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Bridging the research gap

Daniel F. Malkin is deputy manager for Education, Science and Technology in the IDB’s Sustainable Development Department. He previously served as head of the Science and Technology Policy Division of the Organization for Economic Cooperation and Development (OECD) Directorate for Science, Technology and Industry. He was responsible for “Education, Science and Technology in Latin America and the Caribbean: A Statistical Compendium of Indicators,” published by the IDB earlier this year. He recently spoke to IDBAmerica about some of the implications of this study.

IDBAmérica: You have pointed out that South Korea invests more in research and development (R&D) than all Latin American nations combined. Can the region really hope close such a huge gap in the foreseeable future?

Malkin: Indeed, in 2003 South Korea invested more than US$15 billion in R&D while all of Latin America spent around US$11 billion. This is the sort of figure that grabs people’s attention, and to some extent it is a relevant indicator. If you look at the ratio of total R&D expenditures to GDP, you see large and increasing gaps between Latin America and the more advanced countries that are continuing to step up their R&D investment. So I don’t think that the gap will be closed, but that should not be the main focus. The goal should be to ensure that efforts in both public and private investment are sufficient to really enhance the competitiveness of the economy and the well-being of your population.

Some countries reach that goal with less investment in R&D than others, depending on their economic structure. So the ratio gives you a reference point, but you should not always run after the leader, especially if you do not have the human capital that can efficiently use the R&D investment. Of course, if you have an objective, then you have a sense of direction. In the European Union, for example, they set the target of 3 percent some years ago. Now, people know that this objective may be unrealistic to achieve, but at least the target mobilized the public sector and the private sector. And you could do the same in Latin America, where there needs to be much more effort in this area.

IDBAmérica: Some people would argue that countries that are still trying to solve serious deficits in basic education and public services can ill afford to spend money on science and technology. Do you agree?

Malkin: I would qualify this question, because when we talk about investing in science and technology, do we mean investing in rocket science and gene splicing? We know that some countries cannot and should not invest in those sorts of very advanced scientific activities, so we should not be talking only about top-level science. We should also be talking about investing in basic technology infrastructure, such as the certification of products or the adoption of international standards. You cannot compete if your standards do not allow you to send your products globally.

For some countries, higher-level science investments might make sense. In Argentina, for instance, the Bank just approved a loan for a satellite project. This country has the capacity to develop satellites and use them for relevant economic applications such as earth observations for agriculture. The poorer countries, on the other hand, should invest in basic technologies that will give them a competitive advantage. For example, some of the region’s countries have textile producers that are now competing with China and the Far East. And there are technology-related investments they can make to upgrade quality of products, diversify production lines, lower costs and expand the scope of the products they are exporting.

Finally, many countries should also invest in human capital in order for them to be in the position to absorb technology that is produced elsewhere and to attract more technology-intensive foreign investment. This is very important, and it brings you back to investments in basic education.

IDBAmérica: Some Latin American countries spend large percentages of their education budget on university systems that benefit a proportionately small number of students. Would they be better off spending this money on primary and secondary education?

Malkin: In some countries, it so happens that the best higher education is provided by public universities that are free. And to enter these universities you have to have qualifications that generally only the richer populations have. So the richest students go to the free universities, and the poorer students, who maybe are less prepared, often have to pay to go to private universities. Some countries have implemented reforms to facilitate the access of low-income students through loans or scholarships. You have to ensure that the higher education system trains people for your economy, and that it does not have biases that prevent qualified low-income people from entering the system.

In other cases, post-secondary technical education is what needs to be improved and developed. Because one of the complaints of multinational corporations that would like to invest in these countries is the lack of qualified manpower, and not just at the top of the spectrum: I mean technicians, people who have two or three years of training after secondary school. And there is a deeper problem, which is that secondary schools in many countries do not prepare students adequately for post-secondary education. So the overall quality of the education system is the root issue.

IDBAmérica: In Asian countries, many politicians have earned public support by prioritizing technological development and competitiveness, but you rarely see a Latin American politician taking up this cause. Why do you think this is so?

Malkin: One reason is that people in these Asian countries notice the change that technology has produced in their lives. Korea, for example, is the most connected country in the world, so people have a really personal perception of what technology does for them.

Second, in these countries they also understand that innovation and technology is what has made them competitive in the global economy. In a country like Chile, there seems to be a consensus about the importance of technology in fostering economic growth. And even if its overall expenditures on research and development remain comparatively low, Chile has an innovation system that is performing. You can see the results in sectors such as aquaculture and fruit production that have benefited from biotechnology—which shows, by the way, that new technology can be applied to “old” sectors such as agriculture. This may facilitate a consensus to increase R&D efforts as has happened in countries like Finland or Korea.

But we have to remember than in many Latin American countries other issues have higher priority, because there are problems that catch the attention of the voters more than technology policy. Even if people personally think technology is important, that is not how they are going to evaluate politicians if basic social problems are still unresolved. But in fact investment in knowledge is an efficient means to bridge the apparent divide between the social and economic aspects of development. Investment in IT technologies provides a clear example of that because of their pervasive effects both in the economic and social spheres.

IDBAmérica: Efforts to forge closer links between industries and research departments in Latin American universities have sometimes been resisted by academics, who argue that such efforts threaten their cherished academic autonomy. How do you counter such views?

Malkin: First of all, this is not a purely Latin American issue. It’s also pervasive in some European countries. This is related to the fact that the resources devoted to science and R&D in Latin America are small, and the bulk of these resources are spent by public research institutions, including to a large extent universities. And the fear that since the funding pie is so small, any change will mean that resources will be diverted from the universities to “more productive use” at the expense of so called basis research favored by academics.

How to address this? One way is to provide incentives to collaboration between universities and the private sector. Scientists in universities are like you and me: they tend to respond to incentives. And if they see that they can do good biology or physics or chemistry in a partnership with private researchers, they will do it. In Brazil and Argentina, a growing percentage of public money is going to finance long-term collaboration between these types of institutions. The key in these cases is good governance: you need a clear and consistent way of handling issues such as intellectual property rights, so you don’t have conflicts over who benefits from a collaborative research project.

IDBAmérica: During his recent appearance at the IDB, Bill Clinton said that he thinks Latin America can become a world leader in the development of biofuels and clean energy technologies. Do you agree, and what do you think needs to happen in order for the region to exert that kind of leadership?

Malkin: I would go even farther than that, because this is already happening. Brazil is already among the world leaders in biofuels, and not only because it has a huge production of the raw materials that can be turned into biofuels, but because Brazil invested for more than 15 years in the chemistry and the biotechnology required for efficient production of ethanol. This is tied to all sorts of incentives: they have provided public money for research on the supply side, and on the demand side they created incentives for the automobile industry to produce flex-fuel vehicles.

So to answer your question, this shows that if the resources are there, if the development of human capital to develop these new technologies is fostered, and if the government organizes its incentives properly, this can work. And I would say that Brazil is currently a center of excellence on a world scale for the production of biofuels. Now the question is to what extent other countries that produce sugar cane or other raw materials can adopt technologies developed in Brazil, or the United States or other countries.

The capacity of a country to acquire or absorb technology produced somewhere else is of vital importance, and it comes back to the questions of education and human capital that we discussed earlier. There are too many examples of technology being taken to countries where it was left to rot, because skilled human resources is simply not there to maintain it.

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