Global Policy Forum

‘There is at the present time a search for alternatives to the current development paradigm, and the role of knowledge in development is critical for the formulation of new approaches’

UNCATD, The Least Developed Countries Report, 2007

The shape of the modern world has been credited to advancements in science and technology. I-C-Ts have facilitated, at a tremendous pace, the generation, preservation, dissemination, exchange and utilization of knowledge. Knowledge has always been crucial to human development. Since the dawn of humankind, the creation and application of new knowledge, in every sphere of human activities, have contributed to the evolution of societies and economic welfare of people. Knowledge of how to do things, how to communicate and how to work with other people has always been regarded as the most precious ‘wealth’ that humans possess.

As analyzed in the UNESCO World Report Towards Knowledge Societies, the poorest are further separated from sources of information when policy-makers fail to have an inclusive approach to development. The result is worse for the poor. They are already at the bottom of the development ladder, scavenging for bits of knowledge. Now this knowledge moves at lightening speed across phone lines and cables bypassing them on its way to the computer screens of those who can afford to access information.

Universal access to knowledge must then remain the pillar supporting the transition toward knowledge societies. Whatever the extent and nature of public domain information and knowledge, it is paramount to ensure that content is really accessible to all, without discrimination. This is seldom the case. Yet, the public domain is a major contributor to the development of human capital and creativity in knowledge societies.

Knowledge has several noteworthy features –it’s transferrable. Once it is in the public domain, anyone can use it freely; it only has real value if it is shared by all, and knowledge begets innovation.

Knowledge-Sharing

Knowledge-sharing should be at the heart of knowledge societies. It cannot be thought of in terms of distribution. Knowledge-sharing cannot be reduced to the appointment of knowledge or to a parceling out of skills, whereby each person is able to take possession of a field of specialization or expertise. The advance of knowledge requires the collaboration of all.

In societies where knowledge moves freely, as if it were networked, possibilities for exchange and sharing are multiplied. This is an environment conducive to universal accessibility.

In emerging knowledge societies, this spirit of sharing should go hand in hand with other values such as openness and curiosity. New forms of networking that have emerged, in particular on the Internet, that lend themselves to exchange, interaction and sharing, are horizontal and not hierarchical. We may therefore legitimately hope that in knowledge societies, each person’s capacities for knowledge will be developed not just through competition but in a spirit of collaboration for the common good – a perfect example: Open Source software.

Such a spirit of sharing and collaboration may seem a far cry from the real conditions of corporate competition in the markets of a global knowledge-based economy. However, the emergence of network societies and the consequent lowering of transaction costs encourage new forms of productive organization involving exchange and collaboration within a single sharing community. The possibility of such architecture of knowledge production highlights the propensity of knowledge societies to favor very free models of cooperative organization. It is the architecture itself of the networks that creates the conditions for the collective monitoring of the sharing process.

The decision to participate in knowledge-sharing requires that certain conditions are met. One of the most essential being that those participating in the sharing community believe in the veracity of the shared information and not feel they are “losing control”. Knowledge-sharing emerges at a critical time. Knowledge in the public domain is shrinking, but the very nature of knowledge-sharing and its proven benefits should create a balance between the protection of intellectual property rights and the promotion of knowledge and information in the public domain.

Knowledge for Development

The major determinants of development have been changing over the past decades. The shift is taking place from manufacturing to services and from capital resources to knowledge resources. Increasingly, knowledge is considered to be the key to escape both poverty and marginalization.

The global economy is becoming increasingly dependent upon the ability to efficiently produce, disseminate and use knowledge. Today, the competitiveness of a country depends on its knowledge acquisition capacity. Conversely, lack of application of knowledge and technical know-how accentuates the process of marginalization and economic deprivation.

Thus emerges a major development challenge, equally if not more serious than the challenges described earlier. We refer to it as the “knowledge divide”. The extent to which the knowledge gap is narrowed and to which we are able to create societies that are truly Knowledge Societies, will determine the pace of development

This gap goes beyond the rifts in mere access to I-C-Ts. It refers to the gaps that exist in what I call the four building blocks of Knowledge societies, namely: Knowledge creation, knowledge preservation, knowledge-sharing and knowledge utilization.

Knowledge Creation

The science and technology sector is more than the architect of knowledge-sharing, as we are coming to know it today; it is an essential part of knowledge creation.

