruption. This is one of the most difficult problems that need to be overcome for the developing countries to find a way out into higher levels of socioeconomic development. The United Nations through some of its institutions studies closely all the issues related to development and poverty reduction. Innovation policies will indeed help any developing country to find an appropriate climate for competition that can produce structural changes in favour of a real enhancement of the socioeconomic development. Dr. Sunil Mani (2003) in one innovation study for the United Nations University and the Institute for New Technologies stated the following: "According to World Development Report 1998 (WDR) in addition to taking advantage of the large global stock of knowledge, the developing countries should develop the capability to create knowledge at home. It also acknowledges that 'some types of knowledge must be built from the ground up'. This capability to create knowledge at home must encompass not only strategies to develop knowledge locally but also policies and mechanisms that will eventually enhance the capability of the nation to absorb knowledge. Together these would constitute public innovation policies in the developing-country context." As we can see from these assertions, innovation policies are necessary in order for the developing countries to adapt themselves to this new knowledge society in which the globalization process is a reality in every corner of the planet. Dr. Mani (2003) speaks about the market shortcomings in the following terms: "Further the recent Human Development Report 2001 of the UNDP also states that the market is a powerful engine of technological progress, but it is not powerful enough to create and diffuse technologies needed to eradicate poverty. Even in the network age, domestic policy still matters. All the countries, even the poorest, need to implement policies that encourage innovation, access and the development of advanced skills." Once again the need for innovation policies seems to be a priority in this new scenario of global restructuring among all the nations with a transition period from an industrial-manufacturing society to a knowledge society. But there is a very common problem in most of the developing countries regarding the lack of innovation policies or even the awareness of their existence as a tool that can increase the competitive advantage of any enterprise in any market leading to sustainable development thanks to the power of innovation. Dr. Mani (2003) addresses this problem as follows: "Most developing countries do not have a policy on innovation, as it is generally believed that developing countries do not engage in any innovative effort at all. At best they are expected to undertake incremental innovations, which are basically the adaptation of imported technologies to local conditions. But the recent growth experience of some of the developing countries and especially those from East Asia shows that they have become generators of new technologies." We have South Korea and Singapore as relevant examples of countries that created new technologies that helped them achieve higher degrees of socioeconomic development. Now they enjoy a well deserved welfare due to the fact that they endeavored themselves into a creative process in favor of innovation that has given them competitive advantages in new markets where their innovative efforts have produced their well-being. Their case is very inspiring for any developing country in search of successful ways to innovate. For all this to happen the developing countries need innovation policies that can regulate the innovation process with clear rules for all the actors in the market. Among the most important reasons to establish innovation policies Dr. Mani (2003) stated the following: "The basic rationale behind public innovation policies is to combat private underinvestment in R&D. Following Leyden and Link (1992), the scope of public innovation policies can be divided into: the creation and maintenance of a legal environment conducive to private sector investment in innovative activities. This is created by legal measures which enhance the power to appropriate the fruits of R&D. Patents and the relaxation of antitrust activity are the primary means by which the government creates such a conducive environment; and the provision of sufficient stimuli to overcome the natural inclination of private agents to consider only their private benefits when choosing the level of innovative activity in which to engage. This takes a variety of forms ranging from governmental grants and contracts to targeted tax incentives." On the other hand, the United Nations University and Institute of New Technologies stress the enormous need for the implementation of innovation policies in developing countries. These institutions work together to achieve relevant goals in helping developing countries face the new challenges of the new knowledge economy. Innovation policy stands as a prominent protagonist that can lead the developing countries into a more promising future. Without innovation policies the road to socioeconomic development seems to be much more difficult because without them there is not the necessary regulation with clear incentives for the creative efforts and the resources that have to be invested in research and development. The United Nations University and Institute of New Technologies (2005) state the following in this line of thinking: "For two centuries now, the world has been developing on the basis of a completely new phenomenon in human