INNOVATION AND INEQUALITIES: IS THERE

A TRADE OFF?

International Conference on

Innovation for Inclusive Development

Cape Town 21 November 2012

Michael Kahn

CREST, Stellenbosch University, Matieland 7602, South

Africa

mikejkahn@gmail.com

How does innovation policy develop frontier

sectors and activities? Do these approaches

increase performance gaps across firms?

Does policy foster dissemination and

innovation performance of laggard

businesses? Do policies target the informal

sector?

Are social issues and inequalities part of

national innovation agendas?

The quest for inclusive innovation: this

session

A set of small agriculture-based colonies on the

periphery

Minority hegemony: exclusion accelerated by mining-

led industrialization from 1870s.

Two wars then 1910 Union : The Crown wins the

economy; Afrikaners win the peace; Africans lose the

land

Apartheid, industrial diversification, self sufficiency

Small system of innovation responsive to crisis

signals;

1963-1987 SA 1744 US patents; Korea 322.

Context is

everything

Employment in Mining

Employment in Agriculture

Mechanization in Agriculture

Who’s in and who’s out?

Pre 1994 social contract between S&T and

society

Linear model: „Research cannot be dictated

and organized from above; it must grow from

within the organization‟ supply side

science push

S&T for the warfare state

Freedom to do basic research – an „own

affair‟

Journal subsidy

Researcher rating scheme

High barrier of entry to the Republic of Science

School science & mathematics restricts supply

An excluding system of innovation?

End of isolation; globalization; accession to

WTO

Member G-20; BRICS April 2011

Modernization and redress: doing all the rights

things

Open economy; 40% JSE foreign owned

#1 financial market development

Exports: Minerals and commodities >60%

#133 primary education

Middle income trap? Binding constraints?

Innovation system approach + supply side

policy

Toward the rainbow

Nation

The Brand Trek

8

Infectious diseases, internationalization and

impact

United States

China

UnitedKingdom

Japan

Germany

France

Canada

Italy

Spain

India

Australia

Korea

Netherlands

Russian Federation

Brazil

Switzerland

Sweden

Poland

Turkey

Belgium

Israel

Austria

Denmark

Greece

Finland

Mexico

Czech Republic

Norway

Portugal

New Zealand

South Africa

Hungary

Ireland

Chile

Slovak Republic

Slovenia

Estonia

Indonesia

Iceland

Luxembourg

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

2.0

0 10 20 30 40 50 60 70 80

Normalised Impact

International collaboration among institutions (%)

Number of articles

50 000 articles

100 000 articles

500 000 articles

BRIICSNorth AmericaEU27Other OECD members

World

Source: OECD Science, Technology and Industry Scoreboard 2011.

Big science

“Joule” electric car Karoo Array

Telescope

S A Large Telescope

Pebble Bed Modular

Reactor

http://ska.ac.za/index.php

A new social contract between science and

society?

Major player in Africa; Higher Education hub of

SSA

Massive demographic change in government

sector

„Own affair‟ science continues

Journal subsidy; rating individuals

+ New supply side instruments

+ Research Chairs Initiative

Science systems take long to build; may often

seem to function in ways that are self-serving

(Nelson, 2003)

Census 2011: a glass half full?

Formal dwelling occupancy up from 68% (2001) to

78%

Access to clean water now 91%

Electricity for lighting now 85%

Adult population with schooling now 91%

Adults with higher education now 11% (2001= 8%).

Household incomes increased quicker than CPI -

White incomes increase half as fast as Africans so

gross racial inequalities gradually reduced.

Social safety net with16 million beneficiaries

The Dutch brought Malay slaves to the Cape

……

0

1000

2000

3000

4000

5000

6000

1960 1970 1980 1990 2000 2010

Malaysia

South Africa

0.4

5

0.5

9

GDP/capita USD current 2000 prices

Gini

Fagerberg; et al (2007): innovative activity rests on

technological competitiveness, capacity to exploit

technology and price competitiveness. Unfavourable

export structure, geography, nature, & climate retard

growth.

Kaplinsky (2011): innovation reduces poverty through

growth, use of capital and labour, environmental

spillovers, and enhanced technological capability

Acemoglu, Johnson, Robinson (2000): differences in

institutions account for ¾ of the variation in

economic performance of former colonies. Nature and

geography marginal. „Good‟ institutions enable

industrialization.

OECD STI Outlook (2012): institutional conditions for

What drives growth? What are the trade

offs?

Innovation System 1.1

CRITICAL JUNCTURE: CHRISTIAN

NATIONALISM

DIRIGISTE LAISSEZ FAIRE

Developmental State II

Evolving inclusive polity

Developmental State I

Extractive polity

Extractive economic

institutions

Extractive economic

institutions

WARFARE

STATE

WELFARE

STATE

MINING

OLIGOPOLI

ES

TNCs

DIVERSIFICATIO

N CRITICAL JUNCTURE: CONSTITUTIONAL

DEMOCRACY

CRITICAL JUNCTURE: UNION OF SOUTH

AFRICA

Innovation System 1.0

So where

to?

A new social contract: Vision for 2030

• Redress the injustices of the past effectively

• Faster economic growth, higher investment &

employment

• Improve education, health and social protection

• Strengthen links between economic and social

strategies

• Effective and capable government

• Collaboration between the private and public

sectors

From passive citizenry receiving services from the

state to systematically include the socially and

economically excluded, where people are active

champions of their own development

Innovation policy for inclusion

S&T key to development - innovation the primary

driver of technological growth

Investment climate - incentive structures

Encourage R&D; increase size and effectiveness

of the innovation system; closer alignment with

companies that operate in sectors consistent with

the growth strategy

Massive investments in infrastructure

Shift toward a low carbon economy

National Council on Science and Innovation (NCRI)

for DEMAND SIDE prioritization and agenda setting

COORDINATION through the Research and

Innovation Vote

FINANCING via Sectoral Funds based on resource

rents

Office of Research and Innovation Policy to replace

NACI and support NCRI with tools for POLICY

LEARNING

Build and reward RESEARCH GROUPS

Prioritize SOCIAL DEVELOPMENT AND

INNOVATION

Ministerial Review of the STI

Landscape

The long walk to freedom