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The economic downturn makes it imperative to find new sources of growth
Innovation is a means of dealing with global and social challenges
OUTLINE A MEASUREMENT AGENDA FOR THE FUTURE:
1 - Improve the measurement of broader innovation and its link to macroeconomic performance
2 - Invest in a comprehensive, high-quality data infrastructure for measuring impacts
3 - Recognise the role, and improve the measurement of, innovation in the public sector
4 - Invest in the design of new statistical methods and interdisciplinary approaches to data collection
5 - Promote measurement of innovation for social goals and of social impacts of innovation
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The latest analysis of which companies are making the most of their innovation resources to drive growth. Now in its 12th year the Innovation Leaders research has become a benchmark for many companies as it assesses how over 2000 organisations across 25 sectors innovate and identifies the leaders. Used a stimulus to learn new insights and refine strategic options, this research is widely shared online and via books. Having also proven the linkages between innovation leadership and financial performance for over a decade, the analysis is now also of increasing interest to the financial investor community.
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THE INNOVATION IMPERATIVE
The economic downturn makes it imperative to find new sources of growth
Innovation is a means of dealing with global and social challenges
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1 - Improve the measurement of broader innovation and its link to macroeconomic performance
2 - Invest in a comprehensive, high-quality data infrastructure for measuring impacts
3 - Recognise the role, and improve the measurement of, innovation in the public sector
4 - Invest in the design of new statistical methods and interdisciplinary approaches to data collection
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Editable Toolkit to help you reuse our content: 700 Powerpoint slides | 35 Excel sheets | 84 minutes of Video training
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2013 cambridge policy directions for innovation in lebanon’s industrial sector,omar bizri sti specialist
1. 7/17/2013 1
Policy directions for
innovation in Lebanon’s
industrial sector
Omar Bizri
Consultant for the Lebanese Council for Scientific Research (NCSR)
How-to of Innovation, Technology and Entrepreneurship
Cambridge, June 20-21, 2013
2. Objectives
This presentation will:
- briefly report the results of a recent survey of industrial
enterprises in Lebanon conducted by NCSR with support
by the World bank during 2012-2013;
- enumerate some of the main challenges facing
innovation in Lebanon;
- present a set of policy directives aimed at ensuring that
Lebanon‟s enterprises are transformed into innovation
driven entities within a viable national innovation system.
4. R² = 0.878
R² = 0.650
0
2
4
6
8
10
12
0 10,000 20,000 30,000 40,000 50,000 60,000 70,000
innovationindex
GDP per capita in PPP Dollars (2007)
Values of the KAM innivation index vs. GDP per capita for all countries for whaich
data is available (blue), the Arab countries (red) and country groups (green)
Source: World Bank KAM Database Aug 2011
Qatar
UAE
KuwaitLebanon
Bahrain
SA
5. The Survey and its findings
The survey covered 479 enterprises;
Included 66 main sections and around 140 questions;
Most firms answered most questions.
Fairly representative in terms of subsectors & firm
sizes;
Generated quite a few questions.
So, in many ways it was well worth doing!
6. Lebanon’s industrial enterprises are mostly
small / micro …
Percentages
of firms
making sales
within
indicated
brackets
(US$
millions)…
10 to 50
3%
1 to 10
39%
less than 1
58%
Percentages of firms making sales within
indicated brackets (US$ millions)
7. Lebanese industrial enterprises are relatively
youthful!
0
20
40
60
80
100
120
140
160
Prior to
1950
1950-1959 1960-1969 1970-1979 1980-1989 1990-1999 2000-2009 2010-2011
Institution building over the period 1950-present
and prior to 1950 (76% est. since 1980)
8. Other characteristics of the industrial
sector in Lebanon
Predominance of family businesses, 13% of firms employing
more than 60 workers (.. conservative, outdated decision making …);
Limited foreign investments and partnerships (…
limited access to innovative inputs …).
9. Areas of specialisation (subsectors)
Food products
16%
Printing and
publshing
14%
Textile and
garments
12%
Plastics and rubber
8%
Chemicals
8%
Metal products and
industrial eqpt.
20%
Software
development and
computer services
8%
Other industries
14%
Distribution of surveyed enterprises across sub-
sectors/segments
10. Areas of specialisation (2)
Four sub-sectors make up 62% of total*
• metal products and industrial equipment (20%);
• food products 16%;
• printing and publishing 14%;
• textiles and garments 12%.
* In terms of numbers rather than sales)
12. Track record of Lebanon’s industrial
enterprises*
Industrial exports per capita doubling
between 2000 and 2007, from $600 million to
$1.25 billion.
As a percentage of GDP, industrial
exports rose from 14 per cent in 2000 to
25 per cent in 2007.
*Figures from sources other than the Survey.
