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European Tunisian Conference Tunis, 18-19th February 2013
Patterns and characteristics of innovation in the ICT sector
lessons from successful catching-up economies
Ilyas AZZIOUI
CNRST. Morocco
Expert Group Meeting on Investment, Research, Development and
Innovation the ICT Sector ( Tunisia, 7-8 May 2013)
Date : 7-9 May 2013
Relevant issues to
innovation
Why we need to innovate?
 How can we promote it?
 What linkages are there between research and innovation?
 Is it the same story across sectors( software, Auto, Agro-
food, etc.)?
Relevant issues to
innovation
As Time Goes By: From the Industrial Revolutions to the Information
Revolution (Chris Freeman & Francisco Louçã)
ICTICT
Sectoral Patterns of
Innovation
• High R&D intensity (electronics, pharmaceuticals) and low R&D intensity
(textiles, shoes) (EC, OECD)
• Schumpeter Mark 1 ‘creative destruction’ easy entry, entrepreneurial role,
innovation (machine, biotech), Schumpeter Mark 2 ‘creative
accumulation’ large firms, barriers to entry (semiconductors 1990s,
mainframes 1950-1990s)
• Nature of knowledge and learning (Malerba and Orsenigo 1996/7):
technological opportunities, appropriability conditions, cumulativeness
• Sources of R&D for other sectors (computers, instruments), users of
technology (textiles, steel) (Scherer 1982)
• Nucleus sectors (electronics, machinery, instruments, chemicals) that
generate innovations, secondary sectors in generating innovation (auto,
steel), user sectors (services) (Robson et al 1988)
Attempts to classify sectoral patterns of
innovation
Sectoral Patterns of
Innovation
Innovation in sectors is the result of different learning processes, of
the use of different knowledge and of the interaction of different
actors
Major differences across sectors exist in the relative importance of
product and process innovations, size and diversification of innovating
firms
Sector regularities: in some sectors the source of technology is
suppliers of equipment (textiles, construction), other contribute to their
process or product technology (chemicals). Firms in assembly and
continuous process industries (autos or steels) concentrate on process
innovation, mechanical and electrical engineering (machinery )
concentrate on product innovation
Why sectoral innovation systems ?
Sectoral Patterns of
Innovation
Category of firm
(1)
Typical core
sectors
(2)
Determinants of technological
Trajectories
Technological
trajectories
(6)
Measured characteristics
Sources
of
technology
(3)
Type
of
user
(4)
Means of
appropriation
(5)
Source of
process
technology
(7)
Relative
balance
between
product and
process
innovation
(8)
Relative size of
innovating
firms
(9)
Intensity and
direction of
technological
diversification
(10)
Supplier dominated
Agriculture;
housing;
Private
services
traditional
manufacture
Suppliers
Research
extension
services;
big users
Price
sensitive
Non-technical
(e.g. trade-marks,
marketing,
advertising,
aesthetic design)
Cost-cutting Suppliers Process Small Low vertical
Scale
Intensive
Production
intensive
Specialised
Suppliers
Bulk materials
(steel, glass);
assembly
(consumer
durables &
autos)
Machinery;
instruments
PE;
suppliers;
R&D
Design and
development
users
Price
sensitive
Performance
sensitive
Process secrecy
and know-how;
technical lags;
patents; dynamic
learning
economies; design
know-how;
knowledge of
users; patents
Cost-cutting
(product
design)
Product
design
In-house;
suppliers
In-house;
customers
Process
Product
Large
Small
High vertical
Low concentric
Science based
Electronics/
electrical;
chemicals
R&D
Public
science;
PE
Mixed R&D know-how;
patents; process
secrecy and
know-how;
dynamic learning
economies
Mixed In-house;
suppliers
Mixed
Large
Low vertical
High concentric
Note: PE = Production Engineering Department
Source: Pavitt (1984)
Pavitt’s (1984) taxonomy of sectoral
patterns of innovation
Sectoral Patterns of
Innovation
Supplier Dominated
Production Intensive
Scale Intensive
Production Intensive
Specialized Suppliers
Science Based
Typical Sectors: Agriculture; housing; services,
construction, traditional manufacturing
Sources of technology and innovation : Minor
contribution to their process or product technology
((Weak in-house R&D and engineering). Most process
innovations come from suppliers of equipment and
materials (IT-intensive design) Research extension
services; big users.
Type of user: Price sensitive
Means of appropriation : Non-technical (e.g. trade-
marks, marketing, advertising, aesthetic design, skills)
Technological trajectories: Cost-cutting through
Process innovation.
