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Prospectus for National Knowledge Assessment 1 What Is a National Knowledge Assessment? New economic trends driven by technological advances and their impact on international commerce and industry have been described in many sources. It is generally agreed that these trends affect developing countries 1 , although the benefit or harm to those most affected are not clear. Sooner or later nearly all countries will be impacted, whether they choose to use the new technologies or not. The metaphor of a stream is often used to describe information. A stream flows past every point on the shore, whether or not the observer chooses to dip a line. Now, new technologies, led by advances in computers, telecommunications and biosciences have transformed the global information stream into a river. New opportunities result, but new knowledge and new equipment are needed to derive benefit from them. The fishers with new boats and tackle may thrive, but those who remain on the shore will do worse if they are not taught again how to fish with the most effective methods and gear. In real terms, new institutions, new mechanisms, and new approaches are needed to cope in a different world. CHANGES IN TECHNOLOGY DRIVE NEW WAYS OF DOING BUSINESS. Telecommunications and informatics technologies have been the principal drivers of the changes in the global economy, but innovations arising from biotechnology, materials science, and other areas have contributed as well. These have forced a restructuring of established industries to make them more global, high speed, and knowledge-intensive. They also have led to the creation of scores of new types of enterprise which can be described as knowledgebased because they depend for their success upon new technologies, timely access to and use of information, and new skills in their work forces. These changes have brought forth important and novel challenges to the developing countries. Faced with a need to adopt some form of sustainable development strategies to cope with expanding populations and deteriorating environments, they are simultaneously forced to confront competitive challenges based on knowledge. Knowledge can contribute to the transition to sustainability while simultaneously generating new forms of high-quality employment. But to those who don't have or use knowledge, knowledge-based transformations can lead to loss of jobs and over-exploitation of the environment. An example from electronics manufacturing illustrates this situation. The recipe for making things is a most important form of knowledge. In the global value chains that characterize the electronics industry, components makers and assemblers may lie around the globe, but communication and transmission of recipes must be precise and timely. So companies put recipes on the Internet (under highly secure conditions), which allows almost instantaneous access by partners in all parts of the world. A firm in a country that does not have open Internet access has no chance to participate in such a global value chain, and the traditional comparative advantage of the developing countries, low-wage labor, carries little weight. The rapid rise of the so-called Asian Tigers or Newly Industrializing Countries (NICs), most of which have very little in the way of natural resources, shows that economies based largely on knowledge-based industry can be successful. Besides business, other sectors of the economy and of society are transformed as well. New opportunities are presented in education by technologies able to reach and teach larger numbers of students. But where the educational system does not prepare students to accept and adapt to changes, it is difficult to introduce new curricula and teacher training methods. Agriculture is dependent on new technologies to combat pests and increase yields for growing populations. Health services too benefit both directly from advances of medical science and indirectly through the application of telecommunications and informatics technologies to enable new modes of diagnosis and treatment of patients in remote areas by physicians in major centers of research and training. 1 National Research Council and World Bank, Marshaling Technology for Development, National Academy Press, 1995.
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Prospectus for National Knowledge Assessment Finally, politics and national identity themselves are affected. The global market in information and in goods and services challenges the very notion of the nation-state as the unit of measure of viability in a society. Supra-national economic and political unions are becoming powerful and important, and every nation at some time may find compelling reasons to join. To profit from membership requires a level of agility, connectivity and speed of decision making that can only be achieved with the effective use of technology. Knowledge assessment will help point to opportunities for links with global partners. Particularly in export industries, but also in domestic manufacturing and services, agriculture, financial services, and other sectors, inter-firm links are increasingly important. In an era of regional trading blocks, it will be difficult for any country to avoid the necessity of joining regional markets and opening the country to trade from abroad. Any local industry is likely to have foreign competition, and the terms of the competition will involve technology and knowledge. The same considerations apply to health care, education, and agriculture, as technologies generate the potential to increase the efficiency of production or service. Further, a trading world is by definition an open world, and economic pressures may likewise force a change in the attitude of governments toward their citizens. Most developing countries do not yet fall among the ranks of the NICs. As they enter the 21st century, their ability to join the knowledge-based industrial revolution is not secure, and they are in need of a new kind of technical assistance. Timing is critical, because the growth in numbers of competitors narrows the opportunity window in time for responding to new markets and economic environments. The focus of this technical assistance can not be determined without a proper diagnosis of the weaknesses in the national knowledge system—the institutions and the links among them that determine the effectiveness of the productive use of knowledge in the country. HOW DID THE CONCEPT ORIGINATE? The concept of a national knowledge assessment arose explicitly at a symposium in November 1994 on the topic Marshaling Technology for Development, sponsored jointly by the National Research Council and the World Bank. Several key speakers, including Professor George Bugliarello and Professor Harvey Brooks, emphasized the impact that new technologies