National Technology Capability

International Conference on Education, Research and Innovation, Madrid, Spain on 16-18 November, 2009

MANAGEMENT STRATEGY TO DEVELOP NATIONAL TECHNOLOGY CAPABILITY Vuyani Lingela Department of Science and Technology, Private Bag X 894, Pretoria 0001 South Africa [email protected]

Abstract The objective of this paper was to use only three variables to develop a quantitative model to determine and benchmark the level of national technology capability (NTC) internationally. This paper achieved its objectives by developing and applying the new NTC model to determine and compare the following three aspects, between 33 OECD member and non-member countries presented in this paper: the level of efficiency in the national system of knowledge production; the level of efficiency in technology development; and the level of national technology capability. This paper also verified the relevance of the NTC as an analytical tool to determine and benchmark the levels of NTC internationally by determining the relationship between the size of national economies (gross domestic product) and their levels of technology capability (percentage). The purpose of this test was not to establish a causal relationship between the level of NTC and the size of the economy. The results suggest a very strong and statistically significant relationship between the levels of technology capability and the size of the national economies. These results indicate that countries such as Japan and Germany, which have attained the highest levels on NTC, are also enjoying the highest levels of economic prosperity (GDP). Another aspect observed from these results is that countries such as Netherlands, Italy, Chinese Taipei, Korea and France, which have about the same or smaller populations as South Africa, have achieved greater levels of technology capability compared to South Africa. These countries have also achieved greater economic prosperity compared to South Africa in 2005. On the other hand, the results suggested that countries that have low levels of technology capability tend to have small economies. These results also presented a unique set of countries such as Russia, Mexico and Spain, which have relatively large economies but have low levels of technology capability. The findings presented in the existing body of literature validated the results presented in this paper. Although this paper focused on 33 countries whose data is available in the public domain, the methodology introduced in this paper can be applied at different institutional levels within a country or between different countries. For example, the NTC can be applied to determine and compare levels of technology capability between different research institutions, universities and companies within a country or between different countries. Governments, research institutions, universities and companies within a country or between different countries can also apply the NTC model to develop strategic national or international partnerships for mutual benefit. Keywords - National technology capability, knowledge production, technology development.

1

INTRODUCTION

Knowledge production is one of the most important drivers of the global knowledge economy and remains a decisive factor limiting developing economies to rise above their socio-economic challenges to take advantage of the opportunities presented by national and global markets. The importance of an efficient national system of knowledge production is characterised by the gradual shift in the structure of the global economy from labour intensive, resource based economies to knowledge intensive, and service based economies. In practical terms, this shift is characterised by the prevailing global trend characterised by the declining importance of agriculture and resource based sectors (e.g. mining and manufacturing) in the gross domestic product (GDP) of many countries and the increasing importance of the service sector in the GDP [13]. Together with knowledge production, technology development is one of the most important drivers of the global knowledge economy and remains a decisive factor for the growing digital divide between developed and developing economies. The UNDP [18] argues that even though high-tech start-ups

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International Conference on Education, Research and Innovation, Madrid, Spain on 16-18 November, 2009

