A Pre-UNCTAD XII eventOn

Science, Technology, Innovation and ICTs for DevelopmentRoom XXVI - Palais des Nations

Geneva, 6th December 2007

Session 2: Development-oriented Policies for a Global, Inclusive Information Society

ICT for Innovation Systems - Comparative Experiences from Developing Countries

Angathevar BaskaranMiddlesex University Business School, London, UK

How much does ICT form an integral part of the How much does ICT form an integral part of the national system of innovation of the selected national system of innovation of the selected economies?economies?

How does country-specific particular innovation How does country-specific particular innovation systems work to facilitate or hinder ICT systems work to facilitate or hinder ICT development?development?

And conversely, how does ICT also influence and And conversely, how does ICT also influence and shape the country’s innovation system?shape the country’s innovation system?

Examine this relationship by taking empirical Examine this relationship by taking empirical account of a group of economies and try to draw account of a group of economies and try to draw principally comparative insight by focusing on each principally comparative insight by focusing on each country’s approach separately.country’s approach separately.

Conceptual IssuesConceptual Issues

What constitute National Innovation System and What constitute National Innovation System and how to apply and integrate it to study technology how to apply and integrate it to study technology accumulation and socio-economic development. accumulation and socio-economic development.

Configuring NIS to give it a global or broader Configuring NIS to give it a global or broader framework by identifying meta elementsframework by identifying meta elements

Linking NIS to ICT elements Linking NIS to ICT elements

Technology specific system, i.e. ICT – identifying Technology specific system, i.e. ICT – identifying major elements and broader socio-economic major elements and broader socio-economic goalsgoals

Conceptual IssuesConceptual Issues

Main Objectives:Main Objectives:

Whether the perception of ICT as a tool for all round Whether the perception of ICT as a tool for all round socio-economic development is being reflected by socio-economic development is being reflected by the ground level developments/ realities. the ground level developments/ realities.

Or it is just a misplaced and over hyped ‘faith’ in a Or it is just a misplaced and over hyped ‘faith’ in a technology that is never going to deliver what it technology that is never going to deliver what it promises.promises.

While recognising the potential of ICT to contribute While recognising the potential of ICT to contribute towards socio-economic development, we would like towards socio-economic development, we would like to challenge the view that ICT is the cure for all to challenge the view that ICT is the cure for all kinds of ills in the world thorough empirical kinds of ills in the world thorough empirical investigation. investigation.

Country Studies: Brazil, China, India, South Country Studies: Brazil, China, India, South Africa, Thailand and Southern African CountriesAfrica, Thailand and Southern African Countries

ICT and National Innovation SystemICT and National Innovation System

A specific technology, left to itself or on its own is A specific technology, left to itself or on its own is neither good nor bad. What is important is how a neither good nor bad. What is important is how a technology is designed, developed, employed, and technology is designed, developed, employed, and whether it can lead to wider social benefits. whether it can lead to wider social benefits.

ICT is believed to have the potential to transform socio-ICT is believed to have the potential to transform socio-economic conditions of the people. economic conditions of the people.

But on its own ICT is not going to bring about socio-But on its own ICT is not going to bring about socio-economic transformation. It requires appropriate economic transformation. It requires appropriate institutional, social, political, and cultural environment institutional, social, political, and cultural environment to accomplish this. to accomplish this.

This environment is created by the national innovation This environment is created by the national innovation system. system.

National Innovation SystemNational Innovation System

National innovation system, we National innovation system, we would argue, is not just a tool to would argue, is not just a tool to achieve the narrow goal of achieve the narrow goal of industrial/economic competitiveness, industrial/economic competitiveness,

But it is about achieving a broader But it is about achieving a broader development and wider social development and wider social benefits. benefits.

National Innovation SystemNational Innovation System1 Conceptual framing within politics and economics 1 Conceptual framing within politics and economics

systemsystem

2. Co-evolution of Institutions/ Technological Cap./ 2. Co-evolution of Institutions/ Technological Cap./ KnowledgeKnowledge

3. Incentives3. Incentives

4. Implementation/ Learning/ Outcomes4. Implementation/ Learning/ Outcomes

5. Feedback / Socio-economic Changes5. Feedback / Socio-economic Changes

Major Elements of National Innovation System (NIS)Major Elements of National Innovation System (NIS) Conceptual Framing: Conceptual Framing:

Ideas, policies need to be linked to a conceptual framing of how economics and Ideas, policies need to be linked to a conceptual framing of how economics and politics are co-governed and/or co-evolved.politics are co-governed and/or co-evolved.

Responding to opportunities, dealing with challenges require policies to be Responding to opportunities, dealing with challenges require policies to be rooted in a conceptual framework that governs the dynamic interaction rooted in a conceptual framework that governs the dynamic interaction between a nation’s political and economic change.between a nation’s political and economic change.

Co-evolution of Institutions, Technologies, and Knowledge: Co-evolution of Institutions, Technologies, and Knowledge:

Need strong interaction, linkages, synergies, and co-ordination to achieve Need strong interaction, linkages, synergies, and co-ordination to achieve coherent co-evolution leading to an efficient innovation system and higher coherent co-evolution leading to an efficient innovation system and higher level of technology accumulation.level of technology accumulation.

