Vladimir Kozharnovich Senior Industrial Development Officer

1. “Research Commercialization: The role of SMEs & International Organizations”International Conference on Promoting R&D in North Africa15-17 July 2008, Rabat, Morocco Vladimir Kozharnovich Senior Industrial Development Officer Investment & Technology Promotion Branch UNIDO

2. Technology & the Economy • Economists agree that the creation and diffusion of technological knowledge is at the heart of economic growth • At least two-thirds of per capita economic growth is due to technology • Technology provides the impetus for economic growth • Technology-based economic development focuses on enhancing the discovery, development, commercialization and adoption of technology • Economic growth is the function of capital and labour, which is influenced by technology • Innovation will be the single most important factor in determining a country’s success in the 21st century • Over the next 6 years, products representing more than 70 percent of manufacturers’ sales today will be obsolete due to changing customer demands and competitive offerings • The key to higher standards of living and job creation is the extent to which innovative ideas and technologies are embedded in services, products and manufacturing processes

3. Key Determinants of the 21st Century Knowledge is now recognized as the key to determining competitiveness in the 21st century, which emphasizes the role of information, technology and learning in economic performance. A key feature in the 21st century is that economic development rests upon knowledge and its useful application. Today’s most technologically advanced countries are truly knowledge-based. By creating new knowledge and its commercialization, they create millions of knowledge-related jobs and thus generate new wealth from their innovations. The term of “knowledge-based economy” results from a fuller recognition of the role of knowledge and technology in economic and social development.

4. Challenges and Opportunities of the 21st Century • Markets are becoming increasingly global and knowledge-intensive. • Industries and sectors are constantly being reshaped through these global forces and the knowledge push – even those which have been around for millennia, such as the agricultural, fishery and forestry sectors. • Only by raising the knowledge capacity of firms, can we base their competitive advantage on providing best new products, processes and services in the world. • This is why the true factor of competitiveness lies in our brains and in our creativity. It is “knowledge” in the broadest sense of the word.

5. Challenges and Opportunities of the 21st Century • The great challenge will be to use technology for growth and profitability. Controlling technology will be the competitive edge of the future. • If a country is to play a substantive role in sustainable and competitive manufacturing in the future, its industry must become proactive in developing a strong self-sustaining innovation capacity to meet customized concepts for high value added sustainable use and production. • Many important aspects of future manufacturing will also create pressure to change the established structures of industry. • A further need is for a change in the format of science education to encourage acquisition of the necessary knowledge and skills.

6. Challenges and Opportunities of the 21st Century • Businesses must become more responsive to radical advances, adopting more flexible and intelligent systems for production and people management. • In a world facing inevitable rises in resource costs, they must embrace the concept of sustainability, recycling and reuse. • They will also be required to co-operate in the setting of objectives for sustainable manufacturing, and to support industry by establishing roadmaps with quantifiable objectives and developing more effective tools for the assessment of sustainability. • With such solid government-research-industry collaboration, anticipative competence building and a strongly life-cycle-oriented production-consumption pattern could do much to fulfill the objective of making a country as being a world’s competitive knowledge-based economy.

7. Trends in Science & Technology • The continuing diffusion of information technology and new applications of biotechnology will be at the crest of the wave. IT will be the major building block for international commerce and for empowering non-state actors. • The integration – or fusion – of continuing revolutions in information technology, biotechnology, materials science and nanotechnology will generate a dramatic increase in investment in technology, which will further stimulate innovation within the more advanced countries. • Older technologies will continue lateral “sidewise development” into new markets and applications through 2015.

8. Trends in Science & Technology • Biotechnology will drive medical breakthroughs that will enable the world’s wealthiest people to improve their health and increase their longevity dramatically. At the same time, genetically modified crops will offer the potential to improve nutrition among the world’s one billion malnourished people. • Breakthroughs in materials technology will generate widely available products that are multi-functional, environmentally safe, longer lasting, and easily adapted to particular consumer requirements.

9. Failures of the Technology Market • Technology market is imperfect and it often violates the assumptions of the free market paradigm: • Externalities - technology research spillover exists (unless technologies are protected by patens or IPR measures) • Restricted competition - technology trades are restricted due to huge upfront investment and years of operation before a positive cash-flow • Asymmetry, incomplete or imperfect technology information - in spite of modern communication means • Use of technology requires development capabilities - both technical and organizational • Costly technology search • High degree of risk and uncertainty in absorbing technologies

10. Lack of access to information on new technologies and innovations • Inadequate institutional infrastructure, management and marketing human skills • Organizational rigidities within the firms themselves • Limited access to finances • Regulatory constraints • Inefficient R&D institutes and disconnection from needs of industry • Inadequate human resources and mechanisms for their upgrading • Lack of resources, knowledge and capabilities within policy institutions • Low efficacy of government support schemes Barriers to Technology Transfer

11. Needs in Industry/Research Partnerships • SMEs are normally short of the existing R&D facilities due to high cost of research, whereas R&D institutes generally possess these in abundance. • SMEs cannot manage all new technologies due to multidisciplinary nature of innovation projects and R&D institutes can provide this knowledge and competence. • SMEs need an objective partner in monitoring technological advances, testing of new products, international standards, etc. enabling to manage the technological change in time so that to be competitive at the international market.

