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					  Identifying indicators for the S&T
          policy in Pakistan:
Entering new Science, Technology and
         Innovation paradigm

    Dr. Arabella Bhutto
    Mehran University Institute of Science and
    Technology Development

    International workshop on S&T Statistics and Policy
                          Making
                May 5 – 7, 2009, Islamabad
Outline
   Challenges
   Approach taken by the developed countries
    towards STI indicators
   Approach taken by the developing countries
    towards STI indicators
   S&T indicators in Pakistan
   Innovation indicators for Pakistan
     Linkages and Networks indicators
     Diffusion of innovative knowledge and   technologies
     Management of innovative knowledge
    Challenges
   Statistical information is essential for understanding
    and appreciating the key contribution of S&T within
    knowledge based economy (Tijssen and
    Hollanders, 2006).
   To provide the Ministry of S&T (MoST) with new
    indicators and for the evidence based policy
   Entering into science, technology and innovation
    (STI) paradigm
      STI indicators of several countries including
       Japan, China, Korea, Malaysia, Thailand, USA
       and EU
   Though these indicators contribute towards the
    knowledge based economies but are they equally
    beneficial in representing the economic growth of
    developed as well as developing countries?
    Challenges
   For developed countries, indicators must include:
   Local applications of indigenous science (i.e., the
    role of professional associations, local scholarly
    journals)
   stocks and flows of human resources (i.e.,
    monitoring the exodus of talented local researchers
    to richer countries)
   demographical trends of PhD students and R&D
    staff (i.e., details on educational background, age
    and gender) (Tijssen and Hollanders, 2006).
Trends of Indicators
   OECD (Organisation for Economic Co-operation
    and Development)
   UNESCO (United Nations Educational, Scientific
    and Cultural Organization)
   World Bank‟s Knowledge Assessment Methodology
    (KAM) tool, etc
   Pakistan Council for Science and Technology
    (PCST) regularly collects, complies and analyzes
    the data and information regarding S&T/R&D
    spending in Pakistan to assist policy makers in
    making informed policy decisions (PCST, 2005)
Purpose of Indicators
   Tijssen and Hollanders (2006), these
    indicators can be used to analyse:
     strengths  and weaknesses
     set level of expectations and attainments
     monitor and track progresses
     track early warning systems to identify problems
      and opportunities
     identify the need of additional statistical data or
      information
     demonstrate tangible results and impacts
     conduct assessment, evaluations and review of
      outputs and outcomes
Approach taken by the developed
countries
   Policymakers are becoming aware that they need
    information on innovative practice to help them
    design effective policies, and monitor their impact
    over time. It is generally agreed that the evidence
    has to be collected systematically and repeatedly, in
    order to better understand not only the trends of
    innovative activity over time, but mainly the factors
    influencing them (Goedhuys and Mytelka, 2005).
   According to OECD (2007), some microeconomic
    and macroeconomic models are required to make
    the intelligent guesses about future and to make the
    effective S&T policies. These policies need to be
    supported by analysis, monitoring and evaluation
    practices, which then feed back into the policy
    process (Veugelers, 2007).
Telling the story
 According to OECD (2007)
 Use STI indicators to tell the story to the
  policy community
 Requires dialogue between indicator
  producers and the users
 Use STI indicators to communicate the
  „big picture‟ to civil society
 How can this happen?
Approach taken by the developed
countries
 Systems approach (Herbert, 1996)
 integrates the actor and the activity
 Actors: economic agents such as firm,
  public institute or an individual.
 Activity: R&D, invention, innovation,
  diffusion of practices or technologies, and
  human resource development
A conceptual model for STI indicators

                                                    Activities                                       Output
       Actors                                        Generate                                        Immediate
       Who?                                   (What, where, & why?)
                                                                                                    Outcome
    STI Knowledge                                                                                   Intermediate
                                                                                                   (What results?)




                                                    Linkage
                                                     Transmit
                                                     (How?)