Size of innovating firms: Small
Sectoral Patterns of
Innovation
Supplier Dominated
Production Intensive
Scale Intensive
Production Intensive
Specialized Suppliers
Science Based
Typical Sectors: Firms producing Bulk materials (steel,
glass, food industry) and durable consumer goods &
vehicles. Technological skills are used to exploit scale
economies.
Sources of technology and innovation : Production &
Engineering Dprt (Process Innovation), In-house R&D
(product design), specialized Suppliers of equipment and
instrumentation.
Type of user: Price sensitive
Means of appropriation : Process secrecy and know-
how; technical lags; patents; dynamic learning
economies; design know-how; knowledge of users;
Technological trajectories: Cost-cutting
Size of innovating firms: Large
Sectoral Patterns of
Innovation
Supplier Dominated
Production Intensive
Scale Intensive
Production Intensive
Specialized Suppliers
Science Based
Typical Sectors: Machinery; Equipment & instruments.
Sources of technology and innovation : Design and
development, users,
Type of user: Performance sensitive
Means of appropriation : firm-specific skills reflected in
continuous improvements in product design and the ability
to respond sensitively & quickly to users’ needs;
Technological trajectories: Product-design
Size of innovating firms: Small
Sectoral Patterns of
Innovation
Supplier Dominated
Production Intensive
Scale Intensive
Production Intensive
Specialized Suppliers
Science Based
Typical Sectors: Pharmaceutical, Chemical and the
Electronic/Electrical sectors.
Sources of technology and innovation : in house R&D
and engineering departments, Public R&D,
Type of user: Performance and Price sensitive
Means of appropriation : Patents (esp. Chemistry)
secrecy, technical lags, firm-specific skills and ability to
operate large scale assembly);
Technological trajectories: Mixed (cost cutting +
Product-design)
Size of innovating firms: Large
Sectoral Patterns of
Innovation
Pavitt’s (1984) taxonomy was an important leap forward in
understanding sectoral innovation patterns but:
Most of understanding of innovation derived from studies of
manufacturing and product innovation;
Provides a poor understanding of service Innovation although
services account for more than 70% of Added Value and
Employment in the industrialised economies;
Neglects the pervasive and disruptive impact that had ICT after
the 80s on both sectors manufacturing & services + the
transmission of IT from capital goods sector to services: from (back
office) process improvements (efficiency of delivery of existing
services), to process innovations (service quality), to product
innovations (new services),
Sectoral Patterns of
Innovation
Sectoral Patterns of
Innovation
Supplier Dominated
Scale Intensive
physical networks
Scale Intensive
Information networks
Science Based
Typical Sectors:
1.Personal Services (Restaurants, Laundry, Beauty).
2.Public and Social Services (Health, Education)
Sources of technology and innovation : weak in-house
R&D, engineering capability & software expertise. Most of the
innovations are coming from suppliers of materials,
information, equipment and ICT sector.
Type of user: 1) Performance sensitive 2) quality sensitive
Means of appropriation : 1) Non-technical (e.g. trade-
marks, marketing, advertising, aesthetic design, skills)
2) not allowed, public,
Technological trajectories: Mixed 1) Product-design 2)
Performance improvement,
Size of innovating firms: 1) Small 2) Large
Sectoral Patterns of
Innovation
Supplier Dominated
Scale Intensive
physical networks
Scale Intensive
Information networks
Science Based
Typical Sectors: Services involving large back office
administrative tasks that are suitable for the application of
ICT to reduce costs (Transport & travel, Wholesale,
distribution)
Sources of technology and innovation : Manufacturers
and Software companies .
Type of user: Price sensitive
Means of appropriation : Standards and norms
Technological trajectories: cost cutting and networking,
Size of innovating firms: Large
Sectoral Patterns of
Innovation
Supplier Dominated
Scale Intensive
physical networks
Scale Intensive
Information networks
Science Based
Typical Sectors: Firms dependent on elaborate
information networks (e.g., banks, insurance, telecom &
broadcasting), Public utilities such as electricity, water &
gas supply might be included.
Sources of technology and innovation : Manufacturers
(ATMs for banks) Software companies, in house.
Type of user: Price sensitive
Means of appropriation : Standards and norms
Technological trajectories: cost cutting and networking,
Size of innovating firms: Large
Sectoral Patterns of
Innovation
Supplier Dominated
Scale Intensive
physical networks
Scale Intensive
Information networks
Science Based
Typical Sectors: Since late 80s Emergence of an
increasing nb Business services closely linked to R&D,
software and DL of IT applications.
