The document discusses best practices for using science, technology, and innovation (STI) to support economic development and transition from a low-income to middle-income country. It recommends focusing STI investments on strategic industries, improving agricultural productivity, and developing human capital through education and health interventions. Countries should also promote technology diffusion through trade and foreign direct investment, build national innovation networks, and initially focus on incremental improvements before attempting cutting-edge research.

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There are many critical levers that support sustainable
development across emerging countries
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Property Rights
(land, IP, business ownership etc.)
Market Economy
(trade, markets, FDI, SME’s, financing, etc.)
Rule of Law
(regulation, policy, judiciary, etc.)
Good Governance
(macroeconomics, corruption, etc.)
Infrastructure
(health, ED, roads, telecoms, etc.)
Science & Tech Absorption
(talent, private sector capacity, etc.)
Social Justice/ Equality
(women, minorities, poverty, etc.)
Human Capital Development
(education policy, curriculums, etc.)

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STI & the Internet can have significant economic & social
impact across Africa in six key sectors moving forward …
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… Resulting in productivity gains of up to $300 billion
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Diversifying economic growth and increasing exports is an
important feature of growth in emerging economies
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A study of Korea’s growth over the last 50 years shows
strategic investments in STI, new industries, and exports
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In the 54 years since 1960, R&D spend in South Korea has increased from $4M/
year to over $65B/ year in 2014, most of it driven by the private sector
Source: Science & Technology Policy Institute

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And general lessons from Asian Tigers suggest a sequential
investment & development of key industries over time
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Mature
indigenous
industries + labor
intensive
industries (copy!)
Attract FDI in
strategic tech
industries
important to
national interests
& economic
growth (copy &
innovate!)
Invest in basic research
and next-generation
technology and
knowledge industries
(innovate!)
15 years 20 years 20+ years …
• Agriculture
• Manufacturing
• Natural Resources
• Health
• Education
• Water
• Energy
• Fishing
• Tourism
• Basic ICT
• Advanced ICT
• Electronics
• Heavy Engineering
• Transportation
• Chemicals
• Aerospace
• Defense
• Alternative Energy
• Biotech
• Computational Systems
• Networks & Sensors
• Artificial Intelligence
• Robotics
• Digital Manufacturing
• Medicine
• Nanotechnology
Develop/CommercializeAppliedResearchBasicResearch

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For low-income countries an acute focus on STI in strategic
industries can enable economic transformation
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Sustaining Transformative Disruptive
Basic Research
Applied Research
Development
Commercialization
Asian Tigers (1960’s – 1990’s)
DARPA
NIH
XXX
CDC
1: Sustaining = process improvement, efficiency, existing product/ service enhancements
2: Transformative = new value proposition, novel experience, rethinking existing categories
3: Disruptive = brand new technology/ product/ service, new industry, no existing competition

