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Part 3: The policy dimension

10 Science and technology policy
11 Technology transfer and diffusion
12 Technology choice and development
13 New technologies: Opportunities and threats
14 Technology assessment

Part 3 looks at the range of policies being used and advocated with regard to science and technology. In chapter 10, Atul Wad offers an assessment of the field of science and technology policy - a policy comprised of collective measures taken by a government in order, on the one hand, to encourage the development of scientific and technical research and, on the other, to exploit the results of this research to achieve desired general social, economic, and political objectives and its application in the context of a dramatically changing world order characterized by a host of pressing challenges, rapid technological change, and globalization. Its importance to developing countries has, if anything, increased. He explains the rationale for science and technology policy, its historical evolution conceptually (stressing the distinctions between science policy and technology policy) and in practical terms- reviewing the range of specific policy instruments and concludes with a description of the shortcomings of science and technology policy to date: it has produced elaborate, often overly bureaucratic, systems of science and technology in many developing countries but has had little impact on the "bottom line" of real technical change and technology decision-making at the level of the enterprise. To illustrate his analysis and the wide variety of approaches to science and technology policy, he reviews the experiences of various countries and regions, traces the role of the United Nations system in this field, and concludes that, for science and technology policy, the key contemporary issues centre around concerns over the use of technology to achieve competitive advantage, access to technology. new forms of government intervention to promote technological development at the firm level and greater participation in world markets - and all of this within the new principles of an emerging techno-economic paradigm.

Amitav Rath examines one important policy dimension: technology transfer and diffusion. He starts by describing the main elements and mechanisms of technology transfer, vertical and horizontal, and concludes that all of the channels are valuable and developing country strategies must ensure that the full mix of channels and mechanisms are used optimally; he points out that the dominant mechanism for technology flows is in the form of capital goods. In tracing the historical background, the author distinguishes two phases where twin economic and political objectives have influenced the concerns of research and policy related to technology transfer, sometimes reinforcing each other and at other times being antagonistic: post-war to the mid-1960s, and mid-1960s to the early 1980s. The main concern in the 1970s was the excessive costs of technology transactions and the many restrictive clauses that were imposed on the recipient by the supplier, thereby limiting the benefits to the recipient firm and country. Besides the implication of market imperfections, other negative impacts from technology transfer were stressed: dependency, inappropriateness, etc.

By the beginning of the 1980s, most developing countries had enacted regulatory mechanisms and rules governing investments and technology. Revisions to the framework, under the pressure of the changing international economic, technological, and policy environments for technology transfer, highlighted several aspects: transaction costs and terms, variations in technological elements and price, and new perceptions of the actors. The greater the involvement of the supplier and the recipient, the more successful is the technology transfer. Production efficiency is highly correlated with the macroeconomic policies and market structures of the recipient country. To conclude, Amitav Rath argues that excessive politicization of the issues has definitely been harmful to the interests of developing countries.

This recent technology debate has brought out into the open a dilemma facing developing countries: what mix of new, conventional, and traditional technologies should they use, and what is the appropriate balance between importing new technologies and using conventional and indigenous ones? Ajit Bhalla addresses technology choice as a crucial dimension of the development process that evolved in relation to shifts in development thinking. In the 1950s and 1960s, the issue of technology choice was secondary to that of maximizing growth. The recommended option invariably favoured the most capital-intensive and advanced technology because it contributed to maximizing savings rates and investment. In the 1970s, the criterion for choosing technology was no longer solely the reinvestible surplus of growth; the employment and income generated, the reduction of inequalities, and output generation were also important factors. The 1970s also witnessed the emergence of the concept of appropriate technology. Its protagonists highlighted the need to widen the set of technological options by developing alternative technologies in a labour-intensive direction to suit the factor endowments of developing countries. The decade of the 1980s is associated with the macroeconomics and political economy of technology decisions, intersectoral linkages to promote technology improvements and reduce technology gaps between modern and informal sectors, and the emergence of new technologies and blending. The author discusses the sparse employment and distributional implications of new technologies, the potentials for developing countries for leap-frogging and technology blending, and whether the use of new technologies and greater scope for "flexible specialization" can improve the efficiency of craft production and thus expand output as well as employment. By highlighting the differences between the debates on the concepts of "appropriate technology" and of "technology blending," Bhalla points to the emergence of a new debate, technological capability-building as a major long-term goal of development of the third world, and speculates on the issues for the 1990s.