Incentives: Incentives:

Appropriate incentives to achieve co-evolutionary dynamics between Appropriate incentives to achieve co-evolutionary dynamics between institutions, technologies, and knowledge production by linking economic and institutions, technologies, and knowledge production by linking economic and non-economic agents to meet stated goals and objectives.non-economic agents to meet stated goals and objectives.

Major Elements of National Innovation System (NIS) Major Elements of National Innovation System (NIS) Implementation and Learning:Implementation and Learning:

Implementation of strategies, policies, projects, and programmes should Implementation of strategies, policies, projects, and programmes should include feedback mechanisms (review, monitoring, and feedback) include feedback mechanisms (review, monitoring, and feedback) leading to learning outcomes. leading to learning outcomes.

Ability to learn - self learning and ability to take corrective measures are Ability to learn - self learning and ability to take corrective measures are imperative for building technological capabilities and embed innovation imperative for building technological capabilities and embed innovation dynamics in both narrow industrial and broader socio-economic dynamics in both narrow industrial and broader socio-economic development.development.

Socio-economic Changes:Socio-economic Changes:

Learning outcomes could lead to different types of socio-economic Learning outcomes could lead to different types of socio-economic changes – corrective, adaptive, evolutionary, structural, contingent, and changes – corrective, adaptive, evolutionary, structural, contingent, and so on.so on.

Transformation: When results in the most dramatic positive change of Transformation: When results in the most dramatic positive change of political/socio-economic system (but it is unlikely to happen often).political/socio-economic system (but it is unlikely to happen often).

Regressive: When results in negative rather than positive impact on Regressive: When results in negative rather than positive impact on political/ socio-economic system.political/ socio-economic system.

NIS

Conceptual Framing

Ideas, policies need to be linked

to a conceptual framing of how

economics and politics play out.

Institutions, Technologies, and

Knowledge:

Need strong interaction, linkages,

synergies, and co-ordination to achieve

more efficient innovation system and

higher level of technology accumulation

Implementation/

Learning Oucomes and Changes :

Implementation of strategies, policies and

programmes should include feedback

mechanisms

Ability to learn and ability to take corrective

measures are imperative for building

technological capabilities and imbed

innovation dynamics in industrial and

socio-economic development

Learning outcomes could lead to different

types of socio-economic changes –

corrective, adaptive, evolutionary, modifying,

and so on (Transformation/ Regressive) Incentives:

Appropriate incentives to

institutions lead to

co-evolutionary dynamics

between institution, technology,

and knowledge production by

linking economic and

non-economic agents.

Figure 1: Major Elements of National Innovation System (NIS)

Efficient or Inefficient National Innovation System

Infrastructure:

Science & Technology,

Intellectual Property Rights,

Government Policy, ICT, and

S&T Culture.

Investment:

R&D Expenditure and

Government R&D Support,

Venture Capital, and FDI.

Relations and

Linkages:

University-Industry Linkages,

Public R&D and Industry,

Globalisation of MNC R&D,

Transnational Networks.

Knowledge and Talent:

Education and Human

Resources development, and

Labour Flexibility.

Figure 2: Linkages between Institutions, Technologies, Knowledge

and Incentives in NIS

Institutions, Technology, Incentives and Institutions, Technology, Incentives and Linkages in National Innovation System (NIS)Linkages in National Innovation System (NIS)

Infrastructure: Infrastructure: Science & Technology, Intellectual Property Rights, Government Science & Technology, Intellectual Property Rights, Government Policy, ICT, and Culture.Policy, ICT, and Culture.

Investment: Investment: R&D Expenditure and Government R&D Support, Venture R&D Expenditure and Government R&D Support, Venture Capital, and FDI.Capital, and FDI.

Knowledge and Talent: Knowledge and Talent: Education and Human Resources development, and Labour Education and Human Resources development, and Labour Flexibility.Flexibility.

Relations and Linkages:Relations and Linkages: University-Industry Linkages, Public R&D and Industry, University-Industry Linkages, Public R&D and Industry, Globalisation of MNC R&D, Transnational Networks.Globalisation of MNC R&D, Transnational Networks.

Technology Specific

System

Such as

ICTBiotechnology

Automobile technology

or a particular

technology

National System of

Innovation

Interaction of various

actors, engaged in a

particular way, to

create:

1. Learning

2. Knowledge

3. Capabilities

Socio-economic

ObjectivesIndustrial-economic

Objectives

One or both systems are weak and

working in disharmony/ different

rates or levels

Both systems are individually

strong and have strong synthesis/

working in tandem

Socio-economic

Objectives- Reducing Inequalities

- Reducing Exclusion

/ Division

/ Imbalances

- Preserving Identity/

Autonomy

Industrial-economic

Objectives- Building Indigenous

Capabilities

- Export Growth

- Employment Growth

- GDP Growth, etc.

High degree of success in

meeting the objectives

Low degree of success in

meeting the objectives

Figure 3: Linkages Between Systems of Innovation and Industrial-economic/

Socio-economic Objectives

Source: Authors

Linkage between National Innovation System Linkage between National Innovation System and Technology Specific System (ICT)and Technology Specific System (ICT)

Positive Side:Positive Side:

On the extreme positive side, national system of On the extreme positive side, national system of innovation and the ICT specific system are strong innovation and the ICT specific system are strong and show a high degree system synergy. and show a high degree system synergy.