Sources of technology and innovation : in-house R&D
and engineering capabilities, customers, suppliers.
Type of user: Performance sensitive
Means of appropriation : R&D Know How , skills
Copyright, product differentiation,
Technological trajectories: System design,
Size of innovating firms: Small & medium
Catching up in
different sectoral
systems
What can we learn from the story of catch-up in six different sectors
in emerging Countries (Taiwan, Korea, brazil, India, China, and
others)?
1.Pharmaceuticals (Science based),
2.Autos (scale intensive),
3. Software (specialized supplier and service sectors),
4.Semiconductors and Telecom (design and engineering is important),
5. Agro-food (traditional sectors).
« Catching-up in different sectoral systems: evidence from six
industries »
Franco Malerba & Richard Nelson (2010)
Catching up in
different sectoral
systems
 firms are the key actors in catch-up , Learning
and Capabilities development of domestic
firms is a necessary condition for catch up
because they provide the catching up country
with the ability of absorbing foreign knowledge
& technology and adapting and modifying
them to generate new knowledge and
products.
Common features affecting
catch-up in 6 sectors
Firms Learning
Access to foreign
Knowledge
Skilled Human Capital
Active Government
Policy
Catching up in
different sectoral
systems
 the channels to which this access took place
have differed (sector & country). from vertical
networks with suppliers and users, to local
networks, collaborative R&D or production
agreements, to participation to the global value
chain or just outsourcing;
 When access to foreign knowledge did not
take place, as in telecommunications in India
and Brazil, the catch-up process has been
seriously unpaired
Common features affecting
catch-up in 6 sectors
Firms Learning
Access to foreign
Knowledge
Skilled Human Capital
Active Government
Policy
Catching up in
different sectoral
systems
 Important inward mobility form advanced
countries of highly skilled human capital
(scientists, engineers, technopreneurs)
Diasporap and foreigners (consultants) were
critical to the catch-up)
Common features affecting
catch-up in 6 sectors
Firms Learning
Access to foreign
Knowledge
Skilled Human Capital
Active Government
Policy
Catching up in
different sectoral
systems
 In our 6 sectors government policy has indeed
stimulated and fostered the learning processes
and the capability formation of domestic firms
with different intensity and tools.
Common features affecting
catch-up in 6 sectors
Firms Learning
Access to foreign
Knowledge
Skilled Human Capital
Active Government
Policy
Catching up in
different sectoral
systems
 In automobile and telecom large firms have
been major actors in the catch-up process
 in software and agro-food small firms have
driven sectoral growth
 New entrepreneurial firms, SMEs or large size,
characterize the pharmaceutical and the
semiconductor firms
 local networks important for the catch-up
process in semiconductors (Taiwan) , formal
and informal interaction, knowledge sharing
 Advent of technological and market
discontinuities may favour either totally
newcomers or established domestic
companies. (Software in India Vs Telecom &
Pharmaceuticals where knowledge is
cumulative and strongly science based)
Diffrences across sectoral systems
Industry StructureIndustry Structure
Demand and vertical
links
Gov Policies
Other elements
Catching up in
different sectoral
systems
 Multinational companies played different roles :
1. software, pharmaceuticals and semiconductors:
catching up countries had to specialize in some
product range in the global value chain and eventually
move uo the learning ladder to more advanced stages
of production or research.
2. Telecom and Autos: the use of license from
multinationals or from foreign firms, or joint ventures
and alliances have been extensively used by domestic
firms to learn and accumulate capabilities.
Diffrences across sectoral systems
Industry Structure
Demand and vertical
links
Gov Policies
Other elements
Catching up in
different sectoral
systems
 Demand has entered catch-up in two ways:
1. Exports: have been the drivers of catch-up, for
both small firms and large firms. This is the
case of semiconductors, telecom,
pharmaceuticals, software and auto.
2. Domestic Market: has been a major driver of
the learning process and the accumulation of
capability by domestic firms in Large countries
such as China, India and Brazil;
Diffrences across sectoral systems
Industry Structure
Demand and vertical
links
Gov Policies
Other elements
Catching up in
different sectoral
systems
 Government policy has differed in the use
of tools and measures
1. Telecom ( Korea and China) - public policy
used R&D support, R&D consortia and public
research organizations to help firms to move
into new generations of telecom technologies
and products
2. In software governments have used different
policies and tools, ranging from public
procurement, to R&D support for SMEs,
favourable companies tax rates and incentives
to attract foreign direct investments
Diffrences across sectoral systems
Industry Structure
Demand and vertical
links
Gov Policies
Other elements
Catching up in
different sectoral
systems
 Standards, regulations and norms : for
relax IP laws were important for the catch-up
of Pharmaceutical industry in India and Brazil
 Finance: VC (Private equity) critical for the
development of Software industry
Diffrences across sectoral systems
Industry Structure
Demand and vertical
links
Gov Policies
Other elements
Catching up in
different sectoral
systems
 In some sectors such as Agriculture, health
and Telecom Public research proved quite
relevant to domestic firms
 In the other sectors the main role of
universities was to provide advanced training
for advanced human capital in the scientific,
engineering and managerial fields. So they
increase the absorptive capacity of the human
capital for foreign cutting edge knowledge.
