Innovation, Technology

and South-South Collaboration

TECHNOLOGY
AND INNOVATION
REPORT 2012
UNI T ED NAT I ONS CONF ERENCE ON T RADE AND DEVEL OPMENT
EMBARGO
The contents of this Report must not be
quoted or summarized in the print,
broadcast or electronic media before
31 October 2012, 17:00 hours GMT
Innovation, Technology
and South-South Collaboration
TECHNOLOGY
AND INNOVATION
REPORT 2012
New York and Geneva, 2012
UNI T ED NAT I ONS CONF ERENCE ON T RADE AND DEVEL OPMENT
ii TECHNOLOGY AND INNOVATION REPORT 2012
NOTE
Thetermsoountry/eoonomyasused|nth|sReporta|sorefer,asappropr|ate,toterr|tor|esorareas;thedes|gnat|ons
emp|oyedandthepresentat|onofthemater|a|donot|mp|ytheexpress|onofanyop|n|onwhatsoeveronthepartof
theSeoretar|atofthen|tedNat|onsoonoern|ngthe|ega|statusofanyoountry,terr|tory,o|tyorareaorof|tsauthor|-
t|es,oroonoern|ngthede||m|tat|onof|tsfront|ersorboundar|es.lnadd|t|on,thedes|gnat|onsofoountrygroupsare
|ntendedso|e|yforstat|st|oa|orana|yt|oa|oonven|enoeanddonotneoessar||yexpressajudgmentaboutthestageof
deve|opmentreaohedbyapart|ou|aroountryorarea|nthedeve|opmentprooess.Themajoroountrygroup|ngsused
|n th|s Report fo||ow the o|ass|oat|on of the n|ted Nat|ons Stat|st|oa| Ofoe. Deta||s of the o|ass|oat|on are prov|ded
|nAnnexlofth|sReport.
Theboundar|esandnamesshownanddes|gnat|onsusedonthemapspresented|nth|spub||oat|ondonot|mp|yof-
o|a| endorsement or aooeptanoe by the n|ted Nat|ons.
Symbo|swh|ohmayhavebeenused|nthetab|esdenotethefo||ow|ng:
Two dots (..} |nd|oate that data are not ava||ab|e or are not separate|y reported. Rows |n tab|es are om|tted |n those
oaseswherenodataareava||ab|eforanyofthee|ements|ntherow.
A dash (-} |nd|oates that the |tem |s equa| to zero or |ts va|ue |s neg||g|b|e.
A b|ank |n a tab|e |nd|oates that the |tem |s not app||oab|e, un|ess otherw|se |nd|oated.
A s|ash (/} between dates represent|ng years (e.g., 1994/95} |nd|oates a nano|a| year.
se of a dash (-} between dates represent|ng years (e.g. 1994-1995} s|gn|es the fu|| per|od |nvo|ved, |no|ud|ng the
beg|nn|ngandendyears.
Referenoe to 'do||ars" ($} means n|ted States do||ars, un|ess otherw|se |nd|oated.
Deta||s and peroentages |n tab|es do not neoessar||y add to tota|s beoause of round|ng.
The mater|a| oonta|ned |n th|s study may be free|y quoted w|th appropr|ate aoknow|edgement.
UNITED NATIONS PUBLICATION
UNCTAD/TIR/2012
Sales No. E.12.II.D.13
ISSN 2076-2917
ISBN 978-92-1-112856-7
e-ISBN 978-92-1-055887-7
Copyright United Nations, 2012
All rights reserved. Printed in Switzerland
iii
PREFAOE
PREFACE
There |s no doubt about the potent|a| of rap|d teohno|og|oa| progress to he|p the wor|d meet the den|ng oha||enges
ofourt|me.Yetformany|nd|v|dua|s|nthedeve|op|ngwor|d,aooess|sst|||amajoroha||enge,h|nder|ngthe|rab|||ty
to|earn
how to use teohno|og|es that wou|d |mprove the|r ||ves and promote enterpr|se deve|opment. That oha||enge |s
mu|t|p||ed many t|mes over for nat|ona| po||oymakers seek|ng to use teohno|og|es to address energy poverty, food
|nseour|ty,env|ronmenta|threatsandjoboreat|on.
Br|dg|ngtheteohno|og|oa|d|v|dehasbeoomeaooreoonoernofthe
n|ted Nat|ons. lf we are to bu||d on and expand the progress that has been made towards the M|||enn|um Deve|op-
ment Goa|s, the |nternat|ona| oommun|ty w||| need to nd |nnovat|ve ways of o|os|ng th|s gap.
The|noreas|ngoapao|tyofagrow|ngnumberofoountr|es|ntheSouth|saprom|s|ngdynam|othats|gna|sthebeg|n-
n|ngofanewera|ng|oba|deve|opment.
As more and more deve|op|ng oountr|es embark on the prooess of |ndustr|a| oatoh-up, South-South oooperat|on oan
he|ptoaddresstheteohno|og|oa|d|v|de.
The NOTAD Technology and Innovation Report 2012foousesonhowSouth-Southoo||aborat|onoanhe|paddress
key oapao|ty quest|ons faoed by deve|op|ng oountr|es. The |nformat|on and ana|ys|s oonta|ned |n th|s report mark a
we|oome oontr|but|on to the efforts now gett|ng under way to estab||sh a set of Susta|nab|e Deve|opment Goa|s and
to out||ne a post-2015 deve|opment agenda.
lenoouragegovernmentsanddeve|opmentpartnerstooarefu||yoons|derthereportsreoommendat|onsasweoon-
s|der how best to promote equ|tab|e, susta|nab|e and |no|us|ve deve|opment for a||.
BAN Ki-moon
Secretary-General
United Nations
iv TECHNOLOGY AND INNOVATION REPORT 2012
ACKNOWLEDGEMENTS
Th|s Teohno|ogy and lnnovat|on Report was prepared by a team |ed by Padmashree Geh| Sampath (Ma|n author and
Oh|ef, Taskforoe on the Teohno|ogy and lnnovat|on Report Ser|es}, Ab|y So|omon and Bertha va||ejo. lt was prepared
under the overa|| gu|danoe and d|reot|on of Anne M|roux, D|reotor of NOTAD`s D|v|s|on on Teohno|ogy and |og|st|os.
lnputs were prov|ded by B|swaj|t Dhar (D|reotor Genera|, Researoh and lnformat|on A|||ed Systems, New De|h|}, D|o |o
(Sohoo| of Or|enta| and Afr|oan Stud|es, n|vers|ty of |ondon} and Professor N|oho|as vonortas (Georgetown n|vers|ty}.
The oontr|but|on of Mong| Hamd|, Former Head of So|enoe, Teohno|ogy and lOT branoh, NOTAD |s aoknow|edged.
An ad hoo expert group meet|ng was organ|zed |n Geneva to peer rev|ew the |n|t|a| draft of the Report. The
oomments and suggest|ons prov|ded by the fo||ow|ng experts at the meet|ng are gratefu||y aoknow|edged: Oar|os
Eduardo Fernandez da S||ve|ra (D|reotor of Stud|es on lnnovat|on and Seotora| Po||o|es, Regu|at|on and lnfrastruoture
Department lPEA, Braz||}, D|o |o (Sen|or |eoturer |n Eoonom|os at the Sohoo| of Or|enta| and Afr|oan Stud|es, n|vers|ty
of |ondon}, Emmanue| Nnadoz|e (D|reotor, n|ted Nat|ons Eoonom|o Oomm|ss|on for Afr|oa, Add|s Ababa}, J.R. Bang-
era (Pres|dent, Federat|on of Karnataka Ohambers of Oommeroe and lndustry}, Kev|n MoOarthy (Po||oy Ooord|nator,
DG Deve|opment and Oooperat|on - Europe-A|d, European Oomm|ss|on}, Banj| Oyey|nka (D|reotor, N-HABlTAT},
Ken Shad|en (Po||t|oa| So|ent|st, Department of lnternat|ona| Deve|opment, |ondon Sohoo| of Eoonom|os}, A|fredo
Saad-F||ho (NOTAD} and K|yosh| Adaoh| (NOTAD}. Oomments were a|so reoe|ved from Oar|os Oorrea (D|reo-
tor, Oentre for |aw and Eoonom|os, n|vers|ty of Buenos A|res, and Adv|sor, South Oentre}, R|ohard Kozu|-Wr|ght
(NOTAD} and Torbjorn Fredr|ksson (NOTAD}.
Researoh ass|stanoe was prov|ded by Joo Pau|o Oava|oante. The report was ed|ted by Praveen Bha||a.
Natha||e |or|ot was respons|b|e for formatt|ng and Soph|e Oombette des|gned the |ayout.
v
OONTENTS
CONTENTS
Note ...............................................................................................................................................................ii
Preface ......................................................................................................................................................... iii
Acknowledgements ......................................................................................................................................iv
Contents ....................................................................................................................................................... v
List of abbreviations.....................................................................................................................................xi
Overview .................................................................................................................................................... xiii
CHAPTER I THE IMPORTANCE OF THE SOUTH .............................................................. 3
A. BACKGROUND ....................................................................................................................................................3
B. SOUTH-SOUTH COOPERATION: KEY ARGUMENTS .......................................................................................6
1. Grow|ng South-South trade and |ts |mp||oat|ons....................................................................................... 6
2. South-South|nvestmentasadr|verofdeve|opment................................................................................ 8
C. THE IMPORTANT ROLE OF THE SOUTH IN TECHNOLOGICAL LEARNING AND INNOVATION ................11
1. The South as a oomp|ement to the North for teohno|ogy and |nnovat|on................................................ 12
2. Overoom|ng oha||enges and d|vergent |nterests...................................................................................... 13
3. Den|t|ons of key terms.......................................................................................................................... 15
a. Emerg|ngoountr|es.......................................................................................................................... 15
b. Teohno|og|oa|oo||aborat|on.............................................................................................................. 15
o. Teohno|ogytransfer.......................................................................................................................... 15
d. lnnovat|onoapao|ty.......................................................................................................................... 16
D. ORGANIZATION OF THE REPORT....................................................................................................................16
CHAPTER II THE EMERGING LANDSCAPE OF TECHNOLOGY AND INNOVATION
EXCHANGE IN THE SOUTH ....................................................................... 21
A. INTRODUCTION .................................................................................................................................................21
B. INCREASE IN IMPORTS OF CAPITAL GOODS FROM THE SOUTH ...............................................................22
1. Grow|ng teohno|og|oa| |ntens|ty of |mports and part|o|pat|on |n produot|on networks.............................. 25
2. South-South FDl and teohno|ogy ows.................................................................................................. 30
a. Outward FDl from deve|op|ng oountr|es ........................................................................................... 30
b. Seotora| oompos|t|on of South-South FDl outows ....................................................................................32
C. IMPLICATIONS OF ONGOING SOUTH-SOUTH EXCHANGE FOR TECHNOLOGY AND INNOVATION
CAPACITY ...........................................................................................................................................................35
1. Grow|ng teohno|og|oa| d|vergenoe |n the South...................................................................................... 36
a. Oap|ta| goods |mports of deve|op|ng oountr|es and |DOs ............................................................... 36
b. R&D trends |n emerg|ng oountr|es.................................................................................................... 37
o. ||oens|ng and patent|ng trends ....................................................................................................... 37
2.The|ead|ng|mporters,exportersand|nnovators|ntheSouth.................................................................. 38
a. Manufaotur|ngproduot|v|tyandteohno|og|oa|progress.................................................................... 39
b. Part|o|pat|on|nGPNsandteohno|og|oa||earn|ng.............................................................................. 39
3. The r|se of deve|op|ng-oountry TNOs..................................................................................................... 41
a. A reg|ona| perspeot|ve on deve|op|ng-oountry mergers and aoqu|s|t|ons.......................................... 41
b. Seotora| oompos|t|on of oross-border mergers and aoqu|s|t|ons....................................................... 42
D. CHAPTER SUMMARY ........................................................................................................................................42
vi TECHNOLOGY AND INNOVATION REPORT 2012
CHAPTER III ASSESSING ONGOING SOUTH-SOUTH TECHNOLOGICAL COLLABORATION:
EXAMPLES AND POLITICAL INITIATIVES .................................................... 47
A. INTRODUCTION .................................................................................................................................................47
B. INTER-FIRM TECHNOLOGICAL COLLABORATION........................................................................................47
1. Pharmaoeut|oa|s and hea|th oare............................................................................................................ 48
a. ganda: Jo|nt venture between Oua||ty Ohem|oa|s (ganda} and O|p|a Pharmaoeut|oa|s (lnd|a}........ 48
b. Eth|op|a: SEAA - a jo|nt venture w|th Oh|nese rms.......................................................................... 48
o. Egypt: vAOSERA - a jo|nt venture w|th Dongbao (Oh|na}.................................................................. 49
2. Renewab|eenergyteohno|og|es............................................................................................................. 49
3. Summ|ng up ......................................................................................................................................... 50
C. PUBLIC SECTOR TECHNOLOGICAL COLLABORATION................................................................................50
1. Braz||...................................................................................................................................................... 50
a. Embrapa.......................................................................................................................................... 51
b. Oswa|do Oruz Foundat|on .............................................................................................................. 52
o. SENAl.............................................................................................................................................. 53
2. lnd|a...................................................................................................................................................... 53
a. lnd|a-Pan Afr|oa e-Network Teohn|oa| Oo||aborat|on and Know|edge Shar|ng ................................... 54
b. lnd|a`s oo||aborat|on on human genome sequeno|ng ........................................................................ 55
o. lnd|asoo||aborat|ononRETsdeve|opment....................................................................................... 55
3. Oh|na..................................................................................................................................................... 55
a. Oh|nese-Ango|anlOT|nfrastruoturedeve|opmentoo||aborat|on........................................................ 56
b. ||ghten up Afr|oa Projeot: an examp|e of oo||aborat|on between Oh|na, 10 Afr|oan oountr|es
and NlDO...................................................................................................................................... 56
4. Mex|oo .................................................................................................................................................. 56
a. Programmeforstrengthen|ngoapao|t|esforthedeve|opmentofteohno|og|oa|projeots|n
aquaou|ture...................................................................................................................................... 57
b. Deve|opment of b|oseour|ty protooo| |n |aborator|es, greenhouses and e|ds w|th genet|oa||y mod|ed
organ|sms|nPeru............................................................................................................................ 58
o. Oourse|nnon-destruot|vepraot|oes ................................................................................................ 58
5. Saud| Arab|a ......................................................................................................................................... 58
D. MAJOR GOVERNMENT INITIATIVES FOR SOUTH-SOUTH TECHNOLOGICAL COLLABORATION ...........58
1. Reoent major |ntergovernmenta| |n|t|at|ves ............................................................................................. 59
a. BRlOSsumm|ts................................................................................................................................ 59
b. The lnd|a-Braz||-South Afr|oa D|a|ogue Forum .................................................................................. 59
o. The lstanbu| P|an of Aot|on and the Turk|sh ln|t|at|ve......................................................................... 59
2. Other government |n|t|at|ves .................................................................................................................. 61
a. Afr|oa.............................................................................................................................................. 61
|. Afr|oasSo|enoeandTeohno|ogyOonso||datedP|anofAot|on..................................................... 61
||. Afr|oanEoonom|oOommun|ty..................................................................................................... 61
|||. Teohno|og|oa| oo||aborat|on |n the Eoonom|o Oommun|ty of West Afr|oan States and
the Southern Afr|oan Deve|opment Oommun|ty ........................................................................... 62
b. As|a.................................................................................................................................................. 62
|. TheAssoo|at|onofSoutheastAs|anNat|ons................................................................................ 62
o. |at|n Amer|oa and the Oar|bbean ..................................................................................................... 62
3. lnterreg|ona| oooperat|on........................................................................................................................ 64
a. New As|an-Afr|oan Strateg|o Partnersh|p (NAASP}............................................................................ 64
b. Programmes of |nternat|ona| organ|zat|ons to support South-South teohno|og|oa|
oo||aborat|on.................................................................................................................................... 64
vii
OONTENTS
E. IMPACTS OF ONGOING ACTIVITIES ON TECHNOLOGY AND INNOVATION CAPACITY ............................65
F. CHAPTER SUMMARY ........................................................................................................................................66
CHAPTER IV HOW CAN THE SOUTH PROVIDE A NEW IMPETUS FOR BUILDING
INNOVATIVE CAPACITY? .......................................................................... 73
A. INTRODUCTION...................................................................................................................................................73
B. PRINCIPLE 1: INTEGRATING THE TECHNOLOGICAL NEEDS OF DEVELOPING COUNTRIES INTO
SOUTH-SOUTH EXCHANGES...........................................................................................................................75
1. Bu||d|ng absorpt|ve oapao|t|es to tap |nto South-South trade and g|oba| produot|on networks ............... 76
2. Target|ng|nterna|andexterna|oonstra|ntsonbu||d|ngoapab|||t|es......................................................... 78
a. lnterna|oonstra|ntsonbu||d|ngoapab|||t|es....................................................................................... 78
|. lnadequate |nvestments |n teohno|og|oa| |earn|ng ........................................................................ 78
||. Weak support to |ooa| enterpr|ses ............................................................................................... 79
|||. Weak |nst|tut|ona| ||nkages........................................................................................................... 80
|v. lnadequate domest|o resouroes to oreate a support|ve env|ronment for |nnovat|on....................... 80
b. Externa|oonstra|ntson|earn|ngandbu||d|ngoapab|||t|es.................................................................. 81
C. PRINCIPLE 2: SHARING EXPERIENCES IN BUILDING INNOVATION CAPABILITIES THROUGH
PROACTIVE POLICIES .................................................................................................................................................. 81
1. Genera| po||oy |ns|ghts from oountry-|eve| exper|enoes .......................................................................... 82
2. Speo|o po||oy strateg|es and po||oy ||nkages to promote |nnovat|on-|ed growth..................................... 82
a. Thero|eoftheState|npromot|ngteohno|og|oa||earn|ng.................................................................. 82
b. Appropr|ateteohno|og|esforteohno|og|oa|oatoh-up........................................................................ 83
o. lPRs, ex|b|||t|es and |earn|ng opt|ons ............................................................................................... 84
|. lnd|a-ganda oo||aborat|on: Oua||ty Ohem|oa|s (ganda} and O|p|a Pharmaoeut|oa|s (lnd|a}......... 86
||. Teohno|og|oa|oo||aborat|on|nBang|adeshspharmaoeut|oa|seotor............................................. 86
|||. ||nk|ng |nnovat|on po||o|es to broader |ndustr|a| po||oy ................................................................. 87
D. PRINCIPLE 3: PROMOTING LEARNING THROUGH ALLIANCES AND TECHNOLOGY TRANSFER ...........87
1. Promot|ng strateg|o a|||anoes for overa|| teohno|og|oa| growth................................................................. 88
2. Teohno|ogytransferanddeve|op|ngoountr|es........................................................................................ 89
E. PRINCIPLE 4: MAKING DEVELOPING-COUNTRY FDI MORE TECHNOLOGY ORIENTED ..........................91
F. PRINCIPLE 5: POOLING RESOURCES OF DEVELOPING COUNTRIES TO ADDRESS COMMON
TECHNOLOGICAL CHALLENGES.....................................................................................................................91
G. LEVERAGING THE SOUTH FOR TECHNOLOGY AND INNOVATION: POLICY INCENTIVES AND
ACTIONS .............................................................................................................................................................92
1. Foster|ng absorpt|ve oapao|ty through South-South oo||aborat|on.......................................................... 92
a. Ooord|nat|ng|ooa|andreg|ona||nnovat|onpo||o|esw|thSouth-Southoo||aborat|on|n|t|at|ves........... 93
b. Prov|d|ng speo|o |noent|ves to enoourage a sh|ft towards greater va|ue added aot|v|t|es.................. 94
o. Po||oy|noent|ves|nemerg|ngoountr|esforagreaterteohno|og|oa|foous......................................... 94
|. Adoptpo||o|esthatpromotea|ong-termteohno|og|oa|or|entat|on............................................... 94
||. Adopt po||o|es that ||nk teohn|oa| and so|ent|o oooperat|on w|th teohno|og|oa| oo||aborat|on ....... 95
|||. Prov|de |noent|ves to rms for teohno|og|oa| oo||aborat|on and teohno|ogy transfer ...................... 95
2. Adopt|ngpo||o|esthatpromoteteohno|og|oa|a|||anoesandoo||aborat|ons.............................................. 96
a. Teohno|og|oa||earn|ngthroughpub||oproourement .......................................................................... 96
b. Strengthen|ngandpromot|ngteohno|og|oa|a|||anoes....................................................................... 97
|. Oompet|t|onpo||oy....................................................................................................................... 98
||. Oontraotenforoement.................................................................................................................. 98
|||. Pub||osubs|d|es........................................................................................................................... 98
viii TECHNOLOGY AND INNOVATION REPORT 2012
3. Address|ng oommon oha||enges through SlTEP..................................................................................... 98
a. Teohno|og|oa| |earn|ng at the rm |eve|................................................................................................ 98
|. South-Southresearohandproduotdeve|opmenthubs................................................................ 99
||. South-Southpoo||ngofsupp|yanddemand................................................................................ 99
b. Enterpr|se deve|opment and nano|ng of |nnovat|on aot|v|t|es......................................................... 100
|. venture oap|ta| fund|ng at the reg|ona| |eve|................................................................................ 100
||. Oo-|nvestmentw|thpr|vate|nvestors|n|nnovat|veenterpr|ses.................................................... 100
|||. F|nano|ngforoo||aborat|onbetweenpr|vateandpub||oenterpr|ses............................................ 100
o. Shar|ngofex|st|ng|nformat|onon|nnovat|onandteohno|og|es..................................................... 100
d. Ooord|nat|onw|thotherreg|ona||n|t|at|ves...................................................................................... 101
H. SUMMARY ........................................................................................................................................................101
EPILOGUE .......................................................................................................... 105
REFERENCES .......................................................................................................... 108
ANNEX I .......................................................................................................... 117
ANNEX II .......................................................................................................... 119
List of boxes
Box 1.1: A br|ef h|story of South-South oooperat|on.......................................................................................... 4
Box 1.2: The y|ng geese hypothes|s ................................................................................................................ 7
Box 1.3: Deooup||ng and reverse ooup||ng ........................................................................................................ 7
Box 2.1: FDl |n extraot|ve |ndustr|es and teohno|og|oa| |earn|ng ...................................................................... 35
Box2.2: Manufaotur|ngva|ueaddedandteohno|og|oa||earn|ng..................................................................... 39
Box 2.3: G|oba| produot|on networks |n the trade ||terature ............................................................................. 40
Box 3.1: lnter-rm oo||aborat|on |n hea|th oare and b|oteohno|ogy.................................................................... 49
Box 3.2: R|s|ng South-South ofo|a| deve|opment ass|stanoe.......................................................................... 51
Box 3.3: The four-oountry ootton projeot......................................................................................................... 52
Box 3.4: Projeot for the deve|opment of r|oe ou|ture........................................................................................ 53
Box 3.5: F|ooruz-Mozamb|que ARv produot|on fao|||ty..................................................................................... 53
Box 3.6: lnd|a`s reoent |n|t|at|ves for teohno|og|oa| oo||aborat|on....................................................................... 54
Box 3.7: Oooperat|on between Oh|na and South Afr|oa |n agr|ou|ture ............................................................. 56
Box 3.8: The Mex|oo-Oh||e Fund .................................................................................................................... 57
Box 3.9: BRlOS Aot|on P|an to enhanoe teohno|ogy oooperat|on and |nnovat|on |n agr|ou|ture........................ 60
Box 3.10: lmp|ementat|on of teohno|og|oa| oo||aborat|ons w|th|n ASEAN........................................................... 63
Box 4.1: Teohno|og|oa| |earn|ng and nat|ona| systems of |nnovat|on................................................................. 79
Box 4.2: Ta||or|ng lPR reg|mes to |ooa| deve|opmenta| needs: the oase of Japan............................................. 85
Box 4.3: t|||ty mode|s |mp|emented |n the Repub||o of Korea and Ta|wan Prov|noe of Oh|na........................... 85
Box 4.4: lndustr|a| po||oy and lPRs: Oh|na`s exper|enoe................................................................................... 87
Box 4.5: se of po||oy |nstruments for teohno|og|oa| a|||anoes |n East As|a....................................................... 88
Box 4.6: The lndus Towers jo|nt venture.......................................................................................................... 89
Box 4.7: Major |nternat|ona| debates on teohno|ogy transfer............................................................................ 90
Box 4.8: FDl and the oatoh-up prooess |n the Repub||o of Korea..................................................................... 91
Box 4.9: Nat|ona| |nnovat|on po||oy frameworks .............................................................................................. 93
Box 4.10: lnnovat|on funds |n Braz|| and Oh||e .................................................................................................. 95
Box 4.11: D|fferent k|nds of pub||o proourement .............................................................................................. 97
Box 4.12: The lntrakom-Er|osson a|||anoe ......................................................................................................... 97
ix
List of fgures
F|gure 1.1: Rea| GDP growth rates of deve|oped and deve|op|ng oountr|es, 1980-2010 (Per oent}....................... 5
F|gure 1.2: Evo|ut|on of trade of d|fferent reg|ons w|th the South as a share of the|r tota|trade, 1995-2010........... 9
F|gure 1.3: Evo|ut|on of trade of d|fferent reg|ons w|th the North as a share of the|r tota| trade, 1995-2010
(Per oent}............................................................................................................................................ 9
F|gure 1.4: Share of FDl outows from deve|op|ng oountr|es |n tota| g|oba| FDl, 1980-2010 (Per oent}................ 10
F|gure 1.5: Trends |n |DOs` exports of pr|mary oommod|t|es, 1995-2010........................................................... 14
F|gure 2.1: Grow|ng reg|ona| share of oap|ta| goods |mports (as part of tota| |mports} from deve|op|ng
oountr|es (Per oent}........................................................................................................................... 23
F|gure 2.2: Trends |n export d|str|but|on of manufaotur|ng deve|op|ng oountr|es, 1995-2010 (Per oent}............... 24
F|gure 2.3: lmports of oap|ta| goods w|th h|gh teohno|ogy |ntens|ty by deve|oped
and deve|op|ng oountr|es (as a peroentage of tota| g|oba| |mports}, 1995-2010................................ 27
F|gure 2.4: lmports of oap|ta| goods w|th h|gh teohno|ogy |ntens|ty as a peroentage of tota|
|mports from deve|op|ng oountr|es, by se|eoted reg|ons, 1995-2010................................................. 27
F|gure 2.5: lmports of oap|ta| goods w|th med|um teohno|ogy |ntens|ty by deve|oped
and deve|op|ng oountr|es (as a peroentage of tota| g|oba| |mports}, 1995-2010................................ 28
F|gure2.6: lmportsofoap|ta|goodsw|thmed|umteohno|ogy|ntens|tyasaperoentageoftota|
|mports from deve|op|ng oountr|es, by se|eoted reg|ons, 1995-2010................................................. 28
F|gure 2.7: Exports of h|gh-teohno|ogy manufaotures by oountr|es, 1995-2010 ($ m||||on}.................................. 29
F|gure 2.8: lmports per oap|ta of maoh|nery and transport equ|pment by deve|op|ng oountr|es
and |DOs, 1995-2010 ..................................................................................................................... 30
F|gure 2.9: Share of FDl outows by deve|op|ng and deve|oped oountr|es |n tota| g|oba|
FDl outows, 1970-2010 (Per oent}.................................................................................................. 31
F|gure 2.10: Shares of FDl outows from d|fferent deve|op|ng oountry reg|ons to the rest of the wor|d,
1970-2010(Per oent}......................................................................................................................... 31
F|gure 2.11: Tota| As|an FDl outows to the rest of the wor|d, 1980- 2010............................................................ 32
F|gure 2.12: Seotora| oompos|t|on of FDl outows by deve|op|ng oountr|es, 2008-2010....................................... 34
F|gure 2.13: Number of so|ent|o and teohn|oa| journa| art|o|es |n |DOs and se|eoted oountr|es, 1986-2007......... 38
F|gure 2.14: Roya|ty and ||oens|ng payments |n |DOs and se|eoted oountr|es, 1996-2010 ($ m||||on}.................... 38
F|gure 2.15: Roya|ty and ||oens|ng reoe|pts |n |DOs and se|eoted oountr|es, 1996-2010 ($ m||||on}....................... 39
F|gure 4.1: Oompos|t|on of merohand|se exports of o||-export|ng |DOs, non-o||- export|ng |DOs and
deve|op|ng oountr|es, 1995-2010 (Per oent}...................................................................................... 77
OONTENTS
x TECHNOLOGY AND INNOVATION REPORT 2012
List of tables
Tab|e 1.1: Rea| GDP growth rates, 1980-2010................................................................................................... 5
Tab|e 1.2: Evo|ut|on of trade by reg|on, 1995 and 2010 (Peroentage of tota| trade}.............................................. 8
Tab|e 1.3: Evo|ut|on of trade of se|eoted deve|op|ng oountr|es, 1995 and 2010................................................... 8
Tab|e 2.1: Reg|ona| share of |mports of oap|ta| goods (as part of tota| |mports} from deve|op|ng and deve|oped
oountr|es, 1995 and 2010 (Per oent}................................................................................................. 22
Tab|e 2.2: Share of se|eot deve|op|ng oountr|es` |mports (as part of tota| |mports of oap|ta| goods} from
deve|op|ng and deve|oped oountr|es, 1995 and 2010 (Per oent}........................................................ 23
Tab|e 2.3: lmports of oap|ta| goods w|th h|gh teohno|ogy |ntens|ty souroed from deve|op|ng oountr|es
(as a peroentage of tota| |mports}, by reg|ona| groups, 1995 and 2010.............................................. 26
Tab|e 2.4: lmports of oap|ta| goods w|th h|gh teohno|ogy |ntens|ty souroed from deve|op|ng oountr|es
(as a peroentage of tota| |mports}, by se|eot deve|op|ng oountr|es, 1995 and 2010............................ 26
Tab|e 2.7: Outward FDl from deve|op|ng oountr|es, 1970-2010 ($ m||||on}.......................................................... 31
Tab|e 2.8: Share of FDl outows by reg|on |n tota| FDl outows from the South to the rest of the wor|d,
1980-2010 (Per oent}........................................................................................................................ 32
Tab|e 2.9: Seotora| oompos|t|on of FDl outows from deve|op|ng oountr|es to the rest of the wor|d,
2008-2010 (Per oent}........................................................................................................................ 33
Tab|e 2.10: Rat|o of R&D expend|ture to GDP, by reg|on and se|eot oountr|es, 1997-2007(Per oent}................... 37
Tab|e 2.11: Mergers and aoqu|s|t|ons g|oba||y and by rms from deve|op|ngoountr|es, 1990-2011...................... 41
xi
LIST OF ABBREVIATIONS
ABO Braz|||an Oooperat|on Agenoy (Ageno|a Bras||e|ra de Oooperao}
AEO Afr|oanEoonom|oOommun|ty
ARv ant|retrov|ra|
ASEAN Assoo|at|onofSoutheastAs|anNat|ons
A Afr|oann|on
BRlOS Braz||, Russ|an Federat|on, lnd|a, Oh|na and South Afr|oa
OAN Oommun|ty of Andean Nat|ons (Oomun|dad And|na de Nao|ones}
OARlOOM Oar|bbean Oommun|ty
DAO Deve|opment Ass|stanoe Oomm|ttee (of OEOD}
EOOSOO Eoonom|o and Soo|a| Oouno|| (of the n|ted Nat|ons}
EOOWAS Eoonom|o Oommun|ty of West Afr|oan States
EMBRAPA Braz|||an Agr|ou|tura| Researoh Oorporat|on (Empresa Bras||e|ra de Pesqu|sa Agropeouar|a}
E Europeann|on
FDl fore|gn d|reot |nvestment
F|ooruz Oswa|do Oruz Foundat|on (Braz||}
GDP gross domest|o produot
GPN g|oba| produot|on network
lBSA lnd|a, Braz||, South Afr|oa (forum}
lOT |nformat|onandoommun|oat|onteohno|ogy
llA |nternat|ona||nvestmentagreement
lPR |nte||eotua|propertyr|ghts
lT |nformat|onteohno|ogy
|DO |east deve|oped oountry
M&A merger and aoqu|s|t|on
NAASP NewAs|an-Afr|oanStrateg|oPartnersh|p
NEPAD New Partnersh|p for Afr|oa`s Deve|opment
NlE new|y |ndustr|a||zed eoonomy
ODA ofo|a| deve|opment ass|stanoe
OEOD Organ|sat|on for Eoonom|o Oo-operat|on and Deve|opment
OEM or|g|na| equ|pment manufaotur|ng
PTA preferent|a| trade agreement (or preferent|a| trad|ng arrangement}
PPP pub||o-pr|vatepartnersh|p
R&D researoh and deve|opment
RET renewab|eenergyteohno|ogy
|lST OF ABBREvlATlONS
xii TECHNOLOGY AND INNOVATION REPORT 2012
SADO Southern Afr|oan Deve|opment Oommun|ty
SlTEP South-Southlnnovat|onandTeohno|ogyPaot
SME sma|| and med|um-s|zed enterpr|se
STl so|enoe,teohno|ogyand|nnovat|on
TODO teohn|oa| oooperat|on among deve|op|ng oountr|es
TlR Teohno|ogyandlnnovat|onReport
TNO transnat|ona|oorporat|on
TRlPS Trade-Re|ated Aspeots of lnte||eotua| Property R|ghts (or WTO - TRlPS Agreement}
NOTAD n|ted Nat|ons Oonferenoe on Trade and Deve|opment
NDAF n|ted Nat|ons Deve|opment Ass|stanoe Framework
NDP n|ted Nat|ons Deve|opment Programme
NEP n|tedNat|onsEnv|ronmentProgramme
NFOOO n|ted Nat|ons Framework Oonvent|on on O||mate Ohange
NlDO n|ted Nat|ons lndustr|a| Deve|opment Organ|zat|on
SAlD n|ted States Agenoy for lnternat|ona| Deve|opment
WHO Wor|d Hea|th Organ|zat|on
WlPO Wor|d lnte||eotua| Property Organ|zat|on
WTO Wor|d Trade Organ|zat|on
xiii
OVERVIEW
OVERVIEW
|. S00Th-S00Th000P8AT|0h|S
800N|h6|h08AS|h6LY|NP08TAhT
As more and more deve|op|ng oountr|es embark on
the prooess of |ndustr|a| oatoh-up, |t |s expeoted that
the new growth po|es w||| |noreas|ng|y oontr|bute to a
ohang|ngdynam|os|n|nternat|ona|re|at|ons.Aprooess
that began w|th the rap|d |ndustr|a||zat|on of the rst-
and the seoond-t|er East As|an eoonom|es |n the 1960s
and 1970s
1
hasbeenfo||owedbyaooe|erated|ndustr|a|
growth |n a newer set of what are often referred to as
emerg|ng oountr|es - lnd|a, Oh|na, Braz|| and South Af-
r|oa.Th|songo|ngbutpunotuatedprooess|sexpeoted
to oont|nue, w|th add|t|ona| oountr|es (suoh as N|ger|a
and Egypt} exper|eno|ng s|m||ar growth |n the future.
Eoonom|o expans|on and growth |n these oountr|es |s
attr|butab|etosevera||mportantand|nterre|atedfaotors:
the|r grow|ng oapab|||t|es |n manufaotur|ng and serv|oes,
greater |nvestments |n teohno|og|es and efo|ent use of
opportun|t|es ar|s|ng from g|oba||zat|on. ln add|t|on, r|s|ng
peroap|ta|noomesandoonoom|tantgrowthofdomest|o
demandhavefurtherboostedthe|rgrowthperformanoe.
The steady eoonom|o growth of these oountr|es has
trans|ated|ntoan|norease|nSouth-Southoooperat|on|n
trade,|nvestmentandteohno|ogyoverthepasttwodeo-
ades, enab||ng them to beoome s|gn|oant g|oba| trad|ng
partnersw|thotherdeve|op|ngoountr|es|nthe2000s.
Ongo|ng South-South oooperat|on |s not restr|oted to
eoonom|o faotors a|one. Some deve|op|ng oountr|es,
a|ongw|ththe|rstrengthen|ngeoonom|oo|out,areoon-
tr|but|ng towards reshap|ng g|oba| trade, a|d and eoo-
nom|o re|at|ons. Th|s |s part|y reeoted |n the|r |noreas|ng
oontr|but|ons to deve|opment oooperat|on and ass|s-
tanoe.Reoentstud|esest|matethatdeve|opmentass|s-
tanoebydeve|op|ngoountr|eshasbeengrow|ngstead-
||y, amount|ng to $7.3 b||||on |n 2010 (OEOD, 2010}.
2
These deve|opments po|nt towards the emergenoe of
a new parad|gm for |nternat|ona| deve|opment, wh|oh
oou|dextendtheex|st|ngboundar|esofengagementto
|no|ude those deve|op|ng oountr|es - part|ou|ar|y |east
deve|oped oountr|es (|DOs} - that are ourrent|y marg|n-
a||zed |n the g|oba| eoonom|o system.
1. 0reater5auth-5authcaaperatiancau|d
benet a|| deve|aping cauntries
R|s|ng South-South trade and |nvestment trends have
beenv|ewedpos|t|ve|yasas|gna|thatsomedeve|op|ng
oountr|es oou|d prov|de a s|gn|oant |mpetus to growth
|n deve|op|ng oountr|es. The ||terature |dent|es two ma|n
aspeots of oooperat|on among deve|op|ng oountr|es.
F|rst,suohoooperat|onwou|dhe|ptheSouthtodeoou-
p|e from the g|oba| oyo||oa| trends of growth, thereby
promot|nganewformofstab|||ty|ntheg|oba|eoonom|o
system. Seoond, s|noe the emerg|ng oountr|es are st|||
|n the|r deve|opment phase, they are better p|aoed to
understand the prob|ems of deve|opment, part|ou|ar|y
|n the ourrent g|oba| oontext, and oou|d prov|de a new
mode|ofoooperat|onandteohn|oa|ass|stanoe|nre|at|on
fordeve|op|ngoountr|es.
Moreover,grow|ngSouth-Southoooperat|onoarr|esw|th
|ttheprom|sethat|toou|dbeohanne||ed|ntoaddress-
|ng speo|o deve|opment goa|s. Rea||s|ng the fu|| poten-
t|a| of South-South oooperat|on w||| requ|re s|gn|oant
ohanges|nthewaytheg|oba|eoonomy|sgoverned,to
make |t more deve|opment-or|ented. Ways and means
toaoh|eveth|sw|||a|soneedtobefu||yexp|oredthrough
po||o|esandpraot|oesatthenat|ona|andreg|ona||eve|s.
Aga|nst th|s baokground, th|s Technology and Innovation
Report TIR 2012 - argues that the t|me |s r|pe to move
beyond ana|ys|ng ourrent trends |n South-South trade
and |nvestment. Speo|oa||y, |t |s |mportant to oons|der
howandtowhatextentSouth-Southoooperat|onoou|d
he|p deve|op|ng oountr|es overoome oerta|n obstao|es
toeoonom|oexpans|onandgrowth|nordertoaoh|eve
speo|o deve|opment goa|s. One suoh goa|, wh|oh oon-
t|nues to e|ude the g|oba| oommun|ty, |s to br|dge the
teohno|og|oa| d|v|de so as to promote |ndustr|a||zat|on
and|no|us|vegrowthaorossthedeve|op|ngwor|d.
2. The5authcancamp|ementtheharth
in pramating techna|agica| |earning
and innavatian capacity
Teohno|ogy and |nnovat|on are both d|fou|t to assess
w|th|neoonom|otransaot|ons,andthere|snos|ng|e|n-
d|oator that measures them ho||st|oa||y. A |ong h|story
ofemp|r|oa|researohhasunooveredanumberof|nter-
nat|ona| faotors shap|ng the prooess of teohno|og|oa|
ohange and produot|v|ty growth. One faotor that |s a s|g-
n|oant oontr|butor to teohno|og|oa| |earn|ng and oapao|-
ty-bu||d|ng|sthe|mportofoap|ta|goods.Part|o|pat|on|n
g|oba| produot|on networks (GPNs} - and |n oustomer-
supp||er-reta||er re|at|onsh|ps |n these networks - a|ong
w|th fore|gn d|reot |nvestment (FDl} are other faotors
that oan promote |earn|ng and the bu||d|ng of oapab|||-
xiv TECHNOLOGY AND INNOVATION REPORT 2012
t|es through teohno|og|oa| sp|||overs to |ooa| rms, e|ther
d|reot|ythrough||oens|ngandteohno|ogytransfer,or|n-
d|reot|y through tao|t know-how aooumu|at|on by |ooa|
personne|. These are often supported by other means
suohasoopy|ng,|nteraot|ngw|thfore|gno||entsonde-
s|gn, standards and qua||ty requ|rements, and oo||abora-
t|on|njo|ntventures.
The|mpaotoftheseohanne|sonthebu||d|ngofoapab|||-
t|esdependsonthepresenoeofsome|eve|ofabsorpt|ve
oapao|ty w|th|n oountr|es. But s|noe |nst|tut|ons |n many
deve|op|ng oountr|es, part|ou|ar|y |DOs, tend to be weak,
they are ||ke|y to be oha||enged |n the|r quest to use South-
South trade and |nvestment to bu||d the|r teohno|og|oa|
oapab|||t|es and promote aot|v|t|es |ead|ng to struotura|
ohange and d|vers|oat|on of the|r eoonom|es.
ln order to overoome these ||m|tat|ons proaot|ve po||o|es
are needed at var|ous |eve|s of South-South exohange.
Emerg|ng oountr|es have used a var|ety of measures to
overoomebarr|erstotradeand|nte||eotua|propertyr|ghts
(lPR} proteot|on |n the|r own eoonom|o deve|opment,
wh|oh oan prov|de |mportant |essons for other deve|op-
|ngoountr|es.The|rsuooessfu|exper|enoesshownoton|y
howteohno|og|oa|oapab|||t|esoanbebu||t,buta|sowhat
po||oy measures oou|d potent|a||y be used to promote
nat|ona|deve|opment|ntheoontextoftheex|st|ngmu|t|-
|atera|tradereg|me.Thes|m||ar|tyofthe|rdeve|opmenta|
exper|enoes |s |mportant, der|v|ng from the|r past path-
dependent oonstra|nts on promot|ng susta|nab|e deve|-
opment.
Shar|ng of exper|enoes amongst deve|op|ng oountr|es
and strengthen|ng the|r oo||aborat|on rema|ns essent|a|
and re|evant for oountr|es that are st||| grapp||ng w|th
ways to oreate harmon|ous and ooherent |ooa| |nnova-
t|on and |ndustr|a| po||oy env|ronments. Reoogn|z|ng th|s,
both po||oy and soho|ar|y ana|yses have begun to g|ve
greater attent|on to what |essons oan be drawn from
exper|enoes of emerg|ng oountr|es for deve|opment |n
genera|,andtheprooessofoapab|||t|esbu||d|ng,|npar-
t|ou|ar.
A seoond and perhaps more appropr|ate advantage of
deve|op|ngoountr|esforfoster|ngteohno|og|oa||earn|ng
|ntheSouth|sthatmostofthemhavefo||oweds|m||ar
pathways|nbu||d|ngthe|roapab|||t|es:fromreverseeng|-
neer|ngto|norementa||y|nnovat|ng|nproduotsandpro-
oesses, to |noreased researoh and deve|opment (R&D}
andoperat|ngattheteohno|og|oa|front|er|tse|f.Even|n
thedeve|op|ngoountr|esthatoanbetermedasemerg-
|ng, wh||e there are a number of |ndustr|es that are at
theteohno|og|oa|front|erg|oba||y,manyother|ndustr|es
or rms faoe rout|ne oonstra|nts on |nnovat|on s|m||ar to
thosepreva|||ng|notherdeve|op|ngoountr|es,|no|ud|ng
|DOs. Th|s |mp||es that, to vary|ng extents, these ooun-
tr|esarest|||oonfrontedw|thsomebas|o|ssuesre|at|ng
topromot|ngtheteohno|og|oa|absorpt|veoapao|t|esof
the|rsystemsasawho|e.
The s|m||ar|ty of many of these oha||enges to |nnovat|on
|endssupporttothev|ewthattheteohno|og|esproduoed
bydeve|op|ngoountr|esmayoftenbemuohmoreaooes-
s|b|e - and oontextua||y appropr|ate - to other deve|op|ng
oountr|es and rms, thus h|gh||ght|ng the |mportanoe of
promot|nggreaterSouth-Southoo||aborat|on|nth|sarea.
Oo||aborat|on on teohno|ogy and |nnovat|on |s perhaps
oneofthemostor|t|oa|oomponentsofSouth-Southso||-
dar|ty,offer|ngarea|prom|seofsusta|nab|edeve|opment
throughoutthedeve|op|ngwor|d.However,beoausesuoh
oo||aborat|on st||| takes p|aoe between deve|op|ng ooun-
tr|esatveryd|fferent|eve|sofdeve|opment,|tneoessar||y
|nvo|vessomepressuresaswe||asopportun|t|esformany
deve|op|ngoountr|es.Pressures|no|udeoonform|ngw|th
oerta|n requ|rements |mposed by var|ous agreements on
|nternat|ona| trade and lPR reg|mes, among others (suoh
as ob||gat|ons re|at|ng to o||mate ohange m|t|gat|on and
adaptat|on,thetrans|t|ontowardsagreeneoonomy,and
lPRs proteot|on}, wh||e ensur|ng |no|us|ve and susta|nab|e
|ndustr|a|deve|opment.
3. Techna|agy and innavatian-based
ca||abaratian may nat be autamatic
G|venthepotent|a|ofSouth-Southoooperat|ontopro-
mote teohno|og|oa| |earn|ng, there |s o|ear|y a renewed
|nterest |n th|s area. Key po||oy oons|derat|ons |no|ude
howongo|ngSouth-Southoooperat|onoou|dbeor|ent-
ed to foster teohno|og|oa| and |nnovat|on oapao|ty, and
how the teohno|ogy needs of a|| deve|op|ng oountr|es
and |DOs oou|d be |ntegrated |nto a ba|anoed agenda
ofoooperat|onandexohange.
lntheo|ass|oa|deve|opmenteoonom|osd|soourse,eoo-
nom|o growth |s oons|dered to be a prooess of mob|||z-
|ng and oomb|n|ng oomp|ementary faotors to sh|ft the
produot|onstruotureofeoonom|esandextendthepro-
duot|onfront|er.Thosefaotorsareoap|ta|aooumu|at|on,
teohno|og|oa| ohange and eoonom|o d|vers|oat|on. ln
theoontextofdeve|op|ngoountr|es,however,eoonom|o
growth, on the one hand, and teohno|ogy and |nnova-
t|on oapao|ty on the other have a mutua||y re|nforo|ng
re|at|onsh|p.Teohno|ogyand|nnovat|onoapao|typ|ayan
|mportant ro|e |n boost|ng eoonom|o growth of the k|nd
thatresu|tsfromohanges|nthestruotureofproduot|on.
Eoonom|o growth often enab|es teohno|og|oa| |earn|ng
andgreatersoph|st|oat|on,andatthesamet|me,teoh-
no|og|oa|oapab|||t|esareor|t|oa|forensur|ngthatgrowth
|sofaproduot|venatureandoanbestead||yma|nta|ned.
xv
OVERVIEW
However, these mutua||y support|ve ||nkages do not
emerge spontaneous|y. Part|ou|ar|y, |n the oontext of
South-Southexohanges,wh||ethere|spotent|a|foroon-
t|nuedgrowthoftradeand|nvestmentthatoanresu|t|n
teohno|og|oa| |earn|ng, muoh st||| needs to be done to
harnessthatpotent|a|. F|rms seek|ng to expand through
a searoh for newer markets and eoonom|es of soope
and soa|e may have on|y ||m|ted |noent|ves to engage
|n oo||aborat|ons/ jo|nt ventures w|th host-oountry rms.
These |noent|ves are usua||y market-based, depend|ng
on the speo|o attr|butes of the host oountry rms that
make them attraot|ve partners. Th|s oou|d |no|ude the|r
extens|ve market|ng and d|str|but|on networks |n the
host oountr|es, or the|r speo|o R&D oapab|||t|es or teoh-
no|og|oa| expert|se, or the|r ab|||ty to produoe part|ou|ar
produots oompet|t|ve|y. However, suoh market-re|ated
|noent|ves on|y ent|oe rms to enter |nto a|||anoes w|th
rms |n host oountr|es that have some |eve| of expert|se,
asdemonstratedbytheva|ueadd|t|ontheyoreate|nre-
turn.Re|y|ngonsuoh|noent|vesforteohno|og|oa||earn-
|ng |s m|s|ead|ng, s|noe they are not sufo|ent to ent|oe
rms on the|r own to enter |nto teohno|og|oa| |earn|ng
a|||anoes w|th partners who have ||tt|e or |ow |eve|s of
teohno|og|oa|expert|se.
Moreover, desp|te the s|gn|oanoe of these |ssues, the
||terature on South-South teohno|og|oa| oooperat|on |s
qu|te soaroe, and genera||y foouses on how press|ng
|nternat|ona| oha||enges, suoh as pub||o hea|th and o||-
mate ohange, oan be addressed through oooperat|on
amongst deve|op|ng oountr|es. The ana|ys|s tends to
be rather genera|, and data on |ssues of teohno|og|oa|
ohangeand|nnovat|onoapao|tyaresoaroeornoteas||y
ava||ab|e. Th|s Report seeks to || th|s gap and a|ms to
oontr|butenewpo||oy|ns|ghts|nth|soomp|exarea.
TheReportarguesthatthes|m||ar|tyofdeve|opmentex-
per|enoes of the oountr|es of the South (part|ou|ar|y |n
promot|ng |nnovat|on oapao|ty}, and the oontextua| ap-
propr|ateness of the|r teohno|og|es, makes them essen-
t|a| oomp|ements to ex|st|ng North-South |nteraot|ons.
The oentra| message of TIR 2012 |s that deve|op|ng
oountr|es, part|ou|ar|y emerg|ng oountr|es, oan be |m-
portantpartnersforpromot|ngteohno|og|oa|oapab|||t|es
|ntheSouth,andthereforeana|ys|nghowSouth-South
oo||aborat|onforteohno|ogyand|nnovat|onoanbepro-
moted|nasystemat|owaytopromote|no|us|vesusta|n-
ab|edeve|opmentshou|dbeapr|or|ty.
Henoe, the Report foouses on whether South-South
exohangesoou|d|eadtobu||d|ngteohno|og|oa|oapab|||-
t|es,andunderwhato|roumstanoes.Fromanana|ys|sof
theourrentpatternsofSouth-Southexohangesonteoh-
no|ogy and |nnovat|on |ssues, the Report seeks to |den-
t|fy key |ssues |n th|s area, and der|ve best praot|oes for
mov|ng forward |n foster|ng South-South oo||aborat|on
onteohno|ogyand|nnovat|on.
||. A8|0hLAh0S0AP0FS00Th-S00Th
X0hAh6|SN86|h6
The grow|ng eoonom|o and oommero|a| |nterests of
some deve|op|ng oountr|es have been fue|||ng market
expans|onandsome|eve|ofteohno|og|oa|oo||aborat|on
w|th other deve|op|ng oountr|es. W|th|n these transao-
t|ons,|mportsofoap|ta|goodsandgrow|ngpart|o|pat|on
|n GPNs may he|p |ooa| rms aooumu|ate know|edge,
noton|yre|at|ngtoteohn|oa|aspeotsofproduot|on,but
a|so to manager|a|, bus|ness and qua||ty-re|ated aspeots.
FDl and ||oens|ng oan a|so have |mportant |mp||oat|ons
for teohno|ogy aoqu|s|t|on and |earn|ng |n some oon-
texts.However,towhatextentth|sho|ds,andwhether
eoonom|o growth |n the South and the resu|t|ng r|se |n
South-Southtradeand|nvestmentdo|ndeedoontr|bute
togreaterteohno|og|oa||earn|nganddeve|opmentof|n-
novat|on oapao|ty rema|n pert|nent quest|ons from both
theoret|oa| and po||oy-mak|ng perspeot|ves.
1. 0eve|aping cauntries are increasing|y
imparting capita| gaads fram the 5auth
Deve|op|ng oountr|es have surpassed deve|oped ooun-
tr|esasmajorpartnersofotherdeve|op|ngoountr|esfor
trade |n oap|ta| goods. Oap|ta| goods |mports are not
on|y |nputs for the expand|ng eoonom|o aot|v|t|es and
oonsumpt|onpatterns|ntheseoountr|es,theya|soshow
that deve|op|ng oountr|es, part|ou|ar|y emerg|ng ooun-
tr|es,are|noreas|ng|yoffer|ngoompet|t|veproduots|na
var|etyof|ndustr|es|nvo|v|ngarangeofteohno|og|es.
Ava||ab|e data show that there has been a marked |n-
orease|ntrade|noap|ta|goodsamongdeve|op|ngooun-
tr|es s|noe the m|d-1990s. lndeed, overa|| trends show a
o|earsh|ftawayfromdeve|opedoountr|esassouroesof
suoh goods for deve|op|ng oountr|es dur|ng the per|od
2005-2010, espeo|a||y after the eoonom|o s|owdown
|n2008.Aspartofr|s|ngSouth-Southtrade,theshare
of deve|op|ng oountr|es |mports from other deve|op|ng
oountr|es has |noreased stead||y, from 35 per oent |n
1995 to 54per oent |n 2010, wh|oh |nd|oates that deve|-
op|ngoountr|eshavebeoomethema|nsouroesofoap|-
ta|goodsforotherdeve|op|ngoountr|es.
Grow|ng |mports of oap|ta| goods by deve|op|ng ooun-
tr|es|mp||estheexpand|ngoapao|ty|ntheSouthtopro-
duoe goods, at |east |n some oountr|es. lt a|so shows
that|mportsofthesegoodsbyotherdeve|op|ngooun-
tr|es are on the r|se as part of the|r |noreas|ng efforts
to promote produot|ve oapao|ty. As noted ear||er, suoh
|mports are |mportant for bu||d|ng produot|ve oapao|ty,
s|noetheyoanresu|t|nthetransferofteohno|ogytothe
xvi TECHNOLOGY AND INNOVATION REPORT 2012
extent that the |mported goods are stud|ed for des|gn
oharaoter|st|os and reverse eng|neer|ng. They oan a|so
d|reot|y|mproveproduot|v|tywhentheyareemp|oyed|n
produot|onprooesses.The|mpaotof|mportsofoap|ta|
goods |n terms of enhano|ng produot|v|ty |n deve|op|ng
oountr|es |s reeoted |n part by the |noreas|ng share of
manufaotur|ng exports from deve|op|ng oountr|es as a
who|e,a|argepartofwh|oh|sa|sosouroedtootherde-
ve|op|ngoountr|es.
W|th|n these broad trends, there has been a oons|stent
|norease |n |mports of h|gh-teohno|ogy-|ntens|ve goods
by deve|op|ng oountr|es. A o|oser |ook at the grow|ng
teohno|og|oa| |ntens|ty of South-South |mports shows
that, on average, over 53per oent of a|| h|gh-teohno|ogy
produots |mported by deve|op|ng oountr|es as a group
was souroed from other deve|op|ng oountr|es |n 2010.
Oompar|ng the |eve| of teohno|og|oa| |ntens|ty (|ow, me-
d|um and h|gh} of deve|op|ng-oountry |mports, there
was a |arger share of manufaotured |mports of h|gh sk|||
and teohno|ogy |ntens|ty than those of med|um sk||| and
teohno|ogy|ntens|ty.Thesetrendsstrengthenthenot|on
thatdeve|op|ngoountr|esare|noreas|ng|yab|etoexport
teohno|ogy-|ntens|ve goods g|oba||y, and part|ou|ar|y to
theSouth.
2. 0eve|aping cauntries are increasing|y
participating in g|aba| praductian netwarks
Apredom|nantfaotorexp|a|n|ngther|s|ngtrend|nteoh-
no|ogy|mports|sthegrowthofGPNs,dr|venbysome
ofthemoreteohno|og|oa||yadvanoeddeve|op|ngooun-
tr|es.Anotherfaotor|sthe|noreas|ngdomest|odemand
|n some of the emerg|ng oountr|es - part|ou|ar|y Oh|na
and lnd|a - due to the|r |arge popu|at|ons and the grow-
|ng purohas|ng power of the|r grow|ng m|dd|e o|asses,
wh|oh |s |ead|ng to a surge |n |mports of teohno|og|oa|
produots from other oountr|es |n the South |nto these
eoonom|es.Manyofthese|mports,asdatatrendsshow,
serve to meet grow|ng demand dr|ven by the expand-
|ng eoonom|o aot|v|t|es and oonsumpt|on patterns |n
theseoountr|es.Moreover,someemerg|ngoountr|esare
ab|e to manufaoture severa| h|gh-teohno|ogy produots
at oompet|t|ve pr|oes, resu|t|ng |n a sh|ft |n deve|op|ng-
oountry|mportsfromdeve|opedoountr|estodeve|op|ng
oountr|es.
However, these trends are uneven aoross reg|ons, and
are |arge|y exp|a|ned by the ex|stenoe of produot|on
networks |n oountr|es |n East As|a, and more reoent|y |n
South-EastAs|aandSouthAs|a.Theseoountr|eshave
progressed|nteohno|og|oa|soph|st|oat|onas|||ustrated
bythe|rab|||tytoproduoeh|gh-andmed|um-teohno|ogy-
|ntens|veproduotsus|ngadvanoedprooesses.Th|sfur-
therfao|||tatesthe|rab|||tytoabsorbnewerproduotsthat
a|so embody h|gh sk|||s and teohno|ogy |ntens|ty muoh
better than some of the other reg|ons shown |n tab|e 3,
suohasSouthernAfr|oa.S|m||artrendsoanbeobserved
w|threspeottomed|um-teohno|ogy-|ntens|ve|mports.
Genera||y,aoountryoan|mportoap|ta|goodsso|ongas
|toanpayforthem.However,whatrema|ns|mportantfor
produot|v|tygrowth|showthese|mportsareohanne||ed
effeot|ve|y |nto generat|ng future |noome. Th|s re|ates to
how rms and seotors are ab|e to adapt and use teoh-
no|og|esembod|ed|nthese|mportstogenerateproduo-
t|v|ty growth. So |ong as th|s |s poss|b|e and ev|dent, |t
wou|d|eadtotheoono|us|onthatsuoh|mportsofoap|ta|
goodsareoontr|but|ngtobu||d|ngteohno|og|oa|oapab|||-
t|es |n deve|op|ng oountr|es. On th|s aspeot, two trends
standout.
F|rst,deve|op|ngoountr|esthata|readyhaveam|n|mum
|eve|ofteohno|og|oa|oapab|||t|esareengag|ng|nexten-
s|ve trade |n oap|ta| goods w|th other oountr|es of the
South. Th|s po|nts to the |mportanoe of some |eve| of
teohno|og|oa|oapab|||t|estopart|o|pate|noap|ta|goods
trade,undersoor|ngthefaotthatwh||eanyoountryoan
|mportoap|ta|goods,thosethatoons|stent|ypart|o|pate
|n trade |n suoh goods use many of these |mports to
enhanoethe|rproduot|onoapao|t|es.
3
Theseoondtrend,
wh|oh to some extent supports the rst, |s that there |s
a s|gn|oant over|ap between oountr|es that |mport oap|-
ta| goods and those that export teohno|ogy-|ntens|ve
goods. Henoe, a sub-set of deve|op|ng oountr|es that
a|readypossesssome|eve|ofteohno|og|oa|oapab|||t|es
areab|eto|everageongo|ngtradeand|nvestmenttofur-
therboostthe|rteohno|og|oa|oapab|||t|esand|nnovat|on
oapao|t|es.
Th|sdoesnotoomp|ete|yexo|udethepresenoeand|m-
portanoeofteohno|og|oa|transaot|ons|notheroountr|es
of the South. But |t po|nts to an |mportant resu|t that
many are ||m|ted by the sma||er s|ze of the|r markets,
|owerab|||tytopayandthe|owerteohno|og|oa||ntens|ty
ofthe|rovera||eoonom|oaot|v|ty.
Trends |n |mports of maoh|nery and transport equ|pment
showaw|den|nggapamongdeve|op|ngoountr|es,oon-
rm|ng the overa|| trends presented here regard|ng the
teohno|og|oa| oapao|ty of oountr|es. Deve|op|ng ooun-
tr|es as a group |noreased the|r |mports of maoh|nery
and transport equ|pment as a share of g|oba| |mports of
th|s oategory from 27per oent |n 1995 to 53per oent |n
2010. However, oountr|es w|th |ower teohno|og|oa| oa-
pao|t|es, suoh as a |arge number of |DOs, |noreased the
share of the|r |mports of th|s oategory from on|y 0.04per
oent |n 1995 to 0.08 per oent |n 2010, wh|oh |s muoh
|ower than that of other deve|op|ng oountr|es.
4
Among
the |DOs, there are further var|at|ons, w|th the o||-export-
xvii
OVERVIEW
|ng |DOs |arge|y aooount|ng for the |norease |n these |m-
ports,show|ngthatsuoh|mportsareb|asedtowardsthe
oommod|ty seotors |n the o|| export|ng |DOs.
5
3. 5auth-5auth F0l has been rising
FDl by deve|op|ng oountr|es has been r|s|ng |n reoent
years, |noreas|ng the poss|b|||t|es for |t to be |everaged
for teohno|og|oa| |earn|ng |n var|ous other deve|op-
|ng oountr|es. The |mportanoe of deve|op|ng oountr|es
as souroes of FDl has |noreased qu|te s|gn|oant|y and
stead||yoverthepastfourdeoades,
6
a|though|tdeo||ned
somewhat |n 2008, fo||ow|ng the erupt|on of the nano|a|
andeoonom|oor|s|s.Theshareofdeve|op|ngoountr|es
|n tota| outward FDl rose from 15per oent |n 2005 (from
$132 b||||on} to 27 per oent |n 2010 ($400 b||||on}, but
pre||m|nary est|mates for 2011 |nd|oate that |t may have
deo||ned to 21.4 per oent for the year.
7
The ana|ys|s of
South-South FDl |eads to the fo||ow|ng ma|n observa-
t|ons:
- A|though there has been a substant|a| r|se |n
South-South FDl, there are s|gn|oant reg|ona|
var|at|ons |n outward FDl wh|oh have an |mpaot on
the share of gross xed oap|ta| format|on |n ooun-
tr|es. East As|a aooounts for most of the FDl out-
ows from the South, fo||owed o|ose|y by South-
East As|a and |at|n Amer|oa.8
- Over the past two deoades, the seotora| oompos|-
t|on of outward FDl from deve|op|ng oountr|es has
ohanged s|gn|oant|y to be oompr|sed of |nvest-
ments |n manufaotur|ng and serv|oes. Of th|s, |arge
sharesared|reotedatotherdeve|op|ngoountr|es.
Est|mates |nd|oate that |n the ear|y 1990s a|most
three fourths of deve|op|ng-oountry |nvestments
abroad went to the manufaotur|ng seotor, wh|oh
aooounted for 27per oent of suoh FDl. Apart from
manufaotur|ng,serv|oesaooountfora|argeshare
of the FDl outows from deve|op|ng oountr|es,
muoh of wh|oh are d|reoted at other deve|op|ng
oountr|es. For |nstanoe, dur|ng the per|od 2008-
2010, serv|oes aooounted for near|y 70per oent of
suoh FDl, of wh|oh more than 55per oent went to
deve|op|ngoountr|es.
ln sum, tota| FDl outows from the South has |noreased,
w|th a o|ear emphas|s on the serv|oes and manufaotur-
|ng seotors. Suoh a seotora| foous wou|d norma||y |mp|y
apotent|a|forteohno|og|oa||earn|ng.However,est|mates
|nd|oate that FDl |n seotors suoh as serv|oes and manu-
faotur|ng or|g|nates ma|n|y from emerg|ng oountr|es, par-
t|ou|ar|y East As|an and South-East As|an oountr|es, and
|s|arge|yd|reotedtothosedeve|op|ngoountr|esthatpos-
sess strong produot|on networks |n these seotors or have
theoapao|tytosouroesuoh|nvestmentsbyv|rtueofthe|r
teohno|og|oa| oapab|||t|es. Th|s |s true of a |arge share of
the serv|oes FDl d|reoted towards deve|op|ng oountr|es.
FDl outows target|ng e|eotron|os and automob||e |ndus-
tr|esarea|sod|reotedtowardsEastandSouth-EastAs|a,
wh|oh have g|oba||y oompet|t|ve produot|on hubs. The FDl
thus he|ps to oement and enhanoe the a|ready ex|st|ng
teohno|og|oa| oapao|ty of these deve|op|ng oountr|es as
part of ex|st|ng produot|on networks.
A |arge proport|on of FDl outows to deve|op|ng ooun-
tr|es that do not have s|gn|oant teohno|og|oa| oapab|||-
t|es suoh as the resouroe-r|oh deve|op|ng oountr|es (|n-
o|ud|ng Afr|oan oountr|es}, go to the|r m|n|ng and natura|
resouroes |ndustr|es. Th|s form of FDl usua||y does not
haved|reotteohno|og|oa||mpaots.
9
|||. ThP0ThT|AL0FS00Th-S00Th
000P8AT|0hF08T0hh0L06|0AL
LA8h|h6ST|LLh0ST08
hA8hSS0
Teohno|og|oa|ohangeandeoonom|ogrowthhaveamu-
tua||y re|nforo|ng re|at|onsh|p |n deve|op|ng oountr|es.
Susta|nab|eeoonom|ogrowththat|sbu||tonproduot|v|ty
|noreases|ntheseoountr|esdoesnotfu||yre|yonfron-
t|er |nnovat|ons, as |n |ndustr|a||zed oountr|es, but rather,
ontheposs|b|||tyto|earnandbu||dupona|readyex|st-
|ng teohno|og|es. Th|s requ|res |nvestment not on|y |n
manufaotur|ng,buta|soaorossarangeofaot|v|t|esthat
supportovera|||ndustr|a|deve|opment,|no|ud|ng|nmar-
ket|ng, manager|a| and nano|a| serv|oes, as we|| as |n |n-
frastruotureand|earn|ngaot|v|t|es.Th|s|nturn|noreases
absorpt|ve oapao|ty and the ab|||ty to adapt and app|y
ex|st|ng teohno|og|es (|n the form of produots and pro-
oesses} by means of |ooa| |nnovat|ons, and thus |eads
toagradua||norease|nproduot|v|ty|na||seotors.Suoh
growth |s |ntr|ns|oa||y t|ed to how produot|on struotures
evo|ve and what k|nds of faotors, po||o|es and |nst|tu-
t|ons enab|e the d|ffus|on of teohno|og|oa| know|edge to
domest|o seotors and rms.
However, muoh st||| needs to be done |n order to har-
nessth|sor|t|oa|re|at|onsh|p|ndeve|op|ngoountr|es.For
|nstanoe, an argument that has often been advanoed
|s that the ongo|ng growth and sh|ft |n produot|on pat-
terns |n some of the emerg|ng oountr|es, from |ow-end
manufaotur|ng to more know|edge-based doma|ns, has
openedupopportun|t|esforotherdeve|op|ngoountr|es,
part|ou|ar|y |DOs, to engage |n |ow-end manufaotur|ng.
Howeverattraot|veth|sm|ghtbe,|tdoesnotooourau-
tomat|oa||y. To deve|op |ndustr|a||zat|on prooesses that
oou|d |ead to a s|gn|oant proport|on of the tota| popu|a-
t|on be|ng engaged |n va|ue-added produot|on requ|res
|nvestments|nbu||d|ngabsorpt|veoapao|ty.Th|sneoes-
s|tates a fundamenta| sh|ft |n the under|y|ng oond|t|ons
xviii TECHNOLOGY AND INNOVATION REPORT 2012
ofmanydeve|op|ngoountr|es,w|thapart|ou|arfoouson
faotorsthatpromoteteohno|og|oa||earn|ngand|nnova-
t|on oapab|||t|es |n those oountr|es. Suoh a sh|ft shou|d
beoons|stentw|ththe|roomparat|veadvantagesand|o-
oa| demand. Th|s oha||enge |n |everag|ng teohno|og|oa|
|earn|ng through ongo|ng eoonom|o growth prooesses
|sdemonstratedbytheana|ys|sofdataandoasestudy
ev|denoe|nTIR 2012.Theoono|us|onsthat|endstrength
toth|sobservat|onareasfo||ows:
- The emp|r|oa| ev|denoe on ongo|ng South-South
teohno|og|oa| exohange shows that the surge of
eoonom|o growth |n deve|op|ng oountr|es, par-
t|ou|ar|y emerg|ng oountr|es, has been made pos-
s|b|e |n |arge part by the|r grow|ng teohno|og|oa|
oapab|||t|es. Th|s |s reeoted |n the |norease |n the|r
oap|ta| goods |mports |n reoent t|mes. A|though
oap|ta|goods|mportsbydeve|op|ngoountr|esare
grow|ng,andareoons|deredtobean|nd|oat|onof
teohno|og|oa||earn|ng,thetrendsshowthata|arge
shareoftheoap|ta|goodsexportedand|mported|s
oonoentrated|nasub-setofdeve|op|ngoountr|es.
Theseareoountr|esthathavesome|eve|ofteohno-
|og|oa|oapab|||t|esto|ntegrate|ntoGPNs,andthe|r
|eve| of eoonom|o growth enab|es them to |mport
oap|ta| goods. On the other hand, a |arge number
of deve|op|ng oountr|es, part|ou|ar|y |DOs, are not
major|mportersorexportersofoap|ta|goods.
- The grow|ng manufaotur|ng oapab|||t|es of a num-
ber of deve|op|ng oountr|es, part|ou|ar|y Braz||,
Oh|na, lnd|a and South Afr|oa, has enab|ed them
to |norease the|r exports of manufaotured goods.
lthasa|soenab|edthemtopart|o|pate|nGPNs|n
both|ow-oostmanufaotur|ngandh|gh-teohno|ogy,
va|ue-added produot|on. Moreover, g|oba||zat|on, as
we||asnewerteohno|og|esandthemovetowards
the know|edge eoonomy, espeo|a||y |nformat|on and
oommun|oat|on teohno|og|es (lOTs}, have prov|ded
opportun|t|esfortheseoountr|estousethe|rex|st|ng
sk|||ed workforoe to aooumu|ate further know|edge
andpromoteteohno|og|oa||earn|ng.
- FDl trends are s|m||ar to teohno|og|oa| empower-
menttrendsoftheSouth,wh|ohtendstobeoon-
oentrated |n some oountr|es, ma|n|y East As|an
oountr|es as we|| as oountr|es suoh as Braz||,
Oh|na and lnd|a. Emerg|ng oountr|es aooount for
the |argest share of FDl outows from deve|op|ng
oountr|es, |no|ud|ng through mergers and aoqu|-
s|t|ons (M&As} |n the South. Wh||e South-South
FDl outows are d|reoted to a var|ety of seotors,
|no|ud|ng serv|oes and hea|th, they tend to be
oonoentrated |n speo|o aot|v|t|es |nvo|v|ng ex-
ohangesamongsomeoountr|es|nthoseseotors.
Th|s shows that a few deve|op|ng oountr|es are
|noreas|ng|y |nvo|ved |n mutua||y beneo|a| teohno-
|og|oa|exohange.
- A rev|ew of oase study ev|denoe on South-South
teohno|og|oa| oo||aborat|ons oonduoted |n the Re-
port10 shows that South-South |nter-rm teohno|-
ogy-re|ated |n|t|at|ves seem to be mot|vated ma|n|y
by eoonom|o oons|derat|ons or proaot|ve govern-
ment |noent|ves, or both. ln oontrast, South-South
pub||oseotorandgovernment-dr|venoo||aborat|ons
are more w|de-rang|ng |n nature, but at the same
t|me they foous more on so|ent|o and teohn|oa| as-
peots rather than on teohno|og|oa| oo||aborat|on or
rm-|eve| |earn|ng. There are a|so a var|ety of govern-
ment|n|t|at|vesforpromot|ngteohno|ogyexohange
and |earn|ng, both reg|ona| and |n the oontext of
South-South re|at|ons, |no|ud|ng the annua| sum-
m|ts of the BRlOS (Braz||, the Russ|an Federat|on,
lnd|a, Oh|na South Afr|oa} and the lnd|a, Braz||, South
Afr|oa (lBSA} forum. However, suoh |n|t|at|ves oou|d
better serve the needs of deve|op|ng oountr|es |f
they speo|ed ways and means of oo||aborat|on for
teohno|og|oa| oapao|ty-bu||d|ng. A|so, they shou|d
bemoreo|ose|yooord|natedw|thgovernmentpo||oy
and projeots w|th|n |nd|v|dua| oountr|es. Ourrent|y,
the so|ent|o and teohn|oa| ass|stanoe programmes
oonduoted by nat|ona| ageno|es are often |so|ated
from teohno|og|oa| oo||aborat|ons |nvo|v|ng pub||o
and pr|vate seotor organ|sat|ons (that oonduot jo|nt
R&D and tra|n|ng aot|v|t|es |n speo|o so|ent|o d|s-
o|p||nes}. ln order to benet the reo|p|ent oountr|es,
theseneedtobeproper|yooord|nated.
- Wh||e some South-South teohno|og|oa| oo||abora-
t|on |s ev|dent, most oountr|es are ||m|ted by the
|aok of |ntr|ns|o teohno|og|oa| oapab|||t|es requ|red
to benet more from ongo|ng South-South ex-
ohanges. Add|t|ona||y, the South |s oontr|but|ng to
an |noreas|ng oommod|ty dependenoe of |DOs,
wh|oh reduoes the|r ab|||ty to struotura||y d|vers|fy
the|r eoonom|es.11 Wh||e th|s |s o|ear|y an |no|denta|
effeotoftheeoonom|oboom|ntheemerg|ngooun-
tr|es,there|saneedtoo|ose|ya||gnthe|nterestsof
a||deve|op|ngoountr|estowardsbr|dg|ngtheteoh-
no|og|oa|d|v|de.
- The ana|ys|s further shows that |n the oountr|es
thathavebeenoo||aborat|ngthemostonteohno|-
ogyand|nnovat|on,support|venat|ona||nnovat|on
env|ronments have been oontr|but|ng to bu||d|ng
the|r teohno|og|oa| oapab|||t|es. W|th|n emerg|ng
oountr|es, pos|t|ve deve|opments |n faotors suoh
as R&D |nvestments, eduoat|on, patent|ng and
||oens|ng trends, the number of researohers per
m||||on peop|e, |nfrastruoture and lOTs are further
strengthen|ngthe|r|nnovat|onoapab|||t|es.
xix
OVERVIEW
These resu|ts po|nt to two fundamenta| |ssues. F|rst,
ongo|ng South-South oo||aborat|on oou|d potent|a||y
prov|de more opportun|t|es for deve|op|ng oountr|es,
|no|ud|ng |DOs, to benet teohno|og|oa||y by |everag-
|ng the ongo|ng prooess of eoonom|o growth exp||o-
|t|ytopromoteteohno|og|oa|ohange.Forexamp|e,the
ana|ys|s on FDl shows that desp|te |ts ourrent reg|ona|
oonoentrat|on, South-South FDl oou|d beoome more
versat||e|ntermsof|tsab|||tytobeoomb|nedw|thoa-
pab|||ty-bu||d|ngapproaohess|noe|t|s|arge|yoonoen-
trated |n manufaotur|ng and serv|oes. The r|s|ng share
of FDl from deve|op|ng oountr|es |nto seotors suoh as
serv|oes a|so oreates opportun|t|es for teohno|og|oa|
oo||aborat|on |n these seotors, wh|oh |s now ourrent|y
notbe|ngfu||yharnessed.
12
Arev|ewofongo|ng|n|t|a-
t|ves |n th|s area shows that there are some |nterest-
|ng oases of so|ent|o and teohn|oa| oo||aborat|on, both
pub||o-seotor-based and pr|vate-seotor-|ed. But these
too do not seem to demonstrate the fu|| potent|a| of
South-South oo||aborat|on for teohno|og|oa| |earn|ng
and|nnovat|on.
Wh||e |t oou|d be argued that South-South teohno|og|-
oa|oo||aborat|on|sst||||n|ts|n|t|a|phases,andtherefore
|aoks ooord|nated efforts, |t st||| seems appropr|ate to
address the key oha||enge of foster|ng suoh oo||abo-
rat|on systemat|oa||y. Th|s automat|oa||y |eads to the
seoond |ssue, name|y, how to ensure that an ap-
propr|ate|eve|ofemphas|s|sg|ventoth|sbydeve|-
op|ng-oountry governmenta| |n|t|at|ves and that the
var|ousp|atformsonSouth-Southoo||aborat|ondo|n
faotresu|t|ngreaterteohno|og|oa||earn|ng.Th|soa||s
for measures that promote o|oser ||nkages between
government agenda-sett|ng and ongo|ng so|ent|o
and teohno|og|oa| oo||aborat|on |n|t|at|ves as we|| as
|nter-rm teohno|og|oa| a|||anoes w|th|n a broader
framework of South-South oo||aborat|on.
|V. AF8ANw08kT0P80N0TS00Th-
S00Th00LLA808AT|0h0hT0hh0L06Y
Ah0|hh0VAT|0h|Sh00
ln order to effeot|ve|y address these |ssues, TIR 2012
proposes a set of pr|no|p|es around wh|oh a framework
of South-South oo||aborat|on for teohno|ogy and |nno-
vat|on oan be struotured. Suoh a framework must be
ab|e to address the oha||enges |dent|ed |n th|s Report.
To beg|n w|th, short-term objeot|ves of trade openness
and the |mports of |nputs for |ndustr|a||zat|on prooesses
shou|dbeoons|stentw|th|onger-termteohno|og|oa|de-
ve|opment goa|s of the deve|op|ng wor|d as a who|e. A
framework on South-South oo||aborat|on oou|d therefore
he|ptoa||gnthe|nterestsofa||deve|op|ngoountr|es|nth|s
h|gh|yre|evantarea.Moreover,a|thoughteohno|ogyand
know|edge are key |nputs to oatoh|ng up (and oonver-
genoe} prooesses through wh|oh deve|op|ng oountr|es
absorb |deas and oonoepts from the |ndustr|a| front|er,
the aooumu|at|on of teohno|og|oa| oapab|||t|es w||| not
beposs|b|ew|thoutexpresspo||oyand|nst|tut|ona|sup-
portbythe|nternat|ona|oommun|tyandbythedeve|op-
|ng oountr|es themse|ves. Therefore, as part of suoh a
framework, TIR 2012 proposes that deve|op|ng ooun-
tr|esstrengthenthe|roooperat|onw|thapart|ou|arfoous
oncollaboration for technology and innovation.Aframe-
work that promotes |nteraot|on at three d|fferent |eve|s |s
suggested:
- Exohange of exper|enoes |n po||oy-mak|ng and |n
dev|s|ng po||oy frameworks for teohno|ogy and |n-
novat|on;
- Teohno|ogy exohange and ows a|med at |noreas-
|ngtheteohno|ogyabsorpt|veoapao|tyofthepr|-
vateandpub||oseotors;and
- Transfer of teohno|og|es |n key seotors of |mpor-
tanoe to pub||o we||-be|ng, suoh as agr|ou|ture,
hea|th,o||mateohangeandrenewab|eenergy.
Suoh a framework for South-South oo||aborat|on on
teohno|ogyand|nnovat|onneedstomovebeyondpr|-
or|ty sett|ng and po||t|oa| deo|arat|ons; |t shou|d pro-
pose a o|ear road map for aot|on. The Report art|ou-
|ates a set of pr|no|p|es that oou|d form the bas|s for
suoh an |nternat|ona| framework. These pr|no|p|es are
der|ved from some |mportant |ssues preva|||ng |n the
oontextofteohno|ogyand|nnovat|onexohangeg|ob-
a||y and among deve|op|ng oountr|es. These are d|s-
oussed br|ey here.
1. The techna|agica| needs af a|| deve|aping
cauntries shau|d be better integrated inta
angaing 5auth-5auth exchange (princip|e 1)
O|os|ngthegapbetweenforma|and|nforma|produot|on
struotures |n a |arge number of deve|op|ng oountr|es,
part|ou|ar|y |DOs, and promot|ng domest|o oapab|||t|es
oa||sformoreproaot|veengagement|naddress|ngthe|r
teohno|og|oa| needs |n a ooherent and dynam|o way.
Th|s form of engagement not on|y neoess|tates great-
er |nvestments |n tert|ary eduoat|on, sk|||s tra|n|ng and
oompetenoe-bu||d|ngw|th|noountr|es;|ta|soneedsto
be re|nforoed by enab||ng greater aooess to know|edge
andteohno|og|oa|oapao|ty-bu||d|ngthrough,forexam-
p|e, |nter-rm oooperat|on, jo|nt ventures and ||oens|ng
agreements. Support for know|edge-based aot|v|t|es
|ndeve|op|ngoountr|es|sthereforeessent|a|fortrans-
form|ng the|r eoonom|es towards aot|v|t|es that foous
ongreaterva|ueadd|t|onandh|gherreturnson|nvest-
ment.
xx TECHNOLOGY AND INNOVATION REPORT 2012
2. The experiences af deve|aping cauntries in
bui|ding innavatian capabi|ities shau|d be
shared mare praactive|y (princip|e 2)
Emerg|ngoountr|eshavepursuedavar|etyof|ndustr|a|
and deve|opment po||o|es and strateg|es to promote
teohno|og|oa|oatoh-up.lnnovat|onpo||o|esareessent|a|
oomponentsofsuohstrateg|es.lnnovat|onpo||oyframe-
works oan be understood as purpos|ve aot|ons and |n-
oent|vesprov|dedbygovernmentstopromote|nteraot|ve
|earn|ngandoo||aborat|onamonga||eoonom|oandnon-
eoonom|oaotors|nthesystem.Suohpo||o|eshavebeen
|nstrumenta| |n overoom|ng market |mperfeot|ons that
obstruotteohno|og|oa|ohange,andwh|oharepervas|ve
and w|despread, part|ou|ar|y |n deve|op|ng oountr|es.
Shar|ngthesepo||oyexper|enoes|sre|evantfortwoma|n
reasons.Tobeg|nw|th,theyareusefu||nordertog|ean
genera||essonsandder|vebestpraot|oesonhowde-
ve|op|ngoountr|esoanbestpromoteeoonom|ooatoh-
up.Seoond|y,theyoana|sobeh|gh|y|nstruot|ve|nde-
r|v|ng po||oy opt|ons for promot|ng ||nkages between
var|ous aspeots of |nnovat|on frameworks. Whereas a||
measuresw|||notbeapp||oab|e|na||oountr|esun|ver-
sa||y,shar|ngtheseexper|enoeswou|dprov|deanarray
ofpo||oyopt|onsfordeve|op|ngoountr|esthatoou|dbe
pursued for |nvestment promot|on, ||nk|ng lPR proteo-
t|on to |nnovat|on po||oy, ||nk|ng enterpr|se deve|opment
w|th |nnovat|on po||oy, and ooord|nat|ng researoh be-
tweenun|vers|t|esand|ndustry,amongothers.
3. Learning needs ta be pramated thraugh
5auth-5auth a||iances and techna|agy
transfer (princip|e 3)
A or|t|oa| sh|ft |n South-South oo||aborat|on on teohno|-
ogyand|nnovat|on|sneeded,w|thafoousonpromot-
|ngteohno|og|oa||earn|ngbasedontheSouthsownr|oh
and d|verse exper|enoes, as h|gh||ghted |n the Report.
Someofthemeansofsuoh|earn|ng,suohasteohno|ogy
transfer,havebeendemandedbydeve|op|ngoountr|es
|n the |nternat|ona| d|soourse for deoades. Teohno|og|-
oa| deve|opment |mp||es more than just promot|ng the
|mport of teohno|og|es through FDl or trade |n oap|ta|
goods.Asment|onedabove,what|smoreoruo|a||sthe
bu||d|ng of oapab|||t|es through sk|||s deve|opment and
the transfer of operat|on and ma|ntenanoe know-how
wh|ohpromotesteohno|og|oa|progress.
Meohan|smsforteohno|og|oa|oo||aborat|onhavetrad|-
t|ona||yfoousedonaNorth-Southd|mens|on,butthere
area|soopportun|t|estodeve|opSouth-Southmeoha-
n|smsfortheshar|ngofexper|enoesonteohno|og|oa|
oapao|ty-bu||d|ng and transfer. lndeed, these oou|d
be part|ou|ar|y appropr|ate |n the deve|op|ng-oountry
oontext, g|ven that these oountr|es share oommon
deve|opment oha||enges. Suoh meohan|sms oou|d
oomp|ement ongo|ng efforts to foster North-South
teohno|ogy transfer by p|ao|ng an exp||o|t emphas|s
onteohno|og|oa||earn|ngandbu||d|ng|ooa|oapao|t|es
for |nnovat|on. One suoh meohan|sm |s the oreat|on of
strateg|oteohno|og|oa|a|||anoesbetweensomedeve|-
op|ng oountr|es, part|ou|ar|y the emerg|ng oountr|es
on the one hand, and other deve|op|ng oountr|es, on
the other, to promote |earn|ng |n seotors that a|ready
havesome|eve|ofdomest|oteohno|og|oa|oapab|||t|es.
Teohno|ogy transfer and the shar|ng of tao|t know-how
|sanother|nstrumentthattheSouthoou|dusetop|o-
neerd|fferentso|ut|onsby|ead|ngbyexamp|e.
4. F0l needs ta be mare techna|agy-ariented
in arder ta suppart the bui|ding af
techna|agica| capabi|ities (princip|e 4)
Many oountr|es have |everaged FDl to promote the ab-
sorpt|on of teohno|og|es and bu||d|ng of |nnovat|on oa-
pao|ty. The Repub||o of Korea |s an examp|e of a oountry
that has sought to use FDl as a souroe of teohno|ogy
w|th|n |ts overa|| |ndustr|a| deve|opment strategy. There
are |nstanoes where South-South FDl has had pos|t|ve
resu|ts|ntermsofbu||d|ngnat|ona|teohno|og|oa|oapa-
b|||t|es. lnterest|ng examp|es of how governments have
promoted the transfer of tao|t know-how by the fore|gn
|nvest|ng rm to a |ooa| partner are those of ganda and
Eth|op|a.
13
These oases show that FDl oan be oomb|ned
w|th a var|ety of other po||oy measures. However, on a
genera|soa|e,there|softenad|sjunot|onbetween|nno-
vat|on po||o|es and FDl po||o|es |n oountr|es. Th|s d|sjuno-
t|onneedstobeaddressedthroughan|nnovat|onpo||oy
framework that a||ows reo|p|ent oountr|es to rea||ze the
potent|a| of FDl for teohno|og|oa| |earn|ng.
5. 0eve|aping cauntries shau|d paa|
techna|agica| resaurces ta address
camman cha||enges (princip|e 5)
There are a range of deve|opment oha||enges that oon-
front a|| oountr|es of the South to vary|ng degrees. They
need teohno|og|oa| |nnovat|ons and p|atforms that pro-
mote a smoother trans|t|on towards a green eoonomy,
he|p address o||mate ohange m|t|gat|on and adaptat|on,
enoouragetheuseofsusta|nab|eenergyandrenewab|e
energyteohno|og|es,aswe||ashe|p|mprovepub||ohea|th
andfoodseour|ty.Fora||theseteohno|og|oa|oha||enges,
oommonresponsesoou|dbeforged.
ln a|| these areas, the |eve| of domest|o rms` oapab|||t|es
|n many deve|op|ng oountr|es |s |nsufo|ent to support
the oreat|on of oonvent|ona| forms of teohno|og|oa| a|||-
anoes.Therefore,there|saneedfornewa|||anoesthat
enab|e the deve|opment of part|ou|ar k|nds of teohno|-
og|es that are of or|t|oa| |mportanoe to the deve|op|ng
xxi
OVERVIEW
wor|d. Deve|op|ng oountr|es oou|d a|so he|p the shar|ng
of a|ready ex|st|ng know|edge |n |mportant seotors and
|ndustr|es,wh|ohunt||nowhasnotbeensystemat|o.ln-
stead,there|saoont|nuedre||anoeonNorth-Southex-
ohanges |n nd|ng teohno|og|oa| so|ut|ons.
Noton|yaredeve|op|ngoountr|esexper|enoes|nbu||d-
|ng |nnovat|on oapao|ty part|ou|ar|y re|evant for br|dg|ng
theteohno|og|oa|d|v|de,the|rteohno|og|esarea|sooften
more|ooa||yadaptab|e|notherdeve|op|ngoountr|es,|n-
o|ud|ng |DOs, ow|ng to s|m||ar oontexts, and henoe they
aremoreappropr|ateforthoseoountr|es.
V. XPL|0|TP0L|0|SA8800|80T0
S0PP08TThN86h00FS00h
A00LLA808AT|VF8ANw08k
Ourrent d|souss|ons on teohno|ogy and |nnovat|on |n
the |nternat|ona| oontext often revo|ve around how |n-
ternat|ona| oomm|tments for teohno|ogy d|ssem|nat|on
and transfer oan be fostered.
14
W|th|n severa| of these
d|souss|ons, suoh as those re|ated to Art|o|e 66(2} of
theAgreementonTradeRe|atedAspeotsoflnte||eotua|
Property R|ghts (the TRlPS Agreement}, oonsensus st|||
needs to be reaohed on den|ng and measur|ng teohno|-
ogy transfer. Wh||e these d|souss|ons rema|n |mportant
fromanovera||g|oba|perspeot|ve,th|sReportart|ou|ates
anumberofpo||oymeasuresthatoou|dbe|mp|emented
atthenat|ona|,reg|ona|and|nternat|ona||eve|s|norder
to operat|ona||ze the pr|no|p|es out||ned above.
The po||oy measures |dent|ed by th|s Report are not
exhaust|ve, but he|p to show the way forward. Moreo-
ver,theyshou|dnotbeoonstruedasb|nd|ngdeve|op|ng
oountr|es, part|ou|ar|y emerg|ng oountr|es, to exaot|ng
teohno|og|oa| oomm|tments. The po||oy measures sug-
gested here are meant to fao|||tate South-South teoh-
no|og|oa| oo||aborat|on through |ong-term-or|ented |n-
st|tut|ons |n a|| deve|op|ng oountr|es, whether they aot
as supp||ers or reo|p|ents of teohno|og|oa| know|edge |n
oo||aborat|veventures.
1. 0|ase|y |ink natiana| innavatian pa|icies
ta 5auth-5auth initiatives
Nat|ona| |nnovat|on po||oy frameworks oou|d be aooom-
pan|edbythefo||ow|ngpo||oymeasuresspeo|a||ya|med
at enoourag|ng South-South oo||aborat|on for teohno|-
ogyand|nnovat|on.
a. 0aardinate |aca| and regiana| innavatian
pa|icies with 5auth-5auth initiatives
There|softenad|soonneotbetweennat|ona|andreg|on-
a| po||o|es on teohno|ogy and |nnovat|on. Furthermore,
s|noe some deve|op|ng oountr|es have on|y reoent|y
emerged as s|gn|oant souroes of teohno|og|oa| |earn|ng,
manyex|st|ngpo||oy|nstrumentsdonotexpress|yrefer
toSouth-Southoo||aborat|on|nth|sarea.Th|sneedsto
berev|sed|npo||oysett|ngexero|ses,bothatthenat|ona|
and reg|ona| |eve|s, to reeot the new rea||ty, reoogn|z|ng
deve|op|ng oountr|es as |ong-term partners |n teohno-
|og|oa|oapao|ty-bu||d|ng.
As part of th|s, |nnovat|on po||oy frameworks at the na-
t|ona| and reg|ona| |eve|s need to be rev|sed to |noor-
porate oerta|n key |nnovat|on pr|or|t|es |n South-South
transaot|ons.Arangeofpo||oymeasuresoou|dbe|mp|e-
mentedtoexpress|ypromoteSouth-Southteohno|og|oa|
oo||aborat|on,|no|ud|ng,butnotneoessar||yrestr|otedto:
- ||nk|ng deve|op|ng-oountry FDl w|th o|ear|y ar-
t|ou|ated teohno|ogy and tao|t know-how requ|re-
ments;
Prov|d|ng/us|ng ex|st|ng government fund|ng to
promote so|ent|o and teohn|oa| oo||aborat|ons for
pr|or|ty seotors between deve|op|ng oountr|es (|n
the|r reg|on or even outs|de the reg|on};
Grant|ngspeo|a||noent|vesandtaxreduot|onsto
|ooa| rms |n return for enter|ng |nto jo|nt ventures
or jo|nt produot|on arrangements w|th rms from
deve|op|ng oountr|es, w|th a part|ou|ar emphas|s
on aoqu|r|ng teohno|og|es;
- Offer|ng |noent|ves to fore|gn rms from deve|op|ng
oountr|es,part|ou|ar|yemerg|ngoountr|es,suohas
speo|a| tax outs or government proourement as-
suranoes,|nreturnforsett|ngupproduot|onfao|||-
t|es and transferr|ng know-how to |ooa| rms;
Prov|d|ng teohno|ogy |noubat|on fao|||t|es to sup-
portnewteohno|ogyapp||oat|ons|n|ooa||ndustry
w|th he|p from rms |n deve|op|ng oountr|es, par-
t|ou|ar|yemerg|ngoountr|es.
b. Pravide incentives far shifting tawards
higher va|ue-added activities
ln order to m|n|m|ze the r|sk of |ooa| rms rema|n|ng at
|owerendsofGPNsw|thfewornoohanoesofmov|ng
uptheva|ue-addedstagesofproduot|on,there|saneed
forexp||o|tpo||oymeasuresthatsupportengagement|n
h|gherva|ue-addedaot|v|t|es.H|gherva|ue-addedaot|v|-
t|es |n th|s oontext are o|ose|y assoo|ated w|th, but not
|dent|oa| to, manufaotur|ng a|though th|s seotor |s oer-
ta|n|yessent|a|fordr|v|ngstruotura|transformat|on.The
not|on of h|gher va|ue-added shou|d a|so enoompass
greatersoo|a|va|ueaddedthrough|nnovat|onaot|v|t|es,
wh|oh essent|a||y re|ate to ensur|ng that |nnovat|on ao-
t|v|t|es respond to |ooa| needs and a|so foster equ|tab|e
and|no|us|vedeve|opmentandarepro-poor.lnnovat|on
funds,bothatthenat|ona|andseotora||eve|s,oou|dhe|p
to |nduoe suoh a sh|ft towards |noreased va|ue added,
part|ou|ar|y|noountr|esr|oh|nnatura|resouroes.
xxii TECHNOLOGY AND INNOVATION REPORT 2012
c. Facus an techna|agica| |earning in pa|icies af
emerging cauntries
lnordertoensurethatteohno|og|oa||earn|ng|sanessent|a|
oomponent of South-South |nteraot|ons, emerg|ng ooun-
tr|esoou|d|ntroduoepo||oymeasuresthathe|pto|norease
the foous on oo||aborat|ons |n mutua||y beneo|a| teohno|o-
g|es and |nnovat|on. These oou|d take the fo||ow|ng forms:
Adopt|ng po||o|es that promote teohno|og|oa| en-
gagementw|thotherdeve|op|ngoountr|esfroma
|ong-termperspeot|ve;and
- Prov|d|ng add|t|ona| |noent|ves to nat|ona| rms to
engage |n teohno|og|oa| exohange and the bu||d-
|ng of tao|t know-how |n rms |n other deve|op|ng
oountr|es.
2. Adapt pa|icies that pramate a |ang-term
techna|agica| arientatian
Theovera||teohno|og|oa|deve|opmentoftheSouth|sa
oommon good that w||| have pos|t|ve network effeots for
a||deve|op|ngoountr|esandthe|rpo||oystrateg|esneed
to reeot th|s. The|r |ong-term v|s|on and strategy shou|d
8ox1: |ost|t0t|ooa|Ieat0resoItheproposedSo0th-So0th|ooovat|ooaodTechoo|ogyPact(S|TP)
TheSlTEPwou|dsupportteohno|og|oa||earn|ngand|nnovat|onoapao|tyaorossa||deve|op|ngoountr|esbyprov|d|ng|nst|tut|ona|
support at three d|fferent |eve|s through a var|ety of po||oy |nstruments. At eaoh of the |eve|s, |nst|tut|ona| support oou|d take the
fo||ow|ngforms.
L 3URPRWHWHFKQRORJLFDOOHDUQLQJDWWKHUPOHYHO
Anumberofdeve|op|ngoountr|es,|npart|ou|aremerg|ngoountr|es,are|noreas|ng|yproduo|ngnew,state-of-the-artteohno|og|es.
Many of these efforts are be|ng nanoed by pub||o |nvestment. Three |nstruments oou|d part|ou|ar|y advanoe aooess to and
produot|on of suoh know|edge:
- Poo||ng pub||o |nvestment for bas|o R&D: Suoh a meohan|sm wou|d poo| together pub||o |nvestment for bas|o R&D aoross
deve|op|ng oountr|es that seek to jo|n hands as a means of promot|ng both the deve|opment of domest|o |earn|ng oapab|||t|es
as we|| as ||nkages and |nteraot|ons among aotors |n |nnovat|on systems aoross themse|ves. Th|s oou|d be done at a reg|ona|
|eve|,oramongstoountr|esthatohoosetopartneraorossreg|ons.
- South-South researoh and produot deve|opment hubs: Reg|ona| R&D fao|||t|es to oreate and susta|n R&D w|th|n rms or
those wh|oh prov|de R&D serv|oes on a pay-as-you-go bas|s oou|d oonst|tute an |mportant short- and med|um-term so|ut|on
tosomeofthemajorprob|emsfaoedbypub||oandpr|vateseotors|ndeve|op|ngoountr|es.
- South-South poo||ng of supp|y and demand: A major |mped|ment to many teohno|og|oa| |nnovat|ons |s the ||m|ted or |aok of
|ooa|/reg|ona| market demand. Th|s |s part|ou|ar|y true |n |ndustr|es where teohno|og|oa| |nnovat|ons are |nvestment-|ntens|ve
and r|sky, suoh as |n hea|th teohno|og|es. Th|s meohan|sm wou|d || that gap by poo||ng demand reg|ona||y or aoross ||ke-
m|ndedoountr|esthathaves|m||arneedsw|th|ntheSouth.
LL 3URPRWH HQWHUSULVH GHYHORSPHQW DQG QDQFLQJ RI VSHFLF LQQRYDWLRQ DFWLYLWLHV WKDW DUH RI SDUWLFXODU LPSRUWDQFH WR
GHYHORSLQJFRXQWULHVDVDZKROH
TheproposedSlTEPwou|dhaveaseoondsetofpo||oy|nstrumentsandaot|v|t|esthatared|reot|ygearedtoa||ev|at|ngmanyof
the oonstra|nts faoed at the enterpr|se |eve|, |no|ud|ng nano|ng that oou|d take var|ous forms as d|soussed be|ow:
- venture oap|ta| fund|ng at the reg|ona| |eve|: Emerg|ng enterpr|ses |n |DOs that show prom|se |n key seotors of reg|ona|
|mportanoe, suoh as pharmaoeut|oa|s, agro-prooess|ng and lOTs, oou|d be prov|ded w|th venture oap|ta| fund|ng. Suoh
fund|ng programmes oou|d offer awards through oontests for part|o|pat|ng reg|ona| rms.
- Oo-|nvestment w|th pr|vate |nvestors |n |nnovat|ve enterpr|ses: A number of sohemes oou|d be |aunohed at the reg|ona| |eve|
for the deve|opment of ear|y-stage |nnovat|ve teohno|og|es by |ooa| rms. Aoqu|s|t|on of teohno|og|oa| know-how oou|d be
supportedthroughpub||o-pr|vate/pr|vate-pr|vatepartnersh|psbetweenvar|ousdeve|op|ngoountr|es.
- F|nano|ng for oo||aborat|on between pr|vate and pub||o enterpr|ses: Suoh an |nstrument oou|d express|y address the |aok of
|noent|ves at the nat|ona|/seotora| |eve|s |n deve|op|ng oountr|es so as to enab|e oo||aborat|ve ||nkages.
(iii) Act as a platform for sharing innovation experiences and promoting policy learning.
Deve|op|ng oountr|es oou|d benet enormous|y from bu||d|ng a oommon forum for exohange of |nformat|on about the|r nat|ona|
teohno|ogyand|nnovat|onpo||o|es.Suohaforumwou|denab|etheshar|ngofexper|enoesonhowoountr|esoou|dpromote
|ndustr|a|deve|opmentw|th|ntheparametersofthe|nternat|ona|tradeandlPRreg|mes.Theforumwou|dprov|deavenuefor
d|souss|ons on the opt|ons and ex|b|||t|es that are st||| ourrent|y ava||ab|e under the ex|st|ng |nternat|ona| ru|es wh|oh, overa||, oan
oftenberestr|ot|ve.
TheSlTEPoou|dbeaugmentedbyreg|ona||n|t|at|vesd|reot|ya|medatbu||d|ng|nnovat|onoapao|tyatthereg|ona||eve|.
Souroe: NOTAD.
xxiii
oonta|no|eartargetsandm||estonestobeaoh|eved|n
termsofteohno|og|oa|oo||aborat|on.
a. Adapt pa|icies that |ink technica| and
scientic caaperatian with techna|agica|
ca||abaratian
AstheReportshows,a|thoughmanydeve|op|ngooun-
tr|es are aot|ve|y engaged |n expand|ng the|r teohn|oa|
and deve|opment ass|stanoe aot|v|t|es, there |s a |aok
of ooord|nat|on between so|ent|o and teohn|oa| oo|-
|aborat|on prov|ded by the|r ageno|es and the ongo|ng
teohno|og|oa| oo||aborat|ons between rms. ln order to
ensurethebestresu|ts,theseaot|v|t|esshou|dbebetter
ooord|natedbymeansofao|earpo||oyonSouth-South
teohno|og|oa|oo||aborat|onsetoutbythegovernments.
Emerg|ngoountr|es,|npart|ou|ar,needtoart|ou|ate|ong-
termstrateg|oobjeot|vesassuggested|ntheaforemen-
t|onedseot|on.
b. Pravide incentives ta rms far techna|agica|
ca||abaratian and techna|agy transfer
Emerg|ngoountr|esoou|dprov|degreater|noent|vesfor
teohno|og|oa| oo||aborat|on and transfer of teohno|ogy
w|th|n the|r po||oy frameworks. These |noent|ves oou|d
take the fo||ow|ng forms:
- Tax oonoess|ons to emerg|ng-oountry rms |n return
forenter|ng|ntoorattraot|ngjo|ntventuresorjo|ntpro-
duot|on arrangements w|th rms |n deve|op|ng oountr|es,
part|ou|ar|y |DOs;
- Grant |ooa| rms speo|a| 'deve|opment-fr|end|y" oert|-
oatesasagoodw|||gesture.Theseoanaddtotheoor-
porate |mage of the rms and he|p them to deve|op a
oustomerbaseaorosstheSouth.
3. 0peratiana|ize the 5auth-5auth lnnavatian and
Techna|agy Pact (5lTEP)
lnordertofao|||tateaoommon,deve|opmentresponse
tothese|ssues,th|sReportsuggeststhepoo||ngofteoh-
no|og|oa| resouroes by deve|op|ng oountr|es through a
oomprehens|veSouth-Southlnnovat|onandTeohno|ogy
Paot (SlTEP}. The proposed paot wou|d be a meoha-
n|sm that seeks to ooord|nate and promote a deve|op-
|ng-oountryresponsetoteohno|ogy-re|ated|ssues.The
SlTEPshou|dprov|de|nst|tut|ona|supportatthree|eve|s.
To beg|n w|th, |t oou|d promote teohno|og|oa| |earn|ng
at the rm |eve| as an essent|a| oomp|ement to ongo|ng
South-South so|ent|o oooperat|on and teohn|oa| ass|s-
tanoeprogrammes.Ataseoond|eve|,|toou|dpromote
enterpr|se deve|opment and nano|ng of speo|o |nno-
vat|onaot|v|t|esthatareofpart|ou|ar|mportanoetode-
ve|op|ngoountr|es.F|na||y,|toou|daotasap|atformfor
shar|ng |nnovat|on exper|enoes and promot|ng |earn|ng
at the po||oy-mak|ng |eve| (box 1}.
G|ven the s|m||ar|ty of deve|op|ng oountr|es |nnovat|on
exper|enoesandthe|rteohno|og|oa|strengths,theReport
reoogn|zes these oountr|es as natura| strateg|o partners
w|theaohother|neffortstobr|dgetheteohno|og|oa|d|-
v|de. Further|ng th|s ro|e requ|res oreat|ng the r|ght bas|s
for aooess|ng so|enoe, teohno|ogy and |nnovat|on re-
souroesw|th|nthedeve|op|ngwor|d.Theteohno|ogyand
|nnovat|on resouroes of the South w||| be or|t|oa| for ||nk-
|ng rms and organ|zat|ons aoross deve|op|ng oountr|es,
part|ou|ar|y |DOs, w|th the g|oba| know|edge eoonomy
to aooe|erate the|r deve|opment prooesses. Th|s needs
to be based on an understand|ng that: (a} |nnovat|on |s a
mu|t|d|reot|ona|,h|gh|y|nteraot|veprooessthat|ntegrates
or 'art|ou|ates" so|enoe, teohno|ogy and produot|on, and
(b} new po||oy th|nk|ng |s needed to he|p estab||sh v|rtu-
ous o|ro|es of r|s|ng produot|v|ty, teohno|og|oa| progress
andstruotura|transformat|onaorosstheent|redeve|op-
|ngwor|d.
******
There are many outstand|ng |ssues oonoern|ng teoh-
no|og|oa| |earn|ng and |nnovat|on oapao|ty |n the oon-
textofdeve|op|ngoountr|es,|no|ud|ngthosere|atedto
teohno|ogytransfer,wh|ohneedtobeaddressedatthe
|nternat|ona| |eve|. Deve|op|ng oountr|es oan |ead the
way by work|ng together and prov|d|ng oonstruot|ve
so|ut|ons to these unreso|ved po||oy oha||enges |n the
oom|ngyears.
OVERVIEW
Geneva, Ootober 2012 Supaoha| Pan|tohpakd|
Seoretary-Genera| of the NOTAD
xxiv TECHNOLOGY AND INNOVATION REPORT 2012
NOTES
1. Referred to as the 'East As|an m|rao|e", the rst-t|er new|y |ndustr|a||z|ng eoonom|es (NlEs} that fo||owed Japan`s |ndustr|a||za-
t|on oompr|sed Hong Kong, the Repub||o of Korea, Ta|wan Prov|noe of Oh|na and S|ngapore, and the seoond-t|er oompr|sed
lndones|a,Ma|ays|aandTha||and.
2. See box 3.2 |n ohapter lll. Some other stud|es suoh as N-EOOSOO (2008} quote h|gher gures. Th|s reeots the oons|der-
ab|e var|at|on |n the qua||ty and ava||ab|||ty of data from the four major oontr|butors from the South - the Bo||var|an Repub||o of
venezue|a, Oh|na, lnd|a and the Repub||o of Korea. Furthermore, th|s gure may underest|mate tota| deve|opment ass|stanoe
bytheSouth,s|noesevera|sma||erb||atera|andmu|t||atera|oontr|but|onswerenot|no|uded|nthestudyduethepauo|tyofdata
and d|fferenoes |n den|t|ons of what oonst|tutes deve|opment oooperat|on.
3. Seeannextab|eA.ll.6oftheReport.
4. Annex tab|e A.ll.11.
5. These trends are oaptured |n gure 2.8, ohapter ll, wh|oh shows a |arge gap |n the |mports of maoh|nery and transport
equ|pment between o||-export|ng |DOs, non-o|| export|ng |DOs and other deve|op|ng oountr|es.
6. Tab|e 2.7 and gures 2.9 and 2.10, ohapter ll.
7. Tab|e 2.7, ohapter ll.
8. Tab|e2.8,ohapterll.
9. Tab|e 2.9, ohapter ll.
10. Ohapterlll.
11. Trends |n exports of pr|mary oommod|t|es show that wh||e |DOs exported the|r pr|mary oommod|t|es ma|n|y to deve|oped
oountr|es, th|s pattern has sh|fted s|gn|oant|y towards deve|op|ng oountr|es s|noe 2003 (gure 1.5, ohapterl}.
12. Tab|e 2.9 and gure 2.12 |n ohapter ll show that the serv|oes seotor aooounts for over 50per oent of a|| FDl from deve|op|ng
oountr|es.
13. Theseexamp|esared|soussed|nohapterllloftheReport.
14. See box 4.8 |n ohapter lv for a d|souss|on.
REFERENCES
OEOD (2010}. The Increasing Importance of the South to the South. Perspectives on Global Development 2010.Par|s.
N-EOOSOO (2008}. Trends in South-South and Triangular Development Cooperation. Baokground study for the
Deve|opment Oooperat|on Forum. New York, n|ted Nat|ons.
THE IMPORTANCE
OF THE SOUTH 1
3
CHAPTER I : THE IMPORTANCE OF THE SOUTH
CHAPTER I
THE IMPORTANCE OF THE SOUTH
A. BACKGROUND
The past deoade has seen a dramat|o
r|se |n the po||t|oa| and eoonom|o s|gn|-
oanoe of some oountr|es of the South,
part|ou|ar|y Braz||, Oh|na, lnd|a and South
Afr|oa.The|rr|se|spartofanongo|ngbut
punotuated prooess of oatoh-up growth
and deve|opment wh|oh began w|th the
rap|d |ndustr|a||zat|on of the rst- and
the seoond-t|er East As|an eoonom|es
|n the 1960s and 1970s.
1
The reoent
r|se of oountr|es |n the South dur|ng the
|ast deoade has, by oontrast been muoh
morew|despread,|no|ud|ng|nAfr|oa,w|th
the ant|o|pat|on that new growth po|es,
suoh as Egypt and N|ger|a, w||| oont|nue
to emerge over the oom|ng years (O`Ne|||
and Supnytska, 2009}.
Susta|ned growth and eoonom|o expans|on
of a number of these oountr|es has been
madeposs|b|eby|nterre|atedfaotors,|no|ud-
|ng the|r grow|ng oapab|||t|es |n manufaotur-
|ng and serv|oes, teohno|og|oa| |nvestments
and efo|ent ut|||zat|on of opportun|t|es ar|s|ng
from g|oba||zat|on. Together w|th r|s|ng per
oap|ta|noomesandtheoonoom|tantgrowth
of domest|o demand, these faotors have
he|ped to oonso||date oumu|at|ve ||nkages
onboththesupp|yanddemands|desofthe
eoonomy,wh|ohhavehe|pedtounderp|nthe
stronggrowthperformanoe.
Steadyeoonom|ogrowth|ntheseoountr|es
hasa|sotrans|ated|ntoan|norease|nSouth-
Southoooperat|on|ntrade,|nvestmentand
teohno|ogyoverthepasttwodeoades,ena-
b||ng them to beoome s|gn|oant g|oba| trad-
|ngpartnersw|thotherdeve|op|ngoountr|es
|n the 2000s (tab|es 1.1 and 1.2}. Ourrent
trends of enhanoed South-South ooopera-
t|on are |n ||ne w|th the po||t|oa| asp|rat|ons
of the deve|op|ng oountr|es dat|ng baok to
the 1950s, when they undertook a ser|es of
po||t|oa| |n|t|at|ves to oo||eot|ve|y ohange the
terms of the|r engagement |n g|oba| pro-
oesses |n an effort to further the|r deve|op-
ment (box 1.1}. These |n|t|at|ves |ed to for-
ma|reoogn|t|onbytheg|oba|oommun|tyof
the need to support teohn|oa| oooperat|on
amongdeve|op|ngoountr|es.
At that t|me, however, these oountr|es d|d
not have the requ|s|te eoonom|o and other
struotura|oapao|t|estheynowhavetosup-
portandexpandSouth-Southoooperat|on.
G|ven the rap|d progress made by some
deve|op|ngoountr|es,therehasbeenare-
newed |nterest |n how they oou|d |mprove
oooperat|on among themse|ves |n trade,
|nvestment and teohno|ogy to further pro-
mote growth and to ensure strong ga|ns
from the o|oser |ntegrat|on of the South |n
the g|oba| eoonomy. Grow|ng d|sappo|nt-
ment |n a var|ety of |nternat|ona| forums
for trade, teohno|ogy and deve|opment,
|no|ud|ng the ruguay Round of trade ne-
got|at|ons (Shafaedd|n, 2010}, has a|so
prompted a rev|va| of |nterest |n South-
Southoooperat|onasameansofaddress-
|ngor|t|oa|deve|opment|ssues.
Ongo|ng South-South oooperat|on ex-
tends far beyond s|mp|e eoonom|o ||nkages.
Popu|at|on growth |n some of the emerg-
|ng oountr|es, part|ou|ar|y Oh|na and lnd|a,
|sanother|mportantfaotorexp|a|n|ngr|s|ng
South-South trade and |nvestment trends.
Somedeve|op|ngoountr|es,a|ongw|ththe|r
grow|ngeoonom|oo|out,havew|denedthe|r
geopo||t|oa| hor|zons for reshap|ng the g|oba|
governanoearoh|teoture.Theseare,|npart,
reeoted |n the|r |noreas|ng oontr|but|ons to
deve|opment oooperat|on and ass|stanoe.
Reoent stud|es est|mate that deve|opment
ass|stanoe from deve|op|ng oountr|es has
been grow|ng stead||y, reaoh|ng $7.3b||||on
|n 2010 (OEOD, 2010}.
2
ln an effort to further the|r geopo||t|oa| as-
p|rat|ons, newer a|||anoes are a|so be|ng
7|e||seoft|eSo0t|
|soa|tofanongo|ngo0t
o0nct0atedo|ocessof
catc|-0og|owt|and
deve|ooment.
Ongo|ngSo0t|-So0t|
coooe|at|onextends
fa|oeyonds|mo|e
econom|c||n|ages.
4 TECHNOLOGY AND INNOVATION REPORT 2012
forged among oountr|es. Th|s |s exemp||-
ed by the BRlOS - Braz||, the Russ|an
Federat|on,
3
lnd|a, Oh|na and South Afr|oa
- and lBSA - lnd|a, Braz|| and South Afr|oa
- groups of oountr|es that have served as
p|atformsforanextendedSouth-Southd|s-
oourse.Theseoountr|es,for|nstanoe,have
|ntens|ed the|r |nd|v|dua| and jo|nt deve|op-
ment oooperat|on w|th other oountr|es of
the South, as ev|dent |n the|r annua| sum-
m|ts that have been he|d s|noe June 2009.
4
Over the three deoades, from 1980 to
2010, the rates of growth of gross domes-
t|o produot (GDP} have var|ed w|de|y aoross
reg|ons and oountr|es. Desp|te the uneven
growth performanoe aoross deve|op|ng
oountr|es over the past three deoades (ta-
b|e 1.1 and gure1.1} and grow|ng |noome
gaps, the reoent surge |n growth |n an |n-
oreas|ng number of deve|op|ng oountr|es
s|gna|sthebeg|nn|ngofanewera|ng|oba|
deve|opment, w|th a sh|ft from a h|therto
b|po|ar deve|opment dynam|o (wh|oh was
predom|nant|y North-South} to a potent|a||y
more p|ura||st|o one (North-South-South}.
As a resu|t, there |s a rea| potent|a| for a
new parad|gm for |nternat|ona| deve|op-
ment to emerge, wh|oh extends the ex|st-
|ng boundar|es of engagement to |no|ude
those deve|op|ng oountr|es - part|ou|ar|y
|east deve|oped oountr|es (|DOs} - that
are ourrent|y marg|na||zed |n the g|oba|
eoonom|o system. Rea||s|ng that poten-
t|a| w||| requ|re s|gn|oant ohanges |n the
way the g|oba| eoonomy |s governed, to
make |t more deve|opment-or|ented and
a burgeon|ng ||terature, supported by
grow|ng emp|r|oa| ev|denoe, has a|ready
h|gh||ghted the potent|a| mer|ts of |noreas-
|ng South-South trade and |nvestment.
8ox1.1: Abr|eIh|storyoISo0th-So0thcooperat|oo
The Bandung Oonferenoe of 1955 was the rst major |n|t|at|ve |n South-South oooperat|on, where 24 oountr|es from As|a and
Afr|oa met on a oommon p|atform to promote eoonom|o and ou|tura| oooperat|on 'on the bas|s of mutua| |nterest and respeot
for nat|ona| sovere|gnty".
a
Th|sAfro-As|anOonferenoewasfo||owedbyamuoh|arger|n|t|at|vebytheoountr|esoftheSouthto
assert the|r r|ght to deve|opment through the non-a||gned movement (NAM}, wh|oh oonvened |ts rst meet|ng |n 1961. The major
oonoerns of NAM were the 'proteot|on of the sovere|gnty and r|ghts of sma|| underdeve|oped states and the|r deve|opment |n
freedom". Perhaps |ts most s|gn|oant oontr|but|on was that |ts members asp|red to aoh|eve 'oo||eot|ve se|f-re||anoe", wh|oh to
th|sdaterema|nsthestrongeststatementofSouth-Southoooperat|on.
Between 1972 and 1977, the Genera| Assemb|y of the n|ted Nat|ons, dr|ven by the aot|on of NAM and the Group of 77 deve|-
op|ng oountr|es (G-77}, adopted a ser|es of reso|ut|ons oa|||ng on the n|ted Nat|ons system to ass|st deve|op|ng oountr|es |n
the|reffortsto|noreaseteohn|oa|oooperat|onamongthemse|ves.TheGenera|Assemb|yrespondedbydeo|d|ngtoestab||sha
work|ng group to formu|ate reoommendat|ons on teohn|oa| oooperat|on among deve|op|ng oountr|es (TODO}; set up a speo|a| un|t
w|th|n the n|ted Nat|ons Deve|opment Programme (NDP} to promote TODO; oonvened a h|gh-|eve| speo|a| sess|on devoted
to deve|opment and teohn|oa| oooperat|on; and |nsor|bed TODO as a permanent |tem on the agenda of the Genera| Assemb|y
(NDP, 1994}.
ln 1974, deve|op|ng oountr|es proposed the Deo|arat|on for the Estab||shment of a New lnternat|ona| Eoonom|o Order (NlEO} at
NOTAD. These proposa|s were a|med at promot|ng deve|op|ng-oountry |nterests and oreat|ng an |ntergovernmenta| forum for
North-South d|a|ogue and negot|at|ons on th|s |ssue. The NlEO as a oa|| by deve|op|ng oountr|es to be|ong and be treated as an
|ntegra| part of the g|oba| order (Oorea 1977: 177-178}. Subsequent|y, |ntergovernmenta| meet|ngs at the N, |no|ud|ng NOTAD,
attempted to oreate an |nternat|ona| framework that |s more oonduo|ve to the deve|opment prooess.
The rst n|ted Nat|ons Oonferenoe on Teohn|oa| Oooperat|on among Deve|op|ng Oountr|es |n 1978 adopted the Buenos A|res
P|an of Aot|on for promot|ng and |mp|ement|ng teohn|oa| oooperat|on (a|so known as BAPA}. As suoh, BAPA prov|ded the rst
major b|uepr|nt for TODO. lt offered a new or|entat|on to deve|opment oooperat|on w|th |ts emphas|s on nat|ona| and oo||eot|ve
se|f-re||anoe among deve|op|ng oountr|es as the foundat|on for a new |nternat|ona| order. BAPA was endorsed |n 1978 by Genera|
Assemb|y Reso|ut|on 33/134, wh|oh o|eared dened TODO. Th|s beoame the bas|s for a ser|es of reg|ona| |ntergovernmenta|
|n|t|at|ves |n the 1980s onwards (see ohapter lll}.
Souroe: NOTAD, based on var|ous souroes.
a
F|na| Oommun|que of the As|an-Afr|oan Oonferenoe of Bandung, 24 Apr|| 1955, ava||ab|e at: http://franke.uoh|oago.edu/F|na|_
Oommun|que_Bandung_1955.pdf.
7||ss|gna|st|e
oeg|nn|ngofanewe|a
|ng|ooa|deve|ooment,
w|t|as||ftf|oma
||t|e|too|oo|a|
deve|oomentdynam|c
toaootent|a||ymo|e
o|0|a||st|c.
5
CHAPTER I : THE IMPORTANCE OF THE SOUTH
Tab|e1.1: 8ea|60Pgrowthrates,19802010
1980 1990 2000 2005 2010
0eve|opedco0otr|es
0.30 2.65 3.88 2.45 2.66
0eve|op|ogco0otr|es
4.68 3.96 5.78 6.80 7.48
AIr|ca
3.59 2.64 3.46 5.45 3.99
Lat|oAmer|caaodthe0ar|bbeao
6.31 0.52 4.41 4.58 5.98
As|a
3.63 6.48 6.79 7.87 8.44
astAs|a
4.98 5.75 8.11 8.63 9.53
So0thAs|a
0.96 6.51 4.04 8.24 7.14
So0th-astAs|a
6.37 8.33 6.15 5.80 7.99
westAs|a
2.93 6.55 6.43 6.86 6.36
Souroe: NOTADstat.
Note: For a|| oa|ou|at|ons, South As|a oompr|ses: Afghan|stan, Bang|adesh, Bhutan, lnd|a, lran (ls|am|o
Repub||o of}, Ma|d|ves, Nepa|, Pak|stan, Sr| |anka. East As|a oompr|ses: Oh|na, Demoorat|o Peop|e`s
Repub||o of Korea, Hong Kong (SAR of Oh|na}, Maoao (SAR of Oh|na}, Mongo||a, Repub||o of Korea,
Ta|wan Prov|noe of Oh|na. South-East As|a oompr|ses: Brune| Darussa|am, Oambod|a, lndones|a,
Ma|ays|a, Myanmar, S|ngapore, Tha||and, |ao Peop|e`s Dem. Repub||o, Ph|||pp|nes, T|mor-|este,
v|etnam. West As|a oompr|ses: Bahra|n, lraq, Jordan, Kuwa|t, |ebanon, Oooup|ed Pa|est|n|an
Terr|tory, Oman, Oatar, Saud| Arab|a, Syr|an Arab Repub||o, n|ted Arab Em|rates, Turkey, Yemen.
|at|n Amer|oa and the Oar|bbean oompr|ses: Angu|||a, Ant|gua and Barbuda, Argent|na, Aruba,
Bahamas, Barbados, Be||ze, Bo||v|a, Braz||, Oayman ls|ands, Oh||e, Oo|omb|a, Oosta R|oa, Ouba,
Dom|n|oa, Dom|n|oan Repub||o, Eouador, E| Sa|vador, Grenada, Guyana, Ha|t|, Honduras, Jama|oa,
Mex|oo, Montserrat, Nether|ands Ant|||es, N|oaragua, Panama, Paraguay, Peru, Sa|nt K|tts and Nev|s,
Sa|nt |uo|a, Sa|nt v|noent and the Grenad|nes, Sur|name, Tr|n|dad and Tobago, Turks and Oa|oos
ls|ands, ruguay, venezue|a. Southern Afr|oa oompr|ses: Botswana, |esotho, Nam|b|a, South Afr|oa,
Swaz||and.
-4
-2
0
2
4
6
8
1
9
8
0
1
9
8
2
1
9
8
4
1
9
8
6
1
9
8
8
1
9
9
0
1
9
9
2
1
9
9
4
1
9
9
6
1
9
9
8
2
0
0
0
2
0
0
2
2
0
0
4
2
0
0
6
2
0
0
8
2
0
1
0
R
e
a
l

