Science, technology and innovation LDC issues

This article was published in the Trade Insight Volume 17 No. 3-4, South Asia Watch on Trade, Economics and Environment (SAWTEE)

When connectivity infrastructure, an enabling policy environment and private sector engagement work in tandem in the LDCs, science, technology and innovation have the potential to respond to systemic issues.

Moshe Kao, Federica Irene Falomi, Jaye Sergeant and Chen-Wen Cheng

Science, technology and innovation (STI) have been the main drivers of socioeconomic development, economic growth and industrialization throughout history. No country has successfully moved up the development ladder and achieved structural transformation without industrialization; but neither has any country achieved successful development without technological learning and upgrading and the development of innovative capabilities. Science, technology and innovation are indispensable ingredients in the development process and essential for catching up with more developed economies. However, for latecomers to economic development and industrialization such as the least developed countries (LDCs), achieving a level of sustainable prosperity and the elimination of poverty remains a major challenge. When connectivity infrastructure, the enabling policy environment and private sector engagement work in tandem in the LDCs, science, technology and innovation have the potential to respond to systemic issues and support in the attainment of the Sustainable Development Goals (SDGs).

Across the 46 LDCs, there is significant variability in the extent to which STI is prioritized and directly applied to alleviate or mitigate the key socioeconomic challenges. In some LDCs, the scientific ecosystem is disjointed, and consequently it tends to be very strong in a particular field, and almost non-existent in others. While in some LDCs, where there is a stronger policy and institutional framework, more coordination can be seen. That said, investing in STI remains an uphill struggle in LDCs. In 2015, gross domestic expenditure on research and development (R&D) by LDCs, as percentage of GDP, was 0.25 percent while high-income countries spent approximately 615 times more.¹

The United Nations Technology Bank for Least Developed Countries (UN Technology Bank) is dedicated to enhancing the contribution of STI to sustainable development in the LDCs. To support the LDCs, a key tool in UN Technology Bank’s work is its Technology Needs Assessments (TNAs) which identify the sector specific technological gaps and priority needs of each LDC. Better understanding of the technological gaps and needs of LDCs are essential requirements for improving national and regional policies, technological coordination, and mobilizing support to enhance innovation capacities. The outcome of these assessments is used as the basis for ongoing monitoring of the progress of STI development in LDCs and any follow-up support required. To-date five TNAs (Bhutan, Guinea, The Gambia, Timor Leste, Uganda) have been completed, 17 TNAs are at different stages of implementation, with the aim of finalizing by 2023.²

The findings of TNAs completed so far indicate that many LDCs are moving towards digitalization, particularly in terms of e-governance and e-commerce. For example, Rwanda is emphasizing e-governance in areas such as health, while Bhutan is working to strengthen e-commerce capacities in order to expand linkages with the regional and international markets for goods such as organic produce. Other countries, such as Uganda, are taking a more industry specific approach, by focusing on capacity building in the agricultural sector. This includes improving water security, mechanization and post-harvest management. This demand-driven approach can also be seen in LDCs facing life-altering environmental pressures, such as climate change and increasing frequency and severity of natural disasters. Pacific LDCs, such as Kiribati, the Solomon Islands and Tuvalu, are experiencing rising sea levels and coral bleaching, which is leading them to focus STI development on disaster warning management and food security, as well as green and low-carbon growth.

Innovation is another area where LDCs have adopted differing approaches and value. In some LDCs the policy environment is open and encouraging to innovation. There are efforts to recognize and harness the latecomer advantage and also types of innovation such as grassroots and frugal innovation. This focus can take the form of tax incentives, direct backing, venture capital and investment, or academic support. Legal and regulatory limitations such as a lack of intellectual property (IP) protection and difficulties in doing business, continue to be substantial blockages, regardless of the amount of goodwill from key stakeholders in the LDCs.

