9/7/2015 Background Research Development and Innovation (RDI) is an investment in a company’s future Highest productivity improvements and hence GDP.

04/19/23

Background

Research Development and Innovation (RDI) is an investment in a company’s future

Highest productivity improvements and hence GDP growth always came from innovation and this since the invention of the wheel

Adapting to fast growing technological innovation is crucial. In open markets, obsoleteness is a wide spread disease

Globalization, open information, and increasing linkages between Universities and Industries facilitate innovation and may one day turn it into a commodity

Remember !

For Industry, the principal purpose of business RDI is to develop differentiated products and services to meet the market needs

COMPETITEVENESS: competitiveness is the set of

institutions, policies, and factors that determine the level of productivity of a country

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The Global Competitiveness Index Ranking for ESCWA Member Countries covered by the report

Country Rank 2010-2011 (139 countries)Qatar 17 Saudi Arabia 21UAE 25Oman 34Kuwait 35Bahrain 37Jordan 65Egypt 81Lebanon Lebanon 9292Syria 97

Lebanon Scores VERY BAD in Competitiveness Index

Basic Requirement Macroeconomic Environment

Lebanon has successfully maintained a healthy economy despite the worldwide economic and financial crisis. (8.7% GDP growth in 2009 vs. world average of 1%)

HOW CAN WE SUSTAIN IT !?

Basic Requirement Health and Primary Education

Good health services exist in Lebanon

Basic Education is of good quality and available to all. Literacy rates are improving

Healthy educated population yields competitive workforce

Resource allocation should remain strong for both sectors in order to sustain competitiveness

Efficiency EnhancersHigher Education and Training

The relatively acceptable higher education system of Lebanon should be built on (we score 4.6/7 – still significant room for improvement)

“There is no science w/o scientists, there is no scientists w/o research!”

Efforts should be made on enforcing linkages with industry hence economy (jobs, R&D, etc)

Efficiency Enhancers Goods Market Efficiency

The country produces a good mix of goods and services

A wide variety of goods are traded on the market competitively

Efficiency Enhancers Financial Markets Development Banking sector is strong, stable, and

well developed.

Stock market is limited and inefficient

Access of funds and capital is low (besides bank loans)

IPOs, private equity and M&As are very low

Investment banking is very weak

Efficiency Enhancers Technological Readiness The technological readiness of

Lebanon’s developed industries is average given their partial ability to use the available technologies to improve productivity and efficiency

The country’s labor force is quite qualified and needs to be continuously up-to-date; they have the ability to adopt the available technologies

Are we going to produce technology or remain users?

Efficiency Enhancers Market Size

Lebanon’s market size is not limited to its boundaries

The market spans to the Arab and European countries and beyond

Exports have been growing and are crucial

Innovation and Sophistication Factors Business Sophistication Many sectors have high

sophistication (mature, efficient, profitable, up-to-date)

Sophistication results also from strong:o Linkages and openness to the worldo Amount of expats that are still in close

contact with the countryo Out-sourcing, sub-contracting, joint

ventures, etc

Innovation and Sophistication Factors Research Development and Innovation Four of Lebanon’s top exporter

industrial sectors namely:o Electromechanical (about 22% of

exports) o Agri-food (about 10% of exports)o Chemical (about 8.5% of exports)o Transportation (about 7% of exports)

…are by nature conducive to innovation

What Research?

Product and Material Research

Manufacturing and Operations Research

Market Research

Product and Material Research

Find new product ideas to meet customers’ needs

Research new Materials to develop new products and processes

Improve Material performance

Find new and different products and new uses of existing products or by-products

Manufacturing and Operations Research Development of tools and equipment

Manufacturing methods aimed at improving productivity and reducing costs

Application of information technology for informed decision-making

Study of optimal resource allocation

Predict system behavior

Market Research

Collection and analysis of market data

o Target marketo Competitiono Environment

Crucial for understanding new trends

Very important to analyze competitiveness

Development

The most economically feasible method for applying the facts or principles identified

Carried out typically after applied research

Innovation

It is the final stage of a development process, representing the final result achieved and implemented successfully

Innovative activities may relate to new products, new services, new methods of production, opening new markets, new sources of supply, and new ways of organizing

Innovation is directly correlated with the performance of firms

Around the world innovation is now recognized as a prime source of

national competitive advantage

MASTER PLAN for RDI

A large improvement can be made on one of the main pillars of competitiveness Industrial Industrial InnovationInnovation

We recommend a Master Plan involving 4 major players:o Public Sectoro Universitieso Industrialistso Banks and Financial Institutions

RDI Master Plan: Public Sector National RDI policy with stakeholders

led by CNRS with RDI observatory to measure i/o, impact, foresight, studies

Tax incentives for RDI in private sector (industry, universities, centers)

IRI facilitation and coordinating industrial research and innovation

ALI matchmaker between industry, CNRS, IRI and universities

RDI Master Plan: Universities Participate in national RDI observatory

activities

Graduate and post-graduate relevant and connected research  

Develop tracks of research priorities needed in country (industry, energy, environment, water, etc)      

Establish graduate schools to offer multi-disciplinary programs and activities

Crediting professional activities by faculty members towards promotion (consulting,

development, applied research, innovation)

RDI Master Plan: Industrialists Include in their business plans an RDI

chapter Strategy on % of RDI spending per year

Conduct state-of-the-art-product research to confirm need for development

Conduct extensive market research to identify consumer needs

Seek local RDI capacity to solve efficiency and development problems, build local expertise over time, hence, multiplier effect

Ask for help from ALI, CNRS, IRI, and Universities

RDI Master Plan: Banks and Financial Institutions

Create Innovation funds (Equity and Loans) to be invested in spin-offs which resulted from innovation  

Find strategic partnerships and alliances

Productive or Waste: Importance of Cycles!

RDI can result from two cycles: Market Driven Research Driven

Any flaw from within one cycle makes the difference between a productive and wasted RDI

Practical Recommendations

We should extend the current law of tax incentives on “Tawzifat Zatiyyeh” related to CAPEX, to include RDI expenses.

Industrialists should be ready to have a high failure rate in RDI projects; however, one success out of ten failures will largely compensate all the losses.