have thrived on venture capital in the United States, there is little prospect of such financing in many developing countries, where even basic financial services are underdeveloped. Further, the UNDP states that the heart of the problem is that technology may be both a tool for development and a means for competitive advantage in the global economy. The dramatic increase in the number of patent applications filed by residents of industrialised and newly industrialised countries to patent offices internationally explains the importance of technology development in the global economy. One of the most important characteristic features of developing countries is the low number of technologies developed using their national scientific and engineering workforce [14]. Technology acquisition involves significant resource costs and requires the active participation of both the transferor and transferee [8; 11]. When acquiring new technologies, countries or firms with low technology capabilities would have to devote substantial resources to assimilate, adapt and integrate acquired technologies into their production systems [4]. Countries with higher technology capability will require fewer human, technical and financial resources to acquire the same technologies. This explains why it remains difficult to replicate knowledge and technologies between firms and countries that have attained different levels of technology capability and economic prosperity. Explaining the importance of the national technology capability for technology transfer, Archibugi and Michie [1] make known that no technology transfer can be effective without an endogenous effort to acquire that knowledge. They explain that even if leading nations were willing to share their knowledge or expertise with catching-up countries, the latter would still have to devote substantial energies to attempt to assimilate it, including the development of their own endogenous scientific and technological capabilities. Odagiri and Goto [12] show that the presence of engineers and entrepreneurs who were willing to take risks and sustain efforts under adversity as well as the general ability of engineers to absorb foreign technology and the ability of workers to absorb new production processes account for some of the key factors that facilitated industrialization in Japan. Articulating the need for new and improved indicators of technological capability, Archibugi and Coco [3] state that governments, policy makers, analysts and academic researchers need indicators of technological capability to understand economic and social transformation. Governments need this information to contextualise the performance of their country in relation to the performance of their development partners and competitors. They caution that no single number that can provide comprehensive information on the entire technological capability of a country. Businesses for example base their international trade and investment decisions on technical and other factor conditions in different countries. Even though it is taken for granted that technological capabilities are a fundamental component for achieving a satisfactory quality of life of higher incomes, Archibugi and Coco [2] insist that the role of technological capability in social and economic development should be conceptualised and quantified. Archibugi and Coco [2] developed a new aggregate indicator of technological capability known as the Technological Capabilities Index (ArCo) to measure the levels of national technological capability. The ArCo is building on existing international body of knowledge for measuring national levels of technological capabilities, namely: the World Economic Forum Technology Index [22; 7], the United Nations Development Program (UNDP) Technology Achievement Index [18; 6]), the United Nations Industrial Development Organization (UNIDO) Industrial Development Scoreboard [19], and the RAND Corporation Science and Technology Capacity Index [20; 21]. It is in this context that this paper introduces a new quantitative model using a limited number of variables and a strategic framework to determine and manage the levels of national technology capability (NTC). This paper defines NTC as the collective ability of the scientific, technical, engineering and managerial workforce in a country to use their skills, national resources and leverage international resources to acquire and create technologies for the production of goods and services to meet national and global market needs. Applying the new NTC model and the strategic framework, this paper aims to determine and establish international comparison on the following three aspects: the level of efficiency in the national system of knowledge production; the level of efficiency in the national system of technology development; and the level of national technology capability. The purpose of this paper is to introduce a quantitative model to determine and benchmark the level of NTC internationally. Unlike most indices, the NTC model introduced in this paper uses only three variables, compared to 8 or more variables used in each of the following indices: World Economic Forum Technology Index [22]; UNDP Technology Achievement Index [18], Technological Capabilities Index (ArCo) [2]; UNIDO Industrial Development Scoreboard [19]; and the RAND Corporation Science

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International Conference on Education, Research and Innovation, Madrid, Spain on 16-18 November, 2009

and Technology Capacity [20; 21]. Based on the new NTC model, this paper introduces a new framework representing strategies for countries to manage their technology capability.

2

DATA AND METHODS

This paper uses the following three variables: the number of patent applications filed by residents to the United States Patent and Trademark Office (USPTO); the number of papers published by residents in journals accredited by Thomson Reuters; and the number of researchers per million of population in a country. This paper uses the number of patents as a proxy to measure the national level of technology development. The number of patents is also included in all five indices mentioned above. The number of scientific publications is used in this paper as a proxy to measure the national level of knowledge production. Out of five indices, The ArCo and the RAND Corporation Science and Technology Capacity are the only indices where scientific publications are included. The number of researchers is used in this paper as a proxy to measure the national level of human resource development in science and technology (S&T). Out of five indices, the RAND Corporation Science and Technology Capacity is the only index where the number of researchers is included. The unique feature of this paper is that it transforms well-known and readily available indicators of knowledge production (publications), technology development (patents) and human resource development in science and technology (researchers) into a new indicator representing the level of NTC. The limited number of variables used in the NTC model introduced in this paper can significantly minimise data transaction and management costs. This paper applies data obtained from the Main Science and Technology Indicators database published by the OECD in May 2009 [15]. Corresponding data on the number of researchers in South Africa in 2006, which was missing in the OECD database, was obtained from the 2006/07 National Survey of Research and Experimental Development published by the Department of Science and Technology in 2008 [5]. This paper also applies recent data obtained from the National Science Indicators published by Thomson Reuters [17].

