Michael Lim Policy Review Section Science, Technology and ICT Branch UNCTAD-DTL

1. Science, Technology and Innovation (STI), agriculture and Development: relevance for Tanzania and Africa Michael Lim Policy Review Section Science, Technology and ICT Branch UNCTAD-DTL Michael.lim@unctad.org Geneva 21 June 2011 UNCTAD Vi study tour University of Dar-es-Salaam Tanzania

2. Outline • Technology and economic growth • Science, technology and innovation (STI) • Innovation systems • National policies for developing STI • National and global challenges • STI and African agriculture • STI policy in Tanzania • Conclusions

3. The Global Distribution of Knowledge(from UNCTAD LDCR 2007)

4. The Global Distribution of Poverty(from UNCTAD LDCR 2007)

5. Technology and economic growth (1) • Output (Y) is a function of capital (K), labour (L) and technology (T) Y=f(K, L, T) or Output (Y) is a function of physical capital (Kp), human capital (Kh), labour (L), and technology (T) Y=f(Kp, Kh, L, T) In standard neoclassical growth theory Y =T*f(Kp, Kh, L) with technology (T) exogenous (external) ie T=f(?) T is unexplained Kp=f(Kpt, It) where It is new investment in physical capital (t is time) Kh=f(Kht, Iht) where Iht new investment in education and training and health L=f(Lt, grL) where grL is population growth

6. Technology and economic growth (2) • Economic growth is directly a function of Kp, Kh and improved technologies. • Controversy over the relative importance of each; the shares vary by time, industry and country. • Additional growth determinants: Initial conditions; institutions and incentive structures; geography; national policies; perhaps culture.

7. What is technology? • Technology - knowledge applied to the production of goods or services or solving practical problems. • Different forms: - physical machinery -production processes -software -tacit knowledge • Knowledge – the theoretical or practical understanding of a subject.

8. What is innovation? • Broad definition: The introduction of new or improved products, or of new or improved processes and organizational methods in the design, production and distribution of goods and services. • Invention: A new, useful process, machine, improvement, etc., that did not exist previously and that is recognized as the product of some unique intuition or genius.

9. Types of innovation • All along value chain: production, design, distribution and marketing. • Technological (related to the introduction of new technologies) or non-technological (organizational, managerial or institutional). • Incremental, radical, revolutionary

10. Is STI important?Innovative Capabilities and Income(from UNCTAD LDCR 2007)

11. Wide innovation capability gaps exist among countries and regions (from UNCTAD, WIR 2005) • Factors reflected in the UNCTAD Index: • R&D personnel/million population; • U.S. patents granted per million population; • Scientific publications/million population; • Literacy rate as % of population; • Secondary enrolment as % of age group • Tertiary enrolment as % of age group 11

12. STI applications: there are many • Building strong STI capabilities, accessing foreign technologies and building strong national systems of innovation are important for economic growth, social welfare and addressing environmental challenges. • STI applications: -improving productivity in manufacturing, agriculture and services -preventing food crises (starvation) -increasing value added, diversifying production -mitigating/adapting to climate change -developing new energy sources – renewable energy -water management -public services (health, education) -addressing disease epidemics -organizing mega-cities (smart urban planning) -early warning systems for natural disasters (tsunamis, hurricanes) -slowing desertification etc.

13. STI capabilities: what are they? (1) • Scientific, technological and innovative capabilities (of different actors – enterprises, farmers etc.). • Broad definition add capabilities in engineering, other technical capabilities, entrepreneurship, management and organizational capabilities. • Institutional capacity for STI policy analysis, formulation, monitoring and evaluation, policy learning, policy change important. • STI capabilities vary by enterprise, farmer, institution, industry, government ministry and country.

14. STI capabilities: What are they? (2) • Scientific capabilities – the ability to learn, understand and apply scientific knowledge and skills to solve problems. • Engineering capabilities – the ability to learn, understand and apply engineering knowledge and skills to solve problems. • Technological capabilities – the ability to learn, understand and master the use of existing (both traditional and recent) technologies to solve problems;the ability to produce new technologies. • Innovative capabilities – the ability to innovate. • Policymaking capabilities – the ability to understand, learn and develop policymaking skills in STI; to design, implement, monitor, evaluate and revise STI policies. • Technological learning by enterprises (firms and farmers most importantly) is important for technological development of a country.