                                                     Impact
                               Impact of STI on economy, society, environment, etc
                    Effect of STI policy, strategy and regulatory environments on STI activities
                                   Socio-economic factors setting STI activities
Current indicators
   STI indicators are rely on the R&D indicators
   Because R&D plays a key role as the source of inventions
    in the science push or linear model of innovation and
    therefore policy focus on R&D indicators is due to the
    dominance of supply side of R&D support programs in
    innovation policy (Arundel, 2007).
   According to INNO policy trendchart (2008), which offers
    major innovation policy trends for Europe, the STI policy
    mostly address R&D indicators:
      support of long term research agendas (17%)
      direct support for business R&D (17%)
      support to innovative startups (15%)
      measuring targeting excellence and management of
        research in universities (15%)
      knowledge transfer (15%)
      support for public research organisations (14%)
Current indicators
   However, the innovation policy priorities are:
     support to innovation management and
      related advisory services (11%)
     cluster framework policies (9%)
     support to sectoral innovation in
      manufacturing (9%)

   In short, it can be observed that less emphasis is
    towards those indicators which are innovative in
    nature but have very little relevance to R&D.
Categorization of indicators used
for EU policy
         Structural Indicators                         Innovation Indicators                     Research Indicators
   R&D and innovation expenditure as %age of        Science and Engineering graduates       Expenditure on R&D
    GDP                                              Population with tertiary education      Researchers
   R&D in business sector                           Broadband penetration rate              New Science and Engineering (S&E)
   Business enterprise expenditure on R&D           Public and private R&D                   graduates: towards new mobility
    (BERD)                                           Innovation expenditures                  pattern
   Public expenditure on human resources            ICT expenditures                        Education expenditure
   Gross domestic expenditure on R&D by             Early stage venture capital             Venture capital investments
    source of funds (Public/private)                 SMEs innovating in-house and co-        Scientific publications
   Level of internet access:                         operating on innovation                 EPO, USPTO, Triadic (US, EU and
    households/enterprises                           High technology employment               Japanese) patents
   Science and technology (S&T) graduates:          High technology exports                 Exports of High technology products
    (total/females/males)                            Sales share of new-to- market/firm       and their trade
   Patents: EPO (European Patent Office),            products
    USPTO (United States Patent and                  Technology Balance of payments
    Trademark Office)                                 received (TBPR)
   Venture capital investments for private R&D      EPO, USPTO, Triadic (US, EU and
   Foreign R&D investment in private sector          Japanese) patents, trade mark and
   ICT expenditure: IT                               design
    expenditure/telecommunication