Paulo Rodrigues Pereira discusses the breakthroughs in new technologies and assesses the opportunities and threats they represent for developing countries under the new techno-economic paradigm, as defined by Freeman and Perez, where technological development is increasingly becoming the dominant factor in determining a country's capacity to compete in world markets. Information technology allows a new technological system, in which far-reaching changes in the trajectories of electronic, computer, and telecommunication technologies converge and offer a range of new technological options to virtually all branches of the economy; moreover, this new system forms the basis for a reorganization of industrial society and the core of the emerging techno-economic paradigm. The reason for the preeminence of the new technological system clustered around information technology over the equally new technological systems clustered around biotechnology and new materials is the fact that information activities of one kind or another make up a part of every activity within an industrial or commercial sector, as well as in our working and domestic lives. Almost all productive activities have a high information intensity, so information technology is capable of offering strategic improvements in productivity and competitiveness, by integration of functions, of virtually any economic and social activity. In assessing the implications for developing countries, the author concludes that the general tendency points to a widening of the information technology gap, both between industrialized and developing countries and within developing countries. Biotechnology, a science-led technology, induces important structural changes in the economy and has widespread applications in different industrial sectors: food and agricultural production, livestock husbandry and animal health, pharmaceuticals and chemical processing, medical treatment. One of the main advantages of these innovations in biotechnology has been the possibility of their economic use on a small scale, without large infrastructure requirements, and their application at different levels of complexity, investment, and effort. However, these opportunities should be weighed against the environmental risks and the interrelated social and economic costs. As regards new and advanced materials, the main impact of the present trends is likely to be felt by developing countries in the medium term, through the loss of competitive power of many of their manufactured products, which will increasingly have to compete with innovative products presenting higher functional integration or offering novel functions and services, manufactured by "multi-material" firms in industrialized countries. But the potential does exist for developing countries to produce materials with the higher purity necessary for high technology industries and it should be exploited.

Under the new techno-economic paradigm where technological innovation is the driving force, assessing its impacts is crucial. For Harvey Brooks, whereas in the industrialized countries, technology assessment is viewed predominantly in the context of anticipating and avoiding unintended social costs of economic growth and of technologies as their scale of application increases and spreads, in developing countries it is seen more as a means of building up an indigenous capability for wise technology choice. The costs and benefits they generate can potentially be large, and their incidence may differ significantly for different groups in society. Hence there is need for analysis so that the mismatches, the wrong investments, and the possible social conflicts can be minimized, while at the same time the beneficial effects and opportunities can be fully exploited. In this context, the issue of technology assessment is viewed as a continuing process of informing the people concerned, generating constructive public debate, and encouraging public understanding and involvement. In his chapter, Brooks first reviews the historical background of the concept and then draws lessons from over 20 years of institutionalization of technology assessment in the United States to derive a typology. project assessment, generic technology assessment, problem assessment, policy assessment, global problématique. Brooks concludes that if technology assessment is seen as a cumulative process of "social learning," it calls for very wide participation of virtually all the stakeholders. Drawing on the experience in industrialized countries with stakeholder participation in technology assessment, he derives principles that can contribute to the success of stakeholder dialogues in developing countries.