Diffrences across sectoral systems
Universities & Public
Research Laboratories
Conclusion
Conclusion
May 8th, 2013 ESCWA Expert meeting 30
Thanks for your attention !
‫لصغائكم‬ ‫شكرا‬ !

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Patterns and characteristics of innovation in the ICT sector lessons from successful catching-up economies

  • 1. European Tunisian Conference Tunis, 18-19th February 2013 Patterns and characteristics of innovation in the ICT sector lessons from successful catching-up economies Ilyas AZZIOUI CNRST. Morocco Expert Group Meeting on Investment, Research, Development and Innovation the ICT Sector ( Tunisia, 7-8 May 2013) Date : 7-9 May 2013
  • 2. Relevant issues to innovation Why we need to innovate?  How can we promote it?  What linkages are there between research and innovation?  Is it the same story across sectors( software, Auto, Agro- food, etc.)?
  • 3. Relevant issues to innovation As Time Goes By: From the Industrial Revolutions to the Information Revolution (Chris Freeman & Francisco Louçã) ICTICT
  • 4. Sectoral Patterns of Innovation • High R&D intensity (electronics, pharmaceuticals) and low R&D intensity (textiles, shoes) (EC, OECD) • Schumpeter Mark 1 ‘creative destruction’ easy entry, entrepreneurial role, innovation (machine, biotech), Schumpeter Mark 2 ‘creative accumulation’ large firms, barriers to entry (semiconductors 1990s, mainframes 1950-1990s) • Nature of knowledge and learning (Malerba and Orsenigo 1996/7): technological opportunities, appropriability conditions, cumulativeness • Sources of R&D for other sectors (computers, instruments), users of technology (textiles, steel) (Scherer 1982) • Nucleus sectors (electronics, machinery, instruments, chemicals) that generate innovations, secondary sectors in generating innovation (auto, steel), user sectors (services) (Robson et al 1988) Attempts to classify sectoral patterns of innovation
  • 5. Sectoral Patterns of Innovation Innovation in sectors is the result of different learning processes, of the use of different knowledge and of the interaction of different actors Major differences across sectors exist in the relative importance of product and process innovations, size and diversification of innovating firms Sector regularities: in some sectors the source of technology is suppliers of equipment (textiles, construction), other contribute to their process or product technology (chemicals). Firms in assembly and continuous process industries (autos or steels) concentrate on process innovation, mechanical and electrical engineering (machinery ) concentrate on product innovation Why sectoral innovation systems ?
  • 6. Sectoral Patterns of Innovation Category of firm (1) Typical core sectors (2) Determinants of technological Trajectories Technological trajectories (6) Measured characteristics Sources of technology (3) Type of user (4) Means of appropriation (5) Source of process technology (7) Relative balance between product and process innovation (8) Relative size of innovating firms (9) Intensity and direction of technological diversification (10) Supplier dominated Agriculture; housing; Private services traditional manufacture Suppliers Research extension services; big users Price sensitive Non-technical (e.g. trade-marks, marketing, advertising, aesthetic design) Cost-cutting Suppliers Process Small Low vertical Scale Intensive Production intensive Specialised Suppliers Bulk materials (steel, glass); assembly (consumer durables & autos) Machinery; instruments PE; suppliers; R&D Design and development users Price sensitive Performance sensitive Process secrecy and know-how; technical lags; patents; dynamic learning economies; design know-how; knowledge of users; patents Cost-cutting (product design) Product design In-house; suppliers In-house; customers Process Product Large Small High vertical Low concentric Science based Electronics/ electrical; chemicals R&D Public science; PE Mixed R&D know-how; patents; process secrecy and know-how; dynamic learning economies Mixed In-house; suppliers Mixed Large Low vertical High concentric Note: PE = Production Engineering Department Source: Pavitt (1984) Pavitt’s (1984) taxonomy of sectoral patterns of innovation
  • 7. Sectoral Patterns of Innovation Supplier Dominated Production Intensive Scale Intensive Production Intensive Specialized Suppliers Science Based Typical Sectors: Agriculture; housing; services, construction, traditional manufacturing Sources of technology and innovation : Minor contribution to their process or product technology ((Weak in-house R&D and engineering). Most process innovations come from suppliers of equipment and materials (IT-intensive design) Research extension services; big users. Type of user: Price sensitive Means of appropriation : Non-technical (e.g. trade- marks, marketing, advertising, aesthetic design, skills) Technological trajectories: Cost-cutting through Process innovation. Size of innovating firms: Small
  • 8. Sectoral Patterns of Innovation Supplier Dominated Production Intensive Scale Intensive Production Intensive Specialized Suppliers Science Based Typical Sectors: Firms producing Bulk materials (steel, glass, food industry) and durable consumer goods & vehicles. Technological skills are used to exploit scale economies. Sources of technology and innovation : Production & Engineering Dprt (Process Innovation), In-house R&D (product design), specialized Suppliers of equipment and instrumentation. Type of user: Price sensitive Means of appropriation : Process secrecy and know- how; technical lags; patents; dynamic learning economies; design know-how; knowledge of users; Technological trajectories: Cost-cutting Size of innovating firms: Large