(Source: EC/Eurostat, 2007)
Indicators not covered
   Veugelers (2007) discussed that certain important assets
    are still not covered in these indicators.
   These indicators do not identify
   industry-science links through co-operations, co-
    patenting and co-publishing between firms and research
    institutes
   researcher mobility between industry and science
   private funding of basic research
   patenting by universities and public research institutes
    and university spinoff
   Along with these, they are lacking in showing regulatory
    barriers, openness to national and international
    competition, and ease of entry.
    Approach taken for developing
    countries towards STI indicators
   Less developed countries are significantly under-
    represented in international S&T statistics and there
    is an urgent need to fill this information gap (Tijssen
    and Hollanders, 2006)
   Relatively small size of the markets, their structure
    of concentration, as well as the relatively smaller
    size of firms, are key factors that shape the
    innovation process in the developing countries
Characteristics of innovation
process in developing countries
1.   Acquisition of embodied technology (equipment) for both
     product and process innovation is a major component of
     innovation.
2.   Minor or incremental changes can be the most frequent type of
     innovation activity in some developing countries, together with
     innovative applications of existing products or processes.
3.   Organizational change is extremely significant in the innovation
     process. Besides its direct impact on firm performance, it also
     contributes to the firm's preparedness to absorb new
     technologies incorporated in machinery and other equipments.
     Heterogeneity frequently prevails with regard to technological,
     organizational and managerial patterns. This leaves a lot of
     room for organizational change, which is often independent from
     product and process innovations.
4.   Innovations in the agricultural sector have a high economic
     impact, due to the significant overall economic weight of this
     sector.
Characteristics of innovation
process in developing countries
   Most of these innovative processes show their dependency
    on the exogenous technologies and on the learning which
    can be achieved through the integration of these
    exogenous technologies with the endogenous capabilities
    of small and low tech firms.
   Therefore, it leaves a little room for the R&D activities on
    which most of the STI indicators rely. As less developed
    countries show inadequate contributions of R&D towards
    their socio-economic growth, using standardized STI
    indicators do not fulfill the criteria of evidence based policy
   Therefore, these emerging catching-up‟ economies and
    lesser developed countries require additional statistical
    information and systemic analyses which can identify the
    potential of their own S&T capacities so that they are better
    able to promote and guide their socioeconomic
    development (Tijssen and Hollanders, 2006).
Characteristics of innovation
process in developing countries
   Through systems approach, need is identified of heavy
    linkage between several actors including firms, universities
    and research institutes of the developing countries.
   It is required that developing countries must have a policy to
    determine what is to be imported and what is to be developed
    locally. This will require adopting sharply focused innovation
    policies to achieve technological development (Mani, 2002)
    which are not a part of most of the S&T policies of developing
    countries
   The impacts of these policies are required to be measured in
    terms of diffusion of exogenous technologies along with the
    diffusion of learning achieved through these technologies.
   The knowledge of these diffusions should be managed to
    share it amongst all the linked actors as well policy
    developers. These diffusions of innovative technologies and
    innovative knowledge and their knowledge management can
    be seen as determinants and impacts of innovation at the firm
    level across the developing countries.
S&T indicators in Pakistan
   To monitor the progress of Pakistan, PCST publishes a
    number of S&T indicators. In order to determine an
    adequate level of R&D expenditure a number of criteria
    are commonly used which are based upon
    recommendations of various United Nations agencies.
   R&D expenditure per capita (PPP)
   Field wise R&D expenditure
   R&D/GDP by source of funding
   Human resources for science and technology
   Enrolment in tertiary level
   Enrolment by degree level
   Growth of universities
   Growth of PhDs per year
   Patents: Pakistan Patent Office (PPO)/ residing and non-
    residing patents
   Research publications
S&T indicators in Pakistan
   The principal aim of the National Science and Technology
    policy (1984) was to re-organize, active and expand the
    science and technology system in the country with a view
    to making it more efficient, dynamic and self-reliant. The
    policy identified that to achieve socio-economic progress
    Pakistan must become a producer of technology, not
    merely a passive recipient. But Pakistan is still relying on
    the high technologies of the developed countries.
   For technological developments, National Technology
    Policy (1993) identified four main objectives including:
      Bridging the gap between the best local and the best
       international practices in industrial technology
      Bridging the gap between the best and sub-standard
       local practices in industrial technologies
      Improve and develop technology to enhance
       international competitiveness in the long run
      Technical manpower development
    S&T indicators in Pakistan
   To enhance intenational competitiveness, policy identified that S&T in
    Pakistan is oriented towards formal and unproductive rather than
    commercial R&D.
   Commericlization means innovative policies and hence focus shifts
    towards innovation indicators.