history: rapid, pervasive and persistent technological innovation. This process as well as its benefits has been very unevenly distributed. Yet we cannot deny the impact of new technologies in the dramatic economic and social changes the world has witnessed. The current pace of change makes the development of informed public policies a daunting task world-wide, but nowhere more than in developing countries. Understanding and mapping innovation patterns, monitoring the emergence of new technologies and assessing their likely socio-economic impacts are key challenges for policymakers today." Another United Nations institution, the United Nations Commission for Science and Technology for Development (StDev) (2004) face the innovation policy issue from another point of view. This institution sees a sustainable solution in the realm of Science and Technology. Its position is very clear. Development depends mainly on scientific and technological advances. Once again this institution is worried about innovation in the developing countries and it states its concerns as follows: "Globalization has brought with it a more intense competitive environment and new requirements for sustained competitiveness. This new competitive environment has fueled the growth of knowledge-intensive production by increasing scientific and technological interactions and the need for innovation. The active search for continuous improvements has created an urgent need to rely even more on scientific and technological innovation and to adjust policies and practices at both the enterprise and government levels." One fundamental aspect that any innovation policy has to take into consideration is the Intellectual Property rights. The International Intellectual Property Institute (IIPI) (2004) in its document entitled "Technology Transfer and National Innovation" addresses this issue and at the same time this organization makes emphasis in the need for innovation policies for any country in its way to socioeconomic development. Let's see: "A growing body of economic literature indicates that a major determinant in a country's long-term economic growth is that rate of innovation that takes place in an economy. A country's "innovation system" - the amalgamation of organizations, laws and policies that pertain to innovation - plays a key role in how well a country innovates. Intellectual property is a key component of any innovation system, because it grants an innovator's opportunity to be compensated for investment of time and resources that go into the creation of new products and services." But besides the innovation policies, the competition policies have to be taken into account. In order to have innovation policies that can help the developing countries in their effort to achieve a higher degree of socioeconomic development, it is necessary to have at the same time competition policies for regulation the interactions in the market. The Centre on Regulation and Competition (CRC) (2004) published their first Policy Brief with the title of "Competition, Innovation and Poverty". On page 2 we find the following assertions about the main benefit of the innovation policies, that is, the competitive advantage: "Over the long term it appears that the ability to generate and follow through a series of innovations is the most important kind of competitive advantage. It also seems to be the most difficult to sustain and this is a good thing because, if innovation only depended on resources, an enterprise that got ahead would stay ahead and take over the market. In fact, innovation is unpredictable. It depends on imagination and lucky breakthroughs as well as investment in research and development." On page 3, the CRC's Policy Brief (2004) gives some solutions in favor of innovation: "If the general objective is to support development, raise the average standard of living and reduce inequality we argue that the best competition policy is a pro-innovation policy. () The innovation challenge is not just about catching up with developed countries in established areas of world production. It is about developing an internal capacity for independent technological development and business knowledge. It is about learning to learn, which takes time and requires resources." On page 4, the CRC's Policy Brief (2004) sums up its findings stating very clear the importance of innovation policies together with competition policies in order for the developing countries to find their way into a sustainable development. Let's see the CRC conclusions: "So, competition policy covers the regulation of the market process, determining the scope of markets and the rules of the game, and maintaining the openness of markets. It extends beyond markets into the wider conditions that influence innovation and enterprise. Recent debates in the WTO and elsewhere on establishing competition law in developing countries are unlikely to be fruitful unless a narrow "within market" perspective on competition is abandoned in favour of one which focuses on innovation and enterprise." In order to answer the question about the innovation policies in relation to the industrialized countries it is very useful to take a look at the findings of the Swedish Institute for Growth Policy Studies (ITPS) in its report written by Hans Westlund (2004) comparing three developed countries from three different continents: United States, Japan and Sweden. The conclusions of this comparative study are valuable in learning that the innovation policies for developed countries are not supposed to be the same in any way. The developed countries face