Facing The R&D Challenge: THE RISE OF ISLAMIC WORLD TO STI PROMINANCE

1. Facing The R&D Challenge: THE RISE OF ISLAMIC WORLD TO STI PROMINANCE Prof. Dr. Yunus Çengel Adnan Menderes University, Aydin,Turkey (University of Nevada, Reno, USA) Alliance of Civilizations Institute Fatih Sultan Mehmet Waqf University, Istanbul, Turkey Workshop on Establishing an Islamic Fund for R&D Istanbul, 2013

2. KNOWLEDGE SOCIETY and KNOWLEDGE ECONOMY

3. KNOWLEDGE SOCIETY AGRICULTURAL Society (... – 1712, Invention of Steam Engine, Newcomen) Occupations (farming, crafts) passed from father to son. • Speed of Change: Low • Required skills/competencies: Simple INDUSTRIAL Society(1712 – 1948, invention of transistor, Bell Labs) • Farming didn’t disappear; it mechanized. Mechanization became the measure of competitiveness in Ag. Working class; new vocations • Speed of Change: Medium • Required skills/competencies: Mechanical (robotic) KNOWLEDGE Society(1948 – ...) • Industrialization continues, but is knowledge-based. Routine tasks are left to robots. Arena of competition: New knowledge and technology developed. • Speed of Change: High; Product life: Short; Life of occupation: Short • Required skills/competencies: Complex and variable

4. Difference Between Poverty and Wealth: KNOWLEDGE 6-fold difference in GDP Source: World Bank

5. SHARE OF TECHNOLOGY GOODS IN WORLD TRADE Source: World Bank, 1999

6. INFORMATION EXPLOSION Information doubles every 4 years • Accelerated increase in knowledge shortens the useful life of knowledge. Knowledge becomes outdated at increasing rate. • Knowledge took 1,750 years to double for the first time, counting from the start of the Christian era. • It then doubled in volume every 150 years and then every 50. • Every 4 years the amount of information in the world doubles. • By 2020 knowledge will double every 73 days. • We are only capable of giving attention to a small fraction of it. • The primary language of the new information in the world is English, which made English the non-formal language of the world. Knowing the ‘World Language’ has now become part of being a ‘World citizen’. • Source: UNESCO Forum Occasional Paper Series Paper No. 4 (2003).

7. An Indicator of Knowledge Economy: Fraction of Intellectual Property: 80% http://www.oceantomo.com/media/newsreleases/Intangible-Asset-Market-Value-Study

8. Cross-border Licensing and Royalty Income Billion USD Source: WIPO (World Intellectual Property Organization) http://www.wipo.int/export/sites/www/freepublications/en/intproperty/944/wipo_pub_944_2011.pdf

9. Firms with Most US Patents in 2012 (Top 25) Source: http://ificlaims.com/index.php?page=misc_top_50_2012

10. 30% of IBM Patents are from Inventors Abroad • IBM collected 6,478 patents in 2012 (the 20th consecutive year in top spot). 8,000 inventors in 46 states and 35 countries have contributed. • About 30% of IBM’s patents were produced by inventors outside the U.S., up from 22 percent in 2010. • With over 430,000 employees worldwide and over 67,000 patents since 1993, IBM invests about $6 billion/year (and 6% of revenues) in R&D. • IBM’s patent asset generates an estimated $1 billion/year in license revenue. But it also is a shield against patent litigation by competitors and patent-holding firms. • Samsung Electronics was granted 5,081 patents. Google posted a 170% jump from #65 in 2011 to #21 in 2012 in patents granted, with 1,151 patents. • In 2012, the U.S. Patent and Trademark Office issued a total of 253,155 patents, a record. • IBM patent strategy: the proliferation of “mixed-skill teams” of researchers in fields like medicine, public health, and oil and gas exploration. Source: http://www.businessweek.com/news/2013-01-10/ and http://bits.blogs.nytimes.com/2013/01/10/