   This identifies that in Pakistan there is a need of shift from S&T
    indicators towards STI indicators which focus less on R&D and more on
    impacts of innovation.
   Pakistan does not offer significant inventions in high technology and
    therefore using R&D as an indicator does not significantly represent the
    socio-economic developments in Pakistan.
   Pakistan can be identified as a good user of high technological
    advancements. Some innovations in products and processes identify the
    innovative capabilities inside Pakistan.
   Theories say, “innovation does not necessarily imply the
    commercialization of only a major advance in the technological state of
    the art (a radical innovation) but it also includes the utilization of even
    small-scale changes in technological know-how (an improvement or
    incremental innovation)”.
   Therefore, integration of innovation indicators with the S&T indicators
    seems to be vital strategy for Pakistan as well as for other developing
    countries to lead towards evidence based policy
Innovation Indicators
   European Union has initiated the process of developing
    new indicators to describe the process of knowledge
    creation and diffusion within the systems of innovation
   Such indicators permit the analysis of the existence of
    networks of researcher/inventors and the extent to which
    the industrial base makes use of the results of scientific
    work for its innovation activities (Veugelers, 2007)
   The observation of these indicators identified three broad
    categories of innovation indicators suitable for Pakistan
    as well as for other developing countries
     Linkages and Networks indicators
     Diffusion of innovative knowledge and technologies
     Management of innovative knowledge
Linkages and Networks indicators
   The closer interaction of academia and industry contributes towards
    country‟s economic development (Quintas et al. 1992).
   International competitiveness, rapid technological advancements
    and growth, science based and technology intensive industries are
    among the variety of forces that have motivated and brought the
    academia and industry into co-operative relationships and alliances
    and investment in R&D in the developed countries (Qureshi, 2006).
   The prevalence of institutional and organizational fragmentation in
    developing countries is one major factor that constrained the
    technology transfer process from translation into the development of
    innovation initiative (Saad, Zawdie and Malairaje, 2008).
   According to Qureshi and Kazi (1997), the major reason of failure in
    developing science and technology in Pakistan is identified due to
    the lack of coordination between stakeholders of the innovation
    system, which included the government, universities, research
    institutes, extension services, support institutions and the user
    agencies i.e. industry, agricuture and service sector. This lack of
    coordination and linkage has also been responsible for the lack of
    innovative products and processess in Pakistan.
Linkages and Networks indicators
   In the process of industrial development in Pakistan, mostly
    large scale plants were imported on turnkey basis and erected
    and very little emphasis was laid on developing indigenous
    capability for upgrading of the technology and the skills for
    improving productivity. Hence there is no mentionable
    interaction between academia and industry (Qureshi, 2006).
   Due to weak or absent linkages, Pakistan has faced a
    tremendous challenge and remained unable to overcome the
    technology-related problems, and therefore lead towards those
    solutions which mostly rely on acquisition of embodied
    technologies (Goedhuys and Mytelka, 2005).
   National Science and Technology policy (1984), in a
    recommendation offered power to research institutes to enter
    into co-operative programme for research and training with
    other institutes.
   National Technology Policy (1993), identified three elements of
    the technology triangle: the Government; the R&D organisation;
    and the entrepreneurs to create co-operating projects and joint
    ventures.
Linkages and Networks indicators
   In order to exploit the embodied technology and to promote
    indigenous technolgical development, the government of
    Pakistan established the Science and Technology Development
    Corporation (STEDEC) to commercialize the processes and
    products developed by universities and research development
    organisations (Qureshi, 2006).
   HEC (2005) identified eleven core targets from which one was
    the enhancement in number of joint university-industry research
    projects at universities with at-least 5 per university.
   The Government, under the MTDF 2005-2010, has also
    declared the programme of strengthening the university-
    industry linkages. It is intended also to esablish the Business
    Develoment Units (BDUs) in the universities to evolve the
    university-industry partnership (Qureshi, 2006). So far, these
    target have not been met but no indicators were proposd to
    meaure these targets as well.
Linkages and Networks indicators
Proposed innovation indicators of linkages and networks:
 Company-university collaboration agreements
 Public-private universities cooperation
 co-publishing
 co-patenting
 Number of university employees working as consultants to
  industry
 Research contract or sponsoring research (conucted by
  reseracher or students) in the university
 Research contract for developmet, design, analysis, testing,
  evaluation
 Access to university facilities (literature and human resources)
 Technology incubation centres
 Percentage of SMEs that collaborate with the public sector
 Percentage of SMEs that collaborate with the private sector
Diffusion of Innovative knowledge
and technologies
   Knowledge diffusion is an essential aspect of innovation by both
    R&D performing firms and non-R&D performing firms.
   It includes the acquisition of knowledge that does not require
    interaction with the source, such as a purchase of capital goods or
