The Future of Foresight in Technology and Innovation Policy for

Development

Luke GeorghiouUniversity of Manchester

Ricardo Seidl da FonsecaUNIDO

Foresight for developing countries and economies in transition

UNIDO’s Role as a Policy Advisor Promoting Technology Foresight –

Present and Future

Part I

The New Global Setting• Increased financial, trade and investment flows• Rapid and accelerating technological progress;

electronics, ICTs, biotechnology, new materials, fuel cells, nanotechnologies

• New international regulations and standards, trade, quality, labor, environment, intellectual property rights

• New systems to design, produce, distribute, and manage• Global value chains and production networks emerge in

all types of industries managed by multinational companies and global buyers

Companies and governments in developing countries are even more affected by changes on global setting

Capacity & resources deficiencies in developing countries

• Lack of conducive integrated policy and institutional framework

• Under-developed technology and innovation promotion capabilities

• Short-term thinking and reactive mode action

• System linkage failures and poor coordination

• Disconnection of application of new technologies from socio-economic problems

• Scientific institutions with strong and inflexible disciplinary focus

• Low technology and innovation intensity in industry

• Lack of funding for technology acquisition and diffusion• Lack of human capital and increasing human resources crisis (brain drain,

demography)• Absence of adequate equipment and infrastructure

Response to emerging challenges and opportunities

Redefining policies compatible with global industrial interconnections– Where innovation and technology up-grading are key for

competitiveness and sustainable development

• Connecting national industries to global value chains– Need of global positioning of national industries

• Through comparing performance and drivers

– Up-grading industrial capabilities

• Enhancing industrial governance

• Promoting foresight culture and application of foresight methodologies

National economy boundary

Domestic industrial cluster

Global customers

Large-scale, multi-outlet retailers Small-scale retailers

Global buyers

Buyer and export agents

Local customers Large-scale or multi-plant manufacturers

Small-scale manufacturers

Small-scale suppliers

Global industrial interconnections

Global industries

Industrial Clusters

Connecting national industry to global value chains

Systems

Su

pp

ort S

yste

ms

Support

Governance system

Framework conditions

Global Links

Linking, liberating and learning

FDI and domestic capability building

Import of capital goods

Trade performance

Capabilities

Human Capital

Technology and innovation

Modern infrastructure

Enabling business environment

Regulatory framework

Credit ranking

Infrastructure

Cost of doing business

Cost of production

Governance

Industrial governance

Economic transformation index

Corporate social responsibility

Economic freedom

Performance Performance

GDP per capitaGDP per capita

Competitive industrial Competitive industrial performanceperformance

PovertyPoverty

EnvironmentEnvironment

Gender developmentGender development

Trade diversificationTrade diversification

Global Positioning of National Industries

DriversDrivers Country positionCountry position

First

Quartile

Second

Quartile

ThirdQuartile

Last

Quartile

•Performance Performance XX

•Business EnvironmentBusiness Environment XX

•Technology and InnovationTechnology and Innovation XX

•Global linkagesGlobal linkages XX

•Governance Governance XX

Comparing Performance/Drivers

0

25

50

75

100

Performance BusinessEnvironment

Technology andInnovation

Global Linkages Governance

Up-grading Industrial Capabilities

Industrial Governance

GOVERNMENT

Guides the overall strategy process and focuses on strategic tasks and policy issues

PRIVATE SECTOR

Identify and assess challenges and opportunities and organize collective responses

SUPPORT SYSTEM

Analyze trends

Support clusters

Strengthen capabilities and global links

REGIONS

Promote and Support the development of local clusters

Promotion of a foresight culture and application of the

foresight methodology

• Establishing a transparent structured decision-making process• Introducing a forward-looking attitude• Provoking a creative and motivating decision making environment• Stimulating a participative approach• Enabling mutual learning and strategic dialogue• Reaching consensus around shared visions• Linking technology acquisition and diffusion to wider socio-economic

issues

UNIDO Initiative on UNIDO Initiative on Technology ForesightTechnology Foresight

Development objectivesDevelopment objectives

• Contribute to enhancing the Contribute to enhancing the industrial industrial competitivenesscompetitiveness and expand and expand trading potentialtrading potential

• Foster Foster economic, environmental and social economic, environmental and social benefitsbenefits at national and regional levels at national and regional levels

• Definition of Definition of innovation policies and R&D innovation policies and R&D programmesprogrammes

ComponentsComponents

• Awareness building and foresight cultureAwareness building and foresight culture

• National and Regional / Supra-national capabilitiesNational and Regional / Supra-national capabilities

• Regional and International coordination – Regional and International coordination – Partnerships promotionPartnerships promotion