2.1

Strategic framework to manage National Technology Capability

This paper introduces a strategic framework, in Fig. 1, to manage national technology capability (NTC) based on the following two dimensions: the average number of researchers per scientific publication; and the average number of researchers per patent application filed. Countries that have low numbers of researchers per million of population both per scientific publication and per patent application filed represent countries that have both high efficiency of knowledge production and technology development. Such countries have high levels of technology capability. On the other hand, countries that have high numbers of researchers per million of population per scientific publication and per patent application filed represent countries have low efficiency of knowledge production and technology development. Such countries have low levels of technology capability.

per scientific publication

Number of researchers

Number of researchers per patent application filed High

Low

Low

High Level of scientific Capacity/Low Level of Technical Capacity (Technology Chasm)

High Level of National Technology Capability

High

Low Level of National Technology Capability

High Level of Technical Capacity/Low Level of Scientific Capacity (Reverse Engineering)

Fig. 1. Management strategy for NTC

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International Conference on Education, Research and Innovation, Madrid, Spain on 16-18 November, 2009

Countries that have low numbers of researchers per million of population per scientific publication and high number of researchers per million of population per patent application filed represent countries that have high efficiency of knowledge production but low efficiency of technology development. Such countries have high levels of scientific capacity but low levels of technical capacity. On the other hand, countries that have high numbers of researchers per million of population per scientific publication and low numbers of researchers per million of population per patent application filed represent countries that have low efficiency of knowledge production but have high efficiency of technology development. It is expected that such countries would have low levels of scientific capacity but high levels of technical capacity. It is in this context that this paper explores appropriate strategies to manage NTC.

2.2

Quantitative model to determine the level of national technology capability

The following thee questions motivated the development of the NTC model: a) What is the level of efficiency in the national system of knowledge production? The efficiency in the national system of knowledge production is determined by the national level of human resource development in science and technology. It is for this reason that this paper determines efficiency in national system of knowledge production using the average number of researchers per publication in journals accredited by Thomson Reuters. Given the same number of researchers, it is expected that countries with efficient systems of knowledge production would generate more knowledge than countries that do not have efficient systems. EK = (Researchers / Publications) The ratio between the total number of researchers (Researchers) per country and the total number of papers published (Publications) by residents in journals accredited by Thomson Reuters is applied in this paper to determine the level of efficiency in the national system of knowledge production (EK). b) What is the level of efficiency in the national system of technology development? Technology is a tool for cooperation as well as a tool for competition in the global knowledge economy. Countries as well as their research institutions or firms that have large portfolios of technologies should be able to gain upper hand in negotiations on benefit sharing of proceeds emanating from technologies developed through joint research ventures. Countries that have large portfolios of technologies are expected to attract new technology investment opportunities. Given the same number of researchers, it is expected that countries with efficient systems of technology development would produce more technologies than countries that do not have efficient systems. ET = (Researchers / Patents) It is in this context that this paper aims to determine the levels of efficiency in the national system of technology development using the average number of researchers per patent applications filed by residents. The ratio between the total number of researchers (Researchers) per country and the total number of patent applications filed by residents to the USPTO is applied in this paper to determine the level of efficiency in the national system of technology development (ET). c) What is the level of national technology capability (NTC)? The increasing contribution of technological innovation in the production of goods and services, to meet national and global market demands, indicates the growing importance of technology in the global knowledge economy. To attain high level of technology capability, countries need to build efficient national systems of knowledge production and efficient national systems of technology development. Given the same number of researchers, it is expected that countries that have successfully attained high levels of efficiency in knowledge production (EK) and technology development (ET) would have high levels of technology capability. NTCM = (EK x ET) / Million of population The product of the average number of researchers per publication in journals accredited by Thomson Reuters and the average number of researchers per patent application filed by residents to the USPTO is applied in this paper to determine the level of technology capability. This product is normalised by population size to offset the effect of the population size on the levels of national technology capability. For example, countries with large populations might show high levels of technology capability than countries with small populations. The product of the efficiency in knowledge

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International Conference on Education, Research and Innovation, Madrid, Spain on 16-18 November, 2009

production (EK) and technology development (ET) which is normalised by the size of the population represents the average number of researchers per unit of output per million of population (NTCM). NTC = (Researchers / NTCM ) / Researchers Finally this paper uses the average number of researchers per unit of output per million of population (NTCM) to express the level of national technology capability as a percentage of the total number of researchers (Researchers) per country (NTC). The purpose of this formulation is to broaden the scope of the NTCM to account for technology capability for the entire country.

