Universities in National Innovation Systems – 4 of 5

National Innovation Systems (NIS) generally have three parts: Firms (industry), Universities (academe) and the Government (RTO). Depending on the political economy traditions of each country, their roles are set up differently. The Philippines needs to path-create a custom-made NIS to find its way out towards strong growth.

Universities may be set up purely to teach and develop human resources up to a desired point;  say, for export labor services like medical care, ship crewing, and BPOs that is the general case in the Philippines. They can also be research universities like the UP System, La Salle and Ateneo that learn as well as teach. They can also extend into business incubation, development of proof-of-concept, and other enterprise prototyping as suggested by the Triple Helix variant of NIS. (Note:  Lundvall does not support Triple Helix.)  And, at some time in China of the 1980’s with privatization of university-based research Labs, Universities can be a birthplace of innovative entrepreneurship to mixed results.

Governments participate in NIS through research and technology organizations (RTOs) like the DOST in the Philippines, a technology latecomer country. Command and developing economies like China have the China Academy of Science to handle government-sponsored basic research in areas like space and atomic energy. Fast-moving latecomer countries have specialized innovation bodies like ITRI of Taiwan for semiconductor and later PCs. Singapore and Malaysia have similar agencies for their chosen industry winners. Developed and free market economies structure specialized basic research differently on specific themes like the U.S. NASA for space, CDC for disease control, and the DOD for armaments.

Firms, being closest to the customers, tend to lead in applications-oriented research and in product development. This can be clearly seen even in China from Professor Xue Lan’s paper. The migration from a centralized research to a more open market economy shows the move to greater activity by firms in such research whether in patent or spending.

The 6th ASIALICS in Hongkong on July 6-7, 2009 had two keynotes on Universities’ role in NIS from Professors Xue Lan of China and VV Krishna of India (Click their names to download their presentations.  Another way to get to the presentations is through ASIALICS here.  I am still trying to learn the least of XML to be able to post in SYNTHESiST.)

In China, after the explosive 1980s when research labs were privatized and researchers became rich, things have settled down. Universities are returning to their traditional role in human resources development and in writing research papers. Lately, Professor Xue’s Tsinghua University, has placed its privatized enterprises in a separate holding company with different managers from the University administrators. The China universities are also preparing for the big demographic shift in China, an aging population with an empty echo from China’s one-child policy of the 1980s. This will have significant impact on the Universities and the economy a whole.

Professor Krishna’s India on the other hand has a different demographic dividend to prepare for in a huge increase in the young population and its echoing bulges in the future. India is expected to overtake China in population by the2030. To prepare, India is doubling the number of IIT’s and IIM’s. They already have successful atomic energy and space programs by the government and ICT and medical research by the private sector.
Both countries have successfully grown their human resources in terms of PhDs and scientists as evidenced by research papers, published journals and patents in preparation for the future.

The Philippine picture is bleak and frustrating as presented in a paper by Professor Aida Velasco of De la Salle University. In PhD’s, scientists, research papers, journals and patents, the Philippines is seriously lagging its cohort. University focus has been on entrepreneurship, specifically those defined by Kauffman (See Post #28) as replicative instead of innovative entrepreneurship.  Most replicative entrepreneurship do not create new wealth but just transfers them from one part of society to another, ie from OFW remittances to shopping mall owners;  Innovative entrepreneurship will tend to create new wealth from productivity improvements, and the like.

Specific Philippine firms have engaged actively in innovation but is doing so in what the Biblical parable as ‘stony ground.” I have mentioned about specific successes in geothermal energy, seaweed farming, ICT and BPO, medical care, ship crewing, agribusiness, and mining.

I just attended a coffee farming training (read in a few posts later) by Nestle, arguably a multinational with coffee in the Philippines as the company’s share in the ASEAN complementation scheme. They have done the scientific and application research from variety selection, cloning and somatic embryo, through scale up, cultivation, weeding, fertilization, pest control, harvest, post-harvest and quality control. The only area they have not done any research is in innovation and implementation as evidenced by their difficulty in meeting production targets despite seeming high yield and financial returns potential.

This last seem to be a potential greenfield area for research and innovative entrepreneurship. The Universities do not have anything on offer here other than opportunities in trial-and-error approaches in business incubation.

Professor Lundvall Post #17, consistent with the precepts of evolutionary economics with emphasis on evolutionary, suggests that each country follows its own path based on its own concrete conditions even as he recommends an NIS template.

I will explore this potential NIS path-creation for the country after the next posts on research and technology organization (RTO) and coffee as agribusiness. Do revisit SYNTHESiST and make comments.

Click here for Part 1, 2, 3, or 5.