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04/19/23
Background
Research Development and Innovation (RDI) is an investment in a company’s future
Highest productivity improvements and hence GDP growth always came from innovation and this since the invention of the wheel
Adapting to fast growing technological innovation is crucial. In open markets, obsoleteness is a wide spread disease
Globalization, open information, and increasing linkages between Universities and Industries facilitate innovation and may one day turn it into a commodity
Remember !
For Industry, the principal purpose of business RDI is to develop differentiated products and services to meet the market needs
COMPETITEVENESS: competitiveness is the set of
institutions, policies, and factors that determine the level of productivity of a country
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The Global Competitiveness Index Ranking for ESCWA Member Countries covered by the report
Country Rank 2010-2011 (139 countries)Qatar 17 Saudi Arabia 21UAE 25Oman 34Kuwait 35Bahrain 37Jordan 65Egypt 81Lebanon Lebanon 9292Syria 97
Lebanon Scores VERY BAD in Competitiveness Index
Basic Requirement Macroeconomic Environment
Lebanon has successfully maintained a healthy economy despite the worldwide economic and financial crisis. (8.7% GDP growth in 2009 vs. world average of 1%)
HOW CAN WE SUSTAIN IT !?
Basic Requirement Health and Primary Education
Good health services exist in Lebanon
Basic Education is of good quality and available to all. Literacy rates are improving
Healthy educated population yields competitive workforce
Resource allocation should remain strong for both sectors in order to sustain competitiveness
Efficiency EnhancersHigher Education and Training
The relatively acceptable higher education system of Lebanon should be built on (we score 4.6/7 – still significant room for improvement)
“There is no science w/o scientists, there is no scientists w/o research!”
Efforts should be made on enforcing linkages with industry hence economy (jobs, R&D, etc)
Efficiency Enhancers Goods Market Efficiency
The country produces a good mix of goods and services
A wide variety of goods are traded on the market competitively
Efficiency Enhancers Financial Markets Development Banking sector is strong, stable, and
well developed.
Stock market is limited and inefficient
Access of funds and capital is low (besides bank loans)
IPOs, private equity and M&As are very low
Investment banking is very weak
Efficiency Enhancers Technological Readiness The technological readiness of
Lebanon’s developed industries is average given their partial ability to use the available technologies to improve productivity and efficiency
The country’s labor force is quite qualified and needs to be continuously up-to-date; they have the ability to adopt the available technologies
Are we going to produce technology or remain users?
Efficiency Enhancers Market Size
Lebanon’s market size is not limited to its boundaries
The market spans to the Arab and European countries and beyond
Exports have been growing and are crucial
Innovation and Sophistication Factors Business Sophistication Many sectors have high
sophistication (mature, efficient, profitable, up-to-date)
Sophistication results also from strong:o Linkages and openness to the worldo Amount of expats that are still in close
contact with the countryo Out-sourcing, sub-contracting, joint
ventures, etc
Innovation and Sophistication Factors Research Development and Innovation Four of Lebanon’s top exporter
industrial sectors namely:o Electromechanical (about 22% of
exports) o Agri-food (about 10% of exports)o Chemical (about 8.5% of exports)o Transportation (about 7% of exports)
…are by nature conducive to innovation
What Research?
Product and Material Research
Manufacturing and Operations Research
Market Research
Product and Material Research
Find new product ideas to meet customers’ needs
Research new Materials to develop new products and processes
Improve Material performance
Find new and different products and new uses of existing products or by-products
Manufacturing and Operations Research Development of tools and equipment
Manufacturing methods aimed at improving productivity and reducing costs
Application of information technology for informed decision-making
Study of optimal resource allocation
Predict system behavior
Market Research
Collection and analysis of market data
o Target marketo Competitiono Environment
Crucial for understanding new trends
Very important to analyze competitiveness
Development
The most economically feasible method for applying the facts or principles identified
Carried out typically after applied research
Innovation
It is the final stage of a development process, representing the final result achieved and implemented successfully
Innovative activities may relate to new products, new services, new methods of production, opening new markets, new sources of supply, and new ways of organizing
Innovation is directly correlated with the performance of firms
Around the world innovation is now recognized as a prime source of
national competitive advantage
MASTER PLAN for RDI
A large improvement can be made on one of the main pillars of competitiveness Industrial Industrial InnovationInnovation
We recommend a Master Plan involving 4 major players:o Public Sectoro Universitieso Industrialistso Banks and Financial Institutions
RDI Master Plan: Public Sector National RDI policy with stakeholders
led by CNRS with RDI observatory to measure i/o, impact, foresight, studies
Tax incentives for RDI in private sector (industry, universities, centers)
IRI facilitation and coordinating industrial research and innovation
ALI matchmaker between industry, CNRS, IRI and universities
RDI Master Plan: Universities Participate in national RDI observatory
activities
Graduate and post-graduate relevant and connected research
Develop tracks of research priorities needed in country (industry, energy, environment, water, etc)
Establish graduate schools to offer multi-disciplinary programs and activities
Crediting professional activities by faculty members towards promotion (consulting,
development, applied research, innovation)
RDI Master Plan: Industrialists Include in their business plans an RDI
chapter Strategy on % of RDI spending per year
Conduct state-of-the-art-product research to confirm need for development
Conduct extensive market research to identify consumer needs
Seek local RDI capacity to solve efficiency and development problems, build local expertise over time, hence, multiplier effect
Ask for help from ALI, CNRS, IRI, and Universities
RDI Master Plan: Banks and Financial Institutions
Create Innovation funds (Equity and Loans) to be invested in spin-offs which resulted from innovation
Find strategic partnerships and alliances
Productive or Waste: Importance of Cycles!
RDI can result from two cycles: Market Driven Research Driven
Any flaw from within one cycle makes the difference between a productive and wasted RDI
Practical Recommendations
We should extend the current law of tax incentives on “Tawzifat Zatiyyeh” related to CAPEX, to include RDI expenses.
Industrialists should be ready to have a high failure rate in RDI projects; however, one success out of ten failures will largely compensate all the losses.