11. IP WARS: $1.17 Billion Award in Patent Infringement Case http://chronicle.com/blogs/ticker/jury-awards-carnegie-mellon-u-1-17-billion-in-patent-infringement-case/53485

12. Cloud Computing: 1-Million New Jobs in the US 5 March 2012

13. An Indicator of Knowledge Economy: Average price of exported goods, $/kg

14. High-Value Added Technology Products Car:$20/kg Tablet:$500/kg Erythropoietin(A hormone that controls red cell production in blood; a biotechnology product used in the treatment of leukemia) $27 billion/kg Source: Prof. Cezmi Akdis, Director of Swiss Institute of Allergy and Asthma Research (SIAF);

15. A Technological Marvel Satellite = Matter {copper, iron, plastic, ...}+Non-matter{imagination, innovation, knowledge, skills, ...} TURKSAT 4A and 4B Mitsubishi Electric, Japan 2013 and 2014 Total mass and price: 7700 kg $571 million Unit cost: $74,000/kg Raw materials: $10/kg? http://www.ntvmsnbc.com/id/25229518/

16. CHANGE: An Intrinsic trait of humanity • Humans are CHANGINGbeings. • Objection to change is objection to being human and denial of humanity. • Intelligent • Talking • Social • Economic • CHANGING HUMANS are BEINGS. (HUMANS vs. ANIMALS) Engineering: A joyful profession. Exhibiting creativity is a human-like and joyful act.

17. ISLAMIC WORLD ON KNOWLEDGE ECONOMY

18. VISION OF OIC • The challenge facing the Islamic world is to re-establish itself at the forefront in science, technology and innovation (STI), and transition to a knowledge economy. • In its Vision 1441H of 2003 “Declaration On ScienceandTechnologyfor EconomicWell-being of the Ummah” in Kuala Lumpur, Malaysia: • Organisationof Islamic Cooperation OIC acknowledged that the Muslim world is facing a knowledge gap because of its deficiency in science, technology and innovation, and set as a goal to achieve 14% of the world’s scientific output and 1.4% of GDP spent on R&D by 2020. • In its Ten Year Programme of Actionof 2005 “to Meet the Challenges Facing the Muslim Ummah in the 21st Century” in Jeddah, Saudi Arabia: • OIC pledged to make science and technology a high priority and called upon member states to spend 1% of GDP on R&D by 2015.

19. The 57 – State Islamic World (OIC): State of STI • The Islamic world which is comprised of the 57 member states of the Organisation of Islamic Cooperation (OIC) has a population of nearly 1.5 billion - about 21% of the world population of 7.2 billion. • Yet, it constitutes only: • 6.8% of the world’s total GDP (PPP), • 2.4% of the world’s total R&D expenditure, • 10% of the world’s total researchers, • 5.9% of global publications, • 1.7% of global patents filed and 1.5% of patents granted – all key indicators well below the world average. • The OIC countries spend 0.5% of their GDP on R&D – much less than the world average of 2.0%. • The annual high-technology exports of the 57 OIC countries total $75 billion, which is less than the annual sales of Apple established in 1980s by a college dropout.

20. Total Patent Applications in the World OIC: 21% of world population; 1.7% of patent applications Source: World Intellectual Property Organization, Statistics Database (SESRIC of OIC)

21. Total Patent Grants (World) OIC: 21% of world population; 1.5% of patents granted Source: World Intellectual Property Organization, Statistics Database (SESRIC of OIC)

22. A Measure of Technological Advancement:PATENTS No. of patents granted by countries (2011) No. of domestic patents granted by Turkish Patent Institute in 2011: 847. No. given to foreign applicants in 2011: 5720 (%87) Source: http://en.wikipedia.org/wiki/List_of_countries_by_patents and Turkish Patent Institute

