The Bank’s Portfolio in LAC

1. The Bank’s Portfolio in LAC Washington, February 18,2004

2. Economic and social development are increasingly driven by the advancement and application of knowledge. Education in general — and tertiary education and research in particular — are fundamental to the construction of a knowledge economy in all nations

3. However, S&T systems in developing and transition countries face persistent problems of finance, efficiency, equity, quality and governance • New challenges linked to rapid changes in technology, communication and the globalization of trade and labor markets have amplified the traditional problems of tertiary education and S&T

4. Challenge ...

5. Knowledge Market • the knowledge market is global and open, • knowledge producers exchange knowledge at “low price” • knowledge users have access at “high price” • knowledge is not consumed when it is applied

6. Lessons ...

7. Knowledge is a critical determinant of economic growth and quality of life • Knowledge is transformed into goods and services through a country’s NIS • Trained human brains are the most effective knowledge transfer and adaptation mechanism • Good science is international

8. Recognition of the Importance of S&T for Development is Not New • technology transfer is involved in virtually every sector • usually includes building of capacity to understand and use new technologies • sectors such as agriculture, education, and health have emphasized building local capacity to generate or utilize new knowledge for development

9. World Bank Lending, 1992-02(volume by region) ECA 1% MENA 4% SA 0% HE and S&T Lending not including Agricultural Lending was concentrated predominantly in East Asia and Latin America LAC 31% EA 60% AFR 4%

10. Trends ...

11. Scientists and Engineers1988 y 1998Source: World Development Indicators 2002

12. Tertiary- OK given level of GDP but... Ph.D.s in Science/million habitants 1996-1997 Source: Brunner 2001

13. Increased Returns to Schooling(Brazil)

14. Increased Private Sector Response(Colombia)

15. Demand and GNP(Colombia)

16. .. an Equity Challenge(Colombia -- 1992 and 1997)

17. Origin of Foreign Students in OECD - 1999Source: OECD

18. NIS …

19. National Innovation System Global Knowledge Economy Human Capital Think Tanks/ Antenna University Innovation Clusters Firms The FPSI Challenge: Other Public Policies Rules of the Game Infrastructure (ICT) Demand for innovation Innovation & TFP Growth Global Knowledge Economy

20. Closing the gap • Skilled people • Knowledge networks and centes of excellence • Creation and transformation of knowledge • Strengthening of culture and language • Information infrastructure • National Information System

21. WB Education Portfolio in LAC 2002

22. Tertiary Educationin LAC

23. it is critical to aim at subsidiarity and coherence in policies and practices. Ofthen lack of continuity in funding and coherence of science and technology policies. • governments should resist the risk of neglecting fundamental science and social sciences, which both are very important components of the NIS. • transparency in communication between players are of critical importance. Can be facilitated by international participation, fx. as peer reviewers, program committees, program reviews, and supervision teams

24. improve policies and institutions within a framework of autonomy and accountability • recognize and support human resources and management capacity • achieve funding sustainability through public-private interaction and cost-recovery • aim at merit and scientific rigor (through competitive funding, peer review, etc.) • establish linkages from productive and the knowledge sectors to basic research and the international knowledge base

25. Thanks for the Invitation Lauritz B. Holm-Nielsen Lholmnielsen@worldbank.org