SCIENCE AND TECHNOLOGY IN THE LAC AND THE KOREAN TECHNOLOGY FUND

Transcription

1 SCIENCE AND TECHNOLOGY IN THE LAC AND THE KOREAN TECHNOLOGY FUND HYUNGHWAN JOO Senior Advisor for Technology and Innovation Inter-American Development Bank November Santiago, Chile

2 OUTLINE Main Trends in S&T in LAC Policy Challenges for LAC IDB s Strategy for S&T Salient Features of the KTF Eligibility Approval procedure Hyunghwan Joo November 27-28,

3 KOREA Area - 99,600 km² Population - 48 million GDP - US$ 788 bn(10 th ) Per capita income - $16,191(05) Trade vol. - $ 546bn(12 th ) Literacy 98% Hyunghwan Joo November 27-28,

4 Transformation of the Korean Economy Per Capita GNI (US$) 11,432 16,191 10,000 5,000 Six Five-Year Economic Development Plans 1,000(1977) 7, (1964) Independence (1945) Korean War (1950~53) Big Take-off OECD (1996) Fin. Crisis (1997) Hyunghwan Joo November 27-28,

5 Developing countries will likely remain mired in poverty unless they can do what developed countries have done to achieve sustainable growth : incorporate science, technology and innovation into their economic strategies. UN Millennium Project Taskforce on Science & Technology and Innovation, 2005 Hyunghwan Joo November 27-28,

6 Main Trends (LAC) Low investment in knowledge, particularly in R&D Countries in LAC spend 0.6% of GDP on R&D Total R&D ($12 b.) < Korea ($16 b., 2.6%), US ($282 b., 2.7%) R&D intensity has either decreased or leveled off (except for Brazil (1.1%), T&T, Mexico) Predominance of public sector in R&D spending Public to Private ratio: 3 : 7 (OECD), 7 : 3 (LAC) The share of business R&D funding has declined Hyunghwan Joo November 27-28,

7 Main Trends (LAC) Low linkage b/w university, PRIs and industry The public research is biased toward basic research Curiosity-driven rather than market-driven or problem-oriented Lack of innovation culture in firms & channel for demand articulation Shortage of researchers Researchers per 1000 persons: 6~10 (OECD) vs. 0.7 (LAC) Low IT penetration rate Low PC penetration, limited broadband connectivity, high access cost Low patenting Growing technology gap Low competitiveness Hyunghwan Joo November 27-28,

8 TFP Has Not Been a Source of Growth for LAC Countries Annual TFP Growth Main Trends (LAC) Anual TFP growth LAC OECD East Asia LAC F : BID-RES. (*) et al World Bank, 2002 Hyunghwan Joo November 27-28,

9 Main Trends (LAC): Comparative Snapshot R&D as % of GDP Private Sector in R&D Researchers per 1000 Internet Users OECD countries 2 ~ 3 % 60 ~ 75 % 6 ~ ~ 70% LAC 0.6% (Brazil 1.0%) 30 % 0.7 (Argentina 1.6) 15% Hyunghwan Joo November 27-28,

10 Policy Challenges (LAC) Supply issues (funding/manpower) + Increasing demand for innovation by firms & ensuring closer PP linkage Mainstreaming innovation policy Treat innovation as a strategic issue in development planning Links to strategic economic and social directions Institutional development Effective S&T policy framework (including reliable database) Improve framework conditions (Competition (service), FDI, Financing (SME, tech start-ups), IPRs) Hyunghwan Joo November 27-28,

11 Policy Challenges (LAC) Public-Private linkage Stimulate R&D investment by industry Policy mix (grants, loans, guarantees / tax incentives) Strategic PP partnerships for research Greater stakeholder involvement in PRIs agenda setting Human resources development Access & quality (secondary/tertiary + vocational training) Focus on 21 st century skills (IT, Science & Math, English) Enhance mobility b/w public and private institutions Attract foreign talent and return migration of expatriates IT infrastructure Hyunghwan Joo November 27-28,

12 Policy Challenges (LAC): Paths to Innovation There is no one size fits all model Strategies depend on initial conditions & resources Need to look beyond regional models : cross modeling IT development: Korean, Scandinavian, Irish, Indian, US models Develop indigenous absorptive capacity Build with acquisition, adaptation, improvement, innovation Distinguish among objectives at different stages this is a multigeneration process Create competitive advantage Chile: salmon, Korea/Taiwan: electronics, Ireland/India: software Hyunghwan Joo November 27-28,

