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Science-Based Economic Development edited by Susan Raymond
Soodursun Jugessur
United Nations Economic Commission for Africa
Introduction
Any science-based development has to take science and technology as the main motors for overall socioeconomic development. Without technology, science stays in the realm of ideas and theories, and has little impact on society. Since technology and thereby science and technology are intersectoral in nature, it is necessary for multiple ministries, stakeholders, and interdisciplinary groups to work together the formulation of policies, plans, programs, and projects, as well as in their implementation and evaluation.
Developing countries, especially in Africa, have ignored the above linkages and have often concentrated on science policies based on the organization and promotion f science and high-level training. This has led to high-level scientists' being trained at taxpayers' expense, and eventually to a brain drain when opportunities for their employment, which necessarily stem from a technology-based development, have been absent. Unless the technology component is explicitly emphasized, any policy for only science-based development will have a marginal development impact in many countries.
Many science research councils, national research councils, and ministries of scientific research and higher education are gradually shifting their emphasis to delivering "goods" to the economy and incorporating technology as the main development parameter, especially in the context of diminishing resources and the need to make optimal use of the limited resources available. The application of available science and technology at the very start of the socioeconomic development process is being recognized as the strategic path, and in the case of the Japanese experience, the emphasis on letting market forces determine the direction of scientific research is even more pronounced: "market—engineering—design—research" (MEDR). 1
Motivations for S&T-Based Partnership
Partnership between government, industry, and universities is the essential determinant in a science- and technology-led development. Such partnership is the sine qua non in an environment of global competitiveness where the market forces determine the pace and direction of development. In many developing countries, the impact of global technological advances has yet to be fully grasped, but with the pressing need to diversify their economies and move rapidly from the simple export of primary commodities, which so far have accounted for the major share of their export earnings, and with the rapid fall in the international price of these commodities, the need to add value to their products and services is being felt more and more. Hence, close collaboration between government, industry, and university is being realized, and policies and strategies are stressing the need for such partnership.
The lack of entrepreneurial capacity in an environment where policies were not tuned to the building up of manufacturing capacities, the lack of suitable incentives to those who wish to take the risk of commercializing research results or investing in manufacturing enterprises, and the reluctance of the international investors to put their money in countries where the basic infrastructure, legal framework, incentive packages, and internal absorptive capacity were lacking have all been motivations for strengthening such a partnership. Though the market forces are basically in the hands of the global private-sector actors, the policies, favoring their successful functioning and the effectiveness of the universities in supporting relevant research depend to a great extent on governments' own policies.
The Challenge of Technological Competitiveness
The increasing costs of acquiring technology from developed countries, the ensuing failure in the implementation of strategies for industrialization, and the globalization of trade in technology over the last decade (culminating in the GATT Uruguay Round Agreements) 2 are all factors that force developing countries to review their policies and strategies. In the context of a globalized world economy, globalized markets have a decisive influence on economic prospects. While posing risks, they also offer opportunities that a developing country has to grasp and take advantage of in order to foster its growth and development.
In April 1994, most of the countries of the world signed the Uruguay Round Agreement in Morocco, ending years of negotiation on the General Agreement on Tariffs and Trade (GATT). 3 In the case of Africa, the challenge facing the countries now is their present inability to meet the requirements of the agreement that require that they adhere to international standards, as prescribed by ISO 9000 series, for their products and services which are to be exported. National standards have to be upgraded to meet international standards so that exports of commodities and finished goods are acceptable on the international market. The earlier protection they enjoyed under the terms of the Generalised System of preferences (GSP) will be gradually eroded, and the privileges of the Lome Convention will also be slowly eliminated. Hence, while the protected market will be reduced, the entire global market will be opened up, provided African goods can meet the requirements of international standards and be competitive. If, instead, the current quality of goods and the competitiveness of the market persist, Africa stands to lose $2.6 billion annually. 4 In the face of such realities, it is imperative that African countries marshal their efforts to apply science and technology to upgrade the quality of their goods and services in order to survive on the international market. Those who are smart enough to avail themselves of the opening of the global market will capitalize on it and win favorable niches in this market through their investment in science and technology.
