S&T Policy Objectives in a Global Knowledge Society

Geological Mapping: Debbie Huntzinger, a Michigan Technological University doctoral candidate in geological engineering, explains the approach for mapping surface expressions of subsurface fracture lineaments to Aqua Terra Tech Enterprise student Gary Lawson on a ranch near Boaco, Nicaragua.
Courtesy: National Science Foundation

I suggest that there are four objectives that should form the basis of science and technology (S&T) policy in countries participating in globalization and in a global knowledge society:

· Import as much knowledge, understanding and technology as the nation can, adapting those as necessary, and utilize them for the nation’s social and economic development and the welfare of its people;

· Utilize scarce S&T resources to generate knowledge, understanding and technology important to the nation’s development and the welfare of its people that can not be imported;

· Create new knowledge and understanding and invent new technology as a contribution to the common good, and as a means of enhancing international competitiveness.

· Maintain and build S&T capacity for the future.

Acquiring S&T knowledge, understanding and technology from abroad.

China, the world’s largest country, has about one-fifth of the world’s population. According to the UNESCO Science Report 2005, the United States has the largest number of scientists and engineers of any country, with 22.8 percent of the world total. The same source indicates that inventors from the USA account for about one-third of the world’s patents. According to Science and Engineering Indicators, 2006, the United States is by far the leader in publications of science and engineering papers, and it publishes some 30 percent of the world’s total.

More knowledge, understanding and technology is being created outside than inside every nation. Consequently, it seems obvious that every country, even the United States, must make its first objective in science and technology to acquire knowledge, understanding and technology from abroad. This is in part true because globalization, especially the development of the global information infrastructure makes it increasingly cost-effective to acquire information from abroad.

For small countries with weak S&T capabilities, it should be obvious that development depends on acquiring S&T from abroad. For many in the United States, however, U.S. dependence on foreign science and technology may be unintuitive. Few people alive today directly experienced the time when the United States looked to Europe as its primary source for knowledge and technology. However, that was the situation even in the early 20th century. World War II saw massive destruction of European economies and S&T systems. The war and its aftermath produced a massive immigration of scientists and engineers to the United States. Moreover, U.S. industry dominated the world economy. As a result of these factors, the United States was able to dominate global S&T to an exceptional degree in the 1950’s and 60’s.

In the succeeding decades Europe’s and Japan’s economies and S&T capacities were rebuilt and expanded, and more recently many other nations have been able to contribute to the international stock of S&T. This is all to the good in that more countries are picking up a part of the global effort and the global stock of S&T knowledge, understanding and technology is growing more rapidly. However, for the United States it means that its global S&T domination has been much reduced, and that the United States has new and ever greater opportunities to acquire S&T knowledge, understanding and technology from abroad.

The mechanisms for acquiring S&T from abroad are well known. Countries can among other things (and in no special order):

· Attract immigrants with S&T training and expertise

· Send their students abroad for S&T training

· Encourage S&T exchanges with other nations

· Import products which embody S&T

· License intellectual property from abroad

· Make S&T books by foreign authors available domestically, translating them as necessary

· Attract foreign direct investment and take measures to assure that the investors transfer knowledge and technology in the process

· Develop the Internet and information literacy of their people.

There is great emphasis on innovation these days, and some may misinterpret that to imply a decreased interest in international technology transfer. I think those individuals may confound innovation with invention. Innovation basically means doing something differently, while invention means doing something really new. Thus studies of the diffusion of technological innovations trace how the use of an invention spreads as people introduce the new technology in their own lives. A newly invented crop variety, for example, is diffused as more and more farmers choose to plant the variety. Most farmers do so by seeing their neighbors succeeding with that crop, and following their example. The agricultural research station may create the new variety, while the farmers innovate by adding the variety to their farms.

I would also point out that the economically most successful countries tend to be those which import the most knowledge, understanding and technology. This is observably true, but it is also theoretically reasonable. I suggest that economic success is based more on the ability to appropriate knowledge, understanding and technology and put it to productive use than it is on the ability to invent.

Creating S&T knowledge, understanding and technology domestically

Importing S&T must be complemented with efforts to master the knowledge, understanding and technology, to adapt it to domestic needs, to adapt domestic systems as necessary to make the new fit in, and usually to further improve and expand that knowledge, understanding and technology. Thus the innovation process involves domestic research and development, and usually fairly extensive R&D, even when it depends on imported technology.

Every country also has a scientific agenda that others will not do for it, or at least that would not be done economically. Thus, a country must develop knowledge and understanding of its own resource base and its management. It must develop knowledge and understanding of its own problems – be they social or physical. Economists must explore the operations of a country’s economy and its idiosyncrasies; sociologists and anthropologists must explore a country’s social and cultural institutions; political scientists its political institutions; organizational scientists the behavior and culture of its formal organizations. So too, epidemiologists must develop knowledge and understanding of its health problems, agricultural scientists of its plant and animal pests and diseases, climatologists and meteorologists of its atmospheric systems and their dynamics.

