How to support the development of innovation in developing countries?
In the case of many developing countries, low level of innovation is the key problem. More and more often, there is debate of the need for systemic support of innovativeness. I am curious about your observations and reflections on this subject.
What is the effective way to support innovation? What tools to use? Which mechanisms are the most effective? And is this the right way to support development for developing countries? I will be grateful for your opinions.
The report (Global Innovation Index 2014) summarizes the key findings of the human factor and innovation: (Dutta et al., 2014, P: xvii-xix)
1. The need to acquire more knowledge in order to better understand the role that the human element can play as well as the presence of technology and capital in the realization of innovation.
2. The need for research and development if the objective is to stimulate innovation.
3 - The need for skilled labor, and the possibility of increasing the enrollment rate of students in higher education.
4. Improving skills is one of the most important ways to increase the level of innovation, productivity and economic growth.
5 - interest in education systems and academic performance, which produces creative individuals and are able to achieve innovation.
6. There is a need to modernize national education systems by modernizing formal curricula and teaching techniques and promoting lifelong learning to support innovative patterns of behavior and attitudes of individuals; to ensure the development of innovative knowledge and skills, and personal qualities (eg entrepreneurship, tolerance, self-confidence, leadership, Creativity, dynamism, and risk bias) since early childhood.
7. The need to mainstream innovation to raise the level of competencies and develop an enabling environment for innovation to achieve and enhance competitiveness.
The Global Innovation Index 2015, has developed a number of principles for the success of national innovation policy: (Dutta et al., 2015, P: 89-95),
1. Innovation policy should focus on maximizing innovation in all industries: policy makers believe that ways to stimulate and focus innovation are to produce high-value-added technological products.
2. Innovation policy should support all types and stages of innovation: to be more effective and not just focus on all industries.
3. The pursuit of a policy of creative destruction: innovation is the existence of competitive markets, which is the most important factor to drive economic growth; and therefore the policy of creative destruction by leading organizations will gain the largest share in the market.
4. Preserving the price of imports of capital goods, especially ICT imports: The success of innovation is not only about coming up with good ideas, but also about the process of innovation that has enabled investment in machinery, equipment and software.
5. Support the creation of key innovation inputs: by supporting digital infrastructure, skilled manpower, and knowledge both in production and dissemination.
6. Develop and support the strategy of innovation, nationalization and productivity.
I agrees with "Mahroum" in the report of (Abu Dhabi on the index of innovation measurement, 2015), in the need to design a special index to measure the innovation consists of two sub-indicators: the index of absorptive capacity, and the development of capacity, where the absorptive capacity index depends on the main factors Three are:
(I) access to knowledge, ie access to knowledge products and new technologies, (ii) the ability to adopt and apply knowledge as part of the work, and (iii) the ability to disseminate knowledge within the surrounding context, whether local or otherwise. If, for example, the indicator shows a low knowledge dissemination capacity, the decision maker can then direct spending towards the establishment of community training and cooperation centers that will help individuals prepare for new techniques or practical and scientific methods.
As for the index of development capability, it depends on two factors: (1) development and innovation of new knowledge; and (2) effective investment of new knowledge.
Dear Joanna,
I am a novice person in the subject. What areas of innovation are you interested in? Are you interested in innovation in technology or innovation in social system in developing countries?
Thanks.
Don
Dear Dr. Joanna,
Very interesting question, again. Congrats!
How to support innovation in developing countries?
I research BRICS countries, but I am instigated to talk about mine (Brazil), in this question.
Well, It would not be new to say that Human Capital is key to innovation. What´s new is that something weird happens in developing countries: Money is spent, and the human capital is not improved. To say that it´s just a question of bad quality of education would not be new either. But to say that schools are used as a repository of teachers chosen politically, despite no merit, maybe!
I agree with your phrase "In the case of many developing countries, low level of innovation is the key problem. More and more often, there is a debate about the need for systemic support of innovativeness". And I´d like to complete saying that low level of innovation is a problem, but not necessarily the key-problem in some of them. Developing countries (at least mine - but not the only one) are one step behind. There is a need of doing the right things in many fields, including innovation. The three powers are not working well, neither together nor independently. The legislation is sold to companies. Property rights are not respected, offering incentives to crimes. Juridical power is just punishing the poor, permitting the big stealers to control their dark markets. And the executive is sharing positions in ministries as it would a birthday gift, with no merit been demanded.
