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Roles of Education, Science, Technology and Innovation in Economic Development

By Vahd Nabyl Mulachela

We know that education is a powerful tool to transform a society. Almost all achievements that are made possible by human mind are perpetuated by various forms of education. For many, education serves as a powerful driver of development for improving quality of life, and a recipe to reducing poverty.


It is widely accepted that investing in education gives large returns and benefit in many levels. For individuals, it promotes employment, provides better livelihood, health and better adaptation to new technologies. For larger societies, education opens the door of innovation, strengthens civil institutions, fosters social cohesion and drives economic growth. It enhances people’s ability to make informed decisions.


The United Nations Organization recognizes people as the real wealth of nations, and education is what makes them responsible citizens of the world. It is a basic human right enshrined in the Universal Declaration of Human Rights and the United Nations Convention on the Rights of the Child.


Realizing the key potential of education in transforming society, countries have made tremendous efforts in providing access to education for their citizens and getting children into the classroom. However, although the majority of children worldwide are fortunately now in primary school, some 260 million children are still out of primary and secondary school. Hundreds of millions of children cannot read or write, despite having attended school. In a large perspective, this is a challenge for everyone.


Science, technology and innovation (STI) are integral parts of today’s education. Nations spend significant amount of budget for R&D. According to UNESCO Science Report Towards 2030, in 2013 the world’s gross domestic expenditure for research and development (GERD) amounted to US$1.478 billion. Global economic crisis in 2008-2009 did not give huge impact in expenditure for R&D. This reflects the growing acceptance worldwide of STI as a driver of development.


Not all R&D investment in a country comes from government’s public fund. Private sectors also play a large part. In many high-income countries such as Australia, Canada and USA, the roles of private sector in R&D might be bigger compared to lower income countries.


UNESCO Report highlighted that in some African countries, such as Ethiopia, Malawi and Uganda, the ratio of GERD to GDP have increased between 2009 and 2013. In many East African countries such as Cameroon, Kenya, Rwanda, and Uganda, investment in STI is boosted by both supports from the public and private sectors. In Brazil, public fund committed to R&D from 2008 to 2013 has remained more or less stable; while in India, business R&D has progressed faster than government-sponsored R&D. In China, public and business funding of R&D have risen in tandem. In South Africa, private-sector R&D has dropped since the global financial crisis 2008-2009, in spite of rising public spending on R&D.


The global crisis of 2008-2009 has affected particularly the high-income countries. Some of them recovered faster than others. For instance, while the US economy is relatively back, their EU and Japan counterparts are still facing uphill struggle to bounce back. This relates to expenditures and fiscal allocations for public investment in knowledge. Among EU countries, only Germany was in a position to increase its commitment to public R&D. Both France and the UK saw it decline.


Balancing Basic and Applied Science

All nations acknowledge the importance of education and STI for sustaining growth. Low and lower-middle income countries expect STI help them raise income levels. Wealthier countries tend to hold their own STI to keep their advantage in competitive global marketplace. However, countries should also pay attention to basic science – not only applied science. Basic research is a fundamental generates the new knowledge that gives rise to applications, commercial or otherwise.


UNESCO has noted that China has been unhappy with the return on its huge investment in R&D. At the same time, over the past decade China has devoted 4–6% of research expenditure to basic research. In India, universities perform less than 5% of GERD. Although in recent years India has produced numerous universities, their industry has complained about the ‘employability’ of science and engineering graduates. Basic research not only generates new knowledge; it also contributes to the quality of university education.


In the US, the Federal government takes role in supporting basic research while leaving private sectors to take the lead in applied research and technological development. Without adequate financial support and prioritization, long-term capacity to generate new knowledge can be hampered. Canada cut back on federal funding of government science but investing in venture capital. The goal is to develop business innovation and attract new trading partners. In 2013, the Canadian government launched its Venture Capital Action Plan, a strategy for deploying CAN$ 400 million in new capital over 7–10 years to leverage private sector- led investment in the form of venture capital funds.


In Russia, the government has traditionally allocated large share of GERD to basic research. However the allocation dropped from 26% to 17% of the total between 2008 and 2013. The EU has embarked in the opposite direction. The European Research Council (est. 2007), the first pan-European funding body for frontier research in basic sciences, has been endowed with € 13.1 billion for the period 2014–2020, equivalent to 17% of Horizon 2020’s overall budget.


The Republic of Korea and Malaysia both increased their own commitments to basic research between 2001 and 2011. In 2012 these two Asian countries devoted a comparable share to that of the USA: 16.5%. In the Republic of Korea, the government is investing heavily in basic research to fix the impression that it made the phenomenal transition from agricultural country to an industrial giant solely through imitation, without developing its own endogenous capacity in basic sciences.


The distribution of investment in knowledge remains geographically unequal. Based on 2015 UNESCO data, the US still dominates with 28% of global investment in R&D. China, the EU and Japan were in second, third and fourth place each with 20%, 19% and 10% of global R&D. The rest of the world that represents 67% of the global population contributed merely 23% of global investment in R&D. As indicated earlier, GERD encompasses both investments in R&D by public and private sectors. In economies that focused on technology-based competitiveness in manufacturing, the share of GERD performed by the business enterprise sector (BERD) tends to be higher.


In 2015, there were estimated some 7.8 million researchers worldwide. The number of researchers has risen by 21% since 2007. This growth is also reflected in the explosion of scientific publications. The world leader for the number of researchers is the EU with a 22.2% share. It is followed by China (19.1%) that has overtaken the USA (16.7%) since 2011. Japan’s world share has decreased from 10.7% (2007) to 8.5% (2013) and Russia from 7.3% to 5.7%. The Big Five account for 72% of all researchers.


Role of both private and public sectors are equally important. Once governments are prepared to invest more in research personnel and in publicly funded research, the tendency of private sector to invest in R&D also escalates. It is expected that public and privately funded research has different aims. However, their contribution to national growth and welfare depends on how good they complement one another. This holds for countries of all income levels.


In the coming years, competition for skilled workers from the global pool will most likely intensify. This trend will depend in part on levels of investment in science and technology around the world. Demographic trends, such as low birth rates and ageing populations in some countries are also influential. Countries are already formulating broader policies to attract and retain highly skilled migrants and international students, in order to establish an innovative environment or maintain it, as in Singapore and Malaysia.


One of the most important migration trends in recent times is the increasing number of international students. The increasing mobility of students at doctoral level reflects to some extent the mobility of scientists. According to UNESCO Institute for Statistics, students from the Arab States, Central Asia, sub-Saharan African and Western Europe were more likely to study abroad than their peers from other regions. Central Asia has even overtaken Africa for the share of tertiary students studying abroad.


The national and regional schemes in Europe and Asia are known for their active encouragement for doctoral students to study abroad. Vietnam and Saudi Arabia, for instance, sponsors the doctoral training of their respective citizens overseas, in order to add doctorate-holders to the faculty of their universities. Malaysia, South Africa and Cuba, meanwhile, are among the most popular destinations for foreign students from their regions.


Recent technological changes are also affecting developing economies. While there has been no rapid increase in “new economy skills” that enables individuals to explore new economic models, the more highly educated individuals have increased their new economy skills faster than individuals with less education. Even though the speed at which an economy adapts to technological change depends on a variety of factors, more educated individuals tend to adapt faster to change, and by doing so, contribute to technological catch-up.


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