10 Science and technology policy

Atul Wad

Science and technology policy: Rationale and issues
Instruments for science and technology policy
The implications of trade policy
Experiences and approaches in the third world
The United Nations system
The knowledge base for STP
Conclusion: Key contemporary issues for STP

After the Second World War, country after country in Asia and Africa was granted or achieved independence from its former colonial rulers. In many cases, the new leaders of these countries - Nehru in India, Kenyatta in Kenya, Nasser in Egypt - subscribed to an emancipated and modern view of science and saw science and technology as essential to the development of their nations. At the same time, they were strong nationalists and believed in the paramount role of the state in building up their societies. As a result, many of these countries, very shortly after independence, gave top priority to scientific and technological activities in the form of education, the establishment of government bodies dedicated to science and technology (e.g. the Council of Scientific and Industrial Research [CSIR] in India), and the promotion of science and technology at all levels in society. As they embarked upon the challenging road of economic development, small circles of academics concerned with science policy issues began to form in these countries. Studies by third world scientists began to appear, often couching the problem of science and technology in developing countries within the larger problématique of development and the structural inequalities of the post-colonial (or neocolonial) period. These scientists included Antoine Zahlan, Ziauddin Sardar, Abdul Rahman, Homi Bhabha, Amilcar Herrera, and M.A. Qurashi, who spoke directly to the problem of science and technology, as well as a number of development economists and political economists who integrated science and technology into their broader analyses of the development process; they include Samir Amin, Fernando Enrique Cardoso, Thestonio dos Santos, Prebisch, Gunnar Myrdal, Dudley Seers, Immanuel Wallerstein, and Andre Gunder Frank. Ideological imperatives were often rampant in these latter analyses, nevertheless they represented an important period in the post-war era for the third world.

Also during this period, interest began to grow in the structure and dynamics of the scientific communities in these countries. All studies stressed the frustration and alienation of scientists operating in developing countries and generally suggested the need for international mechanisms of cooperation to support these communities. One such mechanism, the International Council of Scientific Unions, has been particularly active in this way. Another significant event was the establishment of the Third World Academy of Sciences.

Science and technology policy: Rationale and issues

The justifications

Science and technology policy (STP) represents the articulation of how the modern state and society at large view the relationships and instrumentalities between scientific and technological change and social and economic development. The effectiveness of STP is essentially a function of how realistic and comprehensive the understanding of decision makers is of these interactions and relationships. On another level, STP reflects the tremendous optimism that is still present today regarding the potential of science and technology, properly developed and applied, to solve the pressing problems of humanity.

The concept and practice of STP is based on the presumption that direct and indirect intervention by the state in scientific and technological activities and processes is necessary in order to achieve desired social, economic, and political goals. The justification for STP and state intervention derives from certain principles:

  1. Technological progress may not proceed in the desired direction without influence by government, leading to poor technology choices, inappropriate allocation of resources, and distorted patterns of industrialization.
  2. The returns from scientific research are too long term to expect market forces to encourage private investments in R&D in areas beneficial to society. The difficulty in "appropriating" the returns from R&D also reduces the incentive to invest by the private firm. Government must therefore intervene to rectify this "market failure," by investing itself, or by enacting policies to encourage private investment [30, 10].
  3. Forsyth [11] adds that the pressures of competition in international trade can push developing countries towards labour-intensive techniques in a narrow range of products, even though a diversified industrial base is preferable. Government intervention is needed to protect and nurture those components of the industrial base that are unlikely to evolve spontaneously. This is the "infant industry" argument [3].
  4. Certain areas of technology are unlikely to develop by themselves, for example the service sectors (health, education, etc.) and therefore require a direct role by the state. This is particularly important in developing countries, with their large populations and severe income inequalities. The state, as the guardian of the social wellbeing of the population, becomes obliged to try to channel scientific and technological activities so as to improve the living conditions of the people. For developing countries, with a pressing need to address social problems such as food, housing, employment, and health, science was seen as a panacea at independence, and in many countries STP was initially undertaken with considerable hope and enthusiasm.
  5. There is also a strong political rationale to science and technology policy, particularly in the industrialized countries. The Manhattan Project and the development of the atomic bomb, which many see as a watershed in the evolution of science policy, established science as a "national asset." Nations undertook scientific projects to achieve political, and often military, goals. In the post-Second World War environment of growing international competition, science policy emerged as a strategic weapon for countries. There was an obvious correlation between the emergence of international crises and the increases in expenditures on R&D. In this regard, STP clearly derived to a major extent from military needs and priorities.