Although I research BRICS and Brazil (where Lula is the best WORST EXAMPLE), one could see something like in South Africa (ZUMA), Argentina (the Kirchner family), Peru (Fujimori), and Zimbabwe (Robert Mugabe), to name just a few.
But, focusing on your interests:
1- What is the effective way to support innovation?
Of course, most of the tech innovation happens in industries, and most of the times, it´s not a personal question but an entrepreneurial issue. Nevertheless:
-No human capital, no education, no food, no health = no work done better
-No intelligent incentives, especially respect to property rights = no change
-No money to Research and Development = no innovation
2-Which mechanisms are the most effective?And is this the right way to support development for developing countries?
a) right incentives to R&D in many ways - for companies and people;
b) laws to guarantee property rights;
c) fight against corruption in social and political institutions;
d) three powers in that people can trust. Policymakers must be trustable;
e) environmental focus;
... the list hasn´t finished. I´ll be back...
And there are some other issues, like:
Jered Diamond (biologist and anthropologist) believes that health and resistance to some ills is a key to development;
Gregory Clark (Economist) believes that the dissemination of the culture and genes of the working class through all the society is a key factor!
And, according to Collier (Sociologist and economist), four traps are very difficult to developing countries avoid along the way:
1-Civil war
2-Natural resources
3-Neighborhood
4-Bad government
But it´s just the beginning... I´ll be back...
My best wishes.
Hess
Dear Joanna,
as you've said, innovation can make a difference, due to its pivotal role in economic development.
In a first assessment of address your question, we may recall that while innovation is important at all stages of development, different types of innovation play different roles at various stages. In earlier stages, incremental innovation is often associated with the adoption of foreign technology, and social innovation can improve the effectiveness of business and public services.
- R&D played a key role in the take-off of several economies (like China, India and Korea).
- Innovation in some emerging countries can create opportunities for new entrants (see division of labour in East Asia and its effects on other countries like Cambodia, the Philippines, Vietnam in taking over lower value activities from China) in the so-called “flying geese” development model.
- ICTs (see the success of mobile banking in developing countries).
In an institutional perspectives, like that of OECD, main topics of work on innovation for development are:
1.The contribution of innovation to economic growth and well-being
2.The impact of globalisation on development and innovation
3.Inclusive innovation
4.Education, skills and human capital
5.ICTs for development
6.Institutional frameworks for innovation policy
Personally, I have special attention on point 4. Skills play a crucial role for innovation. Limited resources devoted to the budgets for education requires the right balance between the training of high-skill specialists which is costly, often concentrated in a few disciplines but essential for the promotion of innovation at the international level and training at the primary and secondary levels which, if absent, reduces absorptive capacities of the economy and the development of grassroot businesses.
Moving to a more concrete level, an interesting area of research concerns use of ICT techniques in the educational and scientific research field, like, for example, the telesimulation that coupling the principles of simulation with remote Internet access to teach procedural skills between countries.
Best regards,
Marco
The report (Global Innovation Index 2014) summarizes the key findings of the human factor and innovation: (Dutta et al., 2014, P: xvii-xix)
1. The need to acquire more knowledge in order to better understand the role that the human element can play as well as the presence of technology and capital in the realization of innovation.
2. The need for research and development if the objective is to stimulate innovation.
3 - The need for skilled labor, and the possibility of increasing the enrollment rate of students in higher education.
4. Improving skills is one of the most important ways to increase the level of innovation, productivity and economic growth.
5 - interest in education systems and academic performance, which produces creative individuals and are able to achieve innovation.
6. There is a need to modernize national education systems by modernizing formal curricula and teaching techniques and promoting lifelong learning to support innovative patterns of behavior and attitudes of individuals; to ensure the development of innovative knowledge and skills, and personal qualities (eg entrepreneurship, tolerance, self-confidence, leadership, Creativity, dynamism, and risk bias) since early childhood.
7. The need to mainstream innovation to raise the level of competencies and develop an enabling environment for innovation to achieve and enhance competitiveness.
The Global Innovation Index 2015, has developed a number of principles for the success of national innovation policy: (Dutta et al., 2015, P: 89-95),
1. Innovation policy should focus on maximizing innovation in all industries: policy makers believe that ways to stimulate and focus innovation are to produce high-value-added technological products.
2. Innovation policy should support all types and stages of innovation: to be more effective and not just focus on all industries.
3. The pursuit of a policy of creative destruction: innovation is the existence of competitive markets, which is the most important factor to drive economic growth; and therefore the policy of creative destruction by leading organizations will gain the largest share in the market.