So too, I suggest, most country’s will have technological needs that will not be fully met by importation of technology. Software will have to be developed not only in the local language, but to meet the needs created by the laws, regulations and practices within that country. Crop varieties will have to be created to meet the specific growing conditions within the country, and the preferences of its citizens. Vaccines and drugs will have to be tailored to the diseases of the country and the immunological characteristics of its population (and to the economic conditions that affect affordability of different products).

Note that developing an adequate S&T capacity is in part a defensive measure. A country that does not understand its own natural resources and their management is at the mercy of international corporations that would exploit those resources. Such countries negotiate from weakness. A country that can not assure the quality of efficacy of products is at the mercy of those domestic and international firms that would distribute (substandard) products within its borders. A country that can not apply local scientific knowledge to the regulation of its economic, political and social institutions is likely to pay a steep price.

Research and experimental development would appear to be a major tool for generating the kinds of knowledge, understanding and technology described in this section of the essay. That effort would include systematic and descriptive scientific research such as is often done in botany, entomology, anatomy, genetics, epidemiology, geology, geography, etc. I would note. however, that not all knowledge and understanding is explicit and much is implicit. People learn by doing, and products and processes can be improved without explicit description of the process of improvement or the improvements themselves. Some S&T does not appear in the R&D budget, or even in the S&T budget.

Creating new knowledge, understanding and technology

Fundamental and pre-competitive R&D are supported by the state in many countries as public goods – in the sense of activities that will not be adequately funded by the private sector to optimize the benefits to the country. Contributions to the world stock of S&T will fall short of the optimum level if there is free loading – e.g. if countries do not invest appropriately in non-commercial R&D but simply seek to take advantage of the knowledge, understanding and technologies created using government or foundation funding from other nations. International agreements, partnerships and collaboration can help to assure the appropriate sharing of the burden of support of this kind of R&D.

Invention is an important element in the generation of competitive advantage for nations with strong S&T capabilities. I recall the example of Israeli agriculture, where I was told that new crops and new exports to the European market were a critical ingredient of the sector policy. Many other countries in the Mediterranean region have climates and growing conditions like those of Israel, lower labor costs, and equal or better geographical access to European markets. Those countries turn out to eventually have comparative advantages in the crops Israel pioneers, and Israel then moves on to pioneer another agricultural export.

I suspect that this pattern is exacerbated by the small size of the domestic market in Israel, but is to be found in many developed countries, with high labor costs and strong capabilities for technological invention and innovation. Indeed, in a globalknowledge-based economy comparative advantages will always shift, and the productive sectors in all nations will be well advised to learn to shift with the changing patterns of comparative advantage and to develop new export markets to replace those which are lost.

Building S&T capacity

Investments in knowledge, understanding and technology depreciate. Conditions change, and their descriptions get outdated. Technology that once was state of the art eventually becomes outmoded. Systems change, and the knowledge, understanding and technology needed for their operations must also change. People retire, research facilities deteriorate, and instrumentation is rapidly obsolete. So even countries with strong S&T capacities need to continue to invest in that capacity in order to retain it.

There seems to be a transition, between very poor nations that spend a fraction of one percent of GDP on R&D, and rich nations that spend two or three percent of GDP on R&D. I suspect that the institution building that is involved in economic development has the effect of increasing the payoffs to R&D, and thus making it more attractive as an investment. It may simply be that richer countries have more money left over after they pay the basics of life—food, health, etc.

I suspect too that the returns to S&T increased over the 20th century. Institutions were created and strengthened to carry out R&D more efficiently, and to utilize knowledge, understanding and technology more rapidly and effectively for economic development. In many fields, positive returns to investment in S&T have been observed.

In any case, it seems clear that countries expecting economic growth should also expect to spend a greater portion of their GDP on S&T. For the top tier countries, facing an ever increasing gap between their domestic salaries and the labor costs of poor nations, invention and innovation appears to be the necessary priority. Such nations need to continuously improve productivity, and to exploit the temporary advantage the inventor has with a new invention. And, of course, the new instruments and new technologies make the productivity of S&T itself greater and greater.

Striking a balance

Each nation then has to strike a balance among these activities. How much effort should it use to import S&T? How much of its scientific capacity should it spend on solving domestic problems (and what should be the priorities among those problems)? How should it balance its emphasis on S&T to compete in global markets versus to solve domestic problems? Note that to some degree the investment in S&T takes away from its application – the trained personnel can either do S&T or they can teach the next generation, but there is a choice between the two functions.

I suspect that countries with relatively weak S&T systems will be best served putting very high priority on using that system to improve domestic systems, but that as S&T capacity grows countries will find decreasing returns to solving domestic problems and increasing opportunities for higher returns in utilizing S&T to create value added exports. Thus, the strongest S&T countries will find their comparative advantage in high technology products, and will emphasize their export.

Perhaps one of the real benefits of comparable international S&T statistics is that they give decision makers a reading on the balance that has been struck in other countries. Still countries differ greatly in the balances the strike, and I suspect that they do so relatively rationally. There are many factors that affect such allocations of resources, and simple econometric models are unlikely to capture real life complexity of such decision making.