This results in greater success in meeting both This results in greater success in meeting both industrial related economic growth and broader industrial related economic growth and broader social-economic objectives. In such environment, social-economic objectives. In such environment, ICT can play a very positive role. ICT can play a very positive role.

Linkage between National Innovation System Linkage between National Innovation System and Technology Specific System (ICT)and Technology Specific System (ICT)

Negative Side:Negative Side:

On the extreme negative side, synthesis between broader On the extreme negative side, synthesis between broader NIS and ICT specific system is weak and they work in NIS and ICT specific system is weak and they work in disharmony.disharmony.

In this case, both NIS and ICT will not lead to fulfilment of In this case, both NIS and ICT will not lead to fulfilment of either narrow or wider social-economic objectives. Instead of either narrow or wider social-economic objectives. Instead of positive contribution, ICT can play a negative role.positive contribution, ICT can play a negative role.

Between these two extremes:Between these two extremes:

it is possible there are varying degrees of system synergy it is possible there are varying degrees of system synergy and synthesis between NIS and ICT specific system. and synthesis between NIS and ICT specific system.

If this is relatively high, then some industrial and social If this is relatively high, then some industrial and social objectives may be fulfilled but not all. If this is low, only few objectives may be fulfilled but not all. If this is low, only few objectives can be realised.objectives can be realised.

Change in Perception of ICT: From Economic Growth to Change in Perception of ICT: From Economic Growth to Broader Social-economic DevelopmentBroader Social-economic Development

Until the early 1990s computer and telecommunications Until the early 1990s computer and telecommunications (mobile) technologies were viewed narrowly as new (mobile) technologies were viewed narrowly as new opportunities for industrial and export growth. opportunities for industrial and export growth.

Since the mid 1990s, increasingly ICT is being perceived by Since the mid 1990s, increasingly ICT is being perceived by the national governments and international organisations as the national governments and international organisations as a vehicle for not only industrial economic growth (in terms of a vehicle for not only industrial economic growth (in terms of exports and employment), but also for achieving wider socio-exports and employment), but also for achieving wider socio-economic development.economic development.

G7/G8 Summit held in Okinawa in 2000 G7/G8 Summit held in Okinawa in 2000 The Millennium Declaration (Target18)The Millennium Declaration (Target18) United Nations Development Programme (UNDP) United Nations Development Programme (UNDP) World BankWorld Bank International Telecommunications Union (ITU) International Telecommunications Union (ITU) Various UN agencies have been promoting the Various UN agencies have been promoting the

application of ICTapplication of ICT

Domestic ICT Market:

Production

Employment

E-commerce

Export ICT Market:

Export Promotion

Export Earning

Attracting Foreign Direct Investment

(FDI)

Attracting Business Processing

Outsourcing (BPO)

Before early 1990s

(Narrow Perception)

ICT was viewed as a new technology

that will help achieve Industrial

Economic Growth. It was just

industry focused

After mid 1990s

(Broader Perception)

ICT has been increasingly viewed as

a tool to achieve Overall

Socio-economic Development

(Concept of ICT for All)

Change in Perception

of ICT

Earlier Perception of ICT's

Impact has Braodened to

Include:

Industry Related Economic Growth

Plus

Poverty Alleviation:

E-education, E-governance

Telemedicine, HR Development

in Rural Areas

Internet Access for All

Agriculture / Environment

Figure 4: Change in the Perception of ICT: From a Technology for Industrial Growth to Tool for Achieving Overall

Socio-economic Development

Source: Authors

GovernmentNational ICT Policies

/ Initiatives

Resource Allocation

Implementation and Review

ICT Users/ Domestic ICT

Market:

- Appropriate Local

Applications

- Local Contents

- Creating Awareness of ICT

- Cheap & Easy Access to

ICT

- Developing ICT

Infrastructure

- Creating Common/ sharing

ICT Facilities

Government

Agencies:

Provincial/ Local

Level

R&D Performing

Institutions:Public R&D Organisations

Universities

Incentive Structures:- Market Forces

- Technological

Opportunities

- Appropriability

- Export Incentives

and Opportunities

Industry:

ICT Firms and Industry

Associations

Supporting Institutions:Financial Institutions

Schooling System

S&T Infrastructure

International and

Regional Organisations:

ICT Initiatives/ Projects

Non-Government

AgenciesPrivate Sector

Non-Profit Sector

ICT Human Resources:

- ICT General Literacy

- ICT Higher Education

- ICT Short Training

Broader Focus:

Socio-economic Development

Bridging the 'Digital Gap'

Narrow Focus:

Economic-Industrial Growth

Industry:

ICT Firms and Industry

Associations

Figure 5: Technology Specific System (ICT ) -- Agents Involved

Source: Authors

Major Elements in ICT SystemMajor Elements in ICT System

Industrial growth through ICT (narrow objective): ICT industry, Industrial growth through ICT (narrow objective): ICT industry, R&D performing institutions, incentive structures, ICT human R&D performing institutions, incentive structures, ICT human resources and the supporting institutions. resources and the supporting institutions.