  • 9. Sectoral Patterns of Innovation Supplier Dominated Production Intensive Scale Intensive Production Intensive Specialized Suppliers Science Based Typical Sectors: Machinery; Equipment & instruments. Sources of technology and innovation : Design and development, users, Type of user: Performance sensitive Means of appropriation : firm-specific skills reflected in continuous improvements in product design and the ability to respond sensitively & quickly to users’ needs; Technological trajectories: Product-design Size of innovating firms: Small
  • 10. Sectoral Patterns of Innovation Supplier Dominated Production Intensive Scale Intensive Production Intensive Specialized Suppliers Science Based Typical Sectors: Pharmaceutical, Chemical and the Electronic/Electrical sectors. Sources of technology and innovation : in house R&D and engineering departments, Public R&D, Type of user: Performance and Price sensitive Means of appropriation : Patents (esp. Chemistry) secrecy, technical lags, firm-specific skills and ability to operate large scale assembly); Technological trajectories: Mixed (cost cutting + Product-design) Size of innovating firms: Large
  • 11. Sectoral Patterns of Innovation Pavitt’s (1984) taxonomy was an important leap forward in understanding sectoral innovation patterns but: Most of understanding of innovation derived from studies of manufacturing and product innovation; Provides a poor understanding of service Innovation although services account for more than 70% of Added Value and Employment in the industrialised economies; Neglects the pervasive and disruptive impact that had ICT after the 80s on both sectors manufacturing & services + the transmission of IT from capital goods sector to services: from (back office) process improvements (efficiency of delivery of existing services), to process innovations (service quality), to product innovations (new services),
  • 13. Sectoral Patterns of Innovation Supplier Dominated Scale Intensive physical networks Scale Intensive Information networks Science Based Typical Sectors: 1.Personal Services (Restaurants, Laundry, Beauty). 2.Public and Social Services (Health, Education) Sources of technology and innovation : weak in-house R&D, engineering capability & software expertise. Most of the innovations are coming from suppliers of materials, information, equipment and ICT sector. Type of user: 1) Performance sensitive 2) quality sensitive Means of appropriation : 1) Non-technical (e.g. trade- marks, marketing, advertising, aesthetic design, skills) 2) not allowed, public, Technological trajectories: Mixed 1) Product-design 2) Performance improvement, Size of innovating firms: 1) Small 2) Large
  • 14. Sectoral Patterns of Innovation Supplier Dominated Scale Intensive physical networks Scale Intensive Information networks Science Based Typical Sectors: Services involving large back office administrative tasks that are suitable for the application of ICT to reduce costs (Transport & travel, Wholesale, distribution) Sources of technology and innovation : Manufacturers and Software companies . Type of user: Price sensitive Means of appropriation : Standards and norms Technological trajectories: cost cutting and networking, Size of innovating firms: Large
  • 15. Sectoral Patterns of Innovation Supplier Dominated Scale Intensive physical networks Scale Intensive Information networks Science Based Typical Sectors: Firms dependent on elaborate information networks (e.g., banks, insurance, telecom & broadcasting), Public utilities such as electricity, water & gas supply might be included. Sources of technology and innovation : Manufacturers (ATMs for banks) Software companies, in house. Type of user: Price sensitive Means of appropriation : Standards and norms Technological trajectories: cost cutting and networking, Size of innovating firms: Large
  • 16. Sectoral Patterns of Innovation Supplier Dominated Scale Intensive physical networks Scale Intensive Information networks Science Based Typical Sectors: Since late 80s Emergence of an increasing nb Business services closely linked to R&D, software and DL of IT applications. Sources of technology and innovation : in-house R&D and engineering capabilities, customers, suppliers. Type of user: Performance sensitive Means of appropriation : R&D Know How , skills Copyright, product differentiation, Technological trajectories: System design, Size of innovating firms: Small & medium
  • 17. Catching up in different sectoral systems What can we learn from the story of catch-up in six different sectors in emerging Countries (Taiwan, Korea, brazil, India, China, and others)? 1.Pharmaceuticals (Science based), 2.Autos (scale intensive), 3. Software (specialized supplier and service sectors), 4.Semiconductors and Telecom (design and engineering is important), 5. Agro-food (traditional sectors). « Catching-up in different sectoral systems: evidence from six industries » Franco Malerba & Richard Nelson (2010)