13. Awareness of the need for product and
process innovations
In answer to the question “ Do you believe that there is
need to change anything in your products or production
processes?”
29 per cent of the firms covered by the Survey did
indeed believe there was need for considerable changes;
25 per cent believed there was need for small or limited
changes;
46 per cent of all responding firms indicated they did
NOT feel any changes in their products or production
process were needed.
14. New or significantly improved products
introduced during 2010-2011 (1)
A sizeable proportion of firms, 45 per cent of the
total firms surveyed, introduced a number of new
or significantly improved products, during
2010-2011.
While 30 per cent of the total, indicated that they
had introduced new or significantly improved
services.
(Four new products or services per firm)
15. New or significantly improved products &
processes introduced during 2010-2011 (2)
- 24 per cent of responding firms, reported
undertaking activities aimed at introducing product
or process innovations that were abandoned
during 2010 – 2011.
- 29 per cent, reported development of product or
process innovations that were still on-going by the
end of 2011.
16. Maximum and minimum values for spending on R&D by
enterprises taking part in the survey (in US dollars)
0
200,000
400,000
600,000
800,000
1,000,000
Minimum value Maximum value Std. deviation
2010 2011
17. through firm's
own abilities
83.3%
mainly by other
enterprises/inst-
itutions
3%
with other
enterprises/inst-
itutions
14%
Modalities utilised by innovative firms in
developing new products.
(From total of 216 responding firms)
18. Were new product innovations achieved with foreign/national
clients/providers or no one, during 2010-2011?
58 per cent of firms were able to introduce product
innovations in cooperation with national clients and
providers, which also indicates that significant
innovation capabilities are nationally accessible.
A significant number of firms relied on foreign partners
or providers. It might be expected that involvement of
foreign partners and technology providers would be
expected to bring in innovative techniques.
20. Innovation in manufacturing and auxiliary
processes
44%
22%
35%
56%
78%
65%
0
50
100
150
200
250
300
350
400
manufacturing processeslogistics, delivery or distribution methodsmaintenance, purchasing, accounting or computing system
Summary of firm's responses regarding new or significantly improved
production processes (pale blue) and auxiliary activities (cerulean blue)
introduced during 2010-2011
New methods were introduced No new methods were introduced
21. Cooperation in the introduction of new
products and services (total of 119 enterprises)
ALI
15%
Chambers of
Comm. & Indy.
24%
Berytech
11%
Kafalat
28%
Lebanese Univ. &
Res. Centres
3%
Foreign Univ. &
Res. Centres
8%
Other institutions
11%
Distribution of instances of cooperation in the introduction
of new products and services across Lebanese and foreign
institutions
22. Sources of information on
technology
Answering the question:
“During the years 2010 and 2011, how significant was the factor
‘Lack of information on technology’ in hampering your
innovation activities or projects or influencing a decision not to
innovate?”
Around 77 per cent, did not view lack of information regarding
new technologies and the market an obstacle in acquiring
innovative inputs.
Only 8 per cent of surveyed enterprises considered „lack of
information on technology‟ of high or medium importance.
23. Figures on instances of cooperation in introducing
product and process innovations indicate that:
significant capabilities exist in both product and process
innovation within the country AND in certain cases
within the industrial firm itself.
a considerable proportion of firms have succeeded in
establishing links with both national and foreign clients
and providers.
a miniscule role is played by both national and foreign
research facilities and universities in cooperative
activities aimed at product and process innovations.
24. Some further comments …
Only 47 per cent of the total number of enterprises surveyed were
members of the Association of Lebanese Industrialists (ALI)!
So ALI may not be truly representative of the widest desirable
range of enterprises.
Institutions such as Berytech and Kafalat (established a little more
than a decade ago) seem to be doing very well in support of
activities aimed at introducing innovative products and processes.
BdL plays a crucial role in support of Kafalat and other innovative
ventures
25. Part II
Many challenges stand out.
Some are related to overall structure of
the economic / political system!
But, let’s focus on more specific
issues:
26. Prominent challenges
High costs of production (energy paramount!);
Limited control on the application of standards and
norms in the sector (poor quality often limits ability to penetrate
foreign markets);
Limited range of products and process technologies;
Inadequate support by government as well as technical
and research institutions established with the express
purpose of aiding the industrial sector.
27. Part III
A vital question is in need of in-depth
consideration:
How grand / modest should Lebanon‟s goals be?
Are we simply seeking to enhance links between
research centres, universities, on the one hand and
industrial enterprises, on the other, or do we wish
to transform the country into an innovation-driven
economy?
28. Lebanon ...
Has the potential for playing a much larger role than many think possible.
Just consider what its enterprises have done, with little or no support from
various quarters:
Exports per capita doubling between 2000 and 2007, from $600 million to
$1.25 billion.