3 3.1

RESULTS Efficiency in knowledge production

The level of efficiency in knowledge production is important because, given the same number of researchers, it is expected that countries that have attained high levels of efficiency in knowledge production will produce greater numbers of publications that countries that have low levels of efficiency in knowledge production. The ratio between the total number of researchers per country and the total number of papers published in journals accredited by Thomson Reuters is applied in this paper to determine the levels of efficiency in the national systems of knowledge production. The results presented in Table 1 show that countries that have achieved the highest levels of efficiency in knowledge production produce one publication per year for every two researchers per country. On the other hand, countries that show the lowest levels of efficiency in knowledge production require a minimum of 16 researchers to produce one publication per year.

Table 1. Efficiency of knowledge production

Country/Year 1. Netherlands 2. Switzerland* 3. Italy 4. Slovenia 5. Belgium 6. Ireland 7. Greece 8. Singapore 9. France 10. Denmark 11. Sweden 12. New Zealand 13. Austria* 14. Germany 15. Norway 16. Spain 17. Turkey 18. Finland 19. Czech Republic 20. Hungary 21. Portugal 22. Poland 23. Mexico** 24. Chinese Taipei 25. South Africa 26. Slovak Republic

Efficiency of Knowledge Production (EK) 2003 2004 2005 2006 2.13 2.34 2.07 2.63 2.63 2.88 2.83 3.07 3.19 2.93 3.19 3.59 3.79 3.74 3.79 3.64 4.94 4.40 4.19 3.97 4.39 4.28 4.61 4.31 4.33 4.29 4.69 4.79 4.62 4.64 4.24 4.48 4.73 4.61 4.47 4.79 5.40 5.00 5.03 5.03 5.39 5.61 5.30 6.51 5.59 5.92 5.92 5.81 5.71 7.01 5.80 5.89 5.94 6.65 6.15 6.08 5.93 5.99 5.87 6.33 5.94 6.56 6.72 6.35 6.43 7.92 7.18 6.99 7.40 6.93 7.05 6.40 7.14 7.14 7.81 7.56 7.26 6.92 7.47 8.32 8.29 7.38 8.08 7.63 8.45 7.90

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International Conference on Education, Research and Innovation, Madrid, Spain on 16-18 November, 2009

Efficiency of Knowledge Production (EK) Country/Year 2003 2004 2005 2006 27. Iceland 8.56 8.47 8.51 28. Korea 9.56 8.65 8.91 8.95 29. Argentina 9.13 9.34 9.51 9.71 30. Japan 10.78 10.72 11.18 11.28 31. Romania 11.70 11.62 11.55 10.20 32. Luxembourg 16.18 13.50 33. Russia 16.03 15.82 15.73 16.03 *2005 data is based on 2004 data **2005 data is based on 2003 data

Based on the results presented in this paper, the list of countries presented in Table 1 can be clustered into three categories. The first category includes countries that have attained the highest levels of efficiency in knowledge production. This category includes countries ranked from number 1 to 11 in Table 1, which require less than five researchers per country to produce one research publication. The second category includes all the countries ranked from number 12 to 29 in Table 1, which include countries requiring 6 to 10 researchers per country to produce one research publication. The third category includes countries showing the lowest levels of efficiency in knowledge production. This category includes countries ranked from numbers 30 downwards in Table 1, which require a minimum of 10 researchers per country to produce one research publication.

3.2

Efficiency in technology development

The level of efficiency in technology development is important because, given the same number of researchers, it is expected that countries with high levels of efficiency in technology development would file greater numbers of patent applications that countries that have low levels of efficiency in technology development. The ratio between the total number of researchers per country and the total number of patent applications filed by residents to the USPTO is applied in this paper to determine the levels of efficiency in the national systems of technology development. The results presented in Table 2, show that countries that have achieved the highest levels of efficiency in technology development file one patent application per year for every seven researchers per country. On the other hand, countries that show the lowest levels of efficiency in technology development require a minimum of 2,000 researchers to file one patent application per year.

