bio
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1.1
The Innovation Capacity Index: Factors, Policies, and Institutions
Driving Country Innovation
Augusto López-Claros,
Founder EFD–Global Consulting Network
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Yasmina N. Mata,
EFD–Global Consulting Network
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bio
notes
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Summary
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For summary and download link to full text of chapter, please click here » ICI
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bio notes
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2.1
Enabling Innovative Entrepreneurship through
Business Incubation
Mohsen A. Khalil,
Global Information and
Communication
Technologies Department,
World Bank Group
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Ellen Olafsen,
infoDev, Global Information and
Communication Technologies
Department,
World Bank Group
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bio
notes
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Summary
For
full text of this paper,
see » Orders
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In
their article “Enabling Innovation and Entrepreneurship through
Business Incubation,” the authors demonstrate how a globally applied
mechanism of “business incubation” is facilitating the creation of an
innovation and entrepreneurship ecosystem that encourages entrepreneurs
who are willing and eager to take the risk of bringing new ideas to the
market, and helps them turn the potential of their ideas and ambitions
into real social and economic value. Basing their research on the
international network of infoDev,
they provide the reader with examples of a wide range of innovations in
products, services and business models which have been brought to
market by developing country entrepreneurs: from biogas cooking stoves
in Rwanda, to improved honey production methods in the Ukraine, to
improved bus services through telephony and tracking in Brazil. They
discuss in some detail the various methods countries can use to spur
innovation domestically and adapt imported innovations, in order to
couple such innovations with viable entrepreneurship. In addition to
the more commonly encountered factors which foster innovation, they
stress an often-overlooked characteristic called “cultural capital,”
which refers to the level of tolerance for risk and the interpersonal
trust that exists in a given society, affecting both decisions to start
a business and the entrepreneur’s ability to grow it. The authors
describe the intricate web of interactions making up the innovation
“ecosystem” and the linkages between all stakeholders in the system.
They then illustrate how business incubators assist early-stage
enterprises to become competitive and grow by interacting with all the
actors in the ecosystem, either directly or indirectly through the
enterprises they serve, and help them to meet the challenges their
clients face, whether related to regulations, finance, labor, or
infrastructure.
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2.2
The US Patent System: Does It Strengthen or Weaken
Innovation and Progress?
Josh Lerner,
Jacob H. Schiff Professor
of Investment Banking,
Harvard University
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Adam B. Jaffe,
Fred C. Hecht Professor in Economics,
Dean of the Faculty of Arts and Sciences,
Brandeis University
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bio
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Summary
For
full text of this paper,
see » Orders
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In
their article “The US Patent System: Does It Strengthen or Weaken
Innovation and Progress?” authors Lerner and Jaffe ask the critical
question: whether it strengthens or weakens innovation and progress. In
order for technological innovation
to create broad social benefits, to enable us “to live differently from
our grandparents,” institutions must create incentives for individuals
and firms to invest money in a financially rewarding process. After a
brief excursion into the history of the “passionate debates” over
patenting in Britain and the Netherlands, the authors describe the
workings of the US Patent Office (PTO), the process by which patent
applications are examined for utility, novelty, and non-obviousness,
and, how, if granted, patents are intended to ensure intellectual
property rights and protect inventors from the risks of infringement.
They then outline three ways in which patents fail to protect and how
they are wielded to retard innovation. By analyzing the 60 largest
countries (by total economic activity) in 2000, they show how patent
systems changed from 1859 to 1990, significantly constraining the
discretion of government officials, increasing the length of patent
shelf life, but not solving the universal dilemma of patent validity.
Changes to US patent law and policy between 1982 and 1990 have resulted
in a decline in rigor with which the standards of novelty and
nonobviousness are applied, pushing under-qualified, underpaid, and
overworked examiners, using “flawed and obsolete tools” to resolve
cases quickly. Coupled with the explosion in patent litigation, the
deterioration in the examination standards of the overworked PTO has
resulted in thousands of noxious “patent weeds” which threaten the
innovation garden. The authors end with concrete recommendations for
reform, with the aim of achieving a better balance between rapid
approval of good applications and reliable rejection of bad ones,
without dramatically increasing expenditures.