As a percentage of GDP, exports rose from 14 per cent in 2000 to 25
per cent in 2007.
Lebanon’s industrial sector is reported as having:
enhanced its sophistication by around 36 per cent.
introduced over 100 new products between 2000 and 2008, including some
with significant innovative inputs, such as ceramics, glass pigments, self-
adhesive plates, paper board, watches, among other goods.
29. In Short
Transforming Lebanon into a Levant or
Middle Eastern Tiger is possible, given sound
policies and adequate support.
30. The way ahead …
R&D by all means! But also look at non-R&D innovations, i.e. in
areas that are not necessarily related to frontier science and technology
inputs:
assembling available innovative inputs, adopting new management, purchasing,
marketing and distribution procedures;
Create a better business environment through policy, legislative,
institutional changes.
Need a spedcialised national body to champion and monitor
innovation, set policy goals, promote specific initiatives, evaluate
progress … .
31. To move ahead …
Looking only at the supply side is never a good option!
Doing what we are doing well even better is a good start!
Facing up to international competition will open up
opportunities that will eventually pay!
Identifying priorities through considering the global rather
than merely the national and regional scenes;
Encourage alliances with overseas partners;
Not easy but doable!
32. The Future will be far brighter for Lebanon
IF:
Trade procedures are simplified, emphasising the export
trade, through new technology;
Support is provided for innovation by SMEs in selected
priority / breakthrough sub-sectors;
Clustering is encouraged for greater profitability;
Greater participation is ensured by the private sector in
building viable innovation infrastructures;
Enterprises are enabled to break into global production
networks;
The national innovation system is radically overhauled!
34. The Future will be far brighter if:
(3)
Better links and networking schemes are forged with Lebanon’s
expatriate community active in promoting science, technology
and innovation;
Greater involvement is ensured in international research
programs and intra-regional collaborative ventures;
Collaboration and networking modalities between higher
education and research centres, on the one hand, and private
enterprises and their associations, on the other, is radically
overhauled;
Better access is ensured to foreign technology, know-
how, skills, organizational and management practices;
A set of key environmental issues are tackled.
35. Radical revision of Lebanon’s
science, technology and innovation policy is
required.
Comprehensive national industrial policy with
clear cut implementation
strategies, benchmarking and progress
evaluation modalities has to be formulated.
Planners and policy makers will have to get
together with the doers with the former listening
more attentively listen to the latter!
Urgent Tasks
37. Networked Readiness Index
Table (1); Networked Readiness Index (NRI): ICT use and technology adoption by business enterprises index values and world rankings
Country
Overall NRI
index value;
ranking
Firm-level
technology
adoption
Capacity for
innovation
PCT patents
per million of
population
Extent of
business
Internet use
Extent of
staff training
Impact of
ICT on new
services and
products
ICT PCT
Patents per
million of
population
Impact of ICT
on new
organizational
models
Knowledge-
intensive jobs
as per
centage of
workforce
Bahrain 4.98 (27) 5.7 (20) 2.4 (117) 2.1 (51) 5.5 (40) 5.0 (11) 5.2 (30) 0.1 (71) 4.6 (42) 20.7 (68)
Qatar 5.10 (28) 6.0 (7) 5.0 (11) 1.3 (61) 5.9 (19) 4.7 (24) 5.4 (18) 0.3 (54) 5.4 (6) 24.2 (55)
UAE 5.07 (30) 5.9 (16) 3.8 (32) 4.5 (44) 5.5 (36) 4.7 (25) 5.4 (15) 1.2 (41) 5.1 (21) 36.1 (30)
Saudi Arabia 4.82 (34) 5.7 (23) 4.3 (21) 2.1 (48) 5.3 (45) 4.6 (28) 5.1 (33) 0.7 (47) 5.2 (18) 22.9 (59)
Oman 4.48 (40) 5.2 (49) 3.2 (57) 0.4 (78) 5.4 (42) 4.3 (42) 4.8 (47) 0.0 (82) 4.5 (44) 24.3 (54)