are having on business practices, spurring development of new products and services, significant increases in productivity, and realization of a global economy. The same technologies may enable even the poorest countries to participate in and benefit from the changes, but only where the government, the people, and the economic system are sufficiently receptive to innovation. It makes little difference whether an innovation is new to the world or merely new to the country; the process of transfer and adoption is the same. Important factors include the educational system, the skilled work force, research laboratories, the system of measures and standards, the legal system and its ability to protect innovation, and the financial mechanisms to invest in innovation. To these are added the openness of the society to the expression of ideas, the media that educates and informs the public, and the receptivity of the general population to learning, to form what is here called the National Knowledge System. At the symposium, Jean-Francois Rischard, World Bank Vice President for Finance and Private Sector Development, summed up these thoughts as follows. “At the Bank we produce country-by-country private sector assessments. Those deal mostly with the regulatory impediments and the other impediments to private sector development, and these assessments also are used to try to develop a sort of road map of strategy for private sector developments. On the other hand the OECD finances reviews of science and technology policies of government, which is a different tack altogether. The way I see it, we could go for something like a knowledge assessment which would be a more ambitious, possibly more powerful undertaking .. to assess a country's ability to capture and generate knowledge, turn it into action, and become what I called ..a ‘learning nation.' So we would look at the various aspects of education, technical literacy, technical training. We would look at the degree of technological awareness of government leaders, of important decision makers, of union leaders. We would look at the business associations' ability to serve as knowledge relays, at the country's internal and external networking capacity, at its access to knowledge in all kinds of channels, including embassies abroad, at its openness to foreign direct investment, to licensing. More generally at its research capacity and its set-up with respect to centers of excellence, .. at whether its labs, its applied research labs, are able to serve as lookout posts for the economy, and of course at the needs with respect to information infrastructure, and so forth.... Indeed, countries increasingly need to look at themselves in this new world economy as knowledge systems, and at how well they have equipped themselves for this high-speed future as knowledge systems.” WHERE ARE THE BARRIERS ON THE PATH TO DEVELOPMENT? Drawing on Mr. Rischard's ideas, we will define knowledge assessment as the evaluation of the ability of an enterprise, an industry, an economic sector, a city, a region, or a nation to create, access, assimilate, diffuse, and use knowledge, and we will seek indicators of that ability. But for many indicators that apply to knowledge assessment, there are no accepted international standards that prescribe for a given country or sector whether the present value of the indicator is adequate or too low to achieve its developmental goals. As there is no single path to development, so there is no easy way to determine, for example, whether two countries with
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Prospectus for National Knowledge Assessment similar values for their knowledge-based indicators are in fact at the same stage of development. How many Internet servers per capita should a developing country have? Which is of higher priority: increasing Internet access in schools or in research labs? How many biotechnologists, software engineers, or patent attorneys does a country need? Some of these questions made little sense or had quite different answers a decade ago, so no one can trace the trajectories of countries that have made different choices. For this reason, knowledge assessment emphasizes a barrier approach. We can recognize the roadblocks even if we don't know precisely where the road is heading. Barriers that prevent individual entrepreneurs, scientists and engineers, physicians and teachers, and other innovators from getting and using the knowledge they need at the least must be removed before optimum development can be achieved. Perhaps in a time of so many changes this is the best we can do. If we can not pick winners, we can at least clear the thicket so that winners can get through. National knowledge assessment must be a catalyzing tool aimed at auto-diagnosis and prescription. Standards may or may not be universal, but barriers are always local. There are two ways to eliminate barriers. One is to remove the barrier and take it away: change a procedure, lower a fee, shorten a line. The other way is to build a bridge that crosses over many barriers at once, including some not yet recognized. The recommendations of the knowledge assessment will be designed to build bridges, where possible, rather than identify and remove every barrier. THE KNOWLEDGE ASSESSMENT PROCEDURE The approach proposed for the National Knowledge Assessment is a combination of a bird's eye analysis of the National Knowledge System, the supply side of knowledge, with the worm's eye studies of sentinel enterprises, the demand side. The sentinel enterprises are selected in order to reveal barriers to knowledge flow and use in sectors and industries of potential or actual importance to the country. They are analyzed by a technique we call virtual case studies, described below. A small number of sentinel enterprises is selected, of the order half a dozen, so as to provide a little redundancy in order to identify barriers that affect more than one kind of enterprise while keeping the effort and expense low. In this way, barrier patterns will be revealed so that bridge-type solutions can be designed. There will be many forms of bridge-type solution. For example, we might imagine that several of the sentinel enterprise studies reveal that there is no competent laboratory for product testing of food products that is recognized by European governments, so that companies are having a hard time selling products based on special formulas (knowledge) to the overseas market. Further, it might be that there is no good source of knowledge on quality management procedures, and no institution capable of conferring ISO 9000 accreditation on a firm. Each of these might be solved by finding a laboratory at a university or private firm and contracting them to develop the capability and provide the specific service. However, a bridge solution might be to