UNIDO supportUNIDO support

• International Conferences and workshops on International Conferences and workshops on best practices and best practices and methodologiesmethodologies (national, supra-national and corporate) (national, supra-national and corporate)

• Promoting Promoting industry participationindustry participation

• Task force of experts Task force of experts and methodology development for preparation and methodology development for preparation and during foresight exercisesand during foresight exercises

• Conducting foresight projects in selected productive chains and Conducting foresight projects in selected productive chains and countriescountries

• Cooperation in the Cooperation in the post-foresight processpost-foresight process

Tools and methodologiesTools and methodologies

• Book on International Practices on Technology ForesightBook on International Practices on Technology Foresight

• UNIDO Manual on Technology ForesightUNIDO Manual on Technology Foresight

• Web page: Web page: www.unido.org/foresightwww.unido.org/foresight

• CD-ROM collectionCD-ROM collection

• Delphi on-lineDelphi on-line

• TF for Production Chains (national and supra-national)TF for Production Chains (national and supra-national)

Regional or Supra-national dimensionRegional or Supra-national dimension

• Foresight as a tool for Foresight as a tool for plurinational R&D programmesplurinational R&D programmes

• Enhance quality and effectiveness of foresight through Enhance quality and effectiveness of foresight through multi-country networkingmulti-country networking

• Reduce costs by sharing Reduce costs by sharing common activitiescommon activities

• Awareness of global and Awareness of global and regional trendsregional trends

• Joint vision and solutions for Joint vision and solutions for cross-border problemscross-border problems

• Concentration of Concentration of plurinational production chainsplurinational production chains

Foresight Exercise for Production Chains

ProductsProducts Production processesProduction processes

MarketsMarkets

Identification of:

Opportunities for the pluri-national production chains and industries

Required cooperation for technology up-grading

Identification of:

Opportunities for the pluri-national production chains and industries

Required cooperation for technology up-grading

Special characteristics of the UNIDO approach:

Participation of different countries

Plurinational

Complex production chains

Multisectorial

Examples of UNIDO foresight exercises

• SupraSupra--national level national level • National levelNational level• SubSub--national level national level • Company levelCompany level

Regional or Supra-national foresight exercises and activities

Some issues have to be examined on higher than national level or international cooperation is required

• Training Programme on Technology Foresight (2001-7)

• Technology Foresight Summit - Budapest, Hungary (2003-7)

• Impact of EU-Accession to Agro-food industry and Automotive industry (2003)

• Future of the Fishery Industry in South American Pacific cost (2005-6)

• Future of the Andean Products: Medicinal Plants (2006-7)

• Future of the Food Industry in 6 CEE countries (2007-9)

National foresight programmes

• Chile - Identify strategic economic and technology sectors

• Brazil - Production chains: textiles, plastics, wood, construction

• Uruguay - Macro-sectors trends: food biotechnology, energy and transportation and logistics

• Venezuela - Application of the results of the TF exercise

• Ukraine – Establish the institutional framework and capability

Sub-national foresight

Specific problems of regions, individual subnational bodies of large countries

• Foresight Programme for Irkutsk – Russian Federation

Corporate Foresight

• Technology Fairs of the Future

• Module 4: Training on Corporate Foresight – BIC Group, Bratislava, Slovakia

What for Technology Foresight in

developing countries?

• Improve Improve decision makingdecision making

• Guide Guide technology choicestechnology choices

• Generate Generate alternative trajectoriesalternative trajectories for future development for future development

• Enhance Enhance learninglearning and improve preparedness for and improve preparedness for emergenciesemergencies

• Motivate Motivate changechange

Inclusion of Foresight in policy-making process

Future UNIDO efforts

• Support companies in developing countries and economies in transition to set up foresight capabilities

• Establish a connection between the construction of alternative future visions through foresight exercises and the definition of industrial policies and governance framework.

Background and objectives of Technology Foresight

Existing experience and extended mandate for

Foresight

Part II

Status of foresight

• Multiple activities and purposes sharing a name • Content focus

– Priority setting– Identifying ways in which future science and technology could address future

challenges for society and identifying potential opportunities • Structural focus (increasing tendency)

– Reorienting Science & Innovation system– Demonstrating vitality of S & I system– Bringing new actors into the strategic debate– Building new networks and linkages across fields, sectors & markets or

around problems • Content and Structural Goals may be addressed simultaneously

– All above may be at organisational, local, regional, national or supranational levels

• Also foresight carrying input from S&T futures into wider policy domains

Context of move to open innovation

• Convergence of innovation and industrial policy in the context of knowledge economy

