Download Research Capacities in Arab Countries: Present Situation

Innovation for Development: An Arab
Perspective
Prof. Dr. Najib Harabi
University of Northwestern
Switzerland, Basel & Olten
Introduction
“The strength of a country is no longer
measured by its military might, size of
population, geographical location or material
resources. The strength of a country is
measured by the wealth of scholars and its
scientists, by its innovative capabilities and
ability to discover, and apply.” Naguib
Mahfouz 1994
Contents
1.
2.
3.
Innovation has always been crucial for
economic growth and development
Arab countries have largely been
unprepared to deal with challenges related
to innovation
It is not too late to catch up if appropriate
innovation policies are implemented
Thesis 1
Innovation has always been crucial for
economic growth and development
Concept of innovation
1.
2.
3.
4.
5.
Research
Developmemt
Invention
Innovation
Diffusion (through dissemination or
imitation)
Concept of Innovation
“Innovation consists of all scientific,
technical, commercial and financial steps
necessary for the successful development
and marketing of new or improved
manufactured products, the commercial use
of new or improved processes or equipment
or the introduction of a new approach to a
social service. R&D is only one of these
steps." (Frascati Manuel, OECD 1981:15-16)
Concept of Innovation



Product versus Process Innovation
Major vs. incremental Innovation
Continous vs. discrete innovation
Measurement of Innovation




Input Indicators
Output indicators
Input-Output indicators, and
Process indicators
Innovation and Economic Growth





Classical economists (Adam Smith, Karl Marx etc.)
Neo-classical economists (Alfred Marshall, Robert
Solow)
Austrian School of Economics: Joseph A.
Schumpeter
New growth theory or endogenous growth theory
(z.B. Romer, Lucas and Benhabib/Jovanovic)
Evolutionary growth theory (Neslon and Winter)
Innovation and Economic Growth


There is a consensus among economists:
innovation is a central engine of economic
growth an development.
What about the situation of innovation in
Arab countries?
Thesis 2
Arab countries have largely been unprepared
to dealing with challenges related to
innovation
Introduction



Arab World: 5% world’s population, less 2%
of world GDP
Several deficits: a.o. knowledge deficit at all
levels: Production, dissemination and
application
Focus here: innovation activities
Innovation Indicators


Up-to-date and accurate information about
innovation activities in AC is hard to come
by: lack of statistics and of political will to
systematically gather those data.
A few data are available on R&D, scientific
publications, and patents (input indicators)
Innovation Indicators
Algeria Tunisia
Morocco
S. Korea
R&D/GDP
0.3%
0.3%
0.3%
1.92%
Patents
200
178
333
Publications 311
(1995)
342
597
6353
Innovation input indicators: R&D/GDP


R&D Expenditures in AC are relatively
weak: 0.2% of GNP on average.
89% of those expenditures come from
government sources, only 3% from private
sector (the rest from NGO and international
organizations)
Innovation Input Indicators



R&D Organizations (around 588); there are three
categories:
Higher Education Institutes and their affiliated
research centers (126)
Free-standing specialized centers of scientific
research (278), mainly in agriculture, health and
engineering
R&D units with links to industry. Small in number;
their performance is below expectations
Innovation Input indicators: R&D
Personal


Statistics on R&D personal is scarce and
incomplete. There are, however, some
telling indicators:
The total number of full-time researchers in
AC is around 35 000. Half of this number
works in Egypt
Innovation input indicators: R&D
Personal



There is an average of 3.3 researchers holding
masters and doctoral degrees of every 10 000
persons in the Arab work force (1996 statistics). This
is a very low percentage, representing 3% to 10% of
the rates of the same indicators in developed
countries.
There are only 50 technicians for every one million
citizens. In developed countries: 1000
Women are significantly under-represented in
scientific research institutions in AC.
Innovation input Indicators:
Publications



Based on the number of scientific
publications per million people, AC fall
within the advanced group of LDC
Most of these publications were in applied
fields, such as medicine, health and
agriculture.
Research in advanced fields, such as ICT
and molecular biology, is almost non-existent
Innovation input indicators:
Publications


Among the indicators for measuring the
quality of research are the several citations
indices
On average only one paper each in Egypt,
Saudi-Arabia, Kuwait and Algeria in 1987
was quoted more than 40 times (in USA:
10481, CH: 523 papers)
Innovation input indicators



Academic Research is mostly supply driven
Research projects often lack clear objectives,
result-orientation and a sense of urgency
In terms of coverage, research activity
continues to be far from innovative
Innovation Input Indicators: Patents



Indicators of the number of patents in AC confirm
the weakness of R&D activities, which lags far
behind that of developed and other LDC
For example, the number of patent application filed
per million people in 1997: 7.9 (Algeria), 11
(Morocco), 17.8 (Egypt), 52 (Saudi-Arabia)
Comparisons: 48 (China) 2783 (Korea), 15674 (CH)
Innovation input indicators: Patents


A large number of patents registered in AC
are by foreigners
The number of patents registered in the US
from AC during the period 1980-2000 is
much lower than those of non-AC
Innovation output indicators


Indicators related to the innovation output
suggest that there is total absence of R&Dbased product and process innovations.
R&D activities are not related to market
activities.
What are the innovation challenges?





Weak human capabilities: education, training
Lack of services: information and management
services in R&D, technology and innovation
Lack of funding: for industrial R&D, venture capital
Market and government failures: incentives and
coordination
Culture and values
Concluding Remarks



There is growing innovation gap: production and
diffusion of product and process innovation is
relatively weak in comparison with the rest of the
world
Substantial efforts are needed in order to upgrade
the knowledge production and dissemination system.
This necessitates deep reforms not only of the
educational and R&D-systems, but also in the
underlying political, economic and social conditions
Thesis 3
It is not too late to catch up if appropriate
innovation policies are implemented
Innovation Policy: Guiding principles



Innovation should be widely distributed over
the whole spectrum of economic activity
Policies should be bottom up and not top
down
Policies should alter the balance between
innovations aim at rent creation versus rent
extraction
Innovation Policy: Four areas of focus
There are many ways by which those
principles may be implemented. Here is the
focus on four areas:
–
–
–
–
Skills
Incentives
Information, and
Availability of finance
Innovation Policy: Skills



Basic and advanced skills are required
Educational system (schools, colleges and
universities) should be responsive to the
needs of the market.
There is an urgent need to overcome the
mismatch between skills supplied and skills
demanded by firms (both private and public)
Innovation Policy: Incentives



Potential inventors and innovators should be
able to anticipate sufficiently high rewards.
Intellectual property should therefore be
protected both in theory and practice.
Barriers to innovation should be low.
Inclusion and openness across firms, sectors
and geographical area should be promoted.
Innovation Policy: Access to
Information



Access to knowledge stocks and to up-to-date
information flows is a necessary condition fore there
to be innovation.
Especially access to information about technology
and about markets for inputs and outputs
Broad Internet access to the population at large,
rudimentary computer skills and search techniques
and basic working knowledge of English may be sine
qua non.
Innovation Policy: Availability of
Finance



Providing funds for innovators by the
government is a central piece of innovation
policy.
The question is how to structure financial
support so as provide incentives to
innovators, while in the same time avoid the
ills of corruption and moral hazard.
There exists a great deal of accumulated
cross-country experience
Concluding remarks
1.
2.
3.
Innovation has always been crucial for
economic growth and development
Arab countries have largely been
unprepared to deal with challenges related
to innovation
It is not too late to catch up if appropriate
innovation policies are implemented