Mobilizing Science-Based Enterprises for Energy, Water, and Medicines in Nigeria

Committee on Creation of Science-Based Industries in Developing Countries

Development, Security, and Cooperation

Policy and Global Affairs

NATIONAL RESEARCH COUNCIL OF THE NATIONAL ACADEMIES

NIGERIAN ACADEMY OF SCIENCE

THE NATIONAL ACADEMIES PRESS

Washington, D.C.
www.nap.edu



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Mobilizing Science-Based Enterprises for Energy, Water, and Medicines in Nigeria Mobilizing Science-Based Enterprises for Energy, Water, and Medicines in Nigeria Committee on Creation of Science-Based Industries in Developing Countries Development, Security, and Cooperation Policy and Global Affairs NATIONAL RESEARCH COUNCIL OF THE NATIONAL ACADEMIES NIGERIAN ACADEMY OF SCIENCE THE NATIONAL ACADEMIES PRESS Washington, D.C. www.nap.edu

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Mobilizing Science-Based Enterprises for Energy, Water, and Medicines in Nigeria THE NATIONAL ACADEMIES PRESS 500 Fifth Street, N.W. Washington, DC 20001 NOTICE: The project that is the subject of this report was approved by the Governing Board of the National Research Council, whose members are drawn from the councils of the National Academy of Sciences, the National Academy of Engineering, and the Institute of Medicine. The members of the committee responsible for the report were chosen for their special competences and with regard for appropriate balance. This study was supported by funding from the National Academies. Any opinions, findings, conclusions, or recommendations expressed in this publication are those of the author(s) and do not necessarily reflect the views of the organizations or agencies that provided support for the project. International Standard Book Number-13: 978-0-309-11118-8 International Standard Book Number-10: 0-309-11118-8 Additional copies of this report are available from the National Academies Press, 500 Fifth Street, N.W., Lockbox 285, Washington, DC 20055; (800) 624-6242 or (202) 334-3313 (in the Washington metropolitan area); Internet, http://www.nap.edu. Copyright 2007 by the National Academy of Sciences. All rights reserved. Printed in the United States of America

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Mobilizing Science-Based Enterprises for Energy, Water, and Medicines in Nigeria THE NATIONAL ACADEMIES Advisers to the Nation on Science, Engineering, and Medicine The National Academy of Sciences is a private, nonprofit, self-perpetuating society of distinguished scholars engaged in scientific and engineering research, dedicated to the furtherance of science and technology and to their use for the general welfare. Upon the authority of the charter granted to it by the Congress in 1863, the Academy has a mandate that requires it to advise the federal government on scientific and technical matters. Dr. Ralph J. Cicerone is president of the National Academy of Sciences. The National Academy of Engineering was established in 1964, under the charter of the National Academy of Sciences, as a parallel organization of outstanding engineers. It is autonomous in its administration and in the selection of its members, sharing with the National Academy of Sciences the responsibility for advising the federal government. The National Academy of Engineering also sponsors engineering programs aimed at meeting national needs, encourages education and research, and recognizes the superior achievements of engineers. Dr. Charles M. Vest is president of the National Academy of Engineering. The Institute of Medicine was established in 1970 by the National Academy of Sciences to secure the services of eminent members of appropriate professions in the examination of policy matters pertaining to the health of the public. The Institute acts under the responsibility given to the National Academy of Sciences by its congressional charter to be an adviser to the federal government and, upon its own initiative, to identify issues of medical care, research, and education. Dr. Harvey V. Fineberg is president of the Institute of Medicine. The National Research Council was organized by the National Academy of Sciences in 1916 to associate the broad community of science and technology with the Academy’s purposes of furthering knowledge and advising the federal government. Functioning in accordance with general policies determined by the Academy, the Council has become the principal operating agency of both the National Academy of Sciences and the National Academy of Engineering in providing services to the government, the public, and the scientific and engineering communities. The Council is administered jointly by both Academies and the Institute of Medicine. Dr. Ralph J. Cicerone and Dr. Charles M. Vest are chair and vice chair, respectively, of the National Research Council. www.national-academies.org

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Mobilizing Science-Based Enterprises for Energy, Water, and Medicines in Nigeria The Nigerian Academy of Science is a private non-profit honorific organization of distinguished scholars in the pure and applied sciences. It was founded in 1977 and now has 126 members. Its mission is to promote the growth, acquisition, and dissemination of scientific knowledge, and to facilitate the use of science in the solution of problems of national interest. The academy is a voluntary organization, independent of government control, but collaborating with the government in the growth and development of science and technology in Nigeria. Professor David Okali is president the Nigerian Academy of Science. Professor Gabriel Ogunmola is former president.