These arguments form the basis for the evolution of STP in both the industrialized and developing countries. There are debates within the field around these and related issues, and as we shall see later, there are new arguments being put forward both in favour of and against the need for STP. It is within the broad context of STP that debates continue over such issues as brain drain, technology transfer, intellectual property, and the relative importance of basic versus applied science.

The distinction between science policy and technology policy

The distinction between science policy and technology policy, once the subject of heated debate, has become less important recently as technology has become more science-based. In the past, however, science policy tended to be given more emphasis than technology policy, the latter being seen as something that should be left to the play of the market and the private sector.

In the context of developing countries, the argument is increasingly put forward that what is needed is more technological dynamism, and that the development of scientific capabilities is less important, at least in terms of addressing the severe near-term problems of the developing countries. Given the high costs involved in developing a reasonable capability in modern science, the practical imperative to become increasingly competitive in global markets, and the successes of the technology adapting and modifying strategies of the four "tigers" of the Pacific rim and before them of Japan, there may be some merit in this argument. On the other hand, there has always been a strong case for a society to have a "culture" of science and a scientific temperament in order to achieve economic growth. In this last regard, the deep cultural importance of knowledge, science, and education and a tradition of reading and writing in the countries of the Pacific rim may well be an important factor in explaining their success.

The debate over the book by Salomon and Lebeau, L'écrivain public et l'ordinateur - Mirages du développement [32], addresses aspects of this issue. Salomon and Lebeau argue that science, as it is understood in the modern world, is established and defined largely by the scientific institutions of the industrialized countries and that it is naturally élitist and hence cannot realistically be expected to address the problems of developing countries. As such, science in developing countries tends to be more preoccupied with the problems defined as "important" by the international scientific community than with the problems of poverty and underdevelopment. Cooper [4] has referred to this as the "marginalization" of science in developing countries. Technology, on the other hand, being of practical relevance in an immediate sense, is where developing countries need to focus their resources and efforts.

The counter-argument of course is that sustained technological development is impossible without a reasonably strong scientific base; technology is dynamic and needs the intellectual foundation that a strong scientific tradition offers. Much of the early thinking in STP was influenced by this view - that science must precede technology. Still some think that there are more urgent needs to develop a whole country than to build up a scientific community that is isolated from the rest of the population. The debate over this issue continues.

For developing countries, the distinctions between science policy and technology policy are best described in one of the reports arising from the project on Science and Technology Project Instruments (STPI) sponsored by the International Development Research Centre (IDRC) in Ottawa (see table).

Policy for science and policy through science

A distinction is also made between policy for science, i.e. the encouragement of certain forms of scientific activity, and policy through science, which relates to the exploitation of research in areas of concern to government. These two aspects have become more complementary with the passage of time, and in particular after the Second World War. Science is both influenced by society and in turn influences social, political, and economic systems. Recently it has been argued that there is really no such thing as a separate "science and technology for development," but that science and technology are really inputs into the development of other activities, such as population control, food production, industrial development this is reflected in the "mission" approach to development, for example in India. There may be some merit in this view, but it does not alter the basic importance of science and technology as deserving of special recognition.

The policy sciences

An entire field of "policy sciences" emerged in the post-war period. The main focus of this field is the analysis of policy-making broadly defined in all areas of government intervention. A major journal, Policy Sciences, was launched in 1970. Included in the scope of this field are the "philosophies, procedures, techniques and tools of the management and decision sciences operations research, systems analysis, simulation, 'war' gaming, game theory, policy analysis, programme budgeting, and linear programming."

Such noted social and policy scientists as Amitai Etzioni, Yehezkel Dror, Harold Lasswell, Albert Hirschman, Erich Jantsch, and Marvin Cetron have been involved in this field. The main purpose of this field is to bring more systematic analytical and practical tools to bear on problems that in the past were dealt with more or less "intuitively" - to bring rationality to governmental behaviour and decision-making.