23. High-Technology Exports (OIC Member states) Source: World Bank, WDI Online (via SESRIC of OIC)

24. Apple Still Tops List of Most Innovative Companies • Ross Rubin: There are different kinds of innovation. “Apple’s innovation focuses on bringing together different parts of an ecosystem and tightly integrating them together with meticulous attention to detail.” • Samsung: Incorporate the latest technologies into its products. • Dell: Focus on relatively unglamorous innovation in process and manufacturing. • Google: Innovation in prototypes and concepts. • Charles Golvin: “A big distinction for Apple is the breadth of areas in which it innovates: hardware, industrial design, software, usability, retail.” Apple has come under criticism for its products being largely “evolutionary,” rather than “revolutionary”. Source: http://www.wired.com/gadgetlab/2012/11/apple-most-innovative/

25. One Country vs. One Person in GDP Generation Syria (185,200 km2; 23 million people) GDP in 2010: $60 billion ($2800 per capita) http://en.wikipedia.org/wiki/Syria Steve Jobs (1955-2011) (Son of a Syrian father + US mother) Apple:$109 billion revenue in 2011) Apple is the most valuable publicly traded firm in the world ($550 billion) Question: What if Steve Jobs were raised in Syria instead of the US?

26. Stanford Univ Grads: World’s 10th Largest Economy (40,000 companies, $2.7 trillion annual sales) Source: http://www.bloomberg.com/news/2012-11-09/stanford-rooted-companies-would-form-world-sized-economy.html

27. UNIVERSITY-DEVELOPED TECHNOLOGIES (2010) Income for licensing (US Universities): • $2.4 billion (Total) • $180 million, Northwestern University • $178 million, New York University • $147 million, Colombia University • 12,281 New patent applications filed • 4469 New patents are issued • 613 new start-up companies formed on university-owned intellectual property. • 657 New commercial products created Source: http://www.autm.net/home.htm; Association of University Technology Managers

28. ‘Good’ Universities Attract ‘Inovative’ Firms As its universities turn out quality engineering grads, POLAND attracts US tech giants • Polandhas continued to grow during the global financial crisis, lining itself up for a strong run to become the continent's next economic powerhouse. • General Electric: Based one of their global design centers here, where Polish engineers helped create the new GEnx engine for Boeing's 787 Dreamliner. • Foreign-based employers are happy with the quality of Polish graduates, who leave university with a strong base in math and basic programming. • Google, Motorola and IBM also opened development labs here. December 12, 2012 By Tom Marshall http://worldnews.nbcnews.com/_news/2012/12/12/15845485-as-its-universities-turn-out-engineering-grads-poland-attracts-us-tech-giants?lite

29. A MUST for STI Ecosystem: PROPER CLIMATE GROWING PLANTS GROWING TECHNOLOGY 27°C %70 RH Sun Freedom of expression, Safe environment, Respecting differences, Risk taking ECOSYSTEM in GREENHOUSES: Fertilizer, water + Proper climate(Temp, humidity, sun) STI ECOSYSTEM: R&D spending, human capital + Proper climate(personal/societal rights and freedoms, democratic environment, free expression, being different, creativity, innovation, entrepreneurship, risk taking, venture capital, team work, safe environment, center of attraction for brains, … )

30. CREATIVITY: The Secret for Success • This innate ability can be activated and mined, but it is not something that can be taught. • “America is the greatest engine of innovation that has ever existed, and it can’t be duplicated anytime soon, because it is a product of multiple factors: • - Extreme freedom of thought, • - an emphasis on independent thinking, • - a steady immigration of new minds, • - a risk taking culture with no stigma attached to trying and failing, • - a noncorrupt bureaucracy, • - and financial markets and a venture capital system that are unrivalled at taking new ideas and turning them into global products.” • - Thomas Friedman, NY Times, March 07, 2004.