The management of technology for international competitiveness depends on a country's emphasis on its science and technology guided by its national orientation, which in turn is characterized by the strategies, the social influences, the entrepreneurial spirit, and the political risks involved. The close cooperation between the public and private sectors of the economy, with the involvement of the consumer community is essential. Indicators that measure the development and application of science and technology for international competitiveness are: (1) national orientation, (2) socioeconomic infrastructure, (3) technological infrastructure, (4) productive capacity, (5) high-tech standing, (6) high-tech emphasis and (7) rate of technical change. 5 High-tech standing and high-tech emphasis are perhaps the most important indicators of a country's share of the world market with respect to current exports and current manufacturing capacity, as typified by the Asian newly industrializing countries (NICs), including Singapore, South Korea, Taiwan, and Hong Kong.
Leadership Role of Government
In developed countries where the private sector lobby is very strong, it is fairly easy for that sector to influence government policies in its favor On the other hand, in most developing countries, the private sector plays a marginal role, and it is up to governments to assume the role of leadership. It is up to governments, with the assistance of their various advisory boards, to frame and enact legislation that can spur socioeconomic development using science and technology as the main engine for development. In some developing countries where the private sector role is recognized, standing consultative committees with government and private-sector representatives have been set up, and these committees meet every three months to deliberate on development policies and orientations. Such countries are experiencing a faster economic growth, and have reoriented the activities of their universities, which in the past were there only for academic training purposes.
National councils or commissions for science and technology have been organized with the overall objective of coordinating and promoting science and technology activities in the countries. These councils or commissions are parastate bodies made up of representatives of government, private sector, universities, and relevant nongovernmental development agencies. National policies in science and technology are first formulated by these bodies, after proper consultation with stakeholders, before eventual legislation, rules, and regulations are passed to implement the policies.
Institutional Barriers
Institutional barriers that come in the way of strengthening partnerships between government, industry, and universities stem from the economic, political, social, and cultural environment prevailing in a particular country. Economic operators have long considered science and technology an academic exercise that has only longterm implications and is therefore of little relevance to their current concerns. This condition is also 'exacerbated by the scientists' own view of their role in society. For many years they were concerned with the imperative to "publish or perish," and had practically no interaction with the economic operators. The science and technology policy they framed was no different from the earlier science policy and was not integrated into the national socioeconomic development policies. There is now a growing realization that these policies have to be recast, and science and technology policies closely linked to the social, economic, industrial, and trade policies of the countries. The role of universities also has to be reviewed, especially in the face of dwindling financial resources and government support.
Political barriers stem from a lack of understanding of the crucial role of science and technology among policy makers. In those countries where this role is recognized, ministries of scientific research attached to the education ministers have changed to ministries of science and technology, attached directly to the country's prime minister or president. When the top-level authority in a country himself gets involved in science and technology matters, both political and material support of science and technology are assured. This is the case especially in the NICs of the Far East.
Social and cultural barriers to strengthening government-industry-university partnership thrive in countries where the overall education and literacy levels are very low, and where medieval mentalities block the empowerment of the masses and democratic processes. Traditional beliefs, often steeped in superstition and religious bigotry, still prevail. Science and technology are viewed as threats to the perpetuation of vested interests.
Solutions to these problems are proposed in the sections that follow. The research-and-development approach, policies, plans, and legislation that have to be put in place, the development of a science and technology culture, the need to give a proper package of incentives to concerned practitioners, and the promotion of small- and medium-scale enterprises and industries will be highlighted with the African region as an example. These views can be adapted to other sociocultural contexts as well with necessary modifications.