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2.3
Innovation Policy as Cargo Cult: Myth and Reality
in Knowledge-Led Productivity Growth
Alan Hughes,
Margaret Thatcher Professor of Enterprise Studies,
Judge Business School;
Director, Centre for Business Research,
University of Cambridge
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Summary
For
full text of this paper,
see » Orders
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In
his article “Innovation Policy as Cargo Cult: Myth and Reality in
Knowledge-Led Productivity Growth,” author Alan Hughes compares the
mid-20th century Melanesian “cargo cults” to the danger he perceives
that the evolution of innovation policy structures which copy perceived
cultural and structural characteristics of the US innovation system
will also fail to deliver the “goods,” viz. economic well-being through
improved productivity. Hughes describes these “ritual structures” as
increased R&D expenditure, the commercialization of science, and
the promotion of an entrepreneurial culture based on the subsidization
of risk-taking in venture capital investment. In questioning the
emphasis on R&D-intensive high-technology spin-offs, he contends
that they have been exaggerated to the neglect of other key factors in
the innovation system which must be considered. After considering these
factors (e.g., diffusion and use of ICT as a generalpurpose technology,
the role of performance transformation of existing firms as compared to
new entrants in driving productivity, and the role of universities in
the creation of human capital, role of public procurement policy, among
others), he concludes by arguing that the crafting of any specific
national innovation policy requires a careful consideration of its own
structural features and particular opportunities and challenges. In
order for the innovation “cargo” to be delivered, space must be created
in institutional mechanisms for the practical utilization of scientific
advances, focused problem solving, and the recognition and potential
exploitation of commercial opportunities.
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2.4
International Mobility of the Highly Skilled:
Impact and Policy Approaches
Ester Basri,
Science and Technology Policy Division,
OECD Directorate for Science, Technology
and Industry
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Sarah Box,
Science and Technology Policy
Division,
OECD Directorate for Science, Technology
and Industry
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bio
notes |
Summary
For
full text of this paper,
see » Orders
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In
their chapter entitled “International Mobility of the Highly Skilled:
Impact and Policy Approaches,” Sarah Box and Ester Basri discuss the
international mobility of highly skilled people, with a particular
focus on “human resources for science and technology” (HRST), the group
of skilled individuals, such as scientists, engineers, and researchers,
who play an important role in stimulating innovative activity. The
mobility of such skilled people, including human resources in science
and technology, has become a central aspect of globalization, with
talented migrants playing an important role in shaping the skilled
labor forces of many countries and influencing the creation and
diffusion of knowledge. The authors present selected data to describe
the broad patterns of mobility of highly skilled people, the importance
of mobility for the transfer of knowledge, the effects on receiving and
sending countries, focusing in particular on the potential impacts of
“brain gain,” “brain circulation,” and the diaspora. Finally, they
outline the policy responses of selected OECD countries regarding
mobility of HRST. Their central message is that mobility of the highly
skilled has the potential to benefit the migrant, the receiving
country, and the sending country, but that the policy environment plays
an important role in whether this mobility can lift innovative
performance. The evidence on return migration and brain circulation,
beneficial brain drain and diasporas suggests that there are a variety
of mechanisms by which migrants can continue to contribute to knowledge
creation and innovation in their home countries.
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2.5
Grassroots Green Innovations for Inclusive,
Sustainable Development
Anil K. Gupta,
Indian Institute of Management,
Ahmedabad National Innovation Foundation |
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Summary
For
full text of this paper,
see » Orders
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“Grassroots Green Innovations for
Inclusive Sustainable Development,” the title of the article by Anil K.
Gupta, is an exploration of open, user-driven innovation, as
exemplified by individuals in India. Long reliant on internal R&D
for innovation, large companies are often constrained in their ability
to identify and meet the needs of what he calls “excluded clients.” The
ability of corporations to influence the lives of common people with a
variety of products and services has not increased in the recent past.