Socio-economic goals (broader objective): local and provincial Socio-economic goals (broader objective): local and provincial govt. agencies, non-govt. agencies, R&D organisations, govt. agencies, non-govt. agencies, R&D organisations, industry, ICT human resources, easy and cheap access to ICT, industry, ICT human resources, easy and cheap access to ICT, local involvement and awareness, and development of ICT local involvement and awareness, and development of ICT infrastructure at the local level (rural areas).infrastructure at the local level (rural areas).

When the inter linkages are stronger between various When the inter linkages are stronger between various elements, then it leads to an efficient ICT innovation system. elements, then it leads to an efficient ICT innovation system.

When the linkages between them are weaker or when some When the linkages between them are weaker or when some actors are absent (or not strong), then it is likely to lead to an actors are absent (or not strong), then it is likely to lead to an uneven or lopsided ICT innovation system. uneven or lopsided ICT innovation system.

Results from Country StudiesResults from Country Studies

The NIS in all countries except Southern African countries The NIS in all countries except Southern African countries

have shown have shown Lopsided and uneven characteristics, with Lopsided and uneven characteristics, with distinctive national patterns of evolution.distinctive national patterns of evolution.

It appears that the effort to foster technology specific system It appears that the effort to foster technology specific system -- ICT in these countries has not reduced the lopsided or -- ICT in these countries has not reduced the lopsided or uneven feature of the national innovation systems. uneven feature of the national innovation systems.

However, there have been quantifiable achievements in both However, there have been quantifiable achievements in both industrial-economic growth and broader social-economic industrial-economic growth and broader social-economic goals in nearly all the case countries. goals in nearly all the case countries.

In the case of Southern Africa, because of and to overcome In the case of Southern Africa, because of and to overcome their weak or absent national innovation systems, the their weak or absent national innovation systems, the countries appear to have turned towards a regional approach countries appear to have turned towards a regional approach to foster ICT knowledge -innovation. to foster ICT knowledge -innovation.

Case Study of Brazil: FindingsCase Study of Brazil: Findings

After liberalization, sophisticated telecom innovation system After liberalization, sophisticated telecom innovation system that was developed over many years was totally that was developed over many years was totally disarticulated.disarticulated.

Telecom infrastructure started growing rapidly, but access Telecom infrastructure started growing rapidly, but access remained uneven or lopsided, service tariffs remained high. remained uneven or lopsided, service tariffs remained high. Govt. trying to address this through initiatives such as Govt. trying to address this through initiatives such as ‘Universal Access Plan’.‘Universal Access Plan’.

IT policies in the 1980s had built up a significant capabilities IT policies in the 1980s had built up a significant capabilities in small computers, peripherals, various types of automation in small computers, peripherals, various types of automation equipment.equipment.

Most Brazilian hardware makers disappeared after Most Brazilian hardware makers disappeared after liberalization. liberalization.

Only software and computer services industries experienced Only software and computer services industries experienced some growth, hardware industry never recovered the some growth, hardware industry never recovered the dynamism of the 1980s; several R&D teams were dismantled dynamism of the 1980s; several R&D teams were dismantled and R&D investment declined.and R&D investment declined.

Case Study of Brazil: FindingsCase Study of Brazil: Findings

In case of wider access to computers, internet, increasing IT In case of wider access to computers, internet, increasing IT literacy, e-commerce, and e-governance: Made significant literacy, e-commerce, and e-governance: Made significant progress, still faces serious challenges.progress, still faces serious challenges.

Internet users, telephone lines and mobile phones per 1000 Internet users, telephone lines and mobile phones per 1000

population registered significant increase. population registered significant increase.

Due to low levels of general literacy and prohibitive cost of Due to low levels of general literacy and prohibitive cost of computers, IT literacy and skills are below target levels.computers, IT literacy and skills are below target levels.

Diffusion of ICT was affected and hampered by very uneven Diffusion of ICT was affected and hampered by very uneven income distribution. Large sections of northern and central income distribution. Large sections of northern and central parts do not have access to ICT.parts do not have access to ICT.

Trying to foster collaboration between public and private Trying to foster collaboration between public and private sector to successfully implement ICT programmes. But sector to successfully implement ICT programmes. But private sector participation was not at expected level.private sector participation was not at expected level.

Majority of the Brazilian population is still very much excluded Majority of the Brazilian population is still very much excluded from the information economy and society.from the information economy and society.

Case Study of China: FindingsCase Study of China: Findings

Government played an instrumental role in actively pursuing Government played an instrumental role in actively pursuing the goal of ‘ICT for development’. the goal of ‘ICT for development’.

China gradually built up a comprehensive ICT infrastructure. China gradually built up a comprehensive ICT infrastructure.

A ‘top-down’ approach, where central government guides ICT A ‘top-down’ approach, where central government guides ICT development through a mixture of investment, intervention development through a mixture of investment, intervention and policy initiatives, while local governments come up with and policy initiatives, while local governments come up with implementation. implementation.

Implementation often start with pilot projects to allow Implementation often start with pilot projects to allow learning and gaining of experience before they are spread to learning and gaining of experience before they are spread to the whole country. the whole country.