• Concept of innovation ecosystem• Foresight role in creating shared strategic vision• Emerging reorientation of innovation policy with

new emphasis upon demand-side policies– Also an industrial policy based upon fostering

clusters, platforms and supply chains– Key driver of development is linkage between local

capabilities and effective demand

Existing experience – in public policy

• Large body of experience logged by EFMN

• Multiple engagement but adaptation and experimentation rather than repetition

• Families of approach– Critical technologies; Delphi; Horizon scanning;

Accession/transition

Existing experience - corporate

• Foresight in business vs Foresight for business• Functions include anticipatory intelligence,

direction setting, priority setting, strategy formulation and innovation catalysis

• Trend to “open foresight” in terms of participation, scope and delineation

• In developing countries particular challenge to build capability and to connect to wider environments

Five generations of ForesightFIRST

GENERATION

Technology forecasts

SECOND GENERATION

Technology and markets

THIRDGENERATION

Technology, markets and the social dimension

FOURTHGENERATION

Distributed Role in Innovation System

FIFTHGENERATION

Structural & broad policy focus

Policy Transfer & Learning in Foresight

• Gains from– Cost reduction through shared efforts– Accessing foresight expertise, training and experience– Accessing broader &/or complementary domain expertise – Addressing transnational problems

• Failure can result from:– Uninformed transfer

• borrowing country has insufficient information about the policy that is being transferred with the result the policy is imperfectly implemented.

– Incomplete transfer• crucial elements of a policy or programme that made the policy or programme a

success are not transferred.

– Inappropriate transfer• insufficient consideration given to social, economic, political and ideological differences

between the borrowings and the transferring country leading to programme failure

• All issues that become more important still when transfer is from developed economy to emerging, transition or developing

– Role for UNIDO in helping policy transfer to be contextualised and informed by previous relevant experience

Extending the Mandate – structural focus

• Overcoming market and system failures• Microeconomic climate for innovation• Addressing deficiencies in firms

– Resources– Incentives– Capabilities– Opportunities

• Also use foresight to address deficiencies in system capacity for strategic development

• Foresight as balancing and linking mechanism

Foresight for policy vs Foresight as policy

• For policy– Use as a tool to inform

and develop policy in any area

– Also for “joining up” policy across domains

– In our domain normally areas of policy with a strong science/ research input

• As policy– Use as an instrument

to implement budgetary, structural or cultural changes

– In our domain as an instrument of research and/or innovation policy

A taxonomy of research and innovation policies

Strategic behaviour

• Impact of foresight involves interaction of foresight outputs with the strategic behaviour of policy and economic actors

• Two way lesson– Possibility to use as means to influence

corporate/business strategy– Need for foresight design to build in interface with

existing strategic processes where possible

Emerging role for foresight in New Wave Demand-side innovation policy

• Need to understand foresight in context of range of tools for innovation policy and how it can interact with, strengthen and be strengthened by combinations with other policies

• Particular opportunities in demand-oriented innovation policies– Clusters and technology platforms

built on base of common visions– Public procurement for innovative

goods and services again driven by shared visions

Conclusion (1) Extended mandate

• Present UNIDO role in foresight continues to be valid

• Opportunity for extended mandate – Promotion of foresight as instrument for

innovation policy and as a means of bringing S&I to bear on wider policy domains

– Support for UNIDO in delivering strategy of productivity enhancement for social advance

Conclusion (2)- Link to demand side innovation policy

• Promotion of foresight in new wave demand side innovation policy

• Need to engage users and regulators as well as developers of technology

• Fast track development of open innovation system• Address areas such as clusters, platforms and

procurement policy• Implication that UNIDO needs to build capacity for

innovation-linked foresight in range of sectoral ministries and agencies– Health, eco-innovation, food, housing, transport

Conclusion (3) – Situating foresight

• Combine elements of 4 and 5G foresight– Shift from monolithic national to distributed multi-level

embedment in innovation system– Supporting firms in knowledge acquisition

• Also recognise role for foresight in restructuring innovation system

• UNIDO instruments largely unchanged but content extended to broader range of actors and themes within productive sectors

• Partnerships for foresight as core for knowledge based economic initiatives– Working with other international agencies

Conclusion (4) – and broader support for UNIDO activities

• Preparing global forum and technical cooperation programmes

• Incorporate technology trends work in the initiatives such as biotechnology, technology parks and centres, ICT, investment promotion, critical technologies for Africa

• Working with other technology related Branches of UNIDO – Agro-Industries and Sectoral Support, Private Sector

Development, Trade Capacity-building, Energy and Cleaner Production, Research and Statistics as well as the Regional Bureaus and field offices.