G
D
P

g
r
o
w
t
h

r
a
t
e
Deve|oped
oountr|es
Deve|op|ng
oountr|es
F|g0re1.1: 8ea|60PgrowthratesoIdeve|opedaoddeve|op|ogco0otr|es,19802010
(Perceot)
Souroe: NOTADstat.
7|e|e|sa|ea|ootent|a|
fo|anewoa|ad|gmfo|
|nte|nat|ona|deve|oo-
menttoeme|ge.
6 TECHNOLOGY AND INNOVATION REPORT 2012
However,theana|ys|srema|nsgenera|,and
data on some other |mportant |ssues are
soaroe or not eas||y ava||ab|e. One suoh |s-
sue oonoerns teohno|og|oa| ows and oo|-
|aborat|on of the k|nd that oan bu||d |nnova-
t|onoapab|||t|es|ndeve|op|ngoountr|esasa
who|e.
Aga|nst th|s baokground, th|s TIR 2012ar-
guesthatthet|me|sr|petomovebeyond
ana|ys|ng ourrent trends |n South-South
tradeand|nvestmentandbeg|noonoeptu-
a||z|ng on how and to what extent South-
South oooperat|on oou|d he|p address
speo|o deve|opment goa|s of deve|op|ng
oountr|es. One suoh goa| |s to br|dge the
teohno|og|oa| d|v|de so as to promote |n-
dustr|a||zat|on and |no|us|ve g|oba||zat|on
w|th|nthedeve|op|ngwor|dasawho|e.
B. SOUTH-SOUTH
COOPERATION:
KEY ARGUMENTS
Arev|ewoftheex|st|ng||teratureonSouth-
South oooperat|on and reg|ona||zat|on
shows that from the outset the d|soourse
has been |arge|y oentred on South-South
trade and |nvestment, and how |t oou|d
oontr|bute to |ndustr|a||zat|on of the ooun-
tr|es|nvo|ved.lnmuohoftheana|ys|s,r|s|ng
South-South trade and |nvestment trends
havebeenv|ewedpos|t|ve|yasas|gna|that
the deve|op|ng oountr|es oou|d prov|de a
s|gn|oant |mpetus to the deve|opment of
theotherdeve|op|ngoountr|es.The||terature
|dent|es two ma|n pos|t|ve aspeots of ooop-
erat|onbetweenoountr|esoftheSouth:
|. Suoh oooperat|on wou|d he|p the
South to deooup|e from the g|oba|
oyo||oa| trends of growth, thereby
promot|ng a new form of stab|||ty |n
theg|oba|eoonom|osystem;and
||. S|noe the emerg|ng oountr|es are
st||||nthe|rdeve|opmentphase,they
are better p|aoed to understand the
prob|emsofdeve|opment,part|ou|ar-
|y |n the ourrent g|oba| oontext, and
oou|dprov|deanewmode|forooop-
erat|onandteohn|oa|ass|stanoe.
Thesev|ewsared|soussed|ngreaterdeta||
here.
1. Growing South-South trade and
its implications
A|ready |n the 1950s, deve|opment eoono-
m|sts advooated |noreased South-South
tradeasan|mportantmeanstooveroome
oonstra|nts ||nked to ||m|ted domest|o re-
souroe mob|||zat|on and the sma|| s|ze of
the |ooa| market (e.g. Myrda|, 1956; |ew|s,
1979}. These oont|nue to be or|t|oa| |ssues
formanydeve|op|ngoountr|eseventoday.
South-South oooperat|on and reg|ona| |n-
tegrat|on were a|so oons|dered an |mpor-
tant means for promot|ng |ndustr|a||zat|on
(EO|A, 1950; Preb|soh, 1984}. Here, the
argumentsforgreaterSouth-South|nterao-
t|ons have ||nked |noreased trade to bu||d-
|ng produot|ve oapao|t|es through the es-
tab||shment of a 'vent-for-surp|us", wh|oh
reoogn|zes that there are many unut|||zed
produot|ve resouroes |n deve|op|ng ooun-
tr|es, |no|ud|ng |abour, wh|oh oou|d be put
to use through |noreased South-South
trade.Th|sv|ewwasthebas|sforavar|ety
of reg|ona| trade agreements between de-
ve|op|ng oountr|es that were oono|uded |n
the 1960s and the 1970s. However, |ater
stud|esshowedthattheseagreementsd|d
not suooeed |n |noreas|ng South-South
trade (see, for examp|e, de Me|o and Pana-
gar|ya, 1993}.
5
At the same t|me, oounter perspeot|ves
on South-South trade expressed soept|-
o|sm over rep|ao|ng market-based 'we|-
fare max|m|z|ng patterns" of trade w|th
|nduoed preferenoes aooorded to trad|ng
partners through preferent|a| trad|ng ar-
rangements (PTAs}. lt has been argued that
suoh PTAs reduoe we|fare beoause, un||ke
market-|nduoed trade that g|ves pr|or|ty to
|owest-oostproduoersofgoods,thePTAs
may favour h|gher-oost produoers over
potent|a| |ow-oost ones and |ead to d|s-
torted trad|ng patterns (see, for examp|e,
Wor|d Bank, 2000}. More reoent ||terature
onSouth-Southtradehasfooused|arge|y
on the poss|b|||ty of deooup||ng, oonver-
genoe and the 'y|ng geese" hypothes|s
(boxes1.2 and 1.3}.
R|s|ngSo0t|-So0t|
t|adeand|nvestment
t|ends|aveoeenv|ewed
oos|t|ve|yasas|gna|
t|att|edeve|oo|ng
co0nt||esco0|do|ov|de
a s|gn|cant |moet0s
tot|edeve|oomentof
t|eot|e|deve|oo|ng
co0nt||es.
7
CHAPTER I : THE IMPORTANCE OF THE SOUTH
Data on trends |n South-South trade show
that |ntra-South trade has |noreased qu|te s|g-
n|oant|y s|noe the m|d-1990s (tab|e 1.2; see
a|so tab|e 2.2 |n ohapter ll}. ln 1995, 42per
oentofthetradeofdeve|op|ngoountr|eswas
w|th other deve|op|ng oountr|es, and by 2010
th|s gure had reaohed 56per oent.
6
Howev-
er, a s|gn|oant aspeot of South-South trade
|sthat|ts|mportanoevar|esoons|derab|yboth
|ntra-reg|ona||y and |nter-reg|ona||y. Among
oountry groups, South As|a and South-East
As|a have the h|ghest proport|on of |ntra-
South trade, amount|ng to approx|mate|y
64per oent of the|r tota| trade. Amongst |n-
d|v|dua|oountr|es,lnd|ahastheh|ghestshare
of |ntra-South trade (tab|e 1.3 and a|so g-
ures 1.2 and 1.3}. Ourrent|y at 66 per oent,
lnd|astradew|th|tsdeve|op|ng-oountrypart-
ners are muoh greater than those of e|ther
Braz|| or Oh|na (tab|e 1.3}. Most |mportant|y,
for a|| the reg|ons and oountr|es |no|uded
|n tab|e 1.1, South-South trade was more
8ox 1.2: The y|og geese hypothes|s
The y|ng geese hypothes|s, based on the works of Akamatsu |n Japan |n the 1930s, shows the sequenoe of oatoh|ng up of |ate-
oomereoonom|esw|thothera|readydeve|opedones.ltpos|tsthat,basedonoomp|ementar|t|es|nproduot|onprooesses,apro-
oessofdynam|ooomparat|veadvantagewou|denab|eastruotura|transformat|onofdeve|op|ngoountr|esfrombe|ng|mporters
ofgoodstoproduoersandexportersofthegoods,therebyoaus|ngthemtogradua||yoonvergeoroatohupw|thmoreadvanoed
oountr|es (Akamatsu, 1962}. The y|ng geese metaphor reeots the 'v" shape of y|ng geese |nverse|y where one or some |ead
oountr|esoou|d,throughthe|rprooessesofstruotura|transformat|on,oreateopportun|t|esforotherstofo||ow.
ln the y|ng geese hypothes|s, the rst stage |s marked by an |ntra-|ndustry prooess by wh|oh a oountry ohanges from be|ng a net |m-
porterofgoods|naseotortoa|ooa|produoerandeventua||yanexporterofgoods|nthatseotor.Th|sgraduat|onfrom|mportsto|ooa|
produot|on and then to produot|on for exports (wh|oh |s marked by |noreased |mports of oap|ta| goods that feed |nto the expans|on
of |ooa| produot|on} |s a fundamenta| e|ement of a oountry`s deve|opment path, aooord|ng to th|s hypothes|s. A seoond stage |s the
dynam|o expans|on of oapab|||t|es from th|s |ead seotor |nto other seotors of the eoonomy (through teohno|og|oa| sp|||overs and a w|der
use of the sk|||s base}. Th|s stage |s or|t|oa|, denot|ng the prooess of struotura| ohange |n the eoonomy, whereby |ndustr|es |n a var|ety of
seotors are deve|oped and a r|s|ng |eve| of oapab|||t|es |n the oountry |s d|reot|y reeoted |n the teohno|og|oa| soph|st|oat|on of the goods
produoed. A th|rd and na| stage |s the re|ooat|on of |ndustr|a| aot|v|t|es to other oountr|es through a prooess of gradua| oonvergenoe.
Souroe: NOTAD.
8ox1.3: 0eco0p||ogaodreverseco0p||og
Rev|ews of the eoonom|o performanoe of oountr|es from the 1950s show o|ear oyo||oa| dependeno|es and ||nkages between the
growth of the deve|op|ng and deve|oped oountr|es, where the growth rates |n the former have been 'ooup|ed" w|th the growth
of the |atter. ln reoent years, the rap|d r|se |n growth rates of severa| deve|op|ng oountr|es has |ed to what |s w|de|y known as the
'deooup||ng hypothes|s", that |s, the poss|b|||ty that w|th s|gn|oant growth rates, deve|op|ng eoonom|es oan de||nk the|r eoonom|o
growthfromtheoyo||oa|patternsofdependenoeonthedeve|opedeoonom|es.
However, desp|te s|gn|oant growth rates |n the South, there has been no ev|denoe of any |mm|nent deooup||ng. At the same
t|me, the qu|oker reoovery of nano|a| markets |n some of the deve|op|ng eoonom|es from the most reoent g|oba| nano|a| or|s|s
(O`Ne||| and Supnytska, 2009} has |ed to a pred|ot|on of 'trend deooup||ng", whereby the emerg|ng oountr|es are at |east part|a||y
deooup|ed from the oyo||oa| boom-bust growth patterns of the g|oba| eoonomy. Whether or not th|s |s ongo|ng |s not fu||y o|ear.
Many deve|op|ng oountr|es have been |ess vu|nerab|e to the or|s|s due to the|r burgeon|ng domest|o markets, but st||| re|y |arge|y
onexportsfromsevera|seotors.
Are|ated|ssuethathasbeenexp|ored|nthe||terature|sthatofoonvergenoe,wh|ohenv|sageseoonom|ooonvergenoebetween
ther|s|ngdeve|op|ngoountr|esandthedeve|opedoountr|es.Soho|arswarnthatwh||eoonvergenoe|saposs|b|||ty,there|sno
o|ear |nd|oat|on that th|s w||| neoessar||y take p|aoe (Rodr|k, 2011}. Just beoause some of the rap|d|y grow|ng eoonom|es of the
Southhaveoonvergedtowardsthedeve|opedoountr|esdoesnotmeanthatotherdeve|op|ngoountr|esw|||oroou|dfo||owa
s|m||arpath.Atthesamet|me,stud|esnotethatamajorreasonforthebetterperformanoeandspeedyreooveryofthe|arger
deve|op|ng oountr|es has been robust domest|o demand, wh|oh has been a key faotor |n reduo|ng the|r vu|nerab|||ty to the |mpaots
oftheg|oba|eoonom|oor|s|s.
Souroe: NOTAD.
/nt|a-So0t|t|ade|as
|nc|easedq0|te
s|gn|cant|y s|nce t|e
m|d-1990sto|eac|
56%oftota|t|ade
|n2010.
8 TECHNOLOGY AND INNOVATION REPORT 2012
Tab|e1.2: vo|0t|oooItradebyreg|oo,1995aod2010
a,b
(PerceotageoItota|trade)
Tab|e1.3: vo|0t|oooItradeoIse|ecteddeve|op|ogco0otr|es,1995aod2010
a
cooomy
0eve|op|og
co0otr|es
0eve|oped
co0otr|es
0thers
0eve|op|og
co0otr|es
0eve|oped
co0otr|es
0thers
1995 1995 1995 2010 2010 2010
0eve|op|ogco0otr|es
41.58 57.64 0.78 55.82 41.88 2.31
Lat|oAmer|ca
aodthe0ar|bbeao
28.91 70.10 1.00 40.42 58.45 1.13
So0theroAIr|ca
59.21 40.64 0.15 52.93 46.60 0.48
So0thAs|a
41.22 56.37 2.41 64.74 32.53 2.73
So0th-astAs|a
44.91 54.64 0.45 64.63 34.42 0.95
astAs|a
46.04 52.90 1.06 56.33 41.23 2.44
westAs|a
38.20 59.69 2.11 55.48 41.29 3.24
0eve|op|og
co0otr|es
0eve|oped
co0otr|es
0thers
0eve|op|og
co0otr|es
0eve|oped
co0otr|es
0thers
1995 1995 1995 2010 2010 2010
8raz|| 37.78 61.31 0.92 53.16 44.51 2.33
|od|a 39.82 57.97 2.21 65.31 32.69 1.99
0h|oa 49.01 49.24 1.74 49.91 47.02 3.07
So0thAIr|ca .. .. .. 53.33 46.18 0.49
Souroe: NOTADstat.
a
The gures presented |n the tab|e add up to 100per oent for eaoh of the years, 1995 and 2010.
b
A|soseeannextab|eA.ll.8.
Souroe: NOTADstat.
a
The gures presented |n the tab|e add up to 100per oent for eaoh of the years, 1995 and 2010.
|mportantthanSouth-Northtrade,exoeptfor
the |at|n Amer|oan and Oar|bbean reg|on.
7
Th|sgrow|ngSouth-Southtradeasaresu|t
of the overa|| growth trends |n deve|op|ng
oountr|es|sa|so|ead|ngtoa|argernumber
of reg|ona| trade agreements between de-
ve|op|ngoountr|es.
2. South-South investment as a
driver of development
H|stor|oa||y, fore|gn d|reot |nvestment (FDl}
has been an |mportant souroe of nano|ng
and oap|ta| |n deve|op|ng oountr|es. The
|mportanoe of deve|op|ng oountr|es, par-
t|ou|ar|y those |n As|a, as souroes of FDl
has |noreased qu|te s|gn|oant|y over the
past two deoades.
8
Th|s r|se has been a||
the more steep s|noe the peak of the g|ob-
a| nano|a| and eoonom|o or|s|s |n 2008.
The share of deve|oped oountr|es |n tota|
g|oba| FDl outows deo||ned, from 94 per
oent |n 1980 to 68 peroent |n 2010, where-
as that of deve|op|ng oountr|es |noreased
from 6per oent |n 1980 to 28per oent |n
2010 (gure 1.4}. Oountr|es suoh as Oh|na
and lnd|a aooounted for a |arge share of
th|s|norease.
9
7|e|moo|tanceof
deve|oo|ngco0nt||es,
oa|t|c0|a||yt|ose|nAs|a,
asso0|cesofFD/
|as|nc|easedq0|te
s|gn|cant|y.
9
CHAPTER I : THE IMPORTANCE OF THE SOUTH
F|g0re1.2: vo|0t|oooItradeoId|IIereotreg|oosw|ththeSo0thasashareoIthe|rtota|
trade,19952010
a
F|g0re1.3: vo|0t|oooItradeoId|IIereotreg|oosw|ththehorthasashareoIthe|rtota|
trade,19952010
a
(Perceot)
Souroe: NOTADstat.
Note: For the oountry oompos|t|on of eaoh of the reg|ona| group|ngs, see note to tab|e 1.1.
a
F|gureshowsthe|noreaseoftradebetweend|fferentreg|onsoftheSouthanddeve|op|ngoountr|esasa
who|easaperoentageoftota|trade.
Souroe: NOTADstat.
Note: For the oountry oompos|t|on of eaoh of these reg|ona| group|ngs, see note to tab|e 1.1.
a
F|gure shows the deorease of trade between d|fferent reg|ons of the South (as we|| as deve|op|ng
oountr|es as a who|e} and deve|oped oountr|es as a peroentage of tota| trade.
10
20
30
40
50
60
70
1995 2000 2005 2010
P
e
r
c
e
n
t
a
g
e

o
f

g
l
o
b
a
l

t
r
a
d
e
|at|nAmer|oaandthe
Oar|bbean
SouthernAfr|oa
SouthAs|a
South-EastAs|a
20
30
40
50
60
70
80
1995 2000 2005 2010
P
e
r
c
e
n
t
a
g
e

o
f

g
l
o
b
a
l

t
r
a
d
e
Deve|op|ngoountr|es
|at|nAmer|oaandthe
Oar|bbean
SouthernAfr|oa
SouthAs|a
South-EastAs|a
EastAs|a
10 TECHNOLOGY AND INNOVATION REPORT 2012
F|g0re 1.4: Share oI F0| o0tows Irom deve|op|og co0otr|es |o tota| g|oba| F0|, 1980-2010
a
(Perceot)
Souroe: NOTADstat.
a
F|gure shows share of FDl outows from deve|op|ng oountr|es |n oompar|son w|th deve|oped
oountr|esandtrans|t|oneoonom|es.
0
20
40
60
80
100
1980 1985 1990 1995 2000 2005 2010
T
o
t
a
l