To the extent that this field covers all aspects of policy-making, not solely science and technology, it is not explicitly covered here. (For more detailed information, see the journal Policy Sciences and various texts by Dror, Wildavsky, Hirschman, Etzioni, and Lasswell.)

Differences between national science and technology policies

Aspect Science policy Technology policy
Objectives A. To generate scientific (basic and potentially useful) knowledge that may eventually have social and economic uses, and will allow understanding and keeping up with the evolution of science.
B. To produce a base of scientific activities and human resources linked to the growth of know edge throughout the world.
A. To acquire the technology and the technical capabilities for the production of goods and the provision of services.
B. To acquire a national capacity for autonomous decision-making in technological matters.
Main types of activities covered Basic and applied research that generates both basic and potentially useful knowledge. Development, adaptation, reverse engineering, technology transfer, and engineering design, which generate ready-to-use knowledge.
Appropriation of results of activities covered Results (in the form of basic and potentially useful knowledge) are appropriated by wide dissemination; publishing ensures ownership. Results (in the form of ready-to-use knowledge) re main largely in hands of those who generated them; patents, secret know-how, and human embodied knowledge ensure appropriation.
Reference criteria for performance Primarily internal to the scientific community. Evaluation of activities is based mainly on scientific merit and occasionally on possible applications. Primarily external to the technical and engineering community. Evaluation based mainly on contribution to social and economic objectives.
Scope of activities Universal: activities and results have worldwide validity. Localized (to firm, branch, sector, or national level): activities and results have validity in a specific context.
Amenability to planning Only broad areas and directives can be programmed. Results depend on the capacity of researchers (teams and individuals) to generate new ideas. Involves large uncertainties. Activities and sequences can be programmed more strictly. Little new knowledge generally required, and existing knowledge is used systematically. In valves less uncertainty.
Dominant time frame Long and medium term. Short and medium term.

Source: Ref. 15, pp. 16-17.

Western science and alternative models of science

Finally, there is the debate over the concept of science itself, particularly with respect to the developing world. Modern science is eminently a Western science based on Western notions of rationality and instrumentality. Some alternative forms of scientific knowledge and their relevance to developing countries are discussed in chapter 4. There is a vast body of literature on the forms of science that prevailed in regions of the world that are now part of the developing world - Joseph Needham on China [25], Claude Alvares on India [2], Nasr and Daghestani on Islamic science [24, 5], Mudimbe and Mazrui on Africa [23, 22], and also Goonatilake and Elzinga and Jamison [13, 8]

This issue is particularly important at present, when there appears to be an exhaustion of the models and strategies that have been pursued by developing countries based on Western notions of development and modernization. Indeed, the resurgence of fundamentalist movements and grass-roots initiatives may in part be seen as a response to this sense of frustration. The implications for STP are still unclear, but it would seem prudent to view the canvas of science and technology in a broader and culturally more sensitive perspective. The deep cultural underpinnings of a society clearly influence its scientific and technological capabilities and potential. Throughout history, in China, India, the Arab world, Central and South America, scientific progress has occurred within a complex and dynamic sociocultural milieu and has declined with the economic and military decline of those societies. The challenge today for the developing world is to identify what type of science and technology makes the most sense in today's politically charged, technologically infused, and global economy.

Instruments for science and technology policy

The manner in which science and technology policy is made operational is through specific policy instruments (STPI). Interest in identifying the range of instruments needed to achieve desired science and technology objectives evolved more or less in parallel with the development of an institutional context for STP in developing countries. Once formal institutions for STP began to be established in developing countries, the need emerged for instruments through which these bodies could enact their objectives and missions.

A landmark event in this area was the multi-country STPI research project undertaken with the support of the IDRC. The project's field office was in Lima and 10 research teams from Africa, Latin America, Asia, and southern Europe participated in it. The overall purpose of the STPI project was "to gather, analyze, evaluate and generate information that may help policy makers, planners, and decision makers in underdeveloped countries to orient science and technology toward the achievement of development objectives" [15].