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Mobilizing Science-Based Enterprises for Energy, Water, and Medicines in Nigeria COMMITTEE ON CREATION OF SCIENCE-BASED INDUSTRIES IN AFRICA Rita Colwell (NAS), Chair University of Maryland College Park, MD Bernard Amadei University of Colorado Boulder, CO Nancy Bearg Consultant Washington, DC Stephen Hoffman (IOM) Sanaria, Inc. Rockville, MD Kung Shain-Dow Consultant College Park, MD Winston Soboyejo Princeton University Princeton, NJ NRC Staff Michael Greene, Study Director Policy and Global Affairs Effie Bentsi-Adoteye Policy and Global Affairs

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Mobilizing Science-Based Enterprises for Energy, Water, and Medicines in Nigeria Preface In 1994 the World Bank approached the National Research Council (NRC) of the U.S. National Academies to propose a joint symposium on a novel topic. The Bank had identified what it called a “technology revolution” and an “economic revolution,” which together were having a significant effect both on the ability of its client developing countries to compete in world markets and on the impact of the developing countries on the world economy itself. As Jean-François Rischard, vice president of the World Bank for finance and private sector development, explained: The world has entered a period of massive shifts in its economy. Among the many changes likely to occur, China will be the world’s largest economy by 2020; digital television and telephone systems will completely change the way people and businesses communicate, and such traditional activities as deposit banking may become shadows of their former selves. Behind these changes and the reshaping of the world economy are two major forces: a technology revolution and an economic revolution.1 With these prescient words, he went on to describe the impact that information technology and its derivatives in transportation, communication, and software were having on business practices while creating new opportunities in the developing world. At the same time, he pointed out, 50 percent of the world’s gross domestic product (GDP) and most of 1 National Research Council and World Bank, Marshaling Technology for Development, Washington, DC: National Academy Press, 1995, p. 8.

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Mobilizing Science-Based Enterprises for Energy, Water, and Medicines in Nigeria its growth were being produced by countries that were not members of the Organisation for Economic Co-operation and Development (OECD), which at that time constituted all of the nonrich countries, by the World Bank’s measure. The theme of the symposium at which Rischard spoke was the central role played by knowledge in the new economy and the importance of access to and the creation of knowledge for all countries. At the conclusion of the symposium, the World Bank asked the National Research Council to develop a tool that the Bank could use in both assessing the state of practical knowledge in its client states and creating in these countries an awareness of the importance of applying that knowledge to exploit new opportunities and niches in the world economy. The Bank called the putative methodology a “knowledge assessment.” The moment was opportune for the NRC to take on this assignment. It had just completed a three-year project in Indonesia, funded by the World Bank, devoted to applying science and technology to industrial development. As part of the U.S. National Academies complex, the NRC is able to recruit and convene experts on nearly every technical topic and every technology from around the world, and many highly distinguished scientists and industrialists were brought to Indonesia during that period. In the process, the Bank and the NRC learned an important lesson: the obstacles to technology development are most often not themselves technical, but rather social, economic, and political. They also found that the local business and scientific communities were quite well informed about the problems and obstacles within their own countries, and thus the combination of the international and local experts working together produced a powerful synergy that aided in finding solutions. At the same time, this synergy created a constituency for change within the country, centered around the local participants themselves. Out of this experience arose the interactive version of the knowledge assessment, in which a small group of international experts plays the role of venture capital investors visiting the country to explore the potential for investment. They meet with different groups of experts representing agriculture, labor, industry, the scientific community, education, and finance to evaluate the potential for investment in new technologies. During that meeting, they select a small number of diverse technologies that, although successful elsewhere, are not presently being exploited within the country’s economy, and they proceed to explore the obstacles that might exist. The next step is a series of workshops called hypothetical case studies, each based on one of the selected technologies. International business experts and engineers, often the CEOs of successful companies based on the technology, work with local experts to create a business plan for a hypothetical enterprise based on the technology in question. In

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Mobilizing Science-Based Enterprises for Energy, Water, and Medicines in Nigeria the process, they expose the problems in the local environment, identify the conditions for creating a profit-making enterprise, and assemble cost estimates. The result of the knowledge assessment, after combining the conclusions of the different hypothetical case studies, is a series of recommendations to donors, government, the private sector, and other local organizations for making the country more hospitable to new technologies and science-based enterprises. In recent years, this methodology was tested in Panama and El Salvador, and the pilot study took place in Prince Edward Island, Canada.2 The Nigerian study described in this report seemed to be a useful, if not ideal, application of the knowledge assessment methodology. The technologies selected had not yet appeared in practice in the country, and the knowledge assessment could be used to identify the obstacles and recommend actions to encourage enterprises to put them to use. There was one difference, however. The original knowledge assessment was intended to analyze the economy, and the case studies were merely vehicles to study different sectors. In the Nigerian study, it was the intention that the enterprises actually come into existence. A feature of the knowledge assessment method is that the workshops between the international experts and the local business and scientific community serve as the exclusive source of all the information generated—that is, the participants provide all information used in the study, even though, in reality, some of it may be misinformed or even wishful thinking. The resulting report can serve as a useful guide to the potential investor or entrepreneur, but with the caveat that the information presented must be verified at the time and specific location it is meant to be applied. For this reason, one single technological solution is not presented; rather a set of choices—amorphous versus crystalline silicon photo cells, ultraviolet versus ceramic water filtration, and several different artemisinin combination malaria therapies—are offered in every case. In fact, in a fast-moving field like artemisinin-based malaria therapy in which an international consortium is striving to support a global subsidy, the committee found it difficult to remain up-to-date, even during the review and publishing process.3 Thus this report may not offer concrete 2 This process is described more fully in the following reports: National Research Council, Committee on Knowledge Assessment, National Research Council Prospectus for National Knowledge Assessment, Washington, DC: National Academy Press, 1996; and National Research Council, Committee on Knowledge Assessment, Lighting the Way: Knowledge Assessment in Prince Edward Island, Washington, DC: National Academy Press, 1999. 3 For example, in the spring of 2007 it was announced that the pharmaceutical giant Sanofi-Aventis had reached an agreement with the Drugs for Neglected Diseases initiative (DNDi) and Médecins sans Frontières to offer a compound drug meeting the price and quality standards of the World Health Organization at less than $1 a course. Another low-cost