o
u
t
w
a
r
d

F
D
I

(
p
e
r

c
e
n
t
)
Trans|t|oneoonom|es
Deve|opedoountr|es
Deve|op|ngoountr|es
(exo|.|DOs}
|DOs
The attraot|on of FDl |s not, however, ||nked
on|y to the soa|e of oap|ta| ows but |n-
o|udes a paokage of other tang|b|e and
|ntang|b|e benets, of wh|oh the most |m-
portant are ||nked to teohno|ogy d|ffus|on
and know|edge aooumu|at|on. Ev|denoe of
teohno|ogy transfer through supp|y oha|ns
of transnat|ona| oorporat|ons (TNOs} from
|ndustr|a||zed oountr|es to East As|an eoon-
om|es and more reoent|y a|so to some of
theotheremerg|ngoountr|es|swe||doou-
mented|nthe||terature.
10
FDl |n produot|ve
seotors a|so has a oha|n effeot resu|t|ng |n
produot|v|tyga|ns|notherseotors,asdem-
onstrated |n Oo|omb|an manufaotur|ng or
|n Oosta R|oa (Kug|er, 2000; B|a|ook and
Gert|er, 2008}. However, the ro|e of FDl |n
bu||d|ng produot|ve oapao|ty oannot be
genera||zed, espeo|a||y |f |nvestment does
not go to produot|ve seotors of the eoon-
omy. Th|s rema|ns a prob|em |n a number
of deve|op|ng oountr|es, part|ou|ar|y |DOs,
where FDl tends to be oonoentrated |n nat-
ura| resouroe exp|o|tat|on and oreates 'en-
o|ave" eoonom|es.
11
Ther|seofemerg|ngoountr|esasasouroe
of FDl g|ves host oountr|es a w|der oho|oe of
partners for a|ternat|ve souroes of nanoe.
Suohaoho|oe,|faooompan|edbysupport-
|vehost-oountrypo||o|esand|nfrastruoture
deve|opment that promote |nvestment |n
produot|ve seotors, a||ows a greater range
offore|gn|nvestments|naw|dervar|etyof
|ndustr|esw|thpos|t|ve|mp||oat|onsforoa-
pao|ty-bu||d|ng. FDl oan |ead to teohno|ogy
sp|||overs when the TNOs br|ng new k|nds
ofproduotandprooessteohno|og|estothe
hostoountr|es.
A|thoughtheseeffeotsmaynotbeun|form
|n d|fferent oontexts, var|ous stud|es sug-
gestthat|noountr|esthathaveam|n|mum
|eve| of domest|o oapab|||t|es and a po||oy
framework that promotes ||nkages, tao|t
know-how aoqu|red by |ooa| workers |n
theTNOsoan|eadtosp|n-offaot|v|t|esthat
|nvo|ve teohno|og|oa| |earn|ng (NOTAD,
2010}. A number of stud|es have noted that
the tendenoy of deve|op|ng-oountry TNOs
to enter |nto jo|nt ventures w|th rms from
other deve|op|ng oountr|es |s greater than
that observed among deve|oped-oountry
TNOs (NOTAD, 2006a}, and that th|s en-
hanoes the potent|a| to foster |earn|ng oa-
pab|||t|es (see ohapters lll and v of th|s Re-
port for some examp|es}. Th|s oou|d a|so be
attr|butedtothevary|ngformsofoorporate
governanoe|n|argeoompan|es|ndeve|op-
|ng oountr|es (see ohapter lv}.
7|eatt|act|onofFD/
|s||n|edtotec|no|ogy
d|ff0s|onand|now|edge
acc0m0|at|on.
7|e||seofeme|g|ng
co0nt||esasaso0|ceof
FD/g|ves|ostco0n-
t||esaw|de|c|o|ceof
oa|tne|sfo|a|te|nat|ve
so0|ces of nance.
11
CHAPTER I : THE IMPORTANCE OF THE SOUTH
C. THE IMPORTANT
ROLE OF THE SOUTH
IN TECHNOLOGICAL
LEARNING AND
INNOVATION
Ourrent growth trends, and the re|ated ex-
pans|on of South-South trade and |nvest-
ment has oreated an |nterest |n how and
to what extent deve|op|ng oountr|es oou|d
he|p bu||d teohno|og|oa| oapab|||t|es |n the
deve|op|ng wor|d. But the ||terature on th|s
aspeot of South-South oooperat|on |s qu|te
soaroe, and genera||y foouses on press-
|ng |nternat|ona| oha||enges, suoh as pub||o
hea|thando||mateohange.
12
lnternat|ona||y,
however,th|srema|nsaor|t|oa||ssuewhere
muohmoreneedstobedone,espeo|a||y|n
theoontextofthew|den|ngteohno|og|oa|d|-
v|deandgrow|ngoonoernsabouttheg|oba|
|nte||eotua| property r|ghts (lPR} proteot|on
reg|meandhow|t||m|tstheposs|b|||t|esfor
the poorest deve|op|ng oountr|es to des|gn
the|roatoh-upstrateg|es.
13
lntheo|ass|oa|deve|opmenteoonom|osd|s-
oourse, eoonom|o growth |s oons|dered to
beaprooessofre|atedfaotorsthatsh|ftthe
produot|on struoture of eoonom|es. Overa||
produot|v|ty |noreases as a resu|t of these
sh|fts |n the produot|on struoture that re-
su|t from a ser|es of |nter|ooked prooesses,
name|y, oap|ta| aooumu|at|on, teohno|og|oa|
ohange and eoonom|o d|vers|oat|on.
lntheoontextofdeve|op|ngoountr|es,how-
ever, eoonom|o growth, on the one hand,
andteohno|ogyand|nnovat|onoapao|tyon
theotherhasamutua||yre|nforo|ngre|at|on-
sh|p (Ooampo and vos, 2009}. Teohno|ogy
and |nnovat|on oapao|ty p|ay an |mportant
ro|e |n expand|ng eoonom|o growth of the
k|nd that resu|ts from ohanges |n the struo-
tureofproduot|on.Eoonom|ogrowthoften
enab|esteohno|og|oa||earn|ngandsoph|s-
t|oat|on, and teohno|og|oa| oapab|||t|es are
or|t|oa|forensur|ngthatgrowth|sofapro-
duot|ve nature and oan be stead||y ma|n-
ta|ned.
Regard|ess, these mutua||y support|ve
||nkages do not emerge spontaneous|y;
muoh st||| needs to be done |n order to
harness th|s or|t|oa| re|at|onsh|p |n deve|-
op|ng oountr|es. For |nstanoe, an argu-
ment that has often been advanoed |s
thattheongo|nggrowthandsh|ft|npro-
duot|onpatterns|nsomeoftheemerg|ng
oountr|es, from |ow-end manufaotur|ng
to more know|edge-based doma|ns, has
opened up opportun|t|es for other de-
ve|op|ng oountr|es, part|ou|ar|y |DOs, to
engage |n |ow-end manufaotur|ng (Wor|d
Bank, 2010; ||n, 2011}.
As attraot|ve as th|s m|ght be, |t does not
ooour automat|oa||y. lndustr|a||zat|on pro-
oesses that oou|d |ead to a s|gn|oant
proport|on of the tota| popu|at|on be|ng
engaged |n va|ue-added produot|on and
manufaotur|ng of the k|nd that |mp||es sp|||o-
vers to other seotors requ|re |nvestments |n
bu||d|ng absorpt|ve oapao|ty. Th|s requ|res
a fundamenta| sh|ft |n the under|y|ng oon-
d|t|ons of many deve|op|ng oountr|es, w|th
a part|ou|ar foous on faotors that promote
teohno|og|oa| |earn|ng and |nnovat|on oa-
pab|||t|es|ntheseoountr|es.Theseaot|ons
shou|dbeoons|stentw|ththe|roomparat|ve
advantagesand|ooa|demand.
Muoh of the ma|nstream ||terature on
growthanddeooup||ngdoesnotdea|w|th
teohno|og|oa| deve|opment |n depth, but
oa||sforaor|t|oa|ana|ys|softheteohno|ogy
|mp||oat|ons of suoh prooesses.
14
lt seems
prudenttoassumethateven|fdeooup||ng
were to be aoh|eved, teohno|og|oa| |earn-
|ng and oapab|||t|es-bu||d|ng wou|d not be
an automat|o resu|t. ln the worst oase, |t
oou|d even entrenoh the |agg|ng oountr|es
further|n|ow-|eve|manufaotur|ngandother
modes of speo|a||zat|on that are not oondu-
o|vetoupgrad|ng.Th|sfurtherh|gh||ghtsthe
|mportanoeoffoous|ngonteohno|ogyand
|nnovat|onasapr|maryoonoern.
Wh||e muoh of the th|nk|ng about teohno|-
ogy transfer has, for obv|ous reasons, fo-
oused on North-South ows and re|ated
oha||enges,arev|ewshowsthatdeve|op|ng
oountr|es have taken a ser|es of |n|t|at|ves
re|at|ng to th|s |ssue, part|ou|ar|y s|noe the
end of the 1990s. The G-77, for |nstanoe,
has emphas|zed the re|evanoe of South-
/nt|econtextof
deve|oo|ngco0nt||es,
econom|cg|owt|,on
t|eone|and,and
tec|no|ogyand
|nnovat|oncaoac|tyon
t|eot|e||asam0t0a||y
|e|nfo|c|ng|e|at|ons||o.
Howeve|,t|esem0t0a||y
s0ooo|t|ve||n|ages
donoteme|ge
soontaneo0s|y,m0c|
st|||needstooedone
|no|de|to|a|nesst||s
c||t|ca||e|at|ons||o.
12 TECHNOLOGY AND INNOVATION REPORT 2012
South oooperat|on for know|edge and teoh-
no|ogy shar|ng and exohange. Bu||d|ng on
th|s,reg|ona|deve|opments,suohasAfr|oas
So|enoe and Teohno|ogy Oonso||dated P|an
of Aot|on adopted |n 2003, emphas|ze the
re|evanoe of know|edge aooumu|at|on and
|nnovat|on oapao|ty for eoonom|o deve|op-
ment.Atthereoent|yhe|dfourthBRlOSSum-
m|t |n lnd|a |n 2012 and at the G-20 meet|ng
of nanoe m|n|sters, the lnd|an Government
proposedtheoreat|onofaded|oateddeve|-
opment bank nanoed by the BRlOS gov-
ernments to dea| w|th oerta|n key aspeots of
deve|opment,|no|ud|ngteohno|ogy.
Desp|te suoh |n|t|at|ves, most of the ||tera-
ture on South-South oooperat|on foouses
predom|nant|y on trade and |nvestment
patterns, w|th very ||tt|e d|reot ana|ys|s of
oooperat|on on |ssues of teohno|ogy and
|nnovat|onandwhat|mp||oat|onsth|soou|d
have for teohno|og|oa| |earn|ng |n the de-
ve|op|ng wor|d. Data on |nvestment (see
ohapter ll of th|s Report} show that some
|nvestment from deve|op|ng oountr|es fo-
ouses on produot|ve seotors, but the data
on th|s top|o rema|n d|fou|t to gather and
are |nsufo|ent. There |s o|ear|y a need for
a systemat|o assessment of the ro|e of
deve|op|ng oountr|es as partners |n bu||d-
|ng teohno|ogy and |nnovat|on oapab|||t|es
|ntheSouthtoenab|ethedeve|opmentof
oonoretepo||oyreoommendat|ons.
Th|s Report argues that the s|m||ar|ty of
deve|opment exper|enoes of the oountr|es
of the South (part|ou|ar|y |n promot|ng |n-
novat|on oapao|ty} makes them essent|a|
oomp|ements to ex|st|ng North-South |n-
teraot|ons. Moreover, they oou|d he|p pro-
v|de more deve|opment-fr|end|y mode|s
of engagement |nternat|ona||y. G|ven the
re|evanoe of the |nnovat|on exper|enoes of
emerg|ngoountr|esfora||deve|op|ngooun-
tr|es,andtheoontextua|appropr|atenessof
the|r teohno|og|es (see ohapter lv}, South-
Southoo||aborat|onneedstobesystemat|-
oa||ypromoted.Theoentra|messageofthe
TIR 2012|sthatdeve|op|ngoountr|es,par-
t|ou|ar|y emerg|ng oountr|es, are |mportant
partnerstopromoteteohno|og|oa|oapab|||-
t|es|ntheSouthandtherefore|t|sapr|or|ty
to ana|yze how South-South oo||aborat|on
for teohno|ogy and |nnovat|on oan be pro-
moted |n a systemat|o way to promote |n-
o|us|ve susta|nab|e deve|opment aoross a||
deve|op|ngoountr|es.
The Report therefore foouses on ana|yz|ng
whetherongo|ngSouth-Southexohange|s
|ead|ng to bu||d|ng teohno|og|oa| oapab|||-
t|es.Fromanana|ys|softheourrentpatterns
of South-South exohange on teohno|ogy
and |nnovat|on |ssues, the Report seeks to
|dent|fy key |ssues |n ongo|ng South-South
exohange |n th|s area, and to der|ve best
praot|oes for mov|ng forward |n foster|ng
South-South oo||aborat|on on teohno|ogy
and|nnovat|on.
1. The South as a complement to
the North for technology and
innovation
There are many ohanne|s through wh|oh
teohno|og|oa| d|ffus|on and oapab|||t|es ao-
oumu|at|onoanbepromotedaorossooun-
tr|es. lmports of oap|ta| goods st||| rema|n
a pr|mary means through wh|oh rms bu||d
teohno|og|oa| oapab|||t|es. Aooord|ng|y, ex-
pand|ng growth and trade among deve|-
op|ng oountr|es ho|ds the prospeot that
South-Southexportsofoap|ta|goodsmay
a|so resu|t |n teohno|ogy ows and transfer.
Other means |no|ude FDl, oustomer-supp||-
er-reta||er re|at|onsh|ps |n va|ue oha|ns and
g|oba| produot|on networks (GPNs}, reverse
eng|neer|ng and oopy|ng, |nteraot|ng w|th
fore|gn o||ents on des|gn, standards and
qua||ty requ|rements, and oo||aborat|ng |n
jo|ntventures.
However,us|ng|mportsofoap|ta|goodsor
FDl or many of the other means ||sted here
(suoh as part|o|pat|on |n g|oba| produot|on
networks} to promote teohno|og|oa| |earn-
|ng requ|res some |eve| of absorpt|ve oa-
pao|tyw|th|nsystems.Buts|noe|nst|tut|ons
|n many deve|op|ng oountr|es, part|ou|ar|y
|DOs, tend to be weak, these oountr|es
are oha||enged |n the|r quest to use South-
Southtradetobu||dthe|rteohno|og|oa|oa-
pab|||t|es and promote aot|v|t|es |ead|ng to
struotura| ohange and d|vers|oat|on of the|r
eoonom|es.
7|ecent|a|message
oft|e7/R2012|st|at
deve|oo|ngco0nt||es,
oa|t|c0|a||yeme|g|ng
co0nt||es,a|e|moo|tant
oa|tne|stoo|omote
tec|no|og|ca|caoao|||-
t|es|nt|eSo0t|.
Exoand|ngg|owt|and
t|adeamong
deve|oo|ngco0nt||es
|o|dst|eo|osoectt|at
So0t|-So0t|exoo|ts
ofcao|ta|goodsmay
a|so|es0|t|ntec|no|ogy
ows and t|ansfe|.
13
CHAPTER I : THE IMPORTANCE OF THE SOUTH
lnst|tut|ona| oonstra|nts oan be forma| and
|nforma||mp|ng|ngon|nnovat|onandteoh-
no|og|oa| |earn|ng (Ha|| et a|., 2001; Ne|son
and Sampat, 2001}, suoh as a |nadequate
regu|atory frameworks (Dos|, 1988; Ne|son
and W|nter, 1982}, |ow emphas|s on organ|-
zat|ona| |earn|ng (|eonard-Barton, 1995}
and |ow human sk|||s and know-how (Rom-
|jn, 1997; Teeoe and P|sano, 1994}. Other
faotorsthat|mpedethebu||d|ngofteohno-
|og|oa| oapab|||t|es |no|ude a |aok of aooess
to nanoe, weak eduoat|ona| opportun|t|es,
weak entrepreneur|a| ou|ture, oompet|t|on
andex|st|ngpatternsofteohno|og|oa|spe-
o|a||zat|on.
lnordertooveroomethese||m|tat|onspro-
aot|vepo||o|esareneededatvar|ous|eve|s.
Emerg|ng oountr|es have used a var|ety of
measures to overoome trade and |nte||eo-
tua|propertybarr|ers|nthe|rowneoonom|o
deve|opment,wh|ohoanprov|de|mportant
|essons for other deve|op|ng oountr|es.
The|rsuooessfu|exper|enoesshownoton|y
how teohno|og|oa| oapab|||t|es oou|d be
bu||t,buta|sowhatpo||oymeasuresoou|d
potent|a||y be used to promote nat|ona|
deve|opment w|th|n the mu|t||atera| trad|ng
reg|me.Thes|m||ar|tyofthe|rdeve|opmen-
ta| exper|enoes |s |mportant, der|v|ng from
the|rs|m||arpastandpath-dependentoon-
stra|ntsonpromot|ngsusta|nab|edeve|op-
ment (see ohapter lv}.
Shar|ng exper|enoes and strengthen|ng
oo||aborat|on |n a|| ways poss|b|e rema|ns
very |mportant and re|evant for deve|op|ng
oountr|es that are st||| grapp||ng w|th ways
tooreateharmon|ousandooherent|ooa||n-
novat|onand|ndustr|a|po||oyenv|ronments.
Reoogn|z|ng th|s, both po||oy and soho|ar|y
ana|yses have begun to g|ve greater atten-
t|on to what |essons oan be drawn by de-
ve|op|ng oountr|es |n genera| from the East
As|anexper|enoes,and,morereoent|y,from
those of the emerg|ng oountr|es |n As|a (see,
for examp|e, St|g||tz et a|., 2012}.
A seoond and perhaps more |mportant
advantage of the South for teohno|og|-
oa| |earn|ng |s that most of the oountr|es
have fo||owed s|m||ar pathways |n bu||d|ng
the|r oapab|||t|es: from reverse eng|neer-
|ngto|norementa||y|nnovat|ngandthento
researoh and deve|opment (R&D}. lndeed,
most |nnovat|on ana|yses of the emerg|ng
oountr|esshowthattheoont|nuumthrough
wh|oh these oountr|es, the|r seotors and
rms have progressed |n the|r quest to
bu||d teohno|og|oa| oapab|||t|es has been
qu|te s|m||ar |n nature. Deve|op|ng oountr|es
a|sofaoeanumberofs|m||aroha||engesto
|nnovat|on. Even amongst the deve|op|ng
oountr|es that oan be termed as emerg-
|ng, wh||e there are many |ndustr|es that
are at the teohno|og|oa| front|er g|oba||y,
many other |ndustr|es or rms faoe rout|ne
oonstra|nts on |nnovat|on s|m||ar to those
preva|||ng|notherdeve|op|ngoountr|es,|n-
o|ud|ng |DOs. Th|s |mp||es that to vary|ng
extents these oountr|es st||| faoe some of
the bas|o |ssues w|th regard to promot|ng
the teohno|og|oa| absorpt|ve oapao|t|es of
the|rsystemsasawho|e.
Th|s |ends support to the v|ew that the
teohno|og|es produoed by the South may
be muoh more aooess|b|e - and oontex-
tua||y appropr|ate - to other oountr|es and
rms of the South, thus h|gh||ght|ng the
|mportanoeofpromot|nggreateroo||abora-
t|on|nth|sarea.However,effortsto|dent|fy
the faotors that oontr|bute to the suooess
of oerta|n oountr|es need to bear |n m|nd
thatwh||eshar|ngthesepo||oyexper|enoes
|s|mportant,teohno|og|oa|ohange|sh|gh|y
oontext-speo|o |n nature, and therefore
s|m||ar |noent|ves may often not produoe
thesamesetofresu|tsaorossoountr|es.
2. Overcoming challenges and
divergent interests
Many deve|op|ng oountr|es st||| faoe enor-
mous oha||enges |n aoh|ev|ng poverty
reduot|on and |no|us|ve deve|opment.
15
Addedtothesearemorereoentandpress-
|ng oonoerns suoh as those |nduoed by
o||mateohangeandtheneedforash|ftto
a green eoonomy. Furthermore, a number
of emerg|ng oountr|es, desp|te be|ng on a
trajeotory of |ndustr|a| oatoh-up are under
pressure to pursue |no|us|ve and susta|n-
ab|edeve|opment,part|ou|ar|yw|threspeot
to m|t|gat|ng o||mate ohange. Bear|ng th|s
|nm|nd,thed|soourseonthero|eofdeve|-
B0tco0nt||esa|e
c|a||enged|nt|e||q0est
to0seSo0t|-So0t|
t|adetoo0||dt|e||
tec|no|og|ca|
caoao|||t|es.
Asecondoe||aos
mo|e|moo|tant
advantageoft|eSo0t|
fo|tec|no|og|ca|
|ea|n|ng|st|atmostof
t|eco0nt||es|ave
fo||oweds|m||a|
oat|ways|no0||d|ng
t|e||caoao|||t|es.
14 TECHNOLOGY AND INNOVATION REPORT 2012
op|ng oountr|es as teohno|ogy prov|ders
needs to reoogn|ze that the South oan
on|yoomp|ement,but not replace,efforts
of deve|oped oountr|es to he|p address
teohno|ogy and |nnovat|on |ssues |n a
oomprehens|veway.
Asmanystud|eshaveobserved,thed|ver-
genoes among deve|op|ng oountr|es are
perhaps the most stark|y ev|dent |n the are-
asof|nnovat|onandteohno|og|oa|oapab|||-
t|es. Growth trends |n |DOs dur|ng the pe-
r|od 2000-2010 were dr|ven by an |norease
|n the demand for pr|mary oommod|t|es,
part|ou|ar|y dur|ng the per|od 1995-2010
(gure 1.5 and annex tab|e A.ll.4}. Thus,
desp|te r|s|ng South-South trade and |n-
vestment, severa| deve|op|ng oountr|es,
part|ou|ar|y Afr|oan |DOs, have beoome
|noreas|ng|y dependent on oommod|ty ex-
ports. Th|s has resu|ted |n a deo||ne |n |n-
dustr|a|aot|v|ty,an|norease|n|nforma|eoo-
nom|oaot|v|tyandpers|stent|yh|gh|eve|sof
|ndebtedness.
Trad|t|ona||y, |DOs exported the|r pr|mary
oommod|t|es ma|n|y to deve|oped ooun-
tr|es, but th|s pattern has sh|fted s|gn|-
oant|y towards deve|op|ng oountr|es s|noe
2003. By 2010, deve|op|ng oountr|es ao-
oounted for about 59per oent of a|| pr|mary
oommod|t|es exported by |DOs, wh||e
deve|oped oountr|es aooounted for about
39 per oent. The growth of the |DOs has
not been aooompan|ed by any s|gn|oant
ohanges |n the|r produot|on struotures
(NOTAD, 2010}, and they are |noreas|ng-
|y dependent on |mports of manufaotures
from emerg|ng oountr|es. The growth rate
ofexportsofmanufaoturesfromAs|a|nre-
oentyearshasbeenextreme|yh|gh,reaoh-
|ng a reoord 30per oent growth |n 2010. Of
these exports, about 52 per oent went to
other deve|op|ng oountr|es a b|g share of
wh|oh |no|uded |DOs (WTO, 2011}.
These re|at|onsh|ps revea| that, |n many
ways,deve|op|ngoountr|esoompeteamong
eaoh other for s|m||ar markets |n the South,
wh|oh may present a prob|em for sma||er
deve|op|ng oountr|es w|th more vu|nerab|e
rms that are seek|ng to aooess the same
markets to expand. Furthermore, the sp|ke
|n oommod|ty exports and the oont|nued
dependenoe of |DOs on exports of natura|
resouroes|sa|soattr|butab|etothegrow|ng
demand by deve|op|ng oountr|es for oom-
mod|t|esandnatura|resouroesforthe|rown
deve|opment prooesses. Wh||e th|s demand
|s a natura| oonsequenoe of the growth |n
the|r own eoonom|es, suoh South-South
trade oan have damag|ng |mp||oat|ons for
teohno|og|oa|upgrad|ngand|earn|ngaot|v|-
t|es |n |DOs as d|soussed here. These |ssues
oou|dbereso|vedtoa|argeextentthrough
ooord|natedaot|onamongdeve|op|ngooun-
tr|eson|ssuesofteohno|ogyand|nnovat|on.
F|g0re1.5: Treods|oL00sexportsoIpr|marycommod|t|es,19952010
Souroe: NOTADstat.
0
10
20
30
40
50
60
70
1
9
9
5
1
9
9
6
1
9
9
7
1
9
9
8
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15
CHAPTER I : THE IMPORTANCE OF THE SOUTH
'HQLWLRQVRINH\WHUPV
The ana|ys|s and oono|us|ons oonta|ned
|n th|s Report use some terms, suoh as
emerg|ng oountr|es, teohno|og|oa| oo||abo-
rat|on, teohno|ogy transfer and |nnovat|on
oapao|ty. These are dened here.
a. Emerging cauntries
The prooess of struotura| transformat|on
and deve|opment |n the South |s an ongo-
|ng dynam|o phenomenon that oannot be
oaptured appropr|ate|y by any one term.
As noted ear||er |n th|s ohapter, eoonom|o
growth and teohno|og|oa| oapab|||t|es have
a mutua||y re|nforo|ng re|at|onsh|p: on the
one hand, eoonom|o growth trans|ates |nto
expans|on of teohno|og|oa| oapab|||t|es, but
at the same t|me, teohno|og|oa| oapab|||t|es
haveao|ear|mpaotonensur|ngthatgrowth
|sproduot|veandsusta|nab|e.Bear|ngth|s|n
m|nd, the term 'emerg|ng oountr|es", for the
purposeofth|sReport,|susedheretode-
notea||deve|op|ngeoonom|esthatsat|sfyat
|eastthreeofthefo||ow|ngor|ter|a:
|. Steady eoonom|o growth over the
pastdeoade;
||. An |norease |n know|edge-|ntens|ve
exports, both g|oba||y and to other
deve|op|ngoountr|es;
|||. lnoreas|ng |nvestments |n R&D;
|v. A r|se |n |nd|oators of progress |n
so|enoe and teohno|ogy, suoh as
so|ent|o pub||oat|ons and patents;
and
v. Assoo|ated po||oy and |nst|tut|ona|
underp|nn|ngs that tend to be or|-
ented towards |ong-term eoonom|o
deve|opment.
ln assess|ng the grow|ng a|||anoes w|th|n
and between oountr|es of the South, that
havea|readyorossedathresho|dof|ndus-
tr|a| deve|opment (suoh as the East As|an
eoonom|es} and those that are emerg|ng
a|ong the same path, th|s Report uses
the term emerg|ng oountr|es to denote
oountr|es suoh as Braz||, Oh|na and ln-
d|a, as we|| as, |noreas|ng|y, other deve|-
op|ng oountr|es |n |at|n Amer|oa (suoh
as Mex|oo} and As|a, as app||oab|e. lt |s
usedthroughouttheana|ys|s|nadynam|o
sensetoa|sooonveytheprooessofstruo-
tura|transformat|onoftheseoountr|esand
othernewoneswheresuohatransforma-
t|on|sourrent|y|nmot|on.
There have been other soho|ar|y works that
oapture these d|st|not|ons |n the |ateoomer
oountr|es, o|ass|fy|ng them often as |ate-
oomers and very |ateoomers, or dynam|o
deve|op|ng oountr|es. Further ana|yses
of the oharaoter of th|s group of oountr|es
neoessar||y enr|oh the den|t|on to take |nto
aooountthe|rperformanoe|ntermsofrap|d
|noomeandproduot|v|tygrowthandteohno-
|og|oa|deve|opment,togetherw|ththeasso-
o|atedpo||oyand|nst|tut|ona|underp|nn|ngs
thattendtobeor|entedtowards|ong-term
eoonom|o deve|opment. The term 'emerg-
|ng oountr|es" used |n th|s Report oaptures
a||thesestagesoftransformat|on|nteohno-
|og|oa|andovera||eoonom|oterms.
b. Techna|agica| ca||abaratian
Th|s term |s used to denote a|| forms of
teohno|og|oa| exohange that are geared
towards teohno|og|oa| |earn|ng and oapa-
b|||ty-bu||d|ng |n the reo|p|ent oountr|es of
the South. These oou|d |no|ude, but are
not be restr|oted to, the fo||ow|ng k|nds of
aot|v|t|es:jo|ntresearohandproduotdeve|-
opment,jo|ntventures,researohoo||abora-
t|ons,||oens|ngaot|v|t|es,teohno|ogytrans-
fer, tra|n|ng and oapao|ty-bu||d|ng between
pub||o-pub||o and pub||o-pr|vate enterpr|s-
es, jo|nt patent|ng, sk|||s deve|opment and
mob|||ty of |abour. The term oovers more
than so|ent|o and teohn|oa| oo||aborat|on; |t
|no|udes,|nadd|t|on,aot|v|t|esthataddress
theoapao|tytoaooess,useandadaptex-
|st|ng know|edge |n rm |eve| aot|v|t|es.
c. Techna|agy transfer
Teohno|ogy transfer, as dened |n th|s Re-
port, |s more than just so|ent|o or teohn|oa|
oo||aborat|on. Th|s term |s used to |no|ude
a|| forms of teohno|og|oa| exohange that
|ead to bu||d|ng the teohno|og|oa| oapao|-
t|es of the user/reo|p|ent. lt |no|udes tao|t
know-how as an |mportant oomponent, |n
add|t|on to maoh|nery, equ|pment and b|ue-
pr|nts.
16 TECHNOLOGY AND INNOVATION REPORT 2012
d. lnnavatian capacity
As opposed to front|er |nnovat|on, rms and
enterpr|ses |n deve|op|ng oountr|es often
bu||d upon ex|st|ng know|edge to |nnovate
produots and prooesses, wh|oh, a|though
not new to the wor|d, are ent|re|y new to
them.Theseaot|v|t|esare|norementa||nna-
ture, and w|th t|me and |noent|ves oreated
bythe|nnovat|onsystemat|arge,resu|t|n
oapab|||ty-bu||d|ng. G|ven that |nnovat|on
oapao|ty |s fundamenta| to deve|opment,
the Report denes |nnovat|on as a|| ohang-
es to produots, prooesses and organ|za-
t|ona| forms that are new to the rm or the
|ooa| oontext (Sohumpeter, 1962; Rosen-
berg, 1982}.
D. ORGANIZATION OF
THE REPORT
Fo||ow|ng th|s |ntroduot|on, ohapter ll seeks
to exp|ore the emerg|ng |andsoape on
teohno|ogyand|nnovat|onexohange|nthe
South |n order to asoerta|n |f and to what
extentthedataandtrendsonSouth-South
teohno|og|oa| oo||aborat|on oan be |nter-
pretedaorossarangeofvar|ab|es,todraw
aoomp|etep|oture.Thema|nfoousofth|s
ohapter |s to assess exper|enoes of teoh-
no|ogy oo||aborat|on and transfer |n order
to determ|ne whether ex|st|ng and emerg-
|ngtrendspo|nttowardstheemergenoeof
South-South oo||aborat|on on teohno|ogy
and|nnovat|on|ssues.lta|soor|t|oa||yana|-
yses how and to what extent suoh teoh-
no|og|oa|oo||aborat|onoanbeexpeotedto
bu||d teohno|og|oa| oapab|||t|es aoross de-
ve|op|ngoountr|es.
Ohapter lll further bu||ds on th|s broader
p|oture to present some ongo|ng oases of
South-South oo||aborat|on on teohno|ogy
and|nnovat|on|ndeta||.Theohaptershows
that suoh oo||aborat|on takes the form of |m-
portant government |n|t|at|ves and rm-|eve|
oo||aborat|on |n some seotors. ln part|ou|ar,
rm-|eve| oo||aborat|ons |n renewab|e energy
teohno|og|es (RETs}, pharmaoeut|oa|s and
hea|thandagr|ou|tura|teohno|og|esoffer|n-
terest|ngoasestud|es.
Ohapter lv dea|s w|th the fo||ow|ng
press|ng quest|on: how oan the South
beabetterpartner|neffortstopromote
|nnovat|on and teohno|og|oa| |earn|ng |n
the deve|op|ng oountr|es? Oo||aborat|on
onteohno|ogyand|nnovat|on|sperhaps
one of the most or|t|oa| areas of South-
South so||dar|ty, offer|ng rea| prom|se
for susta|nab|e deve|opment aoross the
South. The ohapter oa||s for an |nterna-
t|ona| framework to harness the potent|a|
of ongo|ng South-South teohno|og|oa|
exohangesforbu||d|ngteohno|og|oa|oa-
pab|||t|es|ndeve|op|ngoountr|esandfor
br|dg|ng the ever-w|den|ng g|oba| teoh-
no|og|oa| d|v|de. lt then art|ou|ates a set
ofpr|no|p|esthatoou|dformthebas|sof
suoh an |nternat|ona| framework. These
pr|no|p|es are based on the need to re-
so|ve some major |ssues that ourrent|y
stand out |n the g|oba| and deve|op|ng-
oountryoontextofteohno|ogyand|nno-
vat|onexohange.
As a oomp|ement to the key |deas pre-
sented |n th|s Report, ohapter lv a|so
proposes some po||oy e|ements for ao-
t|on. These oompr|se a set of po||oy
|noent|ves for a|| deve|op|ng oountr|es
that shou|d work |n tandem to oreate an
overaroh|ng framework for South-South
oo||aborat|on |n teohno|ogy and |nnova-
t|on.lfsuohoo||aborat|on|stobeoomea
rea||ty,|nst|tut|onsneedtoadopta|ong-
term perspeot|ve wh|oh |s not oonf|ned
to the teohno|ogy supp||er a|one; they
need to oons|der the teohno|ogy reo|p|-
ent as we||, beoause oapab|||ty-bu||d|ng
neoessar||y requ|res ooherent efforts and
support from the |nternat|ona| oommu-
n|ty. ln order to promote suoh a ho||st|o
approaoh,theohapterproposespo||o|es
at d|fferent |eve|s (|nternat|ona|, reg|ona|
and nat|ona|} of support to deve|op|ng
oountr|es.
Ohapter v of the Report |s a br|ef ep||ogue,
wh|oh seeks to draw oono|us|ons from the
ana|ysesoonta|ned|nthepreoed|ngohap-
teraspartofthebroaderdebateonSouth-
Southoooperat|on.
17
CHAPTER I : THE IMPORTANCE OF THE SOUTH
NOTES
1. Referred to as the As|an m|rao|e, the rst-t|er new|y |ndus-
tr|a||z|ng eoonom|es (NlEs} that fo||owed Japan`s |ndustr|-
a||zat|on oompr|sed Hong Kong, the Repub||o of Korea,
Ta|wanProv|noeofOh|naandS|ngapore,andtheseoond-
t|eroompr|sedlndones|a,Ma|ays|aandTha||and.
2. See box 3.2 |n ohapter lll. Some other stud|es suoh as N-
EOOSOO (2008} quote h|gher gures. Th|s reeots the oons|d-
erab|e var|at|on |n the qua||ty and ava||ab|||ty of data from the four
major oontr|butors from the South - the Bo||var|an Repub||o of
venezue|a, Oh|na, lnd|a and the Repub||o of Korea. Fur-
thermore, th|s gure may underest|mate tota| deve|opment
ass|stanoebytheSouth,s|noesevera|sma||erb||atera|and
mu|t||atera|oontr|but|onswerenot|no|uded|nthestudydue
the pauo|ty of data and d|fferenoes |n den|t|ons of what
oonst|tutesdeve|opmentoooperat|on.
3. The Russ|an Federat|on |s not a member of the G-77.
4. The rst summ|t was he|d |n the Russ|an Federat|on.
5. de Me|o and Panagar|ya (1993} or|t|oa||y ana|yse the |mpaot
of reg|ona| PTAs |n the 1960s and 1970s on deve|op|ng-
oountrytradetrends.
6. See tab|e 2.2 |n ohapter ll, wh|oh shows that |n 1995, 35per
oentof|mportsofdeve|op|ngoountr|esweresouroedfrom
other deve|op|ng oountr|es, and by 2010 th|s gure had ex-
oeeded 53per oent.
7. Th|s oou|d potent|a||y be exp|a|ned by the strong trade
||nkages between severa| oountr|es |n the reg|on w|th North
Amer|oa.
8. See annex tab|e A.ll.12.
9. East As|a aooounts for about 73 per oent of the tota| FDl
from As|a (see gures 2.11-2.13 presented |n ohapter ll of
th|s Report and annex tab|e A.ll.15}.
10. See for examp|e, the oase of teohno|ogy transfer from for-
e|gn rms through baokward ||nkages to the lnd|an truok
|ndustry (|a||, 1980}. A|so see the oase of oatoh-up |n the
South-Korean eoonomy (Ohapter lv}.
11. The term 'eno|ave" eoonom|es |s used |n the ||terature to
denote |noreas|ng dependenoe of oountr|es on resouroe
eno|avesthataremost|yo||andgas-based,but|toana|so
extendtom|n|ngandsomeformsoftour|sm.Seea|sothe
ana|ys|s on FDl |n ohapter ll of th|s Report.
12. Forad|souss|ononhowSouth-Southteohno|og|oa|oo||abo-
rat|onoanhe|paddresso||mateohangeandpub||ohea|th,see
Oorrea (2011} and NOTAD (2010a} respeot|ve|y.
13. Severa| aspeots of the WTO Agreement on Trade-Re|ated
Aspeots of lnte||eotua| Property R|ghts (TRlPS Agreement}
have g|ven r|se to oonoerns regard|ng whether, and |f so,
how, deve|op|ng oountr|es and |DOs oou|d des|gn |ooa| re-
g|mes that promote teohno|og|oa| |earn|ng (see, for examp|e,
Oorrea, 2011; Roffe et a|., 2005; Ga||anger, 2005}.
14. Muohhasbeenwr|ttenon|nst|tut|ona|andevo|ut|onaryeoo-
nom|os (Ne|son, 1982; Freeman, 1982; Teeoe and P|sano,
1994} and on eoonom|o oatoh-up (Amsden, 1989; Amsden
and Ohu, 2003; St|g||tz et a|., 2012} |dent|fy|ng the |mpor-
tanoeofteohno|og|oa|ohangeand|nnovat|onoapao|ty|nthe
oatoh-up prooesses. The ma|nstream ||terature on growth
however,doesnotoonta|ndeta||edtreatmentofthe|mp||oa-
t|onsofteohno|og|oa|oapab|||t|esfortheprooessofoonver-
genoe.
15. Aooord|ng to Wor|d Bank est|mates, |n 2010 the poverty
head oount rat|o for peop|e ||v|ng on |ess than $1.25 a day
was 14per oent for Oh|na, 8per oent for Braz|| and o|ose to
42per oent for lnd|a.
THE EMERGING
LANDSCAPE OF
TECHNOLOGY AND
INNOVATION EXCHANGE
IN THE SOUTH 2
21
CHAPTER II : THE EMERGING LANDSCAPE OF TECHNOLOGY AND INNOVATION EXCHANGE IN THE SOUTH
CHAPTER II
THE EMERGING LANDSCAPE OF
TECHNOLOGY AND INNOVATION EXCHANGE
IN THE SOUTH
A. INTRODUCTION
Teohno|og|oa|ohangeandeoonom|ogrowth
have a mutua||y re|nforo|ng re|at|onsh|p |n
deve|op|ng oountr|es. Susta|nab|e eoonom|o
growththat|sbu||tonproduot|v|ty|noreases
|ntheseoountr|esdoesnotre|yonfront|er|n-
novat|ons, as |n |ndustr|a||zed oountr|es, but
rather, on the poss|b|||ty to |earn and bu||d
upon a|ready ex|st|ng teohno|og|es. Th|s re-
qu|res |nvestment not on|y |n the manufaotur-
|ngseotor,buta|soaorossarangeofaot|v|t|es
that support overa|| |ndustr|a| deve|opment,
|no|ud|ng market|ng, manager|a| and nano|a|
serv|oes,aswe||as|n|nfrastruotureand|earn-
|ngaot|v|t|es.Th|s|nturn|noreasesabsorpt|ve
oapao|ty and the ab|||ty to adapt and app|y
ex|st|ngteohno|og|esbymeansof|ooa||nno-
vat|ons,andthus|eadstoagradua||norease
|nproduot|v|ty|na||seotors.
Suohgrowth|s|ntr|ns|oa||yt|edtohowpro-
duot|on struotures evo|ve and what k|nds
of faotors, po||o|es and |nst|tut|ons enab|e
the d|ffus|on of teohno|og|oa| know|edge
to domest|o seotors and rms (Ooampo,
2004}. Emp|r|oa| work |n th|s area revea|s
there|at|vewe|ghtofsomefaotors|nd|o-
tat|ngtheprooessofteohno|og|oa|ohange
and produot|v|ty growth. Part|ou|ar|y, op-
portun|t|es oan ar|se as part of var|ous
|nternat|ona| transaot|ons, |no|ud|ng teoh-
no|ogy sp|||overs from FDl (Benhab|b and
Sp|ege|, 1994; Pav|tt and Soete, 1982},
part|o|pat|on|nGPNsors|mp|yaooess|ng
teohno|ogy through the |mport of oap|ta|
goods.
A rst faotor, wh|oh |s a s|gn|oant oontr|bu-
tor to teohno|og|oa| |earn|ng and oapao|ty-
bu||d|ng, |s the |mport of oap|ta| goods.
lmports of oap|ta| goods have |ong been
reoogn|zed |n the ||terature as a oontr|bu-
tor to teohno|og|oa| |earn|ng and oapao-
|ty bu||d|ng. Part|o|pat|on |n GPNs and FDl
oou|d promote |earn|ng and oapab|||t|es
bu||d|ngthroughteohno|og|oa|sp|||oversto
|ooa| rms e|ther d|reot|y through ||oens|ng
and teohno|ogy transfer, or more |nd|reot|y
through tao|t know-how aooumu|at|on |n |o-
oa| personne|. The |mpaot of these ohan-
ne|s on oapab|||t|es bu||d|ng depends on
the presenoe of some |eve| of absorpt|ve
oapao|tyw|th|noountr|es.
Oountry and oontext-speo|o faotors suoh
as eduoat|on (part|ou|ar|y vooat|ona| and
tert|ary eduoat|on}, ava||ab|||ty of oap|ta|
(pub||o and pr|vate}, know|edge |nfrastruo-
ture (suoh as test|ng and des|gn |abora-
tor|es, pub||o oentres of exoe||enoe and
un|vers|t|es}, qua||ty standards and qua||ty
oontro|fao|||t|esare|nstrumenta||npromot-
|ng the absorpt|ve oapao|ty of rms to ava||
of teohno|og|oa| opportun|t|es. New know|-
edge re|ated to prooesses aoqu|red by
these means enab|es |noreases |n output,
wh||e know|edge re|ated to new produots
he|ps |ooa| rms oreate newer markets or
expand a|ready ex|st|ng markets. Th|s |eads
toeoonom|esofsoa|eandprov|desfurther
soopeforgrowth.
ln the speo|o oontext of South-South, as
ohapterlshows,thegrow|ngeoonom|oand
oommero|a||nterestsofsomedeve|op|ng
oountr|es have been fue|||ng market ex-
pans|on and some |eve| of teohno|og|oa|
oo||aborat|on w|th other oountr|es of the
South. W|th|n these transaot|ons, |mports
A s|gn|cant cont||o0to|
totec|no|og|ca||ea|n|ng
andcaoac|ty-o0||d|ng
|st|e|moo|tofcao|ta|
goods
...oa|t|c|oat|on
|nGPNsandFD/a|e
ot|e|facto|s.
22 TECHNOLOGY AND INNOVATION REPORT 2012
of oap|ta| goods and grow|ng part|o|pa-
t|on |n GPNs may he|p |ooa| rms aoou-
mu|ate know|edge, not on|y of the k|nd
re|ated to teohn|oa| aspeots of produo-
t|on,buta|soofmanager|a|,bus|nessand
qua||ty-re|ated aspeots. FDl and ||oens-
|ng oan a|so have |mportant |mp||oat|ons
for teohno|ogy aoqu|s|t|on and |earn|ng
|n some oontexts. However, to what ex-
tent th|s ho|ds, and whether eoonom|o
growth|ntheSouthandtheresu|t|ngr|se
|n South-South trade and |nvestment do
|ndeed |ead to a surge |n teohno|og|oa|
|earn|ng and |nnovat|on oapao|ty rema|n
|mportant quest|ons.
Th|s ohapter seeks to exam|ne these ohan-
ne|s of |nteraot|on to ana|yze whether ex|st|ng
and emerg|ng trends po|nt towards a sys-
temat|oemergenoeofSouth-Southoo||abo-
rat|ononteohno|ogyand|nnovat|on|ssues.
Seot|on B presents ava||ab|e data on the
trends |n |mports of oap|ta| goods, FDl and
part|o|pat|on |n GPNs.
1
Seot|on O ana|yses
onthebas|sofex|st|ngdataandtrendsasto
whether ongo|ng South-South exohange |s
hav|ng|mpaotonteohno|og|oa|ohangeand
|nnovat|on oapao|ty |n reo|p|ent oountr|es,
and, |f so, under what o|roumstanoes. Th|s
seot|on a|so exam|nes the k|nds of teohno|o-
g|esbe|ngsharedandthetypesofa|||anoes
and partnersh|ps that have been forged. ln
add|t|on,outstand|ng|ssuesre|at|ngtoour-
rent patterns of teohno|ogy and |nnovat|on
|n the South-South oontext are h|gh||ghted.
Seot|on D of the ohapter oono|udes.
B. INCREASE IN
IMPORTS OF CAPITAL
GOODS FROM THE
SOUTH
There has been a marked |norease |n trade
|n oap|ta| goods among deve|op|ng ooun-
tr|es s|noe the m|d-1990s. Th|s |s part|ou-
15
30
45
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|at|nAmer|oaandthe
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SouthernAfr|oa
SouthAs|a
South-EastAs|a
EastAs|a
WestAs|a
F|g0re2.1: 6row|ogreg|ooa|shareoIcap|ta|goods|mports(aspartoItota||mports)
Iromdeve|op|ogco0otr|es(Perceot)
Souroe: NOTADstat.
Note: Southern Afr|oa oompr|ses: Botswana, |esotho, Nam|b|a, South Afr|oa, Swaz||and. South As|a
oompr|ses: Afghan|stan, Bang|adesh, Bhutan, lnd|a, lran (ls|am|o Repub||o of}, Ma|d|ves, Nepa|,
Pak|stan, Sr| |anka. East As|a oompr|ses: Oh|na, Demoorat|o Peop|e`s Repub||o of Korea, Hong
Kong (SAR of Oh|na}, Maoao (SAR of Oh|na}, Mongo||a, Repub||o of Korea, Ta|wan Prov|noe of
Oh|na. South-East As|a oompr|ses: Brune| Darussa|am, Oambod|a, lndones|a, Ma|ays|a, Myanmar,
S|ngapore, Tha||and, |ao Peop|e`s Dem. Repub||o, Ph|||pp|nes, T|mor-|este, v|etnam. West As|a
oompr|ses: Bahra|n, lraq, Jordan, Kuwa|t, |ebanon, Oooup|ed Pa|est|n|an Terr|tory, Oman, Oatar,
Saud| Arab|a, Syr|an Arab Repub||o, n|ted Arab Em|rates, Turkey and Yemen. |at|n Amer|oa and the
Oar|bbean oompr|ses: Angu|||a, Ant|gua and Barbuda, Argent|na, Aruba, Bahamas, Barbados, Be||ze,
Bo||v|a, Braz||, Oayman ls|ands, Oh||e, Oo|omb|a, Oosta R|oa, Ouba, Dom|n|oa, Dom|n|oan Repub||o,
Eouador, E| Sa|vador, Grenada, Guyana, Ha|t|, Honduras, Jama|oa, Mex|oo, Montserrat, Nether|ands
Ant|||es, N|oaragua, Panama, Paraguay, Peru, Sa|nt K|tts and Nev|s, Sa|nt |uo|a, Sa|nt v|noent and
the Grenad|nes, Sur|name, Tr|n|dad and Tobago, Turks and Oa|oos ls|ands, ruguay, venezue|a.
7|e|e|asoeena
ma||ed|nc|ease|nt|ade
|ncao|ta|goodsamong
deve|oo|ngco0nt||es
s|ncet|em|d-1990s.
Ove|a||t|endss|owa
c|ea|s||ftawayf|om
deve|ooedco0nt||es
asso0|cesofs0c|
goodstowa|ds
deve|oo|ngco0nt||es
d0||ngt|eoe||od
20052010.
23
CHAPTER II : THE EMERGING LANDSCAPE OF TECHNOLOGY AND INNOVATION EXCHANGE IN THE SOUTH
Tab|e2.2: ShareoIse|ectdeve|op|ogco0otr|es|mports(aspartoItota||mports
oIcap|ta|goods)Iromdeve|op|ogaoddeve|opedco0otr|es,1995aod2010
(Perceot)
|mport|ogreg|oo
0eve|op|og
co0otr|es
0eve|oped
co0otr|es
0thers
0eve|op|og
co0otr|es
0eve|oped
co0otr|es
0thers
1995 2010

P
a
r
t
o
e
r
8raz||
44.25 54.52 1.24 60.24 37.91 1.86
|od|a
35.45 62.28 2.27 59.16 39.44 1.4
0h|oa
44.73 54.61 0.66 42.87 53.92 3.22
So0thAIr|ca
.. .. .. 59.77 39.54 0.68
Souroe: NOTADstat.
|ar|y s|gn|oant beoause overa|| trends show
ao|earsh|ftawayfromdeve|opedoountr|es
as souroes of suoh goods for deve|op|ng
oountr|es dur|ng the per|od 2005-2010,
espeo|a||yaftertheeoonom|os|owdown|n
2008.Aspartofr|s|ngSouth-Southtrade,
the share of deve|op|ng oountr|es |mports
from other deve|op|ng oountr|es has |n-
oreased stead||y, from 35per oent |n 1995
to 54per oent |n 2010 (tab|es 2.1 and 2.2
and gure 2.1}, thereby render|ng deve|op-
|ngoountr|esasthemajorsouroeofoap|ta|
goodsforotherdeve|op|ngoountr|es.
Many faotors have oontr|buted to the
growth of |mports of oap|ta| goods by de-
ve|op|ng oountr|es between 1995 and
2010. One |mportant faotor has been trade
||bera||zat|on undertaken by many of these
oountr|es, |no|ud|ng through the reduot|on
of tar|ffs and the remova| of quant|tat|ve
restr|ot|ons |n the oontext of the ruguay
Round agreements of the Genera| Agree-
mentonTar|ffsandTrade.Theabsenoeof
major eoonom|o shooks dur|ng the per|od
1995-2000, enab|ed the further expans|on
of trade. However, by the end of the 1990s,
the nano|a| or|s|s that h|t the East As|an
eoonom|es and |ts oontag|on effeots |ed to
marked|y |ower growth rates |n the affeoted
oountr|es. Th|s oontr|buted to the grow|ng
|mportanoe of trade between deve|op|ng
oountr|es. More reoent|y, the g|oba| nano|a|
andeoonom|oor|s|shashadas|m||areffeot.
Tab|e2.1: 8eg|ooa|shareoI|mportsoIcap|ta|goods(aspartoItota||mports)
Iromdeve|op|ogaoddeve|opedco0otr|es,1995aod2010(Perceot)
|mport|ogreg|oo
0eve|op|og
co0otr|es
0eve|oped
co0otr|es
0thers
0eve|op|og
co0otr|es
0eve|oped
co0otr|es
0thers
1995 2010

P
a
r
t
o
e
r
0eve|op|ogco0otr|es
35.36 62.21 2.43 53.99 43.78 2.23
Lat|oAmer|caaodthe0ar|bbeao
30.42 68.80 0.79 39.27 60.02 0.71
So0theroAIr|ca
.. .. .. 57.90 41.46 0.64
So0thAs|a
32.45 65.00 2.56 56.06 42.36 1.57
So0th-astAs|a
44.13 55.43 0.44 62.57 36.67 0.76
astAs|a
45.52 53.73 0.75 50.21 47.03 2.76
Souroe: NOTADstat.
Note: For the oountry oompos|t|on of eaoh of these subgroups, see note to F|gure 2.1.
24 TECHNOLOGY AND INNOVATION REPORT 2012
An |mportant aspeot of South-South trade
|noap|ta|goods|sthat|tvar|esoons|derab|y,
bothaorossgroupsofoountr|esandbetween
|nd|v|dua|oountr|es.Asobservedw|thovera||
|mportsfromeaohreg|on,therearea|soother
|ntrareg|ona| and |ntra-oountry var|at|ons. An
ana|ys|sof|nterreg|ona|var|at|onsshowsthat
the South-East As|an oountr|es and South
As|an oountr|es (part|ou|ar|y Oh|na and lnd|a}
have depended more on deve|op|ng ooun-
tr|esthanonthedeve|opedoountr|estomeet
the|r |mport requ|rements for oap|ta| goods af-
ter 2000 (gure 2.1 and tab|e 2.2}.
2
Amongst
the other reg|ons, |at|n Amer|oa and the Oar-
|bbeanhavea|sow|tnessedas|m||ar|norease
whereasth|shasnotbeentheoase|nSouth-
ern Afr|oa. At 60per oent eaoh, Braz||, lnd|a
andSouthAfr|oahavea|argeshareofoap|ta|
goods from the|r Southern partners (see ta-
b|e2.2}.
These trends are supported, and are very
s|m||ar to, overa|| trade trends (see ohapter
1, gure 1.2}, wh|oh |nd|oate that South-
South trade has progress|ve|y |noreased
|n |mportanoe |n oompar|son w|th South-
North trade. South-North trade deo||ned
from 57 per oent of tota| g|oba| trade |n
1995 to 42 per oent |n 2010, whereas
South-South trade rose from 42per oent to
56per oent over the same per|od (tab|e 1.1
|n ohapter 1}. The reg|ona| var|at|ons |n tota|
South-South trade and South-South trade
|n oap|ta| goods a|so fo||ow a s|m||ar pat-
tern w|th South As|a and South-East As|a
aooount|ng for the h|ghest share of |ntra-
Southtradeandoap|ta|goods|mports.
3
Th|s|mp||esagrow|ngoapao|ty|ntheSouth
to produoe suoh goods, at |east |n some
oountr|es, but a|so that there |s a grow-
|ng trend |n other deve|op|ng oountr|es to
|mporttheseaspartofthe|rexpand|ngef-
forts to promote produot|ve oapao|ty. As
noted ear||er, suoh |mports are |mportant
forbu||d|ngproduot|veoapao|ty,s|noethey
oan resu|t |n the transfer of teohno|ogy to
theextentthatthosearestud|edfordes|gn
oharaoter|st|os and reverse eng|neer|ng.
They oan a|so d|reot|y |mprove produot|v-
|ty when they are emp|oyed |n produot|on
prooesses. Th|s |s oaptured |n part by the
marked |norease of manufaotur|ng exports
from deve|op|ng oountr|es (exo|ud|ng |DOs}
to other oountr|es (gure 2.2}.
As gure 2.2 shows, the grow|ng manu-
faotur|ng oapab|||t|es |n a number of de-
ve|op|ng oountr|es, part|ou|ar|y Braz||, ln-
d|a,Oh|naandSouthAfr|oa,hasenab|ed
them to |norease the|r exports of oap|ta|
-
10
20
30
40
50
60
70
80
90
100
1995 2000 2005 2010
Toothers
To|DOs
Todeve|op|ngoountr|es
(exo|.|DOs}
Todeve|opedoountr|es
F|g0re2.2: Treods|oexportd|str|b0t|oomao0Iact0r|ogoIdeve|op|ogco0otr|es,19952010
(Perceot)
Souroe: NOTADstat.
7||s|mo||esag|ow|ng
caoac|ty|nt|eSo0t|to
o|od0ces0c|goods
andag|ow|ngt|end
|not|e|deve|oo|ng
co0nt||esto|moo|t
t|eseasoa|toft|e||
exoand|ngeffo|tsto
o|omoteo|od0ct|ve
caoac|ty.
25
CHAPTER II : THE EMERGING LANDSCAPE OF TECHNOLOGY AND INNOVATION EXCHANGE IN THE SOUTH
goods.lthasa|soenab|edthemtopart|o-
|pate|nGPNs|nboth|ow-oostmanufao-
tur|ng and h|gh-teohno|ogy va|ue-added
produot|on. Moreover, g|oba||zat|on,
as we|| as newer teohno|og|es and the
move towards the know|edge eoonomy,
espeo|a||y |nformat|on and oommun|oa-
t|on teohno|og|es (lOTs}, have prov|ded
opportun|t|es for these oountr|es to use
the|r ex|st|ng sk|||ed workforoe to ao-
oumu|ate further know|edge and pro-
mote teohno|og|oa| |earn|ng. Wh||e ln-
d|a sought to promote |ooa| enterpr|ses
through reverse eng|neer|ng and pro-
duot|on, Oh|na, for |nstanoe, opted for
a dua| approaoh - promot|ng |ooa| en-
terpr|sesbuta|soattraot|ng|nvestments
byg|oba|TNOs.lnsome,thoughnota||,
of the deve|op|ng oountr|es, part|ou|ar|y
the emerg|ng oountr|es, TNO aot|v|t|es
through subs|d|ar|es have oontr|buted
toanovera||efforttobu||dteohno|og|oa|
oapab|||t|es (OEOD, 2011}. Regard|ess of
the means and po||oy |noent|ves, these
oountr|eshavebeenab|etousethe|rex-
|st|ngsupp||esofeng|neer|ngandentre-
preneur|a| sk|||s, a|ded by |nvestments |n
|nfrastruoture, to bu||d the|r teohno|og|-
oa| oapab|||t|es and |mprove the qua||ty
ofgoodsproduoed.
The re|ooat|on of produot|on fao|||t|es to
some deve|op|ng oountr|es has taken on
a new mean|ng |n the oontext of grow-
|ng oompet|t|ve teohno|og|oa| oapab|||t|es
oftheseoountr|es|nmanyseotors.Suoh
re|ooat|on |nvo|ves not on|y produot|on
aot|v|t|es, but a|so aspeots of R&D, espe-
o|a||y |n lnd|a and Oh|na (NOTAD, 2005}.
A new, gradua| reoongurat|on of manu-
faotur|ng and |nnovat|on aot|v|t|es at the
g|oba| |eve| |s tak|ng p|aoe (Ohesbrough,
2003; 2006} |n wh|oh severa| deve|op|ng
oountr|es are beg|nn|ng to p|ay a or|t|-
oa| ro|e. ln 2007, the Oh|nese eoonomy
aooounted for 36 per oent of a|| manu-
faotur|ng va|ue-added goods produoed
wor|dw|de (NOTAD, 2007}. Moreover,
s|noe 1999 there has been a sharp |n-
orease |n R&D expend|ture |n Oh|na, aver-
ag|ng approx|mate|y 24 per oent per an-
num. lndeed, Oh|na`s R&D-to-GDP rat|o
has more than doub|ed |n a deoade to
reaoh 1.70per oent |n 2009. Meanwh||e,
lnd|a fo||ows the n|ted States |n be|ng
theseoondmostfavoured|ooat|on|nthe
wor|d for offshor|ng of R&D (Eoonom|st
lnte|||genoe n|t, 2007}.
As a resu|t of a|| these faotors, deve|op|ng
oountr|es have beoome |arger exporters
of oap|ta| goods, |no|ud|ng manufaotured
goods, than deve|oped oountr|es for other
oountr|es w|th|n the South over the past
deoade (tab|e 2.1 and 2.2 and gure 2.2}, a
trend that |s expeoted to oont|nue we|| |nto
thefuture.
1. Growing technological intensity
of imports and participation in
SURGXFWLRQQHWZRUNV
W|th|n these broad trends, there has been
a oons|stent |norease |n |mports of h|gh-
teohno|ogy-|ntens|vegoods|ntheSouth.
A o|oser |ook at the grow|ng teohno|og|oa|
|ntens|ty of South-South |mports shows
that, on average, over 53 per oent of a||
h|gh-teohno|ogyproduots|mportedbyde-
ve|op|ngoountr|esasagroupwassouroed
from deve|op|ng oountr|es (tab|es 2.3 and
2.4 and gures 2.3 and 2.4}. Oompar|ng
the |eve| of teohno|og|oa| |ntens|ty (|ow,
med|um and h|gh teohno|ogy-|ntens|ve}
ofdeve|op|ng-oountry|mports,therewas
a |arger share of manufaotured |mports
of h|gh teohno|ogy |ntens|ty than those
of med|um sk||| and teohno|ogy |ntens|ty
(tab|es 2.5 and 2.6 and gures2.5 and 2.6
for s|m||ar data on med|um-teohno|ogy-
|ntens|ve manufaotures}.
A substant|a| share of h|gh-teohno|ogy ex-
portsfromtheSouthared|reotedtodeve|-
op|ng oountr|es. For |nstanoe, 60 peroent
of Braz||`s h|gh teohno|ogy exports, 54per
oent of Oh|nas h|gh teohno|ogy exports
and 47 per oent of lnd|a`s h|gh teohno|-
ogy exports were souroed to deve|op|ng
oountr|es as a who|e (tab|e 2.4}. Deve|op-
|ng oountr|es rema|n the |argest |mporters
ofh|ghteohno|ogyproduotsfromEastAs|a
(64 per oent of East As|a`s tota| exports}.
Theresu|tsfortheSouthAs|ansub-reg|on
and lnd|a are s|gn|oant and seem to sug-
7|eg|ow|ng
man0fact0||ngcaoa-
o|||t|es|nan0moe|of
deve|oo|ngco0nt||es
|asa|soenao|ed
t|emtooa|t|c|oate|n
GPNs|noot||ow-cost
man0fact0||ngand||g|-
tec|no|ogyva|0e-added
o|od0ct|on.
26 TECHNOLOGY AND INNOVATION REPORT 2012
gest that they are both |ntegrat|ng more
rap|d|y w|th the h|gh-sk||| and teohno|ogy-
|ntens|ve|ndustr|es,atrendthat|ss|m||arto
what was w|tnessed |n South-East As|a |n
|tsear||erstagesofdeve|opment.
However, these trends are uneven aoross
reg|ons, and are |arge|y exp|a|ned by the
ex|stenoe of produot|on networks |n South-
EastAs|a,andmorereoent|y|nSouthAs|a.
Thega|nsoftheseoountr|es|nteohno|og|-
oa| soph|st|oat|on fao|||tates the|r ab|||ty to
absorb produots w|th h|gh sk||| and teoh-
no|ogy |ntens|ty better than some of the
other reg|ons shown |n tab|e 2.3, suoh
as Southern Afr|oa. S|m||ar trends oan be
observed w|th respeot to med|um-teoh-
no|ogy |ntens|ve |mports (tab|es 2.5 and
tab|e2.6}.
Anana|ys|softhedataandtrendsforh|gh-
teohno|ogyandmed|um-teohno|ogy|nten-
s|veseotorsrevea|sthefo||ow|ngpatterns
ofteohno|ogy|ntens|ty|n|mports:
4
Tab|e2.3: |mportsoIcap|ta|goodsw|thh|ghtechoo|ogy|oteos|tyso0rcedIrom
deve|op|ogco0otr|es(asaperceotageoItota||mports),byreg|ooa|
gro0ps,1995aod2010
|mport|ogreg|oo
0eve|op|og
co0otr|es
0eve|oped
co0otr|es
0thers
0eve|op|og
co0otr|es
0eve|oped
co0otr|es
0thers
1995 2010

P
a
r
t
o
e
r
0eve|op|ogco0otr|es
24.85 74.07 1.08 53.04 46.23 0.73
Lat|oAmer|caaodthe0ar|bbeao
26.62 73.31 0.07 34.14 65.35 0.51
So0theroAIr|ca
.. .. .. 58.60 40.74 0.66
So0thAs|a
52.13 37.76 10.11 47.60 45.06 7.34
So0th-astAs|a
42.93 56.64 0.43 54.61 44.82 0.56
astAs|a
42.14 57.19 0.67 64.67 33.89 1.44
Souroe: NOTADstat.
Note: For the oountry oompos|t|on of eaoh of these subgroups, see note to gure 2.1. 'Others` refers to
trans|t|on eoonom|es and Ooean|a.
Tab|e2.4: |mportsoIcap|ta|goodsw|thh|ghtechoo|ogy|oteos|tyso0rcedIrom
deve|op|ogco0otr|es(asaperceotageoItota||mports),byse|ect
deve|op|ogco0otr|es,1995aod2010
|mport|ogreg|oo
0eve|op|og
co0otr|es
0eve|oped
co0otr|es
0thers
0eve|op|og
co0otr|es
0eve|oped
co0otr|es
0thers
1995 2010

P
a
r
t
o
e
r
8raz||
45.73 54.2 0.07 59.69 39.89 0.42
|od|a
52.52 37.13 10.36 47.39 45.41 7.2
0h|oa
47.23 52.37 0.41 54.13 43.74 2.13
So0thAIr|ca
.. .. .. 61.1 38.18 0.72
Souroe: NOTADstat.
W|t||nt|eseo|oad
t|ends,t|e|e|asoeena
cons|stent|nc|ease
|n|moo|tsof
||g|-tec|no|ogy-
|ntens|vegoods
|nt|eSo0t|.
As0ostant|a|s|a|eof
||g|-tec|no|ogyexoo|ts
f|omt|eSo0t|a|e
d||ectedtodeve|oo|ng
co0nt||est|emse|ves.
27
CHAPTER II : THE EMERGING LANDSCAPE OF TECHNOLOGY AND INNOVATION EXCHANGE IN THE SOUTH
20
30
40
50
60
70
80
1995 2000 2005 2010
T
o
t
a
l

c
a
p
i
t
a
l

i
m
p
o
r
t
s

(
p
e
r

c
e
n
t
)
Deve|op|ngoountr|es
Deve|opedoountr|es
F|g0re2.3: |mportsoIcap|ta|goodsw|thh|ghtechoo|ogy|oteos|tybydeve|oped
aoddeve|op|ogco0otr|es(asaperceotageoItota|g|oba||mports),19952010
F|g0re2.4: |mportsoIcap|ta|goodsw|thh|ghtechoo|ogy|oteos|tyasaperceotageoItota|
|mportsIromdeve|op|ogco0otr|es,byse|ectedreg|oos,19952010
a,b
Souroe: NOTADstat.
Souroe: NOTADstat.
Note: For the oountry oompos|t|on of eaoh of these reg|ons, see note to gure 2.1.
a
Thedatareferto|mportsofgoodsofh|ghteohno|ogy|ntens|tybyvar|ousreg|ona|groupsfromdeve|op|ng
oountr|esasawho|e.
b
Foroorrespond|ngperoentagesforSouthernAfr|oa,seeAnnextab|eA.ll.8.
10
20
30
40
50
60
70
1995 2005 2010
I
m
p
o
r
t
s

o
f

h
i
g
h
-
t
e
c
h

i
n
t
e
n
s
i
t
y

m
a
n
u
f
a
c
t
u
r
i
n
g

f
r
o
m

t
h
e

S
o
u
t
h

(
p
e
r

c
e
n
t
)

SouthAs|a
South-EastAs|a
EastAs|a
|at|nAmer|oaandthe
Oar|bbean
|. South-South|mportsaretheh|ghest
|n te|eoommun|oat|ons and sound
reoord|ng and reproduo|ng appara-
tus and equ|pments.
||. Ofoe maoh|nes and automat|o
data prooess|ng maoh|nes are a|so
re|at|ve|y s|gn|oant |n the |mports of
deve|op|ng oountr|es from other
oountr|esoftheSouth.
|||. South-South |mports of power-gen-
erat|ng maoh|nery and equ|pment
have not been very s|gn|oant, oon-
st|tut|ng on|y 29per oent of the tota|
|mports of th|s produot oategory by
deve|op|ng oountr|es |n 2010.
|v. South-South |mports of produots |n
some seotors that have pub||o we|-
fare |mp||oat|ons |s on the r|se, suoh
aspharmaoeut|oa|s.
5
Wh||e these patterns rema|n |mportant, the
under|y|ng quest|on that |s or|t|oa| |s wheth-
er these teohno|og|oa| |mports are of a k|nd
28 TECHNOLOGY AND INNOVATION REPORT 2012
that promotes teohno|og|oa| oapab|||t|es |n
deve|op|ng oountr|es? From the ava||ab|e
dataonSouth-Southteohno|ogyexohange
(as ana|yzed here |n th|s ohapter}, and ex|st-
|ng oase stud|es and other ev|denoe (d|s-
oussed |n ohapter lll}, the patterns of suoh
exohangeoanbeexp|a|nedbyafewongo-
|ngdeve|opments.
A predom|nant faotor exp|a|n|ng the teoh-
no|og|oa| |mport trends |s the growth of
produot|on networks dr|ven by some of the
more teohno|og|oa||y advanoed deve|op|ng
oountr|es. ln add|t|on, |noreas|ng domest|o
demand |n some of the emerg|ng oountr|es
- part|ou|ar|y Oh|na and lnd|a - due to the|r
|argepopu|at|onsandthe|noreas|ngpurohas-
|ng power of the grow|ng m|dd|e o|ass, |s a
faotorexp|a|n|ngthesurge|n|mportsofteoh-
no|og|oa|produotsfromotheroountr|es|nthe
South|ntotheseeoonom|es.These|mports,
asdatatrendsshow,serveas|nputsforthe
expand|ngeoonom|oaot|v|t|esandoonsump-
t|onpatterns|ntheseoountr|es.Someemerg-
|ngoountr|esareab|etomanufaoturesevera|
h|gh-teohno|ogy produots at oompet|t|ve (and
often |ower} pr|oes, wh|oh are |ead|ng to a
sh|ft|n|mportsoftheSouthfromdeve|oped
oountr|estodeve|op|ngoountr|es.
F|g0re2.5: |mportsoIcap|ta|goodsw|thmed|0mtechoo|ogy|oteos|tybydeve|oped
aoddeve|op|ogco0otr|es(asaperceotageoItota|g|oba||mports),19952010
F|g0re2.6: |mportsoIcap|ta|goodsw|thmed|0mtechoo|ogy|oteos|tyasaperceotageoI
tota||mportsIromdeve|op|ogco0otr|es,byse|ectedreg|oos,19952010
Souroe: NOTADstat.
Souroe: NOTADstat.
Note: For the oountry oompos|t|on of eaoh of these subgroups, see note to F|gure 2.1.
-
10
20
30
40
50
60
70
80
1995 2000 2005 2010
T
o
t
a
l

i
m
p
o
r
t
s

(
p
e
r

c
e
n
t
)
Deve|op|ngoountr|es
Deve|opedoountr|es
20
30
40
50
60
70
1995 2000 2005 2010
I
m
p
o
r
t
s

o
f

m
e
d
i
u
m
-
t
e
c
h

i
n
t
e
n
s
i
t
y

m
a
n
u
f
a
c
t
u
r
i
n
g
f
r
o
m

t
h
e

S
o
u
t
h

(
p
e
r

c
e
n
t
)

|at|nAmer|oaandthe
Oar|bbean
SouthernAfr|oa
SouthAs|a
South-EastAs|a
EastAs|a
W|||et|eseoatte|ns
|ema|n|moo|tant,
t|e0nde||y|ngq0est|on
t|at|sc||t|ca||s
Ao|edom|nantfacto|
exo|a|n|ngt|e
tec|no|og|ca||moo|t
t|ends|st|eg|owt|of
o|od0ct|onnetwo||s
d||venoysome
oft|emo|e
tec|no|og|ca||y
advanceddeve|oo|ng
co0nt||es.
w|et|e|t|ese
tec|no|og|ca||moo|ts
a|eofa||ndt|at
o|omotestec|no|og|ca|
caoao|||t|es|n
deve|oo|ngco0nt||es?
29
CHAPTER II : THE EMERGING LANDSCAPE OF TECHNOLOGY AND INNOVATION EXCHANGE IN THE SOUTH
On a genera| |eve|, a oountry oan |mport
oap|ta|goodsso|ongas|toanpayforthem.
However, what rema|ns |mportant for pro-
duot|v|ty growth |s how these |mports are
ohanne|ed effeot|ve|y |nto generat|ng future
|noome. Th|s br|ngs us baok to the |ssue of
how rms and seotors are ab|e to adapt and
useteohno|og|esembod|ed|nthese|mports
togenerateproduot|v|tygrowth.So|ongas
th|s|sposs|b|eandev|dent,|twou|d|eadto
the oono|us|on that suoh |mports of oap|ta|
goods are oontr|but|ng to bu||d|ng teohno-
|og|oa| oapab|||t|es |n deve|op|ng oountr|es.
On th|s aspeot, two trends stand out. F|rst,
the trends show that oountr|es w|th an a|-
ready ex|st|ng m|n|mum |eve| of teohno|og|-
oa| oapab|||t|es are engag|ng |n extens|ve
trade |n oap|ta| goods w|th other oountr|es
oftheSouth.Th|spo|ntstothe|mportanoe
of some |eve| of teohno|og|oa| oapao|ty to
part|o|pate |n oap|ta| goods trade, under-
soor|ngthefaotthatwh||eanyoountryoou|d
|mport oap|ta| goods, those that oons|st-
ent|ypart|o|pate|nsuohoap|ta|goodstrade
aretheoountr|eswherethese|mportsfeed
|nto enhano|ng produot|on oapao|t|es.
6
Th|s
|sundersooredbytheseoondtrend,wh|oh
shows a s|gn|oant over|ap between ooun-
tr|esthat|mportoap|ta|goodsandthosethat
exportgoodsw|thteohno|og|oa|oontent.ln
order to |||ustrate these trends further, gures
2.7 and 2.8 present data on |mports of h|gh-
sk||| and teohno|ogy-|ntens|ve manufaotures,
and maoh|nery and transport equ|pment.
Th|s|snottooomp|ete|yexo|udethepres-
enoe and |mportanoe of teohno|og|oa|
transaot|ons|notheroountr|esoftheSouth.
Wh||e oountr|es of the South mutua||y |m-
portteohno|ogy-|ntens|vegoodsfromeaoh
other, many are ||m|ted by the sma||er s|ze
of the|r markets, |ower ab|||ty to pay and the
|owerteohno|og|oa||ntens|tyofthe|rovera||
eoonom|oaot|v|ty.
Regard|ng |mports of maoh|nery and trans-
port equ|pment, the gap |s a|so w|den|ng and
oonformstotheothertrendspresented|nth|s
seot|on. Deve|op|ng oountr|es as a group |n-
oreasedthe|r|mportsofmaoh|neryandtrans-
port equ|pment as a share of g|oba| |mports
of th|s oategory from 27 per oent |n 1995
to 53 per oent |n 2010. However, oountr|es
w|th |ower teohno|og|oa| oapao|t|es, suoh as
a |arge number of the |DOs, |noreased the
share of the|r |mports of these oategor|es
from on|y 0.04per oent |n 1995 to 0.08per
oent |n 2010.
7
Among the |DOs, the o||-
export|ng |DOs aooounted for a |arge amount
ofthe|norease|nthese|mports,show|ngthat
suoh |mports are seotora||y b|ased towards
the oommod|ty seotors. Th|s |s oaptured |n
gure 2.10 shows a |arge gap |n the |mports
of maoh|nery and transport equ|pment be-
tween |DOs and other deve|op|ng oountr|es.
0
50
100
150
200
250
300
1
9
9
5
1
9
9
6
1
9
9
7
1
9
9
8
1
9
9
9
2
0
0
0
2
0
0
1
2
0
0
2
2
0
0
3
2
0
0
4
2
0
0
5
2
0
0
6
2
0
0
7
2
0
0
8
2
0
0
9
2
0
1
0
Emerg|ngoountr|esto|DOs |DOstoemerg|ngoountr|es
Emerg|ngoountr|estodeve|oped
oountr|es
Deve|opedoountr|estoemerg|ng
oountr|es
F|g0re2.7: xportsoIh|gh-techoo|ogymao0Iact0resbyco0otr|es,19952010($m||||oo)
Souroe: NOTADstat.
Aco0nt|ycan|moo|t
cao|ta|goodsso|ongas
|tcanoayfo|t|em
w|at|ema|ns|moo|-
tantfo|o|od0ct|v|ty
g|owt||s|owt|ese
|moo|tsa|ec|anne|ed
effect|ve|y|nto
gene|at|ngf0t0|e
|ncome.
30 TECHNOLOGY AND INNOVATION REPORT 2012
2. South-South FDI and technology
RZV
The ro|e of FDl |n promot|ng teohno|ogy
transfer - through ||oens|ng, teohno|og|oa|
sp|||overs and sk|||s deve|opment - and |ts
|mpaotonr|s|ngproduot|veoapao|ty|nreo|p-
|entoountr|es|sbe|ng|noreas|ng|yexp|ored.
||terature on th|s shows that TNOs engage
|n FDl when |t offers them advantages, e|-
ther|ntermsofoap|ta|orteohno|ogy,orboth
(see for examp|e, ||psey and Sjoho|m, 2005;
Dunn|ng, 1993; NOTAD, 2006a and 2007}.
ln add|t|on to prov|d|ng oap|ta| and sett|ng
up part|ou|ar k|nds of produot|on fao|||t|es |n
thehostoountry,therearesevera||nstanoes
where sk|||s, espeo|a||y tao|t know-how, have
been transferred from |nternat|ona| rms to
|ooa| aotors through rout|ne produot|on ao-
t|v|t|es of the rms (see a|so ohapter lv, and
NOTAD 2006a, 2011a and 2011b}.
As ment|oned ear||er |n th|s ohapter, FDl oan
potent|a||y |ead to |earn|ng and the bu||d|ng
of oapab|||t|es through teohno|ogy sp|||overs
to |ooa| rms. Th|s oan happen e|ther d|reot|y
through||oens|ngandjo|ntventuresthaten-
ta|| teohno|ogy transfer, or |nd|reot|y through
tao|t know-how aooumu|at|on by |ooa| per-
sonne|. ||oens|ng offers aooess to teohno|-
ogy by enab||ng |ooa| rms or subs|d|ar|es to
purohase produot|on and d|str|but|on r|ghts
(proteoted by lPRs} and the know-how re-
qu|red to enab|e the exero|se of produot|on
and d|str|but|on r|ghts (Maskus, 2004}. Where
FDl |s part of a jo|nt venture, the TNOs usua||y
prov|de know|edge-based assets, whereas
the |ooa| rms |everage the|r |ooat|ona| advan-
tages suoh as d|str|but|on networks, |ow-oost
|abour and government support (see ohap-
ter lll for oase stud|es}. FDl oan a|so resu|t |n
|nd|reot teohno|ogy sp|||overs to other rms
|n the eoonomy through tao|t know-how of
produots and prooesses aoqu|red by |ooa|
emp|oyees. Over t|me, through the move-
ment of those emp|oyees to other rms, suoh
tao|t know-how |s transferred to those rms.
a. 0utward F0l fram deve|aping
cauntries
FDl by deve|op|ng oountr|es has been r|s|ng
|n reoent years, |noreas|ng the poss|b|||t|es
for|ttobe|everagedforteohno|og|oa||earn-
|ng |n var|ous other deve|op|ng oountr|es.
The |mportanoe of deve|op|ng oountr|es as
souroes of FDl has |noreased qu|te s|gn|-
oant|y and stead||y over the past four deo-
ades (tab|e 2.7 and gures 2.9 and 2.10},
a|though|tdeo||nedsomewhat|n2008,fo|-
|ow|ng the erupt|on of the nano|a| and eoo-
nom|oor|s|s.Theshareofdeve|op|ngooun-
tr|es |n tota| outward FDl rose from 15 per
oent |n 2005 to 27 per oent |n 2010, but
pre||m|nary est|mates for 2011 |nd|oate that
|t may have deo||ned to 21.4per oent.
F|g0re2.8: |mportspercap|taoImach|oeryaodtraosporteg0|pmeotbydeve|op|ogco0otr|es
aodL00s,19952010
Souroe: NOTADstat.
Note: |DO o|| exporters |n the gure are: Ango|a, Ohad, Equator|a| Gu|nea, Sudan and Yemen.
0
50
100
150
200
250
300
350
400
450
500
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
I
m
p
o
r
t
s

p
e
r

c
a
p
i
t
a

(
$
)
|DOo||exporters |DOs(exo|.o||exporters}
Deve|op|ngoountr|es A|||DOs
C0||ent|y,co0nt||est|at
cons|stent|yoa|t|c|oate
|ns0c|cao|ta|goods
t|adea|et|eco0nt||es
w|e|et|ese|moo|ts
feed|ntoen|anc|ng
o|od0ct|oncaoac|t|es.
Manya|e||m|tedoy
t|esma||e|s|zeoft|e||
ma||ets,|owe|ao|||ty
tooayandt|e|owe|
tec|no|og|ca||ntens|ty
oft|e||ove|a||econom|c
act|v|ty.
31
CHAPTER II : THE EMERGING LANDSCAPE OF TECHNOLOGY AND INNOVATION EXCHANGE IN THE SOUTH
Tab|e2.7: 00twardF0|Iromdeve|op|og
co0otr|es,19702010($m||||oo)
$m||||oos
atc0rreotpr|ces
AsaperceotageoI
tota| g|oba| o0tows
1970 50.97 0.36
1980
3 192.39 6.19
1985
3 962.13 6.39
1990
11 914.02 4.93
1995
55 723.59 15.34
2000
135 116.42 11.02
2005
132 507.00 14.91
2010
400 144.12 27.57
F|g0re 2.9: Share oI F0| o0tows by deve|op|og aod deve|oped co0otr|es |o tota| g|oba|
F0| o0tows, 1970-2010 (Per ceot)
F|g0re 2.10: Shares oI F0| o0tows Irom d|IIereot deve|op|og co0otry reg|oos to the rest oI the
wor|d,1970-2010
a
(Perceot)
Souroe: NOTADstat.
Souroe: NOTADstat.
Souroe: NOTADstat.
Note: For the oountry oompos|t|on of eaoh of these subgroups, see note to F|gure 2.1.
a
The oorrespond|ng data |s oonta|ned |n annex tab|e A.ll.14.
0
10
20
30
40
50
60
70
80
90
100
1970 1975 1980 1985 1990 1995 2000 2005 2010
P
e
r

c
e
n
t
Deve|op|ng
oountr|es
Deve|oped
oountr|es
Ana|ys|ng FDl outows from the var|ous
deve|op|ngreg|onstotherestofthewor|d
s|noe the 1970s shows a deo||n|ng trend |n
FDl from Afr|oa, from 37 per oent |n 1970
to 1.8 per oent |n 2010,
8
and from |at|n
Amer|oa from 61per oent |n 1970 to 30per
oent |n 2010.
9
FDl from As|a, on the other
hand, rose from 2per oent to 68per oent
dur|ng the same per|od (gure 2.10}. East
As|a aooounts for most of the outward FDl
from As|a (tab|e 2.8 and gure 2.11}. There
are s|gn|oant reg|ona| var|at|ons |n outward
FDl, wh|oh have an |mpaot on the grow-
|ng share |n gross xed oap|ta| format|on |n
theseoountr|es.
-10
0
10
20
30
40
50
60
70
80
90
100
1
9
7
0
1
9
7
5
1
9
8
0
1
9
8
5
1
9
9
0
1
9
9
5
2
0
0
0
2
0
0
1
2
0
0
2
2
0
0
3
2
0
0
4
2
0
0
5
2
0
0
6
2
0
0
7
2
0
0
8
2
0
0
9
2
0
1
0