Inclusive science

To understand the health of a scientific ecosystem within a country, there are many commonly agreed indicators which help to understand research capacity. Factors such as the number of researchers and PhD students per million citizens and number of citations reflect the capacity and activeness of a country’s scientific environment. In terms of input indicators, the science systems in LDCs are characterized by relatively low aggregate government spending on R&D. Over the past twenty years, the spending on R&D in the least developed countries has remained significantly lower than the 1 percent of GDP level recommended by United Nations Educational, Scientific and Cultural Organization (UNESCO). For example, in 2018 least developed countries spent an average of 0.20 percent of their GDP on R&D, even below the 2015 level.³ While there has been considerable growth in scientific output of LDCs from 2000 to 2020, the growth rate observed in Organisation for Economic Co-operation and Development (OECD) countries is by far greater, widening the gap between LDCs and developed economies.⁴ This is an important measure that demonstrates the key role academic institutions and personnel can play in strengthening the scientific policy capacity of a country.

Applying the gender lens, women are still substantially underrepresented in science in the LDCs, a reality that is similar across developed and developing countries. For example, despite the job market having an increasing demand of the engineering skills globally, including in many LDCs, less than 2 percent of girls choose professions in the engineering field. Despite a shortage of skills in technologies that are driving the 4IR, women account for 28 percent of engineering graduates and 40 percent of graduates in computer science and informatics.⁵

Dedicated and coordinated actions on these two fronts can help set LDCs on a positive cycle of high growth, sustained social progress and beneficial integration into the world digital economy. To help address this challenge, the UN Technology Bank partnered with the International Centre for Genetic Engineering and Biotechnology (ICGEB) and The World Academy of Sciences (TWAS) to set up a Programme of Collaborations with LDCs (PACTs)⁶ aimed at strengthening biotech research capacity in the LDCs. The biotechnology programme awards fellowships to early-career scientists, particularly women from the LDCs.

From a policy formulation perspective, academies of science, or similar institutions, have long played a role in developed countries providing a platform for science and a discussion and debate on research. Acknowledging their importance, the UN Technology Bank has supported the establishment of such institutions in Angola, Democratic Republic of Congo, Lesotho and Malawi.⁷

Notably, the large diaspora from LDCs can play a positive role in providing impartial advice to their countries. Primarily viewed in economic terms, particularly remittance flows, the diaspora network can also become an advantage which can help a country to develop its knowledge-based economy. If LDCs can create STI ecosystems that are flexible and provide stability and opportunity, they can turn brain drain into brain circulation. This can see the repatriation and reinvestment of skills and knowledge back into the country from expatriates.

Technology and innovation

An element of technology that is gaining speed in many LDCs, particularly in Rwanda and Bangladesh, is digitalization. Countries such as Bhutan see it as key to expanding their economies through e-commerce. A recent study by the UN Technology Bank, undertaken in Bangladesh, Cambodia, Ethiopia and Senegal on the role of entrepreneurship development, found that ideas such as innovative financial models and strengthening internationalization of SMEs through novel models, such as soft-landing programs could be effective pathways towards more integrated and effective use of digitalization.⁸

Bangladesh is an example of such efforts as it has been growing substantially over the past 12 years with high levels of digital penetration. From the policy perspective, there is a focus on e-governance, and human resource development and infrastructure in information and communication technology. Technology has created significant job opportunities and five years ago the public sector established a startup ecosystem policy and academy. Bangladesh is now witnessing the emergence of about 200 new startups every year and significant academic and venture capital support, channeled through the Bangladeshi government.⁸ The country has seen US$350 million investment globally over the past few years and in the last 7 years startups have created 1.5 million jobs. In comparison, the garment industry has created 4.5 million jobs.¹⁰ This shift also aids the diversification of exports, and capacity building and decentralization is key to the objective of becoming an upper middle-income country by 2031.

Intellectual property protection plays a critical role in moulding and shaping digitization in LDCs. This requires a country to also engage with privacy and data protection. Through its capacity-building project in digital entrepreneurship and business development, the UN Technology Bank is supporting the LDCs in leveraging such capacities.

