International Conference on TIM, 2012, Nepal

1. International Conference on TIM, 2012, Nepal National Technology and Innovation Policy By Ananda Raj Khanal Director and Acting Chief of Office Nepal Telecommunications Authority 11 October, 2012 Kathmandu, Nepal.

2. International Conference on TIM, 2012, Nepal Plan for the presentation

3. Pondering over the title itself-National Technology and Innovation Policy • National-adj- • National means relating to the whole of a country or nation rather than to part of it or to other nations • National means typical of the people or customs of a particular country or nation • Technology-noun • Technology refers to methods, systems and devices which are the results of scientific knowledge being used for particular purpose

4. Pondering over the title itself • Innovation-noun • An innovation is a new thing or a new method of doing something • Innovation is the introduction of new ideas, methods or things • Innovation is the introduction of a new or significantly improved product, process or method – holds the key to boosting productivity. • Innovation—the improvement of existing or the creation of entirely new products, processes, services, and business or organizational models—drives long-run economic growth and quality-of-life improvements.

5. Pondering over the title itself.. • “An innovation is the implementation of a new or significantly improved product (good or service), or process, a new marketing method, or a new organisational method in business practices, workplace organization or external relations.” • By definition, all innovation must contain a degree of novelty. • Source : OECD and Eurostat (2005), Oslo Manual: Guidelines for Collecting and Interpreting Innovation Data. OECD, Paris, at http://www.oecd.org/document/33/0,3746,en_2649_34273_35595607_1_1_1_1,00.html.

6. Pondering over the title itself Policy-noun • A policy is a set of ideas or plans that is used as a basis for making decisions especially in politics, economics or business • An official organization’s policy on a particular issue or towards a country is their attitude and actions regarding that issue or country • Policies are guidelines for decision making to achieve goals. • Hence –Title means • It is a national policy on technology and innovation-approved by the competent national executive authority- the Government (cabinet)or a concerned ministry

7. Why this conference is important? • New needs in society: rising demands for food, water, energy, health welfare and environmental concerns increase pressure on the universities to be ‘relevant’. • Increasing numbers of technological opportunities providing external stimulus to universities to modernize and contribute to the knowledge economy. • A knowledge economy uses knowledge as the key engine of economic growth.

8. Why this conference is important? • The global downturn and “creative destruction” • “Creative destruction” – the process whereby economic downturns force less • innovative incumbents to exit and allow more innovative firms to enter – can play a • powerful role in improving overall innovation performance

9. THE PRESURE ON UNIVERSITIES • The social and political pressure on universities to ensure that their new knowledge brings new benefits to society, especially in the area of applied research, is growing. • Big question: • Who asked you to do it? • Who needs it? • Who wants it? • Is it demand-driven? • Is it market-driven? • Is it need-driven? • Is anyone prepared to pay for it?

10. Innovation policy responses to the global financial and public debt crises • Requirements and challenges for innovation policy • Innovation policies at present need to focus on two objectives: • to promote positive long-term trends in innovation performance. The downturn has affected innovation. • long-term damage to innovation systems caused by the crises themselves.

11. Why innovation policy? • Innovation has become the central driver of economic growth • Is a key focal point of countries’ economic development strategies as they seek to gain global competitive advantage. • countries are increasingly designing national innovation strategies that seek to coordinate their policies toward • skills, scientific research, information and communications technologies (ICTs), tax, trade, intellectual property, government procurement, standards, and regulations in an integrated approach designed to drive economic growth through innovation.

12. Why innovation is important? • innovation has arisen to the top of the policy agenda for every stakeholders in the world. • So Nepal cannot be untouched by this wave • One reason for this is a growing recognition by policy makers of the • important contribution that innovation plays in national development and socio-economic growth. • Policy makers not only in the national, regional and global level, but more so in the organizational level as well

13. Why is it important? examples • The ability to rapidly innovate is now playing a major role in an increasingly global economy. • 2010 Ministerial Report on the OECD Innovation Strategy: “Innovation is essential if countries and firms are • to recover from the global economic downturn and • thrive in today’s highly competitive and connected global economy. • It is a powerful engine • for development and • for addressing social and economic challenges. • And it holds the key, • to employment generation and • enhanced productivity growth through • knowledge creation and • its subsequent application and diffusion.”

14. Global Innovation Policy Index: seven core policy areas: 1. Open and non-discriminatory market access and foreign direct investment policies; 2. Science and R&D policies that spur innovation; 3. Openness to domestic competition and new firm entry; 4. Effective intellectual property rights protection policies; 5. Digital policies enabling the robust deployment of ICT platforms; 6. Open and transparent government procurement policies; and 7. Openness to high-skill immigration.

