NEW GLOBAL ALLIANCES: THE END OF DEVELOPMENT ASSISTANCE?

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With knowledge emerging as the currency of an innovation-driven global economy, new patterns of international interdependencies are starting to emerge that make terms such as ‘developed’ and ‘developing country’ and ‘donor’ and ‘recipient’ look increasingly irrelevant. In this month’s LINK LOOK Andy Hall and Jeroen Dijkman wonder whether this means it is time to radically rethink development assistance and the way it deals with agricultural science and technology. Can these emerging global knowledge alliances be harnessed for poverty reduction? Can national self interests replace the altruism of development assistance? Or do we risk even further dividing a world of haves and have nots into a world of knows and know nots?

A VISION OF THE FUTURE

For a decade or so analysts have been telling the sceptical European public that they are knowledge workers in a knowledge economy and that this will ensure future prosperity. However, others have warned that a knowledge-based economy with its globalising markets and innovation-based competition will have dire consequences for the developing world. They worry about a knowledge divide where countries that lack the information technology infrastructure and skills to access the global pool of knowledge become ever more socially and economically disadvantaged while those with these resources can advance very rapidly.

However, a series of recent papers from UNU-MERIT present an alternative vision of the future¹. The central theme in these papers is that far from entrenching global inequities globalisation of the quest for knowledge may restructure relations between what have up to now been viewed as the developed and the developing world. The argument is that just like Europe required the raw materials of Asia and Africa for its 19th century paradigm of economic development, it now needs knowledge, information and expertise from countries in these regions.

According to these papers, unlike the pre-knowledge economy era where public and industrial R&D were the main knowledge sources for innovation, contemporary European innovation has social, environmental as well as economic dimensions that require all forms of knowledge. European prosperity, therefore, increasingly depends on access to design, context, market, process, social and ethno-botanical knowledges that are not necessarily located in either scientific organisations — nor within Europe itself — and often only emerge from specific social and economic activities.

But doesn’t this expanding need for knowledge sow the seeds for a new era of knowledge-based imperialism? Quite the contrary, it is argued. The nature of modern innovation — with its emphasis on co-creation of ideas, products and services — means that global strategies to acquire knowledge need to be collaborative rather than extractive. Truly global challenges such as climate change or HIV/AIDS, by definition, have to be collaborative. Increasingly, so do the innovation patterns of modern commerce.

Photo courtesy FAO

Add to this mix a new assertiveness among the more successful emerging economies (G8+5, for example, which includes China, India, Brazil, Mexico and South Africa); the shifting balance of world power and alliances in the post-cold war period; new economic (rather than ideological) links between developing economies (for example, between China and some African countries); and the strengthening of regional economic communities — and one can catch a glimpse of a global future where the remnants of 19th and 20th century exploitative patterns of international relations will struggle to survive.

Prosperity in the 21st century will owe its origins to this emerging pattern of international interdependencies. This is still going to require countries to build their own internal architectures to use knowledge more effectively — in practice this usually means institutional innovations to better link research with social and economic activity. But it is the strengthening of international knowledge-based alliances in combination with these internal capacities that will define their comparative advantage in this new world order. This is a challenge for all countries.

DOES THIS HAVE ANY CHANCE OF REDUCING POVERTY?

In another twist to this vision, one feature of modern innovation is that global markets are becoming synonymous with global sources of knowledge. Because continuous innovation needs an understanding of consumer trends and preferences, trading relationships between countries have to be as much about information access and flows, as about flows of products and services.

Cynics may argue that this is just a fancy way of saying that as the developing countries get richer they will become a ready market for the luxury goods that companies from developed economies produce and market so well. Yet in the words of C.K. Prahalad², fortunes can better be made at the base of the income pyramid (the poor) where the numbers are large, and not from the (relatively small) affluent class at the apex.

Those who have worked on innovation in agriculture know that succeeding with a customer base of poor consumers and micro-entrepreneurs requires a decentralised, interactive, bottom-up approach to innovation if it were to have any chance of success. So, if companies from developed countries really want to innovate products and services for the poor, they will have to shift research, design and testing operations to the areas where the poor live. In other words they will need to socially embed their innovation processes in order to profit from them.

This means that potentially poverty-reducing activities, wholly based on market principles and involving international collaboration, could emerge where the role of public policy is restricted to providing an enabling environment to allow these new innovation capacities to thrive. They could, therefore, target social and economic objectives. This will need to resemble participatory innovation ‘models’ of the sort advocated in some rural development circles, but with a new twist. The incentives for making this process happen will be profit and self-interest — how different from the current participatory rural innovation practitioners who work in an environment where arrangements are explicitly designed so that individuals and foreign partner countries don’t profit from success. Welcome to the world of development assistance.

