Innovation Processes in Developing Countries Specificities and Policy Issues for Inclusive Development Second session Judith Sutz, Universidad de la República,

Innovation Processes in Developing Countries

Specificities and Policy Issues for Inclusive Development

Second session

Judith Sutz, Universidad de la República, Uruguay

EULAKS Summer School

“The role of social sciences in the construction of knowledge based

societies: Latin American and European perspectives”

Summing-up from the first session

It is useful to ask ourselves what do we understand by knowledge society

It is useful to distinguish between “knowledge society” and “capitalist knowledge society”

If we agree that “knowledge society” means that knowledge plays a structural role in the economy, the culture, the personal development of people, etc.,we can refine our question in the following way:

Is the “knowledge society” a universal phenomenon, or is it a trend that can be observed in some societies while it seems not to be so clearly present in other societies?

Again, it depends on how we define “knowledge society”

We need a way of characterizing “knowledge society” that is useful to better understand development (and

underdevelopment) today We posit that such a characterization needs to put in a

central place the process of learning Learning is a process with two “legs”: one is the leg of

acquiring and producing knowledge, “learning by studying”; the second is the leg of aplying creatively the acquired knowledge to solve problems “learning by solving” (but remember the imptant remark made by Maria yesterday: what makes a problem a problem?)

If we map each country in a systems of Cartesian co-rodinates according with the values attached to each leg (by a given proxy), we find, for the latest data available

>2.5% Sweden South KoreaJapan USA

Finland2 - 2.5% Germany France

Denmark Netherlands1.5 - 2% Belgium

R&D/GDPCanadaUK

1 - 1.5% ItalyNorway

0.8 - 0.9% Brazil Spain

Chile0.5 - 0.8% Colombia

>2.5% Sweden South KoreaJapan USA

Finland2 - 2.5% Germany France

Denmark Netherlands1.5 - 2% Belgium

R&D/GDPCanadaUK

1 - 1.5% ItalyNorway

0.8 - 0.9% Brazil Spain

Chile0.5 - 0.8% Colombia

MexicoVenezuela

<0.5% Uruguay Argentina

< 15%- - - - - - >50%

Enrolment in higher education

We agree to call the red line “the learning divide”

Now we can suggest that those countries that are above the learning divide are those that we use as proxies to the concept of “knowledge society”

Warning! “Society” is a too broad concept. There are people below the line in “knowledge societies” and people above the line in societies that as a whole are below the line

But we have grasped a possible dynamic: advancing towards knowledge societies means crossing, as nations and not only as individuals, the learning divide

For that we must have more knowledgeable people and more local demand for their creativity

This is not a complain: it is just an attempt at understanding

Furthermore, they were not the “developing” countriesof today(Africa, South-Asia, Latin America) that startcomparing and complaining: it was Germany in theXIX Century, through Friedricht List, who famouslycoined the expression “kicking away the ladders”answering to Adam Smith:“Any nation that by means of protective duties and

restrictions on navigation has raised her manufacturing power and her navigation to such a degree of development that no other nation can sustain free competition with her, can do nothing wiser than to throw away the ladders of her greatness and to preach to other nations the benefit of free trade…”

“Kicking away the ladders: development strategy inhistorical perspective”, Ha-Joon Chang, 2002

Has the “knowledge society” concept a normative turn, or is it only a

descriptive concept?

If the concept has a normative turn, what would it imply?

Let’s come again to theory, and to a concept proposed by Fernando

Fanjzylber in 1990: “the empty box of Latin American development”

Low inequality High inequality

Slow growth Uruguay

Quick growthMexicoBrazil

Many Latin American

countriesMexicoBrazil

Many Latin American

countries

What has this matrix to do with innovation?

Quick growth with high inequality has to do with the “neo-peripheral” insertion of L.A. in the world market: transformation of natural resources with low value added in the South and “maquila” type production in the North. Both cases are not “knowledge and innovation driven”.

Slow growth with low inequality occurs because there is in place a reactive type of equality, that is, equality that is not connected to knowledge and innovation.

Two places where the cell of low inequality and quick growth is full, Scandinavia and South Korea, have proactive equality, that is equality accompanied by strong knowledge-based innovative processes.

Which of the societies depicted in Fanjzylber’s matrix can be

termed “knowledge societies”?

Can we agree that the issue of inequality is somehow related to the characterization and, moreover, the dynamic, of “knowledge societies”?

If yes: Why is inequality important, and not only

poverty?Moreover: Do we know countries extremely unequal

which economies are knowledge-based and innovation-driven?

If not: What can we conclude?

Why is inequality important, and not only poverty?

Albert Hirschman observation: “Tolerance toinequality is like a credit that has an expiration date.”