S
h
a
r
e

o
f

F
D
I

(
p
e
r

c
e
n
t
)
Afr|oa
|at|nAmer|oaand
theOar|bbean
As|a
FD/oydeve|oo|ng
co0nt||es|asoeen||s|ng
|n|ecentyea|s,
|nc|eas|ngt|e
ooss|o|||t|esfo|
|ttooe|eve|agedfo|
tec|no|og|ca||ea|n|ng.
7|e|ea|e
s|gn|cant |eg|ona|
va||at|ons|no0twa|d
FD/|nt|eSo0t|.
32 TECHNOLOGY AND INNOVATION REPORT 2012
b. 5ectara| campasitian af 5auth-5auth
F0l autaws
The |mpaot of FDl on teohno|og|oa| |earn|ng
|sgenera||yana|ysedbyassess|ngtheseo-
tora| oompos|t|on of FDl outows, where
FDl |n produot|ve seotors s|gna|s a greater
probab|||ty of |earn|ng and sp|||overs |n the
host oountr|es. Over the past two deoades,
the seotora| oompos|t|on of outward FDl
from deve|op|ng oountr|es has ohanged
s|gn|oant|y. Est|mates |nd|oate that |n the
ear|y 1990s a|most three fourths of deve|-
op|ng-oountry|nvestmentsabroadwentto
the manufaotur|ng seotor, w|th the pr|mary
and seoondary manufaotur|ng seotors ao-
oount|ng for 14per oent and 13per oent of
suoh FDl respeot|ve|y. W|th|n the manufao-
tur|ngseotor,rubberandp|ast|osandwood
produots, two seotors that are based on
raw mater|a|s souroed ma|n|y from the |n-
vest|ngoountr|es,werethemostprom|nent
|ndustr|es (NOTAD, 2009}.
Two deoades |ater, there have been s|gn|-
oantohanges|ntheseotora|d|str|but|onof
outward FDl from the South to other ooun-
tr|es of the South (tab|e 2.9 and gure 2.12}.
Dur|ng the per|od 2008-2010, serv|oes
aooounted for near|y 70 per oent of suoh
FDl, of wh|oh more than 55per oent went
to deve|op|ng oountr|es. Th|s was a reeo-
t|onofthegrow|ngadvanoes|nserv|oes|n
|nformat|on teohno|ogy (lT} and re|ated
F|g0re 2.11: Tota| As|ao F0| o0tows to the rest oI the wor|d, 1980- 2010
Souroe: NOTADstat.
Note: For the oountry oompos|t|on of eaoh of these subgroups, see note to F|gure 2.1.
-20
0
20
40
60
80
100
1
9
8
0
1
9
9
0
1
9
9
5
2
0
0
0
2
0
0
1
2
0
0
2
2
0
0
3
2
0
0
4
2
0
0
5
2
0
0
6
2
0
0
7
2
0
0
8
2
0
0
9
2
0
1
0
S
h
a
r
e

o
f

F
D
I

(
p
e
r

c
e
n
t
)
EastAs|a
SouthAs|a
South-East
As|a
WestAs|a
Tab|e 2.8: Share oI F0| o0tows by reg|oo |o tota| F0| o0tows Irom the So0th to
therestoIthewor|d,19802010(Perceot)
Year
1980 1985 1990 1995 2000 2005 2010
AIr|ca 34.35 8.99 5.53 5.34 1.14 1.37 1.76
Lat|oAmer|ca
aodthe0ar|bbeao
28.15 16.22 2.53 13.49 36.92 33.31 29.97
As|a 36.93 74.77 91.85 81.2 61.94 65.22 68.23
astAs|a 4.7 57.04 80.36 60.22 52.72 39.18 49.68
So0thAs|a 0.34 0.71 0.08 0.23 0.41 2.66 3.4
So0th-astAs|a 12.33 13.61 19.54 21.83 6.64 13.99 11.04
westAs|a 19.55 3.4 -8.13 -1.09 2.17 9.4 4.11
Souroe: NOTADstat.
Ove|t|eoasttwo
decades,t|esecto|a|
comoos|t|onofo0twa|d
FD/f|omdeve|oo|ng
co0nt||es|asc|anged
s|gn|cant|y.
D0||ngt|eoe||od
20082010,se|v|ces
acco0ntedfo|nea||y
70oe| cent of s0c| FD/,
ofw||c|mo|et|an
55oe| cent went to
deve|oo|ngco0nt||es.
33
CHAPTER II : THE EMERGING LANDSCAPE OF TECHNOLOGY AND INNOVATION EXCHANGE IN THE SOUTH
Tab|e 2.9: Sectora| compos|t|oo oI F0| o0tows Irom deve|op|og co0otr|es to the rest
oIthewor|d,2008-2010(Perceot)
Prod0ctcategory
ShareoIdeve|op|og
co0otr|es|o
tota|g|oba|F0|
0|str|b0t|oooIF0|Iromdeve|op|ogco0otr|es
Todeve|op|og
co0otr|es
TorestoI
thewor|d
Pr|marysector 13.00 5.26 7.74
Agr|ou|ture, hunt|ng, forestry and sh|ng
0.57 0.53 0.04
M|n|ng, quarry|ng and petro|eum
12.41 3.65 8.76
Nao0Iact0r|og 12.12 11.37 0.75
Food,beveragesandtobaooo 1.47 .. ..
Text||es,o|oth|ngand|eather 0.16 .. ..
Wood and wood produots 0.08 .. ..
Pub||sh|ng,pr|nt|ngandreproduot|on
ofreoordedmed|a
0.00 .. ..
Ooke, petro|eum produots and
nuo|earfue|
0.19 .. ..
Ohem|oa|sandohem|oa|produots 0.53 .. ..
Rubberandp|ast|oproduots 0.13 .. ..
Non-meta|||om|nera|produots 0.38 .. ..
Meta|sandmeta|produots 1.02 .. ..
Maoh|nery and equ|pment 0.25 .. ..
E|eotr|oa| and e|eotron|o equ|pment 0.88 .. ..
Motorveh|o|esandothertransport
equ|pment
0.92 .. ..
Serv|ces 69.69 54.46 15.24
E|eotr|o|ty,gasandwater 0.88 0.88 0.00
Oonstruot|on 1.16 .. ..
Trade 7.72 5.31 2.41
Hote|sandrestaurants 0.29 .. ..
Transport,storageandoommun|oat|ons 3.90 2.88 1.02
F|nanoe 15.93 12.15 3.77
Bus|nessaot|v|t|es 38.13 .. ..
Oommun|ty,soo|a|andpersona|serv|oe
aot|v|t|es
0.23 0.08 0.16
Souroe: NOTADstat.
areas by oountr|es ||ke lnd|a. ln add|t|on,
the emergenoe of g|oba| nano|a| oen-
tres |n S|ngapore and Hong Kong (Oh|na}
has ra|sed the pro|e of nano|a| serv|oes
|n the |nvestment outows of deve|op|ng
oountr|es. South-South FDl |n serv|oes and
market|ng |s a|so expand|ng |n Afr|oa, for |n-
stanoe, where FDl |s beg|nn|ng to d|vers|fy
|nto these seotors (NOTAD, 2011a}.
The fo||ow|ng summar|zes some sa||ent fea-
tures of South-South FDl that have |mp||oa-
t|onsforteohno|og|oa||earn|ng.
|. The manufaotur|ng seotor has |ost
|mportanoe |n FDl outows. The ma-
oh|nery and transport subseotors
are the |argest |dent|ab|e oategor|es
for FDl, s|gn|fy|ng the teohno|og|oa|
advanoement of emerg|ng oountr|es
|ntheseareas.
Somesa||entfeat0|es
ofSo0t|-So0t|FD/
|ave|mo||cat|onsfo|
tec|no|og|ca||ea|n|ng.
34 TECHNOLOGY AND INNOVATION REPORT 2012
||. East and South-East As|a are the
ma|n souroes of FDl outows |n man-
ufaotur|ng. They have been |noreas-
|ng the|r presenoe |n e|eotron|os,
meta| and meta| produots, automo-
b||es, and ohem|oa|s and ohem|oa|
produots. The s|gn|oanoe of e|eo-
tron|os and automob||es |n outward
FDl from these subreg|ons |s |n keep-
|ng w|th the|r pos|t|on as produot|on
hubs, baoked by the presenoe of
strong produot|on networks (gure
2.11 and annex tab|e A.ll.14}.
|||. As|an FDl |n manufaotur|ng |n Afr|oa
and |at|n Amer|oa and the Oar|b-
bean |s gradua||y expand|ng and
severa| stud|es note that |t has oon-
s|derab|e potent|a| (NOTAD, 2011a;
||n, 2011}.
|v. Other than bus|ness serv|oes and
nanoe, FDl |n extraot|ve |ndustr|es
(o|| and gas, meta| m|n|ng, as we|| as
other extraot|ve aot|v|t|es} aooounted
for a s|gn|oant proport|on of tota| FDl
fromtheEast,South-EastandSouth
As|an subreg|ons, w|th Oh|na, lnd|a,
Ma|ays|a and the Repub||o of Korea
be|ngthemajor|nvest|ngoountr|es|n
these seotors. However, not a|| th|s
FDl |s d|reoted to deve|op|ng ooun-
tr|es (tab|e 2.9 and gure 2.12}.
A s|gn|oant |ssue of re|evanoe for teoh-
no|og|oa| |earn|ng through FDl ar|ses from
theongo|ngseotora|ohanges|n|tsoom-
pos|t|on. Est|mates |nd|oate that FDl |n
seotors suoh as serv|oes and manufao-
tur|ng or|g|nates ma|n|y from East As|an
oountr|esandemerg|ngoountr|es.More-
over, th|s FDl |s |arge|y d|reoted to those
deve|op|ngoountr|esthatpossessstrong
produot|on networks |n these seotors or
have the oapao|ty to souroe suoh |nvest-
mentsbyv|rtueofthe|rteohno|og|oa|oa-
pab|||t|es. Th|s |s true of a |arge share of
serv|oes FDl d|reoted towards deve|op|ng
oountr|es. The FDl thus he|ps to oement
and further the|r teohno|og|oa| oapao|ty
as part of ex|st|ng produot|on networks.
Some other FDl outows, suoh as those
target|ng e|eotron|os and automob||e |n-
dustr|es, are d|reoted towards East and
South-East As|a, wh|oh have g|oba||y
oompet|t|ve produot|on hubs. The FDl
outows target|ng m|n|ng and natura| re-
souroes are d|reoted towards resouroe-
r|oh deve|op|ng oountr|es (|no|ud|ng Af-
r|oan oountr|es}, a|though a s|gn|oant
part of th|s FDl |s a|so d|reoted to other
reg|ons of the wor|d (tab|e 2.9}. The po-
tent|a|teohno|og|oa||mp||oat|onofther|se
of FDl |n extraot|ve |ndustr|es |s d|soussed
|n box 2.1.
F|g0re 2.12: Sectora| compos|t|oo oI F0| o0tows by deve|op|og co0otr|es, 2008-2010
Souroe: NOTADstat.
0
20
40
60
80
100
Pr|mary
produots
Manufaotur|ng Serv|oes
Tootherreg|ons
Todeve|op|ngoountr|es
Est|mates|nd|cate
t|atFD/|nsecto|s
s0c|asse|v|cesand
man0fact0||ngo||g|nates
ma|n|yf|omEastAs|an
co0nt||esandeme|g|ng
co0nt||es.
7||sFD/|s|a|ge|y
d||ectedtot|ose
deve|oo|ngco0nt||es
t|atoossessst|ong
o|od0ct|on
netwo||so||avet|e
caoac|tytoso0|ces0c|
|nvestmentsoyv||t0e
oft|e||tec|no|og|ca|
caoao|||t|es.
35
CHAPTER II : THE EMERGING LANDSCAPE OF TECHNOLOGY AND INNOVATION EXCHANGE IN THE SOUTH
C. IMPLICATIONS OF
ONGOING SOUTH-
SOUTH EXCHANGE
FOR TECHNOLOGY
AND INNOVATION
CAPACITY
A br|ef summary of the emerg|ng p|oture
onSouth-Southteohno|ogyand|nnovat|on
br|ngs out the fo||ow|ng faots. The surge
of eoonom|o growth |n deve|op|ng ooun-
tr|es, part|ou|ar|y emerg|ng oountr|es, has
beenmadeposs|b|e|n|argepartsbythe|r
grow|ng teohno|og|oa| oapab|||t|es. Th|s |s
ev|denoed by the |norease |n the|r oap|ta|
goods exports |n reoent t|mes. A|though
oap|ta|goods|mportsbydeve|op|ngooun-
tr|es |s a grow|ng trend, and |s oons|dered
to be an |nd|oat|on of teohno|og|oa| |earn-
|ng,thetrendspresented|nseot|onBshow
thata|argeshareoftheoap|ta|goodsex-
ported and |mported |s oonoentrated |n a
sub-setofdeve|op|ngoountr|es.Theseare
oountr|es that have some |eve| of teohno-
|og|oa| oapab|||t|es to |ntegrate |nto GPNs,
andthe|r|eve|ofeoonom|ogrowthenab|es
them|mportoap|ta|goods|mports|ntothe
domest|o eoonomy. On the other hand, a
|argenumberofdeve|op|ngoountr|es,par-
t|ou|ar|y |DOs, are not major |mporters or
exportersofoap|ta|goods.
8ox2.1: F0||oextract|ve|od0str|esaodtechoo|og|ca||earo|og
The share of extraot|ve |ndustr|es |n FDl outows from the South, East and South As|an subreg|ons has been r|s|ng. Oh|nese
rms, |n part|ou|ar, have been energet|oa||y aoqu|r|ng m|nera| assets abroad, as reeoted |n the share of extraot|ve |ndustr|es |n
tota| FDl outows from Oh|na, wh|oh exoeeds 20per oent. Th|s growth of FDl outows |n extraot|ve |ndustr|es has been dr|ven by
ther|s|ngdemandforor|t|oa|energyresouroes|nthesefast-grow|ngeoonom|es,suohasOh|naandlnd|a.Apr|marymot|vefor
these |nvestments seems to be the searoh for energy seour|ty at a t|me when oommod|ty pr|oes are on the r|se (NOTAD, 2010a
and 2011a}. State-owned rms from both Oh|na and lnd|a have been spearhead|ng |nvestments |n natura| resouroes, |no|ud|ng o||
and natura| gas (and more reoent|y |n sha|e gas}. But a|so new |nvestors, |no|ud|ng meta| oompan|es and oong|omerates, suoh as
OlTlO (Oh|na}
a
and Re||anoe Group (lnd|a}, as we|| as sovere|gn wea|th funds, suoh as Oh|na lnvestment Oorporat|on and Temasek
Ho|d|ngs (S|ngapore}, have emerged dur|ng the past few years. Furthermore, o|| and gas and hote|s and tour|sm have been two
s|gn|oant |ndustr|es |n West As|a`s portfo||o of greene|d projeots abroad.
Th|s b|as towards extraot|ve |ndustr|es |s oaptured |n box gure 2.1.1, wh|oh presents exports of |DOs by produot oategory.
The r|se |n exports of pr|mary oommod|t|es and fue|s dur|ng the per|od 1995-2010, as shown |n the gure, |s attr|butab|e to the
grow|ng demand for these produots (see a|so gure 2.8 |n th|s ohapter and gure 4.1 |n ohapter lv}.
ln some oases, FDl |n aot|v|t|es suoh as m|n|ng oou|d |ead to the oreat|on of baokward ||nkages and boost produot|ve oapao|t|es
|nreo|p|entoountr|es.However,the|mp||oat|onsfor|earn|ngorproduot|veoapao|ty-bu||d|ngoannotbeautomat|oa||yder|ved.
Souroe: NOTAD
a
The OlTlO Group, former|y known as the Oh|na lnternat|ona| Trust and lnvestment Oorporat|on, |s a state-owned |nvestment oompany.
8ox g0re 2.1.1: Share oI pr|mary commod|t|es aod mao0Iact0res |o tota| L00 exports, 1995-2010
0
10
20
30
40
50
60
70
80
1
9
9
5
1
9
9
6
1
9
9
7
1
9
9
8
1
9
9
9
2
0
0
0
2
0
0
1
2
0
0
2
2
0
0
3
2
0
0
4
2
0
0
5
2
0
0
6
2
0
0
7
2
0
0
8
2
0
0
9
2
0
1
0
P
e
r

