Download The Knowledge Revolution and the Need to Develop

Advancing Knowledge in the Public
Sector: A World Bank Perspective
Carl Dahlman
World Bank
Advancing Knowledge and the Knowledge Economy
January 10-11, 2005
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Growing Differences in GDP/Capita
Per Capita GDP for Selected Regions or Countries
(1990 international $, 1480-1998)
30000
25000
Western Europe
Eastern Europe
20000
United States
Latin America
15000
Japan
China
10000
India
5000
Other Asia
Africa
0
1480
1560
1640
1720
1800
1870
1950
1998
Source: Calculated from Angus M addison, The World Economy : A M illennial Perspective, OECD: Paris, 2001
GDP/Capita Growth: Korea vs Ghana
Knowledge makes the Difference
between Poverty and Wealth...
14
Thousands of constant
1995 US dollars
Rep. of Korea
12
Difference
attributed to
knowledge
10
8
6
4
2
Ghana
0
1960
1965
1970
1975
1980
1985
1990
1995
Difference
due to
physical
and human
capital
2000
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Key Issues for Governments in
Developing Economies
How to help them develop appropriate policy
knowledge for broad development strategy?
Economic analysis as part of project preparation
and or policy dialogue
Technical assistance loans
Training and helping set up institutional capability
What can they do to develop better strategies
to make more effective use of technical
knowledge for successful economic
development
Policy analysis/advice/training/study tours visits
Projects such as metrology, standards, quality
control, public research institutions, higher
education
Few Countries Have Sustained High
Growth Rates over Long Periods
Have analyzed countries with highest growth
performance and found that key elements of
their strategies, in addition to appropriate
macroeconomic management and good
economic incentive regimes have been:
Massively tapping into global knowledge
Investing strongly in education
More recently, investing heavily in ICT
For most advanced, focusing much more on
producing own world frontier knowledge, if not
across the board, at least in some sectors
Framework for Using K4D:
Four Key Functional Areas
Economic incentive and institutional
regime that provides incentives for the
efficient use of existing and new
knowledge and the flourishing of
entrepreneurship
Educated, creative and skilled people
Dynamic information infrastructure
Effective national innovation system
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KAM Methodology
KAM: 76 structural/qualitative variables to
benchmark performance on 4 pillars
Variables normalized from 0 (worst) to 10
(best) for 121 countries
www.worldbank.org/kam
Basic scorecard for 14 variables at two
points in time, 1995 and 2002
Aggregate knowledge economy index (KEI)
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Relative Positioning of Countries in Global KE
Conceptual Framework for Innovation
in Developing Countries
Innovation in developing countries
should be understood broadly as
something new to the local environment
Therefore distinguish two broad types of
innovation
Local improvements through adoption of
existing foreign technology
Development of technologies new to world
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Innovation in Developing Countries
In developing countries the first type is
the most relevant, the second is rarer,
except for the more advanced
developing countries
Developing countries will get a bigger
economic impact from raising average
local practice to best world practice than
from creation of their own new knowledge
They will also get a bigger impact from
raising average local practice to best local
practice, therefore the critical importance of
domestic diffusion
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Challenges
Focus of most S&T policymakers is not on the most
important elements of the innovation system in developing
countries
R&D not the main source of innovation
High tech sectors are tiny part of developing
economies
Service sector is largest share of economic activity
Successfully applying knowledge requires
entrepreneurship, management, organizations,and
also depends on economic and institutional regime
Need a better conceptual framework and policy tool kit
that
Differentiates across countries
Provides made to measure policy advice and specific
project design
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Differentiated Strategies
Acquiring
Creating
Disseminating
Catch-Up Sectors
Most critical:
-lots of knowledge
in pubic domain
-also large stock to
be purchased
Therefore need
good global
scanning and
acquisition ability
Less relevant or
feasible, but still
need R&D
capability to acquire
and adapt.
Focus limited R&D
efforts on
complementing
what can be
acquired
Very important:
-extension services
-technical information
-metrology, standards,
testing and quality control
-specialized suppliers
-growth of most efficient
firms
Sectors Nearer
Frontier
Continue tapping
global knowledge
-FDI/licensing
-Strategic alliances
-foreign R&D as
antennas to tap
knowledge
Refocus public
efforts on
commercially
relevant research
Increase private
R&D efforts
Stimulate more
interaction among
R&D institutes,
firms and
universities
Dissemination efforts
continue to be critical
But also need to
commercialize
knowledge
-technology transfer
offices
-tech parks/spin-offs
-cluster development
-regional
innovation
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for Development, WBI
Three Key Policy Areas
for Innovation Policy
Education and training policies
Appropriate S&T policies
Regional cluster policies
Education and Training Policies
Increasing average educational attainment of
labor force
Increasing higher education enrollment rates
as it is now more important to make effective
use of knowledge as well as to create new
knowledge
Strengthening the research capability of
universities and their interaction with firms
and research institutes
Developing life long learning opportunities in
order to facilitate continuous learning and reskilling
Specific S&T Policies
Increasing public R&D funding, and encouraging
private sector to increase its own R&D effort
Allocating public funding more effectively
Getting more spin-offs from public R&D efforts
Encouraging greater interaction among three key
domestic actors: public R&D institutes, universities
and productive sector
Encourage greater investment in R&D and knowledge
assets by private sector
Encouraging greater interactions between domestic
actors and foreign knowledge actors
Encouraging brain circulation rather than brain drain
Encouraging the development of regional knowledge
clusters
Development of Regional
Innovation Clusters
While the general economic and institutional
framework and broad policies towards science and
technology and education, are very important,
innovation happens at the local level
Therefore governments also have to stimulate
development of regional innovation clusters.
This involves developing stronger interactions among
firms, universities and research institutions through
formal and informal processes
Not just among local actors
But increasingly with foreign firms and institutions
Also involves regional development policies,
infrastructure and logistics
Conclusion
Greater attention needs to be paid to creating domestic
capability to make more effective use of knowledge
S&T strategies appropriate to country’s level of development
Policies to help firms and organization to tap into global
knowledge more effectively
Investments in human resources, especially higher education
Development of local R&D capability to
• scan , acquire and adapt relevant global
• improve and create appropriate new knowledge
Need to make more convincing case to ministries of
finance and to business sector that investing in
knowledge is necessary and can yield high economic
and social returns
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END
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Brazil
China
India
Korea
Mexico
Russia
USA