The author presents the model of the “Honey Bee Network,” which offers
new thinking to help the formal sector learn from grassroots innovators
and traditional knowledge-holders, enabling them to solve problems in
an affordable, accountable, and accessible manner. Using intriguing
examples of grassroots innovations by users—a bicycle that generates
energy from bumpy roads, a peanut pod-collecting device, an organic
pesticide, and more—the author stresses the importance of reorganizing
consumption and production relationships, minimizing investment in
wasteful packaging, creating frugal design and development processes,
allowing communities to take creative ownership in order to solve
serious local problems, creating global markets of grassroots products,
and redesigning supply chains. Gupta stresses the importance of
including grassroots innovators in the benefits of their creativity
when products are marketed, and giving them full credit for their work,
through patenting andintellectual property rights.
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2.6
Quantifying the Impact of ICTs on Growth in
Developing Economies
Markus Haacker,
Honorary Lecturer at London School
of Hygiene and Tropical Medicine;
Consultant to the World Bank |
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Summary
For
full text of this paper,
see » Orders
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“Quantifying the Impact of ICTs on Growth in
Developing Economies” is the title of the article by Markus Haacker, in
which he sets out to quantify the growth impact of technological
advances in ICTs across the developing world. The author analyzes
existing data on the production of ICT equipment, and builds a dataset
covering the absorption of ICT equipment in a cross-section of
developing economies. His analysis suggests that the direct growth
impact of technological advances in the production of ICT equipment
plays a subordinate role in the developing world. However, advances in
ICTs do affect economic growth across the developing countries, as
lower prices of ICT-equipment result in ICT-related capital deepening.
Haacker finds that the growth impact of ICTs across the countries
covered has increased from 0.19 percent annually in 1991–1995 to 0.26
percent annually in 2000–2006, and that there appears to be a greater
growth impact in low-middle-income countries than in low-income
countries, reflecting higher rates of ICT-related investment. He
concludes that the sources of these growth increments are divided
evenly between capital deepening related to IT and to communications
equipment and that, while investment in communications equipment has
been roughly twice as high as investment in IT equipment, the rate of
technological progress regarding IT equipment has been higher.
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2.7
Good Governance for Sustained Growth and Development
Daniel Kaufmann,
Senior Fellow, Global Economy
and Development Program,
The Brookings Institution |
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Summary
For
full text of this paper,
see » Orders
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The article “Good Governance for Sustained
Growth and Development,” by Daniel Kaufmann, provides more solid
evidence for judging the effects of governance on development, and the
effectiveness of strategies to improve it. Kaufmann’s research
disproves the common assumption that becoming rich is a precondition
for a country to “afford good governance,” to have a competent
government bureaucracy, sound rule of law, and an environment in which
corruption is not condoned. Contrary to popular belief, he says,
corruption is not the direct result of low income, and good governance
is not a “luxury good.” His studies point to better governance as being
the cause of higher economic growth and improved development, and not
the reverse. By introducing the notion of “state capture” and “legal
corruption,” the author explains why traditional definitions and views
of the investment climate—usually focused on the public sector—have
tended to underestimate the importance of governance factors and why
they do not accurately reflect what enterprises themselves report as
being of greatest significance for their operation. He ends his chapter
by showing how moves toward transparency, gender equality, freedom of
expression, and public participation result not only in better
socio-economic and human development indicators, but in higher
competitiveness, less corruption, and the fostering of a culture of
innovation. Reforms in such areas have proven to be net savers of
public resources, obviating the necessity for excessive regulations or
rules. Kaufmann makes strong recommendations to the international aid
community to rethink strategies and embrace more fully good governance
approaches.
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2.8
Dynamics and Challenges of Innovation in Germany
Alexander Ebner,
Professor of Socio-Economics,
Johann Wolfgang Goethe
University,
Frankfurt am Main, Germany
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Florian A. Täube,
Assistant Professor of Growth Management,
Strascheg Institute of Innovation and Entrepreneurship, European Business School,
Oestrich-Winkel, Germany
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bio
notes |
Summary
For
full text of this paper,
see » Orders
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In their article “Dynamics and Challenges of
Innovation in Germany,” authors Alexander Ebner and Florian Täube
analyze the historical underpinnings and current challenges facing
innovation in Germany. They first review the conceptual frameworks for
assessing innovation dynamism and survey the relevant institutional
components of the German economy, discussing the trade regime,
competition law, labor relations, the financial system, and
entrepreneurship policies. They then highlight the basic features of
the German innovation system, in particular pointing to factors such as
education and training, R&D, and university-industry relations.