15. Defining and measuring innovation • innovation encompasses a wide range of activities in addition to R&D, • organisational changes, • training, • testing, • marketing and • design. • an innovation can be • new to the firm, • new to the market or • new to the world.

16. Measuring innovation • It is evolving -subsequent versions of the Oslo Manual, which guides statisticians in their attempts to measure it. • In 1992 and 1997, the Manual focused exclusively on technological innovations, covering only products and processes. • In 1997, coverage was extended from manufacturing to services. • In 2005, the ‘technological’ qualifier for innovation was eliminated, innovation in methods was added, and for the first time, innovation in the public sector was mentioned as an area needing further study. • This was further reinforced in 2010 when the OECD Ministerial Report on Innovation suggested that statisticians should attempt to measure public sector innovation as well as innovation for social goals (commonly known as “social innovation”). • This history suggests that our concepts of innovation are likely to continue to evolve in the coming years.

17. can innovation be measured? • Probably the most comprehensive attempt to measure innovation at macro national levels is Global Innovation Index (GII) — a comparative index ranking 125 economies — most recently published in 2012 • The GII uses 80 indicators to produce a composite ranking of countries. • it includes five input pillars capturing elements of national economies that are enablers for innovative activities: (1) institutions, (2) human capital and research, (3) infrastructure, (4) market sophistication, and (5) business sophistication. • It also includes two output pillars capturing evidence of innovation outputs: (6) scientific outputs and (7) creative outputs. • Each pillar is divided into sub-pillars composed of individual indicators.

18. Measurement can differ… • Generally, it can be noted that measuring innovation and particularly its impact is still a “work in progress” • depending on the statistical methodologies used, country rankings can substantively differ across other innovation indices. • These include, inter alia, • the BCG/NAM International Innovation Index, • the Innovation Union Scoreboard, • the Global Innovation Index of the Economist Intelligence Unit, • the Innovation for Development Report and • the Global Competitiveness Index from the World Economic Forum.

19. Competitiveness Research Firms Supply Demand Gov. Institutions Growth Innovation System

20. Why better technology? world economy • globalization of markets, characterized by an increasing competition which leads to look for new technologies based on scientific knowledge. The incorporation of these technologies to the production system allows to • reduce costs, • improve quality, • save energy • scarce raw materials • increase the productivity of the labour force.

21. Global Innovation Index 2012Nepal • Key indicators • Population (millions) ........................................ 28.5 • GDP per capita, PPP$ ..................................... 1,328.1 • GDP (US$ billions) ............................................. 18.3 • Score (0–100) or value (hard data) Rank • Global Innovation Index 2012 (out of 141) 113 • Score 26 out of 100

22. Global innovation index -2012 Nepal ( out of 141)

23. Legal framework for S&T in NepalArticle 35 of the Interim Constitution 2007- State Directive Principles: State Policies: (11) The State shall, with a view to bringing about prosperity in the country, pursue a policy of giving priority to the development of science and technology, and shall also give due consideration to the development of local technology. (12) The State shall, for the purpose of national development, pursue a policy of attracting foreign capital and technology, giving priority to the national investment.

24. Legal framework for S&T in Nepal • there exists no direct legal framework to facilitate the development and promotion ofS&T in Nepal. • There are some Acts which bear indirect relations with the development of S&T, such as • the Nepal Industrial Development Corporation Act 1959, • Patent Design and Trade Mark Act 1965, • Industrial Enterprise Act 1981, • Foreign Investment and Technology Transfer Act 1981, • Industrial Enterprise Act 1982, • RONAST Act 1990 and • Water Resources Act1992. • Telecommunications Act 1997 • Similarly, there are over half a dozen Acts and Rules/Regulations related to • biodiversity and environment protection • Aquatic Animals Protection Act 1961, • National Parks and Wildlife Conservation Act 1973, • Soil and water Conservation Act 1982, • Forest Act 1993.

25. Political Parties and Their Commitment to S&T • Election manifesto: • None of the political parties proclaim explicit commitment to S&T but mention • green revolution, • irrigation, • environment, and • IT. • The development plans reveal that it took 25 years for S&T to be explicitly mentioned in the Sixth Plan (1980-1985). • Science and Technology policy approved in 1989 • Although the total outlays have increased 575 times to Rs 189 • billion by the Seventh Plan, S&T was a mere 1.1% in 1996. The Tenth Plan (2002-2007) proposed to formulate a 20-year S&T plan with RONAST. But • Has not materialized yet

26. National Science and technology (NS&T) policy 1989Salient features of this policy are : 1. A conducive environment will be created for imparting standard science and technology education at school and higher education levels. The promotion of technical education will be gradually increased. 2. Improvements in indigenous and traditional technology will be made and special consideration will be given to commercialize it. 3. Advanced technologies will be imported. The selection process for imports will give priority to export promoting and under employment reducing technologies. 4. Production and productivity will be increased by the compulsory adoption of advanced technology in economic and social sectors.