A VISION OF THE PAST: DEVELOPMENT ASSISTANCE

Photo courtesy FAO

The effectiveness of development assistance is an issue of much debate and disagreement. However, most would agree that, at best, it has had mixed results. The number of poor people globally is still unacceptably high; poverty reduction rates are too slow; and the internationally-agreed Millennium Development Goals (MDGs) are likely to be missed by quite a large margin.

Agricultural innovation — and its support through science and technology initiatives — has been one of the mainstays of development assistance. Initially deployed as a way of tackling food-based poverty, it has been reemphasised more recently because of the recognition that agriculture and rural-led growth can be an effective way of reducing poverty. Historically there have been three main strategies in agricultural science and technology support, listed below:

• The establishment and strengthening of national agricultural research and extension organisations. This has often been achieved through technical assistance programmes and loans from multilateral development agencies, such as the FAO and the World Bank.
• The establishment of a global network of international agricultural research organisations (the CGIAR centres) with an initial mandate of solving isolatable technical problems of international significance (such as rice productivity). Later this grew to include strengthening the capacity of national agricultural research organisations, and, later still, developing international public goods.
• Bilateral technical cooperation, where developed country agricultural scientists were seconded to developing country research programmes in order to transfer technology and expertise. Over time the emphasis shifted to funding research collaboration between donor and recipient countries. Later still, funding was channelled to national, sub-regional and regional agricultural research organisations.

The degree to which bilateral development assistance was “tied” to the supply of goods and services from donor nations has varied. However, from the 1990s the trend in a number of countries has been toward “untying aid”, with the overriding principle being that donor countries should not gain from their own development assistance programmes, if at all practically possible.

This trend extended to agricultural research collaboration, where, increasingly, development assistance research funds were used exclusively to support developing country researchers rather than those based in donor countries. This shift was partially driven by a well-founded desire to build capacity in recipient countries and embed research in local contexts. However, countries like the Netherlands, and to some extent the UK, severely restricted the funding available to their own researchers and, in the process, stifled international collaboration.

Looking at these developments through the future vision of the global knowledge economy it all seems very strange.

• National governments have been supported to build research organisations but not to connect them to other local sources of empirical and complementary knowledge-eusing activities in the agricultural innovation system (although the World Bank has recently started to shift towards this perspective).
• An international network of agricultural research organisations has been created, which, like its national counterparts, is disconnected from national agricultural innovation systems where it is expected to have an impact. Its international public goods mandate has tended to reinforce its technology development mission in an era where institutional innovation has become a priority and a prerequisite to better connect science with society.
• Bilateral programmes, instead of helping to strengthen patterns of international research and innovation collaboration, are severing historical knowledge links between the developed and developing world.
• Instead of incentives for developing effective alliances for co-development, development assistance is a professional environment where succeeding (in reducing poverty) means working your way out of a job and pretending that interdependencies don’t exist.

FOOTPRINTS OF THE FUTURE

So what evidence do we have that new global knowledge alliances are emerging? Alliances through global business partnerships and takeovers have been common for a while. Many in the agro-industrial sector, however, have distinct old-era features, such as the acquisition of local seed companies by multinationals to gain access to local markets.

Perhaps the real portent of the future is the way the European Union and its member states have been making conspicuous efforts to foster research collaboration with developing countries. The French have established an initiative (see http://www.inra.fr/audiovisuel/a_la_une/open_science_network_meeting_partnerships_innovation_agriculture) specifically to promote the integration of its agricultural research activities into the global arena, and which brings together the French National Institute for Agricultural Research and the French agricultural development assistance organisation CIRAD. The British research councils (responsible for supporting British science and innovation) have established regional offices in New Delhi and Beijing. The 8th research framework programme of the European Union has the specific objective of strengthening scientific collaboration with developing countries. All of these initiatives are justified in terms of supporting the continued prosperity of Europe and its member countries. These are all entirely separate from European development assistance programmes, although these continue in parallel.

China partnered with a number of African countries during the Cold War, but today their rapidly expanding ties are based on trade. There are worries that China’s prime objective is access to natural resources. However, as we have argued, knowledge and innovation may also accompany these links. Other South-South alliances include Indian collaboration with West Africa on biofuels; Brazil with Mozambique on agricultural research (helped by a common language), etc.