From its renowned position as a “social market economy,” combining
technological innovativeness, international openness, and industrial
competitiveness with an extensive welfare system, Germany has become an
institutional “hybrid” moving in the direction of greater
entrepreneurial spirit. The innovation system, based in a rather
bureaucratic, bank-dominated economy, has been seriously challenged by
globalization, technological change, demographic pressures, persistent
unemployment, and the burdens of reunification. They contend that the
current situation requires an urgent institutional response, in the
form of increased venture capital, high-growth stock markets, more
flexible regulatory measures, the removal of hindrances to innovation
in small and medium enterprises, and increased public support for
R&D. According to Ebner and Täube, the German service sector lags
behind in knowledge-intensive services to create employment in the
current world economy and there is a significant lack of human capital
in high-tech industries which could be addressed by creating more
attractive conditions in the research and educational systems.
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2.9
From Enlightenment to Enablement: Opening up
Choices for Innovation
Andrew Stirling,
Science Director at Science and
Technology Policy Research (SPRU),
University of Sussex
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Summary
For
full text of this paper,
see » Orders
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“From Enlightenment to Enablement: Opening up
Choices for Innovation,” by Andrew Stirling, provides insight into the
“knowledge society” and the widespread notion that scientific and
technological progress is linear and cumulative, that every possible or
feasible path will be realized. Rather, Stirling writes, “whether
deliberately, blindly, or unconsciously,” societies pursue only a
restricted subset of diverse possibilities, in which certain pathways
for change are “closed down,” while others are “opened up.” The factors
driving choice are determined by whether power is exercised
deliberately and democratically, and whether public policy is open,
inclusive, and accountable in dealing with links between technological
risk, scientific uncertainty, social values, political priorities, and
economic interests. Stirling analyzes the relationships between social
and technological progress, on the one hand, and public participation
and responsible precaution, on the other, and asks what are the most
appropriate and practical ways, under different conditions, to “get the
best out of specialist expertise,” while “engaging stakeholders,
learning from different experiences, and empowering the least
privileged groups in society.” Stirling analyzes the vulnerability of
society from technology (biological, environmental, etc.), and its
intriguing opposite: the risks for technology from society, such as
when wise, feasible choices are foreclosed because of “market lock-in,”
prejudice, or the needs, preferences, values, and interests of
restricted groups. After a discussion of the governance of these
vulnerabilities, the author examines some of the unfounded assumptions
about knowledge itself: that every marketable innovation is socially
acceptable, or that the knowledge responsible for an innovation also
encompasses its consequences, and reminds us that even apparently
complete knowledge may be indeterminate in its implications, that facts
and values are not necessarily interdependent. The article ends with a
description of the “precautionary principle” which acknowledges both
the potential for irreversible harm and the impossibility of scientific
certainty, and opens up “directions for choice.”
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2.10
How do Emerging Markets Innovate? Evidence from
Brazil and India
Simon Commander,
Managing Partner of Altura Advisers;
Senior Adviser, European Bank for Reconstruction
and Development (EBRD), London
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Summary
For
full text of this paper,
see » Orders
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The article entitled “How Do Emerging Markets
Innovate? Evidence from Brazil and India” by Simon Commander examines
the productivity effects of ICT adoption and use in two of the emerging
market economies, Brazil and India. The author takes off from the past
studies on the varied productivity and growth consequences of ICT
adoption across countries and regions and inquires into the factors
behind such variation. ICT has been adopted and managed in different
ways in different parts of the world, and, not surprisingly, associated
organizational dimensions of the new technology appear to play an
important role in explaining differences in outcomes. The author’s
research, based on interviews with 1,000 manufacturing firms in the two
countries, describes the factors explaining the pace of ICT
adoption—including policy and financing constraints—and the
consequences of that adoption. The results show that that there are
differences not only in the timing of adoption and the patterns of ICT
use across the two countries, but also within the countries themselves.
