1. Strategies and Challenges for ICT and
Innovation Systems in Emerging
Economies and Developing Countries
WB Training 7th June 2012
Hannes Toivanen, Ph.D., Principal Scientist
Innovation and Knowledge Economy
VTT Technical Research Centre of Finland
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VTT Technical Research Centre of Finland
VTT IS
 a globally networked multitechnological applied research organisation
 a not-for-profit and impartial research centre
VTT HAS
 extensive cross-disciplinary technological and business expertise
 unique research infrastructure
 comprehensive global partnership networks in business, industrial and
research communities
VTT CREATES
 new technology and science-based innovations
in co-operation with domestic and foreign
partners
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VTT Group in brief
Turnover 307 M€ (2011) • Personnel 3,187 (31.12.2011)
Customer sectors Focus areas of VTT’s operations
- Biotechnology, research - Research and
pharmaceutical and food - Applied materials Development
industries - Bio- and chemical - Strategic Research
- Chemical industry and processes - Business Solutions
environment - Energy - Business Development
- Electronics - Information and - Group Services
- Energy communication
- Forest industry VTT’s companies
technologies
- ICT - VTT Expert Services Ltd
- Industrial systems
- Machine, vehicle and (incl. Labtium Ltd, Enas
management
metal industries Ltd)
- Microtechnologies and
- Real estate and - VTT Ventures Ltd
electronics
construction - VTT International Ltd
- Services and the built
- Services and logistics (incl. VTT Brasil LTDA)
environment
- VTT Memsfab Ltd
- Business research
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Services
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Innovation and Information Society for Development
Innovation policy and information society Ready networks for I4D / ICT4D
 Strategy development  ICT (e.g. wireless interent, social media)
 Foresight, evaluation & monitoring  Construction
 Program development and planning  Energy, especially renewable energy
 Over 20 dedicated innovation and  Over 2000 experts in wide array of
information society experts technological and business areas
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ICT and Knowledge in Emerging Economies
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Innovation in ICT industries
 Continued global growth in innovation– despite of
industry transition and cyclical slow-downs;
 Continued global push to expand R&D bases and
search for talent;
 Intensified global competition to create ”Innovation
Hot-Spots”, which combine strong R&D base and
business acumen;
 What will be the division of labour between emerging
markets and traditional high-technology areas?
 What will be the winning strategy to combine
proximity to growth markets, user driven innovation
and S&T research driven innovation?
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The ICT Ecosystem
Consumers
Global trade
Platforms, contents &
applications
Financial
markets
Networks Regulation
Networked elements Standardization
Global trade
Modified after: Fransman M, 2007;
Toivanen H, 2011.
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ICT Research Trends – Some Stylized Facts
 Digital Convergence
 Convergence of service and
technology driven business models
 Rivalry of Ecosystems: Turning
products into technology platforms
 Continued relevance of S&T and
continued growth of research &
patenting
 High-end markets attract most
business focus, but BOP markets are
most reliable source of growth
ICT related patenting grew 4,7% In 2005, over 50 000 international
/ year 95‐05 ICT patents were filed
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ICT Research Trends – Bibliometric Snap-Shot
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Bibliometric assessment Scientific and Technological Research
Bibliometrics:
 Metrics for quantity / quality;
 Static and dynamic analysis;
 Descriptive analysis;
 Social networks data;
ISI Web of Science data, the most comprehensive database providing a
snapshot of African knowledge production;
 Excellent coverage of medical and basic sciences, agricultural research;
 Good coverage of humanities and social sciences (incl. economics and
business)
 Moderate coverage of technology and engineering (30-50 %)
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Finnish ICT related research – publication totals by subject, 1988-2008
Hannes Toivanen, work-in-progress
NOTE:
• Data source: Thomson Reuters Web of Science; VTT Database
• Articles, Proceedings and Meeting Abstracts;
• N: 16 494 – NOTE: Data cleaned, includes cross-disciplinary papers – work in progress
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The role of national innovation systems
 Developing and emerging countries differ radically in their ability to
valorize knowledge;
 Some are confined to ”knowledge traps” – Use foreign
knowledge and technology without really making progress in
national knowledge economy
 Some are embarking on powerful ”catch-up” trajectories,
progressing at fastest pace in knowledge economy
 The key difference appears to be what types of national systems of
innovation countries have, and what role domestic knowledge
creation plays;
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Conclusions
 Research continues to matter for innovation in ICT industries;
 User driven innovation continues to gain importance;
 Plethora of new innovation system and ecosystem models are
emerging;
Perspectives on developing country and emerging economies: ICT
research
 Need to stand out and develop distinct, region specific winning
formula
 European and North American models do not pay serious attention to
poverty or societal challenges in ICT agenda
 Define strategy how to integrate to and capture value from the global
ICT ecosystem
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ICT and Economic & Development Impact
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ICT & Development
 Mobile telephony has positive impact on
economic growth and this effect is twice as
large in developing countries compared with
developed countries (Waverman et al 2005)
 Between 1996-2003, 10 mobile phones per
100 population added 0.59 percent units to
per capita GDP (Waverman et al 2005)
 Macro-economic evidence is more or less
clear, but not without problems:
 Inherent unreliability for developing
country data;
 Remains investment focussed;
 Does not provide guidance on pro-poor or
inclusive strategies, and thereby falls
short of connecting ICT with development.
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ICT and Development
Source: Heeks 2010
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Standard ICT4D impact models
 Key channels for ICT to advance development (Aker & Mbiti 2010):
 Enhanced access and use of information (search cost)
 Improve firm’s productivity by allowing better management of value
chains
 Creation of local ICT-related jobs in rural and urban areas
 Enhanced communication among social networks reduces exposure to
risks (natural disasters, political violence, etc.)
 Enhanced delivery of services (financial, health, education, etc) via m-
and e-delivery platforms.
 We have relatively solid (theoretical and empirical) understanding of user-
benefits and impacts, though not in monetary figures.
 We have scant evidence of how ICT boosts jobs and entrepreneurial opportunities,
and much less on how such impacts are or can be pro-poor.
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Thank you!
 Further info and
publications on I4D@VTT:
http://www.vtt.fi/i4d
 Contact:
Hannes.Toivanen@vtt.fi
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VTT - 70 years of
technology for business
and society
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