  • 18. Catching up in different sectoral systems  firms are the key actors in catch-up , Learning and Capabilities development of domestic firms is a necessary condition for catch up because they provide the catching up country with the ability of absorbing foreign knowledge & technology and adapting and modifying them to generate new knowledge and products. Common features affecting catch-up in 6 sectors Firms Learning Access to foreign Knowledge Skilled Human Capital Active Government Policy
  • 19. Catching up in different sectoral systems  the channels to which this access took place have differed (sector & country). from vertical networks with suppliers and users, to local networks, collaborative R&D or production agreements, to participation to the global value chain or just outsourcing;  When access to foreign knowledge did not take place, as in telecommunications in India and Brazil, the catch-up process has been seriously unpaired Common features affecting catch-up in 6 sectors Firms Learning Access to foreign Knowledge Skilled Human Capital Active Government Policy
  • 20. Catching up in different sectoral systems  Important inward mobility form advanced countries of highly skilled human capital (scientists, engineers, technopreneurs) Diasporap and foreigners (consultants) were critical to the catch-up) Common features affecting catch-up in 6 sectors Firms Learning Access to foreign Knowledge Skilled Human Capital Active Government Policy
  • 21. Catching up in different sectoral systems  In our 6 sectors government policy has indeed stimulated and fostered the learning processes and the capability formation of domestic firms with different intensity and tools. Common features affecting catch-up in 6 sectors Firms Learning Access to foreign Knowledge Skilled Human Capital Active Government Policy
  • 22. Catching up in different sectoral systems  In automobile and telecom large firms have been major actors in the catch-up process  in software and agro-food small firms have driven sectoral growth  New entrepreneurial firms, SMEs or large size, characterize the pharmaceutical and the semiconductor firms  local networks important for the catch-up process in semiconductors (Taiwan) , formal and informal interaction, knowledge sharing  Advent of technological and market discontinuities may favour either totally newcomers or established domestic companies. (Software in India Vs Telecom & Pharmaceuticals where knowledge is cumulative and strongly science based) Diffrences across sectoral systems Industry StructureIndustry Structure Demand and vertical links Gov Policies Other elements
  • 23. Catching up in different sectoral systems  Multinational companies played different roles : 1. software, pharmaceuticals and semiconductors: catching up countries had to specialize in some product range in the global value chain and eventually move uo the learning ladder to more advanced stages of production or research. 2. Telecom and Autos: the use of license from multinationals or from foreign firms, or joint ventures and alliances have been extensively used by domestic firms to learn and accumulate capabilities. Diffrences across sectoral systems Industry Structure Demand and vertical links Gov Policies Other elements
  • 24. Catching up in different sectoral systems  Demand has entered catch-up in two ways: 1. Exports: have been the drivers of catch-up, for both small firms and large firms. This is the case of semiconductors, telecom, pharmaceuticals, software and auto. 2. Domestic Market: has been a major driver of the learning process and the accumulation of capability by domestic firms in Large countries such as China, India and Brazil; Diffrences across sectoral systems Industry Structure Demand and vertical links Gov Policies Other elements
  • 25. Catching up in different sectoral systems  Government policy has differed in the use of tools and measures 1. Telecom ( Korea and China) - public policy used R&D support, R&D consortia and public research organizations to help firms to move into new generations of telecom technologies and products 2. In software governments have used different policies and tools, ranging from public procurement, to R&D support for SMEs, favourable companies tax rates and incentives to attract foreign direct investments Diffrences across sectoral systems Industry Structure Demand and vertical links Gov Policies Other elements
  • 26. Catching up in different sectoral systems  Standards, regulations and norms : for relax IP laws were important for the catch-up of Pharmaceutical industry in India and Brazil  Finance: VC (Private equity) critical for the development of Software industry Diffrences across sectoral systems Industry Structure Demand and vertical links Gov Policies Other elements
  • 27. Catching up in different sectoral systems  In some sectors such as Agriculture, health and Telecom Public research proved quite relevant to domestic firms  In the other sectors the main role of universities was to provide advanced training for advanced human capital in the scientific, engineering and managerial fields. So they increase the absorptive capacity of the human capital for foreign cutting edge knowledge. Diffrences across sectoral systems Universities & Public Research Laboratories
  • 30. May 8th, 2013 ESCWA Expert meeting 30 Thanks for your attention ! ‫لصغائكم‬ ‫شكرا‬ !