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Governments can facilitate economic development &
growth through Science, Technology & Innovation
• Implicit policies are created to facilitate a supportive environment for investments in STI – much like policies that
build climate for investment, jobs, sustainable growth and generally empower the poor
– Set priorities for public sector financing
– Directly finance some parts of the system
– Governing, regulating and partially managing the system
– Incorporating results of research into public policy decisions
– Monitor and evaluate the system to ensure accountability and relevance
• Basic macroeconomic stability for continuity needed for the finance of research and commercialization
• Openness to trade and FDI: some countries have improved STI performance just domestically. But there are more
cases in which trade and FDI were the critical outlets for technology transfer that spurred growth
• Credit policies: industrial development can be stifled if finance instruments like loans, equity, financing and
venture capital don’t evolve with tech capacity increases
• Intellectual Property Rights protection: assign rights through judicial process that are efficient, transparent, and
predictable (which can be overridden when deemed useful for greater social good)
• Competition policy: create a level playing field and facilitate entry/exit of firms into new markets to stimulate
innovation and commercialization of new technologies
• Provision of industrial standards: government creates and maintains standards that permit tech-based commerce,
or simply create an atmosphere in which firms themselves agree on such standards to facilitate open exchange
• Promote ICT Infrastructure to ensure access to global stock of knowledge and information
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Best Practices: Moving from low to mid-income country (I)
• Build broader capacity though industrial sectors like manufacturing, agriculture, and natural resources
• Industrial Technology Development (ITD) projects are successful when there is a robust national strategy
– Many fast growing countries like Korea and Singapore had well-crafted policy in place and experienced
positive S&T led growth following subsequent investments in ITD
• Technology sourcing is a key success factor not only for aspirational industries like manufacturing, textiles or BPO,
but equally important for agriculture productivity & moving up that value-chain
– East Asian “miracle countries” have become large scale exporters of manufactured goods with increasing
sophistication and have become highly urbanized and well educated
• High levels of savings, pro-business governments and mercantilist commercial policies add to this effort
– Mobility of labor and capital (which is essential to industrial growth) is made possible due to social and
economic improvement in agriculture
– Successful land reforms in Korea and Taiwan were significant factors in subsequent growth and development
performance in those countries
• Bulk of benefits in the early stages of growth will likely accrue from thousands of small scale tech improvements in
small and medium enterprises, not just from large corporate labs
– Improved tech development at SME level creates income that can finance future investments
– Focus on SME for painstaking 2-3 decades instead of supporting cutting edge R&D
– Institutional innovations by state (including establishment of R&D institutes) have been helpful to smaller
firms that cannot afford major organized R&D efforts.
– Example: Taiwan’s Industrial Tech Research Institute follows a model where much of the R&D is carried out in
the form of blue collar activities on factory floors and repairs shops, and “reverse engineering” (aka piracy)
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Best Practices: Moving from low to mid-income country (II)
• To develop STI what is also needed are favorable policies, sound fiscal and macroeconomic policies, accessible
quality education, affordable/accessible health services, & good governance
• Technology change is determined in large part by technology diffusion carried in traded goods as well as by FDI
across borders
– Trade with countries closer to the international technology frontier might be especially beneficial to
developing countries without expending resources reinventing the wheel
– FDI was central to the economic success of China, Malaysia, Chile, Thailand and Indonesia, for example
– Trade liberalization is intended to increase wealth in industrial and developing countries by concentrating
resources in most productive and competitive sectors to maximize comparative advantage
• Entrepreneurial and successful developing countries in East Asia were intellectual property rights pirates before
becoming concerned about their own intellectual property rights being infringed upon by the “next wave”
– Developing countries can reap the benefits of investments and patents by rich countries without large costs
– e.g. Energy services including simple motor driven systems for pumping water, sewer systems, efficient
irrigation & pest-control technologies, auto collection & grinding of grain, etc. to improve agro productivity
• Focus on agricultural productivity, health, sustainable use of natural resources, education, creation of economic
opportunity (basic human needs – stabilizing population, alleviating poverty and sustaining natural resource base)
– Household and government expenditures are heavily influenced by the role of technology in converting
allocations into advances in education, health and other human development
– African concerns include inability of productive systems like agriculture and economy keeping pace with rapid
growth of population
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Best Practices: Moving from low to mid-income country (III)
• Human development must be strengthened before policy reforms and economic growth can be attained
– Through basic science education to build a core base of scientifically literate citizens – one track for those
with everyday skills, and another for those who are informed intellectuals …
– … And health interventions
• Stimulate interest among youth to pursue careers in science and technology.
– Educate diverse labor force for skills of various purposes and sophistication; i.e. researchers, technicians,
scientists, service force, etc.
– Encourage research and advanced trainings for highly specialized (but strategic) industries to advance
frontiers of knowledge to solve critical problems (specifically at research universities)
• Develop national institutional infrastructure to make ties among member state institutions and enterprises that
are capable of creating networks in order to generate knowledge
– Rich countries spent decades on continuous investment in human capacity and institutions, built
infrastructures to better allow for potential of STI flourishing
– Once in place, infrastructure helps create wealth that funds future investment
– Infrastructure acts as “global magnet”, attracting foreign talent
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