Table 2. Efficiency of technology development

Country/Year 1. Chinese Taipei 2. Japan 3. Korea 4. Netherlands 5. Switzerland* 6. Germany 7. Finland 8. Singapore 9. Belgium 10. Ireland 11. France 12. Sweden 13. Italy 14. Austria*

Efficiency of Technology Development (ET) 2003 2004 2005 2006 7.27 7.23 6.98 6.54 13.76 12.81 11.97 11.38 19.03 15.39 13.63 11.83 20.17 17.20 15.67 18.66 18.66 21.02 19.66 27.61 24.44 24.99 22.36 30.50 28.73 30.43 25.79 31.90 36.18 33.40 43.14 41.29 34.21 38.52 36.38 36.63 36.09 36.57 30.94 36.78 35.69 36.90 41.94 41.89 43.18 43.18 40.85

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International Conference on Education, Research and Innovation, Madrid, Spain on 16-18 November, 2009

Efficiency of Technology Development (ET) Country/Year 2003 2004 2005 2006 15. Denmark 35.97 42.83 43.59 37.85 16. Luxembourg 33.72 47.90 17. Norway 79.51 68.39 18. Iceland 62.80 72.09 89.38 19. New Zealand 65.86 78.32 20. Slovenia 142.84 116.84 177.77 165.40 21. South Africa 137.08 150.41 199.32 171.39 22. Hungary 256.71 211.25 239.75 229.27 23. Mexico** 240.96 240.96 24. Spain 261.66 244.21 258.24 228.70 25. Czech Republic 515.10 494.96 463.48 345.01 26. Greece 561.16 491.12 27. Argentina 348.87 448.22 521.81 457.58 28. Poland 1,600.54 955.75 959.56 983.41 29. Russia 1,201.69 1,201.87 1,068.64 944.03 30. Slovak Republic 3,221.60 1,446.17 1,095.38 940.80 31. Portugal 1,792.75 1,227.07 1,144.52 32. Romania 2,360.73 1,703.31 1,644.89 1,038.69 33. Turkey 2,661.43 1,606.46 1,822.96 1,269.27 *2005 data is based on 2004 data **2005 data is based on 2003 data

Based on the results presented in this paper, the list of countries presented in Table 2 can be clustered into three categories. The first category includes countries that have attained the highest levels of efficiency in technology development. This category includes countries ranked from number 1 to 19 in Table 2, which require less than 100 researchers per country to produce one patent application. The second category includes all the countries ranked from number 20 to 27 in Table 2, which includes countries requiring 101 to 600 researchers per country to file one patent application per year. The third category includes countries showing the lowest levels of efficiency in technology development. This category includes countries ranked from numbers 28 downwards in Table 2, which require a minimum of 1,000 researchers per country to file one patent application per year.

3.3

National Technology Capability

This paper defines NTC as the collective ability of the scientific, technical, engineering and managerial workforce in a country to use their skills, national resources and leverage international resources to acquire and create technologies for the production of goods and services to meet national and global market needs. The increasing contribution of technological innovation in the production of goods and services, to meet national and global market demands, indicates the growing importance of technology in the global knowledge economy. Based on the empirical results presented in their study, Hung and Tang [8] suggest that the technological capability (including technological level, technological innovation and R&D activities) is the most significant factor influencing the determination of modes of technology acquisition. This paper uses the product of the average number of researchers per publication in journals accredited by Thomson Reuters and the average number of researchers per patent application filed by residents to the USPTO to determine the level of technology capability. The results presented in Table 3 present different levels of technology capability attained by different countries that have achieved different levels of economic prosperity. For example, while some countries have achieved the highest levels of technology capability (>90%) others are experiencing very low levels (<1%). Based on the results presented in this paper, the list of countries presented in Table 3 can be clustered into three categories. The first category includes countries such as Japan and Germany that have attained the highest levels of technology capability (>60%) in 2005. The second category includes countries such as Netherlands, Italy, Chinese Taipei, Korea and France, which have achieved 30% to 60% level of technology capability in 2005.