15. Linear models of innovation

16. Framework conditions ▪ Financial environment ▪ Taxation and incentives ▪ Propensity for innovation andentrepreneurship ▪ Trust ▪ Mobility ▪ Education, Literacy Demand ▪ Consumers (final demand) ▪ Producers (intermediate demand) Business system ▪ Companies ▪ Farms ▪ Healthcare, etc Education and research system ▪ Professional education and training ▪ Higher education and research ▪ Public sector research Intermediate Organizations ▪ Research institutes ▪ Brokers, etc Infrastructure ▪ Banking, venture capital ▪ IPR and information system ▪ Innovation and business support system ▪ Standards and norms A National system of innovation(from Arnold and Bell (2001))

17. National policies for STI development (1) STI policy (S&T policy, innovation policy, S&T/innovation strategies) Education and training policies Trade policies Foreign direct investment (FDI) and TNC policies Intellectual property (IP) policies Technology transfer policies S&T infrastructure policies Financial sector policies Macroeconomic policies Industrial policies 17

18. National policies for STI development (2) Physical infrastructure policies (esp. energy, physical clusters (science parks, S&T parks, ICT parks) Migration policies (skilled migrants and brain circulation) MSME policies Policies to support technology start-ups Policies to link SMEs to value chains Entrepreneurship policies Competition policies Metrology, standardization, testing and quality (MSTQ) policies Government procurement policies Cluster policies Developing STI indicators to aid policymaking (analysis, monitoring and evaluation, policy change) 18

19. Typology of STI policy goals at different stages of development Distant technological laggard countries (early stage). Technological laggard countries (later stage). Near technological frontier countries. At the technological frontier countries. 19

20. National and global challenges • Poverty, inequalities among and within countries • Food security – food crises, malnutrition, starvation • Climate change • Energy security – fossil fuels and RETs • Water security • Natural resource depletion • Growth, employment and natural resource sustainability • Malthusian trap?

21. Tanzania and Africa: national and regional challenges • Diversification from commodities (agriculture, minerals) into manufacturing; structural economic transformation • Building strong productive capacities • MSME and farmer development – the core of firms in Africa • Small open economy means high vulnerability to shocks • Low resilience to shocks • Climate change adaptation/mitigation • Food, energy security • Competitive enterprises and industries – in agriculture, manufacturing, services; SME development • Poverty reduction via inclusive, sustainable growth and development, job creation

22. Economic liberalization and integration economic growth poverty reduction The conventional approach to economic growth

23. UNCTADs approach to poor countries: Productive capacities and global integration

24. UNCTAD Technology and Innovation Report 2010 Enhancing food security in Africa through science, technology and innovation

25. African Agriculture: What are the challenges? • Lack of food security affecting 1 billion people globally • Restoring per capita food production, which has declined continuously over the last 40 years in the LDCs - dropping by one-fifth between the early 1970s and the mid 2000s; • Addressing ineffective farming techniques and wasteful post-harvest practices that result in loss in productivity;

26. Science, Technology and Innovation for African Agriculture: What are the challenges? • Building local research priorities into agricultural programmes; • Shifting focus from simply science and technology to science, technology and innovation; • Viewing the issue in a systems perspective with the African farmer as a key actor; • Mobilizing domestic policies, institutions and resources to revive collaborative linkages and respond to domestic and regional demand. • Strengthen the ability of policy makers to respond to emerging issues, such as climate change and IPRs.

27. A fresh perspective is called for to address issues of food security in Africa, and this can be done best within an integrated technology and innovation framework.

28. Strengthening agricultural innovation capabilities in Africa

29. Agricultural Innovation Systems Macroeconomic & International Regulatory Environment Education System & Training Physical Infrastructure Global Innovation networks Agricultural Knowledge Generation, Diffusion and Use Firms and Networks Industry, other supply led systems & value chains Regional innovations systems Research & standard Setting Bodies FARMERS Science suppliers Supporting Institutions National Innovation System Agricultural Innovation Capacity Farming & Soil Conditions Product Market Conditions Sector Performance Growth, Jobs, Competitiveness Source: Adapted from OECD, Managing National Innovation Systems, 1999