13 IDB s Strategy: New framework for S&T Commitment of IDB leadership to strengthening Bank activities in the S&T and innovation area New Organizational Setup Establishment of the new Sub-Department in charge of S&T, ICT and education High level S&T advisory Group to the President New Financing Tool : Korean Technology Fund Created by a contribution of US$ 50 million from Korea Increase the flow of technical assistance Hyunghwan Joo November 27-28,

14 IDB s Strategy: New Strategic Directions Mainstreaming S&TI into country dev t strategies Through country dialogues & policy assessments, raise the awareness and identify policy priorities & funding requirements Employ convening power to stimulate dialogue among country policy makers and share best practices Regional policy dialogue on S&T Institution Building Institutional & governance reforms of the STI system Priority setting/public funding/autonomy & Accountability of PRIs Adapt regulatory conditions to innovation requirements IPR, Competition, environmental and consumer regulations Human resources development Foster a skilled workforce at post secondary technical levels Engineering & technical training /curricula design & accreditation Hyunghwan Joo November 27-28,

15 IDB s Response: Strategic Directions Technological Infrastructure ICT: e-applications, Public-private partnership facility in ICT Establish and disseminate standards, metrology, IPR Promote technology transfer and diffusion mechanisms Public-private linkage Innovation cluster development, technology consortia, strategic programs addressing social needs Health, energy, housing, disaster prevention, digital divide Promote innovation in the private sector Notably in SMEs, and in the context of innovation cluster Support for the development of ICT-based portal for SMEs access to technology information Design / implement financing mechanism to support innovations Assessment and improvement of incentive systems and support instruments (tax/fiscal incentives, funds, guarantees.) Hyunghwan Joo November 27-28,

16 IDB s Strategy: New strategic Directions <Approach: Systematic/Evolutionary approach > Differentiated approach Based on needs of a particular country, considering diversity in terms of economic and institutional development Strengthening NIS in more developed countries vs. technological infrastructure (metrology, standard, IPRs ) and capacity building in less developed ones Regional approach Pool knowledge and S&TI capacity for large scale projects Regional large scale technological projects, training programs Develop common best practices Harmonization and training of IPR regime Development of a regional information system to monitor STI for performance Hyunghwan Joo November 27-28,

17 KTF : Background Korea s contribution of $ 200 million in 2005 IDB : $ 50 million KTF (two-tranches: $25 mil. in 05 + $ 25 mil. in 08) $ 50 million Poverty Reduction Fund IIC : $ 40 million SME Development Fund MIF: $ 60 million replenishment Hyunghwan Joo November 27-28,

18 KTF : Salient Features Supports technical cooperation projects Small-scale e-application projects Non-reimbursable 100% untied No project ceilings Proposals of $100,000 or more : donor approval Hyunghwan Joo November 27-28,

19 KTF : Purpose To support activities that promote S&T and innovation capacity of the countries in the region To enhance the Bank s competence in the S&TI area Develop the portfolio of the Bank s ST&I loan & TC Enhance the countries capacity to generate S&T and technological innovation policies and projects Hyunghwan Joo November 27-28,

20 KTF : Eligibility - Grant Recipients - All borrowing member countries Public institutions (federal / state/local governments) Private organizations that are eligible to receive TC fund (e.g., private firms, industry organizations, educational institutions, NGOs) Regional + Sub-regional organizations composed of borrowing member countries All Bank Units Supports demand driven activities + Bank-sponsored activities Finances collaborative proposals b/w Bank Units + b/w the Bank & other organizations Promotes intra- / inter-institutional collaborations Hyunghwan Joo November 27-28,

21 KTF: Eligibility Eligible Activities - Activities that strengthen S&T and related innovation capacity building e.g.) (pre) feasibility studies, policy assessments, sector analysis, institution building and strengthening, strategy and policy making, regulatory frameworks and human resources development In case of economic and sector work, more specific/action oriented assessments or analyses are preferred Activities that promote IT infrastructure and related e- applications e.g.) e-government, e-health, e-education, e-business Hyunghwan Joo November 27-28,