12. UNIDO Technology Promotion Programme • New and enabling technologies (bio-technology, ICT, new materials) • Technology Foresight • Technologies for the Poor • Technology Centres • Technology Parks • Investment and Technology Components National Innovation Systems Promoting enabling and new technologies to address critical social and economic problems for poverty reduction and achievement of MDGs

13. National Innovation System Government R&D Business Organisations Firms S&T Structure Market Place Productive Chains Financial System Learning &Education System Conformity System

14. StrengtheningNational Innovation System

15. Technology Related Tools & Methodologies • Technology Needs Assessment Manual and reporting software system • UNIDO Manual on Technology Transfer Negotiation and Training Kit • Training Package on Technology Management • Guidelines on Business Alliances • Guide on Joint Ventures • UNIDO BOT Guidelines • UNIDO’s Subcontracting System

16. Technology Upgradation Quality Upgradation Market Access Capacity Building ICT Application Waste Minimization Environment Skill Upgradation A holistic approach A holistic approach

17. Global Forum Activities • Research and Publications • Technology Trends Assessment • Investment paper series • UNIDO’s industrial investment perspectives • Ranking of African countries investment attractiveness • Tools, Guidelines and Manuals • COMFAR (environmental assessment) • Technology Needs Assessment • Technology Roadmapping • High-Tech Park Guidelines • Conferences & Policy dialogue • Technology Foresight/Roadmapping • Management of Technology • Afripanet • Networking • ITCs, ITPOs, IPAs, SPXs, Exchange

18. R&D Institutes: New Global Setting • Increased financial, trade, investment and technology flows. • Rapid and accelerating technological progress, including ICTs, biotechnology, new materials, electronics, robotics. • New managerial and organizational systems. • New international rules and regulations: trade, quality, environment, intellectual property rights.

19. Present Performance of R&DInstitutes • Technology push and supply-driven approach • Absence of marketing mechanism • Largely disconnected from the needs of industry • Weak international linkages • Limited knowledge of international best practice to improve competitiveness through technology upgrading and technology support services to industry

20. Major Reasons For Revitalization of R&D Institutes: Challenges of Industry • Global competition is getting fiercer • Cooperation and strategic alliances are now essential • Flexibility is becoming increasingly necessary in order to adjust to rapid technological pace and changing costumer demands • Quality requirements are higher than ever

21. Motivation for Encouraging Revitalization • Seek out new sources of finance • Eestablish links with the productive sector and increaseindustry expenditures through improved services to enterprises • Exploit the centres’ S&T capabilities on the national and international stage • Upgrade the performance and international competitiveness • Strengthen S&T infrastructure & improve networking capabilities

22. Types of Support Services • Formulation of new vision and strategy • Development of new management tools • Advice and assistance in policy formulation • Development of funding mechanisms • Introduction of marketing and project management tools • Benchmarking and training

23. Focus Areas in Specific Services • Innovation mechanisms • S&T funding systems • Best practices in management & marketing • Networking & collaboration • Vision and strategy development • High level policy advice

24. Strategy Process • The process starts with a diagnosis of selected R&D institutes followed by the formulation of a joint with industry vision and business plan for technology promotion and provision of technical support services to industry. • The implementation of strategies on commercialization of new technologies and innovations by industries and their support institutions are at the core of the process. • The government policies focus on key elements of the innovation and learning support system: global business linkages, development of skills, incentives, technological efforts, entrepreneurship, SMEs and infrastructure. • Joint programmes with focus on strengthening the relations between the support system and industry, including linkages with external knowledge partners and business and between research and the education institutions.