Technology transfer

The UN Technology Bank’s TNAs show that technology transfer is a major source of technological learning and upgrading in LDCs. Technology transfer is a key aspect of the UN Technology Bank mandate. It is the process of conveying results stemming from scientific and technological research to the marketplace and to wider society, along with associated skills and procedures. It is at the heart of the process of translating technological innovation into economic growth. Without it, LDCs can become locked into a cycle of dependency. However, for the technology transfer to become effective, local absorptive capacity is important. This is why technologies that are successfully transferred but that are not met with sufficient practical infrastructure and logistics, legal and regulatory support and knowledge capacity fail to bring meaningful technological change in the local economy.

In response to COVID-19, the UN Technology Bank undertook a pilot of rapid technology transfer. In partnership with United Nations Development Program (UNDP), United Nations Conference on Trade and Development (UNCTAD) and World Health Organization (WHO), Technology Access Partnership (TAP) was established to support developing countries and LDCs to access, as well as utilize and circulate appropriate technologies to manufacture COVID-19 medical equipment and personal protective equipment (PPE). The initiative provided a proof of concept of technology transfer, where a technology holder provided a technology seeker with technology to produce N95 masks for the local and regional market.¹¹

When deployed thoughtfully and contextually, such efforts can be a powerful antidote to the cycle of technological dependency that can trap LDCs. One way technology can enhance trade in LDCs is through developed and developing countries providing incentives to enterprises and institutions in their territories which promote and encourage technology transfer to LDCs. This is called on by Article 66.2 of the TRIPS Agreement—to create sound and viable technological bases across the LDCs. With this said, successful transfer of technology in this regard has rarely yet yielded positive largescale outcomes. In this context of TAP, the technology holder not only provided the technology but complemented it with supporting the technology seeker with know-how and adapting the technology to meet the local needs and standards.

STI policy framework

While there is a lack of supporting and enforced legal systems, almost all the LDCs have a national legal framework for STI. For some countries, including Bangladesh, Benin, Burkina Faso, Democratic Republic of the Congo and Senegal, national laws are used to provide a framework for research and higher education. In the other cases, national decrees have been enacted for the creation of specific STI authorities or national research centres (e.g. Benin, Burundi, Senegal) to approve or adopt national policies, to finance or regulate IT equipment (e.g. Comoros), cyber security (e.g. Madagascar), to organize the research in different application areas (e.g. Senegal and Togo) or to ensure diploma recognition (e.g. Senegal). In a number of LDCs, STI-related national law(s) have been adopted. Malawi and Zambia have dedicated legal acts for their national science and technology framework. Bangladesh and Comoros have legal acts for their ICT/digital communication framework. Tanzania, Togo, Rwanda, Niger, Malawi and DRC suffer from a minimal interaction between academia and the industry, in part due to the absence of a legal framework to support the linkages between academia and industry.¹² Such weak linkages between academic institutions that undertake R&D and generate technology and innovation, and the government and industry is also a challenge in the LDCs.

Innovation gaining ground

Innovation and innovation systems in least developed countries are very different from that of developed countries. For instance, systems are more fragmented and often strongly dependent on the external support. Innovation in these contexts is frequently characterized as ‘frugal’ and ‘grassroots’. This is in part due to the high level of informality in LDC markets, which in turn has a complex relationship with innovation performance. On the one hand, it brings challenges regarding financial markets and regulating uncertainty and could make innovating processes and systems harder. On the other hand, actors in the informal economy demonstrate high levels of resilience and adaptability, particularly in the face of technological and economic shocks. This increases their agility and ability to innovate. Frugal innovation, or ‘doing more with less’ can be defined as a type of innovation which generates considerably more business and social value while significantly reducing the consumption of scarce resources. A recent study estimated that around 10 percent of innovations in developing and emerging countries can be classified as frugal innovation.¹³

To support innovation, the UN Technology Bank together with UNDP and private sector partners initiated the SDG Impact Accelerator (SDGia) program funded by the Turkish Ministry of Foreign Affairs. SDGia partners decided to focus on empowering impact entrepreneurs who can provide innovative solutions to address the challenges faced by low-income groups, mainly those who are displaced and the disadvantaged host communities in the LDCs. In 2021, the program focused on digital agriculture and financial inclusion in Uganda and Bangladesh respectively.

