Universities, Competitiveness and Universities, Competitiveness and the National Innovation Systemthe National Innovation System
Alfred WatkinsAlfred WatkinsS&T Program CoordinatorS&T Program Coordinator
Education DepartmentEducation DepartmentHuman Development NetworkHuman Development Network
Regional Higher Education ConferenceStrategic Choices for Higher Education Reform
Kuala Lumpur, MalaysiaDecember 3-5, 2007
2
Plan of Presentation
1. Innovation and Competitiveness – The role of Higher Education (and basic, secondary, vocational, technical and life-long learning)
2. Benchmarking Exercise
3
Universities, Competitiveness and the National Innovation System
• National goals are to accelerate growth, reduce poverty, achieve the MDGs, and improve the competitiveness of local industry, thereby creating higher wage, higher-skilled jobs that generate rising standards of living for all
• In today’s global economy, tertiary education and innovation are indispensable tools for achieving those goals
4
Innovation, Competitiveness Innovation, Competitiveness and and
Higher EducationHigher Education
5
Growth and Poverty Reduction are the Objectives;Growth and Poverty Reduction are the Objectives;Education, Innovation, and PSD Education, Innovation, and PSD
Are Means to Achieve These ObjectivesAre Means to Achieve These Objectives
HigherEducation
PrivateSector
DevelopmentInnovation
Growth and Poverty
Reduction
6
The Pieces Must Fit TogetherThe Pieces Must Fit Together
PSD
Innovation
Higher Education
7
Why Worry About All This?
0
2
4
6
8
10
12
14
1960 1965 1970 1975 1980 1985 1990 1995 2000
K n o w le d g e m a k e s th e D if fe re n c e b e tw e e n P o v e r ty a n d W e a lth . . .
R e p . o f K o r e a
G h a n a
T h o u s a n d s o f c o n s t a n t 1 9 9 5 U S d o lla r s
D if fe r e n c e a t t r ib u t e d t o k n o w le d g e
D if fe r e n c e d u e to p h y s ic a l a n d h u m a n c a p it a l
8
WHAT KIND OF WHAT KIND OF KNOWLEDGE?KNOWLEDGE?
WHERE DO YOU GET IT?WHERE DO YOU GET IT?
HOW DO YOU FIND IT?HOW DO YOU FIND IT?
9
Dimensions of STI Capacity
National (and local) government capacity to
formulate and implement coherent S&T programs
and policies
Enterprise capacity to utilize knowledge to
innovate and produce higher value added, globally competitive goods and services
Education, vocational training, and R&D
institutes
Technologically and scientifically skilled workforce trained to work with modern equipment and production processes
National (and local) government capacity to
formulate and implement coherent S&T programs
and policies
Enterprise capacity to utilize knowledge to
innovate and produce higher value added, globally competitive goods and services
Education, vocational training, and R&D
institutes
Technologically and scientifically skilled workforce trained to work with modern equipment and production processes
Import, adapt, and adopt knowledge produced
outside the country
Produce and use new knowledge via R&D
10
Capacity Building Occurs at Different Levels of the Economy
• National policy organizations
• S&T organizations -- -- universities, R&D institutes
• Enterprises – both users of knowledge and creators of new knowledge
• Labor Force
11
National Technological LearningNational Technological LearningS&T learning
capacityS&T learning opportunities
Knowledge generation
capacity
Capital imports
Inward FDI
S&T co-operation
+Knowledge absorption capacity
Education
R&D
Licensing
Diaspora and Expats
Internet Export
Customers
12
Groups of Firms According to Technological Capability
High
Low
Awareness of the need to change Low High
Type 1 Firms ‘ Don ’ t know that they don ’ t know ’
Type 2 Firms ‘ Know they don ’ t know,
but don ’ t know what ’
Type 3 Firms ‘ Know what, but not
always where and how ’
Type 4 Firms High capability and absorptive capacity
Awareness of What and How to Change
13
Getting the Balance Right is Important!
14
BENCHMARKINGBENCHMARKING
(CURRENT BENCHMARK (CURRENT BENCHMARK RANKING RANKING
IS NOT DESTINY!!)IS NOT DESTINY!!)