‘‘Localisation’ of ICT policies is encouraged to make the ICT Localisation’ of ICT policies is encouraged to make the ICT application better suited to local conditions and needs.application better suited to local conditions and needs.

But overlapping responsibilities between ministries appear to But overlapping responsibilities between ministries appear to have led to tensions which reduced the effectiveness of have led to tensions which reduced the effectiveness of implementation. implementation.

Case Study of China: FindingsCase Study of China: Findings

Liberalization brought only limited competition in the Liberalization brought only limited competition in the telecommunication sector, more liberalization and competition telecommunication sector, more liberalization and competition is needed. is needed.

Given the stronger innovation capability and efficiency of Given the stronger innovation capability and efficiency of foreign companies, Chinese ICT companies have to improve foreign companies, Chinese ICT companies have to improve their competitiveness to be able to survive. their competitiveness to be able to survive.

On the other hand, opening up will bring more opportunities for On the other hand, opening up will bring more opportunities for Chinese companies to collaborate with foreign companies. Chinese companies to collaborate with foreign companies.

China’s effort in bridging ‘digital divide’ has seen initial results, China’s effort in bridging ‘digital divide’ has seen initial results, but the gap still appears to be large.but the gap still appears to be large.

Diffusion of ICT depends on people’s ICT literacy. This is an area Diffusion of ICT depends on people’s ICT literacy. This is an area China needs to make significant investment. China needs to make significant investment.

Although ICT has the potential to narrow the gap between the Although ICT has the potential to narrow the gap between the higher efficiency and lower efficiency tiers of national higher efficiency and lower efficiency tiers of national innovation system, so far it has achieved only limited success innovation system, so far it has achieved only limited success in this area. in this area.

Case Study of India: FindingsCase Study of India: Findings

Comprehensive policy framework to build a strong ICT Comprehensive policy framework to build a strong ICT industry and to achieve socio-economic transformation and to industry and to achieve socio-economic transformation and to make India a ‘knowledge superpower’. make India a ‘knowledge superpower’.

State has played a vital role in developing the technology State has played a vital role in developing the technology specific system - ICT. specific system - ICT.

Implemented a number of policies and programmes towards Implemented a number of policies and programmes towards achieving these goals.achieving these goals.

Created a strong ICT industrial base and capacity to compete Created a strong ICT industrial base and capacity to compete in some areas such as IT software and ITES-BPO in the global in some areas such as IT software and ITES-BPO in the global market.market.

Does not appear to have achieved same level of capacity in Does not appear to have achieved same level of capacity in the area of utilising ICT for socio-economic changes. the area of utilising ICT for socio-economic changes.

Case Study of India: FindingsCase Study of India: Findings

However, a number of initiatives (national, regional, and local However, a number of initiatives (national, regional, and local level) have been taken in e-education, e-health, e-level) have been taken in e-education, e-health, e-government, and so on and some progress appears to have government, and so on and some progress appears to have been made.been made.

These are unevenly spread across the country. These are unevenly spread across the country.

Succeeded when local people were clearly informed of their Succeeded when local people were clearly informed of their benefits and where there were local participation and good benefits and where there were local participation and good co-ordination and understanding between local people and co-ordination and understanding between local people and the officials. the officials.

Significant progress in facilitating universal access to ICT, Significant progress in facilitating universal access to ICT, particularly in the areas of mobile telephones, TVs, particularly in the areas of mobile telephones, TVs, computers, and internet. computers, and internet.

Still most of the rural population and sizeable urban Still most of the rural population and sizeable urban population have no access to ICT. population have no access to ICT.

Case Study of South Africa: FindingsCase Study of South Africa: Findings

Formulated a strong policy/institutional framework for Formulated a strong policy/institutional framework for developing an efficient technology specific system - ICT.developing an efficient technology specific system - ICT.

Like its uneven/lopsided national innovation system, the Like its uneven/lopsided national innovation system, the technology specific system - ICT has proved more efficient technology specific system - ICT has proved more efficient only in certain areas and inefficient in many other areas.only in certain areas and inefficient in many other areas.

In ICT industrial sector, there has been significant growth in In ICT industrial sector, there has been significant growth in terms of turnover, exports and employment, particularly in terms of turnover, exports and employment, particularly in the area of software. the area of software.

But the industry lacks the necessary competitiveness to But the industry lacks the necessary competitiveness to operate at a higher level of value chain and technological operate at a higher level of value chain and technological complexity. complexity.

In socio-economic development and ICT diffusion, In socio-economic development and ICT diffusion, collaborative approach to designing and implementing collaborative approach to designing and implementing projects by the government, private sector, and non-projects by the government, private sector, and non-government (non-profit sector) agencies have been working government (non-profit sector) agencies have been working successfully.successfully.

Case Study of South Africa: FindingsCase Study of South Africa: Findings

Number of collaborative ICT projects in the area of e-education, Number of collaborative ICT projects in the area of e-education, e-health, e-government, IT literacy, and IT skills creation have e-health, e-government, IT literacy, and IT skills creation have been implemented at different levels (national, provincial, and been implemented at different levels (national, provincial, and local).local).

But their impact is not yet fully evaluated or clear. But their impact is not yet fully evaluated or clear.