Editor's Notes

  1. Le plan de développement des cités de l’innovation prévoit, dans sa première phase, de lancer en 2011 la réalisation de 4 cités de l’innovation en partenariat avec les Universités . Citer les villes concernées par la première phase.
  2. In  As Time Goes By: From the Industrial Revolutions to the Information Revolution , a seminal work in cliometrics—the study of economic history—Chris Freeman and Francisco Louçã use historical data on technological advances, economic structure, salaries, and political unrest to derive a clear pattern linking innovation to the performance of the economy. These generational cycles of invention, expansion, and depression are called “Kondratiev waves” in honor of Nikolai Kondratiev, the Russian economist who first postulated their existence. Cliometrics was founded in 1960 as a response to the simplistic models of neoclassical economics. By combining historical facts and economic theories, cliometrics seeks to create a fuller picture of economic growth than either discipline alone can provide. Combining the quantitative field of economics with the qualitative study of history leads to conclusions that may not always fit squarely under the methods of either discipline, but nonetheless the exercise tosses up some intriguing conclusions. Here are several of them. Kondratiev waves carry transformational technologies into the market and create new industries When we think of the industrial revolution, we think of steam engines and factories, but in fact, this was only one of many industrial revolutions. Freeman and Louçã show the correlation between repeated technological revolutions and the waves of economic growth that carry them. Each of these Kondratiev waves is driven by a “carrier-branch technology,” defined as a new way of doing things so much more efficiently than the old ways that it reshapes every aspect of the economy. The five carrier-branch technologies that Freeman and Louçã identify are: Water-powered machinery Steam power Electrification The internal combustion engine Computerization Carrier-branch technologies have a core input, for example coal, or iron, or oil, or computer chips, and give rise to a whole secondary economy of supporting industries and social institutions. And each Kondratiev wave follows a similar economic pattern—the initial invention creates a period of boom, with rising material wealth, but as the technology reaches a point of saturation, the economy enters a downswing or “crisis of structural readjustment.” These upswings and downswings in the past lasted from 20 years to 30 years each, leading to a total cycle time of around 50 years. Similar patterns can be seen with the other Kondratiev waves, but I would like to focus on the one that we are most familiar with, having lived through it. Computing and information technology have driven unprecedented productivity gains in the U.S. economy and underpinned much of recent growth. The dawn of the computer era can’t be precisely pinned down; good arguments can be made for the creation of ENIAC in 1946 or the integrated circuit in 1959. But I prefer the mid-1960s, with the first standardized commercial computers, such as the IBM S/360 and DEC PDP-8. Like the steam engine it took a little while for society to recognize the value of a new transformational technology. The astounding growth in Silicon Valley since then has driven innovation around these machines, making them cheaper, more reliable, and more user friendly. The presence of computers, and especially networked computers, changed every aspect of business over the past 45 years, leading to whole new markets and products that could scarcely be dreamed of before, as well as socially transformative access to information and knowledge through computer networks. The next Kondratiev wave? Computers are rapidly approaching the point of saturation in many markets. Microprocessors are in every imaginable device, and there are over 4.6 billion cell phone users on the planet. Computer processor and memory manufacturing is a cut-throat business conducted on the slimmest of margins, and while technology keeps improving, at this point, much so-called “innovation” has become about advertising and sales, not fundamental technological breakthroughs. The dot-com bubble and recent financial crisis, which was made possible by complex computerized financial instruments, are two signs that the Kondratiev wave based off of computers may be reaching its peak, and we are now in a period of structural adjustment. Kondratiev wave theory would posit that the Great Recession cannot be blamed only on complex derivatives, bad mortgages, or greedy bankers, or government deficits, although these are all contributing factors. Rather these are signs that we have reached the limits of our present technology. Escaping it will require a new carrier-branch technology, with all that that entails. I can’t tell you what that technology will be renewable energy, an industrial revolution founded on nanotechnology and synthetic biology, completely recyclable zero-waste products that turn trash into gold, or advances in robotics and artificial intelligence. What is certain, however, is that it will be based on a fundamental breakthrough in science and technology.