22 KTF : Eligibility Eligible Activities - Activities that identify and disseminate best practices for S&T and innovation capacity e.g.) workshops, conferences, seminars, publication of papers, development of a regional S&T data (statistical) base 2007 workshops: Financing technological innovations, Strengthening S&T policy framework, Promoting universityindustry partnership, Sustaining rural connectivity Hyunghwan Joo November 27-28,

23 KTF : Eligibility Emphasis for Funding - Particular emphasis will be given to : <country> Lower income countries + Countries with a weaker S&T capacity <sector> e-applications Industrial development with strong technology and innovation components through adoption & diffusion of new technology such as IT, BT Promotion of technological innovations in SMEs S&TI Institution building & strengthening Training (in the areas of science, engineering, IT and for SMEs) Hyunghwan Joo November 27-28,

24 KTF : Proposal Characteristics (quality) Impact on S&TI capacity and performance Sustainability Additionality in terms of financing and approach Consistency with the Bank s strategy and priorities in the country / on S&TI Contribution to Bank effectiveness enhanced lending, quality technical support, and potential to replication Others: Legal/technical competence of the requesting organization Plans to monitor & evaluate projects (indicators and outcomes) Hyunghwan Joo November 27-28,

25 KTF : Approval Procedure The approval process follows the Bank TC guidelines with the following exceptions: Proposal may be submitted at any time of the year In-country organizations must provide a nonobjection letter from their respective governments submit proposals through local Bank offices The Manager of the proposing Dep. will submit the proposal to the KTF manager (SDS/EST) Hyunghwan Joo November 27-28,

26 KTF : Approval Procedure The KTF manager will screen the proposal for its compliance with eligibility criteria Proposals of $100,000 or more are forwarded to the Donor for approval The CRG will review the Plan of Operation for approval A completion report should be prepared within six months from the project completion date Hyunghwan Joo November 27-28,

27 < Overview of Approval Procedure > Preparation of of Proposal Eligibility Screening (all (all projects) Review & Approval (donor, CRG) CRG) (> (> $100K) Completion (Report) Monitoring Implementation Hyunghwan Joo November 27-28,

28 Thank you Hyunghwan JOO Senior Advisor for Technology and Innovation & Korean Technology Fund Program Coordinator Inter-American Development Bank Hyunghwan Joo November 27-28,

29 Appendix: IT industrial Development (Korea) At the initial stage, the government played a leading role as an enabler or a facilitator Put in place an effective policy framework Laws & Master Plan: Informatization Promotion Act( 95), Cyber Korea 21( 99) Funding mechanism: Informatization Promotion Fund Propelling Institutions: MIC and NCA <Supply push> Expand telephone & broadband network Invest in human resources & critical technology (such as TDX, CDMA through PPP) Promote IT Venture Hyunghwan Joo November 27-28,

30 Appendix: IT industrial Development (Korea) <Demand pull> Liberalization and competition in telecom/broadband market encourage telecoms to main low tariffs via a reduction in cost Provide low cost PC, free broadband access to all primary & secondary schools, internet training for 10 mil. people for 3 yrs e-government projects Slogan to spread an IT culture: Media Campaign Although our industrialization lagged, our digitalization will not Approach: Strategic & focused Which area to target: HW or SW If SW, which niche market to target: business applications/solutions, on-line game, e-gov t, computer animation Business model: Global penetration, outsourcing(india), near sourcing(mexico) Roadmap with a proper sequencing and pacing of core measures is key Hyunghwan Joo November 27-28,

31 IIC SME TF: Salient Features Salient features : Project ceiling: US$ 500,000 non-reimbursable 100% untied All proposals exceeding US $100,000 should obtain an approval from the donor Hyunghwan Joo November 27-28,

32 IIC SME TF: Purpose & Eligibility Purpose : To promote private SME development through an IIC mission support Project eligibility : Accounting, legal and environmental consulting services for SMEs Feasibility study and project identification New financing mechanism development Best practice and training activities SME capacity building and business environment enhancing activities (e.g., through IT) Hyunghwan Joo November 27-28,

33 IIC SME TF: Criteria & On-going Projects Qualitative criteria In line with an IIC s business plan In support of a new business initiative Enhance synergies with the IDB and the MIF On-going and future projects FINPYME (SME diagnosis program) Family corporate governance training Local currency bond issuing project SME consulting project (accounting improvement & legal advice for small loan, renewable energy project) Hyunghwan Joo November 27-28,