25. Recommendations for Improving Performance • Develop vision and strategy based on rapidly changing economic environment • Improve and adjust organizational structure & strengthen management system • Design funding mechanism • Apply best international marketing practices • Implement project management system • Undertake market needs analysis • Improve negotiation skills

26. ITP: Strengthening Research – Industry Links(Revitalization of R&D Institutes) Cultural Transformation Vision Leadership Adapting and responding to the external environment. Legal,technological, environmental, political, regional and national institutions, commercial, financial, international,global Business Process Engineering R&D Institutes R&D Institutes Adopt Best Practice Organizational Restructuring Introduce New Services Benchmarking Adopt Best Strategies Become a Learning Organization IT Systems Quality Management Management Support Services Innovation Management Networking Fund Raising

27. ITP: Strengthening Research – Industry Links (Revitalization of R&D Institutes) Approaches Actions IPT Services Cultural Transformation IT Systems New Vision & Leadership R&D Institutes Business Process Engineering Quality Management Organizational Restructuring National Innovation System Management of Supp. Services Benchmarking Adopt Best Strategies Innovation Management Adopt Best Practice ITP as facilitator Become a Learning Organization Networking Leading change processes -towards revitalisation Fund Raising New Services & Activities

28. The Role of International Organizationsin Technology Cooperation • Ensure transparency • Provide technology options • Ensure independent evaluation and selection of right technologies • Provide support services through UNIDO tools and methodologies • Strengthen trust between technology owners and recipients • Decrease financial risks in the transfer of technology • Develop multiple partnerships for sustainability

29. UNIDO Experiences and Instruments • 19 Investment & Technology Promotion Offices (ITPO) • 9 International Technology Centers (ITC) • 48 Subcontracting and Partnership Exchange (SPX) Offices in 28 countries • 34 National Cleaner Production Centres • Tools and methodologies, including software, for: • Investment & technology promotion • Technology transfer • Technology needs assessment • Entrepreneurship development

30. INTERNATIONAL TECHNOLOGY CENTRES (Ongoing Projects) • International Centre for Science and High Technology (ICS, Trieste, Italy) • International Centre for Advancement of Manufacturing Technology (ICAMT, Bangalore, India) • International Centre for Small Hydro Power (ICSHP, Huanzhou, China) • International Centre for Promotion and Transfer of Solar Energy (ISEC, Lanzhou, China) • International Centre of Hydrogen Energy Technology (ICHET, Istanbul, Turkey) • UNIDO-Shanghai International IT Technology Promotion Centre (Shanghai, China) • UNIDO-Shenzhen Environment Technology Promotion Centre (Shenzhen, China) • International Centre for Materials Technology Promotion (ICM, Beijing, China) • Russia-Brazil Centre for Technological Cooperation

31. Russia-Brazil Centre for Technological Cooperation: Results • The Centre transferred the technology allowing to prepare geophysics airborne surveys based on use of gravimetry, gamma-spectrometry and magnetometry for exploration of oil and gas resources. • The project allowed to: • Enable the Brazilian institutions develop a technology cooperation projects with relevant Russian institutions and enterprises • Facilitate the technology transfer process • Deploy the technologies in Brazil through: • Creation of a national company • Transfer and installment of equipment • On-job training of around 120 technicians • Preparation of guidelines for operation and maintenance of equipment • Reduce the risk of investment and stabilize the funding process • Ensure the high quality of services • Increase the trust between the partners • Develop new technology transfer project proposals for future cooperation

32. Future of Technology Cooperation:Goal & Objectives • Goal: • To enhance international cooperation in technology commercialization and transfer between the countries for the sustained growth and partnership • Objectives: • Act as a catalyst for knowledge-based development • Increase capacities of science and technology institutions on innovation and technology commercialization • Effective and efficient utilization of available science & technology by industry • Increase productivity and industrial competitiveness of enterprises through international technology exchange • Increase trade and investment flows between the countries

33. International Programme for Technology Commercialization & Transfer: Functions • Assessment of needs of industry in new technologies and technology markets • Diagnostics of technology sources, institutions and transfer systems • Technology valuation and Intellectual property • Mobilization of funds • Business plan development • Catalyze, support and facilitate concrete UNIDO programmes • Capacity building programmes for technology commercialization and transfer • Technology intermediary and technical support services • Development of technology inventory, database and networks • Advice on technology development policy

34. Expected Response from the Business Community • Access to technology resources • Availability of expertise • Provision of information on technologies needed • Confirmation of technology ownership • Identification of transparent conditions for technology transfer • Support in access to financial resources

35. Preconditions for Success • Political support & endorsement from the country leaderships • Technological cooperation as agenda of high-level political dialogue in participating countries • Consensus on Technology Partnerships • Active involvement of business & scientific communities

36. Thank you ...for your attention. Vladimir Kozharnovich Senior Industrial Development Officer Investment and Technology Promotion Branch UNIDOPhone: +43-1-26026 3720/3702 Fax: +43-1-26026 6870 e-mail: V.Kozharnovich@unido.org