Classical Research and Development Approach
In order to understand the problems and prospects of strengthening partnerships between government, industry, and universities, it is first necessary to gauge the nature of research and development (R&D) in the region. In the colonial era, most research was carried out in the field of agriculture by universities and research institutes established to help the colonizers exploit the natural resources for their own markets, and the majority of the researchers came from their own group. Little, if anything, was done to promote the interests of the indigenous populations. In areas of critical and strategic interests, the data collected were analyzed and exploited in overseas laboratories. After independence, African countries inherited many of these infrastructures and attempted to exploit them for local development. But extreme financial difficulties arose. Progress continued in agriculture, and many of the results obtained were diffused through extension services. But research results were rarely commercialized, in part because the concept of patenting of research results for eventual commercialization had not taken root. Even now, the extent to which public-sector research results can be patented is not clearly established. In areas outside agriculture, university research has mostly been geared toward publications and academic promotion. Very little research has been undertaken in the private sector.
Analysis of expenditures on research and development in the public sector, including universities, shows that most of the money was spent on the R component of R&D, and little on the D component, with the result that research results have hardly led to development. In technological research, rare cases of development to a pilot stage have been undertaken, but even here commercialization has hardly taken place because of the lack of an enabling environment for this purpose.
Studies at the United Nations Economic Commission for Africa (ECA) 6 have confirmed that the very approach to science and technology in Africa has to change. Instead of following the classical concept of R&D leading to application, as has been the case in developed countries, Africa should start from the opposite direction, i.e., follow a path from application to development to research—the A-D-R instead of the R-D-A path. 7 This is because the resources available are limited, and time is not in our favor. There is need to start with the application of off-the-shelf science and technology to solve the pressing problems of meeting the basic needs of the population, and to improve the quality and standard of the African products and services so that they can win a share of the world competitive market. In the process of applying available science and technology, there will be a stage where local adaptation of the technology and development will be required. This will entail innovation and research, which will eventually be plowed back into the production process. Consequently the research and development to be undertaken will necessarily have to be target-oriented. Even the training that will accompany the research will have to be relevant training so that optimal use can be made of the available resources.
It is time that institutions involved in research and development realize the crucial need for a close collaboration with the stakeholders and the economic operations so that funding for R&D can be ensured. The continent as a whole spends less than 0.34 percent of its GNP on research, while the U.S. and Japan spend over 3 percent of GNP. At the same time, while the U.S. and Japan spend over 50 percent of their R&D expenses on development (the D component), Africa spends over 90 percent on the R component. With little gains from the R&D in Africa, funding agencies, including the governments, are reluctant to allocate funds for R&D unless this R&D aims at finding solutions to the pressing problems of underdevelopment. That is why the declarations made in the Lagos Plan of Action to devote up to 1 percent of GDP to science and technology have not been fulfilled.
Policies, Plans, and Legislations
Most African countries have formulated science policies or science and technology policies in one form or another. On the other hand, very few have developed any specific technology policy. The national science and technology policies have invariably been biased towards the organization and funding of research and development, and very little emphasis has been given to the application aspect of science and technology—transfer, adaptation, and commercial exploitation of technologies.
Policies should lead to plans and legislation, with ways and means to their implementation. Here again few African countries have developed and integrated national science and technology plans into overall socioeconomic development plans. And very few have gone to the level of formulating the requisite laws to give a practical bent to the policies. The ECA is presently helping countries review existing policies in science and technology and formulate appropriate legislation to provide the necessary incentives to developers and appliers of science and technology, whether nations or foreign investors. Through its advisory services to governments and universities and through national, subregional, and regional seminars and conferences, the message is being given to interested target groups.
The policies, plans, and regulations should be closely integrated with economic and development policies, including financial, fiscal, trade, and industrial development policies, if they are to affect the growth of a dynamic and productive nation. The ECA is also encouraging member states of the subregions to evolve subregional science and technology policies 8 that can enhance and expedite subregional cooperation.