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International Conference on Education, Research and Innovation, Madrid, Spain on 16-18 November, 2009

The third category include countries ranked from numbers 8 to 33 in Table 3 which have the lowest levels (<16%) of technology capability. The majority (67%) of countries listed in Table 1 have achieved less than 4% level of technology capability. Based on their analyses of research interactions between public R&D institutions and industry in India, Mohan and Rao [10] suggested some of the possible reasons for poor levels of national technology capability. They suggest that this might be because R&D is pursued for its inherent scientific value. They explain for example that public R&D institutions in developing countries give low priority to commercial success and market needs, even though they are expected to play an important role in building technological competence of domestic industries.

Table 3. National Technology Capability

National Technology Capability (NTCM) Country/Year 2003 2004 2005 2006 1. Japan 1.16 1.08 1.05 1.01 2. Germany 1.43 1.26 3. Netherlands 2.65 2.48 1.99 4. Italy 1.78 1.79 2.19 2.26 5. Chinese Taipei 2.51 2.41 2.22 1.98 6. Korea 3.80 2.77 2.52 2.19 7. France 2.75 2.81 2.65 2.69 8. Switzerland* 6.58 6.58 9. Belgium 11.50 13.18 11.61 10. Mexico** 16.89 16.89 11. Sweden 15.44 19.50 12. Austria* 26.54 26.54 26.60 13. Finland 35.20 28.75 28.96 25.18 14. Singapore 33.34 28.98 30.48 25.26 15. South Africa 21.76 26.32 34.48 26.20 16. Ireland 53.40 44.75 34.54 35.97 17. Spain 36.88 33.86 34.60 29.61 18. Denmark 28.31 35.52 38.09 32.10 19. Norway 113.30 82.78 20. New Zealand 87.18 93.74 21. Russia 132.43 131.43 116.76 105.68 22. Argentina 83.85 109.10 128.06 113.49 23. Turkey 263.78 129.75 149.11 103.23 24. Hungary 166.17 140.39 150.90 146.40 25. Poland 310.02 173.40 177.35 164.98 26. Greece 223.63 189.39 27. Czech Republic 302.25 284.51 286.52 199.54 28. Slovenia 209.44 186.57 318.75 312.08 29. Portugal 1,360.22 838.76 758.67 30. Romania 1,270.08 912.48 877.98 490.80 31. Luxembourg 1,208.30 1,389.82 32. Slovak Republic 4,837.93 2,051.38 1,719.06 1,379.12 33. Iceland 1,857.84 2,064.47 2,499.73 * 2005 data is based on 2004 data **2005 data is based on 2003 data

National Technology Capability (%) 2003 2004 2005 2006 86.06 93.02 95.47 99.46 69.91 79.13 37.80 40.35 50.21 56.03 55.78 45.56 44.17 39.84 41.52 44.97 50.59 26.31 36.08 39.65 45.58 36.34 35.60 37.70 37.23 15.20 15.20 8.69 7.59 8.61 5.92 5.92 6.48 5.13 3.77 3.77 3.76 2.84 3.48 3.45 3.97 3.00 3.45 3.28 3.96 4.60 3.80 2.90 3.82 1.87 2.23 2.90 2.78 2.71 2.95 2.89 3.38 3.53 2.82 2.63 3.12 0.88 1.21 1.15 1.07 0.76 0.76 0.86 0.95 1.19 0.92 0.78 0.88 0.38 0.77 0.67 0.97 0.60 0.71 0.66 0.68 0.32 0.58 0.56 0.61 0.45 0.53 0.33 0.35 0.35 0.50 0.48 0.54 0.31 0.32 0.07 0.12 0.13 0.08 0.11 0.11 0.20 0.08 0.07 0.02 0.05 0.06 0.07 0.05 0.05 0.04

As illustrated in Fig. 2, this paper verified the relevance of the NTC as an analytical tool to determine and benchmark the levels of NTC internationally. This paper established international comparison by determining the relationship between the size of national economies (gross domestic product) and