develop a new kind of institution, national or regional, that can provide product testing and quality management assistance to a wider range of industries, making use of computer links with European labs. (There is no U.S. equivalent of laboratory accreditation.) With proper incentives, such an institution might be formed in the private sector, and the recommendations of the knowledge assessment might focus on the nature of the incentives. The value of knowledge assessment depends critically on the fact that the recommendations are achieved through a structured, participatory process, sponsored, at least initially, by the World Bank. Participation by members of the business and technical community of the country or region will be seen as prestigious and even patriotic, despite the likelihood that some government policies will be criticized. The implicit promise of new financial and technical support will reinforce the lessons of a knowledge assessment and make it attractive for the country. Eventually, as different groups gather experience organizing knowledge assessments, this might itself develop into an important new capability and the potential for a new industry, analogous to environmental impact statements. The kit for carrying out a knowledge assessment will include two basic items: a template for describing the knowledge infrastructure or National Knowledge System of the country, and a procedure called a virtual case study for identifying both barriers to be eliminated or avoided and high leverage points to be reinforced and exploited. The template and procedure are general, but the applicability depends strongly on the identification and understanding of the economy, people, and institutions of the country. In a country with little tradition of self-analysis, the knowledge assessment could be a vehicle for new thinking about the country's response to these world trends, in which many local stakeholders would take part. The product would be better adapted to the unique conditions of the country, as it must be to be of use as a basis for change. WHAT IS A NATIONAL KNOWLEDGE SYSTEM? In analogy with the OECD definition of National System of Innovation, we can define the National Knowledge System as a network of institutions in the public and private sectors whose activities and actions motivate, create, access, assimilate, diffuse, and use knowledge for productive activity and promotion of the public welfare. The National Knowledge System is represented by a map of institutions that deal with knowledge, showing how knowledge flows
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Prospectus for National Knowledge Assessment from one to another. The map is derived from a template on which “locations” are functions that influence the use of knowledge. The first step in the elaboration of the National Knowledge System involves labeling the functions of the template with the corresponding national institutions and determining the extent of flow in all directions. These institutions will include universities, schools, libraries, academies of science and engineering, industrial associations, technical services and consulting companies, the technical media, and government agencies such as the census bureau, ministry of information, ministry of health, and ministry of agriculture. As an example, consider two functions relating to assimilation of knowledge: collect and publish information on manpower skills in the workforce and provide on-the-job training opportunities. The label on the first might be the Statistics Bureau, and the second might be the Ministry of Labor. The knowledge assessment process would explore the links and the flow of information between them, suggesting whether training programs are designed with or without a knowledge of the skills needed. The next step will be to identify the leverage points in the National Knowledge System. These will be institutions whose nodes on the chart are the focus of lines coming from many different directions, indicating links to centers of creation, access, assimilation, diffusion, and use of knowledge. It is expected that the bridge-type recommendations will make particular use of these institutions. In some cases, the recommendation will be to create a point of high impact on the chart if none exists to carry out the necessary function. Examples of functions that might be included in the template are shown in table 1 on page 18. The categories of measure are somewhat arbitrarily chosen to be a) motivation for learning and knowledge-based enterprise, b) creation of new knowledge, c) access to information and knowledge, d) assimilation and organization, e) diffusion within the society and the economy, and f) use of knowledge for productive ends. There is no clear distinction among them in every case, but nearly all the functions associated with knowledge assessment can reasonably be assigned to one or another of them without violating logical norms. WHAT ARE VIRTUAL CASE STUDIES? Virtual case studies are a way of probing the National Knowledge System, to identify the barriers to knowledge flow and application and the high leverage places in the system that should be reinforced. The virtual case study is based on the questions, “how” (“In this country, how do you ..?”) and “who” (“If conditions were right, who would ..?”). The predicate of both sentences is “create a sentinel enterprise,” a hypothetical enterprise in a knowledge-based industry, or a knowledgebased health clinic, or an enterprise for science-based agriculture, or whatever enterprise is appropriate to the comparative advantage or future needs of the country. It is not required that the selected enterprises be non-existent in the country, but it is assumed that they have not yet realized their full potential for reasons having to do with knowledge. If case studies of existing enterprises are available, they would be considered as well. This exercise is not necessarily intended to encourage competitors for already successful enterprises, but it might help identify additional factors making for higher performance for existing enterprises. The virtual case study entails participation by local and international experts who can systematically identify the steps to be taken to create a successful enterprise and, along the way, identify local barriers that must be reduced so that the process might actually happen in the real world. It emphatically will not be suggested that such an enterprise should actually be created. Rather the method is based on the assumption that if the barriers were removed or avoided, then firms or entrepreneurs would be able to evaluate for themselves the market and the opportunity, and they would succeed in this or similar enterprises in the future. The choice of sentinel enterprises must be made on that basis: to reveal the weaknesses in the