However, there have been significant achievements in ICT usage However, there have been significant achievements in ICT usage like the increase in the use of fixed and mobile phones, like the increase in the use of fixed and mobile phones, computers, internet, IT literacy and IT skills. computers, internet, IT literacy and IT skills.

Large sections of people and the country, particularly rural areas, Large sections of people and the country, particularly rural areas, have no access to ICT and they are not even aware of the have no access to ICT and they are not even aware of the benefits of ICT.benefits of ICT.

Technology specific system - ICT in South Africa has not been able Technology specific system - ICT in South Africa has not been able to remove the historical imbalances in the sector. to remove the historical imbalances in the sector.

ICT definitely has the potential to reduce certain economical, ICT definitely has the potential to reduce certain economical, social and regional disparities, but it is unlikely to solve social and regional disparities, but it is unlikely to solve fundamental problems such as rural poverty and under fundamental problems such as rural poverty and under development and imbalances in health care and education. development and imbalances in health care and education.

Case Study of Thailand: FindingsCase Study of Thailand: Findings

Since 1990s, two ICT master plans, together with the Since 1990s, two ICT master plans, together with the establishment of the ICT Ministry, and more structured ICT establishment of the ICT Ministry, and more structured ICT institutional framework.institutional framework.

While ICT policies have been relatively well formulated, the actual While ICT policies have been relatively well formulated, the actual implementation has not been systematically monitored or implementation has not been systematically monitored or evaluated. evaluated.

Made significant progress in fostering ICT for development, but Made significant progress in fostering ICT for development, but there are still major weaknesses. there are still major weaknesses.

Electronics sector, the number one exporting industry, appears to Electronics sector, the number one exporting industry, appears to be locked up in the lower end of the value chain, notwithstanding be locked up in the lower end of the value chain, notwithstanding recent evidence suggesting an upward mobility along the value recent evidence suggesting an upward mobility along the value chain.chain.

Software industry and ICT services are still lagging behind other Software industry and ICT services are still lagging behind other countries of the region.countries of the region.

Access to ICT is still largely confined to relatively a small section of Access to ICT is still largely confined to relatively a small section of the society, mainly due to low income level and slow spread of the society, mainly due to low income level and slow spread of computer literacy. computer literacy.

Case Study of Southern African Countries: Case Study of Southern African Countries: FindingsFindings

Southern African economies are generally too small and lack Southern African economies are generally too small and lack necessary institutional infrastructure to design effective ICT necessary institutional infrastructure to design effective ICT policies on their own. policies on their own.

Regional initiatives have proved to be a key means to develop Regional initiatives have proved to be a key means to develop harmonised frameworks that serve as a basis for national ICT harmonised frameworks that serve as a basis for national ICT policies. policies.

Regional economic communities have been the foundation for Regional economic communities have been the foundation for horizontal cooperation to emerge and for regional horizontal cooperation to emerge and for regional collaborative e-projects. collaborative e-projects.

These projects need coordination among themselves. These projects need coordination among themselves. Otherwise, Southern African countries might end up with Otherwise, Southern African countries might end up with several pieces of redundant infrastructure. several pieces of redundant infrastructure.

Role of NEPAD and its e-Africa Commission in overseeing the Role of NEPAD and its e-Africa Commission in overseeing the priorities, overlaps and gaps of infrastructure e-projects priorities, overlaps and gaps of infrastructure e-projects becomes crucial. becomes crucial.

Case Study of Southern African Countries: Case Study of Southern African Countries: FindingsFindings

Some of the routes for interconnectivity do not attract Some of the routes for interconnectivity do not attract commercial interest because markets are too small commercial interest because markets are too small and/political risks are too high.and/political risks are too high.

Despite the relevance of regional initiatives, individual African Despite the relevance of regional initiatives, individual African

national governments need to provide incentives for private national governments need to provide incentives for private investors to fill the financial gap. investors to fill the financial gap.

This should be coupled with more pro-active initiatives such This should be coupled with more pro-active initiatives such as the provision of soft loans or specific licensing schemes. as the provision of soft loans or specific licensing schemes.

Despite these efforts to harmonise ICT development in the Despite these efforts to harmonise ICT development in the region, the status of ICT policies and activities varies greatly region, the status of ICT policies and activities varies greatly across countries. across countries.

Southern Africa still faces many challenges in achieving its Southern Africa still faces many challenges in achieving its ICT development goals. ICT development goals.

However, war and poverty have not hindered the emergence However, war and poverty have not hindered the emergence of a path towards ICT development through collaboration. of a path towards ICT development through collaboration.

Table 1: Comparison of Selected Countries – Major Characteristics of and Major Events/Factors Shaping the National Innovation System

Brazil China India South Africa Thailand SouthernAfrica

Lopsided and uneven characteristics, with distinctive national patterns of evolution.

Influence of macroeconomic liberalization of the 1990s.

NIS going through major changes, but continues to be lopsided and uneven.

Aggravates even further the uneven and lopsidedness of economy and society.

Lopsided and uneven characteristics, with distinctive national patterns of evolution.

Influence of macroeconomic reforms and opening up of economy from the mid 1980s.

Resulted in two-tier NIS – higher efficiency level and lower efficiency level.

Aggravates social, rural/urban and regional inequalities.