  3. Le plan de développement des cités de l’innovation prévoit, dans sa première phase, de lancer en 2011 la réalisation de 4 cités de l’innovation en partenariat avec les Universités . Citer les villes concernées par la première phase.
  4. Le plan de développement des cités de l’innovation prévoit, dans sa première phase, de lancer en 2011 la réalisation de 4 cités de l’innovation en partenariat avec les Universités . Citer les villes concernées par la première phase.
  5. Le plan de développement des cités de l’innovation prévoit, dans sa première phase, de lancer en 2011 la réalisation de 4 cités de l’innovation en partenariat avec les Universités . Citer les villes concernées par la première phase.
  6. Le plan de développement des cités de l’innovation prévoit, dans sa première phase, de lancer en 2011 la réalisation de 4 cités de l’innovation en partenariat avec les Universités . Citer les villes concernées par la première phase.
  7. Le plan de développement des cités de l’innovation prévoit, dans sa première phase, de lancer en 2011 la réalisation de 4 cités de l’innovation en partenariat avec les Universités . Citer les villes concernées par la première phase.
  8. Le plan de développement des cités de l’innovation prévoit, dans sa première phase, de lancer en 2011 la réalisation de 4 cités de l’innovation en partenariat avec les Universités . Citer les villes concernées par la première phase.
  9. Le plan de développement des cités de l’innovation prévoit, dans sa première phase, de lancer en 2011 la réalisation de 4 cités de l’innovation en partenariat avec les Universités . Citer les villes concernées par la première phase.
  10. Le plan de développement des cités de l’innovation prévoit, dans sa première phase, de lancer en 2011 la réalisation de 4 cités de l’innovation en partenariat avec les Universités . Citer les villes concernées par la première phase.
  11. Le plan de développement des cités de l’innovation prévoit, dans sa première phase, de lancer en 2011 la réalisation de 4 cités de l’innovation en partenariat avec les Universités . Citer les villes concernées par la première phase.
  12. Le plan de développement des cités de l’innovation prévoit, dans sa première phase, de lancer en 2011 la réalisation de 4 cités de l’innovation en partenariat avec les Universités . Citer les villes concernées par la première phase.
  13. Le plan de développement des cités de l’innovation prévoit, dans sa première phase, de lancer en 2011 la réalisation de 4 cités de l’innovation en partenariat avec les Universités . Citer les villes concernées par la première phase.
  14. Le plan de développement des cités de l’innovation prévoit, dans sa première phase, de lancer en 2011 la réalisation de 4 cités de l’innovation en partenariat avec les Universités . Citer les villes concernées par la première phase.
  15. Le plan de développement des cités de l’innovation prévoit, dans sa première phase, de lancer en 2011 la réalisation de 4 cités de l’innovation en partenariat avec les Universités . Citer les villes concernées par la première phase.
  16. Le plan de développement des cités de l’innovation prévoit, dans sa première phase, de lancer en 2011 la réalisation de 4 cités de l’innovation en partenariat avec les Universités . Citer les villes concernées par la première phase.
  17. Le plan de développement des cités de l’innovation prévoit, dans sa première phase, de lancer en 2011 la réalisation de 4 cités de l’innovation en partenariat avec les Universités . Citer les villes concernées par la première phase.
  18. Le plan de développement des cités de l’innovation prévoit, dans sa première phase, de lancer en 2011 la réalisation de 4 cités de l’innovation en partenariat avec les Universités . Citer les villes concernées par la première phase.
  19. Le plan de développement des cités de l’innovation prévoit, dans sa première phase, de lancer en 2011 la réalisation de 4 cités de l’innovation en partenariat avec les Universités . Citer les villes concernées par la première phase.
  20. Le plan de développement des cités de l’innovation prévoit, dans sa première phase, de lancer en 2011 la réalisation de 4 cités de l’innovation en partenariat avec les Universités . Citer les villes concernées par la première phase.
  21. Le plan de développement des cités de l’innovation prévoit, dans sa première phase, de lancer en 2011 la réalisation de 4 cités de l’innovation en partenariat avec les Universités . Citer les villes concernées par la première phase.