Because inequality have beed found as the main reason of divergence in development paths (South America and Scandinavia)

“To be excluded from common facilities or benefits that others have can certainly be a significant handicap that impoverishes the lives that individuals can enjoy. No concept of poverty can be satisfactory if it does not take adequate note of the disadvantages that arise from being excluded from shared opportunities enjoyed by others.” (Amartya Sen)

Do we know countries extremely unequal which economies are knowledge-based

and innovation-driven?

Let’s look to the following map

Gini Index in the World (World Bank)

Endogenous capability building, research, higher education, can be considered key dimensions for development and the building of knowledge societies: simple observation shows that in development failures such dimensions have been rather neglected while in development successes they have received true priorityGiven that successful cases also include asingredients a fairly egalitarian situation at departure,we can conclude that we do not have where to look foradvise, or for models, on how to use science,technology and innovation for development and to buildknowledge societies in nations characterized byimportant levels of inequality

SO… how can we advance towards knowledgesocieties in developing countries, given thathigh inequality seems to be a big barrier?

We already know what does not work: conceiving equality problems exclusively as poverty problems and then bettingon the trickle- down effect of economic growth

(Innovation) Competitiveness

Economic growthFiscal surplusto finance healthpolicies Economic catch-up

Safety nest forthose outside general improvement of equity“the system”

The “Gini map” shows that the question about what kind of science, technology and

innovation are needed to foster development and to build knowledge societies in unequal societies deserves

attentionWhy has been this so elusive?

A question of agendas (the 90/10 gap) A question of lack of adequacy

A way to look into this problems

Can this matrix be of some help?

Problems for which Problems for whichsolutions have been solutions have not beenfound in AICs searched or found in AICs

Problems for The vas t majority of Solutions to problemswhich solutions solutions acquired mainly posed in DCs andsuitable for DCs through technology developed locallyconditions exist transfer

Problems for “Canonical” solutions No solutions (yet)which solutio ns exist, but for differentsuitable for DCs scarcity reasons they Typically health issuesconditions do are not suitable for DCs like vaccines againstnot exist conditions cholera or AIDS

Problems for which Problems for whichsolutions have been solutions have not beenfound in AICs searched or found in AICs

Problems for The vas t majority of Solutions to problemswhich solutions solutions acquired mainly posed in DCs andsuitable for DCs through technology developed locallyconditions exist transfer

Problems for “Canonical” solutions No solutions (yet)which solutio ns exist, but for differentsuitable for DCs scarcity reasons they Typically health issuesconditions do are not suitable for DCs like vaccines againstnot exist conditions cholera or AIDS

Srinivas and Sutz, 2008

Examples

From Cuba From Uruguay From Brazil From.......

And now, finally, what about policies?

See you tomorrow!

To minimize the impact of the “kicking away the ladder” effect, theory is not sufficient, but

it is indeed necessaryThe NIS approach seems particularly useful to grasp the dynamics of technical change, but would it be useful if mechanically applied to a very different context than that where it was

conceived? NIS in the South is an exante concept, rather than an expost concept It has a normative weight Moreover, it is relational It deals centrally with policies (it is a “purposeful” concept besides being a descriptive concept)

It takes into account conflicts

This way of reasoning leads to ask what the new concepts that are proposed to grasp

the dynamics of change mean when observed “from the South”

Knowledge economy/knowledge society Learning economy/learning society

New types of divides (between whom?)

What are the consequences of all this in terms of policy design in the South? We cannot give for granted that a system exists; we

cannot either declare that it exists because we design a structure and we name it NIS

We must study carefully the actors of the systems, starting by identifying those that are in place and those that should be but are not there

We should look into specially important “relational actors”

Possible conflicts should be anticipated

Enhancing NIS and, moreover, linking NIS to development, needs strong policies

But what type of policies?BLAST and GALA

Two approaches to development (Amartya Sen, 1997)

“There exist, on the one hand, approaches that see development as a ‘fierce’ process, with a moral that invokes ‘Blood, Sweat and Tears’ (to use Winston Churchill’s rousing phrase)”:

the BLAST view of development.

A contrasting view sees “development as essentially a ‘friendly’ process, with a focus on people’s helping each other and themselves, and with being able ‘to get by with a little help from their friends’ (to apply a phrase from the Beatles)”: “Getting by, with A Little Assistance”:

the GALA view of development.

What means GALA in terms of science, technology and innovation?

First: to recognize that science, technology and innovation can be part of the problem and not only

a provider of solutions

“…diffusion researchers …have been specially inattentive to the issue of how the socio-economic

benefits of innovations are distributed within a social system. When the issue of inequality has been investigated, we often find that the diffusion of

innovations widens the socio-economic gap between the higher an the lower status segment of a system”

(Rogers).

Some questions

Is inequality important at world level? Is inequality a problem in terms of policy Is inequality a problem at all, or the real

problem is poverty? How are STI related to the overcoming of

inequality?