4. Preserving the price of imports of capital goods, especially ICT imports: The success of innovation is not only about coming up with good ideas, but also about the process of innovation that has enabled investment in machinery, equipment and software.
5. Support the creation of key innovation inputs: by supporting digital infrastructure, skilled manpower, and knowledge both in production and dissemination.
6. Develop and support the strategy of innovation, nationalization and productivity.
I agrees with "Mahroum" in the report of (Abu Dhabi on the index of innovation measurement, 2015), in the need to design a special index to measure the innovation consists of two sub-indicators: the index of absorptive capacity, and the development of capacity, where the absorptive capacity index depends on the main factors Three are:
(I) access to knowledge, ie access to knowledge products and new technologies, (ii) the ability to adopt and apply knowledge as part of the work, and (iii) the ability to disseminate knowledge within the surrounding context, whether local or otherwise. If, for example, the indicator shows a low knowledge dissemination capacity, the decision maker can then direct spending towards the establishment of community training and cooperation centers that will help individuals prepare for new techniques or practical and scientific methods.
As for the index of development capability, it depends on two factors: (1) development and innovation of new knowledge; and (2) effective investment of new knowledge.
Financial support is the key factor for may innovative work in developing countries....
1) Access to capital: Companies in emerging markets simply don’t have access to the type of capital markets and mature business ecosystem that entrepreneurs in the US or in more developed countries enjoy. Financing growth organically can be a challenge as the startups home market may not be a large enough market to finance internal growth.
2) Access to Talent Some countries simply don't have the talent pool to support a tech startup. A particularly interesting insight from the comments posted in my post was while finding engineering talent may be easy (specially in many countries in Eastern Europe, South America, Asia, etc), finding management talent--specially product management talent is much harder simply because of a lack of enough successful product companies in these regions.
3) Enabling infrastructure
These can include government regulations around business, taxation, banking, payments or IP protection--always a major challenge for any entrepreneur--specially when introducing innovative/new services.
4) Effective communications You already highlighted this in your question--and can include such areas as lack of market data, lack of maturity around marketing communications, limited channels to promote your new business, combating pre-conceived notions/perceptions around your product/service or re-educating your market, perceptions of the developing country you are based as you expand internationally, and so on.
These papers might be helpful.
https://www.enterprise-development.org/wp-content/uploads/Strengthening_Innovation_In_Developing_Countries.pdf
https://collections.unu.edu/eserv/UNU:858/A2011916102624_20.pdf
http://www.oecd.org/innovation/inno/50586251.pdf
investing in Human Capital can boost Innovation and Economic Growth in Developing countries...
Reduce the level of competition so that the innovation increases in both product and process innovation.
Source - http://www.econ.uchile.cl/uploads/publicacion/af339693c4b585bf4fb949fc684a38b3171f8d0e.pdf
Dear Dr. Joanna
- Opening of postgraduate courses in all disciplines of scientific and literary
- The opening of research centers for all specialties .
- Support the researcher with money for innovation .
-Support the researcher thanks and appreciation for innovations .
-The researchers participation in conferences and related courses in developed countries .
- It is important to respect the innovation that you achieved and record .
Best regards
.
I appreciate all answers from developed countries and trying to follow.
The work of adopting a holistic vision in the development of the science and technology system in support of innovation leads to the synergy of the components of this system and the alignment of its plans and the strengthening of their links and interaction with economic, social and cultural activities. This is done through business incubators which are mechanisms of supporting innovation in small and medium enterprises, Sentence of services and facilities for these institutions for the purpose of charging them with an initial payment they can overcome the burdens of the start-up phase, business incubators are working to provide modern technology and methods and tools of innovation, as the innovation works to increase the competitiveness of these institutions under new regional and international conditions and renewable.
Developing countries should fund quality research and can also seek funding from donor agencies.
In Bangladesh, we are following following steps:
1. Every office has innovation committee
2. Innovation committee blends idea with others
3. Initiative for small innovation and start up for action
4. Innovation report submitted to ministry
5. Cabinet on behalf of prime minister monitors
Bangladesh has success story.
Many thanks for your contribution, great answers and helpful comments! Regards and best wishes! Joanna
I think innovation is outcome of best educational atmosphere, research and promotion of research with the help of academia, industry, markets and social media. there must be such platform which should acknowledge to innovations and frame them into stream line with the help of experts and analysts. there is race and competition in every regard and in this situation there is need of sustainable innovation in every walk of life. it should be promoted and shared for the benefit of men globally but not locally.
