Research and Technology Organizations in National Innovation Systems – 5 of 5

Research and technology organizations (RTOs) are government-sponsored organizations, like the DOST in the Philippines, dedicated to implementing national science and technology policies in line with a government’s development goals.

Note: This is our fifth and last post on the 6th ASIALICS held in HKUST on July 6-7 (Posts 80, 81, 82, 86 and 87).

The 6th ASIALICS in Hongkong had a special session to compare perspectives between Asia and Europe on interactions between research and technology organizations (RTO) and other innovation actors such as universities and industry.

At HKUST, July 2009

European RTOs are in ferment due to the European Union. RTOs dedicated to national goals are reviewing their direction as the EU resulted into duplication of goals and consolidation of national champions and industries. At the same time, successes of Asian RTOs like ITRI for Taiwanese semiconductors and PCs, KIST for Korea and the emergence of emerging countries like China and India dictated a look eastward.

It was an interesting session among technical and policy wonks.

The most original and interesting participant for me was Professor Patarapong Intarakumnerd of Thailand’s Thammasat University and the National Science and Technology Development Agency (NSTDA). I found him interesting because he comes from Thailand, a latecomer country like the Philippines. Also, his insights were well grounded in data, founded on a clear knowledge train and original in formulation. Finally, his paper, Measuring Innovation in Late-comer Countries: An Experience from Thailand was candid in its findings.

The most interesting of his findings is quoted from a previous (2002) Patarapong paper, “ national innovation systems of East Asian NIEs were built and shaped to produce ‘intensive learning’ which facilitated technological catching up processes.” In this later study, he quotes “latecomer firms evolved as ‘learners’, not innovators, by borrowing & improving existing technology (Amsden and Hikino,1993).”

My own experience is that borrowing and improving, nay scanning and adapting, then diffusing technology is the effective extent of innovation by firms in a latecomer country. For successful turnkey projects that succeed over time, an evaluation should show effective adaptation, hence innovation. Taiwanese entrepreneurs during my visits in 1988 – 1995 innovated a lot on Western-sourced equipment until they developed the capability to fabricate improved versions.

Another of Professor Patarapong findings which I quote below could well apply to the DOST and RTOs of latecomer countries and I quote lengthily:

As for public Research and Technology Organisations (RTOs) which have directresponsibility for developing S&T capability of the countries, RTOs in Thailand mainly focus on R&D with limited industrial relevance, not on building lower levelcapability such as technology assimilation and adaptation, designing and engineering, which are the technological thresholds faced by most Thai firms. In this aspect, Thai RTOs behave differently from those of NIEs in the 1970s and 1980s, when their level of development was more or less at the same level of Thailand.

In the presentation itself, he commented that technical experts in latecomer RTOs promote technology based their own knowhow rather than on the needs of industry. He went on to contrast with Korea and Taiwan and again we quote lengthily:

Korean Institute of Science and Technology (KIST) or Industrial Technology Research Institute (ITRI of Taiwn), for example, emphasised institutional and technical supports for industrial technological capability development within firms, such as helping firms to solve their operational problems and develop absorptive capacity, and disseminating foreign technologies to local firms through mechanisms like R&D consortiums and spin off (see Hobday, 1996; Mathews, 2007).

While the comment could objectively apply to DOST as well, the comparison with Korea and Taiwan may not be entirely fair to the Thai and Philippine RTOs for the following reasons:

1. Taiwan and Korea are in a state of war with wartime goals;
2. Consequently, both are command economies while Thailand and the Philippines are democracies with more challenging processes for getting consensus;
3. Thailand and he Philippines government organization separates the science and technology organization from the trade and industry department. Hence, innovation – which crosses the boundaries of both departments – are coordinated at the next higher level which is already the head of state. Leadership and coordination at that level is more difficult.

Of course, the United States of America is the proof against the three arguments above. But then other factor can come into play notably the lack of industrial space for DUI-learning (learning-by-doing) interactions As mentioned in the previous Post #86, the USA overcomes this barrier through dedicated policy-based RTOs in space, disease control and armaments for example, on top of a huge industrial space.

The Philippine DOST has industry specific technology management institutes but at two levels below the President, they lack the tooth and resources to work as effectively as ITRI or KIST.

The Czar mode under the President’s office, as has been set up for ICT and Entrepreneurship, may be good politically but would not have the institutional clout that a department may have but picking industry winners may be difficult. In a democracy, we end up with a ‘wish list’ like the Investment Promotions Plan at the commercial stage and not in technology innovation.

Professor Patarapong, in his paper, points out the there are huge private channels of innovation in Thailand and other latecomer countries that remain un-recognized by present global surveys. These surveys use R&D spending and patents as proxies for innovation that are biased to the experience of developed countries. South American and African countries have worked to developed addenda surveys to capture local inputs to inform ‘policy-making.’ No such effort is being done yet for the ASEAN latecomers.

I suspect that private channel surveys will identify intensive learning, defined as scan-adapt-diffuse, the best approach to boost innovative entrepreneurship in latecomer countries. Policies in the commercial and technological fields that boost such intensive learning are the key to catch-up development.

Click here for Part 1, 2, 3, or 4 .