Development of Science and Technology Culture
There cannot be any science- and technology-based development—with successful application of science and technology to enhance production or any commercialization of research results—in the absence of a science and technology culture in a nation. If we want to develop capacity to absorb scientific and technological developments for socioeconomic growth, especially the capacity to appreciate and apply science and technology, it is necessary to develop an S&T culture at all levels of the society. This will require the review of the relevance of existing science curricula in primary, secondary, and tertiary levels of education. The engineering courses at polytechnic and university levels will also have to be made more relevant to local needs, and the project and research topics will have to be carefully selected, based on local needs. Students must be made to perceive the link between their courses and the environment outside so that they can understand, appreciate, and use the knowledge they acquire through formal courses. 9 And since the environment is also made of the common man and woman, popularization of science and technology through radio programs, folk songs and dances, films, popular publications, and other media should be supported by the government and concerned groups. The establishment of science museums in different parts of a country can be very effective in promoting a S&T culture. 10 Here again partnership between government, industry, and universities can be very effective in developing a science and technology culture.
African universities have to come out of their ivory towers and offer courses in line with local requirements. So far, the scientists and technologists they have trained have only added to the number of white-collar bureaucrats and alienated them from the common man outside. Their research and publications have contributed little to solving the problems of the people around them. While it is recognized that the conditions under which they operate are not congenial, it is up to this very elite to mold public opinion, including that of policy makers, to change the course of events in the nation.
Motivations through Incentives
The strengthening of partnership between government, industry, and university in order to promote the application of science and technology to enhance production and the commercialization of research results has been constrained mainly because of the lack of an enabling environment in which the researchers, scientists, teachers, lecturers, entrepreneurs in small-, medium-, and large-scale enterprises, industrialists, and foreign investors have to operate. This enabling environment is usually promoted by a series of incentives that induce the people to put in their efforts or resources towards enhanced production in the nation. Even though governments have built up institutions and infrastructure, these have not received the necessary support for their successful operation. Adequate legislation is very often lacking in many cases. Such laws, when applied, would guarantee proper incentives to the different categories of operators in the educational or industrial fields.
The different forms of incentives 11 that can foster growth and development in the technological field are:
Basic market incentives
Institutional and infrastructural incentives
Financial incentives
Fiscal incentives
Budgetary incentives
Legal and regulatory incentives
Public procurement incentives
Honorific incentives
Knowledge-base incentives
A market economy with free competition, openness to the global economy in an atmosphere of stable democracy, rights to private property, an efficient bureaucracy, and accountability is a prerequisite for the establishment of industries and enterprises that can ensure the application of science and technology and the commercialization of research results. As regards commercialization of research results, institutional incentives in the form of science and technology parks or research parks within or near university complexes, export processing zones with basic infrastructural facilities and legal protection, and technology transfer centers backed by science and technology information systems are essential. For all these, it is the government that takes the leadership role as the champion of economic reform. The science and technology parks ensure close university-industry interaction and act as university-industry research centers geared towards commercialization of research results. It is to be noted that of the two hundred science parks in the world, the United States has the largest share, around 115, while France and Japan each have around twenty, followed by the United Kingdom, Canada, and Germany. 12 In Africa suchiparks are rare, and a few countries are in the process of establishing them at present.
Financial, fiscal, and budgetary incentives are perhaps the main ones for ensuring finance for the application of science and technology. While financial incentives deal with availability of credit, venture capital, low-interest lending rates, etc., fiscal and budgetary incentives deal with tax allowances, compensation, and subsidies to individuals and enterprises.
Legal and regulatory incentives provide protection for intellectual property rights, enforce a minimum standard and quality to goods and services produced, and facilitate the hiring of foreign experts and technology imports. Public procurement incentives give preferential treatment to local technological products and services, although with the advent of GATT these practices are not allowed.
Honorific and knowledge-based incentives apply to the agricultural, industrial, and educational sectors, where recognition is given to innovators, dedicated lecturers, and students. They can be one way of motivating teachers and university professors who are poorly paid, are often denied access to international seminars or to sabbaticals, and who are frustrated in the existing working conditions in many countries.