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Mobilizing Science-Based Enterprises for Energy, Water, and Medicines in Nigeria and certain answers, but it can be used to suggest the questions that need to be asked. As for the usefulness of the report to the Nigerian government, the fact that prominent local businessmen, businesswomen, and scientists believe in the truth of its statements—for example, those related to education, infrastructure, and regulation—is itself important information about business confidence. ACKNOWLEDGMENTS The committee is grateful to the Nigerian Academy of Science and its president at the time of this study, Professor Gabriel Ogunmola, for their help and collaboration in carrying out this work. The efforts of all the Academy members and other experts named in the appendixes who voluntarily participated in the workshops and are primarily responsible for the information that appears in the report are sincerely appreciated. A strong expression of gratitude is extended to Hellen Gelband of the Institute of Medicine. Ms. Gelband was project director of the study Saving Lives, Buying Time, which proposed the global subsidy for artemisinin-based malaria drugs, and her guidance through that thicket was invaluable. Krishna Kumar of Howard University provided the cost estimate for artemisinin combination therapy manufacture. The report was edited, meticulously as always, by Sabra Bissette Ledent. This report has been reviewed in draft form by individuals chosen for their diverse perspectives and technical expertise, in accordance with procedures approved by the NRC’s Report Review Committee. The purpose of this independent review is to provide candid and critical comments that will assist the institution in making its published report as sound as possible and to ensure that the report meets institutional standards for objectivity, evidence, and responsiveness to the study charge. The review comments and draft manuscript remain confidential to protect the integrity of the deliberative process. We wish to thank the following individuals for their review of this report: Dana G. Dalrymple, U.S. Agency for International Development; Thomas L. Dixon, TechnoServe (Tanzania); Barrett Hazeltine, Brown University; Uford Inyang, National Institute for Pharmaceutical Research and Development (Nigeria); Akinlawon L. Mabogunje, Nigerian Academy of Science; and R. Rhodes Trussell, Trussell Technologies Inc. Although these reviewers provided many constructive comments and suggestions, they were not asked to endorse the conclusions or recom- compound is in the process of registration in Brazil. However, because this report does not identify which compound should be produced in Nigeria, these developments do not alter its conclusions.

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Mobilizing Science-Based Enterprises for Energy, Water, and Medicines in Nigeria mendations, nor did they see the final draft of the report before its release. The review of this report was overseen by Queta Bond of Burroughs Wellcome Foundation. Appointed by the National Research Council, she was responsible for making certain that an independent examination of this report was carried out in accordance with institutional procedures and that all review comments were carefully considered. Responsibility for the final content of this report rests entirely with the authoring committee and the institution.

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Mobilizing Science-Based Enterprises for Energy, Water, and Medicines in Nigeria Contents     Summary   1 1   Introduction   11      Nigeria,   13      Filling the Gaps: Three Technologies to Meet Three Major Needs,   15      Doing Business with the Poor,   19 2   Methodology   26      Hypothetical Case Studies,   28      Nigerian Adaptation,   29 3   The Case Studies   31      Solar Photovoltaics,   31      Financing the Enterprise,   36      Water Purification,   37      Antimalarial Artemisinin Combination Therapy (ACT),   45 4   Meeting Needs   55      Mobilizing the Private Sector to Provide Public Goods,   57      The Special Case of Artemisinin,   59      Linking Science-Based Enterprises to Research,   61

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Mobilizing Science-Based Enterprises for Energy, Water, and Medicines in Nigeria 5   Recommendations   63      Incentives for Private Companies to Provide Public Goods and Services,   63      The Challenge of Artemisinin Combination Therapies,   66      Consumer Education and Training,   67      The Role of Philanthropic Foundations and Donor Agencies,   68      The Role of the Nigerian Academy of Science,   70     Appendixes: Workshop Reports   75      A  Solar Photovoltaics: Hypothetical Case Study   77      B  Water Purification: Hypothetical Case Study   90      C  Artemisinin-Based Malaria Therapy: Hypothetical Case Study   108