different challenges. They are worry about sustainability and competitiveness, for example, rather than on achieving development. On page 14 of the ITPS report Hans Westlund (2004) states the following in relation to Japan, Sweden and the United States and their development status in the present knowledge economy: "Both Sweden and Japan learned much from American innovations and production methods and developed their own innovation systems -long before the term was coined- but these lessons were adapted to the countries' peculiarities. () The analysis indicates that the United States and especially California, so far leads in developing growth and innovations of the knowledge economy" On page 16, Westlund (2004) gives his tentative conclusion: "A tentative, general conclusion of this report is that it is the diversity of the Californian/American society that has contributed to the growth of high-tech industry and other applications of the knowledge economy. This has so far happened in a relatively small number of regions which have been able to combine diversity and tolerance." So we can see that the challenge regarding innovation policy is quite different for the developed countries as they are concerned with completely different issues. They also have the ethical responsibility of helping the developing countries in achieving their desired goals of socioeconomic development. Poverty is really immoral in a world with so many resources. The unfair distribution of wealth is a dramatic problem that appropriate innovation policies can solve in the long run. But the innovation policies have to be carefully studied before being implemented. One interesting alternative to the traditional innovation policy approach is the Innovation Systems approach that it is explained by David J. Spielman (2005) on behalf of the International Service for National Agricultural Research (ISNAR) Division of the International Food Policy Research Institute (IFPRI). The Innovation Systems Framework presents new ideas about policymaking that can be of a lot of help in the regulation process in any developed or developing country. On page 2, Spielman (2005) gives some insight about this systemic approach: "An innovation systems approach can help policymakers, researchers, research managers, donors, entrepreneurs, and others identify and analyze new ways of encouraging innovation. It does so by offering greater insight into the complex relationships between diverse actors, processes of institutional learning and change, market and non-market institutions, public policy, poverty reduction, and socioeconomic development." Spielman (2005) sums up his assertions about the Innovation Systems approach comparing this new framework with the traditional approach: "Studies that use an innovation systems framework () often provide analyses of policy design from the perspective of policy as a continuous process that adapts to institutional and technological opportunities presented by socioeconomic change and development (Metcalfe, 1995, 2000). This differs significantly from the neoclassical assumption that policy is the domain of fully informed social planners who reconcile social and private welfare within a system of rational maximizers." As we can see the road to establish innovation policies in the developing countries is really necessary in order to create new opportunities, new technologies, new overall growth among all the actors of this present global market in which any competitive advantage can make a great difference in achieving a sustainable development. In the long run, the goal should be to create a global market where all the actors can be successful. The aim of such a market should be to reduce poverty in a very significant way. References Centre on Regulation and Competition (CRC). "Policy Brief: Competition, Innovation and Poverty". (2004). Number 1. The University of Manchester. Retrieved 1 December, 2005, from http://www.competition-regulation.org.uk/publications/policy_briefs/pbdl/issue%201.pdf International Intellectual Property Institute (IIPI). "Technology Transfer and National Innovation". (2004). Retrieved 2 December, 2005, from http://www.iipi.org/topics/technology_transfer_national_innovation.asp Mani, Dr. S. "Using Innovation Indicators to Measure Effectiveness of Innovation Policies". (March 24, 2003). United Nations University/Institute for New Technologies. Retrieved 2 December, 2005, from http://www.uis.unesco.org/TEMPLATE/pdf/sc/presentations/UNU.ppt Spielman, D. J. "Innovation Systems Perspectives on Developing-Country Agriculture: A Critical Review". (Sept., 2005). International Service for National Agricultural Research (ISNAR) Division. International Food Policy Research Institute (IFPRI). Retrieved 2 December, 2005, from http://www.ifpri.org/divs/isnar/dp/papers/isnardp02.pdf United Nations Commission for Science and Technology for Development (StDev). "Science, Technology and Innovation Policy Review". (2004). United Nations Conference on Trade and Development (UNCTAD). Retrieved 2 December, 2005, from http://stdev.unctad.org/capacity/stips.html United Nations University and Institute of New Technologies. "Research at UNU-INTECH". (2005). Retrieved 2 December, 2005, from http://www.intech.unu.edu/research/index.php Home > Research at UNU-INTECH Westlund, H. "Social Capital, Innovation Policy and the emergente of the Knowledge Society: A Comparison of Sweden, Japan and the USA". (2004). Swedish Institute for Growth Policy Studies (ITPS). Retrieved 2 December, 2005, from http://www.innovation.lv/ino2/publications/A2004_017.pdf Read More