An environment to think in a creative manner must be developed.Already existing system/techniques with which we have become comfortable must be questioned and the educational system must be restructured in order to sharp the creativity skills,and to promote it further.Moreover,encouragement by the Govt. is also very much needed.
As the global economy is more complex, it has become unavoidable that to maintain and compete a presence in global markets it is essential to boost the human capital endowments of the labor force, whose members must be constantly trained in processes, have access to new knowledge and in the operation of the newest technology. Education has become important driver in the development of the technological innovation capacity, as the experience of Taiwan, Finland, Korea, and Israel clearly shows.
Nothing will work unless the national institutional development becomes the part of the policy or so to say 'strategy'. It means national and context specific-institutions, and those institutions that support integration between the supply side of the knowledge and demand side of the consumption. Neither alone can transform internally and externally development knowledge to commercial artefacts unless the incentive structure is in place.
Here is a warning! Never assume that replication from others in its entirety works. Thus, learning, the transformation of what has been acquired, and its translation into local meaning so that the users and producers move in the same direction.
History has shown that national industrial policies contribute to innovation and socio-economic development. A piecemeal approach to making a patch here and the patch can dry up resources. There are multiple examples, but I do not intend to annoy those countries that have wasted resources.
What are institutions? A long list of things that exists, and other list that does not exist. We know that the former type refers to regulations. Those that do not exist, by that I mean some mechanisms reduce ambiguities and increase certainty for risk-taking--invisible incentives.
If my hastily written response has some value for you, then you can turn to reach two streams:
What institutions are---structure or rules
What actors behave to those institutions--response rules
If you think it is not relevant to you, please ignore this move on many other good responses.
Wishes
Thank you so much for your helpful comments and hints!
Best wishes!
Joanna
Dear Joanna,
In terms of "physical capital", the large scale organizations often seem luckier. However, the governments should construct some mechanisms supporting SMEs and allocate this responsibility to some specific institutions. For example, in Turkey, KOSGEB (Small and Medium Industry Development Organization) is a very supportive and succesful public organization for support of Turkish SMEs and their innovative efforts. In addition, the governments specify some macro policies for improvement of "human capital" in their countries. For example, educational opportunities for citizens can be improved with low costs and equal access as a principle to these opportunities should be guaranteed by governments for all groups in related country. As a consequence, higher human capital in a country may often result with more technical innovation. "Social capital" is based on trust based social networks. It is known that social networks under appropriate conditions may support innovations. So, trust based positive climate of a society can be constructed by governments. These recommendations above were related to technical innovations. In addition, to support managerial innovations, MNCs investing to related developing country may be a good way to "translate" (not transfer) managerial knowledge into its new context, developing country.
Best regards,
Mehmet
On a macro scale, probably with legislative support, stimulus and incentives for specific industries that are known to be sources of such innovation. Other avenues would probably be raising awareness and improving access to innovation. This probably has an effect on the culture of a country - territory or whatever you're hoping to effect.
Innovation is a little complicated as it is a rather subjective term when spoken about in industrial context.
Hope this helps,
These papers might be helpful.
https://www.enterprise-development.org/wp-content/uploads/Strengthening_Innovation_In_Developing_Countries.pdf https://collections.unu.edu/eserv/UNU:858/A2011916102624_20.pdf http://www.oecd.org/innovation/inno/50586251.pdf
Funds allocation and trend towards quality research could support innovation in developing countries.
Regards
Dear Colleagues and Friends from RG, Information, data, technology, innovation and entrepreneurship have been one of the most important production factors in developed knowledge-based economies for several decades. Developing countries are also building their technological resources and activating the development of innovation and entrepreneurship as part of interventionist, pro-development economic policies. Research shows that some types of innovations, including technological ones regarding Industry 4.0 issues as well as ICT and internet information technologies are developed mainly by commercial companies. However, in developing countries there is strong pressure to activate technological development and increase the innovativeness of the economy. Therefore, a significant part of innovation is also created in research institutions, scientific institutes, research and development centers and universities financed or co-financed from public sector funds. Activation of innovation increases the scope and number of emerging technological, process, logistics, marketing, internet, product and other innovations in the national economy, which are then implemented into production processes as well as services rendered by enterprises and other entities. Increased innovation contributes to increasing the efficiency of manufacturing processes, improving the quality of manufactured products and services, reducing operating costs, etc.