31. Foreign-born US scientists: 76% of Patents

32. BRAINPOWER FIRST: SILICON VALLEY • Silicon Valley is just the ground of brain power and creative thinking, not the source. • Silicon valley is merely the field where the orchards of creativity that blossomed in the garages of houses are planted. • “Knowledge and skills now stand alone as only the source of comparative advantage. Silicon Valley and Route 128 are where they are, simply because that is where the brain power is.” • - Lester Thurow, MIT Economist “In the U.S. immigrants have founded 52% of Silicon Valley’s companies and created millions of jobs.” (Vivek Wadhwa, Washington Post, Oct. 4, 2011).

33. FUNDING R&D

34. R&D Funding for Knowledge Economy • R&D funding is of crucial importance to facilitate innovation, but these funds should be used intelligently to realize clearly set objectives and specific outputs. • For example, Google has concentrated its funding efforts to the development of driver-less cars. • The DOE is funding projects with specific goals in the US, like artificial leaves for solar energy, new generation of car batteries, and the development of commercial electric vehicles like Tesla. • The successful funding mechanisms of NSF, DOE, NIH, and even GOOGLE should be studied carefully together with TUBITAK of Turkey. • The Framework Programs like FP7 with a budget of 50 billion euros and EUREKA in Europe are good examples for multinational collaborative research. • There is innovation even in funding mechanisms, and a good starting point is a careful study of best international funding practices. • But successful innovation from conception to market place requires the establishment of a dynamic ecosystem among many intertwined components from entrepreneurship to access to venture capital in a climate conducive of innovation.

35. GERD, % of World Total (2011) OIC: 21% of world population; 2.4% of R&D Expenditures Source: UNESCO Institute for Statistics (SESRIC of OIC, Gross expenditures on R&D)

36. Global R&D Spending: 2.0% of GDP OIC (% GDP) Tunisia, 1.10%, Malaysia, 1.07% Turkey, 0.84%, Iran 0.79%, Saudi Arabia, 0.08%, Kuwait, 0.09%, Qatar, 0.33%, UAE, 0.47% WORLD: 2% of GDP http://www.rdmag.com/articles/2011/12/2012-global-r-d-funding-forecast-r-d-spending-growth-continues-while-globalization-accelerates

37. GERD as a % of GDP (OIC Member States) Source: UNESCO Institute for Statistics (SESRIC of OIC, Gross expenditures on R&D)

38. R&D Spending of Countries (2012) http://www.rdmag.com/articles/2011/12/2012-global-r-d-funding-forecast-r-d-spending-growth-continues-while-globalization-accelerates

39. Top R&D Spending Firms (2011) http://www.booz.com/media/uploads/BoozCo_The-2012-Global-Innovation-1000-Study.pdf

40. Johns Hopkins University: $2.15 Billion/yr R&D (Total Univ R&D in the US: $65 milyar; %57 in Life Sciences) Source: http://www.nsf.gov/statistics/infbrief/nsf13305/

41. TARGETED R&D FUNDING

42. R&D Team to Improve Batteries for Electric/Hybrid Cars The US Department of Energy chose Argonne to lead the effort after a national competition. The lab will receive up to $120 million over 5 years. http://www. car-battery-research-20121130,0,7799993.storychicagotribune.com/news/local/sns-ap-il-- • Other members for the new ‘Joint Center for Energy Storage’ include: • 5 universities (Northwestern, U. Chicago, U. Illinois-Chicago, U. Illinois-Urbana Champaign, U. Michigan) • 4 national labs (Lawrence Berkeley, Pacific Northwest, Sandia, SLAC National Accelerator Lab) • 4 industrial partners(Dow Chemical, Applied Materials, Johnson Controls, Clean Energy Trust). • 120 individuals working on battery technology around the country will visit the Argonne hub on a regular basis. • Goal: To license the inventions fostered there for commercialization. • A breakthrough in battery technology would have major implications for the auto, wind and solar industries.