15
Benchmarked Countries• Bangladesh• Cambodia • Fiji • India• Indonesia• Malaysia • Mongolia • Nepal• Pakistan • Philippines • Sri Lanka • Timor-Leste • Thailand and • Vietnam
16
Rankings on indices differ significantlyUNCTAD
(117 countries)
UNIDO(87 countries)
Competitiveness (131 countries)
Bangladesh 106 56 107
Cambodia - - 110
India 83 40 48
Indonesia 87 38 54
Korea 19 10 11
Malaysia 60 15 21
Mongolia 69 - 101
Nepal - 69 114
Pakistan 100 49 92
Philippines 64 25 71
Sri Lanka 79 62 79
Singapore 26 1 7
Thailand 54 23 28
Timor-Leste - - 127
Vietnam 82 - 68
17
Different Benchmarking Indices Measure Different Dimensions of Innovation
Capacity and Competitiveness• UNCTAD’s Innovation Capability Index—underlying technological capacity with a focus on inputs to innovation (education and R&D)
• UNIDO’s Competitive Industrial Performance Index—revealed technological capacity in industry with a focus on manufacturing competitiveness
• WEF’s Global Competitive Index—to see how institutions, innovation, education, etc. contribute to competitiveness
• World Bank’s Knowledge Economy Index (KEI)—knowledge economy readiness with focus on innovation and education
World Bank’s Doing Business Indicators—how conducive the business environment is for enterprises
18
Global Competitiveness Rankings– Out of 131 Countries
Source: The Global Competitiveness Report 2007
19
Knowledge Economy IndexKnowledge Economy Index
East Asia and P acific
Korea
Malaysia
ThailandP hilippines
Sri LankaMongolia
IndonesiaVietnam
South Asia
P akistan
Nepal
Bangladesh
Lao P DR
India
0
1
2
3
4
5
6
7
8
9
0 1 2 3 4 5 6 7 8 9
1995
Mos
t Rec
ent
Source: Knowledge Economy Index 2007, World Bank
20
0
5
10Econ. Incentive Regime
Innovation
Education
Information Infrastructure
most recent 1995
Knowledge Economy Index
EDUCATION:- Adult literacy rate- Secondary Enrollment- Tertiary Enrollment
INFORMATION INFR.:-Tel. Lines per 1000 people- Computers per 1000 people- Internet hosts per 10,000 people
ECON. INCENTIVE REGIME:-Tariff & Non-tariff barriers-Property Rights-Regulation
INNOVATION:-Researchers in R&D- Manuf. Trade as % of GDP- Scient. & Tech. Pub. per million people
Source: WBI KAM
21
0
5
10GDP grow th (%)
Human Development Index
Tariff & nontariff barriers
Property Rights
Regulation
Researchers in R&D
Manuf. Trade as % of GDP
Scientif ic and technical journal articles permillion people
Adult literacy rate (% age 15 and above)
Secondary Enrollment
Tertiary enrollment
Telephone per 1000 (mainlines + mobile)
Computers per 1,000 persons
Internet hosts per 10,000 people
1995 Most Recent Data
Basic KE Scorecard
LATVIASource: WBI KAM
22
Human Capital for Knowledge EconomyKorea
0
5
10Adult Literacy Rate
Gross TertiaryEnrollment
Gross SecondaryEnrollment
P rof. and Tech.Workers as % of
Labor ForceQuality of Science
and MathEducation
Quality ofManagement
Schools
Brain Drain
Extent of StaffTraining
Malaysia
0
5
10Adult Literacy Rate
Gross TertiaryEnrollment
Gross SecondaryEnrollment
P rof. and Tech.Workers as % of
Labor ForceQuality of Science
and MathEducation
Quality ofManagement
Schools
Brain Drain
Extent of StaffTraining
Vietnam
0
5
10
Adult LiteracyRate
Gross TertiaryEnrollment
Gross SecondaryEnrollment
P rof. and Tech.Workers as % of
Labor ForceQuality of Science
and MathEducation
Quality ofManagement
Schools
Brain Drain
Extent of StaffTraining
Nepal
0
5
10Adult Literacy Rate
Gross TertiaryEnrollment
Gross SecondaryEnrollment
P rof. and Tech.Workers as % of
Labor ForceQuality of Science
and MathEducation
Quality ofManagement
Schools
Brain Drain
Extent of StaffTraining
23
Human Capital for Knowledge Economy-IIPakistan
0
5
10
Adult LiteracyRate
Gross TertiaryEnrollment
Gross SecondaryEnrollment
P rof. and Tech.Workers as % of
Labor ForceQuality of Science
and MathEducation
Quality ofManagement
Schools
Brain Drain
Extent of StaffTraining
Philippines
0
5
10Adult Literacy Rate
Gross TertiaryEnrollment
Gross SecondaryEnrollment
P rof. and Tech.Workers as % of
Labor Force
Quality of Scienceand Math
Education
Quality ofManagement
Schools
Brain Drain
