Technology+Diffusion+&+Adaptation

Introduction
Absorbing and adapting preexisting and new-to-the-market or new-to-the-firm technologies, may be a necessary condition for a developing country to create R&D capacity and subsequently be able to commercialize the results of R&D to produce new businesses, products and services to address national needs.

 “The capacity to absorb and diffuse existing knowledge is at least as important as the capacity to produce new knowledge….Innovation more frequently entails building the capacity to use technologies that are in widespread use elsewhere but that are new to the country, new to the firm, or used in new ways. To facilitate this type of innovation, countries must build the capacity to find, absorb and use these technologies.”

 Watkins and Ehst, Science, **Technology and Innovation: Capacity Building for Sustainable Growth and Poverty Reduction**, World Bank, 2008, available at [], P. 7.

Technology Absorption by Innovative SMEs
@http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2012/06/20/000425970_20120620142841/Rendered/PDF/699500ESW0P10800proceedings10final..pdf

Improving the absorptive capability of countries – their ability to tap into the global technology pool – is an important mechanism for accelerating industrial development, raising productivity of workers, and raising economic growth. Trade flows, foreign direct investment (FDI), research and development (R&D), intellectual property rights (IPRs) (e.g. patents, licensing), and labor mobility and training are key elements for knowledge absorption. Yet the speed and success of this absorption process hinges crucially on having a favorable investment climate along with solid national education and innovation

systems. A favorable environment for private sector development can be enhanced at the regional level, as in the case of the industrial districts in Italy, where enough of these enabling factors are present.

These proceedings provide a précis of the main issues and conclusions presented at the Forum by an outstanding group of academics, practitioners, and policymakers.2 It also encapsulates the key results of the ECAKE II Report on the role of trade, FDI and IPRs in promoting economic growth. It reviews the Italian industrial cluster experience that occupied center-stage at the Forum and discusses the replicability of this success story in the context of ECA countries, and draws lessons for technology absorption by innovative small and medium enterprises.

Global Economic Prospects 2008 Science and Technology Diffusion in the Developing World
@http://siteresources.worldbank.org/INTGEP2008/Resources/complete-report.pdf

Studies show that the bulk of technological progress in developing countries has been the absorption and adaption of preexisting but new-to-the-country or new-to-the-firm technologies, rather than the invention of new-to-the-world technologies.The World Bank report Global Economic Prospects 2008 Science and Technology discusses diffusion in depth. Advice given to most developing countries and sectors is that R&D should focus on the adoption and adaptation of preexisting technologies, not on efforts to expand the global technological frontier. The transition from such technology diffusion to technology commercialization, or indeed the relevance of technology commercialization for developing countries is less understood.

===Technology, Adaptation, and Exports - How Some Developing Countries Got It Right. Edited by Vandana Chandra and Shashi Kolavalli, the World Bank, 2006. ===



"THE HISTORY OF ECONOMIC DEVELOPMENT IS replete with cases in which governments have tried unsuccessfully to promote the use of new technologies to accelerate growth. The many reasons for failure include bad luck, poor governance, flawed policy design, and weak implementation. That said, developing-country policy makers must continue to look for innovative ways to increase economic growth, especially through exports. The challenges they face are daunting, not least because global competition is rising and taking new forms, driven by rapid technological change and the growth of global production networks in which sophisticated skills and capabilities are required at the entry level, even for manufactured goods as simple as T-shirts. At the same time, it is easier than ever before to gain access to technology. Knowledge of new production techniques—often bundled with financial, management, and technical skills—is carried across national boundaries to be paired with natural resources and local factor markets in new global production centers. For many developing countries, especially low-income ones, easier access to technology offers renewed hope for improving competitiveness and growth. To realize that hope, however, countries must become able to apply the new technologies. In this task, the developing countries are not alone. The government of almost every country that has experienced significant, sustained growth has been involved in a major way in promoting technological development and in supporting the private sector in the quest to improve productivity. This volume studies 10 cases of developing countries that successfully adapted new technologies to catch up with developed countries in a particular industry."

 See also The "how to" of **Catching up in Technological Adaption - lessons from 10 successful cases** Vandana Chandra. The World Bank, 2005 []

Cases from India (from maize to poultry, wine, software IT), Chile (table grapes to wine, salmon farming and processing), Uganda (Nile perch), Kenya (cut flowers), Malaysia (oil palm to oleo chemicals), Taiwan (high-end electronics), and Malaysia (low-end electronics),

 We may look at the above question from another perspective: The role of Design and Development - D+D (versus Research and Development - R&D) in the context of Technological Innovation. Conventionally, and for a long time R&D has been under attention (due to variety of reasons), and the role of D+D has not been sufficiently appreciated. The D+D activities embraces a variety of activities such as absorption and adaptation of technologies, as well as Forward and Reverse Design. By combining the R&D and D+D we will have a more comprehensive model for technological innovation.