c
e
n
t
Pr|maryoommod|t|es
(|no|.fue|s}
Manufaoturedgoods
Ores,meta|s,
preo|ousstones
Souroe: NOTADstat.
7|eFD/t|0s|e|os
tocementandf0|t|e|
t|e||tec|no|og|ca|
caoac|tyasoa|tof
ex|st|ngo|od0ct|on
netwo||s.
36 TECHNOLOGY AND INNOVATION REPORT 2012
South-South FDl trends show that there
has been |norease |n FDl outows from the
East As|an and the South-East As|an sub-
reg|ons,whenoomparedtootherreg|ons|n
thedeve|op|ngwor|d.Thedataa|soshows
thatthereareohanges|ntheseotora|d|str|-
but|on of South-South FDl. Notab|y, a |arge
amount of FDl between deve|op|ng ooun-
tr|es that have some |eve| of teohno|og|oa|
oapab|||t|es |s oonoentrated |n serv|oes and
manufaotur|ng, whereas a |arge amount of
the FDl from deve|op|ng oountr|es (part|ou-
|ar|y emerg|ng oountr|es} to other deve|op|ng
oountr|es (part|ou|ar|y |DOs} |s |arge|y |n the
o||andgasseotors.
On the bas|s of the |nformat|on ava||ab|e and
ana|yzed |n the prev|ous seot|on, how oan we
bestunderstandongo|ngSouth-Southteoh-
no|ogytransaot|onsandthe|r|mp||oat|onsfor
teohno|og|oa| |earn|ng, |nnovat|on and oa-
pao|ty-bu||d|ng|ndeve|op|ngoountr|es?Th|s
Seot|on seeks to ana|yse what these trends
|mp|yfordeve|op|ngoountr|esasawho|e,as
we||asforpart|ou|arsub-group|ngs.
1. Growing technological
divergence in the South
Oonrm|ng ear||er stud|es on the top|o (see
NOTAD, 2010a; Ooampo and vos, 2009},
there|so|ear|yad|verg|ngtrend|ntheao-
oumu|at|on of teohno|og|oa| oapab|||t|es
amongd|fferentoountr|es|ntheSouth.The
datatrendspresented|ntheear||erseot|ons
ofth|sohaptershowthattheteohno|og|oa|
d|v|de among deve|op|ng oountr|es |s not
on|yw|den|ng,buttherearea|soe|ements
of South-South trade that entrenoh |DOs
further |nto exports of pr|mary oommod|-
t|es. Severa| var|ab|es he|p to assess the
extentofth|steohno|og|oa|d|vergenoe:the
d|fferenoes|nmanufaotur|ngoapao|t|es,the
var|at|ons |n patterns of |mports of oap|ta|
goods amongst oountr|es, and oapao|t|es
for R&D as we|| as ||oens|ng and patent|ng
trends.Theseared|soussed|ndeta||here.
a. 0apita| gaads imparts af
deve|aping cauntries and L00s
Oomparedw|thmanydeve|op|ngoountr|es,
|DOs suffer from struotura| vu|nerab|||t|es
that rema|n unm|t|gated |n the prooess of
|noreased g|oba||zat|on (NOTAD, 2010a}.
Severa|faotors,|no|ud|ngexoess|ve|yrap|d
market-|ed reforms, gradua| teohno|og|oa|
stagnat|on w|th|n the|r eoonom|es and the
grow|ng |mportanoe of the g|oba| lPR re-
g|me and the g|oba| know|edge eoonomy,
oonstra|n the bu||d|ng of |nnovat|on oapa-
b|||t|es |n most |DOs. The grow|ng demand
for pr|mary oommod|t|es (see box gure
2.1.1, for examp|e}, and thus the |noreas-
|ng dependenoe of |DO eoonom|es on
oommod|ty exports, has |ed to a sh|ft of
the |abour foroe |n |DOs from agr|ou|ture
to |nforma| eoonom|o aot|v|ty as opposed
to other produot|ve aot|v|t|es, |nd|oat|ng an
ongo|ng prooess of de|ndustr|a||zat|on.
10
lt
has |ong been aoknow|edged that the sh|ft
towards manufaotur|ng and know|edge-
|ntens|veaot|v|t|esrepresentsaoruo|a|step
|n teohno|og|oa| progress and eoonom|o
deve|opment.The|noreas|ngteohno|og|oa|
d|v|de between |DOs and other oountr|es |s
ev|dent|ntheongo|ngteohno|og|oa|down-
grad|ng of aot|v|t|es w|th|n key seotors |n
|DOs, w|th a deo||ne |n the share of manu-
faotur|ng |n tota| emp|oyment (Tregenna,
2009}.
Furthermore,astheana|ys|s|nth|sReport
shows, some bas|o |eve| of teohno|og|oa|
oapab|||t|es |s a prerequ|s|te for enab||ng a
oountrytopart|o|pate|nSouth-Southtrade
|n oap|ta| goods |n a mutua||y beneo|a| way.
ln the oase of |DOs, the|r ourrent|y |ower
|eve|softeohno|og|oa|oapab|||t|es||m|tthe|r
ab|||ty to benet from ongo|ng South-South
trade to |everage |earn|ng (see next seo-
t|on}. lmports of oap|ta| goods a|so seem
to be |arge|y oonoentrated |n o||-export|ng
|DOs, wh|oh oonrm these observat|ons.
Some As|an |DOs are beg|nn|ng to deve|op
the|rmanufaotur|ngseotorandarea|soore-
at|ng a serv|oes seotor, but for most other
|DOs, opportun|t|es for teohno|og|oa| de-
ve|opmentrema|ne|us|ve.
Eoonom|o unoerta|nty oaused by regu|ar
boom-bust oyo|es |n |nternat|ona| oom-
mod|ty pr|oes (NOTAD, 2010a} as we||
as |ooa| pr|oe vo|at|||ty a|so have undes|r-
ab|e effeots on rm-|eve| aot|v|t|es |n |DOs.
Suoh unoerta|nty aots as a d|s|noent|ve
to |ooa| entrepreneur|a| efforts |n both the
/nt|ecaseof/DCs,
t|e||c0||ent|y|owe|
|eve|softec|no|og|ca|
caoao|||t|es||m|tt|e||
ao|||ty to oenet f|om
ongo|ngSo0t|-So0t|
t|adeto|eve|age
|ea|n|ng.
A|a|ges|a|eoft|e
cao|ta|goodsexoo|ted
and|moo|ted|sa|so
concent|ated|na
s0o-setofdeve|oo|ng
co0nt||es.
37
CHAPTER II : THE EMERGING LANDSCAPE OF TECHNOLOGY AND INNOVATION EXCHANGE IN THE SOUTH
pr|vate and pub||o seotors, thereby further
|mped|ng efforts to bu||d teohno|og|oa| oa-
pab|||t|es.Thesefaotors,|noonjunot|onw|th
other externa| |nuenoes suoh as the g|oba|
lPR reg|me (see ohapter lv}, affeot the ab|||ty
of |DOs to respond to teohno|og|oa| oppor-
tun|t|es |n the g|oba| know|edge eoonomy.
b. B&0 trends in emerging
cauntries
The researoh and deve|opment (R&D}
trends observed |n emerg|ng oountr|es
are |n stark oontrast to those |n severa|
otherdeve|op|ngoountr|es,po|nt|ngtothe
huge d|spar|ty |n R&D expend|ture aoross
the deve|op|ng wor|d. Between 2002 and
2009, most of the |norease |n R&D spend-
|ng was |n the East As|an and South-East
As|an reg|ons (tab|e 2.10}. ln oross-oountry
oompar|sons, oountr|es suoh as Braz|| and
Oh|na d|sp|ayed above average perfor-
manoe for the deve|op|ng wor|d, whereas
lnd|a and South Afr|oa have been some-
what |ower. lndeed, Oh|na had the th|rd
|argest R&D |nvestments |n the wor|d |n
2010, after the n|ted States and Japan,
w|th Germany and Franoe |agg|ng beh|nd
Oh|na (OEOD, 2011}.
Both oonoeptua||y and based on emp|r|oa|
stud|es,|thasbeenpo|ntedoutrepeated|y
for the South as a who|e that r|s|ng R&D
expend|ture does not d|reot|y equate w|th,
or exp|a|n, the p|ethora of aot|v|t|es re|at-
|ng to teohno|og|oa| deve|opment. Rather,
R&D expend|ture |s mere|y an |nd|oat|on
of the broader trends |n produot|ve |nvest-
ment, most |mportant|y |n |nfrastruoture
andhumanresouroedeve|opment.Ause-
fu||nd|oatorof|nnovat|onandteohno|og|oa|
oapab|||t|es that |s regu|ar|y used |n oom-
par|sons between oountr|es |s the number
of so|ent|o pub||oat|ons and journa| art|o|es
pub||shed. Aooord|ng|y, gure 2.13 be|ow
presents the trends |n suoh pub||oat|ons
between |DOs and a range of deve|op|ng
oountr|es, part|ou|ar|y emerg|ng oountr|es,
tooapturethe|eve|sandgrowthofhuman
sk|||s |n these respeot|ve oountr|es between
1986 and 2008. Reoent est|mates by the
OEOD (2011} |nd|oate that there has been
an |norease |n |nvestments |n tert|ary edu-
Tab|e2.10: 8at|ooI8&0expeod|t0reto60P,
byreg|ooaodse|ectco0otr|es,
20022009
a
(Perceot)
8&0xpeod|t0reas
perceotageoI60P
2002 2007 2009
0eve|oped
co0otr|es
2.22% 2.24% 2.32%
0eve|op|og
co0otr|es
(exc|.L00s)
0.83% 0.99% 1.11%
L00s 0.22% 0.20% 0.20%
Lat|oAmer|ca
aodthe
0ar|bbeao
0.59% 0.60% 0.66%
S0b-Saharao
AIr|ca(exc|.
So0thAIr|ca)
0.30% 0.28% 0.29%
hoogkoog,
|odooes|a,
Na|ays|a,
Ph|||pp|oes,8ep.
oIkoreaaod
S|ogapore
1.44% 1.76% 1.83%
8raz|| 0.98% 1.10% 1.19%
0h|oa 1.07% 1.40% 1.70%
|od|a 0.74% 0.76% ..
So0thAIr|ca 0.73*% 0.92% 0.93*%
Souroe: NESOO lnst|tute for Stat|st|os (lS} est|-
mat|ons, Ootober 2011.
Notes:
a
Data oorrespond to an year pr|or to the
referenoeyear.
oat|on|na||reg|onsouts|dethedeve|oped
wor|d. These are not reeoted |n the gure
s|noe there |s usua||y a t|me |ag of one or
two deoades for |noreased tert|ary eduoa-
t|on to be reeoted |n var|ab|es suoh as |n-
oreased so|ent|o pub||oat|ons (see annex
tab|e A.ll.17}.
c. Licensing and patenting
trends
A |arge number of deve|op|ng oountr|es,
part|ou|ar|y emerg|ng oountr|es, have be-
guntoobta|npatentsforaw|devar|etyof
oonvent|ona|andh|gh-teohno|ogyproduots
and prooesses |n a var|ety of seotors. For
examp|e, there has been a s|gn|oant r|se |n
patent|ng of teohno|og|es assoo|ated w|th
o||mate ohange m|t|gat|on and adaptat|on,
Between2002and2009
mostoft|e|nc|ease
|nR&Dsoend|ngwas
|nt|eEastAs|anand
So0t|-EastAs|an
|eg|ons.
A|a|gen0moe|of
deve|oo|ngco0nt||es,
oa|t|c0|a||yeme|g|ng
co0nt||es,|aveoeg0nto
oota|noatents.
38 TECHNOLOGY AND INNOVATION REPORT 2012
|n oountr|es suoh as Braz||, Oh|na and lnd|a
(NOTAD, 2011o}. F|gures 2.14 and 2.15
show the roya|t|es and ||oenoe fee pay-
mentsandreoe|pts|nse|eotedoountr|esas
|nd|oatorsofthe|rrespeot|vero|es|ntodays
know|edge eoonomy. Severa| East As|an
eoonom|es |ead |n these |nd|oators, wh|oh
g|ve an |dea of the|r share |n the know|edge
|ntens|ty of the|r ongo|ng eoonom|o aot|v|-
t|es.lntermsofroya|tyand||oenoefeesre-
oe|pts (wh|oh reeot the overa|| demand of
the lPR assets owned by these oountr|es},
Oh|na |s o|ose|y fo||owed by Braz|| and Ma-
|ays|a|norderof|mportanoe.
2. The leading importers, exporters
and innovators in the South
Thesetrends|nproduot|onandexportsof
manufaotured goods (seot|on B} and re|at-
ed va|ue-added, greater R&D |nvestments
and|nfrastruotureexpans|onandpatent|ng
dep|otedhereneedtobev|ewed|npara||e|
w|ththemuoh|essdynam|operformanoes
of other deve|op|ng oountr|es. Manufao-
tur|ng aot|v|t|es of the South are gradua||y
|ntegrat|ng|ntoGPNs,wh|ohareoontr|but-
|ngto|noreas|ngtheteohno|og|oa|oapab|||-
t|es of rms |n many deve|op|ng oountr|es.
F|g0re 2.13: h0mber oI sc|eot|c aod techo|ca| jo0roa| art|c|es |o L00s aod se|ected
co0otr|es,1986-2007
F|g0re2.14: 8oya|tyaod||ceos|ogpaymeots|oL00saodse|ectedco0otr|es,
19962010($m||||oo)
Souroe: NOTADstat.
Souroe: NOTAD oa|ou|at|ons, based on Wor|d Deve|opment lnd|oators (2011}.
0
10000
20000
30000
40000
50000
60000
1
9
8
6
1
9
8
7
1
9
8
8
1
9
8
9
1
9
9
0
1
9
9
1
1
9
9
2
1
9
9
3
1
9
9
4
1
9
9
5
1
9
9
6
1
9
9
7
1
9
9
8
1
9
9
9
2
0
0
0
2
0
0
1
2
0
0
2
2
0
0
3
2
0
0
4
2
0
0
5
2
0
0
6
2
0
0
7
|DOs
Braz||
Oh|na
lnd|a
SouthAfr|oa
Ma|ays|a
lndones|a
0000
2000
4000
6000
8000
10000
12000
14000
1
9
9
5
1
9
9
6
1
9
9
7
1
9
9
8
1
9
9
9
2
0
0
0
2
0
0
1
2
0
0
2
2
0
0
3
2
0
0
4
2
0
0
5
2
0
0
6
2
0
0
7
2
0
0
8
2
0
0
9
2
0
1
0
|DOs
Braz||
Oh|na
lnd|a
Ma|ays|a
SouthAfr|oa
Man0fact0||ng
act|v|t|esoft|eSo0t|
a|eg|ad0a||y|nteg|at|ng
|ntoGPNs
w||c|a|econt||o0t|ng
to|nc|eas|ngt|e
tec|no|og|ca|
caoao|||t|es of |ms
|nmanydeve|oo|ng
co0nt||es.
39
CHAPTER II : THE EMERGING LANDSCAPE OF TECHNOLOGY AND INNOVATION EXCHANGE IN THE SOUTH
The g|oba||zat|on prooesses of the 1990s
have o|ear|y oontr|buted to fao|||tat|ng th|s
trend. Teohno|og|oa| oo||aborat|on among
deve|op|ngoountr|es|sanaspeotofongo-
|ng,progress|ve|yexpand|ngmanufaotur|ng
|n the South. However, as th|s d|souss|on
shows, many |DOs and deve|op|ng ooun-
tr|esthatdonothavesomem|n|mum|eve|
ofteohno|og|oa|oapab|||t|eshavenotbeen
ab|e to benet from GPNs.
a. Manufacturing praductivity
and techna|agica| pragress
var|at|ons |n manufaotur|ng produot|v|ty
havetrad|t|ona||ybeenoons|deredasoon-
tr|but|ng to growth d|fferent|a|s between
oountr|es. W|th the reoogn|t|on of teoh-
no|og|oa| progress as a faotor |nueno|ng
produot|v|ty |n the ear|y 1960s, produot|v|ty
wasno|ongerassoo|atedon|yw|ththetra-
d|t|ona| faotors of produot|on - |abour and
oap|ta|; |t a|so oame to be seen as be|ng
d|reot|y dependent on teohno|ogy embed-
ded |n the maoh|nery and equ|pment used
|n produot|on (So|ow, 1956}. Th|s ro|e of
teohno|ogy |n promot|ng eoonom|o per-
formanoe of manufaotur|ng rms has a|so
been extens|ve|y exp|ored |n the ||terature
(box 2.2}.
11
Thus|t|sbeoom|ng|noreas|ng|y
|mportant to understand the eoonom|o ef-
feotsofhowexper|enoesga|ned|nproduo-
t|on oan be used to promote |nnovat|on
oapao|tyre|atedtoadapt|ngand|mprov|ng
theteohno|ogy|nuse.
b. Participatian in 0Phs and
techna|agica| |earning
Not on|y have GPNs p|ayed a determ|n|ng
ro|e |n br|ng|ng eoonom|es o|oser together
by st|mu|at|ng the ows of goods and oap|-
F|g0re2.15: 8oya|tyaod||ceos|ogrece|pts|oL00saodse|ectedco0otr|es,
19962010($m||||oo)
Souroe: NOTAD oa|ou|at|ons, based on Wor|d Deve|opment lnd|oators (2011}.
0
100
200
300
400
500
600
700
800
900
1
9
9
5
1
9
9
6
1
9
9
7
1
9
9
8
1
9
9
9
2
0
0
0
2
0
0
1
2
0
0
2
2
0
0
3
2
0
0
4
2
0
0
5
2
0
0
6
2
0
0
7
2
0
0
8
2
0
0
9
Braz||
Oh|na
lnd|a
SouthAfr|oa
Ma|ays|a
8ox2.2: Nao0Iact0r|ogva|0eaddedaodtechoo|og|ca||earo|og
The way manufaotur|ng rms bu||d oapao|ty through va|ue-added aot|v|t|es has been w|de|y exp|ored and dooumented. On the
one hand, deve|oped-oountry rms bu||d the|r oore and strateg|o oapab|||t|es at the |nternat|ona| teohno|og|oa| front|er, where
a oerta|n |eve| of teohno|og|oa| oapab|||t|es has a|ready been aooumu|ated (Dos|, 1988; Dos| and Marengo, 1993; Ne|son and
W|nter, 1982; Teeoe, P|sano and Shuen, 1997; Teeoe et a|., 1994}. On the other hand, deve|op|ng-oountry manufaotur|ng rms
have h|stor|oa||y |aoked the bas|o teohno|og|oa| oapab|||t|es wh|oh has foroed them to bu||d the essent|a| know|edge base that |s
neoessary to surv|ve |n the market at a|| |eve|s - |ooa||y, reg|ona||y and g|oba||y.
a
Manufaotur|ng exports aot as a dr|ver of eoonom|o growth by bu||d|ng oapab|||t|es that a||ow greater oapao|ty ut|||zat|on, export
oompet|t|veness, eoonom|es of soa|e, |noent|ves for teohno|og|oa| |mprovements and efo|ent management |n response to oom-
pet|t|ve pressures from abroad. However, |n order to use manufaotur|ng strengths for boost|ng exports, deve|op|ng-oountry rms
need to be ab|e to |ntegrate |nto the g|oba| market and meet |nternat|ona| standards of produot|on.
Souroe: NOTAD.
a
Po||o|es|ndeve|op|ngoountr|eshaveoftentr|edto|nduoeth|sprooessof|earn|ngby||m|t|ngfore|gn|mportsorTNOpresenoe|nthe
oountry.Someexamp|es|no|udethelnd|anandBang|adesh|pharmaoeut|oa|seotors.
Many/DCsand
deve|oo|ngco0nt||es
t|atdonot|avesome
m|n|m0m|eve|of
tec|no|og|ca|caoao|||-
t|es|avenotoeenao|e
to oenet f|om GPNs.
40 TECHNOLOGY AND INNOVATION REPORT 2012
ta| aoross oountr|es; they have a|so oon-
tr|buted to know|edge d|ffus|on. ln add|t|on,
theyhaveprov|dedopportun|t|esfordeve|-
op|ng|ooa|oapab|||t|es|noountr|esthatare
part of the networks. Th|s |atter d|mens|on
has reoe|ved re|at|ve|y ||tt|e attent|on |n the
||teratureonGPNs,foous|ngma|n|yonsuoh
networks as a new organ|zat|ona| form for
trade |ntegrat|on (box 2.3}.
GPNs have |mp||oat|ons for teohno|og|oa|
|earn|ng for the fo||ow|ng reasons. To beg|n
w|th, a|| supp||ers part|o|pat|ng |n those net-
works need to meet the standards and ex-
peotat|onsofproduot|onpartners.lnorderto
ensure th|s, the oore rm of the GPN usua||y
transfers teohn|oa| and manager|a| know|-
edge to deve|op|ng-oountry part|o|pants
|n the networks. lntegrat|on |nto the GPNs
thereforehasare|nforo|ngeffeotontheon-
go|ng|earn|ngprooesses|nthepart|o|pat|ng
deve|op|ngoountr|es,he|p|ngtoupgradethe
supp||ers` teohn|oa| and manager|a| sk|||s on
a oont|nuous bas|s. GPNs transfer know|-
edge aoross borders through a var|ety of
meohan|sms, suoh as market meohan|sms,
||oens|ngoontraotsand/oroutr|ghtpurohase
of both teohno|ogy and p|ant equ|pment,
amongothers,wh|ohmayormaynot|nvo|ve
FDl. Seoond|y, the oore rm of the GPN may
transfer teohno|og|es through the supp|y
oha|n,and,|ndo|ngso,wou|dbeexero|s|ng
oontro| over the manner |n wh|oh the know|-
edge |s d|ssem|nated to and used by the
supp||er.Theoontro|overthesupp|yoha|n|s
ev|dent by the manner |n wh|oh the opera-
t|ons of or|g|na| equ|pment manufaoturers (or
the so-oa||ed 't|er 1" supp||ers} are managed
by the oore rm of the network.
Seoond|y, the |noreas|ng rate of produot
obso|esoenoeseen|na|argenumberof|n-
dustr|es,part|ou|ar|ythoseproduo|nggoods
thatuselOTs,exertspressureontheGPNs
to oonstant|y upgrade the teohno|og|es
of the|r supp||ers (Bernhardt and M||berg,
2011}. Th|s |n turn prov|des opportun|t|es for
GPNsupp||erstoupgradethe|rteohno|og|-
oa| know|edge on a regu|ar bas|s.
Th|rd|y,|rrespeot|veofthenatureofGPNs
(|.e. whether they are produoer-dr|ven or
buyer-dr|ven}, oore rms |n the GPNs are
ab|e to |nuenoe the produot|on prooess-
es of the|r supp||ers by aot|ve|y transfer-
r|ng know|edge |n the form of b|uepr|nts
and teohn|oa| speo|oat|ons. The objeo-
t|ve |s to ensure that the supp||ers meet
the teohn|oa| standards of the na| prod-
uots of the network.
12
GPNsarea|soab|e
to enoourage rms part|o|pat|ng |n the
networks to aooess know|edge |nd|reot-
|y through other meohan|sms, suoh as
by he|p|ng them to |mport soph|st|oated
equ|pment to |mprove the|r produot|on
oapab|||t|es.
Fourth|y, the matur|ng of produot|on net-
works |n reoent years has a|so resu|ted |n
some ohanges |n the pattern of know|-
edge aoqu|s|t|on. F|rms |n GPNs have
been |ntroduo|ng |nnovat|ons that have
moved them up the va|ue oha|ns there-
by ga|n|ng more soope to operate |nde-
pendent|y. Th|s re|ates pr|mar||y to rms
mov|ng up from manufaotur|ng (as or|g|-
na| equ|pment manufaoturers (OEMs}} to
beoome |nnovators |n des|gn, thereby
assum|ngsomerespons|b|||tyforownde-
s|gn and manufaotur|ng (ODM}, and then
na||y branoh|ng out to market the|r own
des|gns under the|r own brands that are
of the qua||ty of the or|g|na| brand manu-
faoturer (OBM}.
However,ongo|ngexper|enoesofdeve|op-
|ng-oountry rms that part|o|pate |n GPNs
8ox2.3: 6|oba|prod0ct|oooetworks|othetrade||terat0re
GPNs have been seen both as the produots of the prooess of ||bera||zat|on of trade and nano|a| ows and as the oata|ysts for
ensur|ng a greater degree of openness to the g|oba| eoonomy. Proponents of th|s th|nk|ng have argued that the ||bera||zat|on of
trade and |nvestment has tr|ggered a ohange |n TNOs, oonvert|ng them from 'tar|ff-hopp|ng" |nvestors to 'g|oba| network ag-
sh|ps" (|.e. oore rms} that have |ntegrated the|r d|spersed supp|y, know|edge and oustomer bases |nto the GPNs. Fragmentat|on
of produot|on oaused by the 'network agsh|ps" |s ass|sted by a p|ethora of speo|a||zed networks of supp||ers usua||y spread over
a |arge geograph|oa| speotrum (Ernst and K|m, 2002}.
Souroe: NOTAD.
Ongo|ngexoe||encesof
deve|oo|ng-co0nt|y |ms
|nGPNss|owst|ats0c-
cessf0|GPNstendto...
...cont|actand|e|yon
|oca|s0oo||e|sw|o|ave
oot|t|ecaoao|||t|esto
aoso|ot|e|now|edge
d|ssem|natedoyt|e
netwo||sandmeett|e
standa|dsofo|od0ct|on
|eq0||ed.
41
CHAPTER II : THE EMERGING LANDSCAPE OF TECHNOLOGY AND INNOVATION EXCHANGE IN THE SOUTH
shows that suooessfu| GPNs tend to oon-
traot and re|y on |ooa| supp||ers who have
both the oapab|||t|es to absorb the know|-
edge d|ssem|nated by the networks and
meet the standards of produot|on requ|red
by them. A oons|derab|e proport|on of the
produot|on,export|ngand|nnovat|onofth|s
k|nd are ooourr|ng |n on|y a few deve|op|ng
oountr|es, part|ou|ar|y the emerg|ng ooun-
tr|es.Part|o|pat|on|nGPNsa|soaooountfor
a s|gn|oant share of South-South exports
of teohno|ogy-embod|ed goods and |m-
ports of oap|ta| goods. Mak|ng use of the
teohno|ogy upgrad|ng opportun|t|es that
ex|stw|th|nGPNs,espeo|a||ythosethata|-
|owthemtoprogressfrommanufaotur|ngto
des|gn|ngandontobeoom|ngor|g|na|brand
oreators, a |arge number of rms |n emerg-
|ng deve|op|ng-oountr|es are a|so |noreas-
|ng|y beoom|ng or|g|nator rms of GPNs |n
many seotors. These emerg|ng oapab|||t|es
are be|ng supported by grow|ng R&D |n-
vestmentsdomest|oa||y,andagreatershare
ofpatentsandearn|ngsfromroya|tyand||-
oens|ngfees|nthe|roountr|es.Asaresu|tof
thesemutua||yre|nforo|ngfaotors,anumber
ofemerg|ngoountr|eshavew|tnessed|arge-
soa|egrowthofoerta|nseotorsandar|se|n
thenumberofthe|rownTNOs.SomeAs|an
|DOs are try|ng to fo||ow a s|m||ar path. One
examp|e|sthetext||esandreadymadegar-
ments|ndustr|es|nBang|adesh.
3. The rise of developing-country
TNCs
A|ongw|ththegrow|ngab|||tytoexportand
produoe oompet|t|ve|y, there has been a
r|se |n the number of rms from deve|op-
|ng oountr|es that are |nvo|ved |n major
g|oba| mergers and aoqu|s|t|ons (M&As}
|n a w|de range of seotors and oountr|es
s|noe the m|d- 2000s (tab|e 2.11}. Est|-
mates show that by the year 2007, the tota|
va|ue of these rms` aoqu|s|t|ons reaohed
near|y $145 b||||on, aooount|ng for about
14 per oent of a|| aoqu|s|t|ons wor|dw|de.
More than 65 per oent of the aoqu|s|t|ons
|nvo|ved rms from the As|an reg|on (NO-
TAD, 2011a}.
Tab|e2.11: Nergersaodacg0|s|t|oos
g|oba||y aod by rms Irom
deve|op|ogco0otr|es,19902011
wor|d
0eve|op|og
co0otr|es
ShareoItota|
by rms Irom
deve|op|og
co0otr|es
( $b||||oo) (Perceot)
1990 98.9 7.6 7.6
1995 112.5 6.4 5.6
2000 905.2 57.6 6.4
2005 462.3 68.7 14.9
2006 625.3 114.9 18.4
2007 1022.7 144.8 14.2
2008 706.5 105.8 15.0
2009 249.7 74.0 29.6
2010 338.8 96.9 28.6
2011 584.9 103.6 17.7
Souroe: NOTAD (2011a}.
a. A regiana| perspective an
deve|aping-cauntry mergers
and acquisitians
ln reoent years, rms from major As|an
eoonom|es, suoh as Oh|na, lnd|a and S|n-
gapore, have been tak|ng over oompan|es
|n deve|oped oountr|es, as h|gh||ghted by
a number of huge oorporate dea|s (see
NOTAD, 2011a, tab|e ll.4}. Many of the
rms |nvo|ved |n suoh M&A ma|n|y a|m to
enhanoe the|r oompet|t|veness and seek
strateg|o assets. lnd|an and Oh|nese rms
haveoftenbeenattraotedbyvar|ous|ntan-
g|b|eassets,suohasadvanoedpropr|etary
teohno|og|es,brandnamesandd|str|but|on
ohanne|s.
ln the |at|n Amer|oan reg|on, the share of
|ntrareg|ona| dea|s |n oross-border M&As
has|noreasedoons|derab|ys|noetheear|y
2000s, from 5 per oent of the tota| oross-
border M&A dea|s |n the reg|on dur|ng the
per|od 1995-2002 to 36 per oent dur|ng
the per|od 2003-2010 (NOTAD, 2011a,
tab|e ll.9}.
The|ead|ngreg|onforM&Aaot|v|t|es|nthe
South rema|ns As|a. Wh||e rms from South,
EastandSouth-EastAs|ahaveengaged|n
Ma||ng0seoft|e
tec|no|ogy0og|ad|ng
oooo|t0n|t|est|atex|st
w|t||nGPNs
a|a|gen0moe|of
|ms |n eme|g|ng
deve|oo|ng-co0nt||esa|e
a|so|nc|eas|ng|y
oecom|ngo||g|nato|
|ms of GPNs |n many
secto|s.
42 TECHNOLOGY AND INNOVATION REPORT 2012
M&A aot|v|t|es |n d|fferent reg|ons through-
out the wor|d, the|r West As|an oounter-
partshaveshownapreferenoeforM&As|n
deve|oped oountr|es. West As|a`s outward
|nvestment ows have been oonoentrated
|n a sma|| number of oompan|es, w|th 10
rms aooount|ng for about 83 per oent of
M&As between 2004 and 2010. On|y three
of these rms have seotora| speo|a||zat|ons,
wh||e the others are ho|d|ng groups or |n-
vestmentoompan|es.
As|an rms p|ayed a marg|na| ro|e |n the
|at|n Amer|oan M&A market unt|| 2010.
Th|s |s s|m||ar to what has been observed
|n the oontext of As|an FDl |n |at|n Amer|-
oan manufaotur|ng. S|noe 2010, however,
the |at|n Amer|oan oross-border M&A
market has w|tnessed a notab|e and un-
preoedented surge of |nvestments by de-
ve|op|ng-oountry rms from the As|an re-
g|on - most|y Oh|nese rms. Aoqu|s|t|ons
by these rms amounted to $20 b||||on |n
2010, aooount|ng for 68per oent of the to-
ta|,wh|oh|smorethanthreet|mesthetota|
aooumu|ated aoqu|s|t|ons of As|an rms |n
the |at|n Amer|oan reg|on over the prev|ous
twodeoades.
b. 5ectara| campasitian af
crass-barder mergers
and acquisitians
On a seotora| bas|s, even w|th|n these
oross-borderM&As,theserv|oesseotorao-
oounts for about 70 per oent of a|| aoou-
mu|ated outward FDl, as a|ready noted. A
|argeproport|onoftheseM&Ashavetodo
w|th GPNs |n nano|a| serv|oes |n East As|a.
Outward FDl |n nano|a| serv|oes have a|so
rebounded s|noe the g|oba| nano|a| or|s|s,
theva|ueofM&Adea|smorethandoub||ng
|n 2010, to $39 b||||on. Market-seek|ng
M&As |n speo|o serv|oe |ndustr|es, suoh
ashote|s,hea|thserv|oesandte|eoommu-
n|oat|ons, have been |noreas|ng, target|ng
eoonom|es both |n and outs|de East and
South-EastAs|a.
M&As |n the te|eoommun|oat|ons seotor
have a|so been a foous |n the past few
years,the|rtota|va|ueamount|ngtoabout
$14b||||on |n 2010. Bhart| A|rte| (lnd|a} a|one
spent $10.7 b||||on to buy the mob||e op-
erat|ons of the Kuwa|t| rm, Za|n, |n Afr|oa.
13
A |arge number of aoqu|s|t|ons by Oh|nese
rms have been |n the o|| and gas |ndus-
try.TheOh|nesestatepetro|eumoompany
(S|nopeo} has made upstream aoqu|s|t|ons
|n Braz|| amount|ng to $7.1b||||on (EO|AO,
2010}. S|m||ar |nvestments have been
made by Oh|nese oompan|es (ONOOO and
S|noohem} |n other |at|n Amer|oan ooun-
tr|es,notab|yArgent|na.lnd|awasa|sothe
souroe of s|gn|oant resouroe-seek|ng ao-
qu|s|t|ons |n the reg|on, espeo|a||y |n the o||
andgas|ndustry|ntheBo||var|anRepub||o
of venezue|a and |n the sugar oane |ndustry
|n Braz||.
D. CHAPTER SUMMARY
Teohno|ogy and |nnovat|on are both em-
beddedfeatures,andthere|snos|ng|e|nd|-
oator that measures them ho||st|oa||y. Deo-
ades of aoadem|o and po||oy researoh on
how to measure them have |dent|ed FDl,
|mports of oap|ta| goods, export oapao-
|ty, R&D |nvestments, eduoat|on, patent|ng
and ||oens|ng trends, researohers per m||-
||on peop|e, |nfrastruoture and lOTs as the
key var|ab|es that oou|d be used to deduoe
teohno|og|oa| |earn|ng and oo||aborat|on.
Th|s ohapter has emp|oyed FDl, |mports of
oap|ta|goods,exportoapao|tyandpart|o|-
pat|on|nGPNstoassesstrends|nongo|ng
South-Southexohange.lnadd|t|on,trends
|n R&D |nvestments, eduoat|on, patent|ng
and ||oens|ng trends, researohers per m||-
||onpeop|eand|nfrastruotureandlOTshave
beenpresentedtounderstandtheunder|y-
|ngoausesforvary|ngteohno|og|oa|oapao-
|tyofdeve|op|ngoountr|esand|ts|mp||oa-
t|ons for South-South teohno|ogy-based
exohanges.
The fo||ow|ng po|nts sum up the key nd-
|ngsofth|sohapter.
(|} Deve|op|ng oountr|es have surpassed
deve|oped oountr|es as major part-
nersofotherdeve|op|ngoountr|esfor
trade|noap|ta|goods.These|mports
arenoton|y|nputsfortheexpand|ng
eoonom|o aot|v|t|es and oonsump-
t|on patterns |n these oountr|es, but
po|nt towards a trend where some
7|e|e|asoeena||se|n
t|e n0moe| of |ms f|om
deve|oo|ngco0nt||es
t|ata|e|nvo|ved|n
ma|o|g|ooa|me|ge|s
andacq0|s|t|ons.
7|e|ead|ng|eg|onfo|
M&Aact|v|t|es|nt|e
So0t||ema|nsAs|a.
43
CHAPTER II : THE EMERGING LANDSCAPE OF TECHNOLOGY AND INNOVATION EXCHANGE IN THE SOUTH
emerg|ng oountr|es are beg|nn|ng to
manufaoturesevera|h|gh-teohno|ogy
produots at oompet|t|ve (and often
|ower} pr|oes, wh|oh are |ead|ng to
a sh|ft |n |mports of the South from
deve|oped oountr|es to deve|op|ng
oountr|es.lmports|eadtoteohno|og-
|oa| |earn|ng when rms possess the
absorpt|veoapao|tytoadaptanduse
theteohno|og|esembod|edthere|nto
generateproduot|v|tygrowth.
(||} W|th|n the ourrent patterns of trade |n
oap|ta| goods |mports, a few dom|-
nant trends emerge. The teohno-
|og|oa|empowermentoftheSouth|s
oonoentrated|non|yafewoountr|es,
ma|n|y |n East As|a as we|| as some
new|y emerg|ng oountr|es suoh as
Braz||, Oh|na and lnd|a. These ooun-
tr|esaooountformostoftheSouth-
Southexohangeofoap|ta|goodsas
aresu|tofthe|rgrow|ngteohno|og|oa|
oapab|||t|es, |arge and |noreas|ng|y
afuent oonsumer markets and the|r
grow|ng ab|||ty to absorb new teoh-
no|og|oa| know|edge.
(|||} Wh||e some South-South teohno|og|-
oa| oo||aborat|on |s ev|dent, two |m-
portantaspeotsstandout.Manyde-
ve|op|ng oountr|es, part|ou|ar|y |DOs,
are ourrent|y ||m|ted by the |aok of
|ntr|ns|oteohno|og|oa|oapab|||t|esre-
qu|red to benet more from ongo|ng
South-South exohanges. Th|s |s re-
eoted |n the |ower demand for oap|-
ta| goods |n non-o||-export|ng |DOs,
andthe|r|nab|||tytopart|o|pate|nthe
grow|ng GPNs of the South. Seo-
ond|y,theSouth|soontr|but|ngto|n-
oreas|ng oommod|ty dependenoe of
the |DOs, wh|oh reduoes the|r ab|||ty
to struotura||y d|vers|fy the|r eoono-
m|es.
(|v} FDl by deve|op|ng oountr|es and the|r
|noreas|ngpart|o|pat|on|nGPNsand
M&Aaot|v|t|es|ntheSouthare|arge|y
oonoentrated |n emerg|ng oountr|es.
Wh||e South-South FDl outows are
d|reotedtoaw|devar|etyofseotors,
|no|ud|ng serv|oes and hea|th, they
tend to be oonoentrated |n speo|o
aot|v|t|es|nvo|v|ngexohangesamong
a few oountr|es |n those seotors.
Th|s shows that some deve|op|ng
oountr|es are |noreas|ng|y |nvo|ved
|n mutua||y beneo|a| teohno|og|-
oa| exohange. The ana|ys|s further
shows that w|th|n the oountr|es that
aooountfortheenhanoedoo||abora-
t|on on teohno|ogy and |nnovat|on,
|noreas|ngteohno|og|oa|transaot|ons
throughvar|ousmeans|no|ud|ngpar-
t|o|pat|on|nGPNs|ntheSouth,a|ong
w|th support|ve |nnovat|on po||oy
frameworks (that are |noreas|ng|y fo-
oused on promot|ng h|gher tert|ary
eduoat|on, as reeoted |n the grow-
|ng number patents and of so|ent|o
and teohn|oa| art|o|es pub||shed |n
speo|a||zed journa|s} are |ead|ng to
furtherstrengthen|ngofthe|r|nnova-
t|onoapao|ty.
44 TECHNOLOGY AND INNOVATION REPORT 2012
NOTES
1. Of part|ou|ar s|gn|oanoe are ru|es re|at|ng to lPRs, wh|oh
restr|ot the ab|||ty of rms |n emerg|ng oountr|es to produoe
|ooa|gener|overs|onsofpatentedproduots.
2. As|m||artrend|sobservedorEastAs|a|ntheper|od2000-
2005.
3. SouthAs|aandSouthEastAs|abothaooountfortheh|gh-
est share of |ntra-South trade, at 66 per oent eaoh. lnd|a
aooounts for the |argest share of |ntra-South trade among
|nd|v|dua|oountr|es.Th|s|sthesame|ntheoaseofoap|ta|
goods|mports.
4. ln the ana|ys|s, oap|ta| goods |no|ude the maoh|nery and
transport groups and profess|ona| and so|ent|o |nstruments
based on SlTO Rev. 3.
5. Th|s may be exp|a|ned by the exp||o|t |nvestments be|ng
made|ndeve|op|ngproduot|onoapao|ty|npharmaoeut|oa|s
andagr|ou|ture|nmanydeve|op|ngoountr|esasaresu|tof
|ooa|pub||ooonoerns.
6. Forthe|norease|nexports,seeAnnextab|eA.ll.6.
7. See Annex tab|e A.ll.11.
8. lt shou|d be noted that |n the 1970s, two Afr|oan oountr|es
(South Afr|oa and the ||byan Arab Jamah|r|ya} aooounted for
most of the outward FDl from Afr|oa.
9. See a|so annex tab|e A.ll.14.
10. NOTAD (2010a} est|mates that agr|ou|tura| emp|oyment (as
a peroentage of tota| emp|oyment} deo||ned from 69.83per
oent |n 2000-2002 to 66.77per oent |n 2006-2008, and ag-
r|ou|tura| va|ue-added (as a peroentage of GDP} shrank from
30.66 per oent |n 2000-2002 to 26.81 per oent |n 2006-
2008.
11. See, for examp|e, Katz (1987}, Dah|man, Ross-|arson and
Westpha| (1987}, and Gutkowsk|, Rodr|gues and Go|ty
(1987}.
12. For examp|e, |n manag|ng the buyer-dr|ven networks, brand-
ed marketers ||ke N|ke and Reebok, ma|nta|n o|ose oontro|
overthe|rsupp||ersbysett|ngstandards,souro|ngrawma-
ter|a|s, d|str|but|ng them and na||y |mport|ng the n|shed
produots.
13. Throughth|sdea|,Bhart|A|rte|ga|nedaooesstomob||emar-
kets |n 15 Afr|oan oountr|es, mak|ng |t the wor|d`s fth |argest
mob||ete|eoomsoperator|ntermsofnumberofsubsor|bers.
ASSESSING ONGOING
SOUTH-SOUTH
TECHNOLOGICAL
COLLABORATION 3
47
CHAPTER III : ASSESSING ONGOING SOUTH-SOUTH TECHNOLOGICAL COLLABORATION
CHAPTER III
ASSESSING ONGOING
SOUTH-SOUTH TECHNOLOGICAL
COLLABORATION:
EXAMPLES AND POLITICAL INITIATIVES
A. INTRODUCTION
Bu||d|ng further on the trends ana|ysed |n
ohapter ll, th|s ohapter assesses ongo|ng
South-South teohno|og|oa| oo||aborat|on
based on severa| examp|es. Suoh oo|-
|aborat|on oan be broad|y d|v|ded |nto the
fo||ow|ng three oategor|es: pub||o-seotor-
based, pr|vate-seotor-based and pub||o-
pr|vate partnersh|ps (PPP}. The |atter often
oons|stofhybr|dformsofpr|vateandpub||o
seotorengagement.Asth|sohaptershows,
depend|ng on the partners |nvo|ved, the
mot|ves for oo||aborat|on may vary, rang-
|ng from s|mp|e so|ent|o oooperat|on to
more soph|st|oated forms of teohno|ogy
and |nnovat|on oapao|ty-bu||d|ng |nvo|v|ng
teohno|ogy transfer. W|th regard to seotors,
most oases |nvo|ve oo||aborat|on |n hea|th,
agr|ou|tureandRETs,thoughtherearea|so
examp|es |n manufaotur|ng and |nfrastruo-
ture.
Th|s ohapter presents examp|es of the
threeoategor|esofSouth-Southteohno|og-
|oa|oo||aborat|ondesor|bedabove.Seot|on
B desor|bes some jo|nt-venture |n|t|at|ves
between rms |n the pharmaoeut|oa| and
b|oteohno|ogy seotors and |n RETs. Seo-
t|on O presents speo|o oases of pub||o-
seotor-|ed South-South oo||aborat|on and
how these gure w|th|n the deve|opment
ass|stanoe |n|t|at|ves of oountr|es. The ex-
amp|es have been ohosen on the bas|s of
|nformat|onava||ab|eontheteohno|ogyand
|nnovat|on parameters of the oo||aborat|on
agreements. They seek to prov|de an un-
derstand|ngofhowtheoo||aborat|onsoon-
tr|buted to teohno|og|oa| |earn|ng, and the
key oontraotua| arrangements and po||oy
|noent|vesthatfao|||tatedth|sprooess.
Aw|derangeofgovernmentand|ntergov-
ernmenta||n|t|at|veshaveemergedoverthe
past deoade, wh|oh foous part|ou|ar|y on
agenda-sett|ng for oo||aborat|on on teoh-
no|ogyand|nnovat|onandarea|medatset-
t|ng po||oy targets at the nat|ona|, reg|ona|
and |nternat|ona| |eve|s. Seot|on D d|souss-
es these var|ous |n|t|at|ves, |no|ud|ng the
BRlOSSumm|tandthelBSAforum,aswe||
asreg|ona|deve|opmentsw|th|ntheAfr|oan
n|on (A} and the New Partnersh|p for Af-
r|oa`s Deve|opment (NEPAD}. The ohapter
ends w|th a d|souss|on of the key features
of eaoh of these |n|t|at|ves and what they
oou|dmeanfromanovera||perspeot|vefor
teohno|og|oa| |earn|ng and the bu||d|ng of
|nnovat|onoapao|ty.
B. INTER-FIRM
TECHNOLOGICAL
COLLABORATION
The most oommon forms of |nter-rm teoh-
no|og|oa| oo||aborat|on take p|aoe through
the transfer of sk|||ed personne|, ||oens|ng
agreements, suboontraot manufaotur|ng,
and jo|nt-venture |n|t|at|ves. There are a
number of mot|ves that dr|ve rms to en-
ter|ntooo||aborat|onagreements,|no|ud|ng
the searoh for oost efo|enoy by mov|ng a||
or some of the|r produot|on to deve|op|ng
oountr|es,aswe||asthesearohfornewor
expanded market opportun|t|es |n those
oountr|es or |n reg|ona| groups (see a|so,
Hoess and va||ejo, 2012}. For the oo||abo-
rat|ng rms, the mot|vat|ons for oo||abo-
7|emot|vesfo|
co||aoo|at|onmayva|y,
|ang|ngf|oms|mo|e
sc|ent|c coooe|at|on
tomo|esoo||st|cated
fo|msoftec|no|ogy
and|nnovat|on
caoac|ty-o0||d|ng
|nvo|v|ng
tec|no|ogyt|ansfe|.
48 TECHNOLOGY AND INNOVATION REPORT 2012
rat|on |no|ude the|r des|re to enhanoe the|r
teohno|og|oa|oapab|||t|es|nordertopromote
|nnovat|on,|mprovethe|roompet|t|venessand
meet pub||o demand for speo|o produots/
serv|oes. As d|soussed |n ohapter ll, |nter-rm
oo||aborat|on oan take the form of e|ther vert|-
oa| oo||aborat|on between rms a|ong the va|-
ue oha|n (that |s, between the produoer and
|ts supp||ers} or hor|zonta| oo||aborat|on.
Teohno|og|oa| oo||aborat|on |s part|ou|ar|y
prom|nent|nthepharmaoeut|oa|sseotor.Po-
tent|a|produot|onbarr|ersduetomostdeve|-
op|ng oountr|es ob||gat|ons to oomp|y w|th
prov|s|onsoftheTRlPSAgreement|samajor
mot|vat|ng faotor that dr|ves the|r rms to ex-
pand produot|on by oo||aborat|ng w|th rms
|n |DOs that are exempt from |mmed|ate
oomp||anoe (e.g. the jo|nt venture between an
lnd|an and gandan rm d|soussed be|ow}.
1. Pharmaceuticals and health
care
Th|s seot|on presents three examp|es of
teohno|og|oa| oo||aborat|on |n the pharma-
oeut|oa|s seotor. ln the examp|es for both
Eth|op|a and ganda, the governments,
aot|ngthroughthe|r|nvestmentauthor|t|es,
offered |noent|ves that were or|t|oa| for the
jo|nt ventures to mater|a||ze. ln the Egypt|an
oase, the government a|so p|ayed a key
ro|e |n fao|||tat|ng the jo|nt venture, wh|oh
|nvo|ved teohno|ogy transfer. Some other
ongo|ng work |s oaptured |n box 3.1.
a. ganda: Jaint venture between
0ua|ity 0hemica|s (ganda) and
0ip|a Pharmaceutica|s (lndia)
1
Oua||ty Ohem|oa|s, a gandan pharma-
oeut|oa| oompany, was a |ooa| d|str|butor
of |mported drugs. ln 2009, |t entered |nto
a jo|nt venture w|th the lnd|an oompany
O|p|a Pharmaoeut|oa|s to produoe drugs
for the treatment of Hlv/AlDS and ma|ar|a.
By 2010, |t was export|ng to reg|ona| mar-
kets |n Burund|, the Demoorat|o Repub||o of
the Oongo, Kenya, Rwanda and the n|ted
Repub||o of Tanzan|a, as we|| as supp|y|ng
the gandan M|n|stry of Hea|th through a
pub||o proourement oontraot. Today, |t has
beoomethe|argestproduoerofant|retrov|-
ra| (ARv} and ant|-ma|ar|a| drugs |n ganda.
The jo|nt venture |s of part|ou|ar s|gn|oanoe
forpub||ohea|th|nthedomest|oandreg|ona|
markets beoause of |ts foous on the produo-
t|on of good qua||ty drugs at affordab|e pr|o-
es.ltwastheresu|tof|noent|vesprov|dedby
thegandanGovernmentaspartof|tspo|-
|oytobu||dproduot|onoapab|||t|esfordrugs
of part|ou|ar |mportanoe to that oountrys
pub||o hea|th. lnoent|ves |no|uded free |and,
an |n|t|a| |nvestment as part of Oua||ty Ohem|-
oa|s` |ooa| equ|ty (of up to 27per oent}, and
afu||purohaseoomm|tmentfora||drugspro-
duoed by the fao|||ty for the rst seven years.
ln return, O|p|a was to prov|de the des|gn
for the produot|on p|ant, wh|oh |s based |n
|uz|ra (near Kampa|a}, and a range of hard-
ware teohno|og|es requ|red for produo|ng
the drugs. These |no|uded manufaotur|ng
andtest|ngteohno|og|es,|nformat|ononthe
souro|ng of raw mater|a|s and paokag|ng
teohno|og|es. The Government of ganda
prov|des the sa|ar|es of O|p|a experts from
lnd|a for oonduot|ng the sk|||s transfer for a
per|od of 3-5 years, wh|oh |s an extra |noen-
t|ve for teohno|og|oa| oo||aborat|on through
thejo|ntventure.
The ma|n foous of the jo|nt venture |s on
know-how and sk|||s tra|n|ng prov|ded by
O|p|a, wh|oh |s essent|a| for ensur|ng the
susta|nab|||ty of the venture and a|so for
promot|ngentrepreneursh|p|nganda.The
jo|nt venture env|sages prov|d|ng not on|y
teohn|oa| tra|n|ng to so|ent|sts and ohem-
|sts, but a|so tra|n|ng on organ|zat|ona| mat-
ters to management personne|. Sk|||s and
know-how that have been transferred over
the past two years re|ate to: (|} p|ant des|gn
and |nsta||at|on, (||} produot and prooess
know-how, (|||} good |aboratory praot|oes,
(|v} p|ant ma|ntenanoe, and (v} souro|ng of
raw mater|a|s. Sk|||s are transferred on the
job|naday-to-day|nteraot|veenv|ronment
as we|| as |n regu|ar week|y teaoh|ng ses-
s|ons|naded|oatedon-s|teo|assroom.
b. Ethiapia: 5EAA - a jaint venture
with 0hinese rms
2
Estab||shed |n 2001, SEAA |s a jo|nt ven-
ture oompany |n Eth|op|a operat|ng |n the
pharmaoeut|oa| seotor. The jo|nt venture
7ec|no|og|ca|
co||aoo|at|on|s
oa|t|c0|a||yo|om|nent
|nt|eo|a|mace0t|ca|s
secto|.
49
CHAPTER III : ASSESSING ONGOING SOUTH-SOUTH TECHNOLOGICAL COLLABORATION
|nvo|vesthreepartners:oneEth|op|anoom-
pany,wh|ohor|g|na||yfoousedonthe|mport
andd|str|but|onofpharmaoeut|oa|produots
|n Eth|op|a, and two Oh|nese oompan|es,
wh|oh speo|a||ze |n the produot|on of phar-
maoeut|oa| produots, med|oa| dev|oes, as
we|| as equ|pment and maoh|nery for phar-
maoeut|oa|manufaotur|ng.
Ourrent|y, as a resu|t of the jo|nt venture,
SEAA |s engaged |n the manufaoture and
market|ng of empty hard ge|at|ne oapsu|es
(EHGO} |n Eth|op|a.
3
Theteohno|ogyassoo|-
atedw|thEHGOproduot|onoons|stsofthe
oapsu|e-mak|ng maoh|nery and a number of
other prooesses and re|ated know-how for
the d|fferent stages of produot|on. Through
th|sjo|ntventure,a||theseteohno|og|eswere
transferred a|ong w|th re|ated know-how.
The Oh|nese partners supp||ed the ma-
oh|nery and equ|pment, as we|| as most of
theteohno|ogyandexpert|se.Oh|neseen-
g|neers prov|ded tra|n|ng to the Eth|op|an
staff |n hand||ng, operat|ng and master|ng
the teohno|ogy and know-how |nvo|ved |n
the manufaotur|ng prooess. The p|ant |s
nowoperatedbyEth|op|anpersonne|,and
thesen|ormanagementand||nestaffofthe
jo|ntventurearea||Eth|op|an.
Severa| government and market |noent|ves
supportedth|sjo|ntventure.TheEth|op|an
lnvestmentAgenoyfao|||tated|tsestab||sh-
ment by arrang|ng for the Orom|ya Reg|ona|
Government (where the p|ant |s |ooated} to
prov|dethe|andandthefao|||tyatvery|ow
rentandonfavourab|eterms.Theabsenoe
of EHGOs |n the domest|o Eth|op|an mar-
ket, a|ong w|th the potent|a| for export to the
reg|ona| market, prov|ded a market |noent|ve
for the Oh|nese rms to estab||sh the jo|nt
ventureproduot|onfao|||ty|nEth|op|a.
c. Egypt: A05EBA - a jaint venture
with 0angbaa (0hina)
4
vAOSERA, a ho|d|ng oompany for b|o-
|og|oa| produots and vaoo|nes |ooated |n
G|za, Egypt, forged oo||aborat|ve t|es w|th
Dongbao, a Oh|nese rm, wh|oh enab|ed
the transfer of teohno|ogy for the produo-
t|on of reoomb|nant |nsu||n |n Egypt. Th|s
wasprev|ous|y|mported,andwasoften|n
short supp|y |n the oountry. The jo|nt ven-
turehasenab|ed|ooa|produot|onof|nsu||n
|n Egypt thereby g|v|ng d|abetes sufferers
|n the oountry a re||ab|e and read||y ava||-
ab|e supp|y of |nsu||n that |s oheaper than
the |mported produot. |ooa| produot|on of
|nsu||nhasa|soresu|ted|nsubstant|a|oost
sav|ngsfortheEgypt|anGovernment.
2. Renewable energy technologies
Pr|vate seotor teohno|og|oa| oo||abora-
t|on |n the area of RETs ma|n|y takes the
formofoo||aborat|onagreementsthatpro-
mote shar|ng of ex|st|ng and suooessfu|
RET-based app||oat|ons, and tra|n|ng and
oapao|ty-bu||d|ng for upgrad|ng human re-
souroes.lnafew|nstanoes|tmaya|so|n-
vo|ve jo|nt R&D between rms. Suoh RETs-
re|atedteohno|og|oa|exohange,suohas|n
pharmaoeut|oa|s and hea|th-re|ated areas,
|softenfao|||tatedby|ntergovernmenta|or-
gan|zat|ons or mu|t||atera| or reg|ona| deve|-
opment banks.
8ox 3.1: |oter-rm co||aborat|oo |o hea|th care aod b|otechoo|ogy
A reoent study (Thorstendott|er et a|., 2010} |nterv|ewed 300 experts |n 13 deve|op|ng oountr|es to est|mate the extent of South-
South oo||aborat|on |n hea|th-re|ated b|oteohno|ogy. Aooord|ng to the study, more than one quarter of hea|th-re|ated b|oteoh rms
|n Braz||, Oh|na, Ouba, Egypt, lnd|a and South Afr|oa have bu||t ||nkages w|th rms |n other deve|op|ng oountr|es, amount|ng to a
tota| of near|y 280 South-South oo||aborat|ons. Braz|| a|one reported more than 60 suoh arrangements. The study notes that as
aresu|tofr|s|ngteohno|og|oa|oapao|ty|nsevera|deve|op|ngoountr|es,South-Southoo||aborat|ons|nhea|thandb|oteohno|ogy
aooount for 47per oent of a|| ongo|ng oo||aborat|ons.
The study notes that these oo||aborat|ons have enab|ed the reo|p|ent oountr|es, suoh as Egypt and Tun|s|a, to meet most (60-
95per oent} of the|r own drug needs today. The |nterv|ews oonduoted |n the study po|nt to many other oo||aborat|ve ventures,
suoh as a tr||atera| South-South-North oonsort|um for o||n|oa| oanoer tr|a|s and a South-South oo||aborat|on (between Braz|| and
Ouba} fao|||tated by the Wor|d Hea|th Organ|zat|on (WHO} for treat|ng Afr|oa`s men|ng|t|s outbreak, among others.
Souroe: Thorstendott|er et a|., (2010}.
P||vatesecto|
tec|no|og|ca|
co||aoo|at|on|nt|ea|ea
ofRE7sma|n|yta|est|e
fo|mofco||aoo|at|on
ag|eements
andt|a|n|ngand
caoac|ty-o0||d|ngfo|
0og|ad|ng|0man
|eso0|ces.
50 TECHNOLOGY AND INNOVATION REPORT 2012
ln some other areas, there |s a |arger en-
gagementofthepr|vateseotor|nresponse
to speo|o |noent|ves granted by govern-
ments. ln add|t|on, prom|s|ng market pros-
peots have p|ayed a ro|e |n the deo|s|ons
of rms to enter |nto suoh jo|nt ventures
(lRENA, 2011}. ln South Afr|oa, for examp|e,
Oh|nasSunteohPowerHo|d|ngss|gnedan
agreement |n 2010 to deve|op so|ar pho-
tovo|ta|o (Pv} oapao|ty of up to 100 mega-
watts.Thetota||nvestmentoftheprojeot|s
est|mated at between $350 and $400 m||-
||onand|nvo|vesaSouthAfr|oanoompany
asa|ooa|partner.
S|m||ar|y, the lnd|an rm Suz|on Energy es-
tab||shed a faotory |n T|anj|n, Oh|na |n 2007
to manufaoture rotor b|ades, generators,
hubs and other w|nd turb|ne oomponents.
Th|spartnersh|p|sest|matedtobeturn|ng
out a oapao|ty equ|va|ent to 600 megawatts
per annum. lt a|so |no|udes a p|an for set-
t|ng up an on-s|te R&D oentre. ln add|t|on,
Suz|on has partnered w|th domest|o |nves-
torsforOh|nesew|nd|nsta||at|ons,andhas
reoent|y opened a sa|es ofoe |n the Repub-
||o of Korea on the expeotat|on of strong fu-
turesa|es|nthatoountry.
3. Summing up
Th|s seot|on has presented examp|es of
pr|vate seotor South-South teohno|og|oa|
oo||aborat|onfoous|ngontheteohno|og|oa|
|earn|ng aspeots of those oo||aborat|ons.
There are other examp|es of South-South
oo||aborat|on |n the ex|st|ng ||terature, but
|t |s d|fou|t to determ|ne whether they are
pure|yforteohno|og|oa||earn|ng,and|fso,
what the|r ma|n foous |s and the k|nd of
oo||aborat|on|nvo|ved.
C. PUBLIC SECTOR
TECHNOLOGICAL
COLLABORATION
Over the past two deoades, the number
of deve|op|ng oountr|es prov|d|ng ofo|a|
deve|opment ass|stanoe (ODA} has grown
oons|derab|y. Severa| oountr|es have been
tak|ng steps to estab||sh deve|opment oo-
operat|onageno|es,andhavebeenbroad-
en|ng the foous from ma|n|y teohn|oa|
oooperat|on to more oomprehens|ve de-
ve|opment programmes. The Organ|sat|on
for Eoonom|o Oo-operat|on and Deve|op-
ment (OEOD} est|mates that |n 1991 the 22
member oountr|es of the Deve|opment As-
s|stanoe Oomm|ttee (DAO} prov|ded about
94per oent of a|| deve|opment ass|stanoe,
wh||e the non-DAO members oontr|buted
the rest. ln the two deoades s|noe, DAO
members oont|nue to prov|de by far the
|argest share of ODA, a|though the amount
of d|sbursements by non-DAO oontr|bu-
tors has been |noreas|ng (box 3.2}. Be-
tween 2000 and 2010, the tota| ODA pro-
v|ded by non-DAO members amounted to
$9,135m||||on |n 2011, up from $1,740m||-
||on|n2000.
5
As|ahassevera|deve|opment
partners,|no|ud|nglndones|a,Ma|ays|aand
Tha||and,|nadd|t|ontoOh|naandlnd|a.As
noted|nohapterl,manyoftheseoountr|es
set up South-South oo||aborat|on arrange-
ments a|ready |n the 1950s and 1960s as
part of broader oooperat|on efforts among
deve|op|ng oountr|es. However, |noreas-
|ng|y,avar|etyofarrangementsfordeve|op-
mentoooperat|onarebeg|nn|ngtoemerge
amongdeve|op|ngoountr|es.
1. Brazil
Braz|| began prov|d|ng deve|opment ass|s-
tanoe |n the |ate 1960s, but estab||shed |t-
se|f as a donor when |t ofo|a||y estab||shed
|ts teohn|oa| ass|stanoe programme |n 1978
(lDRO, 2007}. lts deve|opment ooopera-
t|on began w|th the Portuguese-speak|ng
Afr|oan oountr|es, wh|oh rema|n a pr|or|ty
|n Braz||`s |nternat|ona| oooperat|on (Krage-
|und, 2011}. The Braz|||an Oooperat|on
Agenoy (ABO}, set up under the M|n|stry of
Fore|gn Affa|rs at the end of the 1980s, be-
oame the pr|mary |nst|tut|on to ooord|nate
the oountrys teohn|oa| oooperat|on pro-
grammes.
6
lt|sest|matedthatthe|argestshareofBra-
z||`s deve|opment ass|stanoe goes to 16 Af-
r|oan oountr|es,
7
a|though th|s |s gradua||y
expeotedtoexpandto|no|udesomeAs|an
oountr|esaswe||.TheABOsprojeotsfoous
pr|mar||y on agr|ou|ture (19per oent}, hea|th
(14 per oent} and eduoat|on (11 per oent},
7|e|ea|eot|e|
examo|esofSo0t|-
So0t|co||aoo|at|on,
o0t |t |s d|fc0|t to
dete|m|new|et|e|
t|eya|eo0|e|yfo|
tec|no|og|ca||ea|n|ng.
Seve|a|deve|oo|ng
co0nt||es|aveoeen
ta||ngsteosto
estao||s|deve|ooment
coooe|at|on
agenc|es,and|aveoeen
o|oaden|ngt|efoc0s
tomo|ecomo|e|ens|ve
deve|ooment
o|og|ammes.
51
CHAPTER III : ASSESSING ONGOING SOUTH-SOUTH TECHNOLOGICAL COLLABORATION
aswe||asonvooat|ona|tra|n|ngfor|ndus-
tr|a| deve|opment |n response to requests
from oountr|es |n sub-Saharan Afr|oa (Wor|d
Bank and lPEA, 2011}. ln the agr|ou|tura|
and hea|th seotors, Braz||`s teohn|oa| ooop-
erat|on|soonduotedthrough|ooa|ageno|es
suoh as the Braz|||an Agr|ou|tura| Researoh
Oorporat|on (Embrapa} and the Oswa|do
Oruz Foundat|on (F|ooruz}.The vooat|ona|
tra|n|ng projeots of ABO are oonduoted
through Braz||`s Nat|ona| Serv|oe for lndus-
tr|a| Tra|n|ng (SENAl}. These are d|soussed
|nmoredeta||be|ow.
lnadd|t|onto|tsb||atera|programmes,Bra-
z|| a|so engages |n severa| mu|t||atera| oo-
operat|onprogrammesa|medatpromot|ng
teohn|oa|oapab|||t|es|nAfr|oanoountr|es.
8
a. Embrapa
The Braz|||an Agr|ou|tura| Researoh Oorpo-
rat|on, Embrapa, |s a State-owned enter-
pr|se under the Braz|||an M|n|stry of Agr|ou|-
ture.
9
Trad|t|ona||y, |t has been respons|b|e
forprov|d|ngfeas|b|eso|ut|onsforthesus-
ta|nab|e deve|opment of Braz|||an agr|bus|-
ness through know|edge and teohno|ogy
generat|on and transfer. W|th the expan-
s|on of Braz|||an deve|opment oooperat|on,
Embrapa has |noreased |ts presenoe |n
sub-Saharan Afr|oa |n reoent years,
10
pr|-
8ox 3.2: 8|s|og So0th-So0th oIc|a| deve|opmeot ass|staoce
The members OEOD-DAO aooount for most of the ODA prov|ded to deve|op|ng oountr|es. A|though |t |s d|fou|t to deter-
m|ne the exaot amount of ODA prov|ded by deve|op|ng oountr|es due to the pauo|ty of data, |t |s known that suoh ODA |s
on the r|se as shown |n box gure 3.2.1. Oountr|es suoh as Braz||, Oh|na and lnd|a, wh|oh are non-DAO donors, have been
|noreas|ng the|r part|o|pat|on (OEOD, 2010; N-EOOSOO, 2008}. Aooord|ng to ava||ab|e data, Saud| Arab|a, Oh|na, the
Bo||var|an Repub||o of venezue|a, lnd|a and Braz|| were the top ve non-DAO donors |n 2008, aooount|ng for 79.1per oent
of the est|mated ODA prov|ded by the top 16 deve|op|ng-oountry donors (OEOD, 2010}.
Th|strendhasbeenre|nforoedbytheeoonom|odeve|opmentoftheemerg|ngoountr|esandthe|rgeopo||t|oa|asp|rat|onsto
oontr|butetoSouth-Southoooperat|on.
Souroe: NOTAD.
8ox g0re 3.2.1: 00A Irom deve|op|og co0otr|es aod Irom 0A0 members, 2000-2010
(atcoostaot$m||||ooasoI2010)
20 000
40 000
60 000
80 000
100 000
120 000
140 000
160 000
2
0
0
0
2
0
0
1
2
0
0
2
2
0
0
3
2
0
0
4
2
0
0
5
2
0
0
6
2
0
0
7
2
0
0
8
2
0
0
9
2
0
1
0
ODA ows from DAO Oountr|es
ODA ows from Non-DAO
Oountr|es
Souroe: OEODstat.
/t|sest|matedt|att|e
|a|gests|a|eofB|az||s
deve|oomentass|stance
goesto16Af||can
co0nt||es.
52 TECHNOLOGY AND INNOVATION REPORT 2012
mar||y through three oomponents: 'struo-
tur|ng projeots", teohn|oa| tra|n|ng, and the
Afr|oa-Braz|| P|atform for Agr|ou|tura| lnno-
vat|on (Wor|d Bank and lPEA, 2011}. Work-
|ng w|th ABO, Embrapa ourrent|y has 78
b||atera| agreements w|th 56 oountr|es and
89 fore|gn ageno|es, espeo|a||y |n agr|ou|-
tura|researoh.Th|spr|mar||y|nvo|vesteoh-
n|oa| oooperat|on |n the form of researoh
partnersh|ps and/or teohno|ogy transfer.
11
G|venEmbrapasgrow|ng|nternat|ona|ao-
t|v|t|es,theagenoy|sexpeotedto|aunohan
|nternat|ona|arm,Embrapalnternat|ona|,|n
2012.
12
The examp|es |n boxes 3.3 and 3.4 be|ow
h|gh||ghttwoofEmbrapasstruotur|ngpro-
jeots |n Afr|oa. Suoh projeots are oustom-
|zed to |ooa| needs, and ooord|nat|on takes
p|aoe through oonsu|tat|ons w|th |ooa|
stakeho|ders. ABO |ntends to he|p promote
|ong-term soo|a| deve|opment |n partner
oountr|es through oapao|ty-bu||d|ng aot|v|-
t|es.
13
A jo|nt Afr|oan-Braz|| |n|t|at|ve, the Agr|ou|-
tura| lnnovat|on Marketp|aoe was |aunohed
|n 2010 to strengthen t|es between Embra-
pa and Afr|oan researohers. Jo|nt projeots
|nvo|ve a tota| of 125 agr|ou|tura| speo|a|-
|sts from 15 of the s|xteen Afr|oan oountr|es
(||sted above} that reoe|ve deve|opment
ass|stanoe from Braz||.
14
The ma|n themes
of the projeots ourrent|y funded |no|ude:
foster|ng know|edge-shar|ng for |ntegrated
natura| resouroe management |n Southern
Afr|oa (Mozamb|que}; sweet sorghum var|-
eta| adaptat|on for ethano| produot|on (Ken-
ya}; rehab|||tat|on of degraded range|ands
us|ng p|anned graz|ng |n ar|d and sem|-
ar|d |ands (Kenya}; prevent|on of pest|o|de
|eaoh|ngand|ossofgroundwater|nooasta|
vegetab|e ou|t|vat|on (Togo}; deve|opment
of ootton var|et|es and pest management
(n|ted Repub||o of Tanzan|a}; enhano|ng
the eoo|ogy and the nutr|t|ona| potent|a| of
nat|vefoodtreespeo|esusedby|ooa|oom-
mun|t|es (Burk|na Faso and the Braz|||an
Amazon}; and deve|op|ng a food seour|ty
andoonservat|onstrategy|ntheoontextof
o||mate ohange (Burk|na Faso}.
b. 0swa|da 0ruz Faundatian
The Oswa|do Oruz Foundat|on (F|ooruz}, a
government-fundedhea|thresearohorgan-
|zat|on, |s engaged |n var|ous |nternat|ona|
oooperat|on |n|t|at|ves, part|ou|ar|y |n |at|n
Amer|oa and |n Portuguese-speak|ng Afr|-
oan oountr|es. Part of the Braz|||an M|n|stry
of Hea|th, the Foundat|on a|ms to support
andpromoteaot|v|t|es|nhea|th,eduoat|on
and so|ent|o and teohno|og|oa| deve|op-
ment.
15
F|ooruz has emerged as a nat|ona|
and reg|ona| p|oneer |n hea|th-re|ated R&D,
produot|on of vaoo|nes, reagents, drugs
and d|agnost|os; human resouroe tra|n|ng;
|nformat|on-shar|ng; qua||ty oontro|; and |m-
8ox 3.3: The Io0r-co0otry cottoo project
|aunohed |n 2008, th|s projeot a|ms to support the deve|opment of the ootton |ndustry |n the 'O-4 oountr|es" - Ben|n, Burk|na
Faso,OhadandMa||.The|n|t|at|vehasastrongoapao|ty-deve|opmentoomponent.lta|msto:
Prov|de too|s for the governments |n a|| four oountr|es to enab|e them to deve|op an autonomous ootton |ndustry.
For examp|e, n|ne Braz|||an ootton var|et|es deve|oped by Embrapa over the past 20 years are be|ng tested and adapted |n
Ma|| (ABO, 2010};
Transp|ant Braz|||an teohno|og|es for |noreased protab|||ty and qua||ty, g|ven the s|m||ar|t|es |n so|| and o||mat|o oond|t|ons |n the
four oountr|es and Braz||; and
lmprove the qua||ty of ||fe and food seour|ty of farmers.
Through th|s projeot, Ma|| has oonstruoted a |aboratory for b|oteohno|ogy at |ts exper|menta| stat|on, wh|oh |s nano|a||y supported
by ABO |n the oountry. Another |aboratory, for b|o|og|oa| oontro|, w||| be bu||t by Embrapa, a|so w|th nano|a| support from ABO.
Theseprojeotsareexpeotedtohe|p|noorporatep|aguemanagement|ntheproduot|onprooess|na||fourprojeotoountr|es.
As part of th|s projeot, 56 researohers from the four oountr|es have part|o|pated |n teohn|oa| tra|n|ng on genet|o |mprovement of
oottonandotherre|atedareas.An|mportanta|moftheprojeot|sto|ntegratethed|fferentoomponentsofanagro-eoosystemto
promote the rat|ona| ut|||zat|on of natura| resouroes.
Souroe: ABO (2010}.
/nadd|t|onto|tso||ate|a|
o|og|ammes,B|az||a|so
engages|nseve|a|
m0|t||ate|a|coooe|at|on
o|og|ammesa|medat
o|omot|ngtec|n|ca|
caoao|||t|es|nAf||can
co0nt||es.
53
CHAPTER III : ASSESSING ONGOING SOUTH-SOUTH TECHNOLOGICAL COLLABORATION
p|ementat|on of soo|a| programmes (GHS
ln|t|at|ves, 2012}.
16
Bu||d|ng on |ts exper|-
enoes w|th teohno|ogy ass|m||at|on, F|ooruz
|s gradua||y expand|ng |ts engagement |n
deve|op|ng teohno|og|oa||y |nnovat|ve oa-
pao|t|es |n hea|th oare |n other deve|op|ng
oountr|es (box 3.5}.
c. 5EhAl
The Braz|||an Nat|ona| Serv|oe for lndustr|a|
Tra|n|ng (SENAl} was oreated |n 1942, and
|sourrent|yfundedthroughmandatoryoon-
tr|but|ons from |ooa| pr|vate enterpr|ses.
17
SENAl |mparts vooat|ona| tra|n|ng to meet
Braz||`s |ndustr|a| requ|rements. Based
on |ts prev|ous exper|enoes, |t has now
jo|ned other Braz|||an |nst|tut|ons as a pro-
v|der of |nternat|ona| teohn|oa| ass|stanoe.
lt has 48 |nternat|ona| partnersh|ps w|th
25 oountr|es, wh|oh have so far |ed to 29
projeots, 5 of them |n sub-Saharan Afr|oa.
W|th the ABO, SENAl has set up 10 vooa-
t|ona| tra|n|ng oentres g|oba||y, 5 of wh|oh
are |n Afr|oa (Ango|a, Oape verde, Mozam-
b|que, Gu|nea-B|ssau, and So Tome and
Pr|no|pe}, and 2 others are be|ng opened |n
SouthAfr|oaandAngo|a.Forexamp|e,the
Braz||-Ango|a vooat|ona| Tra|n|ng Oenter |n
Oazenga supported nat|ona| reoonstruot|on
throughtra|n|ngandrehab|||tat|onofthede-
mob|||zed |abour foroe as Ango|a`s 40-year
o|v|| war wound down. Between 1999 and
2006, |t tra|ned more than 3,000 Ango|ans
|n e|ds suoh as d|ese| meohan|os, o|v|| oon-
struot|on, appare| mak|ng and |nformat|on
teohno|og|es (Wor|d Bank and lPEA, 2011}.
2. India
lnd|a`s agsh|p programme on teohn|oa|
oooperat|on oan be traoed baok to 1964
when|tsoughttohe|pmeettheneedsof|ts
partneroountr|esthroughb||atera|engage-
ments v|a the lnd|a Teohn|oa| Eoonom|o
Oooperat|on (lTEO} programme. lt was
|n|t|a||y |aunohed as a oooperat|on |n|t|at|ve
for new|y |ndependent oountr|es, part|ou-
|ar|y members of the Oommonwea|th. The
lTEOprogramme|sbased|ntheM|n|stryof
8ox 3.4: Project Ior the deve|opmeot oI r|ce c0|t0re
Th|s |s Embrapa`s th|rd projeot |n Senega|, jo|nt|y deve|oped by the Senega|ese lnst|tute for Agr|ou|tura| Researoh (lnst|tut Sene-
ga|a|s de Reoherohes Agr|oo|es} and Embrapa`s r|oe and beans un|t |n Braz||. ln|t|ated |n 2010 at a oost of $2.4 m||||on, |ts a|m |s to
ass|st and transfer teohno|ogy to Senega| as |t moves towards se|f-sufo|enoy |n r|oe produot|on by |mprov|ng efo|enoy. Aot|v|t|es
|no|udeapp|y|ngproduot|onteohno|og|es,prov|d|ngtra|n|ngandoapao|ty-bu||d|ngtoSenega|esepraot|t|oners,andexper|ment-
|ng w|th 10 d|fferent var|et|es of r|oe deve|oped by Embrapa`s r|oe and beans un|t for |rr|gated ou|tures at |ntermed|ate e|evat|ons
and|ntheh|gh|ands.
Th|s projeot |s strateg|oa||y |mportant beoause r|oe |s a bas|o stap|e of the Senega|ese d|et: average annua| oonsumpt|on |s 74 kg
per person oompared w|th 44 kg |n Braz||.
Souroe: Wor|d Bank and lPEA (2011}.
8ox3.5: F|ocr0z-Nozamb|g0eA8Vprod0ct|ooIac|||ty
Among F|ooruz`s jo|nt projeots w|th other deve|op|ng oountr|es, the F|ooruz-Mozamb|que ARv produot|on fao|||ty has reoe|ved
muoh attent|on. nder th|s |n|t|at|ve, F|ooruz |s ourrent|y support|ng the estab||shment of a $21 m||||on faotory for the produot|on of
ARv drugs for the treatment of Hlv/AlDS |n Mozamb|que. Th|s |n|t|at|ve for the deve|opment of affordab|e ARv drugs |n Mozam-
b|que was based on the suooessfu| exper|enoes of two of Braz||`s domest|o Hlv/AlDS hea|th programmes.
a
Thegoa||storeduoe
Mozamb|que`s dependenoe on donors and to |norease hea|th partnersh|p opportun|t|es |n Afr|oa.
b
The projeot has been extended by severa| years, and produot|on |s expeoted to start |n |ate 2012 w|th fu|| teohno|ogy transfer
expeoted to take p|aoe by 2014.
o
Severa| other Braz|||an |nst|tut|ons, part|ou|ar|y SENAl, are |nvo|ved |n prov|d|ng equ|pment and
stafftra|n|ng.
Souroe: NOTAD, based on var|ous souroes.
a
The rst was the AlDS oontro| programme nanoed by three Wor|d Bank |oans ($160 m||||on |n 1993, fo||owed by $165 m||||on |n 1998,
and an add|t|ona| $100 m||||on |n 2003} (Wor|d Bank, 2004}. The seoond was a gener|o drugs po||oy |n|t|ated |n 1999, wh|oh a||owed
Braz|||ans to purohase drugs at more affordab|e pr|oes and qua||ty assuranoe.
b
lt |s expeoted that the fao|||ty w||| have the oapao|ty to produoe 226 m||||on ARv tab|ets and 145 m||||on un|ts of other med|o|nes annua||y
fordomest|osupp|yandprov|s|ontootherAfr|oanoountr|es.
o
Based on GHS| (2012}, p. 26.
54 TECHNOLOGY AND INNOVATION REPORT 2012
Externa| Affa|rs, and |no|udes the fo||ow|ng
oomponents: tra|n|ng and oapao|ty-bu||d-
|ng,projeotoooperat|on,andtheprov|s|on
ofteohn|oa|ass|stanoebylnd|anexperts.
18
lnd|a a|so engages |n South-South teoh-
no|og|oa| oo||aborat|on v|a the lnterna-
t|ona| Oooperat|on D|v|s|on of the M|n|stry
of So|enoe and Teohno|ogy. Oooperat|on
projeots are |mp|emented through b||at-
era|, mu|t||atera| or reg|ona| agreements
for fao|||tat|ng and strengthen|ng |nterao-
t|ons among governments, aoadem|a, |n-
st|tut|onsand|ndustr|es|nareasofmutua|
|nterest. lnd|a ourrent|y has b||atera| so|-
enoe and teohno|ogy oooperat|on agree-
mentsw|thsevera|deve|op|ngoountr|es.
19
Thesefoousma|n|yonthefao|||tat|onand
enhanoement of b||atera| trade w|th other
deve|op|ng oountr|es, and many have a
teohno|ogy |earn|ng oomponent. A s|gn|-
oant number of them take p|aoe |n Afr|oa.
Some of the key |n|t|at|ves are the Foous
Afr|oa Programme, the lBSA ln|t|at|ve and
the Teohno-Eoonom|o Approaoh Move-
ment (TEAM-9}: West Afr|oa. A|| of these
|n|t|at|ves|no|udeoomponentsforteohno-
|og|oa| oo||aborat|on (box 3.6}.
Some examp|es of pub||o|y funded teoh-
no|og|oa| oo||aborat|on |n|t|at|ves as part of
lnd|as South-South oooperat|on oomm|t-
mentsaredesor|bedbe|ow.
a. lndia-Pan Africa e-hetwark
Technica|0a||abaratianand
Knaw|edge 5haring
The Pan-Afr|oan e-Network Projeot |s an
|n|t|at|ve|edbythelnd|anGovernment,un-
dertaken |n partnersh|p w|th the 53 mem-
bers of the A. |aunohed |n 2007, |n|t|a||y
for a per|od of ve years, |ts objeot|ve |s
to empower the Afr|oan oont|nent through
te|emed|o|ne and te|e-eduoat|on. Th|s pro-
jeot |s among the |argest programmes of
d|stanoe eduoat|on |n te|emed|o|ne ever
undertaken. lt seeks to prov|de eduoat|ona|
fao|||t|esandaffordab|ehea|thoare|nreo|p|-
entoountr|es.
The oo||aborat|on oovers the oost of sup-
p|y,|nsta||at|on,test|ngandoomm|ss|on|ng
ofhardwareandsoftware,end-to-endoon-
neot|v|ty, sate|||te bandw|dth, support ser-
v|oes, and the prov|s|on of te|e-eduoat|on
and te|emed|o|ne serv|oes to 53 Afr|oan
oountr|es for a ve-year per|od. Eaoh Afr|-
oanoountrys|gn|nguptothe|n|t|at|vedes-
|gnates an |mp|ement|ng agenoy to Te|e-
oommun|oat|ons Oonsu|tants lnd|a ||m|ted
(TOl|}, wh|oh |s the |mp|ement|ng agenoy of
the projeot. They a|so des|gnate a oentra|
hosp|ta| as we|| as a oentre for e-|earn|ng
(NDP, 2009}.
20
The rst phase of the Pan
Afr|oan e-Network Projeot has been |mp|e-
mented |n 11 oountr|es s|noe 2009.
21
8ox3.6: |od|asreceot|o|t|at|vesIortechoo|og|ca|co||aborat|oo
lnd|a`s three key |n|t|at|ves foous|ng ma|n|y on aspeots of teohno|og|oa| oo||aborat|on are desor|bed be|ow.
The Foous Afr|oa programme was |aunohed under the Export lmport Bank of lnd|a (ElM Bank}, and was |mp|emented between
2002 and 2007. Part|ou|ar emphas|s was sought to be g|ven to prov|d|ng ass|stanoe for Afr|oan exports of speo|o produots,
part|ou|ar|y text||es, pharmaoeut|oa|s, maoh|nery and |nstruments, transport equ|pment and |nformat|on and oommun|oat|on teoh-
no|og|es (lOTs}.
a
The lBSA |n|t|at|ve, a tr||atera| |n|t|at|ve between lnd|a, Braz|| and South Afr|oa, forged the New De|h| Agenda for Oooperat|on and
P|an of Aot|on, wh|oh a|ms to enhanoe tr||atera| trade and oooperat|on between the three oountr|es. lt |no|udes teohno|og|oa|
oo||aborat|on |n pharmaoeut|oa|s and hea|th oare, lOTs, o|v|| av|at|on and defenoe (see seot|on D of th|s ohapter for more deta||s}.
The Teohno-Eoonom|o Approaoh Movement (TEAM-9} |s an |n|t|at|ve fooused on enhano|ng oommero|a| t|es between West Afr|oan
States and lnd|a. lt env|sages shar|ng var|ous types of teohn|oa| expert|se and teohno|og|oa| and nano|a| resouroes. As part of
th|s |n|t|at|ve, speo|o projeots have been undertaken |n key seotors, and a ored|t ||ne of $500 m||||on has been extended through
the ElM Bank of lnd|a for nano|ng these projeots (Humphrey, 2011}. The |n|t|at|ve |s expeoted to enoompass eduoat|on, tra|n|ng
andre|evantteohno|ogytransfer|nseotorssuohasagr|ou|ture,sma||-soa|e|ndustr|es,pharmaoeut|oa|sandhea|thoare,andlOTs.
b
Souroe: NOTAD, based on var|ous souroes.
a
See:lndo-Afr|oanOhamberofOommeroeandlndustr|es,at:http://www.|ndoafr|oan.org/lnd|as%20ln|at|ed.pdf.
b
See:lndo-Afr|oanOhamberofOommeroeandlndustr|es.
/nd|ascoooe|at|on
o|o|ectsa|e
|mo|ementedt||o0g|
o||ate|a|,m0|t||ate|a|
o||eg|ona|
ag|eements...
...fo|fac|||tat|ng
andst|engt|en|ng
|nte|act|onsamong
gove|nments,academ|a,
|nst|t0t|onsand
|nd0st||es|na|easof
m0t0a||nte|est.
55
CHAPTER III : ASSESSING ONGOING SOUTH-SOUTH TECHNOLOGICAL COLLABORATION
b. lndia's ca||abaratian an human
gename sequencing
ln 2003, lnd|a beoame one of the rst de-
ve|op|ng oountr|es to be |nvo|ved |n deve|-
op|ng a database on human genome se-
queno|ng. The |n|t|at|ve was undertaken by
the pub||o|y funded lnst|tute for Genom|os
and lntegrated B|o|ogy (lGlB} of the Ooun-
o|| for So|ent|o and lndustr|a| Researoh
(OSlR}. lt was mandated to estab||sh a net-
work of |nst|tut|ons - the lnd|an Genome
var|at|on (lGv} oonsort|um - dr|ven by so|-
enoe and teohno|ogy |nst|tut|ons |n lnd|a.
S|noe then, the lnd|an Government has
sought to use the know|edge generated
bytheprogramme|n|tsoo||aborat|onw|th
otherdeve|op|ngoountr|es.For|nstanoe,a
oo||aborat|ve venture |n Sr| |anka, |ed to the
generat|on of the rst Sr| |ankan human ge-
nome, wh|oh was suooessfu||y sequenoed
byso|ent|stsandb|o|nformat|o|ansfromthe
n|vers|ty of Oo|ombo, Sr| |anka, and the
lnst|tute of Genom|os and lntegrat|ve B|o|-
ogy, New De|h|, lnd|a.
22,23
c. lndia's ca||abaratian an BETs
deve|apment
As one of the forerunners |n the RETs
seotor among deve|op|ng oountr|es, par-
t|ou|ar|y|nso|arandw|ndpower,lnd|ahas
exper|enoe|nus|ngsem|-gr|dandoff-gr|d
app||oat|ons for he|p|ng to a||ev|ate rura|
poverty. The examp|e of the ||ght|ng a B||-
||on ||ves |n|t|at|ve (|aB|} demonstrates
the Governments approaoh |n promot|ng
so|ut|ons to the prov|s|on of e|eotr|o|ty |n
remoteareasand|nshar|ngth|ssuooess-
fu|exper|enoew|thotherdeve|op|ngooun-
tr|es. Th|s |n|t|at|ve has now been soa|ed
up for w|der app||oat|on |n other deve|op-
|ngoountr|es.
The |aB| |n|t|at|ve was |aunohed |n 2008
by the Energy and Resouroes lnst|tute
(TERl}, an |nternat|ona| th|nk tank that |s
supported by the Government of lnd|a.
s|ng an entrepreneur|a| mode|, |t seeks to
de||ver energy serv|oes through the prov|-
s|on of h|gh-qua||ty, oost-effeot|ve so|ar |an-
terns that are d|ssem|nated through so|ar
oharg|ng stat|ons set up |n non-e|eotr|ed
or poor|y e|eotr|ed v|||ages.
24
The opera-
t|on and ma|ntenanoe oosts are borne by
theusersoftheso|ar|anterns|ntheform
oftherenttheypaytotheoperatorsofthe
oharg|ngstat|ons,wh||etheoap|ta|oostof
sett|ng up the oharg|ng stat|on |n the v||-
|age|sra|sedbyTERlthroughgovernment
ageno|es, oorporate donors and oommu-
n|t|es.S|noethe|n|t|at|vewas|aunohed|n
2008, around 35,000 rura| househo|ds |n
lnd|a have rep|aoed the|r kerosene |amps
w|tho|eanandenv|ronmenta||yfr|end|yso-
|ar |anterns (for more deta||s, see NOTAD,
2011o}.
The |n|t|at|ve has a|so formed a bas|s for
South-South oo||aborat|on through tra|n-
|ng and oapao|ty-bu||d|ng programmes,
teohno|ogy transfer |n|t|at|ves, p||ot|ng of
suooessfu| de||very mode|s and |dent|oa-
t|on of |ooa| partners for rep||oat|ng and
soa||ngupthemode||nvar|ousdeve|op|ng
oountr|es. ln ganda, for examp|e, |aB|
|s be|ng expanded through |ooa| partner-
sh|ps deve|oped |n oo||aborat|on w|th pr|-
vate d|str|but|on networks |n the oountry.
Severa| |nternat|ona| donors, suoh as the
n|ted States Agenoy for lnternat|ona| De-
ve|opment (SAlD}, N-HABlTAT, and the
n|ted Nat|ons lndustr|a| Deve|opment Or-
gan|zat|on (NlDO}, are support|ng the ex-
pans|onofthe|n|t|at|ve|notherdeve|op|ng
oountr|es.
3. China
Oh|nas aot|v|t|es |n deve|opment ooopera-
t|on take many forms, and spend|ng re|ated
to those aot|v|t|es often does not fo||ow
DAO report|ng gu|de||nes, so that the es-
t|mates vary oons|derab|y. Oh|nese deve|-
opment oooperat|on aot|v|t|es, wh|oh are
o|ose|y ||nked to trade and |nvestment, are
spread aoross d|fferent government m|n|s-
tr|es,|no|ud|ngtheM|n|str|esofFore|gnAf-
fa|rs,Oommeroe,F|nanoe,Hea|thandEdu-
oat|on. The Oh|na Deve|opment Bank and
the Oh|na Export lmport Bank prov|de the
nano|ng |n oooperat|on w|th the re|evant
m|n|str|es.
Oh|nasSouth-Southteohno|og|oa|oo||ab-
orat|onooversavar|etyofareas,|no|ud|ng
C||nesedeve|ooment
coooe|at|onact|v|t|es
a|eso|eadac|oss
d|ffe|ent
gove|nmentm|n|st||es.
/nd|ac0||ent|y|as
o||ate|a|sc|enceand
tec|no|ogycoooe|at|on
ag|eementsw|t|seve|a|
deve|oo|ngco0nt||es.
56 TECHNOLOGY AND INNOVATION REPORT 2012
agr|ou|ture, o|| and gas, and |nfrastruoture
deve|opmentsuohasoonstruot|onandte|-
eoommun|oat|ons. Oh|na a|so has teohno-
|og|oa| oo||aborat|ons w|th some emerg|ng
oountr|es.Areoentexamp|e|sthestrength-
en|ng of |ts so|ent|o and teohno|og|oa| oo|-
|aborat|on |n agr|ou|ture w|th South Afr|oa
(box 3.7}.
a. 0hinese-Anga|an l0T
infrastructure deve|apment
ca||abaratian
25
Huawe| Teohno|og|es, a Oh|nese lOT rm,
|soontr|but|ngtothedeve|opmentof|nfra-
struotureforAngo|asoperators|nw|re|ess
teohno|ogy and new generat|on networks.
Th|s oo||aborat|on, funded by Oh|na`s ElM
Bank, has |ed to the |nsta||at|on of opt|oa|
bre oab|es |n |uanda and |t |s expeoted to
expandtootherprov|noesaswe||.Huawe|
Teohno|og|es has |nvested the requ|s|te -
nanoes to transform the former Instituto
Nacional das Telecomunicaos (lTE|} |nto
Universidade de Telecomunicaes,aswe||
as bu||d a new Te|eoom Teohn|oa| Tra|n-
|ng Oentre. The tra|n|ng oentre |s based
onamode|thattheOh|neseoompanyhas
emp|oyed |n ve other Afr|oan oountr|es,
name|y Kenya, N|ger|a, South Afr|oa, Tun|s|a
andganda.Bes|desthetra|n|ngAngo|an
reoru|ts reoe|ve at home, staff exohanges
between Oh|na and South Afr|oa are en-
v|saged|nordertopromotethetransferof
tao|t know-how. Ango|a`s M|n|stry of Oom-
mun|oat|ons |s o|ose|y |nvo|ved |n the oo|-
|aborat|on.
b. Lighten up Africa Praject:
an examp|e af ca||abaratian
between 0hina, 10 African
cauntries and hl00
26
Th|s projeot |nvo|ves oooperat|on between
theOh|nalnternat|ona|OentreforEoonom|o
and Teohn|oa| Oooperat|on (OlOETE} under
the M|n|stry of Oommeroe (MOFOOM} and
the lnternat|ona| Oentre for Sma|| Hydro
Power (lO-SHP}, a member |nst|tut|on of
the Oh|na South-South Oooperat|on Net-
work. lt |s the ou|m|nat|on of many rounds
of oonsu|tat|ons w|th NlDO and a number
of Afr|oan governments. One of the key ob-
jeot|ves of th|s projeot |s to set up 100 m|n|-
hydropower stat|ons |n remote rura| areas
of 10 Afr|oan oountr|es - Oameroon, Eth|o-
p|a, Kenya, ||ber|a, Ma||, N|ger|a, S|erra |e-
one, ganda, Zamb|a and Z|mbabwe - to
prov|depowertorura|Afr|oa.lt|sexpeoted
to benet 100,000 peop|e (NDP, 2009}.
4. Mexico
ln 2011 the Mex|oan Government |ssued
the lnternat|ona| Deve|opment Ooopera-
t|on |aw (|OlD}. Th|s |aw |nst|tut|ona||zes for
the rst t|me a nat|ona| system of |nterna-