Indeed, as part of the knowledge gap, we witness today a clear divide in scientific knowledge creation. This notion of a scientific divide is not determined solely by economic disparities. Differing political conceptions of the economic and social role of science also play a role. The risk of a scientific divide arises when leading policy-makers fail to regard science as a priority economic and human investment. From this standpoint, an indicator such as research and development spending as a percentage of national Gross Domestic Product (GDP) gives a fairly accurate idea of disparities.

This indicator, in a sense, describes the degree of the national research effort and the capacity of each country to invest financial and human resources in scientific and technological activities.

The fact that science and technology are a source of development and expansion, make it all the more impossible to disregard the continuing or widening of such a gap. If nothing is done to close it, the anticipated benefits of Knowledge Societies could well prove advantageous to only a small number of countries or communities.

The divide between North and South in science education, scientific research, technology, agriculture, health care and information technology is part cause and part effect of a development divide.

What we see presently is remarkable growth in a small number of emerging Asian economies, led by China, which is challenging the leadership of North America, Europe and Japan in research and development (R&D), according to the 2005 UNESCO Science Report (UNESCO Science Report, 2005 - Paris: UNESCO 2005. ISBN 92–3–103967–9. http://www.unesco.org/science/psd/publications/science_report2005.pdf). The report says that “the most remarkable trend is to be found in Asia, where gross expenditure on R&D has grown from a world share of 27.9% in 1997 to 31.5% in 2002”. This dynamism is largely driven by China where, in 2002, there were more researchers than in Japan, 810,000 and 646,500 respectively. There is growing recognition that south-south cooperation in knowledge creation and sharing could contribute significantly to the development of poor countries.

Knowledge Preservation

There are two aspects of knowledge preservation that are important factors to sustaining this crucial building block of knowledge societies, namely: the preservation of indigenous knowledge and the preservation of digital knowledge.

Indigenous knowledge is crucial to the lives of local communities, being a core element in their food security, health, education, and natural resources management. Avoiding the spread of forest fires, preventing the transmission of a virus or optimizing agricultural production while respecting the environment – these life-sustaining actions are, for example, informed by local knowledge. Consequently, it is essential to engage in the preservation of these kinds of knowledge. There are, however, many obstacles to overcome as most of these knowledge systems are intangible.

The exploitation of this intangible knowledge is one way to preserve it. Over the past decades, biotechnology and pharmaceutical and health care industries have developed a growing interest in the traditional knowledge held by local and indigenous communities. This knowledge is increasingly integrated into the creation process and industrial production of medicine, chemical products and fertilizers. It is, however, important that knowledge is not only preserved but also protected. Very often, traditional and indigenous knowledge is not sufficiently acknowledged and protected by conventional intellectual property legislation and owners of indigenous knowledge receive nothing from the economic gain foreign companies make with this local knowledge.

With the advent of ICTS new possibilities to preserve information have arisen. Although digital copies cannot replace original paper documents, digitization does provide an opportunity to make information available for wider use without damaging the original masters.

Knowledge Diffusion

While the creation of Gutenberg's printing press in 1455 marked an important development in the advancement of knowledge dissemination, rapid developments throughout the last century have led to breathtaking possibilities of providing information to an ever larger public. Radio, television, and above all the fast-growing use of the World Wide Web has revolutionized the way information is disseminated. While it took radio 38 years to reach an audience of 50 million people, television achieved this in 13 years and the Internet in only 4 years. It is evident that we live in a world in which knowledge moves fast and it is important to ensure that knowledge does not pass by a large part of the world's inhabitants but that the knowledge revolution truly is a rising tide that lifts all boats.

Education and Training

The dissemination of knowledge and its inherent potentials for development very much depend on educational structures. Various studies (See for e.g. Education for all: The quality imperative; EFA Global Monitoring Report, 2005. – Paris: UNESCO, 2004 ISBN 92-3-103976-8 http://unesdoc.unesco.org/images/0013/001373/137333e.pdf)

While recognizing the important role of education in development and the emerging knowledge societies, it is evident that the world faces major educational challenges.