Larger sized firms and foreign ownership tend to be associated with
higher adoption, and in both countries, associated with a higher share
of educated workers and a change in the skill mix. The Brazilian firms
are shown, on average, to have adopted more ICT than their Indian
counterparts, and to have used it more intensively. However, firms
operating in Indian states with good institutional arrangements tend to
have adoption rates similar to those in Brazil. There is clear evidence
that high returns in productivity have resulted from investment in
organizational change and improvement in the quality of infrastructure
arrangements.
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2.11
Technology and Innovation for Addressing Climate
Change: Delivering on the Promise
Laura Altinger,
Economic
Advisor, Office of the Director, Environment, Housing and Land
Management Division at the United Nations Economic Commission for
Europe (UNECE)
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Summary
For
full text of this paper,
see » Orders
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The
chapter entitled “Technology and Innovation for Addressing Climate
Change: Delivering on the Promise,” by Laura Altinger, first provides
an overview of the current thinking about climate change and then an
analysis of the promising role for innovation in global efforts to
reduce greenhouse gases, in adapting technologies to decrease the
vulnerability of those most likely to suffer the most serious impact of
climate change, and in moving our economies onto green and sustainable
growth trajectories. While key technologies already exist with great
potential for limiting GHG emissions, leading up to 2050, the
technologies that will be relied upon to make the substantial cuts in
GHG emissions required to keep the planet safe will target energy
efficiency in all key sectors: carbon capture and sequestration for
power generation and industry, nuclear power, biofuels, wind, electric
and plug-in vehicles, and hydrogen fuel cells. The author describes the
roles to be played by the private sector in developing technologies,
and by the public sector in addressing important market failures, using
such mechanisms as carbon markets and regulatory regimes to provide
investment incentives for alternative environmental technologies, to
facilitate research, and ensure an adequate pool of human capital. She
proposes that governments boost investment, supplemented by carbon
taxes, in supportive infrastructure for new technologies or green
fiscal stimulus spending aimed at environmental technology development.
Finally, she discusses the importance of legally binding commitments to
regulate countries already generating significant GHG emissions,
improving risk management in smaller developing countries, removing
barriers to trade and investment, and support by developed countries
for the transfer of clean technology in regions of the world where it
is most needed.
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2.12
Innovation and Social Development in Latin America
Hernán Rincón,
President, Microsoft Latin
America
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Summary
For
full text of this paper,
see » Orders
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In
his article “Innovation and Social Development in Latin America,”
author Hernán Rincón shares his view of the current financial crisis
and its effects on developing economies from the perspective of the CEO
of Microsoft Latin America. He takes issue with the notion that
“developing” necessarily implies moving from a low- to a high-income
economic model, and to the idea that countries are going to return to
the seemingly “stable” high-income regime that prevailed before the
current crisis. For Rincón, economic development does not necessarily
dovetail perfectly with economic growth—as measured by GDP—any more
than GDP satisfactorily measures economic well-being. Referring to the
current situation as a challenge of recalibration rather than
recession, Rincón uses the example of the photographic industry which
failed to foresee the onslaught of the digital camera, and stresses the
critical importance of people-centered training, re-training, R&D,
and IT applications in managing the shift to new business models. He
points to the success of Brazil’s San Luis Digital project in providing
an entire province with free wireless Internet access, and Mexico’s
Housing Funds Institute, which gave partners access to instant
messaging, video and audio conference capabilities, vastly simplifying
communications, and increasing productivity. Rincón is optimistic that
Latin America is now better positioned to face the downturn and adapt
to new conditions, both because of the continent’s past experience in
surviving severe economic, political, and social upheavals, and because
of recent stronger economic policies which lowered inflation and
interest rates, improved public finances, reduced external debt, and
substantially increased foreign exchange reserves. Rincón concludes by
describing Microsoft’s “Unlimited Potential” program to promote
sustained social and economic opportunity for the world’s five billion
people, who have yet to benefit from technological advances, by
transforming education, fostering local innovation, and creating jobs
and opportunities.
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See also Contents of the Report: go to » CONTENTSpdf
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Copyright © 2009
The Innovation for Development Report
Augusto López-Claros, Editor |