    services including the license of intellectual property; the acquisition
    of knowledge that is freely available from sources such as scientific
    publications or through attendance at trade fairs; and the acquisition
    of tacit knowledge obtained directly from other people through
    collaborations (Arundel, 2007).
   Pakistan mostly possesses non R&D based firms which bring in the
    embodied technologies. The absorption of these new technologies,
    mostly incorporated in machinery and other equipment, requires
    significant organizational changes (Goedhuys and Mytelka, 2005).
    For observing such absorption, PCST offers the patents and
    publications indicators but these indicators cannot represent
    changes at the individual or organisational levels of R&D and non-
    R&D firms separately.
Diffusion of Innovative knowledge
and technologies
   The diffusion is observed at the individual level or at the
    organisational level.
   According to Fichman (1992), adoption of innovations by individuals
    is subject to strong managerial influences (Leonard-Barton and
    Deschamps, 1988) or by organizations as a whole (Kwon and Zmud
    1987; Robertson and Gatignon 1986; Rogers 1983). However, there
    is also an adoption of special classes of technologies, i.e., those that
    involve marked adopter interdependencies (Katz and Shapiro 1986;
    Markus 1987) or that impose an exceptional knowledge burden on
    would be adopters (Attewell 1992; Cohen and Levinthal 1990).
   In short, it can be seen that strong management and its willingness
    to change creates opportunities of diffusion, where individuals learn
    for new technologies and then diffuse this knowledge within
    organisation for innovations. The Arundel (2007), observed that
    making innovation work means innovation capacity building, the
    uptake of new technologies and of existing technologies in a new
    context and carrying them through to the business level (Arundel,
    2007).
Diffusion of Innovative knowledge
and technologies
   Pakistan explicitly mentioned in the National Technology Policy
    (1993) the need of industrial extension services as an effective
    instrument for diffusing technical know-how.
   The plan was to support SMEs in establishing their own cooperative
    industrial extension centres providing testing, training, designing and
    information services.
   However, what these extension centres are going to test was not the
    part of any S&T policy.
   In order to measure the diffusion of innovation, there is need to first
    identify the product, services and process innovations at the
    organisational level. Once identified can be separately discussed for
    R&D and non-R&D firms to observe the invention based innovations
    and diffusion based innovations
   Observing S&T competitiveness indicators in ASEAN (Association
    of South East Nations) and CIS (Community Innovative Survey), the
    following indicators are proposed which can be utilized as diffusion
    of innovative knowledge and technology in Pakistan.
Diffusion of Innovative knowledge
and technologies
Proposed diffusion indicators:
 Product and service innovations
 Process innovations
 New technology adoption
 Number of institutional trainings
 Trainings for innovation management
 Trainings for knowledge management
 Number of trade fairs
 Value added by knowledge
 Value added by technology (innovation sales share)
 Individual and group learning
 Knowledge management institutes inside firms
 R&D departments inside firms
 Youth interest in science and technology
Management of innovative knowledge
   Knowledge management is all about getting the
    right information to the right people at right time
    (Mcelroy, 2003)
   The most significant innovation capability is
    knowledge accumulated by the firm, mainly
    embedded in human resources, but also in
    procedures, routines and other characteristics of
    the firm (Goedhuys and Mytelka, 2005)
   Generally knowledge management has been
    discussed at the organisational level and been
    identified as an organisational activity.
   It is generally considered as a set of new
    organisational practices that seems to be of
    broad relevance to the knowledge economy
Management of innovative knowledge
   knowledge as a product of learning by doing
   It been observed that it is difficult to transfer the knowledge
    because it possesses the attributes of being tacit and codified
   As far as knowledge management inside organisations is concerned,
    it identifies the need of converting the tacit knowledge into codified
    knowledge
   Codification increases the memory capacity of an organisation and
    creates learning programs for new workers (Foray, 2007) which are
    mainly done through ICT capabilities
   There are supportive evidences that ICT instruments help
    organisations in realizing values of their organisational complements
    such as business processes, decision making structures, incentive
    systems, human capital and knowledge management (Brynjolfsson
    and Hitt, 2005)
   The ICT has also been used as a category of indicator by the World
    Bank for the Knowledge Assessment Methodology (KAM) tool,
    through which several developed and developing countries can
    identify their challenges in making transition towards the knowledge
    based economy.
KAM (KEI and KI)
   Economic incentives and institutional regime works on three key
    indicators
      Tariff and Nontariff barriers
      Regulatory quality
      Rule of law
   Innovation works on three key indicators
        Total royalty payment and receipts
        Patents granted by USPTO
        Scientific and technical journal articles
   Education works on three key indicators
        Adult literacy rate
        Secondary enrollment
        Tertiary enrollment
   ICT works on three key indicators
        Telephone penetration
        Computer penetration
        Internet penetrations (per 1000 people)
Cross Country comparison on the
basis of KEI
                                   Economic Incentive and
                      KEI              Institutional Regime     Innovation        Education             ICT