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There needs to be increased public investment to provide access to quality education for all. For now, governments are by far the largest funding bodies in education. The public expenditure on education varies between 2-6% of the gross national product in most countries. In spite of commitment, many governments will not be able to invest much more as there are other areas such as health and the environment which are also in need of major investment. Conflict is another drain on treasuries, making peace a key factor in providing opportunities not only for development but also for education. It is essential that governments shift their priorities.

The recent revolution in ICTs provides new opportunities for learning and has produced a variety of ICT-based models of learning. The new technologies can improve educational quality; they can increase access to basic learning for everyone and have the capacity to reach disadvantaged populations. ICTs can furthermore improve educational management; it provides opportunities to establish a stable lifelong learning system and enhances diverse and collective learning processes. Through ICTs a shift in the learning process could take place from teaching to self-directed learning, from a one-time event to lifelong learning.

It appears that also the Internet and Web technologies offer a remarkable medium for a new learning framework that is destined to dominate education in the twenty-first century. Learning has generally been accomplished through a classical model involving direct instruction. The classical learning model is restricted by limitations of both time and physical space.

The Web, however, is a dynamic, world-wide forum in which to teach courses. Course materials can be easily updated. Course text, examples and exercises can be interactive with the results of inputs appearing instantaneously and hyperlinks to other web-sites reinforcing a student’s interest and thirst for knowledge. The Web-based learning model is essentially free from limitations of space and time while it reaches students around the world with great ease, given technical considerations.

Good Governance and Development

All countries, especially the poorest, need to implement policies that encourage innovation, access, and the development of advanced skills to nurture creativity in a highly competitive, innovation-driven environment. For developing countries it means putting into action reforms that emphasize openness to new ideas, new products and new investment, especially in ICTs with the overall goal of understanding and adapting global technologies for local needs. In those countries new legal and market arrangements need to overcome government or private monopolies in telecommunications to foster competition and further incentives for innovation and investment in research and development. But these changes are not enough if not accompanied by expanding human skills. Technological change dramatically raises the premium every country should place on investing in the education and training of its people. Innovative educational systems such as open and distance learning could help poor countries enhance access to quality education to larger segments of their population.

Poverty and information gaps can be reduced in developing countries, but this means concrete measures toward guaranteeing rule of law, accountability, participation, transparency, and enjoyment of human and civil rights. Given the particular context of developing countries, good governance mechanisms must include poverty reduction indicators on corruption, gender equality, marginalized groups, access to education and ICTs, and food security. Moreover, good governance policies must be aimed at enhancing indigenous capacity for development, creating stable socioeconomic foundations for long term, sustained and sustainable endogenous development. Development of free, independent and pluralistic media can contribute significantly to good governance.

Foreign Aid

Foreign aid is one of the original tools for the promotion of development, but it is not without its critics, especially in the area of sustainable development. While the role of Foreign Aid remains of crucial importance, especially in cases of natural or human disasters and immediate relief, long-term foreign assistance needs to be evaluated against a history of failed interventions that overwhelm the instances of positive outcomes.

In the construction of viable Knowledge Societies, foreign aid needs to emancipate from the classical terms of aid conditionality that tend to focus on agendas that are of interest to donors rather than to recipients. These might include adopting reforms aiming toward opening the national markets to foreign competition, trade liberalization, and privatization of national industries, which can undermine a sense of well-being if not adapted to the national context.

There needs to be a shift from “conditionality” to “selectivity”, rewarding countries that have performed well in using funds providing them with strong incentives. Development policies and programs funded by foreign aid – from bilateral agreements or through international financial institutions – to be successful have to be owned by the country and adapted to its situation, needs and priorities (Stiglitz, J. (2002) Globalization and its Discontents pp.49-50). As stated by President Benjamin Mkapa of Tanzania: “Development cannot be imposed, it can only be facilitated”. Indeed country ownership has become a basic principle of the Millennium Development Goals (MDGs). Best practices in foreign aid indicate that donors must be responsive to partner countries’ priorities for aid financed projects. Donors must ensure that aid complements and strengthens a country’s own strategy rather than undermining it by parallel donor-run administration.

Within the UN system, joint development efforts in a given country are coordinated among different agencies, funds and programmes and negotiated with the government – what is commonly referred to as the drive to “Deliver as One”. These joint programmes vigorously stress the principle of government ownership and leadership as well as the preponderance of national priorities and objectives and a strong focus on strengthening national capacities.