 In the context of the new model for technological innovation, it would be possible to have a better understanding on the role of R&D versus D+D activities for the different types of industries and in the different countries. A case serves as an example: IDEO which a very successful and innovative company in the Silicon Valley, is NOT an R&D company, it is a Design company.

Notes
> > [comment contributed by SJ unedited] One of the most important outcomes of globalization in regards to developing countries is promotion of the innovation. This process is supported by tremendous, ongoing technological and scientific progress that takes place in developed countries, gradually replacing product based society with knowledge based society. > > The socio-political environment in developing countries differs profoundly from the environment in developed countries. The former face some obstacles, or better said show a significant amount of incompetence in promoting and/or adopting/adapting innovation. By innovation is not understood only technology innovation or invention, but business innovation as well, new approaches to marketing, management or supply chain. The obstacles originate from inadequate education system, poor business conditions, undeveloped infrastructure, no relation between the universities and industry, improper government polices. However it is not about the formal set of regulations, but their implementation in practice. In most of the cases the implementation is the weakest link in the value chain. Behind this general and simplified approach the detailed picture is much more complicated. The innovation landscape in developing countries is burden by differences in cultural and historical heritage, level of the development, mentality of the people etc. Hence, the innovation policies have to be customized to country specific or region specific conditions. > > <span style="font-family: Arial,Helvetica,sans-serif;">One common attribute of majority of low income countries is lack of technology infrastructure. Consequentially, the main concern of the innovation policies should be development of technology infrastructure. The other peculiarity associated with developing countries is indigenous knowledge. It is a non written, non documented knowledge, in possession of local communities, usually related to some traditional healing or agriculture methods. However this knowledge is very important for local population and it has to be used as a basis for creating innovations. Talking about innovations in developing countries, one has to clarify that the innovations have to be designed according to the needs of the people who live there and has to add value to their lives. By no meaning they have to be compared with the innovations invented in developed world, since the standard of living is very different. Thus, it should be something new or some improvement in local context. > > The other point is whether the experience and/or model of transferring scientific solutions into business practice from the technologically more advanced countries can be mapped to the less developed ones. For instance knowledge advanced countries are characterized by strong IP protection policy. Would this type of policy if applied in a country with few innovations resources and limited infrastructure rather foster or hinder the innovation climate? The IP policy could be an instrument to protect the rights of the inventor and those who share the endeavor with him/her, and acts as perk of working for the companies who compete in innovations abundant landscape, but for the countries where the innovations are rare its role would be definitely opposite. Open innovation model would fit better to the developing countries' environment, since it offers collaboration, open network and support to those who focus their effort in enhancing the awareness of the importance of the innovation in the economical development of the country. >
 * 1) <span style="font-family: Arial,Helvetica,sans-serif;">Balancing limited resources between supporting both diffusion and commercialization to achieve outcomes superior to those of diffusion alone – in the short and long term.
 * 2) <span style="font-family: Arial,Helvetica,sans-serif;">Experience of developing countries with open innovation and open business models in supporting and extending technology absorption and adaptation.
 * 3) <span style="font-family: Arial,Helvetica,sans-serif;">Forward versus Reverse Design

Open Innovation: A Key to Achieving Socioeconomic Evolution • 3 How Smaller Companies Can Benefit from Open Innovation
Henry Chesbrough Economy, Culture & History JAPAN SPOTLIGHT Bimonthly []

How should SMEs address the opportunities and risks posed by open innovation? SMEs have some structural disadvantages when it comes to open innovation. They often lack many of the capabilities necessary to identify, transfer and absorb external ideas and technologies effectively from outside into their firms.

Technology Absorption by Innovative SMEs


F. Montes-Negret Director, Private and Financial Sector Europe and Central Asia, The World Bank
 * Globalization has been a main driver of technological progress
 * The technology gap between rich and poor countries has narrowed -- but remains large
 * Progress in developing countries reflects the absorption of pre-existing technologies – not at-the-frontier inventions
 * Technology diffusion across countries has picked up, but diffusion within countries remains slow and penetration rates uneven
 * Persistent weakness in technological absorptive capacity may constrain further technological progress

Fostering Accelerated Technology Absorption for Affordable Health, Agriculture, Energy and Environmental Products
Potential for affordable solutions in agriculture, health care and environment improvement []