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Strategies and Challenges for ICT andInnovation Systems in Emerging Economies and Developing Countries

WB Training 7th June 2012

Hannes Toivanen, Ph.D., Principal ScientistInnovation and Knowledge Economy VTT Technical Research Centre of Finland

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VTT Technical Research Centre of Finland

VTT IS

a globally networked multitechnological applied research organisation

a not-for-profit and impartial research centre

VTT HAS

extensive cross-disciplinary technological and business expertise

unique research infrastructure

comprehensive global partnership networks in business, industrial and research communities

VTT CREATES

new technology and science-based innovations in co-operation with domestic and foreign partners

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Customer sectors- Biotechnology,

pharmaceutical and food industries

- Chemical industry and environment

- Electronics- Energy- Forest industry- ICT- Machine, vehicle and

metal industries- Real estate and

construction- Services and logistics

Customer sectors- Biotechnology,

pharmaceutical and food industries

- Chemical industry and environment

- Electronics- Energy- Forest industry- ICT- Machine, vehicle and

metal industries- Real estate and

construction- Services and logistics

Focus areas of research- Applied materials- Bio- and chemical

processes- Energy- Information and

communication technologies

- Industrial systems management

- Microtechnologies and electronics

- Services and the built environment

- Business research

Focus areas of research- Applied materials- Bio- and chemical

processes- Energy- Information and

communication technologies

- Industrial systems management

- Microtechnologies and electronics

- Services and the built environment

- Business research

VTT’s operations- Research and

Development - Strategic Research- Business Solutions- Business Development- Group Services

VTT’s companies- VTT Expert Services Ltd

(incl. Labtium Ltd, EnasLtd)

- VTT Ventures Ltd- VTT International Ltd

(incl. VTT Brasil LTDA)- VTT Memsfab Ltd

VTT’s operations- Research and

Development - Strategic Research- Business Solutions- Business Development- Group Services

VTT’s companies- VTT Expert Services Ltd

(incl. Labtium Ltd, EnasLtd)

- VTT Ventures Ltd- VTT International Ltd

(incl. VTT Brasil LTDA)- VTT Memsfab Ltd

VTT Group in brief

Turnover 307 M€ (2011) • Personnel 3,187 (31.12.2011)

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Services

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Innovation policy and information society Strategy development

Foresight, evaluation & monitoring

Program development and planning

Over 20 dedicated innovation and information society experts

Innovation and Information Society for Development

Ready networks for I4D / ICT4D ICT (e.g. wireless interent, social media)

Construction

Energy, especially renewable energy

Over 2000 experts in wide array of technological and business areas

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ICT and Knowledge in Emerging Economies

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Innovation in ICT industries

Continued global growth in innovation– despite of industry transition and cyclical slow-downs;

Continued global push to expand R&D bases and search for talent;

Intensified global competition to create ”Innovation Hot-Spots”, which combine strong R&D base and business acumen;

What will be the division of labour between emerging markets and traditional high-technology areas?

What will be the winning strategy to combine proximity to growth markets, user driven innovation and S&T research driven innovation?

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Networks

Networked elements

Platforms, contents & applications

Consumers

Financial markets

Global trade

Regulation

StandardizationGlobal trade

The ICT Ecosystem

Modified after: Fransman M, 2007; Toivanen H, 2011. 

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ICT Research Trends – Some Stylized Facts

Digital Convergence

Convergence of service and technology driven business models

Rivalry of Ecosystems: Turning products into technology platforms

Continued relevance of S&T and continued growth of research & patenting

High-end markets attract most business focus, but BOP markets are most reliable source of growth

ICTrelated patenting grew 4,7%/year 95‐05

In2005,over 50000internationalICTpatents were filed

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ICT Research Trends – Bibliometric Snap-Shot

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Bibliometric assessment Scientific and Technological Research

Bibliometrics:

Metrics for quantity / quality;

Static and dynamic analysis;

Descriptive analysis;

Social networks data;

ISI Web of Science data, the most comprehensive database providing a snapshot of African knowledge production;

Excellent coverage of medical and basic sciences, agricultural research;

Good coverage of humanities and social sciences (incl. economics and business)

Moderate coverage of technology and engineering (30-50 %)

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Finnish ICT related research – publication totals by subject, 1988-2008

NOTE:

• Data source: Thomson Reuters Web of Science; VTT Database

• Articles, Proceedings and Meeting Abstracts;

• N: 16 494 – NOTE: Data cleaned, includes cross-disciplinary papers – work in progress

Hannes Toivanen, work-in-progress

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The role of national innovation systems

Developing and emerging countries differ radically in their ability to valorize knowledge;

Some are confined to ”knowledge traps” – Use foreign knowledge and technology without really making progress in national knowledge economy

Some are embarking on powerful ”catch-up” trajectories, progressing at fastest pace in knowledge economy

The key difference appears to be what types of national systems of innovation countries have, and what role domestic knowledge creation plays;

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Conclusions

Research continues to matter for innovation in ICT industries;

User driven innovation continues to gain importance;

Plethora of new innovation system and ecosystem models are emerging;

Perspectives on developing country and emerging economies: ICT research

Need to stand out and develop distinct, region specific winning formula

European and North American models do not pay serious attention to poverty or societal challenges in ICT agenda

Define strategy how to integrate to and capture value from the global ICT ecosystem

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ICT and Economic & Development Impact

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ICT & Development

Mobile telephony has positive impact on economic growth and this effect is twice as large in developing countries compared with developed countries (Waverman et al 2005)

Between 1996-2003, 10 mobile phones per 100 population added 0.59 percent units to per capita GDP (Waverman et al 2005)

Macro-economic evidence is more or lessclear, but not without problems: Inherent unreliability for developing

country data;Remains investment focussed;Does not provide guidance on pro-poor or

inclusive strategies, and thereby fallsshort of connecting ICT with development.

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Source: Heeks 2010

ICT and Development

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Key channels for ICT to advance development (Aker & Mbiti 2010): Enhanced access and use of information (search cost) Improve firm’s productivity by allowing better management of value

chainsCreation of local ICT-related jobs in rural and urban areasEnhanced communication among social networks reduces exposure to

risks (natural disasters, political violence, etc.)Enhanced delivery of services (financial, health, education, etc) via m-

and e-delivery platforms.

We have relatively solid (theoretical and empirical) understanding of user-benefits and impacts, though not in monetary figures.

We have scant evidence of how ICT boosts jobs and entrepreneurial opportunities, and much less on how such impacts are or can be pro-poor.

Standard ICT4D impact models

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Thank you!

Further info and publications on I4D@VTT: http://www.vtt.fi/i4d

Contact: Hannes.Toivanen@vtt.fi

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VTT - 70 years oftechnology for business

and society