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International Conference on Education, Research and Innovation, Madrid, Spain on 16-18 November, 2009

their levels of technology capability (percentage). The purpose of this test was not to establish a causal relationship between the level of NTC and the size of the economy. The objective was to demonstrate the relevance of the NTC as a practical tool to compare the levels of technology capability between countries that have attained different levels of economic development. Another reason was to illustrate that countries that have attained high levels of economic prosperity tend to have high levels of technological capability. Their technology capabilities are embedded in goods and services produced by firms from these countries to meet the global market demands. The results presented in Fig. 2 suggest a very strong and statistically significant relationship (R=0.814; 2 R =0.662; p=0.000) between the levels of technology capability (percentage) and the size of the national economies. These results indicate that countries such as Japan and Germany which have attained the highest levels on NTC (>60%) are also enjoying the highest levels of economic prosperity (GDP). Another aspect observed from these results is that countries such as Netherlands (16.3 million people), Italy (58.6 million people), Chinese Taipei (22.8 million people), Korea (48.1 million people) and France (62.8 million people) which have about the same or smaller populations as South Africa (47.3 million people) have achieved greater levels of technology capability compared to South Africa in 2005. These countries have also achieved greater economic prosperity compared to South Africa in 2005.

4,000

Gross Domestic Product (Billion current PPP$)

Japan

3,000

Germany 2,000 France Russia Italy Mexico Spain

South Korea

1,000 Turkey Poland South Africa Belgium Switzerland Sweden

Chinese Taipei Netherlands

0 0

25

50

75

100

National Technology Capability (%)

Fig. 2. National technology capability

On the other hand, Fig. 2 suggests that countries that have low levels of technology capability tend to have small economies. These results also present a unique set of countries such as Russia, Mexico and Spain, which have relatively large economies but have low levels of technology capability. Literature review was conducted to uncover why it is possible that a country with relatively large economy has low levels of technology capability. The findings presented by Yegorov [23], in his paper focusing on the main characteristics of the post-Soviet research and development (R&D) systems, validates the results presented in Fig. 3 in this paper. The Russian R&D system, which was

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International Conference on Education, Research and Innovation, Madrid, Spain on 16-18 November, 2009

responsible for major achievements during the era of the Soviet Union, has been unsuccessful in the 1990s and early 2000s to redirect scientific activities away from military and towards civilian goals [23]. Yegorov [23] explains that there was little need for mechanism for intellectual property rights (IPR) protection in a highly centralised Soviet Union planning system where the state exerted control over almost all R&D results and their utilisation. Following the collapse of the Soviet Union in 1991, the planning system could not react satisfactorily to new challenges and could not redistribute resources effectively to new areas of S&T. As a result, the Soviet Union started to lag behind in some key and fast growing scientific and technological disciplines, such as electronics and biotechnology, while its position in mathematics, physics and new materials remained relatively strong up to the beginning of the 1990s. The system of regulation of the scientific activities and the corresponding rewards were quite different from those that existed in Western countries. Adding to this problem, a significant number of scientists emigrated from the post-Soviet countries during 1990s. Russia for example lacks indirect measures to promote cooperation between research organisations and industry. Consequently, there is relatively weak stimulus for larger industrial enterprises to increase their innovation activities because of the underdeveloped regulations in a variety of areas, including the protection of IPR [23]. Yegorov [23] recommended the state to create favourable conditions for the introduction of innovation. He points out that the introduction of adequate legal protection for IPR, especially in foreign countries, is of critical importance for individual researchers, science-based small and medium enterprises, S&T institutes and foreign companies seeking to engage in direct investment or some other form of business alliance and for domestic companies that seek to cooperate with them. He explains that Russia urgently needs not only a serious transformation within the R&D system, but also important changes in the national system of innovation are required. The findings presented by Solleiro and Castañón [16], in their paper focusing on the competitiveness in Mexico as well as its innovation system, also validates the results presented in this paper in Fig. 3. They indicate that Mexico’s competitive position is low, especially if its exporting sector and the size of its economy are taken into account, and this state of condition has not changed much from 1997 to 2002. Reinforcing the conclusion that the innovative results of the firms continue to be very poor relative to the size of the economy of Mexico, Solleiro Castañón [16] indicate that by 2001 Mexican nationals applied for 534 patents, 325 of which were from independent inventors, 183 from large enterprises and 24 from research centres. Metcalfe and Ramlogan [9] presented the research findings suggesting that the limited absorptive capacity of universities in Mexico, which provide the bulk of scientific and technological talent, weakens the ability of the industry to interact with the S&T system.