system in an area of potential interest by preparing a detailed blueprint for a real enterprise. The number of different sentinel enterprises chosen will depend on the complexity of the economy or the sector chosen for the knowledge assessment, based on the need for a number sufficient so that general patterns of institutional, economic or cultural constraints will be revealed, and tempered by the need to complete the exercise in a reasonable time. ISSUES AND OPPORTUNITIES The template for the National Knowledge System is organized in six basic categories of knowledge-related functions. These six categories are described below, with some of the issues and opportunities that will be considered in the knowledge assessment. Motivation Motivation means incentives to learn and use knowledge for economic activity. Many of the functions and responsibilities that fall in this area of the National Knowledge System are normally the responsibility of government, but the general attitude of the public toward knowledge and toward innovation is important. Cultural and political climate In some cultures, learning is respected, and knowledge is considered of value for its own sake. Often this cultural attribute is associated with immigrants or ethnic minorities in a country. (This implies that external factors and policies may have an influence on the value that is given by a population to education and learning.) Other populations with an
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Prospectus for National Knowledge Assessment oral tradition that respects learning within that tradition may have a difficult time adapting to the flood of written knowledge that characterizes the modern trends. Peoples whose traditions hold that knowledge belongs to everyone and find copyright laws distasteful may also have difficulty acquiring the proprietary knowledge they require for economic competitiveness. The political climate is likewise influential. In both oral and bookish traditions, debate among scholars is considered a valid source of wisdom. The Moslem, Jewish, and Confucian traditions, among others, are renown for using accounts of ancient debates among sages as guides to modern life. In a new context, modern debates among today's scholars are no less useful, and the economic, political, and technological discussions associated with a free press and open society will enhance a country's ability to find the best answers. Economic incentives or disincentives Macroeconomic policy will have a crucial influence on the ability of a country to compete successfully in knowledge-based industry and commerce. Protectionism, regulation, subsidies, taxes, license fees, import and export duties, and restriction on movement of people figure in the arsenal of governments that seek to influence economic behavior. Most of the effects of most of these policies are well understood, and will be an important subject of knowledge assessment analysis and recommendations. National and industrial leadership One of the more important functions of leadership is to set a personal example, over and beyond the policies that are promoted. One example of a “learning nation” is unquestionably Taiwan, which is also known for the number of Ph.D. holders in the cabinet, including the Prime Minister. Interest shown by public officials in science, technology, research, and cultural issues is reflected by a corresponding attention by the elites and by the general population. Ignorance or contempt for these things is also duly noted and sets the tone for a negative climate for knowledge-based enterprises. The same is true for industrial leadership, officers of professional and business associations, owners and CEOs of major companies, and labor leaders. Their attitudes toward knowledge and technology may have direct repercussions on economic matters, but the public perception of their leadership views is important also, though harder to measure. Data and IPR protection A hallmark of knowledge-based business activities is reliance on the ability to control the knowledge on which the activity is based. As no one would invest effort or fortune in an enterprise whose assets could be freely taken and used by anyone, so are those whose primary assets are intangible equally needing of protection. The protection of knowledge assets lies in secrecy and security and in legal safeguards of intellectual property rights (IPR). Knowledge is no respecter of international boundaries, so IPR protection tends to be governed by international standards, and national IPR laws are measured by how they conform to international agreements. The negative effects of weak laws may have to be assessed by inference; those who are deterred from investing in a country, authors who do not publish, translators who do not translate, and inventors who do not reveal their inventions because of IPR risks will not be identifiable to participate in knowledge assessment exercises. These issues, however, can arise in the virtual case studies. Corruption Corruption is a fact of life in probably all societies, including industrialized ones. Our concern here is the extent to which corruption distorts the decision-making process of society, and causes wrong choices to be made, wrong priorities to be set, wrong projects to be carried out, and wrong technologies to be introduced. In this sense, management systems existing in some governments which provide paid incentives for certain kinds of activities by public officials have effects little different from corruption. The performance of employees who receive salary or fees based on the number of meetings they attend, the number of trips they take, or the number of reports they write is sometimes little to be distinguished from that of those who are bribed. In either case, the motivation for knowledge-based activities that rely on government collaboration is adversely affected. Bureaucracy The word bureaucracy carries a negative connotation, associated with excessive regulation, red tape, and slow response. In his study of the informal sector in Peru 2 , Hernando de Soto showed how excessive bureaucracy can hinder the establishment of legal enterprises of any kind. Knowledgebased enterprises may be particularly sensitive because they must use public channels —telecommunications, transport, or the media—to access their sources of knowledge. By the same token, a sympathetic and agile bureaucracy can do much to encourage and assist knowledge-based enterprises. Training consumers to use technology In some societies, the consumer market is highly responsive to new technologies, electronic tools and appliances, and modern office and communications equipment. Often this is a product of exposure to television, films, and maga- 2 De Soto, Hernando, The Other Path: The Invisible Revolution in the Third World. Harper and Row, New York. 1989.
