1 / 19

Capital, Labour and Innovation: these three and the greatest of these is Innovation

Capital, Labour and Innovation: these three and the greatest of these is Innovation. Michael Kahn Panel discussion on Industrial and Innovation Policy At TIPS, 30-31 October 2008 SA’s economic miracle – has the emperor lost his clothes?. Why does Innovation Matter?.

tuari
Download Presentation

Capital, Labour and Innovation: these three and the greatest of these is Innovation

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Capital, Labour and Innovation: these three and the greatest of these is Innovation Michael Kahn Panel discussion on Industrial and Innovation Policy At TIPS, 30-31 October 2008 SA’s economic miracle – has the emperor lost his clothes?

  2. Why does Innovation Matter? • The significant ‘other’ in the production function – changes in productivity of capital and labour insufficient explanation • Innovation is the key driver of economic growth (and hopefully of well-being) • Where do innovation activities occur? How to promote these? Links with industrial policy?

  3. ‘Knowledge’ (Innovation?) and GDP Source: KDI and K4D

  4. Juntas and Innovation

  5. …. there was no shipbuilding industry in South Korea until the 1960s. When the country’s dictator, Park Chung-hee, summoned Chong (of Hyundai) and told him to produce oil tankers, for which there was a sudden demand, Chong went straight to Greece and scooped up two contracts to build 260,000-tonne tankers, promising his customers delivery within two years, sooner than anyone else. He had neglected to mention that at that moment he lacked even a shipyard. He then waved the order in front of Barclays Bank, which lent him enough money to build a modern yard. No one in South Korea knew how to do that, so Chong dispatched 60 engineers to Scotland to learn. The ships were delivered before the deadline. Economist, 25 September 2008

  6. What counts as Innovation? • Introduction into a market of a new or significantly improved good or service; or the implementation of a new or significantly improved production process, distribution method, or support activity for those (OECD/Eurostat) • Financial innovation; public sector innovation; social innovation? • Globally appropriate? Path dependence?

  7. INNOVATION ? ? ! ? ! ? ? RESEARCH ? ! DEVELOPMENT

  8. Washington consensus, ‘BeST’ and innovation systems • Private sector role minimal • State financing and direction • Latecomer effects • Deep capacity building creates ability to produce goods for markets over sustained period • Export orientation • All the other good things: openness; regulation • The private sector as driver of innovation…

  9. Innovation systems External environment FDI Financial system Cultural-political UTILIIES UNIVERSITIES GOVERNMENT RESEARCH INSTITUTES BUSINESS + R&D NGOs Standards Laws & regulations Associations SKILLS Triple helix: BUS; HE; gov

  10. What is Innovation Policy? • A coordinated set of policies across government that harmonize framework conditions toward innovation activity • The 4 Ks: • Knowledge workers • Knowledge infrastructure • Knowledge transfer • Knowledge measurement

  11. SA approach to Industrial Policy • Grow and diversify manufacturing exports and ‘tradable’ services • Intensification of industrialization toward a Knowledge Economy • Labour absorbing industrialization • Inclusion of previously marginalized; African expansion Services contribute 70% of GDP

  12. Not sharply focused • Capital/Transport equipment and metals • Automotives and components • Chemicals, plastics fabrication and pharmaceuticals • Forestry, pulp and paper and furniture (NIPF: 3.2) Inadequate state support for investment, upgrading , innovation and technology (NIPF: 1.4)

  13. Check the clothes 1% !!! GERD/GDP GDP NEGATIVE/ZERO LOW MEDIUM

  14. PBMR Is the gorilla in the room

  15. IL SG, AU MX, CL, ZA RU, PL, AG PT, GR, SL CN, TK, BR, RO

  16. An innovation system is as strong as its weakest link

  17. ♥ 4th: patents “Chemistry: Fischer-Tropsch Processes” ♥ 12th: patents “Specialized Metallurgical Processes” ♥ 17th: patents “ Liquid Purification or Separation compositions” ♥ 18th: patents “Conveyors: Power Driven” ♥ 20th: patents Chemistry of Inorganic Compounds” ♥ 5th: Plant Breeder’s Rights ♥ 6th: Number of scientific publications/GDP/Capita ♥ 6 Universities generate scientific citations in top 1% by vol: clinical medicine, biology and biochemistry, chemistry, engineering, environment/ecology, geosciences, materials science, plant & animal science, and social science

  18. SA’s Ten Year Plan for Innovation Five ‘grand challenges’: biotech and nanotech; space S&T; energy (hydrogen; fuel cells); climate change; human & social dynamics Human Capital Development Knowledge infrastructure Not so much a Plan as a re-working of the R&D Strategy of 2002

  19. Clothed in techno-nationalism DTI …..Concentrate on the “D” Support product and process innovation Exploit IP generated by Science Councils “…the government should invest in areas of the highest socioeconomic return, i.e. Grand Challenges.” DST …. Science for scientists Complex R&D tax incentive; excludes service sector Hostile IP law FDI, but ‘no foreign clinical trials’ Inadequate HR policy

More Related