Lopsided and uneven characteristics, with distinctive national patterns of evolution.

Influence of the shift from inward looking to outward looking NIS since early 1990s.

Islands of excellence in selective civil and dual-use sectors.

Aggravates social, rural/urban and regional inequalities.

Lopsided and uneven characteristics, with distinctive national patterns of evolution.

Stratified by racial, and first economy (advanced industrial) and second underdeveloped economy.

Aggravates rural/urban, social and regional inequalities.

Lopsided and uneven characteristic, with distinctive national patterns of evolution.

Weak, fragmented and even stagnant, slow technological learning.

Undergoing system transition since 2001 due to major shift in government policies and practices.

Weakly formed institutional arrangements for building national systems of innovation.

Making and designing of innovation systems at South African Regional level may be the most likely route to organize capacity and innovative learning.

Table 2: Comparison of Selected Countries – Trajectory of ICT Contribution to Industrial-economic Growth

Brazil China India South Africa Thailand SouthernAfrica

After liberalization: Sophisticated telecom innovation system that was developed over the years was totally disarticulated.

Most Brazilian hardware makers either disappeared or were bought out by foreign firms.

Indigenous R&D investment and capacity have declined.

Significant achievements in Software sector.

Significant growth in all ICT sectors. But uneven growth between hardware and software sectors.

In telecom sector, liberalization brought only limited competition.

To increase the amount and quality of service, more liberalization and competition is needed.

Chinese ICT companies have to improve their competitiveness to survive.

State has played a vital role in developing an innovation system for ICT, and created a strong ICT industrial base.

High level of capability to compete globally in IT software and IT enabled services.

But failed to develop such capability in the hardware sector.

In ICT industrial sector, there has been significant growth in terms of turnover, exports and employment.

Significant growth, particularly in the software sector.

However, the industry lacks the necessary competitiveness to operate at a higher level of value chain and technological complexity.

Government policy has been active in providing incentives for firms to change from their risk-averse state to more risk-taking actors

Industry is locked up in the lower end of the value chain and software industry and ICT services are still lagging behind other countries of the region.

Weakly formed institutional arrangements for building systems of innovation in ICT sector

Adequate institutional system and the ability to design and implement an effective ICT strategy are the main problems.

Regional effort to build basic ICT infrastructure and capabilities

Table 3: Comparison of Selected Countries – Trajectory of ICT Contribution to Socio-economic Development Goals

Brazil China India South Africa Thailand SouthernAfrica

Made significant progress in terms of increasing access to ICT such as internet, fixed and mobile telephones, and computer literacy.

Still faces serious challenges in achieving all objectives.

Attempt to spread ICT diffusion to the society as a whole “appears to have made little headway”.

Majority of Brazilians are still very much excluded from the information economy and society.

Instrumental role played by the Chinese state in pursuing the goal of ICT for broader socio-economic development.

Significant growth in terms of access to PCs, internet, fixed line and mobile phones, and IT education.

Gap between rural and urban areas and the Western and Eastern regions.

Historic ‘East-West divide’ in levels of development is also mirrored in the degree of ICT diffusion, presenting a picture of ‘digital divide’.

Significant developments such as access to internet, computer, fixed and mobile phones and IT education

Despite numerous initiatives and programmes, India has not so far succeeded in effectively utilising ICT for socio-economic changes.

Ambition to make India as ‘knowledge super power’ resides mainly in the development of the ICT industry and not in the broader diffusion of ICT to achieve social-development goals.

Collaborative approach to designing and implementing ICT projects by the government, private sector, and non-government agencies have been working successfully.

Large sections of people and the country, particularly rural areas, have no access to ICT and they are not even aware of the benefits of ICT.

Like the lopsided nature of national innovation system, its ICT innovation system has proved to be more successful in the first economy and not so in the second economy.

ICT policies have been well formulated, but implementation is still slow.

Made significant progress in fostering ICT for development, but there are still major weaknesses.

ICT access to wider society is low mainly due to low income and slow spread of computer literacy

Regional economic communities have been the foundation for regional collaborative ICT projects.

Lack of coordination among projects.

Despite regional initiatives for ICT development, there are great variations across countries.

Role of NEPAD and its e-Africa Commission in overseeing the priorities, overlaps and gaps of ICT projects crucial.

Findings on Conceptual QuestionFindings on Conceptual Question

How much does ICT form an integral part of the How much does ICT form an integral part of the national system of innovation of the selected national system of innovation of the selected economies?economies?

Brazil:Brazil: NIS NIS (which continues to be lopsided) is going (which continues to be lopsided) is going through a major change and technology specific ICT through a major change and technology specific ICT system in Brazil has followed the trend in NIS that system in Brazil has followed the trend in NIS that saw the role of production dominated by the MNC’s saw the role of production dominated by the MNC’s subsidiaries growing over that of indigenous firms. subsidiaries growing over that of indigenous firms.

China:China: Although ICT has the potential to narrow the Although ICT has the potential to narrow the gap between the higher efficiency and lower gap between the higher efficiency and lower efficiency tiers of national innovation system, so far it efficiency tiers of national innovation system, so far it has achieved only limited success in this area. has achieved only limited success in this area.