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Prospectus for National Knowledge Assessment zines from countries with large consumer markets. A consumer market can be an important impetus for innovation, and carefully conceived courses, do-it-yourself materials, and TV and educational programs may contribute to a receptive climate for consumer technology. Culture of innovation There are certain people whose character, inclination, and perhaps job description makes them particularly receptive to innovation. They are called in the literature gate-keepers, champions, receptors, or even entrepreneurs. Although these names do not necessarily mean the same thing, there is agreement that such people are very important to the innovation process and contribute much to accelerate the diffusion of knowledge. A technique used by some firms to create or encourage innovators is to employ as managers people whose background is in research and development and who are natural problem-solvers. Programs to assist technologists to acquire management skills would be effective. Alternatively, knowledge assessment bridge-builders may recommend research and innovation courses for managers. Creation The creation of knowledge is the essence of science and engineering. Scientific and technical activities provide many other benefits to society, but the quality of science and engineering is usually measured by the output of original discoveries or inventions. This is as true for developing countries as it is for advanced countries. However valuable is the process of research and development for developing related skills such as management or problem solving, research which repeats work that is already known or produces results which do not stand up to scientific review is a poor use of resources, both material and human. Access to existing knowledge and creation of new knowledge should be linked closely in every scientific and research institution. Local generation of knowledge Local generation means several things within the context of knowledge assessment. First, it includes scientific and technological findings that are new to the world, produced in the laboratories, farms, factories, and workshops of the country, from which local entrepreneurs could gain a competitive advantage. This innovative knowledge is often considered in two categories: the radical and the incremental. Radical innovations, appropriately rare, may lead to the creation of new products and new processes. Superconductivity and genetic engineering are examples of radical innovations. Incremental innovations are small, more frequent improvements in products, processes, organizations, and production systems. Their payoff can be large or small, and they have much to do with the continued learning and competitiveness of knowledge-based enterprises. The cumulative effect of numerous minor incremental innovations can sometimes be more transforming and have more economic impact than a few radical innovations or “technological breakthroughs.” Similarly, radical innovations seldom stand alone, and realization of their economic or societal benefits usually requires many incremental improvements and the development of ancillary technologies, most frequently combined with organizational changes and social learning, which take more time and face more barriers than the acceptance of the technological aspects of the innovations themselves. For this reason, the benefits which accrue to radical innovations may be less likely to be captured by the individual, enterprise or country that originates the innovation. (Exceptions to this statement may be more common in pharmaceuticals and medical devices, and in a small number of other fields, like computer software, where a single patent offers an unusually large measure of protection against competitors and is sometimes used as a traded asset.) Second, the term local generation embraces knowledge whose original source may be elsewhere but which is new to the country. This kind of knowledge is gained through reverse engineering, through licensing, or through transmission by a returning student or worker from abroad. The process of technology transfer, development, and innovation for this rediscovered knowledge is similar to the process for new knowledge that is locally generated, and involves similar entrepreneurial initiative and risk. A third but very important category is knowledge of mainly local import, like weather, agricultural conditions, maps, soils, and geological and oceanographic knowledge. Other examples, which require sophisticated analysis techniques and interpretation, are census data, manpower statistics, patent and license data, public opinion surveys, and market research and advertising data and analysis. Access Access to knowledge comes in many forms. Codified knowledge is available from books and documents and through the media, both print and visual, as well as through new channels like Internet. “Embodied” knowledge comes from import of products, process technologies, and equipment, training and education, and through research and development (including the know-how gained by the researchers). “Tacit” knowledge of languages, of aesthetics, and other intangibles must be sought, trained, and exploited. Knowledge and information Knowledge is usually associated with information, but it is useful to distinguish them in order to understand problems of access. While no analogy is exact and will be useful in all
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Prospectus for National Knowledge Assessment contexts, information may be thought of as a transmissible form of knowledge, having a similar relation to knowledge as currency has to wealth: a medium of trade. Information and experience both contribute to knowledge. Information does nothing if it is not used, but the organized accumulation of it becomes knowledge. Knowledge itself goes beyond transmissible information to embrace codified knowledge, embodied knowledge, and tacit knowledge and skills. Information infrastructure Some countries are beginning to develop national information infrastructures, or “intranets,” to enhance the capability of the services available to local users. In the United States, America Online and CompuServe are examples of nationalscale intranets, although far from universal. Within companies, such packages as Lotus Notes provide the equivalent power. National or regional intranets may be a fertile area for recommendations of the knowledge assessment. Language Much of the world's technical literature is in English, as is nearly all the international communication on the Internet. Facility in English will be an important factor in the access, assimilation, and diffusion of knowledge. The quantity and quality of literature published in the local language also varies among countries and among language groups. Also, the local language may not contain an adequate technical vocabulary, and advanced students and technology workers may have to become familiar with the technical vocabulary in English. Some languages play a bridging role within a limited region. Russian is spoken widely throughout eastern Europe. Arabic is the language of the Arab countries in the Middle East, while Turkish is widely understood in Western and Central Asia. Malay can be understood in Malaysia, Indonesia, and Singapore, and ke-Swahili in most of East Africa. These bridging languages play an important role in several regions, especially where the bridging language is the national language of one of the countries of the region. Often there is a larger technical library available in the bridging language than in the local language, and that can be important for countries with low literacy rates in European languages. Support for regional languages may be a useful type of bridge-type recommendation. Openness in society Other things being equal, an open society is more permissive of knowledge flows than one that is closed. The existence of a non government-controlled press that can deal freely with technical and economic subjects is a good indicator of communicativeness and knowledge transfer in society. The media has an important role in educating the public to accept innovation and providing much of the information and knowledge that maintains current awareness in the population. An open and responsible press captures the attention of the people and can be a trusted source of new knowledge. Does the media discuss problems and interpret knowledge? A press dominated by the government or other interests may be less effective, not because it can not provide knowledge on technical subjects, but because it commands less confidence and is therefore less influential, particularly on economic matters. For the strict purposes of knowledge assessment, it is important to make distinctions between political free speech and openness on technical and economic matters. Internet access and availability of accurate economic and statistical data will be important indicators. The relation between learning in a nation and the existence of a free press is difficult to determine. Since both “learning” and “free” are adjectives with subtle shades of meaning, it is important to be precise about what people need to learn and what is expected of the press. Assimilation Assimilation is an objective of the firm or producer; assimilation of knowledge allows it to make and do new things, and also to contribute to knowledge and remain competitive. Assimilation refers to selection, interpretation, and understanding of information: the conversion of information to knowledge. It deals mainly with human resources, and the ability of the receivers of information to understand and use it. Information quality and attention management A salient characteristic of the modern age is the shift from scarcity to abundance of information. As Herbert Simon points out, the scarce resource is no longer knowledge but attention. 3 The problem for knowledge managers, scholars, and all who depend upon current knowledge is to sift the overwhelming abundance for the useful gems that distinguish information from misinformation, and to assess the quality and reliability of the knowledge available. Another aspect, perhaps more important in developing countries, is the lack of knowledge as to what knowledge is available or what is needed and relevant in a concrete situation. In response, specialized services have grown to direct the flow of knowledge to selected clients and subscribers. Newsletters, listserv services on the Internet, trade journals, and consortia are among the devices that are used to direct attention of busy officials and executives to knowledge that is important to them. Few developing countries employ these devices, but they may be the subject of knowledge assessment recommendations. 3 See, for example, Brooks, Harvey, “The Problem of Attention Management in Innovation for Sustainability, International Institute for Applied Systems Analysis Working Paper WP-95-41, May 1995.
