Developing countries attach a growing importance to science and technology (S&T) to pursue their development agenda. In Industrial Development Report 2016, the United Nations Industrial Development Organization (UNIDO) has given importance to technology and innovation for attaining sustainable and inclusive development. To commemorate World Intellectual Property Day on April 26, 2017, World Intellectual Property Organisation (WIPO) has picked the theme: "Innovation-Improving Lives." In developing countries, including Bangladesh, the government department or ministry entrusted with S&T governance has one major responsibility. This is about formulating policies to increase the role of science and technology in accelerating economic activities. In the language of economics, this responsibility is geared towards improving a country's total factor productivity (TFP). In addition to raw materials, labour and capital, increasing the role of S&T in economic outputs has become a target for increasing TFP.
In terms of policy making, developing countries have historically followed the advanced nations. Advanced countries are the examples of beneficiaries of S&T. Should developing countries follow them to repeat the success of the role of S&T in economic growth? Or, instead of copying advanced nations, should they rather logically figure out their science and technology policies and continuously adjust them to increase the role of S&T in economic outputs?
Some of the commonly practised policy options are: 1. Support basic research in science and technology increasing publications so that next generation products (substitution) could be developed around the outputs of the basic research; 2. Support applied research to pursue incremental innovations, to improve existing products; 3. Support applied research to improve processes in producing existing products so that the quality improves and cost reduces; 4. Provide support to imitate (reverse engineering) already available foreign products and offer protection and tax incentives to create local markets of those copied products; 5. Arrange idea competition to come up with new product ideas and provide support in terms of training and risk capital finance to turn those ideas into products; 6. Keep expanding science, technology and engineering (ST&E) education creating a large pool of ST&E graduates; 7. Reduce tax and increase budget for expanding the import of advanced technology products with the assumption that access to technology will lead to higher technology value addition.
Advanced countries like the USA and Germany have been benefiting by following the first policy. Investment in basic research has been leading to the expansion of scientific knowledge. This knowledge is being used to invent as well as improve technology to support commercial innovations. For example, success of the USA in developing large-scale semiconductor industry is primarily attributed to basic research in solid-state physics, and computational logics. USA's journey of semiconductor industry started with the invention of transistor in 1947 through basic research; for which in 1956 John Bardeen, Walter Houser Brattain, and William Bradford Shockley were honoured with the Nobel Prize in Physics. By following this model, leading developing countries like India, or even China has not produced any remarkable commercial success story as yet. Oftentimes, scientific publications are considered the indicator to assess performance of different countries in basic research. Although most of the technologocallly advanced countries have high density of scientific publications (whether measured as ratio of people or GDP), there are examples that countries with lower number of scientifc publications have been outperfoming some of those advnaced ones in innovations. For example, Korea with less density of scientific publications has been outperforming United Kindom in productivity gain, through both product and process innovations.
On the other hand, the policy of supporting incremental product innovations has been the key factor for the success of some industrial economies like Japan. To succeed with process innovation strategy, Korea's S&T policy primarily focussed on absorbing scientific knowledge and technology to improve production processes to improve the quality and reduce the cost of production of existing products. Instead of basic research, Korea's S&T policy has rather given importance to the applied aspect for incrementally improving processes, followed by products. Instead of following the path of discovery to invention leading to innovation to benefit from S&T capability development, Korea followed the path of assimilation of state-of-the-art foreign technologies (primary imported from USA and Japan) in producing products for both domestic consumption and export.
Korea managed the journey from production technology absorption to upgradation to produce the same product at lower cost, even of better quality. Gradually, it developed the capability to upgrade existing products. From 1990s, it started to invest in university based research to acquire the capability of innovation, leading to new products as well as enterprises. Instead of relying on foreign direct investment (FDI), Korea focussed on production technology import, assimilation and up-gradation. Such market focussed approach has encouraged the private sector to take the growing role in S&T capacity development, leading to self sustainable national industrial innovation system. For example, in 1970s, Korean government's investment in R&D (research and development) was above 70 per cent, while private sector's investment was around 30 per cent. By 1990s, the scenario got reversed. The ratio has improved further, lowering the government's R&D investment to less than 20 per cent, while the ratio of R&D investment to GDP (gross domestic product) has grown to above 4.0 per cent--highest in the world.
To facilitate the commercialisation of basic research, many American institutions like Massachusetts Institute of Technology (MIT) promoted idea competition. Such idea competitions have led to successful innovations and formation of companies around them. Despite the absence of basic as well as applied research and development capabilities, some developing countries followed this policy option to promote innovative entrepreneurships, termed as start-up campaigns. Till to date, there have not been scalable success stories in developing countries though.
By observing high science and technology (S&T) graduate density in advanced countries, some researchers have come up with the observation that there is a likely correlation between science and technology graduates and total factor productivity. For example, according to 2015 OECD Science, Technology and Industry Scoreboard, Korea, Germany and Sweden produced 32, 31 and 28 per cent of graduates respectively in tertiary education with Science, Technology, Engineering and Math (STEM) degrees. Believing in such correlation, many developing countries have ramped up the expansion of science and technology education, even by setting up specialised universities.
In certain developing countries like Bangladesh, women participation in STEMP education has reached above 30 per cent, comparable to the related situation prevailing in many advanced countries. To their disappointment, these countries have observed that such progress has only increased the pool of unemployed or underemployed S&T graduates.
To increase access to technologies, some countries like Bangladesh had waved taxes on import of technology products, primarily computer, with the idea that such measure would likely lead to the growth of high-tech industries. In reality, such policy has also failed to produce expected result.
All these policy options appear to be complementary in nature. How to sequence them at the early stage to take-off is a rational decision-making challenge. At one stage, all of these policies should be pursued simultaneously, having time varying adjustments in relative weights. Deciding about the sequencing of take-off and optimally adjusting weights have been a challenge. The return on investment in S&T primarily depends on deciding about the sequencing and adjusting the weights of those policies along the path of development progression. Instead of copying advanced countries, developing countries should rather keep reinventing their S&T policy framework to maximise the return from the investment.
M Rokonuzzaman Ph.D, academic, researcher and activist on Technology, Innovation and Policy is Professor, Department of Electrical and Computer Engineering, North South University, Bangladesh.
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