Extent of StaffTraining
Indonesia
0
5
10Adult Literacy Rate
Gross TertiaryEnrollment
Gross SecondaryEnrollment
P rof. and Tech.Workers as % of
Labor ForceQuality of Science
and MathEducation
Quality ofManagement
Schools
Brain Drain
Extent of StaffTraining
Thailand
0
5
10Adult Literacy Rate
Gross TertiaryEnrollment
Gross SecondaryEnrollment
P rof. and Tech.Workers as % of
Labor Force
Quality of Scienceand Math
Education
Quality ofManagement
Schools
Brain Drain
Extent of StaffTraining
24
UNCTAD –Innovation Capability Index
Human capital
Index
Technological Activity index
Literacy rate
as % of population X 1
R&D personnel
per million population
Secondary school enrolment
as % of age group X 2
US patents granted
per million population
Tertiary enrolment
as % of age group X 3
Scientific publications
per million population
25Source: UNCTAD World Investment Report 2005; Rankings out of 117 countries
UNCTAD –Innovation Capability Index
26
Patents, Journals, Researchers in R&D
0500
1,0001,5002,0002,5003,0003,5004,0004,500
Patents Granted by USPTO, avg 2001-05 Technical J ournal Articles/Mil. people, 2003
Researchers in R&D / Mil. People, 2004
0
0.5
1
1.5
2
2.5
3
Latest 1999
Investment in R&D (% of GDP)
27
Korea R&D (% of GDP) 1963-2003
Source: Korea Science and Technology Policy Institute; WDI, 2007
0
0.5
1
1.5
2
2.5
3
1963 1970 1980 1990 2003
28
Korea Patent Trends (1965-2006)
0
1000
2000
3000
4000
5000
6000
7000
1965
1967
1969
1971
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
Source: United States Patent and Trademark Office (USPTO), 2007
29
UNIDO - Competitive Industrial Performance Index
1. Manufacturing value added (MVA)
per capita
2. Manufactured exports per capita
3. Share of medium and high-tech activities
in MVA
4. Share of medium and high-tech products
in manufactured exports
30Source: UNIDO Industrial Development Report 2004; Rankings out of 93 countries
UNIDO - Competitive Industrial Performance Index
31
High Tech Not Automatically Equal to High Income
Philippines
India
Fiji Colombia
Chile
Argentina
Brazil
Indonesia
China
Pakistan
Malaysia
Thailand
Sri Lanka
Costa Rica
Vietnam
CambodiaB'desh
Mexico
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
0 10 20 30 40 50 60 70
Hi Tech (% of Manufacturing Exports)
GD
P P
er
Ca
pit
a (
Co
nta
nt
US
D)
Source: World Development Indicators, 2007
32
GDP per capita in 2006 (constant 2000 US$)
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
Nepal
Timor
-Les
te
Cambo
dia
Bangla
desh
Mon
golia
Vietn
am
Pakist
anIn
dia
Indo
nesia
Sri La
nka
Philip
pines Fiji
Thailand
Mala
ysia
Korea
33
Export Structure by Technology CategoryProducing “what” vs. producing “how”
Finland
Hi Tech22%
Medium Tech 30% Low Tech
10%
Resource Based 38%
34
Agriculture Value-Added Per Worker (Constant US Dollar)
0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000
Nepal
Timor-Leste
Vietnam
Cambodia
Bangladesh
India
Indonesia
Thailand
Pakistan
Sri Lanka
Mongolia
Philippines
Malaysia
Korea
Finland
United States
Singapore
Source: World Development Indicators, 2007
35
Manufacturing Value-Added Per Capita (Constant US Dollar)
Source: UNIDO, 2005
0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000
Bangaldesh
India
Pakistan
Sri Lanka
Philippines
Indonesia
Thailand
Malaysia
Korea
United States
Singapore
Finland
36
Export Structure of Forest Cluster in Latvia and Finland, 2000
0
5
10
15
20
25Sa
w &
Othe
r Mills
,Pla
ning
Conta
iners
& Bo
xes
Furn
itures
& Fix
tures
Pulp
ofwo
od,
pape
r &pa
perb
oard
Me
tal &
Woo
dwo
rking
Mach
inery
Spec
ialIn
dustr
ialMa
chine
ry
Elec
trica
lIn
dustr
ialMa
chine
ry
Labor-intensive Technology-driven
Latvia
Finland
37
38
39
Ease of Doing Business Rankings
Source: Doing Business Report, 2007
40
Doing Business-Top 30 Performers in 2007
41
Regional trends in rankingsAverage rank, ease of doing business
22
76 77
87
96
107
136
High income: OECD Europe & Central Asia East Asia & Pacific Latin America & Caribbean Middle East & North Africa South Asia Sub-Saharan Africa
High income OECD
Latin America &
Caribbean
East Asia & Pacific
MiddleEast &
North Africa