27. Salient features of this NS&T policy are 5. Science and Technology Committee and Research and Development (R & D) unit will be formed in all government and semi-government agencies. 6. Private sector will be encouraged to invest a certain percentage of their profits to research. Science and technology sectors will be initiated in districts, municipalities and village development Committees. 7. A national science and technology management system will be developed to ensure efficiency and effectiveness of investment. 8. A separate science and technology service will be developed within the civil service. Incentives will he provided to scientists and technologists involved in R & D. Lateral entry will be allowed. 9. Research findings of science and technology will be disseminated. 10. A twenty year science and technology perspective plan will be prepared. 11. Necessary institutional framework and system will be developed for science and technology. 12. Brain drain of science and technology personnel will be controlled. 13. Technology parks will be established.

28. Acts/Policies indirectly related to S&T • Industrial Enterprise Act and Industrial Policy • The Industrial Policy, 1992 recognized the key role of private sector in industrial promotion. The • Policy stressed on privatization, market oriented pricing of industrial products, determining wages on the basis of • productivity and protecting industries through custom duties. The main characteristics of this policy are briefly

29. Acts/Policies indirectly related to S&T • The Foreign Investment and Technology Transfer Act, 1992 • The Foreign Investment and Technology Act, 1992 was enacted with a view to attract foreign investors to invest in Nepal so that production capacity of the country is enhanced with good opportunity for employment on the one hand. On the other hand, it is regarded as an instrument to transfer technology from developed countries to Nepal.

30. Acts/Policies indirectly related to S&T • National Policy on Technical Education and Vocational Training, 1999 • The policy was formulated realizing the need for a nation-wide coordinated effort to put for developing • human resources and infrastructure in the field of technical and vocational sector and which will be instrumentals • in addressing poverty issue of the country by enabling the people to get employment or self-employment and • thereby contribute in promoting economic development of the nation.

31. Acts/Policies indirectly related to S&T ( ICT) • Information Technology Policy, 2067 (2010) • Telecommunications Policy 2004 • Electronic Transaction Act/Regulation 2007 • Telecommunications Act/Regulations 1997 • Climate Change Policy 2011

32. Institutional framework for S&T • National Planning Commission • National Council for Science and Technology • Nepal Academy of Science and Technology • Ministry of Environment, Science and Technology • Nepal Agricultural Research Council • Water and Energy Commission • Environment Protection Council • National Health Research Council • Research Centre for Applied Science and Technology TU • Government Departments • Public and private initiatives . • BalajuYantrashala • Council for Technical Education and Vocational Training • Alternative Energy Promotion Center ( AEPC)

33. Institutional framework for S&T (ICT) • NPC • MoIC • MoEST • DoIT • NTA • NITC • OCC

34. Action Plans on S&T:National development plans • Nepal, for the first time, had initiated planned effort in 1956 as the First Five-Year Plan (1956-1961) • where budget was allocated for industry and mining. The Second Plan (1963-1965) concentrated on institutional change and infrastructure development. Agriculture and industrial sector had been given high priority and provision was made to promote industries through pilot projects in the industrial districts located at Balaju and Patan during the Plan period.

35. Development plans • The Third Plan (1965-1970) emphasized on developing infrastructure so as to • accelerate the pace of economic development in the country. So, substantial budget was allocated for the • development of transportation base, electricity and agriculture production. High priority was given to transportation • and agriculture sectors in the • Fourth Plan (1970-1975) compared to industry sector. • The Fifth Plan(1975-1980) gave due attention in the production of mass consumption goods, optimum utilization of human • resources and promotion of regional balance and integration. The plan also gave emphasis on improving quality • of industrial products. As a result, a Nepal Standardization Board was set up.

36. Development plans • The Sixth Plan (1980-1985) stressed in increasing industrial production at a faster rate in order to • address poverty and unemployment. The plan also aimed at fulfilling the basic minimum needs of the people. • The Seventh Plan (1985-1990) further emphasized in the planned growth of industrial and commercial sectors. • Realizing the importance of private sector, the plan encouraged this sector to take lead role in the promotion of • industries so as to attain the anticipated goal of import substitution and export promotion. At the end of the • seventh plan, the Government observed some key constraints in the process of industrialization and also realized • that the industrial sector could not get momentum due to policy distortion, lack of transparency, over control and • complicated process for licensing.