A table of appropriate incentives for science and technology development and application, is given as TABLE 1. In the African region, countries like Mauritius and Morocco that have been able to implement such incentives have shown evidence of enhanced and rapid economic growth on the continent and have been able to attract substantial foreign direct investment.
Small and Medium-Scale Industries and Enterprises
Small and medium-sized industries and enterprises (SMIs and SMEs) are the cornerstone of rapid economic and technological development, and are some of the main operations that encourage government, industry, and university to work together. A few countries that have paid special attention to their growth have succeeded in improving the standard of living of their population. In most cases their development is constrained by the lack of finance, industrial and entrepreneurial skill, technology information, risk-venture capital and market access. The series of incentives mentioned in the above section are the best means to promote them. The problems of unemployment faced by the majority of African countries can be solved by the growth of SMIs and SMEs operating in an environment that is favorable to them. In Mauritius, they have been particularly successful since the government established export processing zones (EPZs), which spread all over the island right after independence in 1970. 13 These are characterized by industries and enterprises engaged in manufacturing, including repair, packing and assembly, and employing for direct production purposes capital and equipment having a maximum c.i.f. value of US$300,000. They number around 4,500 establishments in that small island and contribute over 9 percent of its GDP. In most cases they enjoy exemption from payment of customs duty and levy on production equipment and machinery.
The institutional framework for policy implementation in the area of SMIs and SMEs in Mauritius includes:
Ministry of Industry and Industrial Technology
The Industrial Council
Mauritius Export Development and Investment Authority (MEDIA)
Mauritius Export Processing Zone Development Authority (MEPZDA)
Mauritius Export Processing Zone Association (MEPZA)
Mauritius Standards Bureau (MSB)
Industrial Vocational and Training Board (IVTB)
Small and Medium Industrial Development (SMIDO)
In all these institutions, representatives of the R&D institutions and the private sector play an important part in formulating policies, strategies, and plans for an aggressive approach towards the development and application of science and technology to enhance production and improve overall socioeconomic development. Besides the above, there are a host of other institutions set up by the private sector, including some that are managed by young entrepreneurs (JCE) who hope to become the major industrialists of tomorrow. The university has a seat in most of the parastate bodies and participates actively in influencing decisions of these institutions, while benefiting from them in advice regarding its own course directions. Thus partnership between government, industry, and university is ensured.
Conclusion
Science- and technology-based development through the transformation of scientific research and development into products and processes, with an emphasis on the application of science and technology, remains the most valid option for accelerated socioeconomic development. The management of science and technology through suitable policy reforms and their implementation to lessen the technological dependence of developing countries; the creation and enhancement of a science and technology culture through educational reforms and popular mass media utilization; the improvement of quality and standards of local products, processes, and services in line with requirements for international competitiveness; and the promotion of an attractive investment climate for foreign technology acquisition and transfer in an environment where appropriate incentives are provided are the means to achieve such a development. These are priorities, and a matter of life and death for many developing countries, for the comparative advantages of cheap labor costs are destined to diminish and disappear with the advent of global integration.
Governments in close collaboration with the science and technology community, including engineering, research, and scientific associations, the private sector through the chambers of commerce and industry, and the consumer organizations, have the ultimate responsibility to take the appropriate steps to expedite the process of technological development, the only way to ensure a viable living standard and quality of life for their population. As for the international community, their relevance and success depend on the success at the country level. Thus the enhancement of production at country level is possible only if science and technology are taken seriously by member states, and if renewed and sustained efforts are made to support their development and application. Dependence on the export of raw commodities is no more advantageous, and it is time that value is added to them and their production enhanced to meet international competitiveness. Any policy for science- and technology-based development, with an emphasis on partnership between government, industry, and university, can succeed only if the highest level of authority within a country takes up the stewardship in order to manage the multiple sectors, often with competing interests, that are the different players in the arena.