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Prospectus for National Knowledge Assessment Human resources The crucial elements in assimilation (and diffusion) are the individuals who receive and interpret knowledge. Using an industrial firm as a model, these can be classified into four categories: Technology workers, technicians. These are the front line workers who are involved in the direct application and daily operation of technology. They must be capable of reading and understanding instructions, operating machinery, and observing quality management standards. They are also responsible for many of the incremental innovations in the workplace that are important to the continued competitiveness and learning ability of firms. They are sometimes secondary school graduates, but increasingly modern industry requires two years of college or university or specialized vocational training programs. On the job training and continual contact with knowledge workers are necessary for them to master their work and to keep them current. The success of knowledge-based enterprises is crucially dependent on the availability and quality of technology workers, which in turn are highly sensitive to the general literacy and numeracy of the population. Technically trained people, engineers and scientists. These people are usually a product of the national tertiary education system or are trained abroad. Their real finishing occurs in the research lab or through other forms of apprenticeship, and the provision of such training opportunities is one of the main arguments for maintaining basic research and development facilities in the country. Their role is technological leadership, either with executive functions or as leaders in technology-based enterprises. These are the players who might most easily be supplemented by foreign expatriates or returning émigré nationals. Entrepreneurs and managers. This group may not directly be involved with technology, yet they must be sensitive to its importance and effects on production. They are active in industry associations and interact with suppliers, clients, and government officials. They must act as the catalysts of change and innovation. Most of this group comes from the formal education system, yet they are largely formed in the industrial environment. Teachers and trainers. This fourth group play no direct role in production, yet they are essential to the preparation of the other three groups. They too must be educated and trained, and their output and productivity can be expected to be no better than their own preparation. The training of teachers, their exposure to technologies and innovations, and the technologies at their command to do their jobs will have a multiplying effect up the entire personnel ladder. Learning institutions Knowledge, like an old automobile, depreciates rapidly if it is not maintained. Since the motivation for carrying out the national knowledge assessment is the rapid pace of technological innovation, much of the knowledge that is relevant to knowledge assessment is tagged with a date and even a time, and loses value rapidly if it is not renewed. An institution whose net stock of knowledge does not depreciate is called a learning institution. The singular most valuable asset whose value appreciates, not depreciates, with time is the learning human being. Learning is an attribute of individuals, organizations, societies, firms, and countries. The absence of learning has a particularly deleterious effect; it can turn knowledge into ignorance, or negative knowledge, as it becomes outdated and therefore false—worse than no knowledge. * It is like a machine with no lubrication; its own actions will destroy it. This will be difficult to capture graphically on a chart representing the National Knowledge System, and must be explored separately. It will be the focus of interviews described below. Research laboratories The primary function of research laboratories, whether university, government, or industry based, is the creation and diffusion of new knowledge. However, they play an important, if less well recognized, role in assimilation of new knowledge and in changing attitudes toward change. Technical change is essentially about changing the way people do things. In order to change, people must be willing as well as able. The work of a laboratory is to find out something that was not known before, or to produce something that has not existed before. Most research and development projects do not in fact succeed in achieving a result that is totally new (neither in developing countries nor developed countries). But the search for the unknown engenders an attitude toward inquiry that is naturally accepting of the new and untried, and naturally leads people to search out and understand what has been done before by others and why it works. It is not the same as exposure to the traditional educational system. There is thought to be a high correlation between schools with strong research facilities (whether the products of their research reach the market or not) and formation of “forward looking” human resources that become key players in the transformation of the productive sector. Knowledge parks Knowledge parks, sometimes called industrial parks or science parks, are planned spaces set aside for industries, often associated with a research university. They permit ac * As a hypothetical example one might imagine a country that requests its academy of sciences to prepare a plan setting forth national research priorities. But the academy is dominated by elderly academicians, no longer active in the laboratory, and the plan they produce reflects research priorities of the sixties, not the nineties. Millions in research funds can be misused as a result of the absence of a “learning mechanism” in the academy of sciences.