India:India: Technology specific Technology specific ICT system in India has not ICT system in India has not been able to overcome the ‘lopsided’ phenomenon of been able to overcome the ‘lopsided’ phenomenon of its NIS. This led to uneven growth within narrow ICT its NIS. This led to uneven growth within narrow ICT industry and in wider socio-economic development.industry and in wider socio-economic development.

Findings on Conceptual QuestionFindings on Conceptual Question How much does ICT form an integral part of the national How much does ICT form an integral part of the national

system of innovation of the selected economies?system of innovation of the selected economies?

South Africa:South Africa: Like its uneven/lopsided NIS the technology Like its uneven/lopsided NIS the technology specific ICT system has proved more efficient only in certain specific ICT system has proved more efficient only in certain areas and inefficient in many other areas. areas and inefficient in many other areas.

Although it has the potential to reduce certain economical, Although it has the potential to reduce certain economical, social and regional disparities, it is unlikely to solve social and regional disparities, it is unlikely to solve fundamental problems such as rural poverty and under fundamental problems such as rural poverty and under development in health care and education.development in health care and education.

Thailand:Thailand: It is not very clear and it is difficult to locate the It is not very clear and it is difficult to locate the exact nature of spillover effects of ICT on Thailand’s national exact nature of spillover effects of ICT on Thailand’s national innovation system.innovation system.

Southern Africa: Southern Africa: Weak institutional arrangements for building Weak institutional arrangements for building national systems of innovation. Turning towards regional national systems of innovation. Turning towards regional effort to build institutions and capabilities.effort to build institutions and capabilities.

General FindingsGeneral Findings All country case studies accept that it is important to develop All country case studies accept that it is important to develop

technology specific ICT systems. technology specific ICT systems.

All agree on ICT’s importance in contributing towards All agree on ICT’s importance in contributing towards economic growth; and its potential for solving some social economic growth; and its potential for solving some social issues is also clear. issues is also clear.

They also accept that government role is critical in They also accept that government role is critical in stimulating the ICT industry and meeting broader social stimulating the ICT industry and meeting broader social objectives. objectives.

Creating a dynamic ICT sector and integrating it to the wider Creating a dynamic ICT sector and integrating it to the wider

system of innovation can create significant developmental system of innovation can create significant developmental economies, efficiencies and dynamics. economies, efficiencies and dynamics.

It is pivotal that ICT is recognised as a key technology It is pivotal that ICT is recognised as a key technology system that can strengthen a country’s national system of system that can strengthen a country’s national system of innovation. innovation.

General ConclusionsGeneral Conclusions ICT infrastructures are public goods and creating ICT infrastructures are public goods and creating

them requires large investment. them requires large investment.

In developing countries with weak private sectors, In developing countries with weak private sectors, only government has such resources, which means only government has such resources, which means government needs to invest heavily in ICT government needs to invest heavily in ICT infrastructure to provide necessary physical infrastructure to provide necessary physical condition for ICT diffusion.condition for ICT diffusion.

Autonomous and specialised policy agencies outside Autonomous and specialised policy agencies outside bureaucratic red-tape might be better instruments in bureaucratic red-tape might be better instruments in formulating and coordinating national ICT policies.formulating and coordinating national ICT policies.

Extent to which a country can benefit from ICT Extent to which a country can benefit from ICT depends on the quantity and quality of its human depends on the quantity and quality of its human capital. Education therefore holds the key to a capital. Education therefore holds the key to a country’s ICT development and diffusion. country’s ICT development and diffusion.

Policy makers should review and learn from Policy makers should review and learn from implemented programmes and promote successful implemented programmes and promote successful cases and examples to enable the experiences to cases and examples to enable the experiences to be shared across departments and regions. be shared across departments and regions.

Many developing countries are doing relatively Many developing countries are doing relatively well in policy formulation, but they are weak in well in policy formulation, but they are weak in implementing and monitoring these policies. implementing and monitoring these policies.

Need for bottom-up rather than top-down strategy Need for bottom-up rather than top-down strategy in achieving wider ICT diffusion. in achieving wider ICT diffusion.

Imperative to address root causes for Imperative to address root causes for unsatisfactory results of ICT for development unsatisfactory results of ICT for development programmes -- poor access to ICT, obstacles to programmes -- poor access to ICT, obstacles to computer literacy, and failure to ‘localise’ ICT computer literacy, and failure to ‘localise’ ICT contents and applications. contents and applications.

Policy makers should not ignore the limitations of Policy makers should not ignore the limitations of ICT and should strive to integrate it with other ICT and should strive to integrate it with other national policy frameworks to solve the problems national policy frameworks to solve the problems of poverty, inequality, exclusion and division. of poverty, inequality, exclusion and division.

Unless development of ICT is also shaped within Unless development of ICT is also shaped within a socially and politically framed national system a socially and politically framed national system of innovation, it is likely to create more of innovation, it is likely to create more diseconomies than economies.diseconomies than economies.

Where the value added from the ICT would come Where the value added from the ICT would come would be when it is integrated with the national would be when it is integrated with the national innovation system to achieve what Friedrich List innovation system to achieve what Friedrich List called mental capital building as a means of called mental capital building as a means of wealth accumulation. wealth accumulation.