Download IDR 2016 key message 6

Industrial Development Report 2016
“The Role of Technology and Innovation in Inclusive
and Sustainable Industrial Development”
Ludovico Alcorta
Director Research, Statistics and Industrial Policy
United Nations Industrial Development
Organization (UNIDO)
The Polish Chamber of Commerce
Warsaw, 20th January 2016
Overview
• Background to the report
• Inclusive and Sustainable Industrialization
• Growth, Industrialization and Technological
Change
• Inclusiveness, Sustainability and Innovation
• Policy Imperatives
• Industrial Competitiveness Index
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Background
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ISID for UNIDO means that…
• Every country achieves a higher level of industrialization in
their economies, and benefits from the globalization of
markets for industrial goods and services.
• No one is left behind in benefiting from industrial growth,
and prosperity is shared among men and woman in all
countries
• Broader economic and social growth is supported within an
environmentally sustainable framework.
• The unique knowledge and resources of all relevant
development actors are combined to maximize the
development impact of ISID
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Science Technology & Innovation and SDGs
• Goal17
• Technology
• Enhance access to ST&I ..through global technology facilitation
mechanism
• Promote the development, transfer…of environmentally sound
technologies to developing countries on favorable terms.
• Fully operationalize the technology bank and ST&I capacity-building
mechanism for LDC
• MOI
• Technology Facilitation Mechanism
• TFM was established by AAAA to support SDGs
• TFM will be composed of UN Interagency TT on ST&I for the SDGs
(UNDESA, UNIDO, UNESCO, UNCTAD, ITU, WIPO & WB) and on-line
platform
• On-line platform will establish comprehensive mapping of, and serve as
a gateway for, information on ST&I initiatives, programmes, etc.
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Inclusive and Sustainable
Industrialization
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IDR 2016 Key message 1
Reaching advanced levels of inclusive and sustainable industrial development
requires not only increasing incomes but also conscious efforts to sustain
growth, promote social inclusiveness and move towards greener structural
transformation—as well as managing the trade-offs between them.
ISID
Poland: Employment intensity
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Poland:Equity-adjusted wages
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Poland: Sustainability
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Poland: ISID Index
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Growth, Industrialization and
Technological Change
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IDR 2016 key message 2
Diversification into manufacturing can help to achieve rapid average growth rates, longer
periods of growth and less volatility in growth—thus sustaining growth in the long run.
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IDR 2016 key message 3
Manufacturing’s share of gross domestic product (GDP) has remained stable
over the last 40 years.
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IDR 2016 key message 4
Industrialization, a major force in structural change, shifts resources from
labour-intensive activities to more capital- and technology-intensive activities. It
will remain crucial to future growth
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IDR 2016 key message 5
Premature deindustrialization smothers economic development potential by limiting the
application of technology to production and generating low productivity and informal
services activities. Mature de – industrialization often leads to dynamic high tech
services
• When deindustrialization is premature countries obtain fewer of the growth
enhancing benefits of manufacturing
• When deindustrialization is premature manufacturing tends to be replaced by the
wrong kind of services.
• When “mature” deindustrialization sets in – in an advanced economy –
subsectors of the expanding sectors have the dynamic characteristics attributed to
manufacturing in the past: strong linkages, productivity increases and innovation
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IDR 2016 key message 6
Technology and capital equipment are the main drivers of both manufacturing
growth and aggregate growth in developed and developing countries although
in developing countries energy and natural resources use affects growth in
middle and low tech industries
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IDR 2016 key message 7
Sector
Electrical and optical equipment
Transport equipment
Machinery, n.e.c.
Manufacturing, total
Other non-metallic mineral
Transport and telecom
Rubber and plastics
Basic metals and fabricated metal
Chemicals and chemical products
Trade etc.
Textiles and textile products
Wood and products of wood and cork
Manufacturing, n.e.c.; recycling
Aggregate economy
Paper, printing and publishing
Leather, leather and footwear
Agriculture
Food, beverages and tobacco
Finance and bus services
Utilities
Public and other services
Mining
Construction
Coke, refined petroleum and nuclear
fuel
Median
9.5
4.4
4.0
3.4
3.2
3.2
3.1
2.7
2.5
2.2
2.0
1.9
1.9
1.9
1.7
1.4
1.3
1.0
0.9
0.4
0.1
-0.2
-0.4
-0.7
Growth in Total factor productivity 1995 – 2007, 37 countries
The choice of sector matters for economic growth and structural change since
the technological opportunities between them vary significantly.