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Prospectus for National Knowledge Assessment cess to university laboratories and researchers, collaboration among firms, and sharing of sophisticated equipment, metrology devices, network links, and subscriptions to journals and newsletters. These often create an atmosphere that is conducive to innovation and knowledge exchange. Management culture The rarest and most sought-after skill in many developing countries is management. Much of it represents a kind of tacit knowledge, not codified and consequently hard to learn in school, and it requires apprenticeship in a working environment where it can be refined by hands-on experience. The culture of management in a country relates strongly to the structure of industry and can be a controlling factor in the rate of innovation. A sector dominated by small and medium enterprises will have certain patterns of management and a corresponding pattern of innovation. One dominated by family-owned businesses will perhaps react differently, and countries with a legacy of “trader mentality” that treats technology like any other commodity to be bought and sold may be more resistant to knowledge-based changes. However, several imaginative approaches to the problem of training managers have been tested in recent years, and the knowledge assessment team will be sensitive to appropriate solutions. Diffusion Diffusion refers to the flow of knowledge among people and institutions, and the means by which it reaches people who are able to put it to use. Diffusion is a national objective, because the economy as a whole benefits when best practice is widely diffused. Flow of knowledge Diffusion of knowledge is dependent on a structured flow of knowledge among the various nodes of the National Knowledge System. Some of the remedies for impeded flow of knowledge will be newsletters, Internet or intranet sites, symposia, journal clubs, government-industry round tables, and high-level commissions. Consortia of industries These exist in few developing countries, but, with varying degrees of formality, some have been highly successful in the United States, Japan, Germany, and other industrialized countries, in meeting the needs of research and development and information gathering for science and technology-based industries, sometimes with government support. Collections of firms with similar or related focus provide a pool of expertise that competes, cross-fertilizes, and is the raw material for fast start-ups of new firms. A notable example is the consortium of semiconductor manufacturers in the United States that contributed much to the revived fortunes of that industry. Another is the collection of machine tools companies that make Germany a world leader in that area. These are bridge-type solutions that might be of use to the knowledge assessment for consolidating resources of firms for market research and advertising, product testing, linking with component suppliers, and technology innovation and diffusion. Use Efficient use of knowledge resources is the proof of the entire knowledge enterprise. It is also thought to be one of the primary characteristics distinguishing countries which have high growth rates and wealth accumulation and those that don't. 4 A successful infrastructure for motivation, access, creation, assimilation, and diffusion of knowledge will benefit a country little if the knowledge thus prepared is not put to effective use. The effectiveness of the National Knowledge System must therefore be measured by the extent to which knowledge is put to use through profitable knowledge-based enterprises, effective and efficient health services, a productive educational system, and a sustainable and sustaining agricultural system. Most of these functions can be monitored with statistical output data collected by the bureau of statistics and various international organizations, and compared with national goals. As knowledge assessment is likely to be employed largely by countries that wish to increase knowledge use, solutions will be sought to increase productive use of assimilated knowledge. Banking sector, venture capital One area for remedial action is making venture capital available to knowledge-based enterprises, either through banks, perhaps via secured loans, or by encouraging the establishment of venture capital firms. Venture capital is an appellation for risk of capital on ventures whose returns are uncertain but potentially large. But venture capitalists can provide a good deal more than just risk capital. In the U.S., at least, they serve as vehicles for bringing together information about technology, market trends, and financial resources which have been crucial to the growth of knowledge-based entrepreneurial enterprises. They can be effective linkers of technical knowledge, managerial know-how, financial know-how, and market knowledge, without which the different elements of a knowledge-based enterprise may never be brought together successfully. Knowledge itself can reduce uncertainty, and hence the degree of risk, in the provision of risk capital. Receptivity of 4 See, for example, “Economic Growth: The poor and the rich,” The Economist, May 25, 1996 p.23.
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Prospectus for National Knowledge Assessment the banking sector may therefore be influenced by the existence and quality of a “knowledge assessment” report in which it has confidence. Thus, the knowledge assessment process itself may be able to establish criteria for access and assimilation of knowledge that will be useful in evaluation of applications for financial support. Management, financial, and technical services Other impediments to the success of enterprises, knowledge-based or not, have to do with shortage of skills for management, finances, and technical support. These resources are usually sought in the skilled labor pool or from consulting firms in the private sector. The financial markets also are consumers and users of knowledge. Credit card networks, electronic transfers, “virtual money,” and advanced accounting and billing systems speed commerce and encourage innovation. Actions aimed at increasing the availability or quality of business support services in general in the country will improve the prospects of knowledge-based enterprises. HOW MAY KNOWLEDGE ASSESSMENT BE USED? In military terms, the output of a knowledge assessment could be described as a map of the terrain, with certain features designated as targets for attack. A plan of action is also suggested. The map is the National Knowledge System, a schematic, annotated map of the knowledge infrastructure of the country. The targets are the barriers to motivation, creation, access, assimilation, diffusion, and, above all, the use of knowledge for productive purposes. The plan of action covers the specific and bridge-type recommendations to reduce or avoid the barriers. No war is won by drawing of a map, but it is hard to win even a battle without one. The value of a knowledge assessment is ultimately measured by the success of the initiatives that are taken by the country with the support of the World Bank to address the problems identified, and the subsequent flourishing of knowledgebased enterprises. Two other benefits will also result. Building Constituencies for Knowledge-Based Activities The knowledge assessment is a participatory exercise. Selected individuals will participate in the virtual case studies, and a wider spectrum of scholars, government officials, businessmen and women, and association figures will join the national symposium to debate the functions and the effectiveness of the knowledge infrastructure. They will thereby gain an appreciation for the potential of knowledgebased development, and some of them may be inspired to take action on the recommendations that emerge from the process of knowledge assessment. Making Comparisons Among Countries It is of interest to the host country government as well as the World Bank and the international community to make comparisons among countries and to measure rates of change to evaluate the success of actions taken. In order to make valid comparisons, the metrics used in each country must be sufficiently similar. The template prepared for the National Knowledge System would provide such a metric. The elements of the template are functions related to knowledge motivation, creation, access, assimilation, diffusion, and use, and the completed assessment of the National Knowledge System identifies the institutions that can carry out these functions. The virtual case studies allow the team to identify “best practice,” or “best in class” (to distinguish among types of countries) for each of these functions, and the performance of the relevant institutions can be measured against the best practice. For ease of analysis or comparison the results can be presented in a “star diagram” format. Star diagram The star diagram is a circular plot of the metric used for motivation, access, assimilation, diffusion, and use with the measure of best practice or best in class as the unit circle. It can be drawn for an economic sector, an industry, or the whole economy. Six sectors of the circle will be labeled motivation, creation, access, assimilation, diffusion, and use. Within each sector will be the functions of the template associated with that sector. In areas where the industry or economy is strong, the grade will approach unity and the radius will be long; where the industry or economy is weak, the radius is short. A glance at the diagram will give an indication of the strengths and weaknesses in the national knowledge system, and will allow inter-country comparisons. The typical diagram will resemble a star; hence the proposed name. A hypothetical example is shown in figure 1 . It describes a country that has good incentives and laboratories FIGURE 1 Star Diagram.
