Cover Image
close this bookBiodiversity Prospecting - A World Resources Institute Book (WRI, 1993, 352 pages)
close this folderVII. Policy Options for Scientific and Technological Capacity-Building
View the document(introduction...)
View the documentNational Innovation Policy and Biodiversity
View the documentLinking Biotechnology to Biodiversity
View the documentBiotechnology Transfer
View the documentTechnology Assessment
View the documentBlind Alleys and Windows of Opportunity
View the documentNotes
View the documentBibliography

National Innovation Policy and Biodiversity

Since colonial days, the global economic system and the national policies of developing countries have promoted the export of raw materials to the industrialized countries for processing. But over the last three decades, returns from the export of raw materials have dropped as technology has changed and production and utilization efficiency increased. Biotechnology itself may make a wide range of raw material exports from developing countries redundant (Sasson, 1992).

Increasingly, developing countries are emphasizing downstream processing as a way of adding value to their exports. Thanks to such policies, machinery imports have been high and local industrial production and employment have grown. Indeed, much of the technological development in the developing countries has been associated with the acquisition of the equipment and machinery needed to extract raw materials. But most new plants have added little to national technological capacity. Experience has given the lie to the assumption that if machinery is installed, technological competence will automatically follow.

Biodiversity offers developing countries unique opportunities for linking the use of a raw material with technological innovation, not simply industrial production. Biotechnology is knowledge-intensive and developing it need not involve the massive transfer of mechanical equipment. The right technology policy can help developing countries capture future returns in both the pharmaceutical and agriculture industries while increasing local technological capacity. By empowering local people to know, use, and conserve biological resources, it can increase meaningful participation in the management and development of genetic resources.

Whatever superficial resemblances the technology policies adopted by various countries have, their underlying differences have enormous significance, especially with respect to international trade and competitiveness. The United States, for instance, emphasizes basic science, health, energy, agriculture, and defense. Japan and the Newly Industrializing Countries (NICs) of the Pacific Rim, on the other hand, tend to take a systems approach with a strong bias toward industrial research and development (R&D); then focus research and commercial activities on local and regional markets (OTA, 1991). Such differences in scientific and technological capability, industrial potential, as well as political and economic ideology, must be taken into account when examining the relevance and transferability of technology strategy to developing countries.

Technology policy measures came of age in the industrialized market-economy countries in the 1960s, when the role of science and technology in the growth of the U.S. economy over the previous 50 years became clear. In the Keynesian tradition, government intervention was considered necessary to compensate for factors inhibiting technological progress. Market and institutional imperfections that distorted the rate and direction of investment in R&D represented one such factor. The failure of firms to translate research findings into applicable technology was another. This failure largely arose from the weak linkages which existed between universities, research and other academic organizations, on the one hand, and industry on the other. This feature is still prevalent in developing countries (Pavitt, 1987; Ghai, 1974). In addition, risk, uncertainty, and the high costs of R&D were in some cases reducing the rate of investment, shifting research toward short-term goals, and reducing the social benefits of R&D. Policy-makers thus began to view government intervention as requisite to maximizing the social gains of R&D.

Against this backdrop, technology policy in the industrialized countries has followed three paths. The Japanese model is one. The role of Japan's Ministry of International Trade and Industry (MITI), which has been studied in depth (Johnson, 1982; Okimoto, 1989), has been to promote technological innovation as a tool for international competitiveness, not to simply promote trade in the context of comparative advantage. Japan's approach has been systemic from the beginning. MITI virtually ignored conventional economic theory and from the start adopted the practical goal of backing the most advanced technologies with the widest possible world market.

Another approach, adopted by the United States, has been to enhance international competitiveness through selective policy measures and government funding for new technologies. Specifically, government procures technologies at the early stages of their development. This approach was used extensively to develop the U.S. electronics industry and stimulate military technology. Other countries, especially in Europe, promoted innovation in renewable energy technology in the 1980s through public procurement.

The third approach to technology policy involves less direct financial support for innovation. Tax credits have been used in countries such as Japan, Canada, United States, and elsewhere to stimulate and promote innovation. In most industrialized countries, grants, risk-sharing investment, and loans are also used. In addition, a number of these countries provide special support to small and medium-size firms.

All of these approaches are currently being supplemented by policies and investments focusing on specific sectors and by international collaborative arrangements. The European Research Coordination Agency (EUREKA), launched in 1985, brings together industry, university, and government researchers working in market-oriented information technologies in a bid to compete against the United States and Japan. Other collaborative research measures include the Programme for Basic Research in Industrial Technologies for Europe (BRITE), the European Strategic Programme of Research and Development in Information Technologies (ESPIRIT), and the European Technological Community, approved by the European Economic Community in June 1985.

In some countries, including Japan, France, and Italy, technology policy furthers broad national development strategies. In others, such as Germany, Denmark, and the Netherlands, the technology policy goal is to create a suitable environment for economic change and international competitiveness. Few countries have integrated technology policies fully into national plans, but this may be changing. Countries such as the Netherlands are already starting to review the role of science and technology in sustainable development, set up a wide range of consultative and co-ordinating procedures along with institutions within government and industry, and introduce new institutional measures to create and galvanize links between industry and government. What remains conspicuously lacking, however, is any attempt to make industrial policies sensitive to environmental concerns.

Unlike their industrial counterparts, developing countries' technology policies have emphasized technology acquisition rather than technological innovation. This fourth approach has led to efforts to tie the transfer and acquisition of biotechnology to the exploration of and access to biodiversity. A few developing countries have also introduced fiscal incentives. For example. South Korea, Singapore, Malaysia, Mexico, and Peru all promote technological development through tax incentives. But the most common stimulus to technological growth in developing countries is direct financial assistance. Singapore, for example, has experimented with a number of R&D and product development schemes in the last 10 years that include direct financing.

In general, most developing countries have yet to come up with effective policies for technological development, and the few that have them haven't administered or managed them well. A case in point is Ethiopia, which worked hard to develop a comprehensive policy framework on science and technology only to have its implementation compromised by the internecine wars raging there and the related lack of funds allocated to science and technology activities.

Given the status and nature of technology policies in developing countries, it's not surprising that biodiversity prospecting is not yet seen as an integral part of technological development. Laws and institutions dealing with biodiversity have so far been based on conservation imperatives, and the economic value of these resources has been all but ignored. Agencies targeting biodiversity are being established in many countries, but most are adjuncts of environmental agencies or natural history institutions with scant experience in product development. Without significant policy changes, biodiversity and its potential for technological development will simply be exported to the developed world, retracing the flows of raw materials during colonial days. The result will be destruction of habitat, limited or inefficient development of resources, and unfair distribution of resulting benefits.