Table 1. Incentives for Science and Technology Development and Application.
| Types | Examples | Remarks |
|---|---|---|
| Systemic/organizational |
Incentives provided by:
|
There are the fundamental incentives for science and technology to make a full contribution to socioeconomic development. |
| IInstitutional/infrastructual | IInstitutions/infrastructure for:
|
In general institutions and infrastructure for S&T development in Africa have deteriorated during the last fifteen years and need to be strengthened. |
| Financial |
Availability of:
|
The financing of technological change is of paramount importance for African countries, which lack a full-fledge financial system and which attract little foreign direct investment and commercial credit. |
| Fiscal | Tax advantages taking the form of exemptions, rebates, reliefs holidays, accelerated depreciations, etc. | Can be used to promote R&D, linkages with industry, application of technology, training, the return of national expertise, use of foreign consultants, essential technology import, etc. |
| Honorific | Public recognition excellence taking the form of prizes and awards. | These incentives are very cost-effective. |
| Manpower development | Facilities and programs to strengthen science and technology in:
|
Encouragement to take up science and scientific disciplines, particularly for girls, is very important. Training should be a lifelong activity. |
| Budgetary | Scholarships, grants allowances, and compensations given to individuals, organizations and subsides to enterprises for the advancement of S&T | Some of there, such as investment allowance and export compensation, are regulated by the new GATT agreement. |
| Legal and regulatory |
Laws and regulations on:
|
Law and regulations need to be reviewed from time to time to adjust to changing circumstances |
| Others | Streamlining of bureaucracy | One important disincentive on the African continent is the cumbersome bureaucracy which impedes development. |
| Public procurement (preferential treatment of local technological products and services). | Although constrained by the GATT agreement, it can still be used to promote the development of endogenous technological capacity |
Footnotes
Note 1: Rustam Lalkaka, "Technological Entrepreneurship: The New Force for Economic Growth," UNDP Technological Cooperation among Developing Countries, New York, October 1995. Back.
Note 2: . UNECA, "The Implementation of the Uruguay Round Agreements by African Countries: A Framework for Action," E.ECA/TRADE/CMT/94, Addis Ababa, October 1994. Back.
Note 3: . ISO 9000-1, "Quality Management and Quality Assurance Standards, Part 1: Guidelines for selection and use," First edition 1994-07-01, Geneva. Back.
Note 4: . African Farmers, "Who Benefits—GATT Accord: Most Gain, but Africa Loses," African Farmer, the Hunger Project, New York, April 1994. Back.
Note 5: . Alan L. Porter & J. David D. Roessner, "Indicators of National Competitiveness in High Technology Industries," Report to National Science Foundation, Washington D.C., May 1991. Back.
Note 6: . UNECA, "Performance Review of Science and Technology Policy Institutions in Gambia, Madagascar, Malawi, Senegal, Sierra Leone and Zimbabwe. NRD/STS/IGCESTD/1/92, Addis Ababa. Back.
Note 7: . S. Jugessur, "Capacity Building for Science and Technology in Africa," Science in Africa Series, the Challenge of Capacity-building, AAAS, Washington, D.C., 1994. Back.
Note 8: . S. Jugessur, "The Basis and Framework for a Subregional Science and Technology Policy in Africa," South African Journal of Science, 90, (May 1994). Back.
Note 9: . C.G. Masi, "Reengineering engineering education," IEEESpectrum 32, 9 (September 1 995). Back.
Note 10: . Trudy E. Bell, "U.S. Science and Technology Museums—1," IEEE Spectrum 32, no. 9 (September 1995). Back.
Note 11: . UNECA, "Incentives for the Development and Application of Science and Technology," ARCST/1/5.b, Addis Ababa, August 1995. Back.
Note 12: UNESCO, "Background Document for Regional Meeting on the Development of University-Industry-Science Partnership Programme," Nairobi, January 1994. Back.
Note 13: . UNECA, "Foreign Direct Investment in an Export Processing Zone: A case study of Mauritius," E/ECA/UNCTAD/21, Addis Ababa, July 1995. Back.
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