30. CHAPTERS 2, 3, 5 Building innovation capabilities in African agriculture Creating an Enabling Environment for Agricultural Innovation Financing smallholder farmers • CHAPTER 6 • Technology mixes • Harvesting technologies • Development and dissemination of harvest technologies • Reducing harvest losses • CHAPTER 6 • Technology mixes • Mechanical technology • Irrigation systems • Biological technology • Developing disease resistant crops • Biotechnology Commodity Value Chain Market Demand CHAPTER 6 Technology mixes Adding value to perishable products and enhancing shelf life Supply Response Input supplies Production Harvesting • CHAPTER 6 • Technology mixes • Post-harvest technologies • Development / dissemination of post-harvest technologies • Reducing post-harvest losses Post Harvest Handling • CHAPTER 6 • Technology mixes • Inorganic fertilizers – Beneficial biological organisms • Pesticides • Zero tillage Fresh Market Value Added Consumers Role of Information and Communications Technologies (UNCTAD-IER)

31. Local consumers The conventional banana value chain Overseas consumers Supermarket Fruit Market Ripener Ripener Trader Importer Reefer & Container lines Exporter Small Holder Producers Plantation Contracted (Farming) Plantation Aerial Spraying Company Absent Source: Agrofair 2008

32. Overseas consumers The AgroFair banana value chain concept Supermarket Fruit Market Shareholders Ripener AgroFair Reefer & Container lines Export Service Provider Small Producers Cooperatives. Worker Co-owned Plantation Small Producers Cooperatives(Women) Aerial Spraying Company AgroFair and Partners Source: AgroFair 2008

33. 1. Innovation that underpins agricultural productivity in Africa is constrained by: The absence of a local private sector that could commercialize research results: The market for agricultural products is severely fragmented in African countries and this stunts demand and supply side coordination: Technological advances in agriculture of relevance to Africa have proceeded in an uncoordinated way:

34. 2. A disproportionate focus on S&T has limited the capacity of agricultural systems in Africa to respond: There has been more focus on science suppliers (scientists, R&D personnel and R&D budgets) than on developing the capacity to apply knowledge for innovation Technology has been misguidedly taken to be embodied more in spare-parts and machinery and less in tacit know-how

35. Evolution of approaches to agricultural research since 1900 Source: Adopted from ICRISAT SATrends, 2005.

36. 3. The enabling environment for agricultural innovation is critical to promote the capacity of all actors, especially farmers. The enabling environment creates absorption capacity in the local agricultural system, and thereby determines whether and how technology is used. Successful transfer of technologies is equally rooted in local capabilities to absorb the technology itself. Technology acquisition and use of processes proceed through four stages: Acquisition: identifying the most appropriate mix of solutions (International sources of technology are invaluable) Absorption: learning and mastering technology (requires absorptive capacity) Adaptation: adapting the technology to suit local needs and requirements Diffusion: promoting access to relevant technologies to all users Without absorption, there can be no adaptation, diffusion or use.

37. The enabling environment for agricultural innovation is critical (cont’d) • The enabling environment will enhance technology transfer, use and adaptation: • -Creating linkages between Scientists and Practitioners, Including Farmers • -Promoting horizontal Linkages between Farmers and Extension Services • -Promoting linkages between the Farming and Non-Farming Systems • -Strengthening Linkages between Farmers and Global Networks and Value Chains • It can promote a new approach to the problem of food security, by helping to integrate soil management, yield productivity, sustainability of small-scale farming and natural resource management issues. • It can create the basis for a new African Agriculture Revolution built on Africa’s technological needs and food crops, using lessons from Asian successes.

38. Example: The Asian Green Revolution Asia’s Green Revolution: Long, non-spontaneous process Irrigation: by 1970, ¼ of India already irrigated Seeds: developed since 1950, continues to this day Fertilizer: by 1970, 24 kg/ha in Asia Sub-Saharan Africa: intrinsic differences Smallholder-based Rainfed-based No inputs Staple-focused Not traded on international markets Less subject to international price volatility Role of women in agriculture Highly variable and different staple crop-mix (cassava, banana, yam, sorghum, millet) Lack of policies No land tenure No credit infrastructure No functional markets No physical infrastructure Lack of investments (partly caused by SAPs) Most countries < 1% of GDP on science Average for sub-Saharan Africa: 4% of GDP on agriculture

39. Green Revolution: why the technology worked • Simple, focused, straightforward science that was easily adoptable (seeds); • Central nodes for research, but very international in nature; • Free material transfer and information exchange; • Training of new national scientists (for field testing); • Regional programs and partnerships (100 sites of testing); • Long-lasting support (started 1950, yield increases only in late 1960s); • Leadership and vision.