Where next for LDCs in STI

Although the situation in each LDC is unique and it is important not to generalize, there are still examples worth paying attention to where STI is acting as the key enabler in LDC development. The absence of STI prioritization can hinder development. Access to science, emphasis on building research capacity and international collaboration are value-adding, particularly in sectors such as digital, agriculture and manufacturing. Equally, the involvement of women in science and providing opportunities for them to advance is crucial. In relation to technology, we are seeing countries use the digitalization of e-governance and e-commerce to address and mitigate systemic issues in areas such as agriculture, manufacturing and health. In regards to innovation, it is valuable to highlight and encourage specific types of innovation such as frugal and grassroots innovation while also ensuring they are IP protected. The once in a decade conference for the LDCs presents an opportunity for the LDCs to define their transformative vision leveraging the power of STI to achieve SDGs and enable LDCs to graduate with momentum. After all, the idea of establishing a Technology Bank for LDCs was borne out of the Fourth UN Conference on LDCs, which took place in Istanbul, Turkey over a decade ago.

Mr. Kao is Programme Management Officer, Ms. Falomi is Associate Programme Management Officer, Ms. Sergeant is Programme Assistant and Ms. Cheng is Public Information Officer at the United Nations Technology Bank for the Least Development Countries.

Notes

1 OECD. 2019. “Connecting ODA and STI for inclusive development: measurement challenges from a DAC perspective.“  http://www.oecd.org/officialdocuments/publicdisplaydocumentpdf/?cote=DCD/DAC(2019)38&docLanguage=En      

2 UN Technology Bank for Least Developed Countries. 2021. “Technology Needs Assessments.” https://www.un.org/technologybank/technology-needs-assessments  

3 UNESCO. 2018. http://data.uis.unesco.org/Index.aspx?queryid=76#   

4 OECD. 2021. “OECD Main Science and Technology Indicators: Highlights on R&D expenditure”. https://www.oecd.org/sti/msti.htm#:~:text=OECD%20R%26D%20intensity%20(a%20headline,real%20GDP%20(%2D4.4%25) 

5 Schneegans, Susan, Tiff any Straza and Jake Lewis. 2021. “UNESCO Science Report: the Race Against Time for Smarter Development.” Paris: UNESCO Publishing.

6 UN Technology Bank for Least Developed Countries. 2021. “PACTs Programme for LDC Call for North-South Training.” https://www.un.org/technologybank/news/pacts-programme-for-ldcs-call-north-south-training  

7 UN Technology Bank for Least Developed Countries. 2022. https://www.un.org/technologybank/academies-of-sciences

8 UN Technology Bank, IDRC and Small Globe Inc. 2021. “Cultivating Small and Medium-Sized Firms: Entrepreneurship Development, Gender, and Technology in Bangladesh, Cambodia, Ethiopia and Senegal.” https://www.un.org/technologybank/sites/www.un.org.technologybank/files/cultivating_smes_report_2021.pdf   

9 Special session on Harnessing science, technology and innovation to support structural transformation and LDC graduation. 2021. https://www.un.org/technologybank/events/harnessing-science-technology-and-innovation-support-structural-transformation-and-ldc

10 ibid.

11 UN Technology Bank for Least Developed Countries. 2022. “UN agencies launch Tech Access Partnership in joint eff ort to scale up local production of life-saving health technologies for COVID-19”. https://www.un.org/technologybank/news/un-agencies-launch-tech-access-partnership-joint-effort-scale-local-production-life-saving

12 United Nations Technology Bank for Least Developed Countries. 2022. (Forthcoming). The state of science, technology and innovation in the least developed countries.

13 Ploeg, Matthias, Joris Knoben, Patrick Vermeulen, and Cees van Beers. 2021. “Rare gems or mundane practice? Resource constraints as drivers of frugal innovation”. Innovation: Organization and Management 23(1): 93–126. https://www.tandfonline.com/doi/full/10.1080/14479338.2020.1825089