t|ona| deve|opment oooperat|on w|th|n the
Mex|oan pub||o po||oy framework (SEGOB,
2011}.
27
lt exp||o|t|y h|gh||ghts the need to
engage|ndeve|opmentoooperat|onaot|v|-
t|es |n deve|op|ng oountr|es. Th|s |no|udes
oooperat|on |n the areas of env|ronmenta|
proteot|on and susta|nab|e deve|opment,
and the |mprovement of teohn|oa|, so|ent|o
8ox3.7: 0ooperat|oobetweeo0h|oaaodSo0thAIr|ca|oagr|c0|t0re
At the Oh|na-South Afr|oa Agr|ou|tura| Oooperat|on Forum |n 2011, the two oountr|es agreed to re|nforoe so|ent|o and teohno|og|oa|
oo||aborat|on |n four key areas |n the agr|ou|tura| seotor.
F|rst, jo|nt researoh on ma|ze p|ant|ng and ou|t|vat|on teohn|ques su|ted to South Afr|oa`s |ooa| oond|t|ons |s p|anned to be
oarr|ed out |n order to overoome the prob|em of the re|at|ve|y short supp|y of new ma|ze var|et|es and support|ng ou|t|vat|on
teohn|ques. Seoond, jo|nt researoh |s expeoted to |mprove on an|ma| breed|ng teohn|ques through the shar|ng of know|edge
and exper|enoes. Th|rd, dry|and farm|ng and water-sav|ng |rr|gat|on teohn|ques w||| be promoted |n response to |ooa| oond|t|ons
and requ|rements. Fourth, |t |s expeoted that both oountr|es w||| pursue jo|nt tra|n|ng |n agr|ou|tura| teohno|ogy on a b||atera|
bas|s. ln the ||ght of South Afr|oa`s deo|eno|es |n eoonom|o and eduoat|ona| deve|opment and workforoe tra|n|ng, after tak-
|ng|anguagetra|n|ngathome,Oh|neseagr|ou|tura|speo|a||stsandyoungandm|dd|e-agedprofess|ona|sareexpeotedtobe
se|eoted and sent to South Afr|oa to prov|de teohn|oa| tra|n|ng to |ooa| workers. Th|s |s part of the objeot|ve to aooe|erate the
app||oat|on and d|ssem|nat|on of Oh|na`s (J|||n Prov|noe} teohno|og|oa| know-how |n South Afr|oa |n order to deepen oo||abora-
t|onbetweenthetwooountr|es.
Souroe: Forum on Afr|oan Oooperat|on (ava||ab|e at http://www.fooao.org/eng/zfgx/t851767.htm}.
C||nasSo0t|-So0t|
tec|no|og|ca|
co||aoo|at|oncove|s
ava||etyofa|eas,
|nc|0d|ngag||c0|t0|e,
o||andgas,and
|nf|ast|0ct0|e
deve|ooment.
57
CHAPTER III : ASSESSING ONGOING SOUTH-SOUTH TECHNOLOGICAL COLLABORATION
andou|tura|eduoat|onthroughtheoo||abo-
rat|ngent|t|es,amongotherdeve|opmenta|
|ssues (SEGOB, 2011}. The |OlD prov|des
two |nstruments for |nternat|ona| deve|op-
ment oooperat|on: the Mex|oan lnterna-
t|ona| Deve|opment Oooperat|on Agenoy
(AMEOlD} and the lnternat|ona| Deve|op-
ment Oooperat|on Program (PROOlD}. The
agenoy has the mandate to d|reot, ooor-
d|nate and |mp|ement Mex|oan po||oy for
|nternat|ona|oooperat|onw|thav|ewto|m-
prov|ng |ntegra| human deve|opment and
susta|nab|e growth predom|nant|y |n the
|at|n Amer|oan and the Oar|bbean reg|on. ln
th|s reg|on, about 48per oent of the projeots
|mp|emented are |n South Amer|oa, 38per
oent |n Oentra| Amer|oa and 14 per oent
|n the Oar|bbean (SRE-AMEOlD, 2011}.
28
Theprogramme|srespons|b|eforthep|an-
n|ng and |mp|ementat|on of a|| of Mex|oos
deve|opmentstrateg|esandaot|ons,andfor
den|ng and estab||sh|ng the objeot|ves and
strateg|oareasforMex|oanoooperat|on.
29
As a member of the OEOD s|noe 1994,
Mex|oo|sa|soanobservermemberofthe
OEOD-DAO, where |t has enhanoed |ts ro|e
asanemerg|ngdonor.Mex|oo|sa|soao-
t|ve |n the n|ted Nat|ons Deve|opment As-
s|stanoe Framework (NDAF} and |n the
G20 Deve|opment Work|ng Group.
W|th|n |at|n Amer|oa, Mex|oo has teohno-
|og|oa| oo||aborat|on projeots w|th Argen-
t|na, Braz||, Oh||e, Oo|omb|a and ruguay |n
nano-andb|oteohno|og|esamongotherar-
eas.lnArgent|na,projeots|no|udeaspeots
ofo||mateohangem|t|gat|onandtheorea-
t|onofnano-andb|oteohno|ogyoentres|n
add|t|on to nat|ona| parks adm|n|strat|on,
|nfeot|ous d|sease oontro|, denta| hea|th,
|nspeot|onsystemsand|ndustr|a|deve|op-
ment.
Mex|oohasa|sobeen|nnovat|ve|noreat|ng
newer methods and |nstruments of deve|-
opment oooperat|on. One suoh |nstrument
|s the jo|nt Mex|oo-Oh||e Fund that nanoes
deve|opmentprojeots|nanumberofooun-
tr|es |n the reg|on, |no|ud|ng Bo||v|a, Eoua-
dor and ruguay (box 3.8}.
Some other |nterest|ng examp|es of Mex|-
oos South-South teohno|og|oa| oo||abora-
t|ons, presented be|ow, demonstrate a fo-
ous on oapao|ty-bu||d|ng for teohno|og|oa|
absorpt|on through tra|n|ng sess|ons and
eduoat|ona| exohange programmes, par-
t|ou|ar|yw|thotheroountr|es|nthereg|on.
a. Pragramme far strengthening
capacities far the deve|apment
af techna|agica| prajects in
aquacu|ture
The Mex|oan So|ent|o Researoh and H|gh-
er Eduoat|on Oentre of Ensenada (OlOESE}
and the Oatho||o n|vers|ty of Peru oon-
duoted a ser|es of oonsu|tat|ons and ex-
ohange programmes |n 2007-2008 as part
oftheprogrammefortheStrengthen|ngof
Oapao|t|es for the Deve|opment of Teohno-
|og|oa| Projeots |n Aquaou|ture. nder the
programme, a team of eng|neers from the
Peruv|anpartnersweretra|ned|nass|m||a-
t|on,adaptat|onandapp||oat|onofpreo|s|on
teohno|og|es at d|fferent |eve|s of |nterna-
t|ona|supp|yoha|nsofthema|nexportab|e
speo|es |n Peruv|an aquaou|ture. The pro-
grammeoovereda||stagesoftheproduo-
t|on oha|n, as we|| as |ts ||nkages w|th other
produot|veseotors.
8ox3.8: TheNex|co-0h||eF0od
The Mex|oo-Oh||e Fund |s an |nnovat|ve meohan|sm of South-South oo||aborat|on |n areas of pr|or|ty. ln 2011, |t nanoed 8 pro-
jeots: 3 |n env|ronment, another 3 to boost the oompet|t|veness of SMEs, 1 |n pub||o management and another |n oonserv|ng the
h|stor|opatr|mony.Theseprojeotsweresponsoredbythefund|nsevera|oountr|esofthereg|on,|no|ud|ngEouador,Bo||v|aand
ruguay.Projeotsw|thEouador|nvo|v|ngtra|n|ng|nmode|sandtoo|sforhydro-|nformat|os,potab|ewatermanagementandfor
sett|ng up rura| m|oro rms. ln Bo||v|a, the areas targeted |no|ude food, text||es, wood manufaotur|ng and oommun|ty tour|sm.
Oooperat|onw|thruguay|nvo|vesagr|ou|ture,hea|th,soo|a|deve|opment,so|enoeandteohno|ogy,env|ronmentandeduoat|on.
Th|sfundoou|dpotent|a||yberep||oated|nmanyotheroountr|es,ormoregenera||yw|th|nSouth-Southoo||aborat|onforteohno|ogy
and|nnovat|on.
Souroe: NOTAD, based on var|ous souroes.
Mex|candeve|ooment
coooe|at|on|nc|0des
coooe|at|on|n
env||onmenta|
o|otect|onand
s0sta|nao|e
deve|ooment,and
t|e|mo|ovementof
tec|n|ca|, sc|ent|c and
c0|t0|a|ed0cat|on.
Mex|co|asa|sooeen
|nnovat|ve|nc|eat|ng
newe|met|odsand
|nst|0mentsof
deve|ooment
coooe|at|on.
58 TECHNOLOGY AND INNOVATION REPORT 2012
b. 0eve|apment af biasecurity
prataca| in |abarataries, green-
hauses and e|ds with genetica||y
madied arganisms in Peru
lnordertodeve|opb|oseour|typrotooo|s|n
|aborator|es, greenhouses and e|ds for the
ou|t|vat|on of papayas, a ser|es of tra|n|ng
sess|onswereoonduoteddur|ngtheper|od
2007-2010 |nvo|v|ng the Mex|oan M|n|stry
of Agr|ou|ture, ||vestook, Rura| Deve|op-
ment, F|sher|es and Food (SAGARPA},
the Mex|oan Oentre for Researoh and Ad-
vanoedStud|esoftheNat|ona|Po|yteohn|o
lnst|tute |n lrapuato, and the Nat|ona| Ag-
r|ou|tura| lnnovat|on lnst|tute of Peru. The
ma|n output of th|s oo||aborat|on was the
oreat|on of a protooo| for prov|d|ng |nfor-
mat|on on the management of genet|oa||y
mod|ed organ|sms (GMOs} |n var|ous en-
v|ronments and on a set of best praot|oes
|nth|sarea.Th|sprotooo||sexpeotedtobe
partofabroaderprotooo|oreat|onexero|se
that Peru |s undertak|ng w|th|n |ts nat|ona|
programmeonb|oseour|ty.
c. 0aurse in nan-destructive
practices
The Mex|oan Eng|neer|ng and lndustr|a| De-
ve|opment Oentre (OlDESl}, w|th the support
of the Japanese lnternat|ona| Oooperat|on
Agenoy (JlOA}, prov|des annua| oourses on
methodo|og|esof|ndustr|a|non-destruot|ve
praot|oes.Thosepart|o|pat|ng|ntheoours-
es |no|ude |nspeotors from teohno|og|oa|
deve|opment organ|zat|ons |n Argent|na,
the Bo||var|an Repub||o of venezue|a, Oo-
|omb|a, Oosta R|oa, Oh||e, Panama, Peru
and ruguay. The part|o|pat|ng |nstruotors
are offered oert|oates on oomp|et|on of
theoourses,wh|ohhasapos|t|ve|mpaot|n
termsofstrengthen|ng|ndustr|a||nst|tut|ons
|nthepart|o|pat|ngoountr|es.
5. Saudi Arabia
Saud| Arab|a has been one of the |argest
non-DAO donors s|noe 1973, w|th ODA
amount|ng to $5,564m||||on |n 2008 - ao-
oord|ng to OEOD data, an amount a|most
three t|mes that of the ODA from Oh|na, the
seoond-|argest non-DAO donor (OEOD,
2010}.
Saud| Arab|a`s ODA oompr|ses ma|n|y pro-
jeot-type ass|stanoe, wh|oh |no|udes some
budget support and debt re||ef. Teohn|oa|
oooperat|on projeots aooount for on|y 4per
oent of the tota| (Rea||ty of A|d, 2010}. A|-
most 95 per oent of Saud| Arab|a`s a|d |s
prov|ded b||atera||y, ma|n|y |n the form of
|oans to ne|ghbour|ng oountr|es. Reoent|y,
ass|stanoe to South and East As|a has |n-
oreased substant|a||y, part|ou|ar|y to Bang-
|adesh, Oh|na and Pak|stan (Woods, 2008}.
The seotors and projeots targeted are
transport and oommun|oat|ons (45 per
oent}, fo||owed by hea|th (22 per oent},
eduoat|on (20 per oent}, agr|ou|ture
(10per oent} and energy (3per oent} (N-
EOOSOO, 2008}. ln reoent years, Saud|
Arab|an ODA has begun to |no|ude some
teohno|ogyoapao|ty-bu||d|ngoomponents.
For |nstanoe |n 2011 Saud| Arab|a s|gned
an agreement w|th v|et Nam to bu||d the
N|nh Thuan vooat|ona| Tra|n|ng Oenter,
wh|oha|mstoprov|deprofess|ona|oours-
es a||gned w|th |ndustry requ|rements. At
th|s oentre, 3,000 tra|nees are expeoted to
graduate every year unt|| 2015 (Saud| Fund
for Deve|opment, 2011}.
D. MAJOR GOVERN-
MENT INITIATIVES
FOR SOUTH-SOUTH
TECHNOLOGICAL
COLLABORATION
Muoh |n keep|ng w|th the ongo|ng b||atera|
aot|v|t|esondeve|opmentoooperat|onand
teohn|oa| ass|stanoe h|gh||ghted |n seot|on
O, the past two deoades have seen a re-
v|va|of|nterest|ngovernment-|ed|n|t|at|ves
thatfoousonteohno|ogyand|nnovat|on|n
the South. These |n|t|at|ves are oonduoted
throughreg|ona|,|nterreg|ona|andother|n-
st|tut|ona| ohanne|s. The var|ous |n|t|at|ves
oanbev|ewedaspartofabroaderagenda
|nthepo||oyarenasoftheoountr|esofthe
South. They are a reafrmat|on of the grow-
|ngreoogn|t|onofthe|mportanoeofgreater
oo||aborat|ononteohno|ogyand|nnovat|on.
Th|s seot|on seeks to present an overv|ew
ofsuoh|n|t|at|ves.
Sa0d|A|ao|a|asoeen
oneoft|e|a|gest
non-DACdono|ss|nce
1973,w|t|ODA
amo0nt|ngto
$5,564m||||on |n 2008.
7|eoasttwodecades
|aveseena|ev|va|
of|nte|est|n
gove|nment-|ed
|n|t|at|vesf|om
deve|oo|ngco0nt||es
t|atfoc0son
tec|no|ogyand
|nnovat|on|nt|eSo0t|.
59
CHAPTER III : ASSESSING ONGOING SOUTH-SOUTH TECHNOLOGICAL COLLABORATION
1. Recent major intergovernmental
initiatives
Over the past deoade, |n add|t|on to b||atera|
deve|opment ass|stanoe, deve|op|ng ooun-
tr|eshavestrengthenedthe|rmutua|oomm|t-
menttofosterSouth-Southoo||aborat|on|n
var|ousways.Tworeoentdeve|opmentsare
part|ou|ar|y noteworthy: the annua| BRlOS
summ|ts,andthelBSAforum,wh|ohared|s-
oussedhere.Anotherexamp|eofan|n|t|at|ve
to expand oooperat|on |s the lstanbu| P|an
of Aot|on (lPOA}, wh|oh was the outoome of
the Fourth n|ted Nat|ons Oonferenoe on
the |east Deve|oped Oountr|es (N|DO lv}.
lt oonta|ns oonorete reoommendat|ons and
has |ed to a greater |nvo|vement of the Turk-
|shGovernmentasd|soussedbe|ow.
a. 8Bl05 summits
Greater oooperat|on among BRlOS mem-
bers,|no|ud|ng|ntheareasofso|enoe,teoh-
no|ogy and |nnovat|on (STl}, |s a oentra| tenet
of these oountr|es, as emphas|zed at the|r
most reoent summ|t |n De|h|. The De|h| Deo-
|arat|onh|gh||ghtedtheneedtopromoteso|-
enoe and teohno|ogy and re|ated know|edge
exohangeamongstthemembers.
30
Reoog-
n|z|ng the broader re|evanoe of know|edge
shar|ng, paragraph 40 of the De|h| Deo|a-
rat|on states that there |s a poo| of 'know|-
edge, know-how, oapao|t|es and best prao-
t|oes ava||ab|e |n our oountr|es that we oan
shareandonwh|ohweoanbu||dmean|ngfu|
oooperat|on for the benet of our peop|es".
31
The speo|o seotors for oooperat|on set out
|n paragraph 43 of the Deo|arat|on |no|ude
thepr|or|tyareasoffood,pharmaoeut|oa|s,
hea|thandenergy,aswe||asbas|oresearoh
|n emerg|ng |nterd|so|p||nary e|ds suoh as
nanoteohno|ogy, b|oteohno|ogy and ad-
vanoed mater|a|s so|enoe (box 3.9}. The
paragraphstressestheneedtoenoourage
the ow of know|edge amongst member
oountr|es researoh |nst|tut|ons through
jo|nt projeots, workshops and exohanges of
young so|ent|sts. Paragraph 45 of the Deo-
|arat|on refers to the|r grow|ng requ|rements
for renewab|e energy resouroes, and a|so
'energy efo|ent and env|ronmenta||y fr|end-
|y teohno|og|es", and the need to exohange
know|edge and teohno|ogy through the|r
oomp|ementarystrengths|ntheseareas.
32
Therearea|sootherongo|ngoo||aborat|ons
among the BRlOS oountr|es, suoh as the
Aot|on P|an on Agr|ou|ture that was na||zed
|n 2011 (box 3.9}.
33
b. The lndia-8razi|-5auth Africa
0ia|ague Farum
ThelBSAForum|snotaforma|arrangement
or po||oy |n|t|at|ve, but rather, a group|ng of
||ke-m|nded States that share s|m||ar|t|es |n
the|rstagesofdeve|opment.lt|sap|atform
forthethreeoountr|estostruoturethe|rg|oba|
engagement and ooord|nate the|r pos|t|ons
on key |ssues, |no|ud|ng the promot|on of
deve|opment oooperat|on (Ber|, 2008}. lBSA
|s a|so expeoted to be an |n|t|at|ve through
wh|oh these oountr|es oan oo||aborate w|th
other deve|op|ng oountr|es, part|ou|ar|y
|DOs.
34
The Bras|||a Deo|arat|on of the Fourth
lBSA Summ|t of 2010 |no|udes prov|s|ons on
South-South oooperat|on that emphas|ze the
|mportanoe of teohno|og|oa| oooperat|on.
35
Theyspeo|fythemodesofoooperat|on|nso|-
enoeandteohno|ogyaswe||asthemutua||y
agreedareasforsuohoooperat|on.
36
The P|an of Aot|on for oooperat|on notes
thatthethreeoountr|esagreeto:
- Share |nformat|on on best praot|oes
|n teohno|ogy transfer and to jo|nt|y
oons|der lPRs |ssues re|ated to the
proteot|on of b|od|vers|ty and trad|-
t|ona| know|edge; and
- Promote network|ng among the|r R&D
|nst|tut|ons|nordertostrengthenand
further deve|op the tr||atera| so|enoe
andteohno|ogyre|at|onsh|p.
37
c. The lstanbu| P|an af Actian and the
Turkish lnitiative
The lstanbu| P|an of Aot|on for |DOs (2011}
that emerged from the N|DO lv Oonfer-
enoe he|d |n May 2011 reoogn|zes so|enoe,
teohno|ogy and |nnovat|on as an |mpor-
tant e|ement for deve|opment (Po|nt 52}.
The p|an aoknow|edges that |DOs requ|re
greater ass|stanoe |n or|t|oa| areas of STl,
andthattheymost|yownoutdatedteohno|-
og|es as reeoted |n the|r produot|on pro-
7||ee|ecent
deve|oomentsa|e
oa|t|c0|a||ynotewo|t|y:
t|eann0a|BR/CS
s0mm|ts,t|e/BSA
fo|0mandt|e/stano0|
P|anofAct|on(/POAI.
60 TECHNOLOGY AND INNOVATION REPORT 2012
oesses and outputs. lt therefore proposes
that |DOs and the|r deve|opment partners
estab||sh a teohno|ogy bank and support-
|ngmeohan|smsforSTlwh|ohw|||foouson
|mprov|ng |DOs` so|ent|o researoh and |n-
novat|on base, enab||ng network|ng among
researohers and researoh |nst|tut|ons, and
fao|||tat|ng aooess to or|t|oa| teohno|og|es.
Paragraph 139 of the lstanbu| P|an of Ao-
t|on emphas|zes the promot|on of aooess
to teohno|og|es |n |DOs through greater
South-Southoo||aborat|on|nth|sarea.
Aspartofthelstanbu|P|an,aso|enoe,teoh-
no|ogy and |nnovat|on oentre, to be oa||ed
the lnternat|ona| lnnovat|on Network, was
proposed by the Government of Turkey to
addresssomeoftheshortoom|ngsofex|st-
|ng |n|t|at|ves on teohno|ogy transfer.
38
The
Network |s |ntended to '.promote aooess
of |DOs to |mprov|ng the|r so|ent|o and
|nnovat|ve oapao|ty needed for the|r struo-
tura| transformat|on."
39
lt wou|d serve as a
rea| and v|rtua| hub for, among others, 'fa-
o|||tat|ng jo|nt |earn|ng - through exohange
of |nformat|on and exper|enoes as we|| as
estab||shment of a shared know|edge base
ofana|yt|oa||yr|gorous,sharedoasestud|es
- to enab|e peer-to-peer |earn|ng between
experts, organ|zat|ons and ageno|es from
|DOs and other oountr|es w|th reoent and
ongo|ng deve|opment exper|enoes."
8ox3.9: 88|0SAct|ooP|aotoeohaocetechoo|ogycooperat|ooaod|ooovat|oo|oagr|c0|t0re
The Aot|on P|an 2012-2016 for Agr|ou|tura| Oooperat|on of BRlOS Oountr|es presents the ways |n wh|oh oooperat|on w||| be
undertaken |n the agr|ou|tura| seotor. The P|an reoogn|zes as |ts fourth e|ement the need to 'enhanoe agr|ou|tura| teohno|ogy oo-
operat|on and |nnovat|on." Th|s e|ement |s ooord|nated by lnd|a |n oo||aborat|on w|th the other four member oountr|es. The Aot|on
P|anoonta|nsthefo||ow|ngreoommendat|ons:
1} Estab||sh a strateg|o oooperat|on a|||anoe on agr|ou|tura| so|enoe and teohno|ogy among the BRlOS oountr|es, and ho|d an
agr|ou|tura| teohno|ogy oooperat|on forum a|ternate|y |n the ve oountr|es every other year. The a|m of the forum w||| be to
strengthend|a|ogueandexohange,jo|nt|yana|ysemajoroha||enges|nagr|ou|tura|teohno|og|es,andd|sousshowtoshare
so|ent|o and teohno|og|oa| resouroes, promote the deve|opment of agr|ou|tura| teohno|og|es and |mprove the efo|enoy of
so|ent|o researoh |n the BRlOS oountr|es;
2} Ho|d a oonferenoe a|ternate|y |n the ve oountr|es every other year to exohange v|ews on agr|ou|ture, sher|es and aqua-
ou|turedeve|opmenttrendsandresearohpr|or|t|es,andd|soussoooperat|ononmanagement,researohand|ndustry|nthe
e|ds of agr|ou|ture, sher|es and aquaou|ture among the ve oountr|es;
3} Strengthen oooperat|on |n resouroes and env|ronmenta| oonservat|on, |no|ud|ng the deve|opment of b|omass energy
andoropres|duereoyo||ng,andoonduotd|souss|onsandexohangesonagr|ou|tura|deve|opmentandenergyexp|o|-
tat|on;
4} Oonduot oo||aborat|ve researoh on |ow-oarbon shery teohno|og|es, |no|ud|ng teohno|og|oa| deve|opment and oo||aborat|ve
researoh on energy sav|ngs and em|ss|on reduot|ons of sh|ng vesse|s, the oarbon s|nk funot|on of aquaou|ture and art|o|a|
wet|ands, and reoyo||ng of aquaou|ture systems;
5} Promote the shar|ng of v|ews on strateg|o objeot|ves that are des|red to be reaohed by 2016;
6} Oreate an lnnovat|on Projeots Store;
7} Promote oooperat|on on teohno|og|es that oou|d strengthen trad|t|ona| forms of produot|on for the ma|ntenanoe of b|od|-
vers|ty;
8} Oonduot d|a|ogue and share researoh on d|etary reg|mes w|th the a|m of |noreas|ng d|vers|ty of food produot|on;
9} Promote oooperat|on on the eoonomy of eoosystems and b|od|vers|ty (TEEB} |n order to strengthen env|ronmenta| oonser-
vat|on|nagr|ou|ture;
10} Oooperate on the susta|nab|e use of water and fert|||zers;
11} Ho|d sem|nars on po||oy oonoern|ng the adopt|on of front|er so|enoes |n b|oteohno|ogy;
12} Exohange germp|asm resouroes (genet|o resouroes, subjeot to nat|ona| |aws}, oonduot stud|es on the breed|ng of hybr|d
r|oe, hybr|d ma|ze, wheat, pu|ses, o|| seeds, hort|ou|ture and other orops; demonstrate and promote oonservat|on farm-
|ng, so|| |mprovement teohno|ogy, ba|anoed fert|||zat|on, new fert|||zer souroes and other y|e|d-promot|ng teohno|og|es to
|norease the un|t y|e|d, and |mprove the qua||ty of orops.
Souroe: http://www.br|os|nd|a.|n/aot|onP|an.htm|.
7|e/POAo|ooosest|at
/DCsandt|e||
deve|oomentoa|tne|s
estao||s|atec|no|ogy
oan|ands0ooo|t|ng
mec|an|smsfo|S7/
w||c|w|||foc0son
/DCs.
61
CHAPTER III : ASSESSING ONGOING SOUTH-SOUTH TECHNOLOGICAL COLLABORATION
2. Other government initiatives
A range of jo|nt |n|t|at|ves ex|st at the na-
t|ona|andreg|ona||eve|samongstdeve|op-
|ng oountr|es, reeot|ng the|r efforts to pro-
moteoo||aborat|on.A|thoughthesearenot
foousedent|re|yonteohno|ogyand|nnova-
t|on, most of them o|ear|y st|pu|ate th|s as
anareaofoooperat|on.Someofthemajor
|n|t|at|vesarepresentedhere.
a. Africa
Severa| reg|ona| |ntegrat|on agreements
|n Afr|oa have prov|s|ons on teohno|og|oa|
oo||aborat|on. These |no|ude the NEPAD
So|enoe and Teohno|ogy P|an, the A
teohno|ogy deve|opment programmes,
andprov|s|onsforso|enoeandteohno|ogy
oo||aborat|on|ntreat|esoftheAfr|oanEoo-
nom|o Oommun|ty (AEO}, the Southern Af-
r|oan Deve|opment Oommun|ty (SADO} and
the Eoonom|o Oommun|ty of West Afr|oan
States (EOOWAS}.
i. Africas Science and Technology
Consolidated Plan of Action
TheAhas|ongbeenaot|ve|npromot|ng
teohno|og|oa| oo||aborat|on w|th|n Afr|oa
(even w|th|n |ts preoursor, the Organ|zat|on
of Afr|oan n|ty}. ln furtheranoe of these ef-
forts, |n February 2003, a group of Afr|oan
oountr|es agreed to estab||sh a Forum on
So|enoe and Teohno|ogy w|th|n NEPAD to
promote oo||aborat|on |n these areas. The
Oonso||datedSo|enoeandTeohno|ogyP|an
of Aot|on (OPA}, under des|gn for severa|
years, was na||y adopted |n 2005 by the
Afr|oan M|n|ster|a| Oonferenoe of So|enoe
and Teohno|ogy. lt out||nes pr|or|ty R&D
programmes|ntheb|oso|enoes,water,ma-
ter|a|so|enoeandmanufaotur|ng,andlOTs.
TheOPA|sstruoturedaroundthreeoorep||-
|ars: know|edge produot|on, teohno|og|oa|
|nnovat|on and oapao|ty-bu||d|ng (NEPAD,
2010}. lt oonta|ns aspeots of |mp|emen-
tat|on |n |ts Seot|on 5 and |n the annex.
However,exper|enoesw|th|mp|ementat|on
|n d|fferent areas have been m|xed, w|th
someareashav|ngmoresuooess|nterms
of praot|oa| aot|on than others. One of the
key oomponents of the p|an |s the deve|op-
mentofso|enoeandteohno|ogy|nd|oators
through the Afr|oan So|enoe and Teohno|-
ogy lnd|oators ln|t|at|ve (ASTl}, wh|oh has
progressed somewhat. However, meoha-
n|sms for fund|ng have been prob|emat|o,
and the p|anned fund|ng meohan|sm - an
Afr|oan So|enoe and lnnovat|on Fao|||ty -
has not mater|a||zed.
ln order to promote ownersh|p of the p|an
by Afr|oan oountr|es and better |mp|e-
mentat|on of the OPAs oomponents, the
NEPAD Programme has been oonverted
|nto the NEPAD P|ann|ng and Ooord|nat|on
Agenoy. lts ma|n tasks |no|ude the fo||ow|ng
(NEPAD, 2010}:
- Fao|||tat|ng and ooord|nat|ng the |m-
p|ementat|onofreg|ona|projeots;
- Mob|||z|ng resouroes and partners to
support |mp|ementat|on of Afr|oas
pr|or|typrogrammes/projeots;
- Oonduot|ng and ooord|nat|ng re-
searoh and know|edge management;
- Mon|tor|ng and eva|uat|ng the |mp|e-
mentat|on of programmes/projeots;
and
- Offer|ng advooaoy serv|oes about the
A and NEPAD v|s|on, m|ss|on and
oorepr|no|p|es/va|ues.
NEPAD rema|ns the key |mp|ement|ng |nst|-
tut|on for a|| of the As teohno|og|oa| oo|-
|aborat|on programmes to promote teoh-
no|ogy deve|opment.
40
ln add|t|on to th|s,
theAprov|dessomeformsofteohno|og|-
oa| ass|stanoe through |ts Teohno|ogy De-
ve|opmentProgrammes.
41
ii. African Economic Community
The Afr|oan Eoonom|o Oommun|ty (AEO}
Treaty of 1991 estab||shes the grounds for
mutua|eoonom|odeve|opmentamongthe
major|ty of the A member States. Art|-
o|e 51 oonta|ns prov|s|ons on so|enoe and
teohno|ogy that st|pu|ate mutua| ooopera-
t|on, |no|ud|ng oooperat|on |n 'the deve|op-
ment, aoqu|s|t|on and d|ssem|nat|on of ap-
propr|ate teohno|og|es".
42
A p|an of aot|on
deve|opedtopromoteth|sgoa||no|udesa
prov|s|onformemberStatesto:
- Harmon|ze nat|ona| po||o|es on so|en-
t|o and teohno|og|oa| researoh;
A|angeof|o|nt|n|t|at|ves
ex|statt|enat|ona|and
|eg|ona||eve|samongst
deve|oo|ngco0nt||es,
|eect|ng t|e|| effo|ts to
o|omoteco||aoo|at|on.
NEPAD|ema|nst|e|ey
|mo|ement|ng|nst|t0t|on
fo|a||oft|eAUs
tec|no|og|ca|
co||aoo|at|on
o|og|ammes.
62 TECHNOLOGY AND INNOVATION REPORT 2012
- Ooord|nate programmes |n app||ed
R&D and teohno|ogy serv|oes;
- Harmon|ze nat|ona| teohno|og|oa| de-
ve|opment p|ans, and oreate an en-
v|ronment for teohno|ogy absorpt|on
and regu|at|on of |ndustr|a| property
andtransferofteohno|ogy;
- Ooord|nate members` pos|t|ons on a||
so|ent|o and teohn|oa| quest|ons that
ar|se|n|nternat|ona|negot|at|ons;
- Oarry out permanent exohange of
|nformat|on and dooumentat|on and
estab||sh AEO data networks and
data banks;
- Deve|op jo|nt programmes for tra|n-
|ng so|ent|o and teohno|og|oa| oad-
res,|no|ud|ngthetra|n|ngandfurther
tra|n|ng of sk|||ed manpower; and
- Promote exohanges of researoh-
ers and speo|a||sts among member
States |n order to make fu|| use of the
teohn|oa| sk|||s ava||ab|e w|th|n the
Oommun|ty.
iii. Technological collaboration in the
Economic Community of West African
States and the Southern African
Development Community
The EOOWAS Treaty |no|udes prov|s|ons on
so|enoe and teohno|ogy |n Art|o|e 27, wh|oh
|s based on Art|o|e 51 of the AEO treaty. lt
st|pu|atesthesamemodesofreg|ona|oo|-
|aborat|onastheAEOtreaty.
43
S|m||ar|y,the
treaty estab||sh|ng SADO |no|udes a prov|-
s|on on so|enoe and teohno|ogy ooopera-
t|on |n Art|o|e 21, where|n member States
agree to oooperate |n areas of human re-
souroedeve|opmentandso|enoeandteoh-
no|ogy.
44
b. Asia
lnAs|a,theAssoo|at|onofSoutheastAs|an
Nat|ons (ASEAN} |s the ma|n reg|ona| b|oo
wh|ohstr|vesforo|oseroo||aborat|on|nso|-
enoe and teohno|ogy |n var|ous seotors,
|no|ud|ng |ndustry and energy. Ooopera-
t|on agreements |nvo|ve R&D oo||aborat|on,
teohno|ogy transfer and exohange of best
praot|oes, as we|| as human resouroe de-
ve|opment.
i. The Association of Southeast
Asian Nations
ASEANhasoneofthemostextens|veoo-
operat|onprogrammesamongdeve|op|ng-
oountry reg|ona| |ntegrat|on agreements,
|no|ud|ngteohno|ogyoooperat|on|nvar|ous
areas. These programmes |nvo|ve |ntrare-
g|ona|aswe||as|nterreg|ona|oooperat|on.
ASEAN teohno|og|oa| oo||aborat|on |s or-
gan|zed under the ASEAN Oomm|ttee on
So|enoe and Teohno|ogy (OOST}. A ser|es
of meet|ngs have been he|d and agree-
ments reaohed on programmes for teoh-
no|og|oa| oooperat|on. The Fourth Meet|ng
of the ASEAN M|n|sters for So|enoe and
Teohno|ogy he|d |n Man||a on 30-31 Janu-
ary 1989 adopted an ASEAN P|an of Aot|on
onSo|enoeandTeohno|ogyandagreedto
oreateanASEANSo|enoeFundw|thseed
oontr|but|onsfrommemberoountr|es.
Based on th|s, the Framework Agreement
onEnhano|ngASEANEoonom|oOoopera-
t|on of 1992 |no|udes prov|s|ons for teohno-
|og|oa| oooperat|on |n Art|o|es 2 and 3. Art|-
o|e 2 states: 'Member States sha|| enhanoe
oooperat|on |n the e|d of energy, |no|ud|ng
energy p|ann|ng, exohange of |nformat|on,
transferofteohno|ogy,researohanddeve|-
opment, manpower tra|n|ng, oonservat|on
an efo|enoy, and the exp|orat|on, produo-
t|on and supp|y of energy resouroes". Art|o|e
3 states: 'Member States agree to |norease
oooperat|on |n researoh and deve|opment,
teohno|ogytransfertour|smpromot|on,hu-
manresouroedeve|opmentandothereoo-
nom|o-re|atedareas.Fu||aooountsha||a|so
be taken of ex|st|ng ASEAN arrangements
|n th|s area."
S|noe then, ASEAN teohno|og|oa| oo||abo-
rat|on has been forma||y reoogn|zed |n var|-
ous ofo|a| agreements that dea| w|th par-
t|ou|araspeotsofSTl,severa|ofwh|ohare
out||ned here. A framework for |mp|ementa-
t|on|s|oose|y|noorporated|nsomeofthese
agreements (box 3.10}.
c. LatinAmericaandthe0aribbean
The |at|n Amer|oa and Oar|bbean reg|on
has been aot|ve|y promot|ng teohno|ogy
transferfora|ongt|me.TheAndeanGroup
ASEAN|asone
oft|emost
extens|vecoooe|at|on
o|og|ammesamong
deve|oo|ng-co0nt|y
|eg|ona||nteg|at|on
ag|eements,|nc|0d|ng
tec|no|ogycoooe|at|on
|nva||o0sa|eas.
63
CHAPTER III : ASSESSING ONGOING SOUTH-SOUTH TECHNOLOGICAL COLLABORATION
of oountr|es (the Bo||var|an Repub||o of ven-
ezue|a, Bo||v|a, Oo|omb|a, Oh||e, Eouador
and Peru}, for examp|e, adopted a oom-
mon set of po||o|es wh|oh were based on
the oentra| oonoept of a oommon reg|me
for the or|g|na| s|x oountr|es on FDl, |ndus-
tr|a| property and transfer of teohno|ogy (Ar-
t|o|es 30 and 31, Deo|s|on 85, May 1974,
oftheOomm|ss|onoftheOartagenaAgree-
ment}. ln broad terms, FDl po||o|es favoured
|nvestment|nseotora|areasoons|deredre|-
evantforthereg|on,part|ou|ar|ythosethat
brought|nfore|gnteohno|og|es.
var|ous other reg|ona| agreements, suoh as
those of the Oommon Market of the South
(Meroosur}, the Andean Oommun|ty and the
Oar|bbean Oommun|ty (OARlOOM}, oonta|n
prov|s|ons on teohno|og|oa| oo||aborat|on.
lnMeroosur,a|thoughtheredoesnotseem
to be any speo|o prov|s|on for |nterre-
g|ona|teohno|og|oa|oooperat|on,thereare
oo||aborat|ons among |nd|v|dua| member
oountr|es.There|sa|sotr|angu|ardeve|op-
mentoooperat|onw|ththeEuropeann|on
(E}, wh|oh |s |mp|emented through an of-
o|a| agreement under the lbero-Amer|oan
So|enoe and Teohno|ogy for Deve|opment
Programme, OYTED.
The Oartagena Agreement of the Andean
oommun|ty has a prov|s|on for teohno|og|-
oa| oooperat|on |n |ts Art|o|es 142 and 143
(deo|s|on 406 Ood|oat|on of the Andean
Subreg|ona| lntegrat|on Agreement}. There
are var|ous regu|at|ons that promote teoh-
no|og|oa|oo||aborat|on,suohasonaspeots
of b|od|vers|ty and |nd|genous know|edge.
The treaty estab||sh|ng OARlOOM a|so oa||s
for reg|ona| teohno|og|oa| oo||aborat|on.
Art|o|e 43 of Protooo|s lll and v amend|ng
theTreatyestab||sh|ngtheOar|bbeanOom-
mun|ty|no|udesteohno|og|oa|oo||aborat|on
prov|s|ons,part|ou|ar|yast|pu|at|ontopro-
moteoooperat|onamongmemberStates|n
R&D, as we|| as |n tra|n|ng, |nformat|on ex-
ohange, human resouroe mob|||ty, and pr|-
vateseotor|ntegrat|onofnewteohno|og|es.
8ox3.10: |mp|emeotat|oooItechoo|og|ca|co||aborat|oosw|th|oASAh
S|noe the 1992 Agreement on Enhano|ng ASEAN Eoonom|o Oooperat|on, some of the ear||er ASEAN agreements have been
amendedtoenhanoeoo||aborat|on|nso|enoeandteohno|ogy|nvar|ousseotors.Theseared|soussedbe|ow.
The Protooo| Amend|ng the Agreement on ASEAN Energy Oooperat|on of 1986 (|n 1995} further promotes teohno|og|oa| ooop-
erat|on on energy. lt speo|es that the range of oooperat|on w||| oons|st of p|ann|ng, deve|opment and human resouroes deve|op-
ment, |nformat|on exohange, and pr|vate seotor part|o|pat|on |n R&D and teohno|ogy transfer.
a
The ASEAN Memorandum of nderstand|ng on ASEAN Oooperat|on and Jo|nt Approaohes |n Agr|ou|ture and Forest Produots
Promot|on Soheme of 1994 |no|udes |ndustr|a| teohno|og|oa| oooperat|on |n the areas of human resouroe deve|opment, teohno|-
ogy deve|opment and transfer, and harmon|zat|on of standards.
b
On the |ssue of lPRs, the ASEAN Framework Agreement on lnte||eotua| Property Oooperat|on of 1995 (art|o|e 1} prov|des for
oooperat|onon|nte||eotua|propertyasameanstooontr|but|ngtothepromot|onofteohno|og|oa||nnovat|onandthetransferand
d|ssem|nat|onofteohno|ogy.
ln 1996, ASEAN formu|ated the 2007-2011 ASEAN P|an of Aot|on on So|enoe and Teohno|ogy (APAST} w|th a foous on s|x pr|or|ty
areas: d|saster management, b|ofue|s, open souroe systems, funot|ona| food, o||mate ohange and hea|th. ln Deoember 2010, the
S|xth lnforma| ASEAN M|n|ster|a| Meet|ng on So|enoe and Teohno|ogy |n Krab|, Tha||and, endorsed a framework for |ntrareg|ona|
oooperat|on on STl (the Krab| ln|t|at|ve}.
The Hano| P|an of Aot|on of 1998 (annex lll, seot|on ll} prov|des for ASEAN teohno|og|oa| oooperat|on on R&D, |no|ud|ng oonduot-
|ng oo||aborat|ve researoh, part|ou|ar|y |n the areas of 'new/|mproved teohno|og|es |n food, agr|ou|ture and forestry produot|on,
post-harvest and prooess|ng aot|v|t|es and shar|ng of researoh resu|ts and ava||ab|e teohno|ogy". The prov|s|on a|so st|pu|ates the
strengthen|ngofprogrammes|ntheseareasaswe||asre|atedteohno|ogytransferandtra|n|ng.
Souroe: NOTAD, based on the var|ous agreements.
a
The Agreement on ASEAN Energy Oooperat|on of 1986 |no|udes a prov|s|on on teohno|og|oa| oooperat|on |n the deve|opment of a||
forms of energy (renewab|e and non-renewab|e} |n Art|o|e 1, Genera| Prov|s|ons, |n the Protooo| Amend|ng the Agreement on ASEAN
Energy Oooperat|on 1995.
b
Enhanoement of Oompet|t|veness of ASEAN Produots (seot|on lv}, |n the Memorandum of nderstand|ng of ASEAN Oooperat|on and
Jo|nt Approaohes |n Agr|ou|ture and Forest Produots Promot|on Soheme (1994}.
7|e/at|nAme||caand
Ca||ooean|eg|on|as
oeenact|ve|yo|omot|ng
tec|no|ogyt|ansfe|fo|a
|ongt|me.
64 TECHNOLOGY AND INNOVATION REPORT 2012
ln 1998, the OARlOOM Heads of Govern-
mentadoptedareg|ona|so|enoeandteoh-
no|ogy po||oy to |ntegrate and harmon|ze
nat|ona|po||o|es.TheOar|bbeanOouno||for
So|enoe and Teohno|ogy was des|gnated
|n 2000 as the agenoy to ooord|nate and
|mp|ementthepo||oy.lnadd|t|on,areg|ona|
po||oy framework for aot|on was formu|ated
and pub||shed |n 2007.
3. Interregional cooperation
Therearevar|ous|nterreg|ona|South-South
as we|| as tr||atera| deve|opment ooopera-
t|on |n|t|at|ves, suoh as the Afr|oa-South
Amer|oa, As|an-Afr|oan and Afro-Arab oo-
operat|on agreements. One examp|e of |n-
terreg|ona|teohno|og|oa|oooperat|on|sthe
NewAs|an-Afr|oanStrateg|oPartnersh|pof
2006,desor|bedbe|ow.
a. hew Asian-African 5trategic
Partnership (hAA5P)
ln Apr|| 2005, |eaders of As|an and Afr|oan
oountr|es gathered |n Jakarta to oe|ebrate
the 50
th
ann|versary of the Bandung Oon-
ferenoe and |dent|fy ways to |norease oo-
operat|on between the two reg|ons. The
jo|nt m|n|ster|a| statement emerg|ng from
th|s oonferenoe oa||ed for oreat|ng a New
As|an-Afr|oan Strateg|o Partnersh|p a|med
at bu||d|ng a br|dge between the two re-
g|ons.Thepartnersh|p|s|ntendedtooover
three broad areas: po||t|oa| so||dar|ty, eoo-
nom|o oooperat|on and soo|o-ou|tura| re-
|at|ons. The NAASP framework refers to
teohno|og|oa|oooperat|onunderSeot|onB
onEoonom|oOooperat|on,wh|ohprov|des
for 'Foster|ng researoh and deve|opment
and the shar|ng of re|evant teohno|og|es,
|no|ud|ng nanoteohno|ogy, b|oteohno|ogy,
and vaoo|ne researoh".
b. Pragrammes af internatiana|
arganizatians ta suppart 5auth-
5auth techna|agica| ca||abaratian
lnternat|ona| organ|zat|ons suoh as the
n|ted Nat|ons Env|ronment Programme
(NEP}, NlDO, and NDP often part|o|-
pate|ntr|angu|ardeve|opmentoooperat|on
projeots |nvo|v|ng teohno|og|oa| oo||abora-
t|on. For |nstanoe, NEPs South-South
Oooperat|on Exohange Meohan|sm |s de-
s|gned to enhanoe NEPs ab|||ty to de-
||ver env|ronmenta| oapao|ty-bu||d|ng and
teohno|ogy support aot|v|t|es |n deve|op|ng
oountr|esandreg|onsoftheSouth.NEPs
supporttoSouth-Southoooperat|onaspart
of th|s |n|t|at|ve |s ourrent|y be|ng undertaken
throughtheBa||Strateg|oP|anforTeohno|-
ogySupportandOapao|tyBu||d|ng.
45
Another |n|t|at|ve, the NDP`s South-South
G|oba| Assets and Teohno|ogy Exohange
(SS-GATE}, oonneots buyers and se||ers
fromoountr|esoftheSouth,enab||ngthem
toobta|nneededteohno|og|es,assetsand
nano|ng |n a seoure env|ronment. SS-
GATE a|so a|ms to prov|de a p|atform for
exohang|ng |nformat|on and exper|enoes
for susta|nab|e deve|opment oentred on
teohno|ogy.
46
NlDO has estab||shed South-South Oo-
operat|onOentres|nafewse|eoteddeve|-
op|ng oountr|es to 'oontr|bute to the |ndus-
tr|a|deve|opmentandeoonom|ogrowthof
deve|op|ngoountr|esby|dent|fy|ngandmo-
b|||z|ng the teohn|oa|, nano|a|, manager|a|,
and other resouroes requ|red for projeots
and programmes w|th|n the framework of
South-South oooperat|on." The projeot ||sts
thefo||ow|ngprov|s|onsthatare|ntendedto
strengthen and fao|||tate South-South oo|-
|aborat|on: exohange of exper|enoes |n |n-
dustr|a| po||oy or|entat|on, formu|at|on, and
|mp|ementat|on; promot|on of |nst|tut|ona|
and enterpr|se network|ng for enhano|ng
produot|ve oapao|t|es, trade, teohno|ogy
and |nvestment ows; rep||oat|on of best
praot|oes for poverty reduot|on through
|ndustr|a| deve|opment and grassroots |n-
novat|onsserv|ngasrura|growth|mpu|ses;
strengthen|ngofnat|ona|and|ooa||nnova-
t|on systems for us|ng modern teohno|o-
g|es;enhano|ngdomest|ooapao|ty-bu||d|ng
and adapt|ve oapab|||t|es to oommero|a|-
|ze new know|edge; promot|on of reg|ona|
trade and |nvestments; and promot|on of
reg|ona||ntegrat|on.
47
lnternat|ona|ageno|esa|sop|ayaro|e|nfa-
o|||tat|ngorsupport|ngthetransferofaw|de
var|ety of suooessfu| approaohes to other
deve|op|ng oountr|es, suoh as the ||ght|ng
7|e|ea|eva||o0s
|nte||eg|ona|So0t|-
So0t|aswe||ast|||ate|a|
deve|ooment
coooe|at|on|n|t|at|ves.
/nte|nat|ona|
o|gan|zat|onss0c|as
t|eUn|tedNat|ons
Env||onmentP|og|amme
(UNEPI,UN/DO,and
UNDPoftenoa|t|c|oate
|nt||ang0|a|
deve|ooment
coooe|at|ono|o|ects
|nvo|v|ngtec|no|og|ca|
co||aoo|at|on.
65
CHAPTER III : ASSESSING ONGOING SOUTH-SOUTH TECHNOLOGICAL COLLABORATION
a B||||on ||ves projeot d|soussed ear||er on |n
th|sohapter.lnadd|t|on,severa||nternat|on-
a| ageno|es have a |arge number of teoh-
n|oa| ass|stanoe projeots wh|oh may a|so
havean|mpaotonteohno|og|oa||earn|ng.
E. IMPACTS OF
ONGOING ACTIVITIES
ON TECHNOLOGY
AND INNOVATION
CAPACITY
Theforego|ngseot|onshaveprov|dedsome
examp|es of ongo|ng South-South and tr|-
angu|aroo||aborat|on|nteohno|ogyand|n-
novat|on. Wh||e the ex|st|ng ||terature (e.g.
NDP, 2009; Oommonwea|th Seoretar|at,
2011; N, 2011} prov|des more examp|es
of South-South oooperat|on |n genera|, |t
|s not o|ear to what extent they dea| w|th
teohno|ogy and |nnovat|on or, |f they do,
what k|nds of aot|v|t|es are undertaken. Th|s
ohapter has sought to || th|s gap; wh||e the
examp|es |t desor|bes are not exhaust|ve,
they prov|de a g||mpse of the k|nds of |n|t|a-
t|ves that ex|st |n the ourrent oontext and
the dr|vers of ongo|ng aot|v|t|es. Some of
the|r|mpaotsared|soussedhere.
As shown |n ohapter ll, teohno|ogy and |n-
novat|on patterns are not |ndependent of
ongo|ng trade and |nvestment patterns of
oountr|es,andareoftenaoomponentw|th|n
ex|st|ng re|at|ons. The rev|ew oonduoted |n
th|sohaptera|soshowsthat,wh||ethereare
a number of |nstanoes of ongo|ng teohno-
|og|oa| oo||aborat|on, they foous |arge|y on
pharmaoeut|oa|s and hea|th, or on RETs,
o||mate ohange and agr|ou|ture. These oo|-
|aborat|ons are dr|ven to a |arge extent by
government|noent|ves,suohas|nvestment
|noent|ves (e.g. lnd|a-ganda, and Eth|op|a-
Oh|na oo||aborat|ons}, tax rebates and pur-
ohaseoomm|tments.The|ower|eve|oflPR
proteot|on|ngandahasa|sop|ayedaro|e
|ntheoaseofthelnd|a-gandajo|ntventure
for the produot|on of ARv and ant|-ma|ar|a
drugs. ln renewab|e energy, the oases d|s-
oussedshowthat,|nadd|t|ontogovernment
|noent|ves, market prospeots have p|ayed a
ro|e |n the deo|s|ons of rms to enter |nto
jo|nt ventures. lndeed, market |noent|ves
p|ay an |mportant ro|e |n strateg|o oho|oes
of rms genera||y, as noted |n the ||terature
(see, for examp|e, Soott, 1994; DFlD, 2009;
|anjouw, 2005}. F|rms |n deve|op|ng ooun-
tr|esa|sooftenfaoemoreoompet|t|vepres-
sure|nseotorssuohaspharmaoeut|oa|sand
energy, g|ven the teohno|og|oa| and nano|a|
strengths of rms |n deve|oped oountr|es.
The former therefore seek to expand the|r
markets through jo|nt ventures abroad. For
a|| these reasons, there |s need for greater
support for |nter-rm oo||aborat|on from the
governments of a|| deve|op|ng oountr|es,
part|ou|ar|y those that have the more teoh-
no|og|oa||y advanoed rms.
Aseoondsetof|ssuesar|sesw|ththegrowth
of ODA from some non-DAO oountr|es. As
ment|oned ear||er |n th|s ohapter, ve ooun-
tr|es - Saud| Arab|a, Oh|na, the Bo||var|an
Repub||o of venezue|a, lnd|a and Braz|| |n
that order of magn|tude of ass|stanoe - ao-
oounted for 79 per oent of a|d from non-
DAO members |n 2008 (OEOD, 2010}. The
foous of non-DAO donor oountr|es var|es,
but on the who|e oountr|es suoh as Braz||,
lnd|a and Mex|oo g|ve pr|or|ty to so|ent|o
oooperat|on|nagr|ou|ture,pharmaoeut|oa|s
and hea|th, energy, env|ronmenta| and |n-
dustr|a| deve|opment. Wh||e governments
arefoous|ng|noreas|ng|yonstruotur|ngoo|-
|aborat|ons |n teohno|ogy and |nnovat|on,
theextenttowh|ohtheteohn|oa|ass|stanoe
programmes (wh|oh foous |arge|y on so|-
ent|o oo||aborat|on} |no|ude teohno|og|oa|
oapao|ty-bu||d|ng |s d|fou|t to assess from
the data ourrent|y ava||ab|e. The reg|ona|
pr|or|t|es of oountr|es a|so vary. Braz||, for
|nstanoe, foouses |n part|ou|ar on Afr|oa,
whereas Mex|oo has a strong reg|ona| fo-
ous on other |at|n Amer|oan oountr|es. The
expans|on of some deve|op|ng oountr|es
deve|opment ass|stanoe programmes to
Afr|oanandAs|anoountr|es|sareoentphe-
nomenon,wh|oh|sexpeotedto|norease|n
the future. Furthermore, some oountr|es,
suohasSaud|Arab|a,foousmuoh|esson
teohno|og|oa| oo||aborat|on |n the|r overa||
deve|opmentass|stanoeprogrammes.
48
Arev|ewofthegovernment|n|t|at|vesana-
|ysed |n the |ast part of th|s ohapter |nd|-
7|eseco||aoo|at|ons
a|ed||ventoa|a|ge
extentoygove|nment
|ncent|ves.
...t|eextenttow||c|
t|etec|n|ca|ass|stance
o|og|ammes|nc|0de
tec|no|og|ca|
caoac|ty-o0||d|ng
|s d|fc0|t to assess
f|omt|edata
c0||ent|yava||ao|e.
W|||egove|nmentsa|e
foc0s|ng|nc|eas|ng|y
onst|0ct0||ng
co||aoo|at|ons|n
tec|no|ogyand
|nnovat|on...
66 TECHNOLOGY AND INNOVATION REPORT 2012
oates some |mportant resu|ts. The rst |s
that, |noreas|ng|y, emerg|ng oountr|es and
other deve|op|ng oountr|es are oons|der-
|ng teohno|ogy and |nnovat|on as pr|or|ty
areas |n wh|oh to strengthen oo||aborat|on
w|th other deve|op|ng oountr|es and |DOs
|ntheoom|ngyears.Th|sgreaterfoouson
teohno|ogy and |nnovat|on oan be attr|b-
utedtotheongo|ngd|soourseonteohno|-
ogyaooessandoapao|ty-bu||d|ngatthe|n-
ternat|ona||eve|,part|ou|ar|ya|soaspartof
the North-South d|soourse. Th|s |s a pos|-
t|ve deve|opment, |mp|y|ng greater pub||o-
seotor-dr|venSouth-Southoo||aborat|onon
teohno|ogyand|nnovat|on.Butatthesame
t|me,therev|ewofvar|ousex|st|ngdeo|ara-
t|ons and reg|ona| agreements shows the
fo||ow|ng:
- On|y a few agreements refer speo|-
oa||ytoSouth-Southoo||aborat|onfor
teohno|og|oa| |nnovat|on, oapao|ty-
bu||d|ng and know|edge aooumu|a-
t|on. For |nstanoe, these aspeots
are not referred to |n Afr|oas Oon-
so||dated So|enoe and Teohno|ogy
P|anofAot|onof2006.Areasonfor
th|s m|ght be that |t |s on|y re|at|ve|y
reoent|y that suoh areas of South-
South oo||aborat|on have beoome
a s|gn|oant opt|on for deve|op|ng
oountr|es.
- The agreements often oonta|n prov|-
s|ons for greater oooperat|on |n so|-
enoeandteohno|ogyforvar|ousseo-
tors,but|mp|ementat|ontendstobe
rather||m|ted|ndepthandsoope.A
oase |n po|nt |s NEPAD (d|soussed |n
th|s ohapter}, where member ooun-
tr|esareoa|||ngforgreaterownersh|p
|n th|s regard. ln part|ou|ar, there |s
muoh emphas|s on what areas re-
qu|re oo||aborat|on, but |ess on how
th|s|stobeoonduoted.
- F|na||y, desp|te the p|ethora of gov-
ernment|n|t|at|ves,thereseemstobe
||tt|e ooord|nat|on between govern-
menta| po||o|es and aot|ons by rms
|ndeve|op|ngoountr|es.A||deve|op-
|ng oountr|es stand to benet from
suoh teohno|og|oa| oo||aborat|on but
do not have o|ear po||oy ||nkages to
promotethe|mpaotofsuoh|n|t|at|ves
on the|r |nnovat|on systems. Th|s |s
a|so true of oountr|es |n Afr|oa and
otherreg|onsofthedeve|op|ngwor|d.
Wh||e there are many reg|ona| |n|t|a-
t|ves on var|ous aspeots of so|enoe,
teohno|ogy and |nnovat|on, |t seems
thatthepo||oy|noent|vesgrantedby
governments |n emerg|ng oountr|es
and other deve|op|ng oountr|es are
not o|ose|y or systemat|oa||y ||nked to
thesebroaderreg|ona|po||oyv|s|ons.
Juxtapos|ng these resu|ts w|th the broader
trendsana|ysed|nohapterllofth|sReport,
|eadstotheoono|us|onthat,a|thoughthere
|s s|gn|oant potent|a| for South-South oo|-
|aborat|on |n teohno|ogy and |nnovat|on,
th|s |s not be|ng harnessed. Rather, our-
rent trends seem to po|nt towards a pre-
ponderanoeofteohno|og|oa|oo||aborat|ons
w|th|nasma||ersubsetofdeve|op|ngooun-
tr|es. These oo||aborat|ons are based on a
teohno|og|oa| g|ve and take as oono|uded
|n ohapter ll, based on the r|s|ng teohno|-
ogy absorpt|ve oapab|||t|es |n some of the
deve|op|ng oountr|es. The ana|ys|s |n th|s
ohapter shows that wh||e there |s a trend
towards greater deve|opment ass|stanoe
and an |noreas|ng emphas|s on oo||abora-
t|on |n teohno|og|oa| |earn|ng |n govern-
ment pronounoements, greater efforts are
neededfor|mp|ementat|on.Ex|st|ngoases
ofSouth-Southteohno|og|oa|oo||aborat|on
presented|nth|sohaptershowthat,when
des|gned appropr|ate|y, suoh oo||abora-
t|onoan|ndeed|eadtooapao|ty-bu||d|ng|n
oountr|es.Henoe,|t|s|mperat|vetoensure
that suoh an effort |s promoted |n a more
systemat|owaythroughooherentpo||o|es.
F. CHAPTER SUMMARY
Th|s ohapter has ana|ysed South-South
oo||aborat|on |n teohno|ogy and |nnovat|on
|n|n|t|at|vesbyboththepr|vateandpub||o
seotors. lt shows that |nter-rm teohno|ogy-
re|ated |n|t|at|ves seem to be fewer and
are ma|n|y mot|vated by eoonom|o oon-
s|derat|ons or express government |noen-
t|ves, or both. Seoond, pub||o seotor and
7|eag|eementsoften
conta|no|ov|s|onsfo|
g|eate|coooe|at|on|n
sc|enceandtec|no|ogy
fo|va||o0ssecto|s,o0t
|mo|ementat|ontends
tooe|at|e|||m|ted|n
deot|andscooe.
67
CHAPTER III : ASSESSING ONGOING SOUTH-SOUTH TECHNOLOGICAL COLLABORATION
government-dr|venoo||aborat|onsaremore
w|de-rang|ng |n nature, but at the same
t|me they foous more on so|ent|o and teoh-
n|oa| aspeots rather than on teohno|og|oa|
oo||aborat|on or rm-|eve| |earn|ng. As the
ana|ys|sshows,therearesevera|teohn|oa|
ass|stanoe|n|t|at|ves|nthew|den|ngdeve|-
opment support programmes of emerg|ng
and other deve|op|ng oountr|es, but these
needtobed|st|ngu|shedfromteohno|og|oa|
oo||aborat|on. Neverthe|ess, these so|ent|o
and teohn|oa| oo||aborat|ons are very |m-
portant for strengthen|ng the genera| sk|||s
baseofthereo|p|entoountr|es.
There may be soope for newer forms of
|noent|ves and a more oonoerted effort to
promoteSouth-Southoo||aborat|on|nteoh-
no|ogyand|nnovat|on|nanumberofways.
For|nstanoe,oo||aborat|onoou|dtargetso|-
ent|o tra|n|ng and oapao|ty-bu||d|ng |n un|-
vers|t|esandresearohoentresofexoe||enoe.
ln add|t|on, |t oou|d promote des|gn and
produot deve|opment aot|v|t|es of the k|nd
that form the baokbone of rm-|eve| |nnova-
t|on.Th|sohapterhasa|sopresentedsome
majorgovernment|n|t|at|ves|nth|sareathat
oou|d form the bas|s of pr|or|t|z|ng po||oy ar-
easbydeve|op|ngoountr|es,|ntheprooess
of enaot|ng oonorete po||o|es. lt nds that
manyofthese|n|t|at|vesoou|dbetterserve
the needs of deve|op|ng oountr|es when
theyo|ear|yst|pu|ateSouth-Southoo||abo-
rat|on for teohno|og|oa| oapao|ty-bu||d|ng,
andaremoreo|ose|yooord|natedw|thgov-
ernmenta| po||oy frameworks and projeots
w|th|n |nd|v|dua| oountr|es. The ma|n oon-
o|us|onthatoanbedrawnfromth|sohapter
|sthatthere|saneedforamoreoohes|ve
po||oy framework on South-South teohno|-
ogy and |nnovat|on that ensures that oo|-
|aborat|ononteohno|og|oa||earn|ngand|n-
novat|ondoes|ndeedbeoomeapr|or|ty|n
expand|ngSouth-Southexohanges.
Deso|tet|eo|et|o|aof
gove|nment|n|t|at|ves,
t|e|eseemstooe||tt|e
coo|d|nat|onoetween
oo||c|esandact|ons
oy |ms |n deve|oo|ng
co0nt||es.
68 TECHNOLOGY AND INNOVATION REPORT 2012
NOTES
1. Th|ssummary|sbasedonGeh|SampathandSpennemann
(2011}.
2. Th|s summary |s based on B|adg|eng et a|., (2011}.
3. EHGOs form the outer oas|ngs used |n p|||s for ora|
oonsumpt|on.
4. Th|sseot|on|sbasedon|nformat|onoonta|ned|nThorsten-
dott|r et a|. (2010}.
5. Some other stud|es report d|fferent ODA gures for non-DAO
oountr|es. For |nstanoe, aooord|ng to the Oommonwea|th
Seoretar|at (2011}, South-South deve|opment oooperat|on
was est|mated to be worth $15.3 b||||on |n 2008, aooount|ng
for a|most 10per oent of tota| g|oba| deve|opment ooopera-
t|on.
6. Braz||`s deve|opment oooperat|on through the ABO has been
expand|ng: between 2005 and 2009, |t d|spensed a tota| of
$1.7 b||||on |n teohn|oa| ass|stanoe (lPEA et a|., 2010}.
7. Aooord|ng to ABO (2010}, these oountr|es are: A|ger|a, An-
go|a, Ben|n, Botswana, Oameroon, Oape verde, Ghana,
Gu|nea-B|ssau, Kenya, Ma||, Moroooo, Mozamb|que, N|ge-
r|a, So Tome and Pr|no|pe, Togo and the n|ted Repub||o
of Tanzan|a.
8. A good examp|e |s Braz||`s oooperat|on w|th Ouba |n the
hea|thseotor,a|medatpromot|ng|ooa|oapao|ty|nAfr|oafor
the treatment of Hlv/AlDS, or w|th Japan |n Bo||v|a, onoe
aga|n foous|ng on the treatment of Hlv/AlDS.
9. See:http://www.embrapa.br/eng||sh/.
10. Embrapa opened |ts Afr|oan headquarters |n Aoora, Ghana |n
2006toooord|natea||aot|v|t|esw|thAfr|oanpartners|nagr|-
ou|tura|deve|opment.Furtherooord|nat|ngun|tsofEmbrapa
nowex|st|neaohoountrywherethereareongo|ngprojeots.
11. Souroe: http://www.embrapa.br/a_embrapa/m|ssao_e_atu-
aoao.
12. ln aooordanoe w|th an amendment to Art|o|e 1 of the |aw that
oreated Embrapa wh|oh a||ows the organ|zat|on to exero|se
|ts aot|v|t|es outs|de Braz||; see: http://www.southsouth.|nfo/
prof||es/b|ogs/braz|||an-government-to-|aunoh-embrapa-
|nternat|ona|-by-the-end.
13. ln add|t|on to the struotur|ng projeots, Braz|| has projeots
throughoutAfr|oathatfoousontra|n|ngandagr|ou|tura|re-
searoh.Theseare|mp|ementedthroughb||atera|partnersh|p
agreements w|th Ango|a, Oape verde, the Demoorat|o Re-
pub||oofOongo,Ghana,Gu|nea-B|ssau,N|ger|a,Togoand
the n|ted Repub||o of Tanzan|a.
14. Projeotsarese|eotedthroughaoompet|t|veprooessandthe
P|atform prov|des fund|ng of up to $80,000 per projeot.
15. See: http://porta|.ooruz.br/pt-br/oontent/estatuto.
16. F|ooruz prev|ous|y gave pr|or|ty to teohno|ogy transfer, and
soughtto|norease|tsown|n-houseresearohandmanufao-
tur|ngoapao|t|esthroughpartnersh|psw|ththepr|vateseo-
tor. One examp|e |s the strengthen|ng of |ts vaoo|ne manu-
faotur|ng oapao|ty (e.g. w|th G|axoSm|thK||ne |n 1985}.
17. lt |s est|mated that about 120,000 Braz|||an enterpr|ses oon-
tr|bute nano|ng to SENAl`s aot|v|t|es.
18. See:http://|teo.mea.gov.|n/.
19. Oountr|es|no|ude:Argent|na;Bang|adesh,theBo||var|an
Repub||o of venezue|a, Braz||, Oh|na, Oo|omb|a, Oroat|a,
Ouba,Egypt,lndones|a,thels|am|oRepub||ooflran,the
Demoorat|o Peop|e`s Repub||o of Korea, the |ao Peo-
p|e`s Demoorat|o Repub||o, |ebanon, ||bya, Ma|ays|a,
Maur|t|us, Mex|oo, Mongo||a, Mozamb|que, Myanmar,
Nam|b|a, Nepa|, Oman, Peru, the Ph|||pp|nes, the Re-
pub||o of Korea, S|ngapore, South Afr|oa, Sr| |anka, Su-
dan, the Syr|an Arab Repub||o, Taj|k|stan, Tha||and, Tr|n|-
dad and Tobago, Tun|s|a, Turkey, zbek|stan, v|et Nam,
Yemen and Zamb|a.
20. TOl|, a pub||o|y funded oompany, |s respons|b|e for sett|ng
uptheneoessary|nfrastruoturefortheprojeotandfororgan-
|z|ng tra|n|ng programmes at the reg|ona| oentres |n Afr|oa |n
te|eooms and |n |nformat|on teohno|ogy (lT} for paramed|-
oa| staff des|gnated to operate the equ|pment/network on a
day-to-daybas|s.
21. The oountr|es are Ben|n, Burk|na Faso, Gabon, Gamb|a,
Ghana, Eth|op|a, Maur|t|us, N|ger|a, Rwanda, Senega| and
Seyohe||es.
22. A s|m||ar projeot |n Ma|ays|a, the Ma|ay Genome Re-Se-
queno|ng, has been |n|t|ated w|th n|vers|t| Tekno|og| MARA
(|TM} |n Se|angor.
23. As |n lnd|a, the Sr| |ankan Genome var|at|on Database has
beendeve|oped,wh|oh|sadatabaseofgenet|o|nformat|on
|nthe|anguagesofthemajorethn|ogroups.Thedatabase
ourrent|y oonta|ns |nformat|on on genotype frequeno|es of 34
genom|o var|at|ons enoompass|ng 14 genes that are oon-
s|dered med|oa||y |mportant to Sr| |anka. The database was
madeaooess|b|etoa||and|ta|soaooeptssubm|ss|onsfrom
theresearohoommun|ty.ltthusoffersresearohersando||n|-
o|ans standard|zed aooess to the speotrum of genet|o var|a-
t|ons|nthepopu|at|on.
24. The oharg|ng stat|ons are operated and managed by |ooa|
entrepreneurs tra|ned under the |n|t|at|ve, who rent out the
so|ar |anterns to |ooa| rura| |nhab|tants every even|ng at an
affordab|eoost.Th|sfee-for-serv|oemode|thusenab|esthe
poorestsoo|o-eoonom|ogroupstoga|naooesstoo|eanen-
ergy.
25. Based on |nformat|on from the Oentre of Oh|nese Stud|es
(2010}.
26. Based on NDP (2009}.
27. Mandated by Oonst|tut|ona| Art|o|e 89, , the |OlD prov|des
the Government of Mex|oo w|th the neoessary |ega| |nstru-
ments to oonduot both, donor and reo|p|ent aot|v|t|es re-
|atedtodeve|opmentoooperat|onaot|onsandprogrammes
between Mex|oo and other oountr|es. lt a|so prov|des for
oooperat|on w|th |nternat|ona| organ|zat|ons through the
exohange of resouroes, goods and eduoat|ona|, ou|tura|,
teohn|oa|, so|ent|o, eoonom|o and nano|a| know|edge and
exper|enoes (Art. 1}.
69
CHAPTER III : ASSESSING ONGOING SOUTH-SOUTH TECHNOLOGICAL COLLABORATION
28. Mex|oosdeve|opmentoooperat|ong|vespr|or|tytothefo|-
|ow|ngareas:povertya||ev|at|on,d|sasterprevent|on,reduo-
|ng |nequa||ty and prevent|on of soo|a| exo|us|on, promot|ng
eduoat|on and ou|ture, address|ng |ssues re|at|ng to the
env|ronment and o||mate ohange, so|enoe and teohno|ogy,
pub||osafetyandhea|th.
29. Two add|t|ona| oomponents of the Mex|oan Oooperat|on
system are the lnternat|ona| Oooperat|on Fund (FONOlD},
wh|oh |ntegrates the nano|a| resouroes for |nternat|ona|
deve|opment oooperat|on, and the lnternat|ona| Ooopera-
t|on Reg|stry (REOlD}, wh|oh prov|des a|| the |nformat|on,
amountsandeva|uat|onsofMex|oos|nternat|ona|deve|op-
ment oooperat|on projeots (SRE-AMEOlD, 2011}.
30. Deo|arat|on of the Fourth BRlOS Summ|t: BRlOS Partnersh|p
for Stab|||ty, Seour|ty and Prosper|ty, 29 Maroh 2012; ava||-
ab|eat:http://www.br|os|nd|a.|n/.
31. See BRlOS Summ|t, De|h| Deo|arat|on, Oouno|| for Fore|gn
Re|at|ons. Ava||ab|e at: http://www.ofr.org/braz||/br|os-
summ|t-de|h|-deo|arat|on/p27805.
32. The lstanbu| Deo|arat|on was agreed upon at N |DO lv,
lstanbu|, May 2011.
33. The P|an was rst formu|ated at the meet|ng of agr|ou|tura|
m|n|sters |n Mosoow on 26 Maroh 2010, and a oonsensus
on |ts |mp|ementat|on framework was agreed |n the rst
meet|ng of the BRlOS Agr|ou|tura| Oooperat|on Work|ng
Group |n Be|j|ng, Oh|na |n 2011.
34. See: http://www.|bsa-tr||atera|.org/|ndex.php?opt|on=oom_
oontent&v|ew=art|o|e&|d=87&ltem|d=1.
35. Paragraph 25 of the Bras|||a Deo|arat|on desor|bes the grow-
|ng trends s|noe the Buenos A|res P|an of Aot|on (1978},
|no|ud|ng 'the shar|ng of know|edge and exper|enoes, tra|n-
|ng, teohno|ogy transfer, nano|a| and monetary oooperat|on
and |n-k|nd oontr|but|ons" (see: http://www.|tamaraty.gov.
br/temas-ma|s-|nformaooes/sa|ba-ma|s-|bas/dooumentos-
em|t|dos-pe|os-ohefes-de-estado-e-de/4th-|bsa-summ|t-
deo|arat|on}.
36. Paragraphs 20 and 21 of the Bras|||a Deo|arat|on.
37. http://www.dfa.gov.za/doos/2004/|bsa0305a.htm
38. See: The lstanbu| Deo|arat|on on the lnnovat|on Network.
39. lstanbu| Deo|arat|on, N|DO lv.
40. A oonorete outoome of NEPAD`s work has been the |mp|e-
mentat|on of the Pharmaoeut|oa| Manufaotur|ng P|an for Af-
r|oa.
41. There are severa| suoh programmes. One key A pro-
grammethat|sprogress|ng|stheestab||shmentofaPanAf-
r|oan n|vers|ty (PA} for Afr|oa oomposed of ve un|vers|t|es
aoross the ve reg|ons of Afr|oa (East, West, North, South
and Oentra|}. The PA w||| |no|ude the n|vers|ty of lbadan
|n N|ger|a (oover|ng earth and ||fe so|enoes}, the Jomo Keny-
atta n|vers|ty of Agr|ou|ture |n Kenya (oover|ng STl}, a new
n|vers|ty |n A|g|ers, A|ger|a (oover|ng water, energy so|enoes
and o||mate ohange}, the n|vers|ty of Yaounde |n Oameroon
(oover|ng governanoe, human|t|es and soo|a| so|enoes} and
the un|vers|ty of Ste||enbosoh, South Afr|oa (oover|ng spaoe
so|enoes}.
42. See: Treaty Estab||sh|ng AEO, Annex lll, Art|o|e 51, So|enoe
and Teohno|ogy. Ava||ab|e at: At: http://www4.wor|dbank.
org/afr/ssatp/Resouroes/HTM|/|ega|_rev|ew/Annexes/An-
nexes%20lll/Annex%20lll-03.pdf
43. Art|o|e 27, So|enoe and Teohno|ogy, |n the treaty estab||sh|ng
EOOWAS, Annex lll. Ava||ab|e at: http://www.afr|map.org/
eng||sh/|mages/treaty/EOOWAS%20Treaty.pdf
44. Art|o|e 21 of Treaty Estab||sh|ng SADO, Annex lll. Ava||ab|e
at: http://www.|ss.oo.za/AF/RegOrg/un|ty_to_un|on/pdfs/
sado/8SADO_Treaty.pdf
45. Th|s |n|t|at|ve |s part of the Ba|| Aot|on P|an of 2010 of the
n|ted Nat|ons Framework Oonvent|on on O||mate Ohange
(NFOOO}. The Ba|| Strateg|o P|an serves as an umbre||a
framework for 'ooherent, ooord|nated and effeot|ve de||very
of env|ronmenta| oapao|ty-bu||d|ng and teohn|oa| support
aot|v|t|es" |n response to we||-dened oountry pr|or|t|es and
needs". See: http://www.unep.org/south-south-ooopera-
t|on/unepsso/h|story.aspx.
46. NDP`s South-South G|oba| Assets and Teohno|ogy Ex-
ohange (SS-GATE} p|atform ava||ab|e at: ssgate.sso.undp.
org.
47. See: http://www.un|do.org/|ndex.php?|d=4915.
48. Saud| Arab|a spends 20 per oent of |ts ODA on eduoa-
t|on that fa||s under so|ent|o oooperat|on (see for examp|e,
OEOD, 2010}.
HOW CAN THE SOUTH
PROVIDE A NEW
IMPETUS FOR BUILDING
INNOVATIVE CAPACITY? 4
73
CHAPTER IV : HOW CAN THE SOUTH PROVIDE A NEW IMPETUS FOR BUILDING INNOVATIVE CAPACITY?
CHAPTER IV
HOW CAN THE SOUTH PROVIDE
A NEW IMPETUS FOR BUILDING
INNOVATIVE CAPACITY?
A. INTRODUCTION
The key |ns|ghts ga|ned from the preoed|ng
ohapters oan be summar|zed as fo||ows.
F|rst,theSouthhasbeoomeamajorexport-
erofteohno|ogy-|ntens|veoap|ta|goodsto
var|ous deve|op|ng oountr|es. However, at
present, South-South trade re|at|onsh|ps
are dom|nated by oountr|es that have the
oapao|ty to absorb and part|o|pate |n the
oreat|on of new teohno|og|oa| produots
andprooesses.
1
Asaresu|t,mostofthese
transaot|ons ooour between emerg|ng
oountr|es themse|ves, and are determ|ned
by the ab|||ty of partners to engage |n a qu|d
pro quo prooess of oo||aborat|on. That |s
to say, teohno|og|oa| oo||aborat|on desp|te
be|ngan|ntr|ns|opartofthesetransaot|ons
|s of a k|nd where the partners undertake
an exohange of the|r re|at|ve|y d|fferent sk|||s
and know|edge to enhanoe the|r oompet|-
t|vebase.
Seoond,there|ssome|eve|ofteohno|og|oa|
oo||aborat|onbetweendeve|op|ngoountr|es
that feeds |nto teohno|og|oa| |earn|ng pro-
oesses and he|ps to bu||d |nnovat|on oa-
pao|ty. As ohapters ll and lll have shown,
theseexohangeshavebeenoontr|but|ng|n
var|ous ways to bu||d|ng |nnovat|on oapa-
b|||t|es |n the deve|op|ng wor|d. However,
a |arge number of deve|op|ng oountr|es,
part|ou|ar|y |DOs, are ourrent|y exo|uded
from most South-South teohno|og|oa| ex-
ohanges beoause they |aok the neoessary
absorpt|ve oapab|||t|es that wou|d enab|e
themtopart|o|pate|nsuohexohanges.
Th|rd, trends ana|ysed |n ohapter ll of th|s
Reportshowthatongo|ngSouth-Southoo-
operat|on oou|d potent|a||y prov|de greater
opportun|t|es for deve|op|ng oountr|es
and |DOs to benet teohno|og|oa||y. For
examp|e, the ana|ys|s on FDl shows that,
desp|te |ts ourrent reg|ona| oonoentrat|on,
South-South FDl oou|d be more versat||e
|n oomb|n|ng w|th oapab|||ty-bu||d|ng ap-
proaohes. Examp|es presented |n ohapter
lll a|so show that rms from deve|op|ng
oountr|es seek|ng to expand |nto newer
markets oou|d be s|gn|oant partners for
FDl that promotes sk|||s deve|opment and
the aoqu|s|t|on of tao|t know-how. The r|s-
|ng share of FDl from deve|op|ng oountr|es
|nto seotors suoh as serv|oes a|so oreates
opportun|t|es for teohno|og|oa| oo||abora-
t|on|ntheseseotors.
2
Fourth, as shown |n ohapter lll, there are
qu|te a few |nterest|ng oases of so|ent|o
and teohn|oa| oo||aborat|on, both pub||o-
seotor-based and pr|vate-seotor-|ed, but
thesedonotseemtodemonstratethefu||
potent|a| of South-South oo||aborat|on for
teohno|og|oa| |earn|ng and |nnovat|on. lt
oou|d be argued that s|noe South-South
teohno|og|oa| oo||aborat|on |s st||| |n |ts
|n|t|a| phase, there |s a |aok of ooord|nated
efforts.However,g|venthegrow|ng|mpor-
tanoeofteohno|ogyand|nnovat|on|nthe
g|oba||andsoapeandtheneedtoexp|ore
a|| s|gn|oant means of promot|ng teoh-
no|og|oa| ohange |n deve|op|ng oountr|es,
|t seems appropr|ate to address the key
oha||enge.
How |s |t poss|b|e to ensure that the em-
phas|s |n government |n|t|at|ves and p|at-
forms on South-South oo||aborat|on on
teohno|ogyand|nnovat|onresu|ts|ngreater
teohno|og|oa| |earn|ng? Ensur|ng th|s oa||s
for measures that promote o|oser ||nkages
Howcanwe
toens0|et|att|e
emo|as|s|ngove|nment
|n|t|at|vesando|atfo|ms
onSo0t|-So0t|
co||aoo|at|onon
tec|no|ogyand
|nnovat|on|es0|ts|n
g|eate|tec|no|og|ca|
|ea|n|ng?
74 TECHNOLOGY AND INNOVATION REPORT 2012
between government agenda-sett|ng and
ongo|ng so|ent|o and teohno|og|oa| oo|-
|aborat|on as we|| as |nter-rm teohno|og|oa|
a|||anoes.
Manyofthepert|nent|ssues|ntheemerg-
|ng |andsoape of South-South teohno|og|-
oa|exohangeares|m||artothosethatstand
out |n the debates on North-South teoh-
no|og|oa| exohange. To beg|n w|th, ||m|ted
teohno|og|oa| oapab|||t|es |n some ooun-
tr|es oause them to be marg|na||zed |n both
South-Southand|nternat|ona|trade.Those
oountr|es that have a fa|r |eve| of teohno-
|og|oa| oapab|||t|es are ab|e to make better
use of trad|ng opportun|t|es to export and
further d|fferent|ate the|r export baskets
through teohno|og|oa| upgrad|ng opportu-
n|t|es|nbothSouth-Southand|nternat|ona|
exohanges. On the other hand, speo|o
patternsofg|oba|demandhaveresu|ted|n
thefurtherentrenohmentofmanydeve|op-
|ng oountr|es |n seotors where poss|b|||t|es
for teohno|og|oa| speo|a||zat|on are ||m|ted.
These patterns of g|oba| demand do not
automat|oa||y |ead to teohno|og|oa| up-
grad|ng of the k|nd that |s oonduo|ve to
struotura| ohange and overa|| eoonom|o
deve|opment. Th|s |s part|ou|ar|y observ-
ab|e |n the oase of |DOs |n the |nternat|ona|
trad|ng system (see, for examp|e, NO-
TAD, 2010a}. Requ|rements |mposed by
the|nternat|ona|trad|ngsystemexaoerbate
these effeots through the overa|| |oss of
po||oy spaoe, tar|ff measures, and the use
of proteot|on measures (NOTAD, 2002;
2006b}. Th|s mutua||y damag|ng |nterfaoe
betweentradeandteohno|ogyneedstobe
addressedurgent|y.
How oan the South be a true partner |n
efforts to promote |nnovat|on and teohno-
|og|oa||earn|ng|ndeve|op|ngoountr|es?ls|t
poss|b|eto|everagetheongo|ngoatoh-up
prooesses tak|ng p|aoe |n some of the de-
ve|op|ngoountr|estofao|||tate|earn|ngand
oapao|ty-bu||d|ng |n the other oountr|es?
ln some ways, these quest|ons |ead to the
more genera| quest|ons be|ng exp|ored by
the ||terature on eoonom|o oonvergenoe
and the y|ng geese hypothes|s and the|r
app||oab|||tytodeve|op|ngoountr|es.But|n
other ways, these quest|ons are more nu-
anoed and are fooused on teohno|og|oa|
deve|opment and the grow|ng teohno|og|-
oa|d|v|de.
Th|s Report argues that deve|op|ng ooun-
tr|esarepotent|a||ystrongpartners|nefforts
to promote teohno|og|oa| |earn|ng |n other
deve|op|ngoountr|esfortwo|mportantrea-
sons. The rst reason |s perhaps the most
pronounoed |n the d|soourse on why and
how South-South teohno|ogy and |nnova-
t|on shou|d be promoted. The emerg|ng
oountr|es and the|r |nnovat|on exper|enoes
are h|gh|y re|evant for other deve|op|ng
oountr|es as they faoe s|m||ar |nnovat|on
oonstra|nts,wh|ohare|nmanywaysd|ffer-
ent from the oonstra|nts and opportun|t|es
of deve|oped oountr|es. Wh||e deve|oped
oountr|es oont|nue to emphas|ze ma|n|y
R&D and lPR proteot|on for the|r rms, |n
deve|op|ng oountr|es the ma|n emphas|s
has been on teohno|og|oa| |earn|ng, |nore-
menta| |nnovat|on, |earn|ng-by-do|ng and
reverse eng|neer|ng. The seoond reason
|s that deve|op|ng oountr|es teohno|og|es
maybepart|ou|ar|yappropr|ateforbu||d|ng
oapab|||t|es |n the South (a po|nt d|soussed
|n deta|| |ater |n th|s ohapter}.
As a resu|t, oo||aborat|on on teohno|ogy
and|nnovat|on|sperhapsoneofthemost
or|t|oa| oomponents of South-South so||-
dar|ty,offer|ngarea|prom|seofsusta|nab|e
deve|opment aoross the South. However,
beoauseSouth-Southoo||aborat|on|n|nno-
vat|on and teohno|ogy takes p|aoe between
deve|op|ngoountr|esatveryd|fferent|eve|s
of deve|opment, |t w||| neoessar||y |nvo|ve
some pressures as we|| as opportun|t|es
for many deve|op|ng oountr|es. Pressures
|no|ude oonform|ng to the requ|rements
|mposed by the |nternat|ona| trad|ng sys-
tem as we|| as the oha||enge of ensur|ng
that deve|op|ng oountr|es pursue a path
of eoonom|o growth that |s |no|us|ve and
susta|nab|e.Asohapterlhasnoted,many
deve|op|ng oountr|es, |no|ud|ng emerg|ng
oountr|es, have eoonom|o seotors that st|||
requ|re part|ou|ar attent|on, |n add|t|on to
the press|ng needs of poverty a||ev|at|on
andemp|oymentoreat|on.
/s|tooss|o|eto|eve|age
t|eongo|ngcatc|-0o
o|ocessesta||ng
o|ace|nsome
oft|edeve|oo|ng
co0nt||esto...
...fac|||tate|ea|n|ngand
caoac|ty-o0||d|ng|n
t|eot|e|co0nt||es?
75
CHAPTER IV : HOW CAN THE SOUTH PROVIDE A NEW IMPETUS FOR BUILDING INNOVATIVE CAPACITY?
Wh||e South-South trade offers a good op-
portun|ty for deve|op|ng oountr|es to use
the|r teohno|og|oa| strengths to ga|n mar-
ket advantages |n the deve|op|ng wor|d, |t
|snotautomat|othataot|v|t|esthattap|nto
suohadvantageswou|dbeab|etofoous|n
para||e| on teohno|og|oa| |earn|ng. lndeed,
asohapterlhasnoted,oftentheremaybe
fr|ot|ons between enab||ng greater market
aooess to deve|op|ng-oountry rms , on the
one hand, and us|ng th|s as the bas|s for
promot|ngteohno|og|oa||earn|ngandteoh-
no|ogy transfer. Therefore, |n order to de-
||veron|tsprom|se,South-Southoo||abora-
t|on on teohno|ogy a|so needs to faotor |n
the requ|rements of deve|op|ng oountr|es,
part|ou|ar|y |DOs for bu||d|ng the|r domest|o
teohno|og|oa|oapab|||t|es.That|s,|t|sneo-
essary to dene the terms on wh|oh suoh
oo||aborat|onoanbepromotedwith partic-
ular attentiontotheteohno|og|oa|needsof
|nd|v|dua|deve|op|ngoountr|es.
lnordertoensureatruepartnersh|pamong
deve|op|ng oountr|es for teohno|og|oa| de-
ve|opment and to exp|o|t the un|que ad-
vantages of suoh a partnersh|p, there |s
need for an |nternat|ona| framework a|med
at harness|ng the opportun|t|es prov|ded
by ongo|ng South-South teohno|og|oa|
exohanges. Suoh a framework shou|d ao-
t|ve|y promote South-South oo||abora-
t|on for bu||d|ng teohno|og|oa| oapab|||t|es.
However, |ts proponents shou|d not p|aoe
ad|sproport|onateonusonemerg|ngooun-
tr|es;the|roo||aborat|onshou|dbeseenas
a oomp|ement to - and not a subst|tute for
- North-South oo||aborat|on on teohno|ogy
|ssues.
Suoh a framework for South-South oo||abo-
rat|ononteohno|ogyand|nnovat|onneeds
to move beyond mere pr|or|ty sett|ng and
po||t|oa| deo|arat|ons; |t shou|d propose a
o|earroadmapforaot|on.Th|sohapterar-
t|ou|atesasetofpr|no|p|esthatoou|dform
the bas|s for suoh an |nternat|ona| frame-
work. These pr|no|p|es are der|ved from
some|mportant|ssuespreva|||ng|ntheoon-
textofteohno|ogyand|nnovat|onexohange
g|oba||y and among deve|op|ng oountr|es.
How oan the teohno|ogy needs of deve|-
op|ng oountr|es best be aooommodated
as a pr|or|ty |n South-South teohno|og|oa|
oo||aborat|on? Th|s seems to be a funda-
menta||ssue|nana|ysesofongo|ngSouth-
South teohno|og|oa| oo||aborat|on us|ng a||
there|evantdataava||ab|e.Another|ssue|s
how best to ensure the shar|ng of exper|-
enoesforpromot|ngteohno|og|oa||earn|ng
and|nnovat|onoapao|ty.Th|rd,howoan|m-
portantohanne|softeohno|og|oa||earn|ng,
part|ou|ar|y the promot|on of teohno|og|-
oa| a|||anoes and the means of teohno|ogy
transfer, be harnessed for the benet of
a|| deve|op|ng oountr|es? Fourth, how oan
South-South FDl be more deve|opment-
or|ented?F|na||y,howoanSouth-South|n-
novat|onandteohno|og|oa|oo||aborat|onbe
|everaged to dr|ve R&D |n or|t|oa| areas that
respond to the part|ou|ar needs of deve|-
op|ng oountr|es, part|ou|ar|y where market
|noent|ves for the promot|on of R&D by the
pr|vateseotorareabsent?
ln th|s sense, there |s a need for new th|nk-
|ng on how to |dent|fy and promote op-
portun|t|esforSouth-South|nnovat|onand
teohno|og|oa| oo||aborat|on |n the areas of
o||mate ohange adaptat|on, renewab|e en-
ergy teohno|og|es, lOTs and pub||o hea|th,
among others. Th|s ohapter d|sousses
these |ssues |n deta||, a|ong w|th poss|b|e
po||oy opt|ons to |mp|ement them. Seo-
t|ons B to F oonta|n an e|aborat|on of the
ve pr|no|p|es, and seot|on G proposes the
po||oymeasuresto|mp|ementthem.
B. PRINCIPLE 1:
INTEGRATING THE
TECHNOLOGICAL
NEEDS OF
DEVELOPING COUN-
TRIES INTO SOUTH-
SOUTH EXCHANGES
Debates on the know|edge eoonomy stress
the |mportanoe of know|edge as an as-
set for eoonom|o aot|v|ty. 'Know|edge of
know|edge", that |s, |nformat|on on where
know|edge |s ava||ab|e, |n wh|oh forms, and
how |t oan be app||ed to further a rm`s or
a oountry`s oompet|t|ve advantage, |s a key
W|||eSo0t|-So0t|t|ade
offe|sagood
oooo|t0n|tyfo|
deve|oo|ngco0nt||esto
0set|e||tec|no|og|ca|
st|engt|stoga|nma||et
advantages|nt|e
deve|oo|ngwo||d
|t|snota0tomat|c
t|atact|v|t|est|attao
|ntos0c|advantages
wo0|doeao|etofoc0s
|noa|a||e|on
tec|no|og|ca||ea|n|ng.
76 TECHNOLOGY AND INNOVATION REPORT 2012
eoonom|o resouroe (Roberts, 2009}. How-
ever, deve|op|ng oountr|es oannot auto-
mat|oa||y se|ze opportun|t|es to part|o|pate
|n the know|edge eoonomy or benet from
|tseffeots.Mostoftenoountr|esthatdonot
havetheteohno|og|oa|oapab|||t|estobene-
t from the know|edge eoonomy nd them-
se|vesexo|uded.O|os|ngthegapbetween
forma| and |nforma| produot|on struotures
|na|argenumberofdeve|op|ngoountr|es,
part|ou|ar|y |DOs, and promot|ng domes-
t|o oapab|||t|es oa||s for more proaot|ve en-
gagement|naddress|ngthe|rteohno|og|oa|
needs|naooherentanddynam|omanner.
Th|s form of engagement not on|y neoes-
s|tates greater |nvestments |n tert|ary edu-
oat|on, sk|||s tra|n|ng and oompetenoe-
bu||d|ng w|th|n oountr|es; |t a|so needs to
be re|nforoed through greater aooess to
know|edge and teohno|og|oa| oapao|ty-
bu||d|ng through, for examp|e, |nter-rm
oo||aborat|on, jo|nt ventures and ||oens|ng
agreements. Support for know|edge-based
aot|v|t|es |n deve|op|ng oountr|es and |DOs
|s therefore essent|a| for transform|ng the|r
eoonom|esfromonesdom|natedbyaot|v|-
t|esw|thdeoreas|ngoroonstantreturnsto
thosew|thafoousongreaterva|ueadded
andh|gherreturns.
1. Building absorptive capacities
to tap into South-South trade
DQGJOREDOSURGXFWLRQQHWZRUNV
Teohno|ogy embedded |n maoh|nery and
equ|pment has |ong been oons|dered an