Country        2008         1995   2008             1995      2008      1995   2008      1995    2008         1995


Turkey         5.61         5.41   7.02              6.4      5.67      4.96   4.38       4.42   5.38         5.87


Jordan         5.53         5.08   5.77             5.49      5.66      6.09   5.49       4.5    5.21         4.25


Oman           5.37         4.71   7.32             6.46      4.95      5.38   4.3        3.13   4.9          3.85


Saudi Arabia   5.15         4.66   5.39             4.57      4.04      4.96   4.87       3.86   6.29         5.26


Kazakhstan     5.01         4.61   4.82             2.18      3.77      4.02   7.21       7.54   4.25         4.71


Iran           3.39         3.15   1.18             0.79      3.02      2.83   3.89       4.44   5.48         4.56


Pakistan       2.24         2.31   2.43             2.21      2.75      2.86   1.07       1.38   2.72         2.78
Sudan          n/a          1.4    0.61             0.53      1.97      2.23   n/a        1.59   3.84         1.22
Management of innovative knowledge
   In the second meeting of NCST (National Commission for Science
    and Technology), one of the major recommondations was about
    strengthening of Pakistan Scientific and Technological Information
    Center (PASTIC) to establish Technology database for nationwide
    dissemination of industrial and technical knowledge (PCST, 2000)
   For evidence based policies there is a need of huge databases
    which could be established by the Planning Commission of Pakistan.
   Their statistics should consider disintegrated sectors and therefore
    separate database for separate industries, including agriculture,
    industry, health, defense, communications and electronics, should
    be created
   The database will help the S&T policymakers and R&D managers in
    the form of large amounts of objective information coupled with
    „insider knowledge‟ of the current state of S&T systems which further
    promotes better awareness of organization‟s strengths, weaknesses
    and potential opportunities
   Such knowledge provides a base of empirical evidence that can be
    used for monitoring, performance assessment, informed debate,
    policy formulation and decision making (Tijssen and Hollanders,
    2006)
   But what can become the part of such database?
Management of innovative knowledge
 Well it has been observed that existing four
  pillars are available for knowledge management
  but at the organisational levels in Pakistan the
  proposed indicators can also be adopted for the
  management of innovative knowledge.
Proposed knowledge management indicators
 Mapping of organisational and business
  processes
 Codification of rules, policies, procedures and
  strategies
 Codified organisational practices in manuals
Conclusion
   The S&T indicators contribute towards evidence based policy
    making
   So far, R&D has remained a major source of indication in almost
    every S&T indicator
   R&D indicators might represent the developed countries but cannot
    represent the developing countries
   New innovation indictors can be adopted for the developing country
   Pakistan as a developing country has also identified the need of
    new indicators for making S&T policy
   A need of paradigm shift from S&T policy to STI policy in Pakistan is
    identified
   With this shift additional S&T indicators are required to be integrated
    with the statistical indicators produced by PCST
   New indicators under three categories
        Linkages and networks
        Diffusion of innovative knowledge and technology
        Management of innovative knowledge.
Conclusion
   Pakistan does not have any innovation policy also there is no government
    body which governs and regulate the innovation system
   Therefore there is a need to formally organize a system which can monitor
    and measure the innovative capabilities along three economic sectors:
    agriculture, industry and services
   It is required to measure that how innovative our firms are in different
    sectors and industries and these measures should be shared at national
    and international levels through information and communication
    technologies. The websites can explicitly present innovation projects
    initiated for products and process innovations.
   Therefore, for the development of evidence based policies there is a need
    of integration and collaboration between policymakers and developers of
    STI indicators
   The centres of excellences should be created where regular meetings
    should be taken place between policy makers and indicator developers
    where they can share their expert advice and plan several practical targets
   Their meetings can create more formal and functional questionnaires for
    further surveys to collect the required data and then use that collected data
    for analysis and creating more generalized indicators
   The data collected through these new indicators will lead further towards
    more evidence based policies, as with time and effort these indicators will
    become more descriptive, informative and insightful.
Thank you

				
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