37. Development plans • With these in mind, the Eighth Plan (1992-1997) was formulated with • objective of promoting of medium and large size industries in order to substitute imports and improve cottage • and small-scale industries using locally available resources to meet the internal demand. The Plan stressed the • following policies for the promotion of SMIs: (i) development of import substituting and export promoting • industries; (ii) priority of private participation; (iii) emphasis on the development and expansion of cottage and • small-scale and agro-based industries; (iv) institutional arrangements to familiarize the cottage and small-scale • industries with market, technology, skills, etc.; (v) strengthening the existing financial institutions and establishing • new ones to assist cottage and small-scale industries.

38. Development plans • The Ninth Plan (1998-2002) with core objective of poverty alleviation during the Plan period. • Tenth Plan 2002-2007 ( Poverty Alleviation) • First Three Year Interim Plan (2007-2010) • Second Three Year Interim Plan (2010-2013)

39. Initiatives: ICT intervention • E-Government Master Plan 2006

40. Policy Intervention : A Success Story Alternative Energy Promotion Center/MOEST Established in 1996 with objectives of promotion of renewable/alternative energy technologies to raise the living standard of the rural people, to protect the environment. Policy • To intensify the development and utilization of the renewable energy technology based on local resources.” (Science and Technology Policy 2005). • To develop and extension of alternative energy technology to ensure the supply of energy of the rural mass and support the rural economy (tenth plan 2002-2007).

41. Community Forestry in Nepal A Policy Innovation for Local Livelihoods • is a global innovation in participatory environmental governance that encompasses well-defined policies, institutions, and practices. The program addresses the twin goals of forest conservation and poverty reduction. As more than 70 percent of Nepal’s population depends on agriculture for their livelihood, community management of forests has been a critically important intervention. Through legislative developments and operational innovations over three decades, the program has evolved from a protection-oriented, conservation-focused agenda to a much more broad-based strategy for forest use, enterprise development, and livelihood improvement. By April 2009, one-third of Nepal’s population was participating in the program, directly managing more than one-fourth of Nepal’s forest area.

42. WAY FORWARD • Develop national innovation system • Develop networks and linkages. • Innovation fund to support partnerships. • Providing state-of-the-art research infrastructure. • Emphasis on needs–driven (problem-oriented) research. • Promoting SMEs in more high-value-added agricultural and industrial activities.

43. Three-pronged policy recommendations for development of S&T in Nepal • Formulating Visionary S&T Policy and Planning • Strengthening S&T education and training system • Building S&T capacity and management

44. Impacts on future innovation performance: Looking ahead • Five factors have long-run effects on innovation systems: i) negative effects on human capital; ii) disruptions to investments that affect future innovation efforts; iii) negative impacts on technological leadership; iv) changes in attitudes towards innovation projects in financial markets; and v) permanent changes to public support systems for innovation.

45. Broad-based innovation policy • User-driven innovation in addition to science and technology driven (DUI+STI) – ‘Combined and complex mode of innovation’ • Exploitation of different modes of innovation and forms of learning • Knowledge creation and innovation in all types of industries with different knowledge bases • Resolve the potential contradiction between competition and social and regional and international cohesion

46. Best practices • The only sustainable path to raising living standards for the vast majority of citizens in developing and developed countries alike will be to leverage innovation to raise economies’ productivity across-the board.

47. Best practices • Countries with the best innovation strategies coordinate their policies toward • skills, • scientific research, • information and communications technologies (ICTs), • tax, • trade, • Intellectual property, • government procurement, • standards, and • regulations in an integrated approach designed to • drive economic growth through innovation.

48. Best practices • Developed nations should focus on implementing science and R&D policies that increase • the supply of ideas, • knowledge, and • Technology in their economies and then incentivize their commercialization.

49. Best practice • Trade: • As innovation and trade policy have become increasingly intertwined, • openness to trade characterized by • open market access and • receptivity to foreign direct investment has become a bedrock pillar of a country’s innovation capacity:

50. Best practice • Science and R&D: • Science and R&D policies boost countries’ innovation potential while enhancing their ability to benefit from technology-based innovation: • Domestic Competition: • Vibrant domestic markets supported by a sound and rules-based regulatory environment that allows both existing and new firms (whether domestic- or foreign-owned) to compete on a level playing field remain a lynchpin of prosperity: • IPR: Recognition of intellectual property rights • (IPR) is a vital element if global trade and foreign direct investment are to thrive: