— TECHNOLOGY PLANNING Workshop — Nairobi, 24-27/02/2009 ‘Lessons from emerging Asian countries’ Dr.-Ing. Yves M. Lamour Consultant, Economic Commission for Africa (UNECA) Executive Director, Pan-African Institute for Technology & Development (PAITD) I. INTRODUCTION a. Address of UNECA’s Executive Secretary, Mr. Abdoulie Janneh to the AU- Summit on Science & Technology in Addis Ababa, on 23-30 Jan. 2007. • It called Africa to undertake “a major science and technology capacity building initiative in order to generate, revamp and deploy large numbers of scientists, engineers and technicians”. • It stressed the “…need to create and foster strong links between technology-based industries, academic institutions and governments, as well as establish public-private partnerships in scientific and technological research to allow Africa to develop appropriate technologies for national needs.” b) Context of the endeavour • In the past four decades, our energies have been directed towards ‘Economic Planning’. Assumption: Economic planning would take care of all the variables necessary for facilitating growth and progressive economic change. • Additionally, development strategies have built on inadequate apprehensions of the economic system… • Besides, strategies have neglected the socio- technological dimensions of development, so vital in modern technology-driven economies/consumer societies. >> Thus need for ‘Technology Planning’! c. Example of Asian countries: Economic development is possible! – Overcoming all known constraints… Thus, African countries can do it too! – But how? – What can we learn from the Asian successes? What characterises the Asian economic wonder? What are the drivers? – Are the Asian successes transferable to Africa? Factors responsible for the transformational process: Factor 1: Independent and assertive approach —> thinking out of the Box! Priority: Responsibility towards their people! • Allegiance to rules set by others is secondary! • Priority = must do! >> Follow-up with plan and bold/decisive action. Factor 2: Exemplarily responsible government leadership — Study cases: Taiwan, Korea, Singapore, China. Factor 3: Government-private sector linkages • Public-private-partnerships (PPP) • PPPs were initiated by Governments to support the industrial development • Forum for exchange of information on problems e.g.: – competitiveness with foreign producers on the Western market – inland competition … • Platform for discussing solutions including: – Decide upon industrial development areas – Needs of firms (HR, know-how, access to credit, financial backup, equipment… – Obtain reduction in government taxation – Marketing strategy… • In Taiwan: – Early government strategies to upgrade the existing industrial structure and enter into secondary ‘import substitution’ – Subsequent restrictive trade policies and high tariff rates for protecting domestic consumer goods from foreign competition – Foreign advice sought for upgrading industrial structure and enter into secondary import substitution. – Establishment of capital intensive, heavy and petrochemical industries — for increasing production of raw materials and intermediate goods needed by export industries – In 1990s, Government’s new strategy focused on high-tech industry following loss of competitiveness of low-tech exports – 1980/1990, establishment of an R&D Consortium — with focus on technological learning – Government encouraged firms to cooperate for raising their technological levels to compete with advanced technology industries – Focus was mainly in IT sectors, consumer products, telecommunications, data switching systems… – In 1990s, the alliance innovatively brought together private firms and public sector research institutions, with organisational input from trade associations – Key role of the Industrial Technology Research Institute (ITRI) in leveraging of advanced technologies from abroad, and their diffusion to Taiwanese firms. – Taiwan firms’ capacity to leverage and adopt new levels of technological capability enabled them to compete with IBM, and in 1995, to have ready a range of computing products based on IBM’s new power PC microprocessor at its official presentation • In Korea: – Firstly, Government worked at developing the business sector – Secondly, Government adopted policy approaches borrowed from other countries – Industrial promotion by Government in cooperation with Private Industry. – Targets for production levels set by the firm and industry associations, in consultation with government. – Monthly meetings between government officials and leading exporters were chaired by the president himself – Latest information on export performance of firm, product and market were analysed, reasons for discrepancy between target and performance discussed – Also ministers collaborated with firms to identify the problems and to take suitable actions – Besides, Government developed a flexible and adjusted incentive system to support ‘industry champions’ – Expectations were: knowledge development, creation of employment opportunities, and contribution to export. – Firms became part of government’s long-term commitment to keep exports profitable. • In Singapore: – Government focused on maximising learning, technological acquisition, rapid movement up the industrial ladder – Supported the development of the skills and incomes of its working population – Government contributed infrastructure, capital, tax concessions, education and skills training, and a stable and friendly business environment – Government incentives targeted FDI by multinationals in the electronics industry – The Economic Development Board managed industrial policy and FDI targeting; industrial competitiveness was assessed by strategic periodic studies – From 1991, Government has encouraged the formation of clusters of industrial firms – Accelerated performances through sharing of resources (e.g. knowledge, equipment, human resources, etc.) – Establishment of a Cluster Development Fund – Government coordinated market penetration. • In China: – Knowledge acquisition: Problems with copyright – Know-how acquisition from European companies Factor 4: Repatriation of skilled HR from the Diaspora • Case of Korea: – Repatriation of the countries’ wealth of highly skilled HR in the Diaspora was crucial in operationalising the process of technological adaptation – Diasporan brought in know-how in specific fields, research capabilities, and fuelled in-house learning – Repatriation as alternative to capacity building — also time issue – Repatriation programmes not confined to provision of attractive salaries and housing – Good working conditions were crucial for ensuring effectiveness of the expensive human assets. Factor 5: Human resources development • All emerging countries invested heavily in HR development: – Improvement of the school system and enrolment – Expansion of third level formal education – Strengthening of training institutions imparting technical knowledge/skills – Capacity building programmes on the job… • Case of Korea: – Expansion of primary and secondary education (1960s) – Enhancement of universities’ training capacities – Accent on technical universities – But strict control on access to university – Focus on vocational training to raise availability of skilled labour. Factor 6: Private sector initiatives • In India: – ‘Bajaj’: Knowhow acquisition through venture/ ‘Vespa’* – Village networks: National NGOs for village development* – ‘Silicon Valley’ in Bangalore > Key role of the IITs! Factor 7: University-private sector linkages – Introduction/strengthening of targeted areas * – problem-oriented R&D * – knowledge acquisition, adaptation and development in targeted production areas* – Cooperation between universities (inland and outside).* Factor 8: Knowledge management – Transformation of East Asian countries into ‘knowledge economies’ – with intellectual capacities to acquire and develop needed knowledge, – (technical and managerial skills are combined with) – dynamic information systems that permitted private sector and research centres to tap global knowledge networks. 2.2 Inside Asian countries’ economic emergence • Performances are not a ‘Quick Fix’! • Also not the result of external plan & assistance! • Asia’s economic successes are also not based on natural resources wealth… • It is due to technological adaptation, and • a transformation of the whole societies! • No specific development model: – Targets, strategies and interventions were fitted to given situation, availability of resources, economic shortfalls… Thinking out of the ‘Box’ • Development process: Not primarily Technology! • Primarily: They think differently ! • They apprehend their situation and the system differently • They think of themselves differently • They understand their relationship to the world differently • In their understanding: — “Development is socio-economic empowerment!” — Asian countries operationalisation strategy • Focus on developing national capacities Goals/Targets: • 1st Phase: Import Substitution > Focus on local market! With development of low-technologies and on capacity building (building on the existing base) • 2nd Phase: High-tech commodity Export Development of high-technology capacities. • Leadership role of responsible and dedicated Governments • Strong cooperation between governments and the private sector. • Public-private-partnerships : — Instruments for driving technological adaptation and market development. 2.3 Transferability of the Asian experiences to Africa Are these experiences transferable? Which are the criteria for their transferability? Remark: • Achieving technological adaptation not only a technical issue! • 5 dimensions: – technical – institutional – financial – leadership – emotional/cultural. Transferability of the Asian experiences to Africa a) Technical dimension — • In general, no culture of industrial production in African countries • Easy business in Trade with foreign products… • Issue of capabilities to carry out industrial production • — incl. infrastructures • Issue of capabilities to perform technological adaptation • — incl. criteria of competitiveness of products. b) Institutional dimension — – Issuing of supportive policies : • Enterprise development — at local/regional level • FDI • capacity building • local market protection • foreign market penetration, … – Creation/strengthening of schools/training institutions – Creation of Public-Private-Partnerships – Cooperation with foreign institutions/governments/firms… c) Financial dimension — – Major stumbling block! – Intelligent use of FDI in Korea — while tapping knowledge from selected investors – Target alternative potential represented by remittances from Diasporan Africans, for African capital building and for financing key industrial projects in African countries – Involve African Banks. d) Leadership dimension — • Emulating the Asian models: Key role of governments • Support to initiatives from the private sector/civil society** >> Inspiring examples: — Grameen Bank, Bangladesh; — Instituto del Tercer Mundo, Chile — Federation des Groupements NAAM, Burkina Faso — Green Belt Movement, Kenya. e) Cultural/emotional dimension — Are Africans committed to such transformational change? What societal/attitudinal changes are necessary? What should be the drivers? Which incentives can be used? • Overcome socio-cultural resistances • High motivation/commitment needed for societal transformation • Work ethics: High societal value of ‘work’ in Asia — for the welfare of all • Need to question African traditional practices, and exhibitionist/consumerist lifestyles. African reactions to the Asian experience Noticeable inspirational effects on African governments: 1. Uganda: President Yoweri Museveni (‘Pan Africanism’, 1996) argues the need for problem solving-oriented research in Africa’: “Technological transfers cannot take place between governments for the simple reason that most of the technology available in the developed countries is in private hands. The big concerns have their own R&D departments and this is where most of the action is. The private firms cannot give away their technology or discoveries freely because they are in business and not charity. Under these circumstances, technological transfers are not easy. We must, therefore, endeavour to create our own research capacity in Africa. ”Our research must be problem solving-oriented; it must be relevant to our needs and not esoteric, merely satisfying the intellectual curiosity of our scientists. Both governments and industries, which consume the research results, must chip in to support research and development. The manufacturers must, to some extent, dictate the kind of research done because we shall rely on them to transform research into products that our people can readily use…” “…The UN recently recommended  that in order for the developing countries to realize any results from research and development, they must spend, at least 2 per cent of their GNP on research. What we are now doing is underdosing the patient. This cannot cure the patient, it merely prolongs misery. It is therefore crucial that in our national budgets, we reconsider the importance of research and development in our future struggle for emancipation from our socio-economic backwardness.” 2. Rwanda: President Paul Kagame emphasises: “ We in Africa must either begin to build our scientific and technological training capabilities or remain an impoverished appendage to the global economy.” Rwanda: Boosted expenditures on science to 1.6% of GDP, striving for 3% within the next 5 years 4. Ethiopia: Establishment of 13 new universities 5. Ethiopia: Programme for producing 5,000 PhDs in 10 years by Addis Ababa University 6. Zambia: will offer postgraduate fellowships to train 300 science and engineering students, with a US$ 30 million loan from the ADB 7. Nigeria: Plans to invest US$ 5 billion to create a National Science Foundation 8. Angola and Mozambique: Brazil’s Pro-Africa Program, in support to scientific and technological capacity building.