In knowledge-based economies, one of the key drivers of economic growth is the activation of innovation and entrepreneurship. In developed countries, information, innovations, new technologies and entrepreneurship are considered to be one of the most important factors for the economic development of a given country and, as a consequence, also for economic growth measured, for example, with the Gross Domestic Product in subsequent years. In addition, scientific research and research and implementation works are carried out in these topics, which further emphasize the high level of significance of innovation, new technologies and entrepreneurship in modern national economies. In recent years, programs of cooperation between research and R&D centers and enterprises have been developed in some countries in order to activate entrepreneurship and innovation of business entities. As part of this cooperation, scientific research and research and implementation works are carried out in these topics, which further emphasize the high level of significance of innovation, new technologies and entrepreneurship in modern national economies. Clusters are created under which enterprises undertake cooperation with other business entities, scientific centers, research and implementation centers, universities and public sector institutions to exchange experience, transfer knowledge, conduct and develop joint research and implementation projects, including innovative technological and process solutions. , research, organizational and other. In recent years, there has been an increase in entrepreneurship in many countries in the field of establishment and development of enterprises and developing companies thanks to the implementation of new information technologies, internet new media, advanced information processing and other technologies of the current, fourth technological revolution known as Industry 4.0 into economic processes. In recent years, entrepreneurship has been growing in the field of business development in the field of using online marketing innovations, including primarily in the field of viral marketing on social media online portals.
Research shows that some micro-enterprises are developing without product, process, technology, marketing innovations, etc. However, many technological startups currently base their development and competitive advantage on technological, product, service, marketing or other innovations. Banks are reluctant to grant investment loans to newly created startups basing their development on innovative technologies. In such a situation, innovative startups are created and financed from external financing sources such as investment funds, business angels, issue of securities, crowdfunding and others. In my opinion, crowdfunding will grow intensively in the future as an alternative to classic forms of external financing of business ventures. It is an alternative to the offer of financial services of financial sector institutions, especially in the segment of financing innovative start-ups. Commercial banks operating as part of classic deposit and credit banking often avoid lending to innovative start-ups due to difficulties in assessing credit risk. In this situation, crowdfunding can be a good solution to problems finding external financing. On the other hand, the importance of cryptocurrencies, which operate outside of institutionalized and centralized financial systems, is growing. Perhaps in the future cryptocurrencies will be displacing traditional currency from online financial transactions between fintechs, financial institutions, innovative startups, online technology companies operating social media portals and their clients, and between users of these portals. In addition, it is necessary to improve the security of financial transactions made on the Internet and settlements carried out as part of online mobile banking. Therefore, blockchain technology is developing, which is used in securing transactions and transmitting data on the Internet. More and more large companies announce the creation of their own cryptocurrency. Some investment banks, such as JP Morgan, have announced the creation of their own cryptocurrency for settlements with key contractors.
Some technology companies operating in the field of ICT and new online media are also planning to develop blockchain technology in cryptocurrency applications. For example, the social media Facebook site also announced the creation of its own critical currency called Libra, which users of the portal will be able to pay for various services available through Facebook. Some investment funds invest their financial capital in some cryptocurrencies. Another issue determining the development of open innovations that are used on the Internet are technologies typical of the current technological revolution, Industry 4.0. The ongoing technological revolution referred to as Industry 4.0 is determined by the development of the following advanced information processing technologies, which include, among others: Big Data database technologies, cloud computing, machine learning, Internet of Things, artificial intelligence, Business Intelligence and other advanced data processing technologies Data Mining. The technologies of advanced information processing listed above are finding more and more applications in various fields of industry, production of goods and provision of services. The number of industries, branches of economic activity and sectors of the national economy is growing, in which advanced information processing technologies typical of the current fourth technological revolution known as Industry 4.0 are used. ICT information technologies and advanced information processing technologies co-creating the current technological revolution Industry 4.0 have in recent years been a key factor in the emergence of new technological innovations and other applications applicable in various branches of the national economy. These innovations are becoming the main factor in the development of innovative startups and technology companies operating on the Internet. In macroeconomic terms, on the other hand, these technological and other innovations are an important factor in the development of modern knowledge-based economies and may have a significant impact on the economic growth rate of a developed and developing economy. In connection with the above, some types of innovations, including technological ones regarding Industry 4.0 issues as well as ICT and internet information technologies are developed mainly by commercial companies. On the other hand, however, a significant part of innovation is also created in research institutions, scientific institutes, research and development centers and universities financed or co-financed from public sector funds. I described these issues in my publications, which are available on the Research Gate portal. I invite you to scientific cooperation.
Best wishes
Dariusz Prokopowicz
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