Eastern Europe
& Central Asia
South Asia Sub Saharan Africa
42
Lessons to Learn from Neighbors: Best and Worst Performers on Ten Indicators of Doing Business
IndicatorHighest Ranking Performer in the Group
Lowest RankingPerformer in the Group
Starting a Business Sri Lanka (Rank 44) Cambodia (Rank 159)
Dealing with license Vietnam (Rank 25) Cambodia (Rank 159)
Employing Workers Malaysia (Rank 38) Nepal (Rank 150)
Registering Property Mongolia (Rank 16) Bangladesh (Rank 167)
Getting Credit Malaysia (Rank 3) Cambodia (174)
Protecting Investors Malaysia (Rank 4) Vietnam (Rank 170)
Paying Taxes Cambodia (Rank 16) India (Rank 158)
Trading Across Border Malaysia (Rank 46) Mongolia (Rank 162)
Enforcing Contracts Mongolia (Rank 41) Bangladesh (Rank 174)
Closing a Business Pakistan (Rank 46) Indonesia (Rank 136)
Excludes Korea and Singapore
43
“Crystals of S&T Learning” -graphical/statistical illustrations
44
“Crystals of S&T Learning” -graphical/statistical illustrations
• The most accessible, passive opportunities for learning from foreign sources created by capital goods imports and FDI (indicators 9, 10)
• Human capital accumulated / human capability for S&T learning (see indicators 11, 12, 1)
• The more demanding opportunities for learning from domestic and foreign sources through domestic R&D (indicators 2, 3)
• The most demanding opportunities for learning through knowledge markets and international S&T cooperation (indicators 4, 5, 6)
• Success in using S&T knowledge for improving technological structures of a country’s MVA and manufactured exports (indicators 7, 8).
45
‘Crystals’ can ‘grow’, but only
in the right (learning) environment
Fast Learning Sweden
0
0.5
1
12 Average years of schoolingof adults
1 Brain retention
2 Researchers in R&D permillion population
3 Total (public and private)expenditure on R&D as % of
GDP
4 Royalty and license feespayments per capita
5 Receipts of royalties andlicence fees per capita
6 International outsourcing ofR&D (domestic ownership of
foreign-made inventions as % ofall inventions owned by
7 Share of high- and medium-tech industries in MVA
8 Share of high- and medium-tech industries in exports
9 Imports of machinery andtransport equipment as % of
total imports
10 Inward FDI as % of grosscapital formation
11 Internet users per 1.000people
Slow Learning Bangladesh
0
0.5
1
12 Average years of schooling ofadults
1 Brain retention
2 Reasearchers in R&D per millionpopulation
3 Total (public and private)expenditure on R&D as % of GDP
4 Royalty and license fees paymentsper capita
5 Receipts of royalties and licencefees per capita
6 International outsourcing of R&D(domestic ownership of foreign-made
inventions as % of all inventionsowned by residents)
7 Share of high- and medium-techindustries in MVA
8 Share of high- and medium-techindustries in exports
9 Imports of machinery and transportequipment as % of total imports
10 Inward FDI as % of gross capitalformation
11 Internet users per 1.000 people
46
6 models of
national technological learning:
• Traditionalist slow learning,
• Passive FDI-dependent,
• Active FDI-dependent,
• Autonomous,
• Creative-isolated,
• Creative-cooperative.
47
Passive FDI-dependent learning
• passively relying on FDI to bring in new technologies,
• low S&T learning capacity,
• no or weak government technological strategy,
• limited opportunities for technological learning,
• high risk of losing in economic competition with poorer, lower-wage countries.
48
Active FDI-dependent learning
• relatively high S&T learning capacity,
• active government strategy aimed at building national human capital and accelerating national technological learning from FDI,
• active targeting of the most beneficial FDI,
• much wider opportunities for technological learning from FDI,
• lower risk of losing in economic competition with lower-wage but lower-skill countries.
49
Crystals of sample
Passive and Active FDI-dependent learners
50
‘Crystals’ assessment –
Malaysia
51
THANK YOU
Alfred Watkins
Science and Technology Program Coordinator
www.worldbank.org/stiglobalforum