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IDR 2016 key message 8
R&D in manufacturing is a key driver to expand the frontiers of
science and technology through technological capabilities
Agriculture
Manufacturing
Mining, construction and
utilities
Services
China
0.04
3.78
0.64
0.21
Poland
0.06
0.70
0.05
0.19
Turkey
0.01
1.23
0.05
0.30
Australia
0.56
4.29
1.85
0.86
France
0.44
6.82
0.44
0.94
Germany
0.65
7.93
0.15
0.42
Korea, Rep. of
0.12
8.81
1.58
0.47
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10.5
0.3
0.7
USA
Technological capabilities are developed in developed countries
through tinkering with the frontiers of science and technology
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Inclusiveness, Sustainability and
Innovation
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IDR 2016 key message 10
Promoting social inclusiveness in manufacturing requires matching the choice
of technologies to a country’s resource and skill endowment.
• More can be done to invent technologies that promote the capabilities of
humans to create new sources of value.
• It is essential to complementarity between human skills and new
technologies (appropriate technology)
• Appropriate technology is the technology which makes best use of country`s
• .resources to achieve its development objectives.
• Appropriate technology in developing countries must be labour intensive,
small scale, use local materials and includes techniques and products for
rural production.
• In South Africa unemployment and exclusion were strongly related to the
large capital intensive minerals industry.
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IDR 2016 key message 12
Environmental productivity is value added/emissions ratio
Hi-tech industries produce an environmental bonus since they are less polluting
than other industries.
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IDR 2016 key message 13
The recycling industry exhibits the win-win-win properties of
sustaining growth, generating employment and equity and being
environmentally friendly.
The recycling waste industry exhibits higher growth rates than total
trade for many items
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Policy Imperatives
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IDR 2016 key message 14
Country
category
Early stage
Objective of
innovation
Improve productivity
and process
technology
Favour the
generation of
inclusive innovation
to improve welfare
and access to
business
opportunities.
Middle stage
Middle and late
stage
Type/source of innovation
Incremental innovation based
on adoption of foreign
innovations and technologies.
Innovation needs to respond to
specific “local” conditions for
outcomes
Incremental innovation based
on combination of foreign
technology and/or local,
traditional knowledge
Build up innovation
capacities try to
reach the world
technological frontier
Build-up niche
competencies
Incremental and radical
innovation capacity to compete
with leading world innovators
Climb the value
ladder in global value
chains
Incremental and radical
innovation capacity to
differentiate contributions
Keep
competitiveness in
frontier industries
Innovation is identical to that
in developed countries exposed
to the global market
Incremental innovations based
on applying foreign
innovations and technologies
strategically to support
industrial development
Main agents
involved
Universities and
research institutes,
private businesses,
especially those
with exposure to
foreign markets
Nongovernmental
organizations, small
firms, public and
private associations
engaged in
disseminating
knowledge via
networks
Private firms,
universities and
research institutes,
public institutions
Public institutions
to address coordination
challenges, private
sector initiative
including foreign
companies
Private sectors with
support from public
agents,
intermediaries,
diasporas; large
firms
Private sector in
interaction with
public research
institutions,
universities and
large firms
Policy instruments for industrial development depend on the type of technology and innovation
being targeted and the country’s level of development, ranging from protecting property rights at
one extreme to providing grants for machinery imports at the other.
.
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IDR 2016 key message 15
Pooling financial and research resources internationally in a global
knowledge base can contribute much to building technological
capabilities for inclusive and sustainable industrialization.
• A market economy cannot generate the optimal level of investments of
innovation (underprovision of public goods)
• To counter this, governments aim to restore optimality by providing
different forms of support to firms` investments. Technology and
innovation in policy making is usually conducted at national level.
• International cooperation is needed to tackle transboundary challenges
such as to share large research infrastructure, to improve the global
knowledge base and to pool financial resources for technological
change.
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Industrial Competitiveness
Index
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MANY THANKS
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