4

CONCLUSIONS

The objective of this paper was to use only three variables to develop a quantitative model to determine and benchmark the level of national technology capability (NTC) internationally. Indices such as the Technology Index [22]; Technology Achievement Index [18]; Technological Capabilities Index [2]; Industrial Development Scoreboard [19]; and the RAND Corporation Science and Technology Capacity [20; 21] use eight or more variables. The following three variables were used throughout this paper: the number of patent applications filed by residents to the United States Patent and Trademark Office (USPTO); the number of papers published by residents in journals accredited by Thomson Reuters; and the number of researchers per million of population in a country. This paper achieved its objectives by developing and applying the new NTC model to determine and compare the following three aspects, between 33 OECD member and non-member countries presented in this paper: the level of efficiency in the national system of knowledge production; the level of efficiency in technology development; and the level of national technology capability. All the countries included in this study were clustered into three categories based on their level of efficiency in knowledge production. The first category represents 33% of countries that require less than five researchers per country to produce one research publication per year. The second category represents 55% of countries require 6 to 10 researchers per country to produce one research publication per year. The third category represents 12% of countries that require a minimum of 10 researchers per country to produce one research publication per year. Countries were also clustered into three categories based on their level of efficiency in technology development. The first category represents 58% of countries that require less than 100 researchers per country to produce one patent application per year. The second category represents 24% of countries that require 101 to 600 researchers per country to file one patent application per year. The third category represents 18% of countries that require a minimum of 1,000 researchers per country to 10

International Conference on Education, Research and Innovation, Madrid, Spain on 16-18 November, 2009

file one patent application per year. Finally, countries were also clustered into three categories based on their level of technology capability. The first category represents 6% of countries such as Japan and Germany that have attained the highest levels of technology capability (>60%) in 2005. The second category represents 15% of countries such as Netherlands, Italy, Chinese Taipei, Korea and France, which have achieved 30% to 60% level of technology capability in 2005. The third category represents 79% of countries that have the lowest levels (<16%) of technology capability. This paper also verified the relevance of the NTC as an analytical tool to determine and benchmark the levels of NTC internationally by determining the relationship between the size of national economies (gross domestic product) and their levels of technology capability (percentage). The purpose of this test was not to establish a causal relationship between the level of NTC and the size of the economy. The objective was to demonstrate the relevance of the NTC as a practical tool to compare the levels of technology capability between countries that have attained different levels of economic development. The results suggest a very strong and statistically significant relationship between the levels of technology capability and the size of the national economies. These results indicate that countries such as Japan and Germany which have attained the highest levels on NTC (>60%) are also enjoying the highest levels of economic prosperity (GDP). Another aspect observed from these results is that countries such as Netherlands, Italy, Chinese Taipei, Korea and France, which have about the same or smaller populations as South Africa, have achieved greater levels of technology capability compared to South Africa in 2005. These countries have also achieved greater economic prosperity compared to South Africa in 2005. On the other hand, the results suggested that countries that have low levels of technology capability tend to have small economies. These results also presented a unique set of countries such as Russia, Mexico and Spain, which have relatively large economies but have low levels of technology capability. The findings presented in the existing body of literature validated the results presented in this paper. The NTC model and the strategic framework introduced in this paper captures the dynamics involved in the national system of knowledge production and the national system of technology development to determine and compare the levels of NTC. Although this paper focused on 33 countries whose data is available in the public domain, the methodology introduced in this paper can be applied at different institutional levels within a country or between different countries. For example, the NTC can be applied to determine and compare levels of technology capability between different research institutions, universities and companies within a country or between different countries. Governments, research institutions, universities and companies within a country or between different countries can also apply the NTC model to develop strategic national or international partnerships for mutual benefit.

Disclaimer Vuyani Lingela is the Chief Director: International Research in the Department of Science and Technology in South Africa. He wrote this paper in his personal capacity.

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