43. TESLA: Driving Innovation in Electric Cars • TESLA MOTORS was founded in 2003 in Silicon Valley, CA, and producing cars since 2008. • It has 2000+ employees and it sold cars in 37 countries. • Produces 500 electric vehicles a week (26,000 cars in 2013. • Predicted sales for 2014: 40,000 cars). • Supercharger stations provide half a charge in 20 minutes. Battery pack can be swapped in 90 seconds. • Received a $465 million loan from US Department of Energy’s Advanced Technology Vehicle Manufacturing Program. • Repaid the entire loan back to DOE in May 2013. Range: 400 km per change. Motor: A 360 hp. Fuel cost: $2.8 per 100 km (at $0.11/kWh). Accelerationfrom 0 to 100 km/h: 5.8 s. Price: $70,000 (in US). http://business.time.com/2013/08/08/tesla-shares-zoom-14-on-strong-sales-as-chinese-market-beckons/

44. DOE Puts $122 Million Into Sunlight-To-Fuel Effort The San Jose Mercury News (7/24, Bohan) reports: "The Department of Energy is putting up $122 million to help humans capture the energy of the sun and create renewable liquid fuels through 'artificial photosynthesis.” The energy department also announced that "Lawrence Berkeley Laboratory and the California Institute of Technology" has been selected to lead the project. Instead of yielding a simple carbohydrate, artificial photosynthesis would be designed to create oxygen and liquid fuels such as hydrocarbons or alcohols that could be directly pumped into vehicles, without additional, costly refinement. http://www.mercurynews.com/breaking-news/ci_15587962?nclick_check=1 (San Jose Mercury News, 23 July 2010)

45. HIGH-RISK ENERGY PROJECTS ($400 million) “Energy Department To Launch Innovation Agency, Announce Grants.”

46. Acquisitions: Quick Access to Technology (China) • Microsoft will acquire Nokia's devices and services unit and license the company's mapping services in a deal worth $7.2 billion in a bid to bolster the company's position in the smartphone market. • The software giant will pay $5 billion for "substantially all" of Nokia's phone unit and another $2.2 billion to license its patents.

47. Chinese Education System Shifting Away from Testing • Preparation for China’s national university entrance exam continues to dominate the lives of secondary students. • The epidemic obsession with testing “severely hampers student development as a whole person, stunts their healthy growth, and limits opportunities to cultivate social responsibilities, creative spirit, and practical abilities in students.” • It also produces poorly socialized adolescents who are ill-prepared to face the challenges of the real world. • China’s education system transforms children into hardworking students with an impressive capacity for processing factual information, like computers or robots. • “Give them a problem and they will find the answer. However, they can’t ask a good question.” • In 2013, the Ministry of Education launched a campaign aimed at shifting the focus away from standardized testing into hands-on learning. (New York Times, Sep. 3, 2013) http://www.nytimes.com/2013/09/03/science/chinese-educators-look-to-american-classrooms.html?_r=0

48. Reversing the Brain Drain; Exploting Diaspora

49. Going Where the Action is/Brains are: Samsung launches Silicon Valley incubator • Samsung opened the doors of a startup and entrepreneurship incubator/accelerator nestled in the heart of Silicon Valley. • Samsung will also open a new Samsung Strategy and Innovation Center in Palo Alto, and incubators in other tech hubs such as New York, Austin, Boston, Russia, and Israel. Samsung Ventures America is a $1 billion fund. http://venturebeat.com/2013/07/12/samsung-launches-silicon-valley-incubator/ July 11, 2013

50. IEEE: 75% Of Cars Will Be Autonomous By 2040 • General Motors' Cadillac division expects to produce partially autonomous cars at a large scale by 2015, and the automaker also predicts it will have fully autonomous cars available by the end of the decade. • The Institute of Electrical and Electronics Engineers recently released predictions that autonomous cars will account for up to 75 percent of vehicles on the road by 2040. • IEEE went even further, forecasting how infrastructure, society and attitudes could change when self-driving cars become the norm around the middle of the century." Source: http://www.wired.com/autopia/2012/09/ieee-autonomous-2040/ (18 Sep 2012)