|mportant souroe of new teohno|ogy for
oountr|es.
3
When |ooa| agents have the
absorpt|ve oapao|t|es to use the embed-
ded teohno|og|oa| know|edge |n a var|ety
of ways to produoe |ooa| produots, |earn-
|ng and oapab|||t|es are gradua||y fostered.
However,|toannots|mp|ybeassumedthat
|ooa|aotorshavetheneoessaryabsorpt|ve
oapab|||t|es. lndeed, the absenoe of suoh
oapab|||t|es|soneofthemajor|mped|ments
to promot|ng teohno|og|oa| ohange |n de-
ve|op|ngoountr|es.
As the ana|ys|s |n ohapter ll of th|s Report
shows, ourrent South-South teohno|og|oa|
oo||aborat|on|sooourr|ngma|n|yamongthe
more teohno|og|oa||y advanoed deve|op-
|ng oountr|es. |DOs and other deve|op|ng
oountr|esare||m|tedbythe|r|nab|||tytopar-
take of these opportun|t|es. ln a |arge num-
beroftheseoountr|es,thedemandforoap-
|ta|goods|mportsforproduot|veseotors|s
|owduetotheoonstra|ntstheyfaoe|nman-
ufaotur|ng. F|gure 4.1 oontrasts the oom-
pos|t|on of merohand|se exports between
o||-export|ng |DOs, non-o||-export|ng |DOs
and a|| deve|op|ng oountr|es to oompare
the |eve|s of struotura| d|vers|oat|on of the|r
eoonom|o aot|v|t|es. The gure a|so he|ps to
show ongo|ng teohno|og|oa| downgrad|ng
|n the |DOs over t|me (see a|so NOTAD,
2010a and 2011b}. lmports and exports are
s|m||ar |nd|oators of teohno|og|oa| oapab|||-
t|es,|nthesensethatan|norease|nexports
ofmanufaotures|nd|oatesar|se|ntheover-
a|| teohno|og|oa| oapab|||t|es of a oountry.
When a oountry`s seotora| aot|v|t|es are d|-
vers|ed and produot|ve, |mports of oap|ta|
goods prov|de teohno|og|oa| |nformat|on
thatfeeds|ntoongo|ngprooessesofteoh-
no|og|oa||earn|ng.
A oompar|son of the merohand|se exports
of deve|op|ng oountr|es w|th those of |DOs
- both o|| and non-o|| exporters - shows
muoh|argervar|at|ons|nexportsofmanu-
faoturedgoodsoomparedw|thpr|maryex-
ports. The share of manufaotured exports
a|sovar|esbetweeno||-export|ngandnon-
o||-export|ng |DOs, show|ng the |ow |eve|s
of struotura| d|vers|oat|on |n the former
eoonom|es. Address|ng the teohno|og|oa|
needsoftheseoountr|es|stherefore|mpor-
tantfromabroaderperspeot|veofeoonom-
|odeve|opment,beoause|nnovat|onoapao-
|tyandteohno|og|oa||earn|ngoontr|butenot
on|y to export oompet|t|veness and |ooa|
enterpr|sedeve|opment;theyarea|soor|t|-
oa| for promot|ng d|vers|oat|on of the k|nd
thatoontr|butestostruotura|ohange.
The |aok of teohno|og|oa| absorpt|ve oa-
pao|t|es of many of these oountr|es a|so
||m|ts the|r ab|||ty to part|o|pate |n GPNs.
Part|o|pat|on |n suoh networks demands
h|gh degrees of oompetenoe a|| a|ong the
supp|yoha|n.Atthesamet|me|tenhanoes
the ab|||ty of |ooa| rms |n deve|op|ng ooun-
Add|ess|ngt|e
tec|no|og|ca|needsof
a||deve|oo|ngco0nt||es
|st|e|efo|e|moo|tant
f|omao|oade|
oe|soect|veof
econom|cdeve|ooment.
77
CHAPTER IV : HOW CAN THE SOUTH PROVIDE A NEW IMPETUS FOR BUILDING INNOVATIVE CAPACITY?
F|g0re4.1: 0ompos|t|oooImerchaod|seexportsoIo||-export|ogL00s,
ooo-o||-export|ogL00saoddeve|op|ogco0otr|es,19952010(Perceot)
0.00
0.20
0.40
0.60
0.80
1.00
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
A| | food | tems Agr| ou| tura| raw mater| a| s Ores, meta| s, preo| ous stones
Fue| s Manufaotured goods
0.00
0.20
0.40
0.60
0.80
1.00
1995199619971998199920002001200220032004200520062007200820092010
A| | food | tems Agr| ou| tura| raw mater| a| s Ores, meta| s, preo| ous stones
Fue| s Manufaotured goods
0.00
0.20
0.40
0.60
0.80
1.00
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
A| | food | tems Agr| ou| tura| raw mater| a| s
Fue| s Manufaotured goods
Ores, meta| s, preo| ous stones
A.0||-export|ogL00s
8.hoo-o||-export|ogL00s
0.0eve|op|ogco0otr|es
Note: O||-export|ng |DOs are: Ango|a, Ohad, Equator|a| Gu|nea, Sudan and Yemen.
Souroe: NOTAD seoretar|at, based on G|obStat - Merohand|se Trade Matr|x, Exports and Annua| 1995-
2010.
78 TECHNOLOGY AND INNOVATION REPORT 2012
tr|estoooord|natevar|ous|nputs|nthe|n-
novat|on prooess, suoh as |nfrastruoture
and sk|||s.
4
Thetrendsd|soussed|nohapter
ll have resu|ted |n the open|ng up of new-
er opportun|t|es for part|o|pat|on |n GPNs
aoross a w|de var|ety of seotors among
deve|op|ng oountr|es. G|ven the |mportant
ro|ebe|ngp|ayedbyGPNsasan|ntegrat|ng
foroe|ntheg|oba|eoonomy,theoha||enge
|stoenhanoeoapab|||t|esandopportun|t|es
|n other deve|op|ng oountr|es and |DOs |n
order to promote |nnovat|on-|ed deve|op-
ment |n the|r eoonom|es. Ensur|ng that a||
deve|op|ng oountr|es and |DOs are ab|e to
tap |nto ex|st|ng and emerg|ng opportun|-
t|es |n trade and GPNs w||| requ|re more
aot|ve engagement |n promot|ng |earn|ng
andbu||d|ngoapab|||t|es.Th|sa|sooa||sfor
address|ngbothexterna|and|nterna|oon-
stra|nts|ntheseoontexts.
2. Targeting internal and external
constraints on building
capabilities
A number of deve|op|ng oountr|es and
|DOs exper|enoe oommon oonstra|nts on
|nnovat|on,depend|ngonthe|rstageofde-
ve|opment.Theextentoftheseoonstra|nts
and the d|fou|t|es |n promot|ng po||oy and
|nst|tut|ona| reforms exp|a|n why a |arge
number of deve|op|ng oountr|es and |DOs
areunab|etofoster|nnovat|onoapab|||t|es.
The oonstra|nts oan be |nterna| and ex-
terna|, and the former are oonstant|y re|n-
foroed by a |arge number of externa| fao-
tors. lnterna| oonstra|nts |no|ude |ntr|ns|o
||m|tat|ons faoed by |ooa| agents, suoh as
the absenoe of requ|s|te sk|||s, weak |nst|-
tut|ona| |nfrastruoture, |aok of researoh oa-
pao|ty, |nadequate nano|ng and r|sk-shar-
|ng meohan|sms, and a |aok of (or poor}
phys|oa| |nfrastruoture (box 4.1}. These fao-
tors|mpedetheoapao|tyof|ooa|agents|n
rms, un|vers|t|es and researoh |nst|tut|ons
to absorb teohno|og|oa| |nformat|on and
app|y |t to rout|ne |earn|ng-by-do|ng aot|v|-
t|es, wh|oh are the baokbone of |nnovat|on
oapao|ty-bu||d|ng. Deve|op|ng oountr|es,
part|ou|ar|y |DOs, are a|so subjeot to other
externa| 'agents of restra|nt" through the
mu|t||atera|tradereg|meandasaresu|tof
oomm|tments to lPR proteot|on under the
TRlPS Agreement (Storm, 2005; NOTAD,
2010a}. The|r |nab|||ty to take advantage of
teohno|og|oa| opportun|t|es |s further oon-
stra|ned by ourrent patterns of |ntegrat|on
of oountr|es |nto g|oba| oommod|ty mar-
kets, wh|oh |ook |n deve|op|ng eoonom|es,
part|ou|ar|y |DOs, at the |ower end of |nter-
nat|ona|va|ueoha|ns.
a. lnterna| canstraints an bui|ding
capabi|ities
There are some major ||m|tat|ons to bu||d-
|ng oapab|||t|es and engag|ng |n teohn|oa|
ohange |n deve|op|ng oountr|es and |DOs,
wh|oh oan be oategor|zed under four broad
head|ngs,asd|soussedbe|ow.Th|sReport
oa||s for South-South teohno|og|oa| oo|-
|aborat|on to be more aot|ve|y engaged |n
address|ngthese||m|tat|ons.
i. Inadequate investments in
technological learning
|earn|ng opportun|t|es for |nnovat|on ar|se
regu|ar|yfromavar|etyofsouroes,suohas
from |nvestments |n new maoh|nery and
equ|pment, teohno|ogy supp||ers, mob|||ty
of |abour, |nteraot|ons w|th other know|edge
agents (e.g. other rms, forma| R&D un|ts
w|th|n enterpr|ses, State-sponsored R&D
|nst|tut|onsandun|vers|tyoentresofexoe|-
|enoe and bus|ness assoo|at|ons}. Externa|
opportun|t|es, suoh as oontraot manufao-
tur|ngforexportsandforsupp|y|ngtog|ob-
a| va|ue oha|ns, are add|t|ona| souroes of
|earn|ng.However,|earn|ngdoesnotooour
automat|oa||y or w|thout oosts; |t requ|res
appropr|ate po||o|es and |nst|tut|ons. For
manyoountr|es,theopportun|t|esfor|ndus-
tr|a||earn|nghavebeenrather||m|teddueto
|nadequao|es |n the |nst|tut|ona| framework
for |nnovat|on, part|ou|ar|y those re|ated to
phys|oa| and know|edge |nfrastruoture, and
to the |aok of |noent|ves to engage |n a oo|-
|eot|ve|earn|ngprooessw|thothers.
One |mportant e|ement enab||ng rms |n
deve|op|ng oountr|es to |ntegrate |nto the
g|oba| market |s the|r ab|||ty to produoe to
estab||shed|nternat|ona|standards.Aor|t|-
oa|enab|er|nth|srespeot|sthe|eve|sand
k|nds of sk|||s of emp|oyees. Emp|oyees
G|vent|e|moo|tant|o|e
oe|ngo|ayedoyGPNs
asan|nteg|at|ngfo|ce|n
t|eg|ooa|economy
.t|ec|a||enge|sto
en|ancecaoao|||t|esand
oooo|t0n|t|es|not|e|
deve|oo|ngco0nt||es
and/DCs|no|de|to
o|omote|nnovat|on-|ed
deve|ooment.
79
CHAPTER IV : HOW CAN THE SOUTH PROVIDE A NEW IMPETUS FOR BUILDING INNOVATIVE CAPACITY?
part|o|pate |n the |earn|ng prooess |n a rm,
thoughthemostoommonsouroesofforma|
sk||| oreat|on are un|vers|t|es and teohn|oa|
sohoo|s that prov|de so|ent|o and teohn|-
oa| know|edge. ln many oountr|es, demand
for a better eduoated and sk|||ed workforoe
has |noreased as a oonsequenoe of teoh-
no|og|oa|ohanges,suohasthe|ntroduot|on
of lOTs (see, for |nstanoe, Autor, Katz and
Krueger, 1998; Howe|| and Wo|ff, 1993}. A
more sk|||ed workforoe |s more oapab|e of
|earn|ng oomp|ex teohno|og|es (P|va, San-
tare||| and v|vare|||, 2003}.
Often, tra|n|ng |s used as a oomp|emen-
tary meohan|sm |n rms and organ|zat|ons
to |mpart speo|o know|edge or to make
up for the shortfa||s (or often the |aok of a
praot|oa| or|entat|on} |n un|vers|ty eduoat|on.
However,tra|n|ngshou|dnotbeoons|dered
a subst|tute for the format|on of bas|o sk|||s
and know|edge of the workforoe; |t |s s|m-
p|y a means through wh|oh a rm enab|es
|ts emp|oyees to aoqu|re know|edge spe-
o|o to that rm`s needs. ln the |ong term,
|n order to be ab|e to oonstant|y upgrade,
|t |s |mportant that the sk|||s and know|edge
taught at un|vers|t|es and tra|n|ng oentres
beofah|gher|eve|thanthosea|readymas-
tered by those emp|oyed |n |ndustry. But
not many deve|op|ng oountr|es have been
ab|e to prov|de eduoat|ona| oourses and
ourr|ou|a that meet the grow|ng demand
for a sk|||ed workforoe. Th|s |mpedes the|r
ab|||ty to ass|m||ate know|edge from ex|st-
|ngsouroes.
ii. Weak support to local enterprises
Muoh of the ||terature on entrepreneur-
sh|p |n deve|op|ng oountr|es foouses on
the 'm|ss|ng m|dd|e", name|y the weak
deve|opment of sma|| and med|um-s|zed
enterpr|ses (SMEs} |n the forma| seotor,
part|ou|ar|y med|um-s|zed domest|o rms
(NOTAD, 2006b}. lnforma| m|oroenterpr|s-
es,wh|ohusebas|otrad|t|ona|teohno|og|es
and oater to sma|| |ooa| markets, aooount for
8ox4.1: Techoo|og|ca||earo|ogaodoat|ooa|systemsoI|ooovat|oo
Teohno|og|oa| |earn|ng, as estab||shed |n theory and praot|oe, |s the prooess through wh|oh rms and organ|zat|ons |n deve|op|ng
oountr|esbu||doapab|||t|es.
a
lt |s made poss|b|e through the aooumu|at|on of know|edge and sk|||s that a||ow rms to |earn and
bu||d the requ|s|te oapab|||t|es to aoqu|re, ass|m||ate, use, adapt, ohange and oreate new and usefu| |nnovat|ons. Furthermore,
bu||d|ng oapab|||t|es |s a muoh broader oonoept than oapao|ty-bu||d|ng, and requ|res both so|ent|o and non-so|ent|o k|nds of
|nfrastruoture, ||nkages and |nst|tut|ona| meohan|sms that promote |nteraot|ve |earn|ng.
However, there |s an |mportant d|fferenoe between us|ng ex|st|ng know|edge |n produot|on prooesses (teohno|og|oa| oapab|||t|es}
and the ab|||ty to mod|fy and ohange that know|edge aooord|ng to new demand|ng s|tuat|ons (|nnovat|on oapab|||ty}. ln order to
suooeed |n the unpred|otab|y ohang|ng modern env|ronment, rms shou|d be ab|e to use the|r know|edge and sk|||s, but a|so,
most |mportant|y, they shou|d be ab|e to adapt, rearrange and mod|fy the|r know|edge oonstant|y and dynam|oa||y |n response to
ohang|ng and evo|v|ng oond|t|ons, s|tuat|ons and demands (Be|| and Pav|tt, 1995; Pate| and Pav|tt, 1997 and 1998}. Aooumu|a-
t|on of know|edge that |eads to teohno|og|oa| and |nnovat|on oapab|||t|es |s not automat|oa||y generated by the use of produot|on
|nputs. lt requ|res exp||o|t efforts a|med at promot|ng teohno|og|oa| |earn|ng w|th|n nat|ona| oontexts. The ||nkages between these
twoprooessesarene|therasautomat|onorasstra|ghtforwardastheymayseem.
Suoh know|edge and sk|||s oan be fostered and bu||t from w|th|n a oountry/seotor, through targeted |nvestments |n what are
termed 'nat|ona| systems of |nnovat|on". S|mp|y put, a nat|ona| system of |nnovat|on oompr|ses a|| eoonom|o and non-eoonom|o
aotors that are |nvo|ved |n |nteraot|ve |earn|ng for the produot|on of new produots/prooesses/organ|zat|ona| forms. lnteraot|ve
|earn|ng and |mproved ooord|nat|on |s the essenoe of teohno|og|oa| |earn|ng |n the |nnovat|on system. lt therefore |nvo|ves |n-
vestment for bu||d|ng know|edge (|no|ud|ng |nvestment |n eduoat|on and sk|||s deve|opment, as we|| as R&D} and for |mprov|ng
phys|oa| |nfrastruoture (suoh as roads, |nternet and oommun|oat|on teohno|og|es, e|eotr|o|ty and other |nputs to the produot|on
prooess}. lt a|so requ|res |nst|tut|ona| meohan|sms for oreat|ng ||nkages and for ooord|nat|on. |ooa| sk|||s and know-how oan be
nurtured through aooess to know|edge and teohno|ogy from outs|de the seotor/eoonomy |n order to deve|op |nnovat|on oapao|ty.
Teohn|oa|ohangethatresu|tsfromth|sprooess|s|arge|y|norementa|,as|s|nnovat|onoapao|ty|tse|f,but|t|sa|soveryusefu||n
he|p|ngtobu||doapab|||t|esandadvano|ngproduot|v|tygrowth.
Souroe: NOTAD.
a
See |a||, 1992; Ernst et a|., 1998; and Be|| and Pav|tt 1992, for ear|y o|ass|oat|ons, and more reoent|y, Sagast|, 2004 and Oye|aran-
Oyey|nka and Geh| Sampath, 2010, for an aooount of the ma|n funot|ons that boost teohno|og|oa| oapab|||t|es.
80 TECHNOLOGY AND INNOVATION REPORT 2012
a|argeshareoftheentrepreneur|a|aot|v|t|es
|n |DOs. ln add|t|on to the foous on SMEs,
however,there|sneedforarenewed|nterest
|n |arger rms and |n faotors oontr|but|ng to
theexpans|onandgrowthofSMEs,both|n
po||oy and praot|oe. Not on|y do |arger rms
|nnovate more than sma||er rms, they are
a|so ab|e to take advantage of the eoonom|es
of soope and soa|e requ|red for oompet|t|ve
produot|on|nsevera|seotorsofutmost|m-
portanoeboth|ooa||yandforexports,suoh
as agro-prooess|ng and pharmaoeut|oa|s.
However, |nnovat|on systems |n deve|op|ng
oountr|es have severa| ||m|tat|ons that |m-
pede the trans|t|on of |nforma| enterpr|ses
|ntoSMEs,aswe||asthetrans|t|onofSMEs
|nto |arger rms that are oapab|e of tak|ng
on the r|sks |nherent |n prooess and produot
|nnovat|ons.Suoh||m|tat|ons|no|ude,butare
not ||m|ted to, the |aok of or |nadequate -
nano|ng of |nnovat|on and standards, |nsuf-
o|entmeanstoaggregateandpoo|demand,
des|gnandeng|neer|ngserv|oes,aswe||as
poor or |nsufo|ent management, market|ng
and|ega|expert|se.
iii. Weak institutional linkages
There |s an overwhe|m|ng agreement on
the oentra| ro|e of |nst|tut|ons |n promot|ng
|nnovat|ve oapao|ty w|th|n a g|ven system.
lnst|tut|ons are essent|a| at eaoh stage of
the|nnovat|onprooess:togrant|noent|ves
toaotorsto|nnovateandoo||aborateatthe
|nd|v|dua| |eve|, to enab|e know|edge ows
and|nteraot|ve|earn|ngbetweenthed|ffer-
ent oomponents of the |nnovat|on system
at the organ|zat|ona| |eve|, and to estab||sh
a ||nk between know|edge and |ts d|ssem|-
nat|on|ntheformofproduot|onoutputsat
thesystem|o|eve|.
Reoogn|z|ng the |mportanoe of |nst|tut|on-
a| and po||oy frameworks, governments
aoross the deve|op|ng wor|d are |nvo|ved
|n sett|ng pr|or|t|es for teohno|ogy and |n-
novat|on to respond to the needs of the|r
popu|at|onandst|mu|ateeoonom|ogrowth.
Asopposedtoamoretrad|t|ona|approaoh
toso|enoeandteohno|ogy,thepastdeoade
hasseenasweep|ngsh|fttowardsso|enoe,
teohno|ogy and |nnovat|on po||o|es, w|th a
greateremphas|sonhow|nvestmentsand
endowments |n so|enoe oan be used to
bu||d teohno|ogy and |nnovat|on oapao|ty.
A range of deve|op|ng oountr|es and |DOs
have new |nnovat|on po||o|es - or are |n the
prooess of adopt|ng them - wh|oh seek to
address the oonstra|nts on |nnovat|on |n
deve|op|ng-oountryoontexts.Effortstouse
the ex|b|||t|es |n the g|oba| lPR reg|me and
targetedpo||oymeasurestoaddresspub||o
oonoernsre|at|ngtohea|thandagr|ou|ture,
for|nstanoe,area|soonther|se.However,
dev|s|ng and mon|tor|ng these po||o|es |s
extreme|y oha||eng|ng: oons|derab|e know|-
edge and sk|||s are requ|red for the|r enaot-
ment and for des|gn|ng |ong-term strate-
g|esfor|nnovat|on.
5
iv. Inadequate domestic resources to
create a supportive environment
for innovation
lnteraot|ve|earn|ng|samajoroomponentof
|nnovat|on. lt ensures that the sk|||ed work-
foroe w|th|n any |nnovat|on system |s oon-
stant|y benet|ng from oo||aborat|on w|th
other know|edge souroes, both |nterna| and
externa|,fortheproduot|onofnewproduots
andprooesses.Tosupportpo||oy|n|t|at|ves,
adequate nano|a| resouroes are needed
for the oreat|on of the neoessary sk|||s, the
prov|s|on of good |nfrastruoture (suoh as
|aborator|es and oentres of exoe||enoe} and
the promot|on of oo||aborat|on (|no|ud|ng
through nano|a| |noent|ves}. W|thout suoh
support, access to knowledge remains, at
best, access to information, s|noe the ao-
tors |aok the oapao|ty to bu||d further upon
|t. However many deve|op|ng oountr|es |aok
theneoessaryfundstoenab|eth|sprooess.
ln add|t|on, a |aok of r|sk-tak|ng a|so ex-
p|a|nswhythere|saoonsp|ouousabsenoe
of enterpr|ses - even sma|| enterpr|ses -
engaged |n |nnovat|on. Many of the rms
and organ|zat|ons |n deve|op|ng oountr|es
havetore|ypr|mar||yonpub||oseotor|nst|-
tut|ons to p|ay a dynam|o ro|e as oata|ysts
of |earn|ng and teohno|og|oa| upgrad|ng.
Mob|||z|ng domest|o resouroes |s therefore
a or|t|oa| task, w|thout wh|oh any po||oy |n|-
t|at|ves for oreat|ng a su|tab|e env|ronment
for|nnovat|onareoonstra|ned|nthe|rab|||ty
toproduoepos|t|veoutoomes.
/nst|t0t|onsa|eessent|a|
ateac|stageof
t|e|nnovat|ono|ocess.
W|t|o0ts0c|s0ooo|t,
accessto|now|edge
|ema|ns,atoest,access
to|nfo|mat|on,s|ncet|e
acto|s|ac|t|ecaoac|ty
too0||df0|t|e|0oon|t.
81
CHAPTER IV : HOW CAN THE SOUTH PROVIDE A NEW IMPETUS FOR BUILDING INNOVATIVE CAPACITY?
b. Externa| canstraints an |earning
and bui|ding capabi|ities
Other oonstra|nts, externa| to nat|ona| |n-
novat|on systems, often tend to re|nforoe
|nterna| ||m|tat|ons of oountr|es |n promot|ng
|nnovat|on,or|nsomeoasestheyevenexao-
erbatethem.lt|so|earbynowthatstruotura|
transformat|on|saoh|evedbymeansofup-
grad|ng produot|on and exports, |ndustr|a||z-
|ngandtherebyd|vers|fy|ngeoonom|oaot|v|-
t|es. The patterns of speo|a||zat|on deve|oped
byoountr|esare|d|osynorat|o|nnature:the|r
export oho|oes are determ|ned not on|y by
faotor endowments (as o|ass|oa| theory d|o-
tates}, but a|so by externa| trad|ng opportun|-
t|esandg|oba|demand,andby|nterna|teoh-
no|og|oa| oapab|||t|es of seotors and rms.
6
Some speo|a||zat|on patterns that usua||y
depend on export opportun|t|es are more
oonduo|vetoteohno|og|oa|upgrad|ngthan
others. When oomb|ned w|th the r|ght
formsofpub||o|nvestmentandpo||oysup-
port,theyoan|eadtoproduot|v|ty-enhano-
|ngstruotura|ohange.Butourrentpatterns
ofg|oba||ntegrat|onaresuohthatthemore
know|edge-|ntens|ve produot n|ohes are
oonoentrated|nafewdeve|op|ngoountr|es
and |n the |ndustr|a||zed oountr|es, and the
|ow va|ue-added and pr|mary-oommod|ty-
based exports are oonoentrated |n |DOs
and |n severa| other deve|op|ng oountr|es
w|th|owerteohno|og|oa|oapao|t|es.
These patterns of speo|a||zat|on tend to
re|nforoe ongo|ng produot|on patterns by
entrenoh|ng a |arge number of deve|op|ng
oountr|es and |DOs |n natura|-resouroe-
based and |ow-teohno|ogy exports and
somemed|um-teohno|ogyexports.Exo|ud-
|ng the examp|es of deve|op|ng oountr|es
suoh as Oh|na and lnd|a and some East
and South-East As|an oountr|es, growth
trends |n many deve|op|ng oountr|es and
a|most a|| the |DOs over the past deoade
have been aooompan|ed by few, |f any,
ohanges |n the|r produot|ve struotures, as
demonstrated by gure 4.1 (see a|so, NO-
TAD, 2007, 2008 and 2010a}.
Other externa| oonstra|nts |no|ude the g|oba|
lPR reg|me, wh|oh poses d|fou|t|es for de-
ve|op|ngoountr|es|n|everag|ngteohno|ogy
transfer,asd|soussed|ater|nth|sohapter.
C. PRINCIPLE 2:
SHARING
EXPERIENCES
IN BUILDING
INNOVATION
CAPABILITIES
THROUGH PROACTIVE
POLICIES
The ways |n wh|oh manufaotur|ng rms |n
deve|oped and deve|op|ng oountr|es bu||d
the|r teohno|og|oa| oapab|||t|es d|ffer. ln the
teohno|ogy-|ntens|ve seotors, deve|oped-
oountry rms, regard|ess of the|r s|ze, bu||d
the|roorestrateg|ooapab|||t|esatthe|nter-
nat|ona| teohno|og|oa| front|er (Dos|, 1988;
Dos| and Marengo, 1993; Ne|son and W|n-
ter 1982; Teeoe, P|sano and Shuen, 1997;
Teeoe et a|.,1994}. Teohno|og|oa| |ntens|ty |s
a key e|ement of market oompet|t|veness,
and lPRs serve as strateg|o assets for rms`
a|||anoesandexpans|on.F|rms|nemerg|ng
oountr|es and |n muoh of the deve|op|ng
wor|d have faoed obstao|es |n aooess|ng
know|edge, and have re||ed on other ways
to bu||d the essent|a| know|edge base neo-
essary to surv|ve |n the market. Many ohan-
ne|s of know|edge d|ffus|on among rms |n
theSouthhavebeenthesameasthoseob-
served|ntheNorth,suohasteohn|oa|oo|-
|aborat|on between rms, equ|pment pro-
ourement, jo|nt ventures, oross patent|ng,
M&As and ||oens|ng (WlPO, 2011; OEOD,
2011}. At the same t|me, rms |n emerg|ng
oountr|eshavebu||tthe|rownteohno|og|oa|
oompeteno|es|nthefaoeofoonstra|ntson
|nnovat|on, wh|oh |n most ways are s|m||ar
to those faoed by other deve|op|ng ooun-
tr|es, part|ou|ar|y |DOs today.
Emerg|ngoountr|eshavepursuedavar|ety
of |ndustr|a| and deve|opment po||o|es and
strateg|estopromoteteohno|og|oa|oatoh-
up. lnnovat|on po||o|es oan be understood
aspurpos|veaot|onsand|noent|vesprov|d-
ed by governments to promote |nteraot|ve
|earn|ng and oo||aborat|on among a|| eoo-
nom|oandnon-eoonom|oaotors|nthesys-
Eme|g|ngco0nt||es|ave
o0|s0edava||etyof
|nd0st||a|and
deve|ooment
oo||c|esandst|ateg|es
too|omote
tec|no|og|ca|catc|-0o.
82 TECHNOLOGY AND INNOVATION REPORT 2012
tem.Suohpo||o|eshavebeen|nstrumenta|
|n overoom|ng market |mperfeot|ons that
obstruot teohno|og|oa| ohange, and wh|oh
are pervas|ve and w|despread, part|ou|ar|y
|n deve|op|ng oountr|es (Rodr|k, 2007}.
1. General policy insights from
country-level experiences
Arev|ewofthedeve|opmentd|soourseand
|essons |earnt from state-|ed East As|an
suooesses |n the 1980s and the 1990s
(Amsden, 1989; Woo-Oumm|ngs, 1999;
St|g||tz et a|, 2012}, and, more reoent|y, the
exper|enoes of oountr|es suoh as Braz||,
Oh|na and lnd|a have |dent|ed a number
of faotors or|t|oa| to the|r prooess of teoh-
no|og|oa| oatoh-up. Broad|y, the fo||ow|ng
faotors have been |dent|ed as be|ng or|t|oa|
toth|sprooess:
Estab||shmentofpub||oresearohand
teohn|oa|eduoat|on|nst|tutes.
- Aoqu|s|t|on of so|ent|o and teohno-
|og|oa| know|edge through oo||abo-
rat|on w|th fore|gn researoh |nst|tu-
t|ons, fore|gn rms or jo|nt ventures,
or through the aoqu|s|t|on of fore|gn
rms.
- D|ffus|on among domest|o rms of
know|edge aoqu|red through oo||ab-
orat|ons w|th fore|gn rms to reduoe
teohno|og|oa|dependenoeonfore|gn
rms.
- Prov|s|on of nano|a| and soa| |noen-
t|ves to support |ooa| rms` R&D ao-
t|v|t|es, and the adopt|on of po||o|es
requ|r|ng fore|gn rms to |nvest more
|n |ooa| produot|on |n deve|op|ng
oountr|es.
Oatoh-up exper|enoes of oountr|es sug-
gests that the prooess of aoqu|s|t|on of
teohno|og|oa| know|edge through the afore-
ment|onedmeohan|smsgenera||yhasbeen
oonduoted through North-South re|at|ons
(Amsden, 1989; Woo-Oumm|ngs, 1999;
Oye|aran-Oyey|nka and Geh| Sampath,
2010; O|mo|| et a|., 2010; St|g||tz et a|.,
2012}. lt further suggests that the moda||ty
ofteohno|ogyaooumu|at|onhasvar|edfrom
seotor to seotor |n aooordanoe w|th the
speo|o needs of the oountry oonoerned.
The estab||shment of eduoat|on |nst|tu-
t|onsforresearohandteohno|ogywaspar-
t|ou|ar|y s|gn|oant for deve|op|ng domest|o
oapab|||t|es to aooumu|ate and adapt the
teohno|og|oa| know|edge aoqu|red through
oo||aborat|onsw|thfore|gn|nst|tut|ons.The
prov|s|on of government |noent|ves for R&D,
|mproved nano|ng poss|b|||t|es and |n-
oreaseddomest|odemand|nduoedthrough
support|vegovernmentpo||o|esa|sop|ayed
aoentra|ro|e.However,|nadd|t|ontothese
faotors, a range of more nuanoed po||o|es
oometo||ghtfromtheexper|enoesofthese
oountr|es, wh|oh have been equa||y - |f not
more - or|t|oa| to promot|ng the|r |nnovat|on
oapao|ty and oatoh-up prooesses. A |arge
number of the|r po||o|es were prompted
bytheneedtoreduoetheadverse|mpaot
of externa| oonstra|nts and |mped|ments
to |earn|ng by |ooa| rms or organ|zat|ons.
Theseared|soussed|nthenextseot|on.
6SHFLFSROLF\VWUDWHJLHVDQG
SROLF\OLQNDJHVWRSURPRWH
innovation-led growth
Speo|o po||o|es and po||oy ||nkages of re|-
evanoe g|eaned from the exper|enoes of
thenowemerg|ngoountr|esandevenfrom
those of today`s |ndustr|a||zed oountr|es
(der|ved from eoonom|o h|story, suoh as
Manse|d, 1985 and Ohang, 2002} he|p to
|dent|fy the fo||ow|ng re|evant faotors. The
ro|e of the State |n promot|ng teohno|og|-
oa| |earn|ng, oonoeptua||z|ng appropr|ate
teohno|og|es for teohno|og|oa| oatoh-up,
lPRs and ex|b|||t|es and the|r |mp||oat|ons
for eoonom|o oatoh-up, and na||y, the ||nk-
|ngof|nnovat|onpo||o|estobroader|ndus-
tr|a|po||oyhaveservedase|ementsofwe||-
eked out po||oy strateg|es for |nnovat|on-|ed
growth.
a. The ra|e af the 5tate in
pramating techna|agica|
|earning
Deve|op|ng oountr|es oan |earn many |m-
portant |essons for teohno|og|oa| deve|op-
mentfromtheexper|enoesoftheState-|ed
|ndustr|a||zat|on strateg|es of the NlEs of
East As|a (St|g||tz et a|., 2012; Oye|aran-
Oyey|nka and Geh| Sampath, 2010}. One
Moda||tyoftec|no|ogy
acc0m0|at|on|asva||ed
f|omsecto|tosecto|
|nacco|dancew|t|t|e
soec|c needs of t|e
co0nt|yconce|ned.
83
CHAPTER IV : HOW CAN THE SOUTH PROVIDE A NEW IMPETUS FOR BUILDING INNOVATIVE CAPACITY?
of these |essons re|ates to the ro|e of the
State,wh|oh|sor|t|oa|forart|ou|at|ng|nno-
vat|on oho|oes, promot|ng the aoqu|s|t|on of
nanoe for teohno|og|oa| aot|v|t|es through
domest|o and externa| resouroe mob|||za-
t|on, and for reduo|ng r|sks |nherent |n the
|nnovat|on prooess. Desp|te be|ng oon-
stra|ned |n numerous ways, the State oan
p|ayav|ta|ro|e|npoo||ngtogethernat|ona|
eoonom|o, soo|a| and |ndustr|a| resouroes
to br|ng about ohange. G|ven |ts ab|||ty to
ooord|nate at every |eve| of governanoe, |t
oan a|so be |nstrumenta| |n reoogn|z|ng new
teohno|og|oa| opportun|t|es, promot|ng the
requ|s|te entrepreneursh|p and d|str|but|ng
the ga|ns from |nnovat|on |n an equ|tab|e
manner. ln part|ou|ar, a we||-oharted gov-
ernmentstrategyfor|nnovat|onthatmeets
soo|a| as we|| as |ooa| demands |s or|t|oa|
|n terms of g|v|ng d|reot|on to other aotors
|nthe|nnovat|onsystemonwheretofoous
the|raot|v|t|es.
b. Apprapriate techna|agies far
techna|agica| catch-up
The term 'appropr|ate teohno|ogy" has vary-
|ng oonnotat|ons |n the d|soourse on the
teohno|og|oa| deve|opment of deve|op|ng
oountr|es. There ex|sts an extens|ve body
of ||terature on the oonoept of appropr|ate
teohno|ogy based on ana|yt|oa| arguments
re|at|ngtodeve|opmentstrateg|esfordeve|-
op|ngoountr|es.For|nstanoe,manystud|es
suggest part|ou|ar or|ter|a for den|ng and
determ|n|ng appropr|ate teohno|og|es (e.g.
W|ok|e|n, 1998; Grundy, 1991; Soheraga,
Te|||s and Tuoker, 2000}. ln br|ef, appropr|ate
teohno|og|es, aooord|ng to these den|t|ons,
wou|dhavethefo||ow|ngoharaoter|st|os:
The teohno|ogy transferred shou|d
funot|on w|thout e|aborate support-
|ng dev|oes or |nfrastruoture and
must t w|th|n an ex|st|ng system |n
thereo|p|entoountry;
- The teohno|ogy |n quest|on shou|d
not patron|ze; rather, |t shou|d pro-
motethereo|p|entseoonom|o|nter-
estsandeffeot|veness;
lf the teohno|ogy |s system-depend-
ent, |t shou|d matoh the ava||ab|e
systemparametersofthereo|p|ent;
The teohno|ogy transferred must be
|ooa||yaffordab|e|n|tsent|rety;
The teohno|ogy shou|d be appropr|-
ate and adaptab|e to the reo|p|ents
env|ronment;
The transferred teohno|ogy must
possessoharaoter|st|osthata||ow|ts
furtherdeve|opment;and
The transferred teohno|ogy shou|d
beoapab|eofbe|ngapp||ed|nvar|ed
wayssothat|toanbesu|tab|ypropa-
gated.
These oharaoter|st|os of appropr|ateness
emerged at a t|me when po||oymakers
andaoadem|osweretry|ngtograpp|ew|th
what teohno|og|oa| exohange and transfer
enta||ed. The |nab|||ty of the reo|p|ents of
oerta|n teohno|og|es to effeot|ve|y use, ap-
p|yandadaptthem|n|ooa|oontexts|edto
aw|dernot|onthaton|ythoseteohno|og|es
that oou|d be 'absorbed" by the reo|p|ent
system were appropr|ate. Wh||e some of
these oharaoter|st|os rema|n va||d, there |s
a need to reoons|der what the not|on of
'appropr|ateness" means |n the oontext
of South-South teohno|ogy and |nnovat|on
exohange. Any teohno|og|es are appropr|-
ate |n the oontext of deve|opment so |ong
asteohno|og|oa|exohangeortransfer|snot
||m|ted to s|mp|y prov|d|ng on|y the teoh-
no|ogy or |nformat|on re|ated to |ts use; |t
shou|d a|so |nvo|ve the aot|ve transfer of
know-how.
Another not|on on South-South teohno-
|og|oa| deve|opment that has been oated
suggests that the most appropr|ate teoh-
no|og|es are those that he|p to address
press|ng|ssuesofpub||o|mportanoe,suoh
as hea|th, agr|ou|ture or o||mate ohange.
W|thout prejud|oe to these seotors, how-
ever, suoh pre-se|eot|on may not be very
produot|ve or oonduo|ve to deve|op|ng |n-
novat|on oapao|ty |n reo|p|ent oountr|es.
Oountr|es ||m|ted ab|||t|es to absorb teoh-
no|og|es, due to suoh faotors as the |aok of
sk|||s and resouroes for |nnovat|on, tend to
begener|oandsystem|o,andw|||therefore
app|ytoa||seotors|naneoonomy.lndeed,
deve|op|ng absorpt|ve oapao|ty |s oentra|
to promot|ng |earn|ng. Another |mportant
Deso|teoe|ng
const|a|ned|n
n0me|o0sways,t|e
Statecano|ayav|ta|
|o|e|nooo||ngtoget|e|
nat|ona|econom|c,
soc|a|and|nd0st||a|
|eso0|cestoo||ng
aoo0tc|ange.
Anytec|no|og|es
a|eaoo|oo||ate
|nt|econtextof
deve|ooment
so|ongas
tec|no|og|ca|exc|ange
o|t|ansfe||snot||m|ted
tos|mo|yo|ov|d|ngon|y
t|etec|no|ogyo|
|nfo|mat|on|e|ated
to|ts0se.
84 TECHNOLOGY AND INNOVATION REPORT 2012
po||oy |ssue thatstandsoutfromear||erex-
per|enoes |s that struotura| d|vers|oat|on |s a
prooess of d|str|but|ng sk|||s upgrad|ng and
|nnovat|onoapao|tyaorossvar|ousseotorsof
theeoonomy,andthat|ndustr|a|deve|opment
|sho||st|o|nnature.ltder|vesfromaoohes|ve
env|ronmentthatsupports|nvestment,|nno-
vat|onandteohno|og|oa||earn|ng,andexport
oompet|t|veness. lt |s therefore |mportant to
e||m|nateseotora|b|aseswh|ohmaybe|n|m|-
oa| to the prooess of promot|ng teohno|og|-
oa|oapab|||t|es,and|nsteadbu||dasbroada
teohno|og|oa||earn|ngbaseasposs|b|e.
A seoond |mportant |esson |earnt that |s
re|evant |n th|s oontext |s that many teoh-
no|og|es are |nterdependent |n ways that
oannot be pred|oted ex-ante. For exam-
p|e, oompeteno|es suoh as those ga|ned
|n b|oteohno|ogy oan be equa||y app||ed to
agr|ou|ture,pharmaoeut|oa|orohem|oa||n-
dustr|es, among others. The same |s true
forotherteohno|og|essuohaslOTs,wh|oh
areapp||oab|etoarangeofseotora|aot|v|-
t|es.Thesefaotorsoha||engethenot|onthat
|earn|ng |n deve|op|ng oountr|es, part|ou-
|ar|y |DOs, shou|d be pr|or|t|zed and that
some seotors shou|d assume preoedenoe
over others when d|souss|ng teohno|og|es
thatareneededasapr|or|ty.Predeterm|n-
|ngteohno|og|oa|pr|or|t|esshou|dbe|eftto
|nd|v|dua|oountr|es|nthe|rpo||oy-sett|ng.
c. lPBs, exibi|ities and |earning
aptians
Severa| stud|es on the |mpaots of lPRs
and the faotors that under||e deo|s|ons of
oountr|es to opt for lPR proteot|on have
|ed to s|m||ar oono|us|ons (Sootohmer,
1991; Maskus and Re|ohman, 2005}. lnd|-
v|dua| oho|oes of oountr|es are ||ke|y to be
prompted more by the mot|ve to oement
the advantages of the|r rms, espeo|a||y
|n the h|gh-teoh seotors, |nternat|ona||y
or reg|ona||y, and th|s |nvar|ab|y resu|ts |n
harmon|zed reg|mes that reeot h|gh |ev-
e|s of lPR proteot|on (Ha|| and Z|edon|s,
2001; |anjouw and Oookburn, 2000}. Th|s
trend |s a|so |noreas|ng|y observed among
emerg|ngoountr|es.Forexamp|e,overthe
past deoade there has been a marked r|se
|nthepatent|ngofteohno|og|esforo||mate
ohange m|t|gat|on |n oountr|es suoh as
Oh|na and lnd|a (NOTAD, 2011o}. Wh||e a
grow|ngshareof|ooa|patents,asopposed
to fore|gn-owned, |n emerg|ng oountr|es
|s ev|denoe of the|r grow|ng teohno|og|oa|
prowess, |t ra|ses oerta|n pert|nent |ssues
for teohno|og|oa| aooess and ohange |n
other deve|op|ng oountr|es and |DOs.
Fromah|stor|oa|perspeot|ve,therearesev-
era| |mportant ways |n wh|oh eoonom|es
suoh as, Japan, the Repub||o of Korea, Ta|-
wanProv|noeofOh|naandthen|tedStates
have taken advantage of teohno|og|oa|
know|edge from outs|de |n the|r deve|opment
prooesses by ta||or-mak|ng the|r respeo-
t|ve lPR reg|mes. The exper|enoes of these
oountr|espavedthewayforexper|mentat|on
|n a var|ety of deve|op|ng oountr|es (|no|ud-
|ng Oh|na and lnd|a}. Dur|ng the|r deve|op-
mentphase,theseoountr|esprov|dedon|ya
m|n|mum of lPR proteot|on (Maskus, 2004}.
Japan`s patent system, for |nstanoe, was
des|gnedtofao|||tate|nnovat|onandd|ffus|on
(Ordover, 1991}. lt prov|ded for ut|||ty patents,
perm|ttedon|ys|ng|eo|a|ms|napatentap-
p||oat|on and requ|red pre-grant d|so|osure.
Thesystema|so|nst|||edanaot|vepatentop-
pos|t|onreg|meandenoouraged|norementa|
and adapt|ve |nnovat|on. ln add|t|on, Japan
strong|y enoouraged |nnovat|ve fore|gn rms
to ||oense the|r teohno|og|es to Japanese
rms. The oountry`s M|n|stry of Trade and
lndustry (MlTl} was aot|ve|y |nvo|ved |n the
teohno|ogy ||oens|ng prooess by exam|n|ng
thetermsofteohno|ogy||oens|ngoontraots
(Maskus, 2000 and 2004; and box 4.2}.
Furthermore, |mportant|y, Japan`s exper|-
enoe shows a h|gh degree of ooord|nat|on
between|tslPRreg|meandotheraspeotsof
|ts |nnovat|on po||oy framework.
S|m||arlPRstrateg|eshavebeenemp|oyed
by other eoonom|es, suoh as the Repub-
||o of Korea and Ta|wan Prov|noe of Oh|na
(box 4.3}, to promote |nnovat|on, e|ther by
notgrant|nglPRsorbygrant|ngapart|ou|ar
var|antoflPRproteot|on,suohastheadop-
t|on of ut|||ty mode|s. The |mportanoe of
theseexper|enoes|ssupportedbythefaot
thatmorereoent|yanumberofdeve|op|ng
oountr|es and |DOs have been oons|der|ng
s|m||arstrateg|es.
W|||eag|ow|ngs|a|e
of|oca|oatents,asoo-
oosedtofo|e|gn-owned
|sev|denceofg|ow|ng
tec|no|og|ca|o|owess
|t|a|sesce|ta|n
oe|t|nent|ss0esfo|
tec|no|og|ca|access
andc|ange|not|e|
deve|oo|ngco0nt||es
and/DCs.
85
CHAPTER IV : HOW CAN THE SOUTH PROVIDE A NEW IMPETUS FOR BUILDING INNOVATIVE CAPACITY?
Oont|nu|ng po||oy |n|t|at|ves |n emerg|ng
oountr|es,part|ou|ar|yOh|naandlnd|a,a|so
prov|deexamp|esofpotent|a|waystouse
ex|st|ng ex|b|||t|es |n the TRlPS Agree-
ment.
7
Suoh oases oarry |essons for |DOs
wh|ohare|ntheprooessofgradua||y|mp|e-
ment|ng the TRlPS Agreement. NOTAD,
for |nstanoe, has argued for the use of |n-
orementa||nnovat|onpatents,basedonthe
mode| adopted by the Repub||o of Korea,
for use |n oountr|es suoh as ganda (NO-
TAD, 2009b}. Pursu|ng suoh poss|b|||t|es
offer severa| opportun|t|es for deve|op|ng
oountr|es|npart|ou|arseotors.
The pharmaoeut|oa| seotor has been one
suoh seotor, where|n the Doha Deo|arat|on
ontheTRlPSAgreementandPub||oHea|th
a||owed unt|| 2005 for deve|op|ng oountr|es
to oomp|y w|th that Agreements patent-
|ng prov|s|ons re|at|ng to pharmaoeut|oa|s.
ln the pharmaoeut|oa| seotor, |n part|ou|ar,
8ox4.2: Ta||or|og|P8reg|mesto|oca|deve|opmeota|oeeds:thecaseoIJapao
ln Japan, the lPR system was oonstrued as part of a broader |nnovat|on system. The Government enoouraged |ooa| rms to as-
s|m||ate |mported teohno|og|es through a|| means, |no|ud|ng FDl. Th|s |ed to |mprovements |n the overa|| system of |nnovat|on (see,
for examp|e, Freeman, 1987; and Ne|son, 1993}, |n part|ou|ar, |n the ab|||ty of Japanese rms to des|gn produots and prooesses.
The 'qua||ty o|ro|es" oreated by the |nnovat|on po||oy were promoted by an emphas|s on soo|a| |nnovat|on that was des|gned to
max|m|ze the oontr|but|on of the |ower |eve|s of the workforoe and to ass|gn respons|b|||ty for teohn|oa| ohange to |ower manage-
ment |eve|s. The Government adopted an '|ntegrat|on strategy" wh|oh brought together the best ava||ab|e resouroes from un|ver-
s|t|es,governmentresearoh|nst|tut|onsandpr|vateandpub||o|ndustr|estoso|vethemost|mportantdes|gnanddeve|opment
prob|ems (Peok and Goto, 1981}.
To support |ts |nnovat|on strategy, Japan reformed the eduoat|on and tra|n|ng system. As a resu|t, the rate of enro||ment, espe-
o|a||y |n so|enoe and teohno|ogy (S&T}, |noreased steep|y. ln S&T eduoat|on, |ndustr|a| tra|n|ng of the k|nd re|evant for rms was
emphas|zed w|th the a|m of bu||d|ng a||-round oapab|||t|es, |no|ud|ng at |ower |eve|s of the workforoe. Th|s enab|ed a more rap|d
hand||ng of equ|pment breakdowns and ma|ntenanoe, and ensured a smoother ass|m||at|on and more ready aooeptanoe of new
prooess teohno|og|es (Gregory, 1985}. Further, the Japanese system of 'deoentra||zed management" perm|tted greater hor|zonta|
|ntegrat|on, and teohno|og|oa| |mprovements |n des|gn, deve|opment and produot|on (Aok|, 1986}. Teohno|ogy-re|ated foreoast|ng
wasoarr|edouttodeterm|newh|ohteohno|og|esshou|dreoe|vegreaterfoous.Th|sorohestrat|onofstrategywasaoh|evedbya
oomb|nat|on of oentra| government ooord|nat|on (ma|n|y by MlTl} and by the |n|t|at|ves of Japan`s |arge |ndustr|a| oong|omerates
(keiretsu}.
a
Souroe: NOTAD.
a
Japan rev|sed |ts patent reg|me between 1988 and 1993 to make |t oomp||ant w|th the Par|s Oonvent|on.
8ox4.3: 0t|||tymode|s|mp|emeoted|othe8ep0b||coIkoreaaodTa|waoProv|oceoI0h|oa
G|ven that a |arge number of |DOs are ob||ged to prov|de lPR proteot|on, the searoh for ex|b|e opt|ons that a|so promote |ndus-
tr|a| deve|opment |s on the r|se. ln th|s oontext, the mode|s used |n the Repub||o of Korea and Ta|wan Prov|noe of Oh|na oan offer
someusefu|opt|ons.
lnboththeseeoonom|es,a||m|tedamountoflPRproteot|on,often|ntheformofaut|||tymode|,wasusedasapo||oy|noent|ve
to enoourage |ooa| rms to |nvest soaroe oap|ta| |n reverse eng|neer|ng for teohno|og|oa| |earn|ng. The ut|||ty mode| |s a weaker
form of lPR proteot|on as |t has a |ower requ|rement of |nvent|ve steps or nove|ty, but |t |s usua||y granted for on|y a few years. Th|s
mode| was a|so used by Japan and the rst-t|er NlEs (Kumar, 2002}.
a
ln the Repub||o of Korea, the sma||er, but smart, |ooa| rms were enoouraged to reverse eng|neer teohn|oa| know|edge embod|ed
|n produots that was read||y ava||ab|e through fore|gn supp||ers to these rms (K|m, 2002}. ln Ta|wan Prov|noe of Oh|na, rms were
s|m||ar|y enoouraged to upgrade after the 1986 patent reforms wh|oh a||owed three k|nds of patent proteot|on: |nvent|ons, new
ut|||t|es and new des|gns (Hu and Mathews, 2005}. ln seotors where suoh proteot|on was preva|ent, rms/|nd|v|dua|s were a||owed
to patent the teohn|oa| proo|enoy of the|r produots w|thout aotua||y a||ow|ng any o|a|ms on the under|y|ng |deas/prooesses.
b
Souroe: NOTAD, based on Geh| Sampath (2010}.
a
However,theut|||tymode|oflPRproteot|on|ntheseoountr|eswasveryd|fferentfromthatobserved|nmanydeve|opedoountr|essuoh
as Germany (Geh| Sampath, 2010}.
b
ldeas a|one are not patentab|e, exoept |n oonneot|on w|th a produot or prooess. ln pharmaoeut|oa|s, oountr|es suoh as lnd|a (unt|| 2005}
and the Repub||o of Korea granted patents on|y on prooesses, not produots. Oompet|tors oou|d thus reverse eng|neer an unproteoted
produot and make |t through a d|fferent, unproteoted prooess.
86 TECHNOLOGY AND INNOVATION REPORT 2012
the requ|rement that deve|op|ng ooun-
tr|es suoh as lnd|a shou|d oomp|y w|th
the TRlPS Agreement re|at|ng to phar-
maoeut|oa| produot and prooess patents
hasoausedoonoernaboutwhetherthese
oountr|es w||| be ab|e to oont|nue to de-
ve|op and produoe more affordab|e ge-
ner|overs|onsofdrugsthatare|mportant
for treat|ng d|seases that are preva|ent
|n other deve|op|ng oountr|es and |DOs.
G|ven the |arge pr|oe d|fferent|a|s be-
tween pharmaoeut|oa| drugs deve|oped
by lnd|an and other deve|op|ng-oountry
rms and deve|oped-oountry rms, gov-
ernments |n some |DOs have sought to
promote |ooa| produot|on oapab|||t|es |n
thehea|thandpharmaoeut|oa|sseotors|n
reoentyears.Manyoftheseoountr|esare
exemptfromtheob||gat|ontoofferpatent
proteot|on on pharmaoeut|oa| produots
as requ|red by the TRlPS Agreement unt||
2016, and oou|d therefore offer a base for
manufaotur|ng gener|o vers|ons of drugs
that are patent-proteoted |n oerta|n non-
|DO oountr|es. However, as |DOs faoe
numerousprob|ems|nestab||sh|ngv|ab|e
|ooa| produot|on fao|||t|es that meet qua||ty
standards,theyneedtobu||dteohno|og|-
oa|oapab|||t|es|nth|sseotor.
The bu||d|ng of suoh oapab|||t|es |s be|ng
supported by severa| |nternat|ona| and b|-
|atera| ageno|es, suoh as the WHO, the
European Oomm|ss|on (EO}, NlDO and
NOTAD. South-South teohno|og|oa| oo|-
|aborat|onsarea|soanessent|a|meansfor
bu||d|ngthoseoapab|||t|es,as|||ustratedby
two oase stud|es d|soussed be|ow. These
oase stud|es are presented |n ohapter lll,
but the|r sa||ent features w|th respeot to
lPRsandother|nst|tut|ona|parametersare
desor|bedhere.
i. India-Uganda collaboration: Quality
Chemicals (Uganda) and Cipla
Pharmaceuticals (India)
Th|s |s an arohetyp|oa| examp|e of how
teohno|ogy and re|ated tao|t know-how
have been transferred from an emerg|ng-
oountry rm to a jo|nt venture |n an |DO.
The Government of ganda aot|ve|y sup-
portedtheoreat|onofthejo|ntventurebe-
tween a |ooa| oompany, Oua||ty Ohem|oa|s
lndustr|es,w|thamajordeve|op|ng-oountry
manufaoturerofgener|odrugs,O|p|aPhar-
maoeut|oa|s,forthesusta|nab|eproduot|on
|n ganda of h|gh-qua||ty, |ow-oost ARvs
and ant|-ma|ar|a drugs to supp|y the East
Afr|oanreg|on.TheGovernmentofganda
offered speo|o |noent|ves to enoourage
O|p|a to ohoose a |ooa| rm |n ganda |n-
o|ud|ng free |and, |nvestment and a buy-
baok guarantee for produots produoed |n
the p|ant up to seven years (see ohapter lll
for deta||s}. From an lPR perspeot|ve, the
po||oy dooument of the gandan Govern-
ment o|ear|y states the need to bu||d |ooa|
produot|on oapao|ty |n the oountry, g|ven
thethreattosupp||esofoheapre||ab|ege-
ner|o drugs from deve|op|ng-oountry rms
due to the dead||ne of 2005 oonta|ned |n
the TRlPS Agreement for a|| deve|op|ng
oountr|es.Th|slPR|ssuep|ayedaro|e|nthe
deo|s|on of O|p|a Pharmaoeut|oa|s to par-
t|o|pate |n the jo|nt venture (Geh| Sampath
and Spennemann, 2011}.
ii. Technological collaboration in
Bangladeshs pharmaceutical
sector
Bang|adesh,w|ththeass|stanoeoflnd|an
and other fore|gn produoers, has estab-
||shed |tse|f as a major manufaoturer and
exporter of pharmaoeut|oa| formu|at|ons
s|noe the 1980s. lt |s now seek|ng to take
advantage of |ts |DO status to manufao-
ture aot|ve pharmaoeut|oa| |ngred|ents for
drugssuohasant|b|ot|os.ltoffersagood
examp|e of how |DO rms oan thr|ve |n
th|s oomp|ex seotor by oonoentrat|ng
the|r bus|nesses on key |nputs a|ong the
pharmaoeut|oa| produot|on prooess. |o-
oa| pharmaoeut|oa| rms dom|nate the
produot|on |andsoape w|th a w|de range
of gener|os that |no|ude ant|u|oerants, ou-
roqu|no|ones, ant|rheumat|o non-stero|d
drugs, non-naroot|o ana|ges|os, ant|h|sta-
m|nes, and ora| ant|d|abet|o drugs. As an
|DO, Bang|adesh, ||ke ganda, |s exempt-
edfrom|mp|ement|ngthepharmaoeut|oa|
patent|ng prov|s|ons of the TRlPS Agree-
ment unt|| 2016. As a resu|t, |ts domest|o
pharmaoeut|oa| oompan|es are benet|ng
Cont|n0|ngoo||cy
|n|t|at|ves|neme|g|ng
co0nt||eso|ov|de
examo|esofootent|a|
waysto0seex|st|ng
ex|o|||t|es |n t|e 7R/PS
Ag|eement.
87
CHAPTER IV : HOW CAN THE SOUTH PROVIDE A NEW IMPETUS FOR BUILDING INNOVATIVE CAPACITY?
extens|ve|y and try|ng to bu||d jo|nt ven-
tures and a|||anoes w|th fore|gn rms, es-
peo|a||ythosefromOh|na,lnd|aandsome
EastAs|anoountr|esto|mprovethe|rprod-
uot qua||ty and standards.
d. Linking innavatian pa|icies ta
braader industria| pa|icy
To address market |mperfeot|ons that ham-
per|nnovat|onand|ndustr|a|deve|opment,
oountr|es |n East As|a and |at|n Amer|oa
have emp|oyed |ndustr|a| po||o|es exten-
s|ve|y |n the|r oatoh|ng up prooesses as a
means to remov|ng obstao|es to struotura|
transformat|on.lndustr|a|po||o|eshavetyp|-
oa||y a|med at prov|d|ng a range of |noen-
t|vesfor|ndustr|a|transformat|onanddeve|-
opment (O`Oonnor and Kjo||erstroem, 2008;
St|g||tz, Sen and F|touss|, 2010; O|mo|| et
a|., 2009}. Suooessfu| oomponents |no|ude
those that target the expans|on of oap|ta|-
and know|edge-|ntens|ve seotors through
assoo|atedteohno|og|oa||earn|ng,promote
the generat|on of forward and baokward
||nkages, boost demand, and he|p oreate
oompet|t|ve advantages (NOTAD, 2011o}.
Po||oy |nstruments re|at|ng to teohno|ogy
and |nnovat|on are therefore a key oompo-
nentof|ndustr|a|po||oy|noountr|es.Severa|
suboomponentsofteohno|ogyand|nnova-
t|on po||o|es, suoh as those re|at|ng to FDl
and lPRs, oan be ne-tuned to promote
teohno|ogy ows and teohno|ogy transfer
throughthebroader|ndustr|a|po||oyframe-
work.
The ga|ns from lPR po||o|es |n terms of
teohno|ogytransfera|sodependonthe|n-
dustr|a| po||oy of the lPR grant|ng oountry.
TNOs may engage |n FDl, jo|nt ventures or
||oens|ng,depend|ngonthebroaderobjeo-
t|vessetout|nthe|nnovat|onand|ndustr|a|
po||oy frameworks of the host oountr|es. ln
add|t|on, to ensure more s|gn|oant teoh-
no|og|oa| sp|||overs, forward and baokward
||nkages need to be estab||shed for wh|oh
|ndustr|a|po||oyoanp|ayan|mportantro|e
(boxes 4.4 and 4.5}.
8
D. PRINCIPLE 3:
PROMOTING
LEARNING THROUGH
ALLIANCES AND
TECHNOLOGY
TRANSFER
Aor|t|oa|sh|ft|nSouth-Southoo||aborat|on
on teohno|ogy and |nnovat|on |s needed,
w|th a foous on promot|ng teohno|og|oa|
|earn|ngbasedontheSouthsownr|ohand
d|verse exper|enoes, as h|gh||ghted |n th|s
ohapter.Someofthemeansofsuoh|earn-
|ng,suohasteohno|ogytransfer,havebeen
demanded by deve|op|ng oountr|es |n the
|nternat|ona| d|soourse for deoades (Pate|
et a|., 2001; Maskus, 2004}. Teohno|og|oa|
deve|opment |mp||es more than just pro-
mot|ng the |mport of teohno|og|es through
FDl and TNO aot|v|t|es or through trade |n
oap|ta| goods. As ment|oned above, what
8ox4.4: |od0str|a|po||cyaod|P8s:0h|oasexper|eoce
ln reoent years, Oh|na has prov|ded an examp|e of how to use |ndustr|a| po||oy to ga|n from estab||sh|ng ||nkages between lPRs
and teohno|ogy transfer. A study oonduoted by the n|ted States lnternat|ona| Trade Oomm|ss|on (SlTO, 2011} observed that
Oh|na`s po||oy to promote |nd|genous |nnovat|on |no|udes s|x oruo|a| prov|s|ons to promote |ooa| |nnovat|on: (|} every year, the
Governmentpreparesaoata|ogueof|nd|genous|nnovat|ons,andtheproduots||stedthere|ngetpreferenoe|nproourementby
both the oentra| and prov|no|a| governments to enoourage Oh|nese rms to deve|op and manufaoture produots embody|ng new
teohno|og|es; (||} Oh|na has |ntroduoed |ts own teohn|oa| standards that d|ffer from |nternat|ona| standards. Suoh standards en-
oourage |ooa| adaptat|on of fore|gn teohno|ogy as we|| as Oh|nese made produots; (|||} there ex|sts a strong ant|-monopo|y |aw; (|v}
Oh|nese rms are ent|t|ed to tax benets |f R&D |s undertaken w|th|n Oh|na and |f the lPRs on suoh produots/prooesses are |ooa||y
owned; (v} |n a number of h|gh-teoh |ndustr|es, |no|ud|ng av|at|on and automot|ves, fore|gn rms` aooess to the Oh|nese market
has often been oont|ngent on the requ|rement that they transfer speo|ed teohno|ogy to a Oh|nese rm, genera||y a jo|nt-venture
partner; and (v|} some rms |nvest|ng |n Oh|na are subjeot to a |ooa| oontent requ|rement |n order to oreate baokward ||nkages.
As a resu|t of suoh po||oy support for Oh|nese rms to enoourage |nd|genous |nnovat|on, the share of Oh|nese res|dent patents as
aperoentageoftota|patentsgranted|ntheoountryhasbeenstead||ygrow|ng.
Souroe: NOTAD, based on SlTO (2011}.
Po||cy|nst|0ments
|e|at|ngtotec|no|ogy
and|nnovat|ona|ea|ey
comoonentof|nd0st||a|
oo||cy|nco0nt||es.
88 TECHNOLOGY AND INNOVATION REPORT 2012
|smoreoruo|a||sthebu||d|ngofoapab|||t|es
through sk|||s deve|opment and the transfer
of operat|on and ma|ntenanoe know-how
wh|ohpromotesteohno|og|oa|progress.
Meohan|smsforteohno|og|oa|oo||aborat|on
havetrad|t|ona||yfoousedonaNorth-South
d|mens|on, but there are a|so opportun|-
t|es to deve|op South-South meohan|sms
for shar|ng of exper|enoes on teohno|og|-
oa| oapao|ty-bu||d|ng and transfer. lndeed,
theseoou|dbemoreappropr|ate|nthede-
ve|op|ng-oountry oontext, g|ven that these
oountr|es share oommon deve|opment
oha||enges.Suohmeohan|smsoou|doom-
p|ement ongo|ng efforts to foster North-
South teohno|ogy transfer by p|ao|ng an
exp||o|temphas|sonteohno|og|oa||earn|ng
and bu||d|ng |ooa| oapao|t|es for |nnova-
t|on. One suoh meohan|sm |s the oreat|on
ofstrateg|oteohno|og|oa|a|||anoesbetween
somedeve|op|ngoountr|es,part|ou|ar|ybe-
tween the emerg|ng oountr|es w|th |DOs or
w|thotherdeve|op|ngoountr|es,topromote
|earn|ng|nseotorsthata|readyhavesome
|eve|ofdomest|oteohno|og|oa|oapab|||t|es.
Teohno|ogytransferandtheshar|ngoftao|t
know-how |s another |nstrument that the
South oou|d use to p|oneer d|fferent so|u-
t|onsby|ead|ngbyexamp|e.
1. Promoting strategic alliances
for overall technological growth
The pro||ferat|on of |nter-rm a|||anoes has
ra|sed expeotat|ons of aooe|erated |ong-
term growth opportun|t|es for deve|op|ng
oountr|esbyenab||ngfasteraooesstomar-
kets and advanoed teohno|og|es and offer-
|nggreater|earn|ngposs|b|||t|es.
9
However,
ev|denoeshowsthat,a|thoughdeve|op|ng-
oountry rms have |noreased the|r par-
t|o|pat|on s|gn|oant|y, reoorded forma| a|||-
anoesarest|||overwhe|m|ng|yoonoentrated
among deve|oped-oountry rms. A sma||
group of rap|d|y deve|op|ng oountr|es w|th
s|gn|oant oapab|||t|es and |arge domest|o
8ox4.5: 0seoIpo||cy|ostr0meotstopromotetechoo|og|ca|a|||aoces|oastAs|a
The Repub||o of Korea, S|ngapore and Ta|wan Prov|noe of Oh|na have suooessfu||y |everaged a|||anoes to deve|op the|r teohno|og|-
oa| oapab|||t|es and dramat|oa||y expand the|r GDP over the past severa| deoades. ln eaoh of these eoonom|es, the government
strategy has been threefo|d: (|} ||nk domest|o rms to the g|oba| eoonomy |n order to bu||d |nd|genous sk|||s and teohno|og|oa|
oapab|||t|es; (||} |everage re|at|onsh|ps w|th other oountr|es and TNOs to estab||sh mean|ngfu| oonneot|ons of strateg|o va|ue; and
(|||} |earn as muoh as poss|b|e about |nternat|ona| best praot|oes and state-of-the-art teohno|og|es, then bu||d on these foundat|ons
and|mproveonthem.
Theapproaohesadoptedbythegovernmentsofeaohoftheseeoonom|es,havevar|edforaoh|ev|ngtheseobjeot|vesandfor
deve|op|ngteohno|og|oa|oapab|||t|es,ash|gh||ghtedbe|ow.
Souroe: NOTAD, based on NlDO (2006:37-38}.
Ta|waoProv|oceoI0h|oa 8ep0b||coIkorea S|ogapore
Strategy: deve|opment of a nat|ona|
teohno|ogy and |nnovat|on system fo-
ousedonbu||d|ngtheoountrysexport-
or|entedSMEs.
Estab||shed an |nvestment promot|on
agenoyfor|dent|fy|ngsu|tab|e|ndustr|es
and teohno|og|es, a|so through teohn-
|og|oa|a|||anoes.
Estab||shed a so|enoe and teohno|ogy
|nst|tute for aoqu|s|t|on, reverse eng|-
neer|ngandd|ffus|on.
Oreated a market|ng agenoy a|med at
prov|d|ng export|ng rms w|th re|evant
|nformat|on on fore|gn markets.
Oreated an agenoy to support o|us-
ter|ng to ||nk |arger rms to o|usters of
sma||er rms.
Strategy:promot|onof|arge|nd|genous
nat|ona| rms that oou|d qu|ok|y |earn
from and oompete w|th deve|oped-
oountryTNOs.
lntroduoed po||oy measures to ensure
that FDl, ||oens|ng agreements and teoh-
no|ogy exohange hastened the bu||d|ng
ofteohno|og|oa|oapab|||t|esattheenter-
pr|se|eve|.
Oreated an |nst|tut|ona| framework
that a||owed the Government to a||o-
oate performanoe-based |noent|ves,
suoh as subs|d|zed ored|t, to a sma||
number of ent|t|es that eventua||y be-
oame|argeoong|omerates.
Strategy: promot|on of ||nkages be-
tween |nd|genous SMEs and the g|oba|
va|ueoha|nsofTNOs,|no|ud|ngthrough
teohn|og|oa|a|||anoes.
Prov|ded an |noent|ve system and
|nst|tut|ona| framework to attraot TNOs.
Oreated |nvestment promot|on agen-
o|esthatsought|nvestmentsfromfore|gn
rms and |ndustr|es.
Oreated ageno|es respons|b|e for |n-
dustr|a|estates.
Estab||shed export-prooess|ng zones.
Estab||shed ||oensed manufaotur|ng
warehouses.
7|e|ea|ea|so
oooo|t0n|t|estodeve|oo
So0t|-So0t|
mec|an|smsfo|
s|a||ngof
exoe||enceson
tec|no|og|ca|caoac|ty-
o0||d|ngandt|ansfe|.
89
CHAPTER IV : HOW CAN THE SOUTH PROVIDE A NEW IMPETUS FOR BUILDING INNOVATIVE CAPACITY?
8ox 4.6: The |od0s Towers jo|ot veot0re
Areoentexamp|eofasuooessfu|jo|ntventure|nthete|eooms|ndustry|sthatofthelnd|antowermanagementoompany,lndus
Towers. lndus Towers was estab||shed |n November 2007 as a jo|nt venture |nvo|v|ng Bhart| A|rte|, ldea Oe||u|ar (lnd|an oompa-
n|es} and vodafone Essar (a n|ted K|ngdom oompany} w|th the a|m of reduo|ng pass|ve |nfrastruoture oosts for eaoh oompany.
Over the past deoade, the lnd|an te|eooms |ndustry has been undergo|ng extraord|nary growth, w|th some experts foreoast|ng an
80per oent penetrat|on rate by as ear|y as 2017. Ear|y oompet|t|on |n th|s |ndustry was |ntense and marg|na| revenues were very
|owoomparedw|thotheroountr|es,wh|ohposedoha||engesforoap|ta||nvestment|nnewtower|nfrastruoture.Atthebeg|nn|ngof
2007, on|y 25per oent of w|re|ess towers |n lnd|a were shared by te|eooms operators - a system that was |nefo|ent for operators
beoause rms were bu||d|ng towers |n over|app|ng areas that oou|d eas||y have been serv|oed by a s|ng|e tower.
Bhart| A|rte| and vodafone Essar, the two |argest pr|vate te|eoom serv|oe prov|ders |n lnd|a, rea||zed they oou|d oooperate on
towerdeve|opmentwh||erema|n|ngoompet|t|ve|nthe|roorebus|nessesofprov|d|ngte|eoomserv|oes.Theythereforedeo|dedto
jo|nt|y estab||sh an |ndependent rm to oonstruot and manage towers throughout the two rms` oommon operat|ng areas. ldea
Oe||u|ar, the th|rd |argest te|eooms operator |n lnd|a, was a|so offered a sma||er share |n the new rm, wh|oh |t aooepted based on
theexpans|onprospeotsth|soou|dprov|de.
Negot|at|ng and |mp|ement|ng the terms of the jo|nt venture posed severa| oha||enges for the part|es |nvo|ved. Determ|n|ng how to
va|uetheassetsthateaohoompanyoontr|butedwasanear|ysouroeoffr|ot|on,wh|ohwasreso|vedthroughtheestab||shmentof
a po|nt system whereby the towers were rated based on attr|butes suoh as |ooat|on and s|ze. The oompan|es then oontr|buted
oap|ta| for ereot|ng new towers suoh that the po|nt va|ues were equa| among eaoh partner. Other ear|y |ssues |no|uded network
downt|me, the |aok of a standard|zed data-shar|ng p|atform, and oon|ots between the strateg|o objeot|ves of the part|o|pat|ng
oompan|es. lndus Towers was ab|e to reso|ve these oha||enges |n |arge part due to equa| representat|on on the management
boardandasharedunderstand|ngofthe|ssuestobereso|ved.
Over the years, lndus Towers has grown |nto an efo|ent veh|o|e that operates towers throughout the oountry, and has suooess-
fu||yevo|ved|ntoan|ndependenttoweroompany.Today,|t|sthe|argestte|eoomtoweroompany|nthewor|d,w|thaportfo||oof
over 110,000 towers, and |t p|ans to add 5,000 more towers annua||y unt|| 2015.
Souroe: NOTAD, based on Gu|at| et a| (2010}.
markets seems to have beneted muoh
morethanothers.Pr|mar||y,TNOsoperat|ng
|n deve|op|ng oountr|es have ut|||zed oross-
border partner|ng and network|ng to s|gn|-
oant|y ra|se those oountr|es teohno|og|oa|
oapab|||t|es and bus|ness oompet|t|veness.
S|gn|oant aot|v|ty has a|so been reoorded
|n natura| resouroe exp|orat|on and exp|o|-
tat|on. These ongo|ng deve|opments offer
|essonsfora||deve|op|ngoountr|esonhow
to|everageteohno|og|oa|a|||anoestodeve|-
op teohno|og|oa| oapab|||t|es (see box 4.5}.
More reoent|y, other deve|op|ng oountr|es,
part|ou|ar|yOh|naandlnd|a,havebeenus-
|ng teohno|og|oa| a|||anoes to bu||d |ooa|
oapab|||t|es. A|though many of these are
notstr|ot|ySouth-South,theyhe|ptoshow
the |mportanoe of suoh a|||anoes and how
they oou|d be app||ed |n the South-South
oontexttobu||dteohno|og|oa|oapao|ty.The
lndusTowersjo|ntventure|sanoutstand|ng
examp|e of how two lnd|an te|eoommun|-
oat|onsoompan|esentered|ntoastrateg|o
partnersh|p w|th a fore|gn oompany to re-
duoe pass|ve |nfrastruoture oosts and fur-
therstrengthenthe|rteohno|og|oa|oapao|ty
(box 4.6}.
Teohno|og|oa| a|||anoes do not neoessar||y
have to be rm-dr|ven. A|||anoes oan s|gn|-
oant|yexpandopportun|t|esforoompan|es
|nterested |n aooess|ng markets and teoh-
no|og|esandforgovernments|nterested|n
|nd|genousoapao|ty-bu||d|ngandeoonom|o
growth. However, benets do not ow au-
tomat|oa||y; nor do partners neoessar||y
ga|n equa||y. There |s oons|derab|e |earn-
|ngassoo|atedw|thsett|ngupandmanag-
|ng suooessfu| a|||anoes, and po||oy deo|-
s|onsoanhe|pfao|||tatethem.Furthermore,
governments oan promote those a|||anoes
wh|oh wou|d enab|e deve|op|ng oountr|es
and |DOs to |everage the|r potent|a| for
teohno|og|oa|oapao|ty-bu||d|ng.
2. Technology transfer and
developing countries
Debates |n |nternat|ona| and reg|ona| po||oy
arenas s|noe the 1960s have not managed
toreaohmuohoonsensusonooreaspeots
ofteohno|ogytransferandhow|toanbefa-
A|||ancescan
s|gn|cant|y exoand
oooo|t0n|t|esfo|
gove|nments|nte|ested
|n|nd|geno0scaoac|ty-
o0||d|ngandeconom|c
g|owt|.
90 TECHNOLOGY AND INNOVATION REPORT 2012
o|||tated. Deve|op|ng oountr|es have repeat-
ed|y stressed the need for a new teohno|-
ogytransferparad|gmw|thbetter|nd|oators
des|gnedtopromoteandmeasureteohno|-
ogy transfer, espeo|a||y s|noe the ourrent
g|oba| lPR reg|me has the tendenoy to re-
|nforoe ex|st|ng teohno|og|oa| advantages
(NOTAD, 2010a, and 2011b and o}. ls-
suesre|at|ngtoteohno|ogytransferareour-
rent|ybe|ngdebated|nsevera||nternat|ona|
forums, |no|ud|ng |n the WTO |n the oontext
of d|souss|ons on Art|o|e 66(2} of the TRlPS
Agreement, wh|oh oa||s on WTO members
to promote the transfer of teohno|ogy to
|DOs, and |n the Wor|d lnte||eotua| Property
Organ|zat|on (WlPO} |n the oontext of the
WlPO Deve|opment Agenda (box 4.7}.
lssues re|at|ng to teohno|ogy transfer have
a|sobeend|soussedextens|ve|y|ntheoon-
text of speo|o teohno|og|es, part|ou|ar|y
those re|at|ng to pub||o hea|th and |nnova-
t|on |n the WHO Oomm|ss|on on lnte||eo-
tua|PropertyR|ghts,lnnovat|onandPub||o
Hea|th (OlPlH} and to o||mate ohange m|t|-
gat|on under the n|ted Nat|ons Framework
Oonvent|on on O||mate Ohange (NFOOO},
as part of the Teohno|ogy Meohan|sm (TM}.
Of a|| these var|ous d|souss|ons, those re-
|at|ngtotheTMhavebeenthemosteffeo-
t|ve. The TM |s an agreed |nstrument that
seeks to promote teohno|ogy transfer w|th
the|ntentofbu||d|ngnat|ona||nnovat|onoa-
pao|tyandteohno|og|oa||earn|ng.
10
As a oomp|ement to ongo|ng d|souss|ons,
and to |ead the way |n forg|ng produot|ve
so|ut|ons, the South oou|d p|ay a key ro|e
|n demonstrat|ng oonstruot|ve means to
aoh|ev|ngteohno|ogytransfer.Thesewou|d
enta|| struotur|ng government-dr|ven teoh-
no|og|oa| a|||anoes that seek to promote
greater teohno|og|oa| |earn|ng w|th a o|ear
|mpaoton|nnovat|onoapao|ty.Theyshou|d
|no|udea||formsofaot|v|t|es,|no|ud|ngso|-
ent|o oooperat|on to bu||d eduoat|ona|
|nst|tut|ons and human sk|||s, teohn|oa| oo-
operat|ontoenhanoetheoapao|tytoenaot
and ooord|nate po||o|es, and teohno|og|oa|
oo||aborat|on that enta||s the exohange of
tao|t know-how and des|gn oapab|||t|es at
the rm |eve|. Furthermore, s|noe |nnovat|on
oapao|ty |s w|der than teohno|og|oa| sk|||s,
South-South teohno|og|oa| oo||aborat|on
shou|da|sopromote|earn|ng|nabroader,
oomprehens|ve sense. Th|s |s further d|s-
oussed |n ohapter v of th|s Report.
Manydeve|op|ngoountr|esarea|readyen-
gaged|nsomeareasofoooperat|onofth|s
k|nd. For examp|e, as ohapter lll shows,
8ox 4.7: Najor |oteroat|ooa| debates oo techoo|ogy traosIer
Artic|e 66(2) af the TBlP5 Agreement:There|sa|ongstand|ngdebateabouttheextenttowh|ohtheteohno|ogytransferob||ga-
t|on oonta|ned |n Art|o|e 66(2} of the TRlPS Agreement has been honoured. ln part|ou|ar, there has been very ||tt|e emp|r|oa|
ana|ys|s on whether and to what extent th|s prov|s|on has resu|ted |n a greater transfer of teohno|og|es to |DOs. Moreover,
very few rev|ews ex|st that exam|ne whether Art|o|e 66(2} has resu|ted |n an |norease |n teohno|ogy ows between deve|oped
oountr|es and |DOs (Moon, 2008 and 2011}. A study based on oountry se|f-reports to the TRlPS Oouno|| between 1999 and
2007, and foous|ng ma|n|y on the pub||o po||o|es and programmes that deve|oped oountr|es have undertaken to enoourage
the|r organ|zat|ons/enterpr|ses to engage |n suoh teohno|ogy transfer arr|ved at two |mportant oono|us|ons (Moon, 2008}. lt
found that a |aok of den|t|ona| o|ar|ty on key terms suoh as 'teohno|ogy transfer" and 'deve|oped oountry" made |t d|fou|t
to determ|ne wh|oh WTO members were ob||gated to prov|de |noent|ves, of what k|nds and towards what ends. lt noted that
many oountr|es d|d not subm|t reports to the Oouno|| on a regu|ar bas|s, but that out of the 292 programmes and po||o|es
reported, on|y 31per oent speo|oa||y targeted |DO members of the WTO. Of these, approx|mate|y a th|rd d|d not aotua||y
promote teohno|ogy transfer. Thus, out of the 292 programmes, on|y 22 per oent |nvo|ved teohno|ogy transfer speo|oa||y
targeted to |DO members of the WTO.
wlP0 0eve|apment Agenda: O|uster O of the WlPO Agenda and the reoommendat|on there|n dea| w|th Teohno|ogy Transfer,
lnformat|on and lOTs and Aooess to Know|edge. Reoommendat|on 28 oa||s for po||o|es and measures to promote the transfer
andd|ssem|nat|onofteohno|ogytodeve|op|ngoountr|es.Aspartofth|so|uster,aProjeotonlPRsandTeohno|ogyTransfer
(ODlP/4/7}, subm|tted for approva| at the fth ODlP sess|on for a th|rd t|me and was approved for |mp|ementat|on. The prev|-
ous subm|ss|ons had fa||ed to be approved ow|ng to a |aok of oonsensus on how teohno|ogy transfer shou|d be dened and
what|tenta||s.
Souroe: NOTAD, based on Geh| Sampath and Roffe (2012}.
91
CHAPTER IV : HOW CAN THE SOUTH PROVIDE A NEW IMPETUS FOR BUILDING INNOVATIVE CAPACITY?
severa|governments,suohasthoseofBra-
z|| and lnd|a, are engaged |n s|gn|oant so|-
ent|o and teohno|og|oa| oo||aborat|on. By
further|ngex|st|ngefforts|nsuohoo||abora-
t|on w|th|n a more ooherent framework, de-
ve|op|ng oountr|es oou|d he|p to show the
way ahead |n |nternat|ona| d|souss|ons on
teohno|ogytransfer.
E. PRINCIPLE 4:
MAKING
DEVELOPING-
COUNTRY FDI
MORE TECHNOLOGY
ORIENTED
Many oountr|es have |everaged FDl to pro-
mote teohno|og|oa| d|ssem|nat|on and |n-
novat|on oapao|ty. The Repub||o of Korea
prov|desanexamp|eofaoountrythathas
sought FDl as a souroe of teohno|ogy w|th|n
|ts overa|| |ndustr|a| deve|opment strategy
(box 4.8}. There are |nstanoes where South-
South FDl has had pos|t|ve resu|ts |n terms
of bu||d|ng nat|ona| teohno|og|oa| oapab|||-
t|es. lnterest|ng examp|es of how govern-
ments have promoted the transfer of tao|t
know-how by the fore|gn |nvest|ng rm to
the |ooa| partner are those of ganda and
Eth|op|ad|soussed|nohapterlll.
FDl oan be oomb|ned w|th a var|ety of
other po||oy measures, as demonstrated
by the oase of the Repub||o of Korea ear-
||er,andmorereoent|ybytheexper|enoes
of ganda and Eth|op|a (ohapter lll}. The
d|sjunot|on between |nnovat|on po||o|es
and FDl po||o|es |n oountr|es |s of part|ou-
|ar note. Th|s d|sjunot|on needs to be ad-
dressed through an |nnovat|on po||oy that
a||ows reo|p|ent oountr|es to rea||ze the
potent|a| of FDl for teohno|og|oa| |earn|ng.
F. PRINCIPLE 5:
POOLING RESOURCES
OF DEVELOPING
COUNTRIES TO
ADDRESS COMMON
TECHNOLOGICAL
CHALLENGES
Where there are |nsufo|ent rm-|eve| oa-
pab|||t|es to support the oreat|on of oon-
vent|ona| forms of teohno|og|oa| a|||anoes,
or where new a|||anoes for part|ou|ar k|nds
of teohno|og|es are of or|t|oa| |mportanoe
to the deve|op|ng wor|d, there |s a need
for |nnovat|ve meohan|sms for know|edge
produot|on and d|ssem|nat|on. Areas of
part|ou|ar |nterest for address|ng soo|a|
needs |no|ude teohno|og|oa| |nnovat|ons
8ox4.8: F0|aodthecatch-0pprocess|othe8ep0b||coIkorea
The exper|enoe of Repub||o of Korea |||ustrates the |mportanoe of domest|o po||oy |n seek|ng out FDl to boost the oatoh|ng up
prooess. Or|g|na| equ|pment manufaotur|ng (OEM} was a speo|o form of suboontraot|ng that evo|ved out of the jo|nt operat|ons
of TNO buyers and NlE supp||ers. nder OEM, n|shed produots are manufaotured aooord|ng to the speo|oat|ons of the TNO
wh|oh then markets the produots under |ts own brand name. ln the Repub||o of Korea, OEM aooounted for a s|gn|oant share of
e|eotron|os exports dur|ng the per|od 1970-1990.
ln|t|a||y, OEM partners he|ped |n the se|eot|on of oap|ta| equ|pment and the tra|n|ng of managers, eng|neers and teohn|o|ans, and
offered adv|oe on produot|on, nano|ng and management. As a resu|t of th|s oo||aborat|on, Samsung (Repub||o of Korea} began
mak|ng e|eotron|os |n 1969 jo|nt|y w|th Sanyo (Japan}. ln 1981, Tosh|ba (Japan} ||oensed m|orowave oven teohno|ogy to Samsung.
ln 1982, Ph|||ps (the Nether|ands} supp||ed Samsung w|th oo|our te|ev|s|on teohno|ogy, and v|deooassette reoorder teohno|ogy
was ||oensed from JvO and Sony (Japan} |n 1983. By 1992, one |n ve m|orowave ovens so|d |n the n|ted States was made by
Samsung, most|y under OEM w|th the rm Genera| Te|ephone and E|eotron|os Oorporat|on (GTE, an Amer|oan oompany}. |ater
Samsung p|aoed greater emphas|s on sa|es of |ts own brands, wh|oh |noreased to 55per oent |n 1992, to 56per oent |n 1993
and to 57per oent |n 1994.
By the 1980s, major oompan|es from the Repub||o of Korea had beoome |ead produoers and exporters of teohno|ogy-|ntens|ve
goods. Japanese rms suoh as Matsush|ta, Sanyo and NOE w|thdrew from jo|nt ventures as tax advantages were oanoe||ed
and rms were enoouraged by the Government of the Repub||o of Korea to |eave. Around the same t|me, networks (chaebols}
oreated w|th the he|p of Koreans return|ng from abroad beoame dom|nant souroes of new know|edge for produot|on and exports.
Souroe: NOTAD.
7|ed|s|0nct|onoetween
|nnovat|onoo||c|esand
FD/oo||c|es|nco0nt||es
|sofoa|t|c0|a|note.
92 TECHNOLOGY AND INNOVATION REPORT 2012
for promot|ng a green eoonomy, |no|ud|ng
for o||mate ohange m|t|gat|on and adapta-
t|on, susta|nab|e energy and the greater
use of renewab|e energy teohno|og|es, as
we||asforpub||ohea|thandfoodseour|ty.
Evenw|th|ntheseareas,ourrent|ytheshar-
|ng of know|edge has not been systemat|o.
lnstead, there |s a oont|nued re||anoe on
North-South exohanges |n nd|ng teohno-
|og|oa|so|ut|ons.
Asment|onedear||er,deve|op|ngoountr|es
exper|enoes |n bu||d|ng |nnovat|on oapao-
|ty tend to be more re|evant for br|dg|ng
the teohno|og|oa| d|v|de. Moreover, the|r
teohno|og|es are a|so often more |ooa||y
adaptab|e |n other deve|op|ng oountr|es
and |DOs ow|ng to s|m||ar oontexts, and
henoetheyaremoreappropr|ateforthose
oountr|es.TheSouthfaoesmanyoommon
oonstra|nts|nternat|ona||y,suohastheoha|-
|engesofm|t|gat|ngo||mateohange,ensur-
|ng |ndustr|a| growth |n a green eoonomy,
andpromot|ngfoodseour|tyandaooessto
med|o|nes, for wh|oh oommon responses
oou|dbeforged.
ln order to fao|||tate a oommon, deve|op-
menta| response to these |ssues, th|s Re-
port suggests the poo||ng of teohno|og|oa|
resouroesbydeve|op|ngoountr|esthrough
a oomprehens|ve South-South lnnovat|on
and Teohno|ogy Paot (SlTEP}. The pro-
posed Paot, as env|saged here, wou|d be
an |nternat|ona| meohan|sm that seeks to
ooord|nate and promote a deve|op|ng-
oountry response to teohno|og|oa| |ssues.
TheSlTEPwou|dprov|de|nst|tut|ona|sup-
portatthree|eve|s.Tobeg|nw|th,|toou|d
promote teohno|og|oa| |earn|ng at the rm
|eve|asanessent|a|oomp|ementtoongo-
|ng South-South so|ent|o oooperat|on and
teohn|oa| ass|stanoe programmes (ohapter
lll}. At a seoond |eve|, the SlTEP oou|d a|so
promote enterpr|se deve|opment and the -
nano|ng of speo|o |nnovat|on aot|v|t|es that
are of part|ou|ar |mportanoe to deve|op|ng
oountr|es. F|na||y, the Paot oou|d aot as a
p|atformforshar|ng|nnovat|onexper|enoes
and promot|ng |earn|ng at the po||oy-mak-
|ng|eve|.
G. LEVERAGING THE
SOUTH FOR
TECHNOLOGY AND
INNOVATION: POLICY
INCENTIVES AND
ACTIONS
Th|s seot|on proposes po||oy opt|ons to |m-
p|ementthepr|no|p|ese|aborated|nthepre-
v|ous seot|ons of the ohapter. These po||oy
opt|ons are not exhaust|ve - they are mere|y
|ntended to he|p show the way forward.
Moreover, they shou|d not be oonstrued as
b|nd|ng deve|op|ng oountr|es, part|ou|ar|y
emerg|ngeoonom|es,toexaot|ngteohno|og-
|oa|oomm|tments.Rather,theyare|ntended
to fao|||tate the deve|opment of an |nterna-
t|ona| framework on South-South teohno-
|og|oa|oo||aborat|ona|medatpromot|ngthe
mutua| |nterests of a|| deve|op|ng oountr|es,
both as supp||ers and reo|p|ents of teohno-
|og|oa| know|edge |n oo||aborat|ve ventures.
Po||oy measures that oou|d he|p |mp|e-
ment two of the pr|no|p|es |dent|ed ear||er,
name|yfoster|ngabsorpt|veoapao|ty|nde-
ve|op|ng oountr|es and mak|ng deve|op|ng-
oountry FDl more deve|opment-or|ented,
are d|soussed rst. Th|s |s fo||owed by a
desor|pt|onofpo||oy|noent|vesforpromot-