Jordan 4.2 (47) 5.4 (37) 2.7 (92) 0.5 (75) 4.9 (76) 3.5 (103) 4.5 (67) 0.2 (60) 4.2 (67) na (-)
Tunisia 4.12 (50) 5.1 (50) 3.4 (44) 0.8 (68) 4.8 (82) 4.4 (38) 4.8 (50) 0.2 (65) 4.6 (41) na (-)
Kuwait 3.94 (62) 5.4 (39) 2.8 (90) 0.4 (82) 4.7 (91) 3.5 (102) 3.6 (120) 0.3 (55) 3.5 (114) 18.7 (78)
Egypt 3.78 (79) 4.7 (78) 2.8 (83) 0.6 (73) 4.6 (96) 3.0 (131) 4.2 (86) 0.1 (78) 4.1 (74) 30.3 (43)
Morocco 3.64 (91) 4.7 (74) 2.6 (108) 0.6 (74) 4.5 (102) 3.9 (74) 3.8 (113) 0.2 (64) 3.6 (102) 6.8 (104)
Lebanon 3.53 (95) 4.8 (68) 2.6 (106) 0.9 (67) 4.7 (90) 3.6 (98) 3.6 (125) 0.4 (51) 3.1 (128) 31.9 (40)
Syria 2.85 (129) 4.8 (70) 2.1 (134) 0.4 (80) 3.8 (132) 2.6 (140) 2.9 (139) 0.0 (81) 2.7 (137) 15.5 (90)
Yemen 2.63 (141) 4.0 (123) 1.5 (142) 0.0 (105) 3.6 (137) 2.9 (135) 2.2 (142) 0.0 (96) 2.6 (139) 17.0 (86)
Source: The United Nations Economic and Social Commission for Western Asia (UN-ESCWA). Information presented in this table quotes the
Global Information Technology Report published by the World Economic Forum and INSEAD 2013. Contents of this table were downloaded on
16th May, 2013 from: http://css.escwa.org.lb/ictd/2094/1.pdf.Its contents tally with the Networked Readiness tables published on the Internet
at:http://www3.weforum.org/docs/GITR/2013/GITR_OverallRankings_2013.pdf
38. Networked Readiness Index
Lebanon’s scores
Lebanon‟s NRI rankings:
106th position among the countries included in the WEF
report, and
8th position in comparison with the thirteen Arab
countries included in table (1).
With regard to business competitiveness among countries
across the world Lebanon‟s ranking is:
95th and with only Syria and Yemen trailing behind;
11th among the thirteen Arab countries for which NRI
values and world rankings are reported.
39. R&D Spending
Country
Spending by private enterprise
(Rank among 127 countries)
Government spending
as percentage of
GDP( )2
Oman -
Tunisia 1.03
Qatar -
Saudi Arabia -
UAE -
Morocco 0.75
Egypt 0.2*
Kuwait 0.2*
Jordan 0.34
Algeria -
Syria -
Bahrain -
Libya -
Lebanon3 -
Sudan - 0.3
1. Dutta S. & I. Mia, 2007; World Economic Forum, The Global Information Technology Report 2007-2009; 2. World Bank, 2008; Knowledge
Assessment Methodology – KAM; 3. National Centre for Scientific Research (Lebanon)
40. Patenting Activity
Rank among 127
surveyed countries
Annual average
of patents
granted during
2002-2006
Patents granted
during 2005-2006
Saudi Arabia 14.8
UAE 4.6
Egypt 5.6
Kuwait 5.6
Syria 0.8
Oman 0.2
Jordan 1.4
Bahrain 0
Qatar 0.4 -
Algeria 0.4 -
Tunis 0.6 -
Morocco 0.8 -
Lebanon - 2.8 -
1- USPTO; 2- KAM 2008; 3- World Economic Forum, The Global Information: Technology Report 2007-2008
45. Arab Research Institutions
Ranking of Arab countries in terms of quality of their research
institutions
Source: Dutta S. and I. Mia, 2007; World Economic Forum, The Global Information Technology Report 2007-
2008
Country
Rank among 127 surveyed
countries
Rank of within Arab countries
Tunisia 36 1
Oman 38 2
Qatar 45 3
Kuwait 46 4
Saudi Arabia 52 5
Jordan 59 6
UAE 66 7
Morocco 79 8
Syria 89 9
Egypt 90 10
Algeria 91 11
Bahrain 113 12
Turkey 49 --
Malaysia 17 --
46. Innovation
Variation of Innovation Index with GDP/Cap; World trend and trend for
selected Arab countries and country groups
(Source: KAM 2008)
R2
= 0.816
R2
= 0.261
0
1
2
3
4
5
6
7
8
9
10
0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000
GDP/Cap (PPP US$, 2005)
InnovationIndex
Lebanon
Jordan
Bahrain
Oman
Tunisia
Kuw ait
UAE
Qatar
Saudi
Arabia
Algeria
Egypt
Syria
47. Information and Communications Technologies
take to extra slides
Computers per 1,000 People and Internet Users per 1,000 People, 2005 vs. Gross
Tertiary Enrollment Rate
R2
= 0.2253
0
100
200
300
400
500
600
700
800
900
1000
0 10 20 30 40 50 60 70 80 90 100
Gross Tertiary Enrollment Rate, 2005
Computersper1,000People,2005
48. Patterns of cooperation that went into the development of
new products
0
20
40
60
80
100
120
National
Clients
Foreign
Clients
No One Foreign
providers
National
providers
Other
Numberofrespondingfirms