Another important aspect of aid for development in the knowledge economy and critical to enabling poor countries to share knowledge is the international intellectual property rights regime. Bilateral or multilateral free trade agreements including provisions on intellectual property rights protection must also include exceptions that enable certain uses of protected knowledge. These might include the flexible use of scientific research by universities and other educational institutions, libraries, individual users with non-commercial purposes, which is often referred to as “fair use”. In any case, open access to knowledge is of utmost importance in the knowledge-based global economy and must be a public policy priority and treated as an element of foreign aid and international cooperation.

The TRIPs agreement provides ‘flexibilities’ in the issuance of licenses, allowing, for instance, the production of generic medicines, which can sell for a fraction of the cost of brand name medicines. Countries must make full use of these flexibilities, according to their needs, which can make a big difference in the well-being of their citizens. At the global level, a limitation of patents and trademarks for products declared to be in the public interest (like vaccines) and secure access to technologies of over-riding national importance must be assured, especially for least developed countries.

Foreign Direct Investment

Openness to foreign direct investment (FDI) goes hand in hand with an open trading regime, and it provides benefits for the acquisition of knowledge. Because multinational investors are global leaders in innovation, their activities in developing countries can be transformative. Valuable knowledge spillovers can occur through their training of local staff and through contacts with domestic suppliers and subcontractors.

Technological catch-up for developing countries requires access to the international knowledge pool and the ability to learn, master and adapt foreign technologies and thereby benefit from international technology diffusion. In developing countries the arrival of transnational corporations leads to technological upgrading of domestic firms through technological spillovers via imitation, competition, labor mobility and exports. These spillover effects have the potential to increase the productivity of local firms.

South Korea offers an outstanding example of technology catch-up due to foreign investment and good public policy. The Government liberalized foreign direct investment and foreign licensing, put more pressure on domestic firms to increase competitiveness through gradual trade liberalization and revised intellectual property laws to pre-empt imitative product development. The Government also established an effective technology transfer centre and technical information centers, which became increasingly popular with users. Measures to promote the development of capital goods producers were also taken (quantitative restrictions, import licensing and domestic content requirements) and this induced local producers to develop technological capabilities to meet the increasing demand for capital goods. Technology extension services were also important for the diffusion of best practices, particularly to small and medium-sized enterprises (UNCTAD Least Developed Countries Report 2007).

Migration and Knowledge Transfer

International markets and demand for information and communications technology personnel make top scientists and other professionals globally mobile. Although a developing country may have invested heavily in creating an educated labor force, many highly educated people migrate abroad to seek working opportunities that correspond to their level of training (UNDP (2001) The Human Development Report: Making new technologies work for human development states that “100,000 Indian professionals a year are expected to take visas issued by the United States –an estimated resource loss for India of $2 billion.”). We can look at this migration as a brain drain for developing countries but also as a brain gain: it generates a diaspora that can provide valuable networks of finance, business contacts and skill transfer for the home country.

Conclusions – Changing Ways of Thinking Development

To face the challenges of the Knowledge Economy means first and foremost changing our classic perspective of Economic Development from a less empiric and dogmatic process to education in the broad and comprehensive sense that covers knowledge, institutions, and culture.

This important mindset shift becomes crucial when we analyse how to close the development gap between countries. The challenge then turns to bridging the knowledge divide between the more developed and the less developed countries. To do this, local tacit knowledge plays a fundamental role.

The idea of tacit knowledge is particularly important. It is based on the fact that knowledge is formed gradually, over time, through repetition, and recurrent interaction. It is situated in systems of ongoing practices and routines, and is a product of social, cultural, economic and political conditions. While codified knowledge is partly transferable and universal, tacit knowledge is embedded in social and cultural practices. Understanding the subtleties of tacit and local knowledge as well as the dynamics of knowledge sharing is of utmost importance. Knowledge is a social learning process, which is situated in social institutions; hence it is socially and culturally embedded, and context-specific.

The established theories of technology transfer, with appropriate policies to promote technological progress, need to include a specific understanding of local tacit knowledge, and aim at stimulating creativity, entrepreneurship, and innovation. Such shift in development can be maximized through openness to trade and foreign investment, coupled with investment in education. Ultimately openness in a knowledge economy requires the revisit of the appropriate competition laws and intellectual property regimes, designed to stimulate the key engines driving growth, knowledge and creativity.