The approach taken in the STPI project, and basically adhered to subsequently by researchers and policy makers, identified three broad categories of instruments:

  1. demand-side instruments designed to influence the nature of demand by firms, enterprises, and organizations and the technological behaviour and decision-making of these entities;
  2. supply-side instruments, which relate to the activities in the science and technology system that have as end products new technology and science, and to the supply of science and technology services and human resources;
  3. instruments directed towards the linkage between the supply and demand sides of the equation, i.e. the links between the R&D and productive system.

The STPI project defined an instrument as "the set of ways and means used when putting a given policy into practice. It can be considered as the vehicle through which those in charge of formulating and implementing policies actualize their capability to influence decisions taken by others" [15, p. 13]. A policy instrument could be a legal device, such as a patent law or technology licensing regulations; an organizational structure, for example an R&D laboratory or a research programme involving several institutions; or a set of operational mechanisms, for example specific R&D management procedures, incentive systems, etc.

Furthermore, policies can be either explicit or implicit, with the former being articulated expressions of desired goals and objectives by high-level government officials or institutions with respect to science and technology, whereas implicit policies are directed towards areas or sectors that in turn will influence science and technology activities.

The STPI project went into great detail about various aspects of the quality and effectiveness of existing instruments in the countries surveyed, and concluded that in general explicit policy instruments had little impact on technological change, particularly in the early stages of industrialization. However, they did have a significant impact on the science and technology infrastructures in these countries.

This perhaps encapsulates the shortcomings of STP to date: that it has produced elaborate, often overly bureaucratic, systems of science and technology in many developing countries, but has had little impact on the "bottom line" of real technical change and technology decision-making at the level of the enterprise.

As I discuss later, this failure to address technical change at the firm level is a result of a conceptual shortcoming in STP research itself, a shortcoming that is only recently being recognized by the research and policy community.

Another deficiency in STPI implementation has been the lack of specific and practical guidelines for policy makers. Thus, even though the broad intentions and concepts of STP were generally understood, few policy makers had a concrete sense of the specific steps that had to be undertaken in order to implement these policies. An attempt to redress this shortcoming has been made by the International Labour Office in Geneva, in the form of a manual for technology policy assessment [11].

A particularly important mechanism for the implementation of STP is the financial institution. There is a limited literature in this field (see, for example, Jecquier and Hu [16]). In general, there is little awareness of the important role that financial institutions can play in STP, especially within the science and technology community itself. Yet, because of the economic and financial rigour they bring to the assessment of a project, and the resources they can mobilize, they can be powerful actors in STP. In recent times, the emergence of `'technology incubators" linked with venture capital funds for the commercialization of new technologies is seen as an essential aspect of industrial development in some countries such as the United States.

The implications of trade policy

The distinctions between science and technology policy on the one hand and trade policy on the other have recently become blurred. Increasingly, national and international trade policies have direct and indirect impacts on technological and scientific activities, and STP has an impact on trade patterns. Thus, for example, trade-related investment measures (TRIMS) and trade-related intellectual property rights (TRIPS) can influence the choice and acquisition of technology and the conduct of research itself.

The growing concern over the environment has also contributed to these interactions. As industrialized countries establish tighter environmental standards and specifications on products and processes developing countries find themselves increasingly under pressure to acquire "cleaner" technologies or face the barrier of "ecoprotectionism." Concern over loss of biodiversity and genetic wealth has prompted developing countries both to take stronger stands on the export and exploitation of these natural resources and to undertake research themselves to capitalize on their potential.

The interactions between STP and trade policy are complex and the subject of attention by, for example, the United Nations Conference on Trade and Development (UNCTAD) and the United Nations Centre on Transnational Corporations. Within such fore as GATT, issues related to intellectual property rights and protectionism are often debated within the same context as access to technology by developing countries and access to markets for their products.

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