40. Green Revolution: the enabling environment • The technology: was a vehicle packaged adequately in an enabling environment • Public policies (pro-poor and pro-smallholder) • Price stabilization (price support) • Expanded availability of modern inputs: fertilizers and pesticides • Along the value chain (from inputs to market access and credit supply) • Land policies (ensuring property rights) • Public spending (India: 16% of government budget) • In research • In infrastructure (irrigation, roads, credit facilities) • In education (universities) • In direct subsidies (dual public-private structures and farmer subsidies)

41. 4. The creation of an enabling environment involves policy action by states in the areas of : • the broader framework for innovation • (legal and regulatory framework for farmers, the policy framework for technology development, transfer and utilization, including intellectual property regimes and competition policy; and credit infrastructure) • the institutional and organizational framework • (design and implementation of policies and programmes for the regulation, promotion and representation of farmers) • the provision of physical infrastructure • dedicated policies for agricultural capabilities that foster collaborative linkages and networking abilities; foster greater information and knowledge flow; and lastly enhance coordination of policies and actors; • policy incentives

42. The Report Makes 12 Recommendations Place smallholders at the centre of policy Strengthen policymaking capacities Target agricultural investment Reinforce agricultural innovation systems Consider local agro-ecological conditions Use potential of global value chains Link national, regional, international research to innovation Revitalize funding for R&D Promote linkages inside and outside the agricultural system of innovation Build capacity Reinforce international cooperation Generate policy space in multilateral arrangements

43. S&T, STI policy in Tanzania 1968: Tanzania National Scientific Research Council (TNSRC) established; but inaguarated and started operations 1972 1980: OAU declaration « Lagos plan of Action for the Economic development of Africa 1980-2000 » with chapter on S&T calling for: formulation of national S&T policies; establishment of S&T systems (S&T ministries and councils); commitment to spend 1% of GDP on R&D in 1980 and increase to 3% by 2000. 1984: Preparations for a national S&T policy take place 1985: First national S&T policy created 1986: Tanzania Commission for S&T (COSTECH) established to coordinate national R&D and establish S&T policy 1990: Ministry of S&T and Higher Education (MSTHE) formed; COSTECH now reports to new MSTHE

44. S&T, STI policy in Tanzania (2) 1995: National S&T policy revised 1996: New National S&T Policy created by MSTHE 2003: S&T Sub-Master Plan (2003-2018) in place 2008: Ministry of Communication, S&T formed 2008 Government preparatory action taken for STI review and STI review process initiated 2009: President Jakaya Mrisho Kikwete announces that Tanzania government will commit in 2010 to increase exp. on R&D from 0.3% of GDP to 1% of GDP Today: Revised STI policy in process of discussion and agreement

45. STI in Tanzania: key STI policy issues • Accelerate technological progress as part of productive capacity building to promote sustainable, inclusive growth and development • Improve STI capabilities and performance • Strengthen national and sub-national systems of innovation • Revise traditional focus on S and S&T; focus also on innovation • Traditionally inadequate policy support for STI – especially implementation of effective STI polcies • Need for coherent STI/industrial/trade/investment/education policies, particularly for agriculture and industrial development • Need to put SMEs and farmers at center of innovation systems • Need explicit targeting of STI in national development plans • Implementation of policies – those in place or being developed • Develop regional/sub-regional STI collaboration - sub-regional EAC innovation systems? • More international STI collaboration - North-South and South-South

46. Conclusions • Strong STI capabilities, human capital and innovation systems, and easy access to foreign technologies, are important for growth and development, social welfare and facing environmental challenges. • National STI policy action critical to support each of them for optimal growth and development impact. • STI policies should ideally be a coherent part of Tanzania’s national development policy and strategy (including PRSPs). • Many international, regional and national challenges; STI badly needed. • Tanzania and Africa more broadly lagging in STI but faces many challenges. STI progress greatly needed. • STI policies needed to stimulate technological and economic catch-up processes. • STI needed to accelerate Tanzanian agricultural and industrial development.

47. UNCTAD’s role • 1975-86 Draft Code of Conduct on transfer of technology • Secretariat for ECOSOC Commission on Science and Technology for Development (CSTD) • Building capacities in STI • STI policy reviews of countries • Building capacities in ICTs development • ICT policy reviews of countries • Publications and studies on STI and ICT issues

48. End