|ng|earn|ngandteohno|ogytransfer.F|na||y,
apo||oy|nstrument|sproposedthatoou|d
he|p forge oommon |nnovat|on responses
bya||deve|op|ngoountr|es.
1. Fostering absorptive capacity
through South-South
collaboration
|earn|ng of the k|nd that bu||ds absorpt|ve
oapao|ty |s mu|t|faoeted: |t |no|udes teoh-
no|og|oa| |earn|ng a|ong w|th other k|nds of
|earn|ng, suoh as that re|ated to bus|ness
prooesses, market|ng and nanoe, a|| of
wh|oh oontr|bute to promot|ng |nnovat|ve
oapab|||t|es.lna||th|s,theStatehasan|n-
d|spensab|e ro|e to p|ay by art|ou|at|ng a
po||oyv|s|onfor|earn|ngand|nnovat|onoa-
pao|ty-bu||d|ng.ldea||y,suohav|s|onshou|d
be aooompan|ed by an |nnovat|on po||oy
thatpromotesthebu||d|ngofdomest|ooa-
pab|||t|es (box 4.9}.
7||sReoo|ts0ggestst|e
ooo||ngoftec|no|og|ca|
|eso0|cesoy
deve|oo|ngco0nt||es
t||o0g|a
como|e|ens|veSo0t|-
So0t|/nnovat|on
and7ec|no|ogyPact
(S/7EPI.
Po||cyoot|onsto
|mo|ementt|ese
o||nc|o|esa|eneeded|n
a||deve|oo|ngco0nt||es.
93
CHAPTER IV : HOW CAN THE SOUTH PROVIDE A NEW IMPETUS FOR BUILDING INNOVATIVE CAPACITY?
A|argenumberofdeve|op|ngoountr|esand
|DOs have an overaroh|ng |nnovat|on po||oy
framework. lt may not speo|oa||y be des|g-
natedassuoh,butamyr|adofpo||o|esthat
amounttoan|nnovat|onpo||oydoex|st.How-
ever, suoh po||o|es are not sufo|ent to |dent|fy
and pr|or|t|ze teohno|ogy needs |n a strateg|o
manner. Des|gn|ng and |mp|ement|ng |nno-
vat|on po||o|es |n deve|op|ng oountr|es are
therefore a start|ng po|nt for pr|or|t|z|ng the
teohno|og|oa| deve|opment of these ooun-
tr|es. Th|s Report suggests that a proaot|ve
|nnovat|on po||oy that o|ear|y |dent|es teoh-
no|og|oa| needs |s a prerequ|s|te for promot-
|ng |nnovat|on oapao|ty systemat|oa||y w|th|n
deve|op|ng oountr|es, tak|ng advantage of
newsouroesofsuohoapao|ty-bu||d|ng,suoh
asNlEsandotherdeve|op|ngoountr|es.
11
Suoh |nnovat|on po||o|es, a|ong w|th teoh-
no|og|oa| needs assessments, oou|d be
aooompan|edbythefo||ow|ngpo||oymeas-
ures speo|oa||y a|med at enoourag|ng
South-South oo||aborat|on |n teohno|ogy
and|nnovat|on.
a. 0aardinating |aca| and regiana|
innavatian pa|icies with 5auth-
5auth ca||abaratian initiatives
Asnoted|nohapterll,there|softenad|s-
junot|on between nat|ona| and reg|ona|
po||o|es on teohno|ogy and |nnovat|on.
Furthermore, g|ven the new|y emerg|ng
opportun|t|es for South-South teohno|og|-
oa| |earn|ng and exohange, many ex|st|ng
po||oy|nstrumentsdonotexpress|yreferto
South-Southoo||aborat|on|nth|sarea.The
new rea||ty needs to be reoogn|zed by rev|s-
|ng |nnovat|on po||o|es at the nat|ona| and
reg|ona| |eve|s |n order to |noorporate oer-
ta|n key |nnovat|on pr|or|t|es |n South-South
8ox4.9: hat|ooa||ooovat|oopo||cyIrameworks
lnoent|ves prov|ded by nat|ona| |nnovat|on po||o|es target a broad range of |earn|ng aot|v|t|es. The oompetenoe to enaot and
matoh d|fferent po||oy |nstruments |s key to enhano|ng the performanoe of seotors that are teohno|ogy-|ntens|ve and promote
va|ueadded.
Hor|zonta| po||o|es are usua||y d|reoted at st|mu|at|ng |nnovat|on oapao|ty aoross the system as a who|e, w|thout target|ng any
speo|o seotor or |ndustry. These |no|ude po||o|es a|med at bu||d|ng the neoessary know|edge and phys|oa| |nfrastruoture, and
promot|ng oo||aborat|on and |nter||nkages:
i. Policies aimed at building a knowledge infrastructure |no|ude those re|at|ng to |nvestments |n tra|n|ng and eduoat|on and R&D
(e.g. government fund|ng of researoh}, government proourement of teohno|ogy-|ntens|ve goods and standards sett|ng.
ii. Policies to improve physical infrastructure |no|udethosere|at|ngto|nvestments|n,forexamp|e,roadsandh|ghways,and
prov|s|onofgoodwaterandenergyfao|||t|esaswe||aslOTfao|||t|es.Energy|spartoftheor|t|oa||nfrastruoturew|thoutwh|oh
|ndustr|a|deve|opment|snotposs|b|e.
iii. Policies that promote collaboration areoentra|to|nteraot|ve|earn|ng. Oo||aborat|on oan take d|fferent forms depend|ng on
theaotors|nvo|ved|n|nnovat|onw|th|nnat|ona|systems.They|no|ude,|npart|ou|ar,|nteraot|onsbetween:
- Supp||ers and produoers (e.g. un|vers|ty-|ndustry programmes}
- sers and produoers (for the art|ou|at|on of demand}
- Produoers and other produoers (at the rm |eve|}
- sers, produoers and supp||ers (e.g. organ|zat|ons suoh as teohno|ogy researoh organ|zat|ons genera||y aot|ng as a br|dge
between so|ent|o organ|zat|ons and |ndustr|es}
- Support organ|zat|ons for bus|ness rms (|no|ud|ng government ageno|es}
ln add|t|on to suoh hor|zonta| |nnovat|on po||o|es, depend|ng on the seotora| and other pr|or|t|es set by the nat|ona| |nnovat|on
po||oy, a range of targeted po||o|es oan be adopted to support |nnovat|on. Broad|y, these may be o|ass|ed |nto two funot|ona|
areas: |noent|ves for the oommero|a||zat|on of un|vers|ty researoh, and |noent|ves that reduoe the nano|a| r|sk |nherent |n |nnova-
t|on. To promote oommero|a||zat|on of un|vers|ty researoh, speo|o |noent|ves oou|d |no|ude the grant|ng of lPRs to un|vers|t|es,
geograph|oa| o|uster|ng po||o|es that |ooate b|oteoh o|usters around |nst|tut|ons of so|ent|o |earn|ng, teohno|ogy foundat|ons and
b|oteohno|ogy exp|o|tat|on p|atforms. Po||oy measures that promote nano|ng of |nnovat|on |no|ude seed-nano|ng programmes,
enterpr|se subs|dy programmes (for sett|ng up new b|oteohno|ogy start-ups, for examp|e} and oommon p|aoement funds for |n-
novat|onandtaxored|tsforresearoh.
Souroe: NOTAD.
G|vent|enew|y
eme|g|ngoooo|t0n|t|es
fo|So0t|-So0t|
tec|no|og|ca||ea|n|ng
andexc|ange
|nnovat|onoo||c|es
att|enat|ona|and
|eg|ona||eve|sneedto
oe|ev|sed.
94 TECHNOLOGY AND INNOVATION REPORT 2012
re|at|ons.Arangeofpo||oymeasuresoou|d
be |mp|emented that express|y promote
South-South teohno|og|oa| oo||aborat|on.
Theyoou|d|no|ude,forexamp|e:
- ||nk|ng deve|op|ng-oountry FDl w|th
o|ear|y |dent|ed requ|rements for
teohno|ogy and tao|t know-how;
- Prov|d|ng/us|ng ex|st|ng government
fund|ng to promote so|ent|o and
teohn|oa|oo||aborat|onsbetweende-
ve|op|ng oountr|es |n pr|or|ty seotors
(|n the same reg|on or even other re-
g|ons};
- Grant|ng speo|a| |noent|ves and tax
reduot|ons to |ooa| rms for enter|ng
|nto or attraot|ng jo|nt ventures or
jo|nt produot|on arrangements w|th
rms from deve|op|ng oountr|es,
w|th a part|ou|ar foous on aoqu|r|ng
teohno|og|es;
- Prov|d|ng speo|a| tax outs and other
advantages to fore|gn rms from
deve|op|ng oountr|es, part|ou|ar|y
emerg|ng oountr|es, |no|ud|ng assur-
anoesofgovernmentproourement|n
returnforsett|ngupproduot|onfao|||-
t|es and transferr|ng know-how to |o-
oa| rms;
- Prov|d|ng teohno|og|oa| |noubat|on
fao|||t|es to support new teohno|ogy
ventures |n |ooa| |ndustry w|th the
he|p of rms from other deve|op-
|ng oountr|es, part|ou|ar|y emerg|ng
oountr|es.
b. Praviding specic incentives ta
encaurage a shift tawards greater
va|ue added activities
ln order to m|n|m|ze the r|sk of |ooa| rms
rema|n|ngatthe|owerendsofGPNs,w|th
fewornoohanoesofmov|nguptheva|ue-
addedstagesofproduot|on,there|saneed
for exp||o|t po||oy measures that support
engagement|nmanufaotur|ngva|ue-added
aot|v|t|es, wh|oh are essent|a| for struotura|
transformat|on.Po||oymeasuresoou|da|so
targetva|ue-addedsoo|a|aot|v|t|es,where-
bythedeve|opmentof|nnovat|onoapao|ty
foousesonoater|ngto|ooa|needsanda|so
promotes equ|tab|e and |no|us|ve deve|op-
ment.
lnnovat|on funds, both at the nat|ona| and
seotora||eve|s,oou|dhe|ptopromotesuoh
a sh|ft towards va|ue-added goods and
serv|oes. ln oountr|es that are part|ou|ar|y
r|oh|nnatura|resouroeendowments,|nno-
vat|on funds oou|d be oreated to oata|yse
anexp||o|tpo||oysh|fttowardsva|ue-added
aot|v|t|es. A good examp|e |s Oh||e, where
the Government has a||ooated a oerta|n
proport|on of |ts tota| revenues from natu-
ra| resouroes to an |nnovat|on fund that
prov|des |noent|ves for enterpr|ses and re-
searoh |nst|tut|ons |n eoonom|o seotors of
nat|ona||mportanoe.Thereareotherooun-
tr|es where seotora| |nnovat|on funds have
been oreated to a||ev|ate |nnovat|on oon-
stra|nts (box 4.10}.
ln a broader oontext of South-South and
reg|ona| deve|opment, suoh funds (w|th
some |nst|tut|ona| var|at|ons} oou|d a|so be
oreated at a reg|ona| |eve| to fao|||tate the
deve|opmentofovera|||nnovat|onoapao|ty.
A oase |n po|nt |s the Mex|oo-Oh||e Fund,
operated jo|nt|y by the two oountr|es for
deve|opment oooperat|on |n the reg|on (see
ohapter lll, box 3.8}.
c. Pa|icy incentives in emerging
cauntries far a greater
techna|agica| facus
lnordertoensurethatteohno|og|oa||earn|ng
|s an essent|a| oomponent |n South-South
|nteraot|ons,emerg|ngoountr|esoou|dadopt
po||oymeasuresthatwou|dhe|pto|norease
the foous on mutua||y beneo|a| oo||abora-
t|ons |n teohno|ogy and |nnovat|on. These
oou|d take the fo||ow|ng forms: po||o|es that
promote |ong-term engagement w|th other
deve|op|ng oountr|es; those that a|m at a
betterooord|nat|onofteohno|og|oa|oo||abo-
rat|on aot|v|t|es by the|r rms and organ|za-
t|ons w|th so|ent|o and teohn|oa| ooopera-
t|onageno|es;andtheprov|s|onof|noent|ves
to nat|ona| rms to engage |n teohno|ogy ex-
ohange and the bu||d|ng of tao|t know-how
w|th rms |n other deve|op|ng oountr|es.
i. Adopt policies that promote a
long-term technological orientation
The overa|| teohno|og|oa| deve|opment of
the South |s a strateg|o goa| that w||| have
/nnovat|onf0nds,oot|at
t|enat|ona|andsecto|a|
|eve|s,co0|d|e|oto
o|omotes0c|as||ft
towa|dsva|0e-added
goodsandse|v|ces.
Eme|g|ngco0nt||es
co0|dadootoo||cy
meas0|est|atwo0|d
|e|oto|nc|easet|e
foc0sonm0t0a||y
oenec|a| co||aoo|at|ons
|ntec|no|ogyand
|nnovat|on.
95
CHAPTER IV : HOW CAN THE SOUTH PROVIDE A NEW IMPETUS FOR BUILDING INNOVATIVE CAPACITY?
pos|t|ve network effeots for a|| deve|op|ng
oountr|es. Th|s needs to be reeoted |n the
|ong-termv|s|onsandpo||oystrateg|esofa||
deve|op|ngoountr|es,part|ou|ar|yemerg|ng
oountr|es,w|tho|eartargetsandm||estones
set for aoh|ev|ng teohno|og|oa| oo||abora-
t|on, |no|ud|ng rm-|eve|, rm-organ|zat|on
and pub||o-pr|vate partnersh|ps. These w|||
be a|med at nat|ona| rms, wh|oh, more of-
ten than not, w||| be the more teohno|og|-
oa||y advanoed partners |n oo||aborat|ons,
suoh as TNOs from deve|op|ng oountr|es
or oore rms of GPNs based |n emerg-
|ng oountr|es. Ourrent|y, a |ong-term v|s|on
ex|sts |n some oommero|a| and eoonom|o
transaot|ons, but |t needs to be expanded
to |no|ude teohno|og|oa| oo||aborat|ons
basedona|ong-termperspeot|ve.
ii. Adopt policies that link technical and
VFLHQWLFFRRSHUDWLRQZLWKWHFKQRORJLFDO
collaboration
Teohn|oa| and so|ent|o oooperat|on bu||ds
the so|ent|o base and sk|||s of aotors |n any
|nnovat|on system. These sk|||s are then em-
p|oyedtoaooessteohno|ogy,andtouseand
app|y the teohno|ogy for the generat|on of
new and |nnovat|ve produots. Ourrent|y, as
ohapterlllshows,a|thoughmanydeve|op|ng
oountr|es are aot|ve|y engaged |n expand-
|ng the|r so|ent|o and teohn|oa| ass|stanoe
aot|v|t|es, there |s a |aok of ooord|nat|on be-
tween the so|ent|o and teohn|oa| ooopera-
t|onprov|dedbythe|rageno|esandtheon-
go|ng teohno|og|oa| oo||aborat|ons between
rms. These aot|v|t|es shou|d be better ooor-
d|natedbymeansofao|earpo||oyonSouth-
Southteohno|og|oa|oo||aborat|onsetoutby
the part|o|pat|ng governments, part|ou|ar|y
those of the emerg|ng oountr|es. The po||-
o|esshou|dart|ou|ate|ong-termstrateg|oob-
jeot|ves,assuggested|nth|sseot|on.
LLL 3URYLGHLQFHQWLYHVWRUPVIRU
technological collaboration and
technology transfer
Teohno|ogyhaspart|ou|arattr|butes,wh|oh
|mp||es that add|t|ona| |noent|ves are re-
qu|red for pr|vate seotor aotors to engage
|nteohno|ogytransferprooesses.Th|s|sbe-
8ox4.10: |ooovat|ooI0ods|o8raz||aod0h||e
Braz||`s Seotora| Funds for So|enoe and Teohno|ogy were estab||shed |n 1999 to |everage |ndustry-based revenues for R&D |n se|eot
seotors. The Funds` key objeot|ve has been to prov|de more stab|e nano|a| resouroes for STl aot|v|t|es |n the oountry. They are expeoted
to support rms` teohno|og|oa| efforts, |no|ud|ng the|r R&D expend|tures, and |norease the|r number of teohn|oa|-so|ent|o emp|oyees
aswe||asthe|r|eve|sofproduot|v|tyand/orexports.|t|mate|y,thea|m|stogeneratepos|t|veexterna||t|esforthesoo|etyasawho|e.
The Funds are nanoed by |noome generated |n 12 |ndustr|a| seotors, pr|mar||y through |ev|es on enterpr|se turnover |n the |ndus-
tr|es that were pr|vat|zed |n the 1990s, |no|ud|ng energy and te|eoommun|oat|ons. The |ntroduot|on of these seotor-speo|o |ev|es
was |ntended as a means of preserv|ng |nnovat|on |ntens|ty after pr|vat|zat|on, g|ven that the former State-owned enterpr|ses that
had former|y dom|nated the network |ndustr|es were aot|ve R&D |nvestors. The Seotora| Funds` strateg|o oo||eot|ve management
approaohensuresao|earandtransparentprooessandpromotesoo||aborat|on.
Oh||e has been |n a prooess of pr|or|t|z|ng the oountry`s |nnovat|on aot|v|t|es s|noe the beg|nn|ng of the 2000s. The Oh||ean Govern-
ment has taken a ser|es of steps, |no|ud|ng reform|ng |ts |nnovat|on po||oy and the sett|ng up of the Nat|ona| lnnovat|on Oouno||
for Oompet|t|veness (OEOD, 2007}. lt |s reoogn|zed that major |mped|ments to |nnovat|on |n Oh||e are a shortage of sk|||s, a |aok
of entrepreneur|a| ou|ture, |ow R&D expend|ture
b
andaoonoentrat|onofa|mostha|fofpub||oresearoh|ntheoap|ta|o|ty,Sant|ago.
Thesefaotorsareseenash|nder|ngeffortstod|vers|fytheeoonomythroughash|fttowardsva|ue-addedaot|v|t|es.
ln an effort to overoome some of these |mped|ments, the Government oreated the lnnovat|on Fund for Oompet|veness (Fondo
de lnnovao|on para |a Oompet|t|v|dad (FlO}} |n 2006. The FlO |s an |nstrument for ohanne|||ng nano|a| resouroes aooru|ng from
roya|t|es from the m|n|ng seotor to nanoe |mp|ementat|on of |ts |nnovat|on po||oy. These nano|a| resouroes are ohanne||ed |nto
med|um- and |ong-term nano|ng of |nnovat|ons |dent|ed as pr|or|t|es for the oountry (OEOD-lDB, 2010}.
The Oh||ean fund |s an attraot|ve mode| wh|oh oou|d be app||ed by severa| natura|-resouroe-r|oh deve|op|ng oountr|es and |DOs
forbu||d|ngthe|rdomest|o|nnovat|onoapao|ty.
Souroe: NOTAD.
Other souroes of nanoe for the Seotora| Funds are the earmark|ng of revenue and a 10per oent |evy on payments to non-res|dents for
teohn|oa|ass|stanoeandroya|t|es.Theoompos|t|onofrevenuesouroesvar|esaorosstheseotora|funds.
b
The 2007 OEOD lnnovat|on Rev|ew and the 2009 OEOD Terr|tor|a| Rev|ew of Oh||e both est|mate the R&D expend|ture of Oh||e to be
0.7per oent of |ts GDP.
7|e sc|ent|c and
tec|n|ca|coooe|at|on
o|ov|dedoyagenc|es
andt|eongo|ng
tec|no|og|ca|
co||aoo|at|onsoetween
|ms s|o0|d oe oette|
coo|d|nated.
96 TECHNOLOGY AND INNOVATION REPORT 2012
oause teohno|ogy aoqu|s|t|on and exohange
are most|y |nuenoed by faotors that are rm-
based and prot-or|ented. F|rms |n deve|op-
|ngoountr|esaswe||,desp|tehav|ngproved
the|r oompet|t|veness and teohno|og|oa|
edge,|nmany|nstanoesareoonstant|yun-
der pressure to oompete and ma|nta|n/en-
hanoethe|roompet|t|venessv|s--v|sg|oba|
TNOs. Thus, a|though rms from emerg|ng
oountr|esmayoftenbeenoouragedtoenter
|nto a|||anoes for teohno|og|oa| |earn|ng and
teohno|ogy transfer, |n a |arge number of
oases,thesea|||anoesneedtobeexpress|y
promotedthroughpo||oymeasures.
lnasurveyofex|st|ngg|oba|trends|nvar|-
ousseotors,thefo||ow|ngaspeotsseemed
to be part|ou|ar|y s|gn|oant:
- There |s emerg|ng oompet|t|on |n oer-
ta|n seotors from rms |n deve|op|ng
oountr|es w|th deve|oped-oountry
rms;
12
- Deve|op|ng-oountry rms are ab|e to
strateg|oa||y offer serv|oes/produot
partnersh|ps on a qu|d pro quo bas|s
overa|ongerterm;
13
- Deve|op|ng-oountry rms are |n-
oreas|ng|y ab|e to searoh efo|ent|y
for a|ternat|ve teohno|og|es and pay
the|r market pr|oe;
- There are a w|de range of pub||o-pr|-
vate|n|t|at|vesa|medatteohno|og|oa|
exohange|noerta|nseotorsofpub||o
|mportanoe, suoh as agr|ou|ture and
hea|th.
Bear|ngth|s|nm|nd,there|saneedtopro-
v|degreater|noent|vesforteohno|og|oa|oo|-
|aborat|onandtransferofteohno|ogyw|th|n
the South-South oontext. These oou|d take
thefo||ow|ngforms:
- Offer|ng speo|a| |noent|ves and tax
reduot|ons to |ooa| rms from deve|-
op|ng oountr|es |n return for enter-
|ng|ntoorattraot|ngjo|ntventuresor
jo|ntproduot|onarrangements|nthe
South;and
- Grant|ng |ooa| rms from deve|op-
|ng oountr|es speo|a| 'deve|opment-
fr|end|y" oert|oates as a goodw|||
gesture that |mproves the oorporate
|mage of the rms and he|ps them to
deve|opaoustomerbasethroughout
theSouth.
2. Adopting policies that promote
technological alliances and
collaborations
Efforts to promote teohno|og|oa| |earn|ng
and |nnovat|on oan be furthered by two
|mportant po||oy measures. One |s pub-
||o proourement, wh|oh has been used
|n severa| |ndustr|a||zed and deve|op|ng
oountr|es. A speo|o and |mportant funo-
t|on of pub||o proourement oan be to use
|arge-soa|e purohases to |nduoe domest|o
|nnovat|on (Ed|er and Georgh|ou, 2007}.
Th|sstemsfromtheunderstand|ngthatde-
mand |s a key dr|ver of |nnovat|on. Pub||o
demand,whendr|v|ng|nnovat|veso|ut|ons
andproduots,hasthepotent|a|togenerate
|mproved |nnovat|on dynam|os and benets
forthewho|eeoonomy.
a. Techna|agica| |earning thraugh
pub|icpracurement
Pub||o proourement oan be used |n vary-
|ng oomb|nat|ons to promote teohno|og|-
oa| |earn|ng (box 4.11}. An |mportant pub||o
proourementoomb|nat|on|swhengovern-
ments prooure strateg|oa||y |n oooperat|on
w|thotherpartners|nordertopromote|n-
novat|veoapab|||t|es|nthe|roountr|es.Many
oountr|es have used th|s as an |nnovat|on
|noent|ve, |no|ud|ng promot|ng R&D spend-
|ng among rms. For |nstanoe, the n|ted
K|ngdom has tr|ed for a|most a deoade to
|noreasethe|mpaotofpub||oproourement
on R&D. More reoent|y, the Oh|nese author-
|t|es have |ntroduoed pub||o proourement
wh|oh favours domest|o produoers w|th a
s|m||ara|m.
14
Pub||o proourements oan be used speo|-
oa||y to promote South-South teohno|og|-
oa| oo||aborat|on. They oan be struotured
so that fore|gn produoers (speo|oa||y those
from deve|op|ng oountr|es} are not shut out
of the proourement oompet|t|on prooess
but are enoouraged to b|d oo||aborat|ve|y
w|th|ooa|partners,w|thteohno|ogy-shar|ng
effeots. The proourement oond|t|ons oan
|no|ude the requ|rement for teohno|ogy-
7|e|e|saneedto
o|ov|deg|eate|
|ncent|vesfo|
tec|no|og|ca|
co||aoo|at|onand
t|ansfe|oftec|no|ogy
w|t||nt|eSo0t|-So0t|
context.
P0o||co|oc0|ements
can oe 0sed soec|ca||y
too|omoteSo0t|-So0t|
tec|no|og|ca|
co||aoo|at|on.
97
CHAPTER IV : HOW CAN THE SOUTH PROVIDE A NEW IMPETUS FOR BUILDING INNOVATIVE CAPACITY?
shar|ng between the |ooa| and the fore|gn
partner to fao|||tate teohno|og|oa| |earn|ng
for the |ooa| partner(s} |n the prooess. There
are numerous examp|es of |ndustr|a||zed
oountr|es us|ng th|s k|nd of proourement
to promote domest|o |nnovat|ve oapab|||-
t|es that offer |essons for promot|ng suoh
a|||anoes |n deve|op|ng oountr|es (box 4.12}.
The O|p|a Pharmaoeut|oa|s-Oua||ty Ohem|-
oa|s oase d|soussed |n ohapter lll of th|s
Report offers an examp|e of an |DO gov-
ernment (ganda} us|ng pub||o prooure-
mentasameansoffoster|ngteohno|og|oa|
oo||aborat|on between |ts rm and an lnd|an
oompany.
b. 5trengthening and pramating
techna|agica| a||iances
As noted |n ohapter lv, |n a|| h|gh-teoh seo-
tors, strateg|o a|||anoes between oompet|ng
rms, or between rms and pub||o or aoa-
dem|o |nst|tut|ons, have beoome oommon
modes of bus|ness |nteraot|on. These re|a-
t|onsh|ps,wh|oharedeeperthanarms-|ength
market transaot|ons but fa|| short of fu|| merg-
ers or aoqu|s|t|ons, are now understood as
|mportant dr|vers of |nnovat|ve aot|v|ty. F|rms
usestrateg|oa|||anoesforavar|etyofreasons,
|no|ud|ng for ga|n|ng aooess to new markets
andteohno|ogy,reduo|ngtheoostsof|nputs,
and shar|ng oerta|n r|sks w|th other rms.
These arrangements a||ow them to ut|||ze the|r
8ox4.11: 0|IIereotk|odsoIp0b||cproc0remeot
Pub||o proourement has been oategor|zed |n d|fferent ways depend|ng on what |s be|ng prooured, for whom and for what purpose. F|rst
a d|st|not|on oan be made between genera| and strateg|o proourement. Any pub||o proourement for s|mp|y fu||||ng a need of the buy|ng
agenoyw|thoff-the-she|fproduots|soons|deredgeneral public procurement. On the other hand, proourement |s oons|dered 'strateg|o"
when demand for oerta|n teohno|og|es, produots or serv|oes |s enoouraged |n order to st|mu|ate the market for those teohno|og|es,
produots and serv|oes |ooa||y. Others further oategor|ze forms of |nnovat|ve pub||o proourement on the bas|s of the |eve| of |nnovat|on
be|ngpromoted.Developmental procurementreferstoproourementthatenoouragesteohno|og|estobedeve|opedfromthestart,
whereasadaptive procurement a|ms to enoourage |nnovat|on of an ex|st|ng teohno|ogy so as to oustom|ze |t to meet a part|ou|ar need
(Edqu|st and Hommen, 2000}.
Yet another oategor|zat|on of pub||o proourement re|ates to the end user of the proourement. Direct public procurement referstoao-
qu|s|t|ons where the end user of the proourement |s the government |tse|f, whereas oooperat|ve pub||o proourement refers to pub||o
ageno|es buy|ng jo|nt|y w|th pr|vate purohasers for ut|||z|ng the bought |nnovat|ons. Catalytic public procurement|swhenaStateagenoy
|n|t|ates the proourement but the |nnovat|on |s used exo|us|ve|y by pr|vate users (Edqu|st and Hommen, 2000; Edqu|st and Zaba|a-
lturr|agago|t|a, forthoom|ng}.
Souroe: NOTAD, based on var|ous souroes.
8ox4.12: The|otrakom-r|cssooa|||aoce
The |dea of deve|op|ng |ooa| |ndustr|a| oapab|||t|es |n te|eoommun|oat|ons equ|pment manufaotur|ng was rst oonoe|ved by Greek
po||oymakers |n the |ate 1970s |n the oontext of a broader European trend to bu||d nat|ona| ohamp|ons of rap|d|y grow|ng |ndus-
tr|es. ln the ear|y 1980s, po||oymakers endorsed strong |ndustr|a| po||oy objeot|ves |n government proourement praot|oes to boost
theeoonomyandoompet|t|veness,|noreaseemp|oyment,and|ntheoaseofGreeoe,toestab||shdomest|ooapao|ty|ntherap|d|y
expand|ng te|eoommun|oat|ons equ|pment seotor.
lntrakom was founded |n 1977, and unt|| the m|d-1980s |t was on|y a supp||er of |mported ana|og sw|tohes to the State te|eoom
monopo|y, OTE. As part of an a|||anoe w|th Er|osson of Sweden |n the |ate 1980s, lntrakon reoe|ved a ||oenoe for the transfer
of produot|on and assemb|y know-how of |mportant te|eoommun|oat|ons equ|pment, and tra|ned Greek eng|neers |n Sweden.
Grow|ngpub||oproourementfromthea|||anoehe|ped|ttoexpandovertheoourseofadeoadetobeoomeamajor|ty|ooa|pro-
duoer of te|eoommun|oat|ons equ|pment. By expand|ng |n teohno|og|oa| |ntens|ty |t was ab|e to make |mportant oontr|but|ons to
software as we||. lntrakom gradua||y sh|fted from a oommeroe-or|ented oompany to a teohno|ogy-|ntens|ve systems |ntegrator.
The teohno|og|oa| soph|st|oat|on aoqu|red through the a|||anoe he|ped lntrakom to beg|n export|ng to Er|osson Sweden, and to
enter |nto mu|t|p|e ||oens|ng agreements w|th other |nternat|ona| vendors (e.g. Maroon|, A|oate| and GNO}, as we|| as to engage |n
oo||aborat|veagreementsw|thsma||er|ooa|oompan|esandun|vers|t|es.
Souroe: Based on Oa|ogh|rou, Oonstante|ou and Karounos (2000}.
98 TECHNOLOGY AND INNOVATION REPORT 2012
resouroes more efo|ent|y and |mprove the|r
ab|||ty to qu|ok|y deve|op better produots and
prooesses.Oonoern|ngdeve|op|ngoountr|es,
a|||anoes prov|de an avenue for |nd|genous
rms to oatoh up w|th those of deve|oped
oountr|esandthushe|pdeve|op|ngoountr|es
estab||shthe|rownoompet|t|ve|ndustr|es.
Governments emp|oy var|ous po||o|es to
promotestrateg|opartnersh|psand|everage
the|r benets. E|ements of an |nnovat|on po|-
|oy framework, |no|ud|ng hor|zonta| |nnova-
t|onpo||oymeasuresforoo||aborat|on,were
d|soussed ear||er |n th|s ohapter. The k|nds of
po||o|esthatpromoteteohno|og|oa|a|||anoes
ares|m||artothosea|medat|nteraot|ve|earn-
|ng |n nat|ona| |nnovat|on po||oy frameworks.
There oou|d a|so be add|t|ona| po||o|es that
seek to e||m|nate |nappropr|ate oontraotua|
behav|our at a|| stages (|.e. |n searoh|ng, bar-
ga|n|ng and enforo|ng oontraots} by mak|ng
surethatthepr|vateseotoroanengage|na|-
||anoesandoanexpeotpos|t|vereturnsfrom
suooessfu| oo||aborat|ons. A|though suoh
po||o|es oan take d|verse forms, the three
ma|n k|nds are d|soussed be|ow.
i. Competition policy
A po||oy measure to spur a|||anoes, wh|oh
has been emp|oyed by many |ndustr|a||zed
oountr|es, |nvo|ves oreat|ng exempt|ons to
oompet|t|on |aws that proh|b|t rms from re-
str|ot|ng or d|stort|ng seotora| oompet|t|on.
TheE,for|nstanoe,exemptsoerta|nant|-
oompet|t|ve agreements as |ong as they
oontr|bute to teohno|og|oa| or eoonom|o
growthandprov|deoonsumersw|tharea-
sonab|e share of the benets. ln the n|ted
States, over severa| deoades the oourts
have genera||y refra|ned from proseout|ng
broada|||anoesthatfoousonresearohand
teohno|og|oa| exohange. Adopt|ng s|m|-
|ar measures |n deve|op|ng oountr|es for
rms from the South wou|d a||ow the|r rms
some|eve|ofd|soret|onwhentheypromote
teohno|og|oa| |earn|ng |n other |ooa| rms.
ii. Contract enforcement
Promot|ng a|||anoes requ|res |ooa| oourts
to have a greater |eve| of soph|st|oat|on
to be ab|e to hand|e d|sputes |n genera|,
but a|so d|sputes |nvo|v|ng |ssues re|at|ng,
forexamp|e,tolPRs.Oo||aborat|ngpart|es
usua||y agree to some sort of oontraotua|
arrangements.However,|ega|oerta|ntyand
efo|enoy |n oontraot enforoement (through
arb|trat|on and oourts} are usua||y requ|red
topromotetrustandensureoomp||anoe.
iii. Public subsidies
A|| governments that seek to promote |n-
novat|onoapao|tyhavetendedtousesome
programmesthatfundoo||aborat|veunder-
tak|ngs. Suoh programmes do not need to
target any speo|o aot|v|ty or seotor; they
mays|mp|yaooordpreferenoetoproposa|s
that|no|udemorethanonegroupofpart|o|-
pants, w|th exp||o|t teohno|og|oa| |earn|ng
m||estones.Th|soou|dbeusedtofao|||tate
oo||aborat|ve undertak|ngs w|th rms from
deve|op|ngoountr|es.
3. Addressing common challenges
through SITEP
Asment|oned|nseot|onFofth|sohapter,the
SlTEPwou|dprov|de|nst|tut|ona|supportat
three|eve|s:promoteteohno|og|oa||earn|ng
at the rm |eve|, promote enterpr|se deve|-
opment and nano|ng of speo|o |nnovat|on
aot|v|t|esthatareofpart|ou|ar|mportanoeto
deve|op|ng oountr|es as a who|e, and aot
as a p|atform for shar|ng |nnovat|on exper|-
enoes and promot|ng po||oy |earn|ng. The
SlTEP oou|d be augmented by reg|ona| |n|-
t|at|vesd|reot|ya|medatbu||d|ng|nnovat|on
oapao|tyatthereg|ona||eve|.Somesuoh|n|-
t|at|ves have a|ready been oonoe|ved, suoh
astheAfr|oann|onPharmaoeut|oa|Manu-
faotur|ng P|an (d|soussed |n ohapter lll} and
the South-South Oooperat|on Mu|t|-Donor
TrustFund.TheFunda|mstoaddressour-
rentoonstra|ntsonSouth-Southteohno|og|-
oa| oo||aborat|on by aot|ng as a fooa| po|nt
forpo||oyformu|at|onand|mp|ementat|on.
15
Deta||s of how the SlTEP wou|d prov|de a||
theseformsofsupportared|soussedbe|ow.
a. Techna|agica| |earning at the rm |eve|
A number of deve|op|ng oountr|es, |n par-
t|ou|aremerg|ngoountr|es,are|noreas|ng|y
produo|ng new, state-of-the-art teohno|o-
g|es. Many of these efforts are be|ng -
nanoedbypub||o|nvestment.Ameohan|sm
7|eS/7EPco0|doe
a0gmentedoy|eg|ona|
|n|t|at|vesd||ect|ya|med
ato0||d|ng|nnovat|on
caoac|tyatt|e|eg|ona|
|eve|.
99
CHAPTER IV : HOW CAN THE SOUTH PROVIDE A NEW IMPETUS FOR BUILDING INNOVATIVE CAPACITY?
that oou|d advanoe aooess and produo-
t|on of know|edge among oountr|es of the
Southwou|dbetopoo|togetherpub||o|n-
vestment for bas|o R&D as a means of pro-
mot|ng both the deve|opment of domest|o
|earn|ng oapab|||t|es as we|| as ||nkages
and |nteraot|ons among aotors |n |nnova-
t|on systems aoross deve|op|ng oountr|es.
A mode| of th|s k|nd |s the Oompet|t|veness
and lnnovat|on Framework Programme of
the European n|on
16
that st|mu|ates suoh
||nkages aoross Europe. Aga|n, South-
Southoo||aborat|onw|||needtore|yonthe
prov|s|on of |noent|ves to domest|o rms
and other aotors to engage |n |nnovat|on
and teohno|ogy deve|opment so that they
are not dr|ven so|e|y by market s|gna|s.
i. South-South research and product
development hubs
Enterpr|ses that deve|op and app|y some
teohno|og|es,espeo|a||ythose|nseotorsof
part|ou|ar pub||o |nterest suoh as pharma-
oeut|oa|sandagr|ou|ture,needasupport|ve
|nfrastruoture,wh|ohoanoftenbeteohno|o-
gy-|ntens|veandoost|y.For|nstanoe,phar-
maoeut|oa| enterpr|ses seek|ng to produoe
good qua||ty gener|o drugs requ|re test|ng
and b|oequ|va|enoe |aborator|es as we|| as
oommon fao|||t|es, suoh as aot|ve pharma-
oeut|oa| |ngred|ents (APls} parks, to be ab|e
to produoe oost-effeot|ve|y and to requ|s|te
standards.Thesame|strueformanyother
seotors. Reg|ona| R&D fao|||t|es to oreate
and susta|n R&D w|th|n rms or those wh|oh
prov|de R&D serv|oes on a pay-as-you-go
bas|s oou|d oonst|tute an |mportant short-
and med|um-term so|ut|on to some of the
majorprob|emsfaoedbypub||oandpr|vate
seotors|ndeve|op|ngoountr|es.Some|n|t|a-
t|vesthatre|yonsuohamode|a|readyex|st,
suoh as the Eng|neer|ng Oapao|ty Bu||d|ng
Programme of the Germany lnternat|ona|
Oooperat|on Agenoy (GlZ}. The GlZ |s pro-
v|d|ng some nanoe and teohn|oa| ass|s-
tanoe to set up a b|oequ|va|enoe fao|||ty for
theEastAfr|oanReg|on|noo||aborat|onw|th
two pharmaoeut|oa| oompan|es from Kenya,
one from the n|ted Repub||o of Tanzan|a
andonefromEth|op|asSohoo|ofPharmaoy
ofthen|vers|tyofAdd|s-Ababa.
17
Suoh reg|ona| R&D fao|||t|es oou|d be ore-
ated by deve|op|ng oountr|es, part|ou|ar|y
|DOs, and supported through the |nterna-
t|ona| oommun|ty or through South-South
oo||aborat|on or even as a tr|angu|ar fao||-
|ty between the |DOs, other deve|op|ng
oountr|es (offer|ng teohn|oa| know-how and
tra|n|ng} and deve|oped oountr|es (offer|ng
nano|a| support}. Th|s oou|d be used to
oreate a ser|es of pay-as-you-go fao|||t|es
for seotors |n wh|oh rms faoe d|fou|t|es |n
ra|s|ng oap|ta| for |nfrastruoture expans|on.
The reg|ona| R&D funds oou|d a|so set re-
searoh pr|or|t|es for teohno|og|oa| expan-
s|on of rms |n part|ou|ar seotors that are
espeo|a||y |mportant, suoh as green teoh-
no|og|es, med|o|nes and reg|ona||y su|ted
oropvar|et|es,amongothers.
ii. South-South pooling of supply and
demand
The SlTEP, |n add|t|on to promot|ng part-
nersh|ps |n R&D, oou|d prov|de greater
|noent|ves for the poo||ng of reg|ona| do-
mest|o demand for part|ou|ar produots
and prooesses that are more oap|ta|- and
researoh-|ntens|ve.
Amajor|mped|menttomanyteohno|og|oa|
|nnovat|ons |s the ||m|ted or |aok of |ooa|/
reg|ona| market demand. ln oountr|es suoh
as Braz||, Oh|na and lnd|a, the|r s|zeab|e do-
mest|o markets have been a major |noent|ve
for |ooa| rms to |nvest |n the deve|opment
of new produots and prooesses. Th|s |s
part|ou|ar|ytrue|n|ndustr|eswhereteohno-
|og|oa||nnovat|onsare|nvestment-|ntens|ve
and r|sky, suoh as |n hea|th teohno|og|es.
The eoonom|es of soa|e and soope made
poss|b|e by |arge |ooa| markets are very
|mportant for severa| seotors, but |n many
deve|op|ngoountr|es,suohas|nAfr|oa,|o-
oa| markets tend to be sma|| and reg|ona|
d|str|but|onsystemsdonotfunot|onwe||.ln
many oases, |ooa| rms are oonstra|ned |n
supp|y|ng to reg|ona| markets beoause of
peroept|on or market|ng |ssues, and th|s of-
ten resu|ts |n produot|on |nefo|eno|es and
|osses. Aggregat|ng demand, for |nstanoe
for vaoo|nes or other hea|th-re|ated prod-
uots, |s a|ready under d|souss|on |n many
other |nternat|ona| forums. Suoh |n|t|at|ves
7|eS/7EPcano|ov|de
g|eate||ncent|vesfo|
t|eooo||ngof|eg|ona|
domest|cdemandfo|
oa|t|c0|a|o|od0ctsand
o|ocesses.
100 TECHNOLOGY AND INNOVATION REPORT 2012
do not need to be restr|oted on|y to a re-
g|ona| |eve|; they oou|d be w|der |n soope,
aoross ||ke-m|nded oountr|es that have s|m-
||arneedsw|th|ntheSouth.
b. Enterprise deve|apment and
nancing af innavatian activities
TheproposedSlTEPwou|dhaveaseoond
set of |nst|tut|ona| measures and aot|v|t|es
thatared|reot|ygearedtoa||ev|at|ngmany
of the oonstra|nts faoed at the enterpr|se
|eve|, |no|ud|ng nano|ng that oou|d take
var|ousformsasd|soussedbe|ow.
i. Venture capital funding at the
regional level
Emerg|ng enterpr|ses |n |DOs that show
prom|se |n key seotors of reg|ona| |mpor-
tanoe,suohaspharmaoeut|oa|s,agro-pro-
oess|ng and lOTs, oou|d be prov|ded w|th
venture oap|ta| fund|ng. Suoh fund|ng pro-
grammesoou|dofferawardsthroughoon-
tests for part|o|pat|ng reg|ona| rms (Ga|||n|
and Sohotohmer, 2002}.
LL &RLQYHVWPHQWZLWKSULYDWHLQYHVWRUV
in innovative enterprises
A number of sohemes oou|d be |aunohed
at the reg|ona| |eve| for the deve|opment of
ear|y-stage|nnovat|veteohno|og|esby|ooa|
rms. Aoqu|s|t|on of teohno|og|oa| know-
how oou|d be supported through pub||o-
pr|vate/pr|vate-pr|vatepartnersh|psbetween
var|ousdeve|op|ngoountr|es.Agoodexam-
p|e |s the teohno|ogy-shar|ng arrangement
between Oua||ty Ohem|oa|s (ganda} and
O|p|a Pharmaoeut|oa|s (lnd|a} for the produo-
t|on of ant|retrov|ra| drugs (see ohapter lll}. As
th|soasedemonstrates,teohno|ogy-shar|ng
offersaprom|s|ngmeansofbu||d|ngoapao-
|ty, but |t may requ|re oo-|nvestment |nvo|v-
|ng governments and pr|vate enterpr|ses |n
deve|op|ng oountr|es and |DOs.
LLL )LQDQFLQJIRUFROODERUDWLRQEHWZHHQ
private and public enterprises
Th|s soheme oou|d express|y address the
|aok of |noent|ves at the nat|ona|/seotora|
|eve|s|ndeve|op|ngoountr|essoastoena-
b|e oo||aborat|ve ||nkages. A good examp|e
of suoh an ongo|ng |n|t|at|ve |s the M|||en-
n|um So|enoe and Teohno|ogy ln|t|at|ve |n
ganda - a projeot sponsored by the Wor|d
Bank that has speo|o funds earmarked for
oo||aborat|ve|n|t|at|vesbetweenpr|vateand
pub||oenterpr|ses.
18
c. 5haring af existing infarmatian an
innavatian and techna|agies
Therearehundredsofex|st|ng|nnovat|ons|n
deve|op|ngoountr|esthatmaynotbepropr|-
etary teohno|og|es, wh|oh oou|d be shared
w|th other deve|op|ng oountr|es to address
the|r needs. However, the|r ex|stenoe may
not be known. The SlTEP oou|d oreate a
system for shar|ng |nformat|on on ex|st|ng
teohno|og|es appropr|ate for deve|op|ng-
oountry needs, part|ou|ar|y for prov|d|ng
so|ut|ons that are pro-poor. Th|s oou|d take
the form of a oentra||zed database, s|m||ar to
what lnd|a and other oountr|es have asked
the WTO to set up under the Work|ng Group
onTradeandTransferofTeohno|ogy.
Deve|op|ng oountr|es oou|d benet enor-
mous|y from bu||d|ng a oommon forum for
exohangeof|nformat|onaboutthe|rnat|ona|
teohno|ogy and |nnovat|on po||o|es. Suoh a
forum wou|d enab|e the shar|ng of exper|-
enoes on how oountr|es oou|d promote |n-
dustr|a| deve|opment w|th|n the parameters
of the |nternat|ona| trade and lPR reg|mes.
The forum wou|d prov|de a venue for d|s-
ouss|ons on the opt|ons and ex|b|||t|es that
arest|||ourrent|yava||ab|eundertheex|st|ng
|nternat|ona|ru|es.lnareassuohaslPRpro-
teot|on, for examp|e, |nternat|ona| ru|es oan
|nh|b|t |m|tat|on and reverse eng|neer|ng of
teohno|ogyfor|ooa|adaptat|onand|earn|ng,
aswe||as|nterferew|thgovernmentprooure-
ment,wh|oh|sameansoftarget|ngteohno-
|og|oa| pr|or|t|es and a|d|ng domest|o rms.
Trade ru|es may s|m||ar|y reduoe the ab|||ty
topromotedomest|o|ndustryorproteot|o-
oa| |nfant |ndustr|es threatened by fore|gn
oompet|t|on.However,therearemanyareas
where |ntervent|on |s st||| poss|b|e, |no|ud|ng
nano|ng of bas|o researoh to promote the
deve|opmentof|ooa|oapab|||t|es,|nvestment
|n eduoat|on and proourement to st|mu|ate
|nnovat|on |n domest|o rms. Shar|ng of ex-
per|enoes on how th|s oan be done and |n
what|nstanoes|sor|t|oa|.
Deve|oo|ngco0nt||es
co0|d oenet
eno|mo0s|yf|om
o0||d|ngacommon
fo|0mfo|exc|angeof
|nfo|mat|onaoo0tt|e||
nat|ona|tec|no|ogyand
|nnovat|onoo||c|es.
101
CHAPTER IV : HOW CAN THE SOUTH PROVIDE A NEW IMPETUS FOR BUILDING INNOVATIVE CAPACITY?
Oreat|ngaforumforSouth-Southoo||abo-
rat|on and exohange of exper|enoes and
praot|oes on |nnovat|on and teohno|ogy
po||oy|sbynomeansarad|oa||dea.Suoh
exohanges often take p|aoe, for |nstanoe
among E oountr|es, and ana|yses on the
subjeot are regu|ar|y undertaken by the
OEOD (see, for examp|e, OEOD, 2007}.
d. 0aardinatian with ather regiana|
initiatives
ln order to aoh|eve the best resu|ts, the
SlTEPshou|dbeooord|natedw|thotheron-
go|ng reg|ona| and |nternat|ona| |n|t|at|ves,
suoh as the Turk|sh lnnovat|on Network.
19
ln
speo|o seotors, other |n|t|at|ves may a|so be
re|evant,suohastheNFOOOsTeohno|ogy
Meohan|smwh|ohpromoteso||mateohange
m|t|gat|on and adaptat|on teohno|og|es, or
the Afr|oan Pharmaoeut|oa| Manufaotur|ng
P|anforhea|th-re|atedteohno|og|es.Reg|on-
a| |n|t|at|ves oou|d be support|ve of SlTEPs
a|mstofurtherenhanoe|tseffeot|veness.
H. SUMMARY
Th|s ohapter has exp|ored the key |ssue of
how South-South oo||aborat|on oan pro-
v|de greater |mpetus to overa|| teohno|og|-
oa| |earn|ng and the bu||d|ng of |nnovat|on
oapab|||t|es|ndeve|op|ngoountr|es.ltoa||s
for an |nternat|ona| framework to promote
South-South teohno|og|oa| exohange w|th
a v|ew to rea||z|ng the potent|a| of South-
Southoo||aborat|onforbu||d|ngteohno|og|-
oa| oapab|||t|es. Suoh a framework, wh|oh
|sor|t|oa|forprov|d|ngao|earroadmapfor
aot|on, shou|d be based on the fo||ow|ng
key pr|no|p|es:
a. Address the teohno|og|oa| needs of
deve|op|ng oountr|es, part|ou|ar|y
|DOs;
b. A|m at know|edge shar|ng and |earn-
|ng from the oatoh-up exper|enoes
of var|ous deve|op|ng oountr|es for
bu||d|ng|nnovat|onoapab|||t|es;
o. Promote|mportantmeansofteohno-
|og|oa| |earn|ng, part|ou|ar|y through
teohno|og|oa| a|||anoes and teohno|-
ogytransfer|n|t|at|ves;
d. Make South-South FDl more teoh-
no|ogyor|ented;and,
e. Poo| deve|op|ng-oountry resouroes
to address oommon teohno|og|oa|
oha||enges.
W|th regard to the na| pr|no|p|e of poo||ng
resouroes to address oommon teohno-
|og|oa| oha||enges, th|s ohapter proposes
a South-South Teohno|ogy and lnnovat|on
Paot (SlTEP} for enab||ng var|ous means of
teohno|og|oa| oo||aborat|on a|med at a||ev|-
at|ngtheb|nd|ngoonstra|ntson|nnovat|on
oapao|ty at three |eve|s: |earn|ng at the rm/
organ|zat|ona| |eve|, nano|ng |nnovat|on
aot|v|t|es and enterpr|se deve|opment, and
na||y prov|d|ng new means of shar|ng ex-
|st|ngteohno|og|oa||nformat|on.
Th|sohapterhasa|soh|gh||ghtedpo||oymeas-
uresthatoou|dbe|mp|ementedatthenat|on-
a|, reg|ona| and |nternat|ona| |eve|s to opera-
t|ona||ze these pr|no|p|es. lt |s suggested that
|nnovat|onpo||oyneedstoo|ear|yv|ewSouth-
South oo||aborat|on as a means of address-
|ng |earn|ng of the k|nd requ|red and |dent|ed
by assessments of the nat|ona| |nnovat|on
systemsofoountr|es.Thesepo||oymeasures
needtobeaooompan|edby|noent|ves|nde-
ve|op|ngoountr|esthatarebasedona|onger
term v|s|on of South-South teohno|og|oa|
exohange w|th|n the|r broader eoonom|o en-
gagement w|th deve|op|ng-oountry partners.
These po||oy measures need to be ooord|-
nated w|th exp||o|t |noent|ves for so|ent|o and
teohn|oa| oooperat|on on the one hand, and
rm-|eve| |noent|ves on the other. The ohapter
a|so |dent|es po||oy measures that oou|d be
usedtopromote|mportantmeansofteohno-
|og|oa| |earn|ng, name|y through pub||o pro-
ourementandteohno|og|oa|a|||anoes.F|na||y,
theohaptere|aboratestheoperat|ona|deta||s
oftheproposedSlTEPwh|ohoou|dhe|p|m-
p|ementsevera|ofthepr|no|p|esdesor|bed|n
theohapter.Th|s|no|udestheshar|ngof|nno-
vat|onexper|enoesandthepromot|onofjo|nt
responsestooommonteohno|og|oa|needs.
/no|de|toac||evet|e
oest|es0|ts,t|eS/7EP
s|o0|doecoo|d|nated
w|t|ot|e|ongo|ng
|eg|ona|and
|nte|nat|ona||n|t|at|ves.
102 TECHNOLOGY AND INNOVATION REPORT 2012
NOTES
1. ln keep|ng w|th the den|t|on of |nnovat|on oapao|ty used |n
th|s Report, 'new" here denotes new |ooa||y, or new to the
reg|onortothewor|dat|arge.
2. See tab|e 2.9 and gure 2.12 |n ohapter ll, wh|oh show that
the serv|oes seotor aooounts for over 50per oent of a|| FDl
fromdeve|op|ngoountr|es.
3. See a|so Katz (1973 and 2000} and Katz and Ab||n (1987},
who present oase stud|es on manufaotur|ng rms |n |at|n
Amer|oa that support th|s nd|ng.
4. See ohapter ll for a d|souss|on on the teohno|ogy |mp||oa-
t|onsofGPNs.
5. Avar|etyofnat|ona|so|enoe,teohno|ogyand|nnovat|onpo||oy
rev|ews (STlPS} oonduoted by NOTAD have reaohed a s|m||ar
oono|us|on (see, for examp|e, NOTAD, 2010b and 2011d}.
6. See Hausmann, Hwang and Rodr|k (2005}, who estab||sh
a ||nk between speo|a||zat|on patterns of eoonom|es and |n-
oome|eve|s.
7. For|nstanoe,lnd|ahasbeenexper|ment|ngw|thvar|ouspro-
v|s|ons |n |ts pharmaoeut|oa| patent reg|me after 2005 that
st||| a||ow |ooa| rms to oont|nue produo|ng gener|o vers|ons
ofdrugsthatare|mportantforpub||ohea|th.
8. A forward ||nkage oan be promoted when a rm produoes
|nputs that reduoe the oosts to |ts oustomer rms or ra|ses
the qua||ty of |ts produots, and a baokward ||nkage oan be
promoted when the rm`s operat|ons |norease demand for
|nputs from |ts |ooa| supp||er oompan|es and when the rm
tr|esto|mprovetheteohno|og|esandstandardsusedby|ts
supp||eroompan|es.
9. Suoh a|||anoes, a|so known as strateg|o a|||anoes, are part|o-
u|ar|y preva|ent |n know|edge-|ntens|ve |ndustr|es. They refer
to the |noreas|ng use of var|ous k|nds of oooperat|ve agree-
ments, suoh as jo|nt ventures, jo|nt R&D projeots, teohno|ogy
exohangeagreements,oo-produot|on,d|reotm|nor|ty|nvest-
mentsandsouro|ngre|at|onsh|ps,toadvanoeoorestrateg|o
objeot|ves (see, for examp|e, Ma|erba and vonortas (2009},
Oa|ogh|rou, Oonstante|ou and Krounos, 2000, Hagedoorn,
2002; and vonortas, 1997.}
10. Efforts to operat|ona||ze the NFOOO`s prov|s|ons on
teohno|ogy transfer ou|m|nated |n the oreat|on of the TM,
as agreed at the 16th Oonferenoe of the Part|es (OOP} |n
Oanoun |n 2010, bu||d|ng further on the ear||er mandates
from the Ba|| Aot|on P|an of 2007 (see, for examp|e, Geh|
Sampath et a|., 2012; Ahmed et a|., 2012; and Oorrea,
2012}.
11. Th|s emphas|s on |dent|oat|on of teohno|og|oa| needs of
oountr|eshasbeoomean|mportantaspeotofpromot|ng
teohno|og|oa|oapao|ty|nsevera|oontexts,|no|ud|ng|nter-
nat|ona| forums. The Teohno|ogy Meohan|sm of the N-
FOOO for oapao|ty-bu||d|ng on o||mate ohange teohno|o-
g|es,for|nstanoe,a|msto|dent|fytheteohno|og|oa|needs
of deve|op|ng oountr|es |n seotors re|evant to o||mate
ohange teohno|og|es. S|m||ar|y, many other approaohes
on teohno|og|oa| oo||aborat|on are based on a o|ear and
oogent |dent|oat|on of teohno|og|oa| needs by reo|p|ent
oountr|es.
12. Th|s |s often the oase when rms |n deve|op|ng oountr|es
areab|etoreverseeng|neertheteohno|og|esandproduots
|n quest|on and are adept at |norementa| |nnovat|on. Many
oompan|es o|te the poss|b|||ty of easy rep||oat|on and oap-
ture of rents by |ooa| rms as a reason for not engag|ng |n
teohno|ogy exohange or even aggress|ve|y proteot|ng the|r
teohno|og|es.
13. lnsomeemerg|ngseotors,teohno|ogya|||anoesareoften
promoted due to the faot that the |nternat|ona| rms |aok
some of the serv|oes/d|str|but|on/efo|ent produot deve|-
opment oapao|t|es that the |ooa| rms offer, and wh|oh
are often needed to ga|n a footho|d |n the |ooa|/reg|ona|
market.
14. For examp|e, the fast-grow|ng Oh|nese oompany, Huawe|,
grewdomest|oa||yunderexo|us|vesupp||eragreementsw|th
the Oh|nese pub||o te|eoommun|oat|ons network (d|soussed
|n ohapter lll}.
15. lt|sexpeotedthatthema|nobjeot|veofthefund,tobe|m-
p|emented by the Afr|oan Deve|opment Bank, w||| be to sup-
port Afr|oan oountr|es |n mob|||z|ng and tak|ng advantage of
deve|opment so|ut|ons and teohn|oa| expert|se ava||ab|e |n
otherdeve|op|ngoountr|es.
16. http://eo.europa.eu/o|p/
17. The |aok of b|oequ|va|enoe fao|||t|es that oan prove that a
|ooa| produot |s b|o|og|oa||y equ|va|ent to |ts branded ooun-
terparthash|nderedAfr|oan|ooa|produoers.S|noetheset-
t|ng up of suoh a fao|||ty |s a very sk|||- and nanoe-|ntens|ve
task, th|s examp|e demonstrates how oountr|es oan poo|
resouroesforsuohpurposestopromote|nnovat|on|nare-
g|ona|oontext.
18. www.wor|dbank.org/projeots/P086513/m|||enn|um-so|enoe-
|n|t|at|ve
19. Seed|souss|on|nOhapterlll.
EPILOGUE
105
EPILOGUE
EPILOGUE
As more and more deve|op|ng oountr|es
embark on the prooess of |ndustr|a| oatoh-
up, the t|me |s r|pe to beg|n oonoeptua||z|ng
how and to what extent South-South oo|-
|aborat|ons oan he|p address speo|o deve|-
opmentgoa|s|nthedeve|op|ngwor|d.Th|s
Report has ana|ysed the potent|a| of the
South for further|ng one suoh goa|: br|dg-
|ngtheteohno|og|oa|d|v|deasameansto
promot|ng |ndustr|a||zat|on w|th|n the deve|-
op|ngwor|dasawho|eandoontr|but|ngto
|no|us|ve g|oba||zat|on.
An overwhe|m|ng po||oy oons|derat|on for
deve|op|ng oountr|es |s how South-South
oooperat|on oou|d be or|ented and har-
nessedtofosterteohno|og|oa|and|nnova-
t|onoapao|ty|ndeve|op|ngoountr|es.How
oantheteohno|ogyneedsofa||deve|op|ng
oountr|es and |DOs be |ntegrated |nto a
ba|anoed agenda of oooperat|on and ex-
ohange?G|venthe||m|teddataava||ab|eon
teohno|ogy trends |n deve|op|ng oountr|es,
th|s Report has sought to oontr|bute new
po||oy|ns|ghts|nth|soomp|exarea.
The nd|ngs of the Report have s|gn|oant
|mp||oat|ons for po||oy and praot|oe. F|rst|y,
the ana|ys|s shows that there are a |arge
number of ongo|ng projeots and |n|t|at|ves
forteohno|ogyexohangeamongdeve|op|ng
oountr|es and |DOs, both government-|n|t|-
ated and pr|vate-seotor-based, wh|oh vary
|n soa|e and soope. The data and trends
ana|ysedshowthat,ourrent|y,South-South
trade and teohno|ogy ows are qu|te s|m|-
|ar to North-South trade and teohno|ogy
ows, w|th some var|at|ons. The greatest
advantage of South-South oo||aborat|on |s
that |t offers a oho|oe to deve|op|ng ooun-
tr|estota||orthe|rpartnersh|ps|nawaythat
oerta|nbroadersoo|a|andeoonom|ogoa|s
are served. ln add|t|on, emerg|ng oountry
partners may have a better understand|ng
of the ways and means of overoom|ng |n-
novat|on oonstra|nts fao|ng other deve|-
op|ng oountr|es, and they may have more
oost- and oontext-effeot|ve teohno|og|es.
Theseadvantagesneedtobeoonso|ous|y
exp|o|ted. ln order to ensure that the our-
rent and projeoted trends |n South-South
tradeand|nvestmentass|st|nthebroader
goa| of |earn|ng and oapab|||t|es-bu||d|ng,
th|sReporthasarguedthatteohno|ogyand
|nnovat|on|ssuesshou|dbeg|venpr|or|ty|n
theSouth-Southd|soourse.
Seoond|y,|nordertoharnessthepotent|a|of
South-South oo||aborat|on for br|dg|ng the
teohno|ogy d|v|de, the Report argues that,
as a rst step |n foster|ng suoh oo||aborat|on
for teohno|ogy and |nnovat|on, |t |s neoes-
sary to move beyond a s|mp|e afrmat|on of
broadnormat|vepr|no|p|es;thereneedsto
beanunderstand|ngofthema|n|ssuesand
opportun|t|esava||ab|e|nth|sarea.Ex|st|ng
|essons on how best to promote teohno-
|og|oa| ohange |n the deve|op|ng-oountry
oontextofferanautomat|ostart|ngpo|ntto
understand and foster South-South ooop-
erat|on |n th|s area. But at the same t|me,
therearesomeoutstand|ng|ssuesthatre-
ma|n. What are the teohno|og|es that are
urgent|yneeded,andhowbestoanSouth-
South oooperat|on foster the|r exohange?
How oan these teohno|og|es be |dent|ed?
ls there a need to rene our understand|ng
of teohno|ogy exohange and ows, |n order
to deve|op a pos|t|ve agenda for promot-
|ng teohno|og|oa| oapab|||t|es? How oan
the teohno|ogy needs of a|| the deve|op-
|ng oountr|es, part|ou|ar|y |DOs, best be
|no|uded, w|th regard to bu||d|ng |ooa| ab-
sorpt|ve oapao|ty and dynam|o oapab|||t|es
for produot|on? What k|nds of appropr|ate
teohno|og|es are requ|red?
Th|rd|y,|nordertoeffeot|ve|yaddressthese
|ssues, TIR 2012 proposes the art|ou|at|on
of a set of pr|no|p|es on wh|oh a framework
for South-South oo||aborat|on for teohno|-
ogyand|nnovat|onoanbestruotured.Suoh
a framework |s needed for many reasons.
Tobeg|nw|th,short-termobjeot|vesoftrade
and aooess to |nputs for |ndustr|a||zat|on
prooessesmaybeatoddsw|ththeovera||
106 TECHNOLOGY AND INNOVATION REPORT 2012
teohno|og|oa|deve|opmentgoa|softhede-
ve|op|ng wor|d as a who|e. A framework for
South-South oo||aborat|on oou|d therefore
he|p|na||gn|ngthesew|ththe|nterestofa||
deve|op|ngoountr|es.
Moreover, a|though teohno|ogy and know|-
edge are key |nputs to the oatoh|ng up and
oonvergenoe prooesses through wh|oh
deve|op|ng oountr|es absorb |deas and
oonoepts from the |ndustr|a| front|er, the
aooumu|at|on of teohno|og|oa| oapab|||t|es
requ|res speo|o po||oy and |nst|tut|ona| sup-
portbythe|nternat|ona|oommun|tyandby
the deve|op|ng oountr|es themse|ves. As
part of suoh a framework, TIR 2012there-
foreoa||sforastrengthen|ngofSouth-South
oooperat|on w|th a part|ou|ar foous on col-
laboration for technology and innovation.
Suoh |nteraot|on shou|d take p|aoe at three
d|fferent|eve|s:
|. Exohangeof|nnovat|onpo||oyexper|-
enoes (and best praot|oes} and po||oy
frameworks for teohno|ogy and |nno-
vat|on;
||. Teohno|ogy exohange and ows
a|med at |noreas|ng teohno|ogy ab-
sorpt|ve oapao|ty |n the pr|vate and
pub||oseotors;and
|||. Transfer of teohno|og|es |n key seo-
tors of |mportanoe to pub||o we||-
be|ng,suohasagr|ou|ture,hea|th,o||-
mateohangeandrenewab|eenergy.
Fourth|y, the Report proposes ve pr|no|p|es
as the bas|s of a South-South framework on
teohno|ogy and |nnovat|on. The pr|no|p|es
wh|ohhe|ptopromote|nteraot|onata||the
three |eve|s |dent|ed here are the fo||ow|ng:
|. Pr|or|t|ze the teohno|og|oa| needs of
the other deve|op|ng oountr|es and
|DOs;
||. A|m at shar|ng and better |ntegrat|ng
the|essons|earnedfromtheongo|ng
oatoh-upexper|enoesofotherdeve|-
op|ngoountr|es|nbu||d|ng|nnovat|on
oapab|||t|esthroughproaot|vepo||o|es;
|||. Promote|mportantmeansofteohno-
|og|oa| |earn|ng, part|ou|ar|y through
a|||anoesandteohno|ogytransfer|n|-
t|at|ves;
|v. Make South-South FDl more teoh-
no|ogyor|ented;and
v. Poo| deve|op|ng-oountry resouroes
to address oommon teohno|og|oa|
oha||enges.
F|na||y, the deve|opment of produot|ve
oapao|t|es |n any oountry |s strong|y |n-
uenoed by |nst|tut|ons that oonstra|n or
restra|n prooesses of oap|ta| aooumu|a-
t|on,teohno|og|oa|progressandstruotura|
ohange. ln add|t|on to sens|t|z|ng nat|ona|
|nst|tut|ona| frameworks on teohno|ogy
and |nnovat|on for greater South-South
oo||aborat|on, a range of reg|ona| |nst|-
tut|ona| frameworks are a|so requ|red to
fao|||tate th|s foous. lf these a|ready ex|st,
theymayneedtoberev|sedoradaptedto
promoteSouth-Southoooperat|ongeared
speo|oa||y to teohno|ogy and |nnovat|on.
lnternat|ona| support to th|s effort
through var|ous ohanne|s w||| be neo-
essary, |no|ud|ng f|nano|a| support and
North-South, South-South and tr|an-
gu|ar oooperat|on and effeot|ve teohno|-
ogytransfermeohan|sms.Severa|po||oy
measuresatthenat|ona|,reg|ona|and|n-
ternat|ona||eve|saresuggestedasaf|na|
step|nordertohe|p|mp|ementthepr|n-
o|p|essetout|ntheReport.Theadopt|on
of suoh measures wou|d mark the |n|t|a-
t|onofaprooessofpos|t|veengagement
topromoteSouth-Southoo||aborat|on|n
teohno|ogyand|nnovat|on.
A speo|f|o po||oy |nstrument, the South-
South Teohno|ogy and lnnovat|on Paot
(SlTEP} has been proposed to prov|de |n-
st|tut|ona|supportatthree|eve|s:topro-
mote teohno|og|oa| |earn|ng at the f|rm
|eve|,topromoteenterpr|sedeve|opment
and f|nano|ng of speo|f|o |nnovat|on ao-
t|v|t|es that are of part|ou|ar |mportanoe
to deve|op|ng oountr|es as a who|e; and
to aot as a p|atform for shar|ng |nnova-
t|on exper|enoes and promot|ng po||oy
|earn|ng.
G|ven the|r s|m||ar deve|opment oontexts,
the Report reoogn|zes that the |nnovat|on
exper|enoes and teohno|og|oa| strengths
of some deve|op|ng oountr|es makes them
107
EPILOGUE
natura| strateg|o partners w|th other de-
ve|op|ng oountr|es |n efforts to br|dge the
teohno|og|oa| d|v|de. Further|ng th|s ro|e
oa||s for oreat|ng the r|ght bas|s for ao-
oess|ng so|enoe, teohno|ogy and |nnova-
t|onresouroesw|th|nthedeve|op|ngwor|d.
Teohno|ogy and |nnovat|on resouroes of
the South w||| be or|t|oa| to ||nk rms and
organ|zat|ons |n other deve|op|ng ooun-
tr|es and |DOs w|th the g|oba| know|edge
eoonomy to aooe|erate the|r deve|opment
prooesses.Th|sneedstobebasedonan
understand|ng that (|} |nnovat|on |s a mu|t|
d|reot|ona|, h|gh|y |nteraot|ve prooess that
|ntegrates or 'art|ou|ates" so|enoe, teoh-
no|ogy and produot|on, and that (||} new
po||oy th|nk|ng |s needed to he|p estab||sh
v|rtuouso|ro|esofr|s|ngproduot|v|ty,teoh-
no|og|oa|progressandstruotura|transfor-
mat|onaorosstheent|redeve|op|ngwor|d.
Therearemanyoutstand|ng|ssuesoonoern-
|ngteohno|og|oa||earn|ngand|nnovat|onoa-
pao|ty|ntheoontextofdeve|op|ngoountr|es,
wh|ohneedtobeaddressedatthe|nterna-
t|ona| |eve|. Deve|op|ng oountr|es oan |ead
the way by work|ng together and prov|d|ng
oonstruot|veso|ut|onstotheunreso|vedpo|-
|oyoha||enges|ntheoom|ngyears.
108 TECHNOLOGY AND INNOVATION REPORT 2012
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ANNEXES
117
ANNEX I
ANNEX I
COUNTRY GROUPINGS USED IN THIS REPORT
Najor ecooom|c areas
The o|ass|oat|on of oountr|es and terr|tor|es aooord|ng to ma|n eoonom|o areas used |n th|s dooument has been
adopted for purposes of stat|st|oa| oonven|enoe on|y and fo||ows that |n NOTAD`s Handbook of lnternat|ona| Trade
and Deve|opment Stat|st|os 2011. Oountr|es and terr|tor|es are o|ass|ed aooord|ng to ma|n eoonom|o areas as fo|-
|ows:
0eve|oped ecooom|es: Andorra, Austr|a, Be|g|um, Bu|gar|a, Bermuda, Oanada, Oyprus, Ozeoh Repub||o, Denmark,
Eston|a,Faeroels|ands,F|n|and,Franoe,Germany,G|bra|tar,Greeoe,Green|and,Ho|ySee,Hungary,loe|and,lre-
|and, lta|y, lsrae|, Japan, |atv|a, ||thuan|a, |uxemburg, Ma|ta, Nether|ands, New Zea|and, Norway, Po|and, Portuga|,
Roman|a, Sa|nt P|erre and M|que|on, San Mar|no, S|ovak Repub||o, S|oven|a, Spa|n, Sweden, Sw|tzer|and, n|ted
K|ngdom, n|ted States.
0ropeao 0o|oo: Andorra, Austr|a, Be|g|um, Bu|gar|a, Oyprus, Ozeoh Repub||o, Denmark, Eston|a, Faeroe ls|ands,
F|n|and, Franoe, Germany, Greeoe, Hungary, lre|and, lta|y, |atv|a, ||thuan|a, |uxemburg, Ma|ta, Nether|ands, Po|and,
Portuga|, Roman|a, S|ovak Repub||o, S|oven|a, Spa|n, Sweden, n|ted K|ngdom.
Traos|t|ooecooom|es: A|ban|a, Armen|a, Azerba|jan, Be|arus, Bosn|a and Herzegov|na, Oroat|a, Georg|a, Kazakhstan,
Kyrgyzstan, Montenegro, Repub||o of Mo|dova, Russ|an Federat|on, Serb|a, Taj|k|stan, the former Yugos|av Repub||o
of Maoedon|a, Turkmen|stan, kra|ne, zbek|stan.
A|| deve|op|og co0otr|es: A|| other oountr|es, terr|tor|es and areas |n Afr|oa, As|a, Amer|oa, Europe and Ooean|a not
speo|ed above.
hew|y|od0str|a||zedecooom|es,1stt|er:Hong Kong (Speo|a| Adm|n|strat|ve Reg|on of Oh|na}, Repub||o of Korea, S|nga-
pore,Ta|wanProv|noeofOh|na.
hew|y|od0str|a||zedecooom|es,2odt|er:lndones|a,Ma|ays|a,Ph|||pp|nes,Tha||and.
Leastdeve|opedco0otr|es
Afghan|stan, Ango|a, Bang|adesh, Ben|n, Bhutan, Burk|na Faso, Burund|, Oambod|a, Oentra| Afr|oan Repub||o, Ohad,
Oomoros, Demoorat|o Repub||o of the Oongo, Dj|bout|, Equator|a| Gu|nea, Er|trea, Eth|op|a, the Gamb|a, Ghana, Gu|n-
ea, Gu|nea-B|ssau, Ha|t|, Kenya, K|r|bat|, |ao Peop|e`s Demoorat|o Repub||o, |esotho, ||ber|a, Madagasoar, Ma|aw|,
Ma|d|ves, Ma||, Maur|tan|a, Mozamb|que, Myanmar, Nepa|, N|ger, Rwanda, Samoa, Sao Tome and Pr|no|pe, Senega|,
S|erra |eone, So|omon ls|ands, Soma||a, Sudan, T|mor-|este, Togo, Tuva|u, ganda, n|ted Repub||o of Tanzan|a,
vanuatu, Yemen, Zamb|a.
L00s geograph|ca| c|ass|cat|oo
AIr|caoL00s(aodha|t|): Ango|a, Ben|n, Burk|na Faso, Burund|, Oentra| Afr|oan Repub||o, Ohad, Demoorat|o Repub||o of
the Oongo, Dj|bout|, Equator|a| Gu|nea, Er|trea, Eth|op|a, the Gamb|a, Gu|nea, Gu|nea-B|ssau, Ha|t|, |esotho, ||ber|a,
Madagasoar, Ma|aw|, Ma||, Maur|tan|a, Mozamb|que, N|ger, Rwanda, Senega|, S|erra |eone, Soma||a, Sudan, Togo,
ganda, n|ted Repub||o of Tanzan|a, Zamb|a (32}.
As|aoL00s: Afghan|stan, Bang|adesh, Bhutan, Oambod|a, |ao Peop|e`s Demoorat|o Repub||o, Myanmar, Nepa|, Yem-
en (8}.
|s|aod L00s: Oomoros, K|r|bat|, Ma|d|ves, Samoa, Sao Tome and Pr|no|pe, So|omon ls|ands, T|mor-|este, Tuva|u,
vanuatu (9}.
118 TECHNOLOGY AND INNOVATION REPORT 2012
0therco0otrygro0p|ogs
0A0memberco0otr|es: The oountr|es of the OEOD Deve|opment Ass|stanoe Oomm|ttee are Austra||a, Austr|a, Be|g|um,
Oanada, Denmark, F|n|and, Franoe, Germany, Greeoe, lre|and, lta|y, Japan, |uxemburg, Nether|ands, New Zea|and,
Norway, Portuga|, Repub||o of Korea, Spa|n, Sweden, Sw|tzer|and, n|ted K|ngdom, n|ted States.
hoo-0A0memberco0otr|esreport|ogtothe000-0A0: Ozeoh Repub||o, Hungary, loe|and, Mex|oo, Po|and, S|ovak Re-
pub||o, Turkey, Tha||and and Arab oountr|es (A|ger|a, lran (ls|am|o Repub||o of}, lraq, Kuwa|t, ||bya, Oatar, Saud| Arab|a,
n|ted Arab Em|rates}.
119
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121
ANNEX II
Tab|eA.||.3: ShareoIdeve|opedaoddeve|op|ogco0otr|esaodtraos|t|ooecooom|es|otota|o0twardF0|,19802010
(Perceot)
Year Developed countries
Developing countries
(excl. LDCs)
LDCs Transition economies
1980 93.81 5.73 0.45 ..
1981 96.92 2.97 0.11 ..
1982 90.38 8.94 0.68 ..
1983 94.60 5.24 0.17 ..
1984 95.21 4.67 0.12 ..
1985 93.61 5.97 0.42 ..
1986 94.71 5.54 -0.25 ..
1987 95.27 4.67 0.06 ..
1988 93.40 6.47 0.13 ..
1989 91.56 8.40 0.04 ..
1990 95.07 4.93 0.00 ..
1991 93.19 6.63 0.18 ..
1992 87.80 11.34 0.09 0.77
1993 83.36 16.18 0.04 0.43
1994 83.32 16.52 0.05 0.11
1995 84.49 15.34 0.00 0.17
1996 83.32 16.43 0.01 0.24
1997 83.53 15.64 0.11 0.72
1998 92.50 7.39 -0.10 0.20
1999 93.60 6.16 0.03 0.21
2000 88.72 10.95 0.06 0.26
2001 88.52 11.15 -0.03 0.37
2002 90.13 8.88 0.10 0.88
2003 89.93 8.13 0.05 1.89
2004 85.21 13.23 0.04 1.53
2005 83.48 14.86 0.06 1.61
2006 81.41 16.87 0.05 1.68
2007 83.24 14.35 0.07 2.35
2008 80.27 16.49 0.17 3.07
2009 73.00 22.75 0.09 4.16
2010 68.18 27.36 0.21 4.25
Source: UNCTADstat, Outward Foreign Direct Investment Flows.
122 TECHNOLOGY AND INNOVATION REPORT 2012
Tab|eA.||.4: Treods|oL00sexportsoIpr|marycommod|t|estodeve|opedaoddeve|op|ogco0otr|es,
L00saodothers,19952010(Perceot)
Year
Partners
Developed countries Developing countries (excl. LDCs) LDCs Others
1995 57.99 38.46 2.48 1.07
1996 55.55 40.99 2.00 1.46
1997 54.12 43.68 1.90 0.30
1998 57.92 38.91 2.49 0.67
1999 50.30 47.23 2.16 0.31
2000 48.03 49.88 1.60 0.49
2001 51.43 46.35 1.73 0.49
2002 52.50 45.10 1.97 0.43
2003 49.62 46.82 2.97 0.59
2004 43.88 53.32 2.27 0.53
2005 49.62 48.46 1.57 0.35
2006 46.21 52.10 1.31 0.38
2007 44.55 54.01 1.12 0.31
2008 46.56 52.24 0.96 0.24
2009 40.30 57.70 1.64 0.36
2010 39.37 58.71 1.59 0.33
Source: UNCTADstat.
123
ANNEX II
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124 TECHNOLOGY AND INNOVATION REPORT 2012
Tab|eA.||.6: Treods|oexportsoImao0Iact0r|oggoodsIromdeve|op|ogco0otr|estotherestoIthewor|d,19952010
(Perceot)
Exports of developing
countries to:
1995 2000 2005 2010
Developed countries 53.56 57.85 50.58 43.11
Developing countries (excl. LDCs) 43.05 39.55 46.47 53.28
LDCs 1.87 1.52 1.18 1.6
Others 1.52 1.08 1.77 2.01
Total 100 100 100 100
Source: UNCTADstat, Outward Foreign Direct Investment Flows.
125
ANNEX II
Tab|e A.||.7: Trade ows oI As|ao deve|op|og co0otr|es: |otra-gro0p aod w|th rest oI the wor|d, 1995-2010 (Per ceot)
Year
Partner
East Asia South Asia South-East Asia
1
9
9
5
Intra-group 29.50 5.19 24.41
Rest of the world 70.50 94.81 75.59
Total trade of group 100 100 100
2
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Intra-group 28.31 4.64 22.98
Rest of the world 71.69 95.36 77.02
Total trade of group 100 100 100
2
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Intra-group 29.18 5.59 22.34
Rest of the world 70.82 94.41 77.66
Total trade of group 100 100 100
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Intra-group 31.19 5.54 22.65
Rest of the world 68.81 94.46 77.35
Total trade of group 100 100 100
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Intra-group 32.50 6.34 24.74
Rest of the world 67.50 93.66 75.26
Total trade of group 100 100 100
2
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Intra-group 32.76 6.24 24.91
Rest of the world 67.24 93.76 75.09
Total trade of group 100 100 100
2
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Intra-group 32.30 6.32 25.33
Rest of the world 67.70 93.68 74.67
Total trade of group 100 100 100
2
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Intra-group 31.97 7.76 24.93
Rest of the world 68.03 92.24 75.07
Total trade of group 100 100 100
2
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Intra-group 30.93 9.10 25.23
Rest of the world 69.07 90.90 74.77
Total trade of group 100 100 100
2
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Intra-group 29.13 9.00 25.55
Rest of the world 70.87 91.00 74.45
Total trade of group 100 100 100
2
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Intra-group 30.11 8.97 24.51
Rest of the world 69.89 91.03 75.49
Total trade of group 100 100 100
2
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1
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Intra-group 28.40 8.53 24.59
Rest of the world 71.60 91.47 75.41
Total trade of group 100 100 100
Source: UNCTADstat, GlobStat - Intra-trade of Regional and Trade Groups, 1995-2010.
126 TECHNOLOGY AND INNOVATION REPORT 2012
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127
ANNEX II
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128 TECHNOLOGY AND INNOVATION REPORT 2012
Tab|eA.||.10:xportsoIh|gh-techoo|ogymao0Iact0res,19952010($tho0saod)
Year
Emerging developing countries to
developed countries
Emerging developing countries to
LDCs
Developed countries to emerging
developing countries
LDCs to emerging
developing countries
1995 136 329 002.97 852 067.89 142 501 763.12 67 754.68
1996 142 185 238.95 883 597.43 146 503 033.24 44 418.88
1997 153 744 847.37 958 967.87 162 012 916.87 27 236.34
1998 157 434 949.65 880 575.79 144 660 929.14 29 143.48
1999 180 330 238.84 931 749.24 159 579 664.37 40 023.43
2000 219 625 725.13 1 132 937.60 195 559 289.47 44 611.53
2001 187 521 917.11 1 055 583.13 168 815 428.56 65 883.66
2002 185 385 651.29 1 082,513.52 162 591 902.05 29 909.60
2003 195 114 973.71 1 243 762.09 175 693 425.28 32 675.89
2004 231 046 565.27 1 576 210.64 209 645 582.74 87 601.14
2005 238 488 755.24 1 848 206.25 220 143 050.27 41 766.13
2006 268 998 054.18 2 230 507.02 243 445 009.88 44 519.41
2007 273 625 532.29 2 547 407.11 252 321 586.94 46 442.92
2008 277 398 967.75 3 094 449.71 272 793 367.15 112 072.41
2009 231 911 509.31 3 208 223.54 220 682 860.79 98 573.27
2010 295 016 265.93 4 154 579.02 280 266 157.79 82 110.42
Source: UNCTADStat, Merchandise Trade Matrix.
129
ANNEX II
Tab|eA.||.11:|mportspercap|taoImach|oeryaodtraosporteg0|pmeotbydeve|op|ogco0otr|esaodL00s,1995-2010
(percap|ta$)
Year
LDCs
Developing countries
Oil exporters Non-oil exporters Total
1995 22.0 14.6 35.8 152.0
1996 27.8 15.6 4.0 161.2
1997 33.0 15.1 4.8 169.3
1998 33.7 14.8 547.3 152.8
1999 35.1 14.5 1.0 157.1
2000 33.7 14.6 236.7 190.0
2001 49.2 14.9 118.8 178.5
2002 54.8 14.7 0.5 187.4
2003 66.2 16.9 124.1 216.2
2004 83.1 20.6 2.5 269.7
2005 114.9 23.0 104.5 306.7
2006 138.5 27.7 1.1 350.2
2007 164.0 31.9 1983.9 393.9
2008 214.2 38.9 26.5 430.3
2009 183.9 37.3 225.7 367.7
2010 198.1 41.4 71.9 462.3
Source: UNCTADstat.
130 TECHNOLOGY AND INNOVATION REPORT 2012
Tab|eA.||.12:00twardF0|Iromdeve|op|ogco0otr|es,1970-2010($m||||oo)
Year
Outward FDI
$ million at current prices Per cent of total global outfows
1970 50.97 0.36
1971 45.04 0.31
1972 113.37 0.72
1973 129.70 0.50
1974 288.96 1.18
1975 536.12 1.87
1976 493.91 1.74
1977 616.39 2.14
1978 773.66 1.97
1979 430.56 0.68
1980 3 192.39 6.19
1981 1 584.13 3.08
1982 2 639.80 9.62
1983 2 020.72 5.40
1984 2 401.36 4.79
1985 3 962.13 6.39
1986 5 125.28 ..
1987 6 722.56 4.73
1988 12 033.07 6.60
1989 19 762.41 8.44
1990 11 914.02 4.93
1991 13 476.89 6.81
1992 23 156.09 11.43
1993 39 319.03 16.21
1994 47 529.14 16.57
1995 55 723.59 15.34
1996 65 406.24 ..
1997 75 218.26 15.75
1998 50 294.41 7.29
1999 67 344.79 6.19
2000 135 116.42 11.02
2001 83 087.38 ..
2002 47 484.26 8.98
2003 46 667.57 8.18
2004 122 791.57 13.26
2005 132 507.00 14.91
2006 239 335.99 16.91
2007 316 863.45 14.42
2008 328 120.83 16.66
2009 268 475.98 22.85
2010 400 144.12 27.57
Souroe: NOTADstat, G|obStat - Fore|gn D|reot lnvestment: lnward and Outward F|ows.
131
ANNEX II
Tab|e A.||.13: Share oI F0| o0tows by deve|op|og aod deve|oped co0otr|es |o g|oba| F0| o0tows, 1970-2010 (Per ceot)
Year Developing countries Developed countries Transition economies
1970 0.36 99.64 ..
1975 1.87 98.13 ..
1976 1.74 98.26 ..
1977 2.14 97.86 ..
1978 1.97 98.03 ..
1979 0.68 99.32 ..
1980 6.19 93.81 ..
1981 3.08 96.92 ..
1982 9.62 90.38 ..
1983 5.40 94.60 ..
1984 4.79 95.21 ..
1985 6.39 93.61 ..
1986 5.29 94.71 ..
1987 4.73 95.27 ..
1988 6.60 93.40 ..
1989 8.44 91.56 ..
1990 4.93 95.07 ..
1991 6.81 93.19 ..
1992 11.43 87.80 0.77
1993 16.21 83.36 0.43
1994 16.57 83.32 0.11
1995 15.34 84.49 0.17
1996 16.44 83.32 0.24
1997 15.75 83.53 0.72
1998 7.29 92.50 0.20
1999 6.19 93.60 0.21
2000 11.02 88.72 0.26
2001 11.11 88.52 0.37
2002 8.98 90.13 0.88
2003 8.18 89.93 1.89
2004 13.26 85.21 1.53
2005 14.91 83.48 1.61
2006 16.91 81.41 1.68
2007 14.42 83.24 2.35
2008 16.66 80.27 3.07
2009 22.85 73.00 4.16
2010 27.57 68.18 4.25
Souroe: NOTADstat.
132 TECHNOLOGY AND INNOVATION REPORT 2012
Tab|e A.||.14: Share oI F0| o0tows |o tota| F0| o0tows Irom deve|op|og reg|oos to the rest oI the wor|d, 1970-2010
(Perceot)
Year AIr|ca
Lat|oAmer|caaodthe
0ar|bbeao
As|a 0thers
1970 36.78 61.25 1.96 ..
1975 32.24 41.38 26.37 ..
1980 34.35 28.15 36.93 0.56
1985 8.99 16.22 74.77 0.02
1990 5.53 2.53 91.85 0.09
1995 5.34 13.49 81.20 -0.03
2000 1.14 36.92 61.94 0.01
2001 -3.18 44.01 59.16 0.01
2002 0.60 25.67 73.68 0.04
2003 2.67 45.92 51.34 0.07
2004 2.11 23.40 74.44 0.05
2005 1.37 33.31 65.22 0.09
2006 3.44 33.29 63.26 0.02
2007 2.94 25.04 72.00 0.01
2008 2.41 29.57 68.00 0.03
2009 1.18 20.23 78.56 0.03
2010 1.76 29.97 68.23 0.04
Souroe: NOTADstat.
133
ANNEX II
Tab|e A.||.15: Share oI tota| F0| o0tows Irom As|ao s0breg|oos to the rest oI the wor|d, 1980-2010 (Per ceot)
Year astAs|a So0thAs|a So0th-astAs|a westAs|a
1980 12.73 0.93 33.39 52.94
1990 87.49 0.09 21.27 -8.85
1995 74.17 0.29 26.89 -1.34
2000 85.11 0.66 10.73 3.50
2001 52.39 2.91 42.21 2.49
2002 79.63 5.08 6.05 9.24
2003 75.19 6.62 23.45 -5.26
2004 69.93 2.53 18.74 8.79
2005 60.07 4.08 21.45 14.41
2006 56.41 9.78 18.89 14.92
2007 50.15 8.80 26.12 14.93
2008 59.70 8.85 14.46 16.99
2009 68.10 7.78 15.64 8.48
2010 72.82 4.98 16.18 6.02
Souroe: NOTADstat.
134 TECHNOLOGY AND INNOVATION REPORT 2012
Tab|eA.||.16:ShareoIpr|marycommod|t|esaodmao0Iact0res|otota|L00exports,19952010(Perceot)
Year A||Iood|tems
Agr|c0|t0ra|raw
mater|a|s
F0e|s
Nao0Iact0red
goods
0res,meta|s,
prec|o0sstooes
Tota|
1995 20.88 13.76 24.19 22.19 18.97 100
1996 20.07 10.72 30.28 24.31 14.63 100
1997 19.35 11.50 28.87 26.88 13.40 100
1998 19.96 10.41 21.03 34.02 14.59 100
1999 17.51 9.11 28.51 32.12 12.75 100
2000 13.27 6.85 39.58 30.80 9.50 100
2001 13.84 6.55 37.09 31.05 11.48 100
2002 13.52 6.48 39.11 29.40 11.49 100
2003 12.63 7.68 41.19 28.28 10.22 100
2004 10.49 6.23 46.74 26.12 10.41 100
2005 9.03 5.03 54.41 21.50 10.03 100
2006 8.82 4.43 54.98 20.77 11.01 100
2007 8.41 4.43 57.65 19.34 10.17 100
2008 6.83 3.09 63.82 16.22 10.04 100
2009 9.70 3.83 53.44 21.78 11.25 100
2010 8.88 3.83 52.15 21.54 13.60 100
Souroe: NOTADstat.
135
ANNEX II
Tab|e A.||.17: h0mber oI sc|eot|c aod techo|ca| jo0roa| art|c|es |o L00s aod se|ected co0otr|es, 1986-2007
Year LDCs Brazil China India Indonesia Malaysia South Africa
1986 620 1 777 2 911 9 925 72 186 2 653
1987 573 1 766 3 146 9 051 66 192 2 670
1988 630 1 766 4 619 8 882 59 208 2 523
1989 586 2 117 5 411 9 744 86 241 2 499
1990 605 2 374 6 285 9 200 104 233 2 406
1991 599 2 640 6 186 9 517 89 260 2 552
1992 697 3 107 6 956 10 100 86 247 2 419
1993 696 2 885 7 566 9 763 103 293 2 377
1994 772 3 073 7 821 9 928 120 345 2 459
1995 845 3 436 9 061 9 370 130 366 2 351
1996 818 3 813 10 526 9 753 141 362 2 216
1997 837 4 498 12 172 9 618 146 349 2 223
1998 837 5 234 13 781 9 945 136 387 2 225
1999 882 5 859 15 715 10 190 163 471 2 303
2000 884 6 407 18 479 10 276 182 460 2 221
2001 874 7 052 21 134 10 801 189 472 2 291
2002 896 7 881 23 269 11 665 178 495 2 328
2003 968 8 330 28 768 12 461 157 479 2 205
2004 1 054 9 573 34 846 13 369 182 586 2 320
2005 1 077 9 897 41 604 14 635 205 615 2 395
2006 1 243 10 799 49 575 16 741 215 724 2 643
2007 1 327 11 885 56 806 18 194 198 808 2 805
Source: UNCTADstat.
136 TECHNOLOGY AND INNOVATION REPORT 2012
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137
ANNEX II
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138 TECHNOLOGY AND INNOVATION REPORT 2012
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