C.K. Prahalad cites a number of examples of ‘bottom-of-the-pyramid (BOP)’ alliances, but these are become rather over-quoted. We would like to draw attention to the activities of the International Development Enterprises (IDE), an organisation that we have been following for the last 10 years or so. It’s interesting not because it is a classic BOP, private sector-driven company (it is actually a nonprofit company), but because it has pioneered and piloted some of the central principles of the BOP. IDE philosophy hinges on using marketing professionals to establish manufacturing and distribution systems that can deliver affordable goods to the poor. Once that is established, IDE moves on to another product or area. Irrigation and post-harvest technology have been the main thrusts of its activities.

Particularly useful is the story of IDE’s promotion of small-scale irrigation pumps in Bangladesh³. Unintended decentralisation of the manufacturing and marketing system allowed for design innovations that suited local needs and purchasing power. Local fabricators simply copied IDE’s design and improved on it. IDE, in turn, copied the local fabricators’ strategy as the new design turned out to be the pumps of choice of the poor. Two million pumps were sold as a result. This story should be a primer for all aspiring BOP entrepreneurs. It’s interesting to reflect on whether the life science companies might have had more success (profit and relevance) with agricultural biotechnology if they had adopted such a socially-embedded approach to product innovation.

THE END OF DEVELOPMENT ASSISTANCE?

The answer is: Of course not. But it’s certainly time for a major rethink and some bold actions. The following things seem important.

Bilateral development assistance would be a much more powerful tool if it were more closely aligned with the development objectives of the donor country. This would allow relationships to move from patronage to partnership and thus take advantage of the incentives inherent to the emerging regime of global interdependencies. A practical implication would be that development departments would needed to be reabsorbed into a donor country’s domestic economic machinery — perhaps as a division of international collaboration in a trade and innovation department?

This, in turn, would lead to a much sharper division of labour between bilateral and multilateral development agencies. The latter would need to focus specifically on issues affecting the poor where bilateral collaboration would find little interest. This might be in areas such as public policy capacity, infrastructure, social safety nets, and in supporting research in areas where only internationally-funded public bodies will create the necessary knowledge and technology.

Photo courtesy FAO

It’s difficult to say what should happen to the CGIAR. One option is that its centres are absorbed into the national agricultural innovation systems in the countries where they sit. Alternatively they could pass into the administrative control of the regional economic groups where they are located and function as knowledge brokers between regional innovation processes and the global knowledge pool. Another permutation might be to privatise them and allow them to sell their services in this interface role or through contract research to public and private clients.

These suggestions will, however, probably leave a gap in mechanisms to address global agricultural (and other) challenges that crop up from time to time, such as avian flu and the food crisis.

One idea might be to use multilateral development assistance funds to establish a rapid reaction facility that would mobilise international consortia of research and other types of organisations from the public, private and civil society sectors to tackle these crises in a mission mode. These consortia would have a limited life-span and would disband once the issue has been addressed — the tendency to extend the life span of institutional models that were effective at a particular point in time has been the critical error in the case of the CGIAR. There are a number of prototype mission mode initiatives in the human health sector to learn from.

So, what next?

GET READY FOR THE GLOBALISED KNOWLEDGE ECONOMY

National governments around the world, like it or not are, are going to have to face the consequences of the transition to a global knowledge economy. So the best thing is to start preparing for it. A first step would be to upgrade national innovation systems. In the case of agriculture this means completing the unfinished task of networking research organisations into the broader economy and strengthening their absorptive capacities so as to make best use of the global knowledge pool. Development assistance should focus on helping countries make this transition and, in the process, ease them into new forms of global knowledge alliances.

INTROSPECTION AND REINVENTION

We would encourage the development assistance community and our own discipline of development studies to start a very serious phase of introspection. We all need to reinvent ourselves for a future that in a number of ways has already arrived.

More practically, as policy researchers we should start to collect evidence of the emerging patterns of interdependence to understand their true ability to address the social and environmental concerns of global public policy. We also need to learn how best to harness these new international dynamics for the benefit of everybody. We are all in this together, so let’s see how we can make it work.

REFERENCES

1 Soete, Luc (2008). Science, Technology and Development: Emerging concepts and visions, UNU-MERIT Working Paper 2008-001
Soete, L. (2008). “International Research Partnerships on the move”, Paper presented at the Dutch Conference Knowledge on the mover, ISS, The Hague, January 2008.
Hall, A. (2008). Embedding research in society: Development assistance options for supporting agricultural innovation in a global knowledge economy. UNU-MERIT Working Paper 2008-011.
2 C.K. Prahalad (2004). The fortune at the bottom of the Pyramid: Eradicating poverty through profits. Wharton School Publishing: University of Pennsylvania.
3 Hall, A.J, Clark, N., Naik, G. (2007). Technology supply chain or innovation capacity?: Contrasting experiences of promoting small scale irrigation technology in South Asia. UNU-MERIT Working Paper 2007-014.

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