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Prospectus for National Knowledge Assessment for creation but lacks trained and skilled people to assimilate and use the knowledge. Leapfrogging The gaps indicated in the star diagram between the way key functions are performed and best practice will point the way for “leapfrogging ” to state of the art knowledge services. When these gaps are reduced, the knowledge, support, and technical services will be available to assist and encourage industry and the public sector to select technologies that will avoid costly stages of development of the energy, environmental, transport, and communications sectors, to the competitive benefit of the country. OTHER PUBLISHED INDICATOR REPORTS The knowledge assessment reports can make use of similar reports made by other organizations and performed with different goals in mind. Knowledge assessment will draw upon these others for data and attempt to go beyond them in the area of knowledge practice. OECD Reviews of National Science and Technology Policy These reviews are intended to allow the countries concerned to appraise the political, economic and structural aspects of the role of scientific and technological research and to gather information on science and technology policies as an instrument of government. The procedure involves a general report prepared by OECD with the assistance of the country. In many cases, the “National System of Innovation” is assessed. Then a team of Examiners visits and meets with officials and stakeholders. At a final review meeting, an OECD committee confronts and challenges officials to propose remedies. National Systems of Innovation (NSI) This new concept, used by OECD and others, emphasizes the innovation process, laboratories, firms and farms, and the interactions among them. NSI is a network of institutions, private and public, whose actions initiate, import, modify and diffuse new technologies. Reports are prepared by task forces combining local experts with international specialists following a template of Functions of a National System of Innovation which inspired the one adopted here for the National Knowledge System. Stakeholders, principal science and technology institutions, and other participating bodies are identified and their roles described and charted following a prescribed format. NSF Indicator Reports Every two years, the National Science Foundation publishes a report to the Congress and the President of the United States on the status of science and technology in the country and the world. The report contains indicators on inputs and investments in science and technology activities, outputs, results, facilities and infrastructure, linkages with other countries, and international comparisons. Included are specialized data bases that would be of use for knowledge assessment studies, for example, foreign science and technology investments and capabilities and foreign students in the U.S. from different countries and their fields of study. The data on foreign sources of U.S. patents will also be useful. Other NSF-Sponsored Reports A technique combining statistical data with expert views was developed by a research group at Georgia Tech with support from NSF and used in the Science and Engineering Indicators report on Asia's New High Tech Competitors. 5 The method relies on four input indicators, called national orientation, socioeconomic infrastructure, technological infrastructure, and productive capacity, and three output indicators, called technological standing, technological emphasis, and rate of technological change, which are derived from a combination of statistical indicators and responses to a set of questionnaires sent by mail to a group of experts. This approach is promising for application to knowledge assessment, particularly if World Bank staff participated actively in the qualitative surveys. International Institute of Management Development World Competitiveness Yearbook The IMD, based in Lausanne, Switzerland, is a leading international management development institute. Each year it publishes a report which ranks countries according to an index designed to measure their “ability to create added value and increase national wealth by managing assets and processes, attractiveness and aggressiveness, globality and proximity, and by integrating these relationships into an economic and social model.” For example, the listing for 1996 show the United States, Singapore, Hong Kong, and Japan as the first four; Taiwan, United Kingdom, France, Australia, Ireland, and Malaysia numbers 19-24; and Brazil, India, Hungary, Greece, Indonesia, and Mexico in the 38-43 positions. Russia is the last rated, number 47. 5 National Science Foundation, Asia's New High-Tech Competitors, NSF 95-309, (Washington, DC. 1995). See also Roessner, J. David, Alan L. Porter, Nils Newman, and David Cauffile, “Implementation and Further Analysis of Indicators of Technology-based Competitiveness. ” Technology Policy and Assessment Center, Georgia Institute of Technology, March 1995, and National Science Foundation, Human Resources for Science and Technology: the Asian Region. NSF 93-303 (Washington, DC. 1993).
Representative terms from entire chapter: