Policy Research 2014-27
STI Strategies for Poverty Reduction:
the Case of Lao PDR
Jeong Hyop LEE, Sira MALIPHOL and Haewon KANG
In cooperation with APCTT-UNESCAP
and the Ministry of Science and Technology, Lao PDR
In consultation with Jet P.H. Shu
연
구
진
연구책임자
Jeong Hyop LEE❘과학기술정책연구원 연구위원
연구참여자
Sira MALIPHOL❘과학기술정책연구원 연구원
Haewon KANG❘과학기술정책연구원 연구원
정책연구 2014-27
STI Strategies for Poverty Reduction:
the Case of Lao PDR
2014년 12월 26일 인쇄
2014년 12월 30일 발행
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Preface
Science, technology, and innovation (STI) is recognized as an important driver
for sustainable growth that can help least developed countries (LDCs) and developing
countries spur development and overcome poverty. This report provides
recommendations after a review of the MDG achievements and limitations in
preparation for the Post-2015 Development Agenda. The key to successful
implementation of STI strategy is to build local ownership and capacity for developing
STI strategies, and to manage enabling and practical solution-based projects for the
countries involved.
Korea managed to develop its economy and overcome poverty through the use
of STI strategies that can now be used as examples for STI development. Although
the framework conditions and global context are different, Korean STI experiences
are relevant to late developing countries today. It is difficult to translate these
experiences into effective and implementable policies for development. Rather than
replicating benchmarking approaches, the Science and Technology Policy Institute
(STEPI) has developed a platform to enable the sharing of STI experience that
includes contextualization and capacity building for implementation.
Knowledge sharing thus far has consisted of benchmarking measures that replicated
the policies used by earlier late industrialized economies. In the developing world,
there are numerous examples of policies that provided tax incentives, built technoor science parks, increased R&D spending, etc. Successful experiences and policies
were packaged for dissemination but the results have been less than spectacular,
if not outright failures. The limitations result from a lack of contextualization, which
is required to ensure that knowledge sharing meets its potential for development.
The contextualization process specifies the knowledge sharing activities that suit
recipient countries.
The methodology for the development of STI strategy at the national level was
developed by STEPI in the engagement of two least developed countries in Asia,
Nepal and Lao PDR, as part of the UN-OSSC (hosted by UNDP)-ROK facility
program project Innovation System Diagnosis and STI Strategy Development (2012
to 2014). Due to the lack of information, statistics and data, the process was
formalized with series of panel brainstorming discussions on targeting, joint project
scoping, diagnosis & solutions and action planning. This report captures the last
two years’ engagement of Lao stakeholders.
The STEPI methodology of holistic diagnosis, future-oriented solutions and action
planning, and intuitive panel brainstorming originated from Korean STI development
experiences. The STEPI approach using the Korean STI ODA model will help partner
LDCs and developing countries by providing a clear rationale for solutions, and later
guiding action plans.
｜Table of Contents｜
Summary ··································································································· i
Chapter 1. Introduction ············································································ 1
1. Purpose and Background ········································································· 1
2. Research Partnership and Milestones ··················································· 2
Chapter 2. Research Framework & Methodology ···································· 5
1. Poverty, STI, and Lao PDR ···································································· 5
2. International Frameworks: Post-2015 & ASEAN ································ 8
A. Post-2015 Framework ·········································································· 8
B. ASEAN context: ASEAN Economic Community (AEC) ··················· 11
3. 3C/3A Approach ······················································································ 12
4. Action Planning ······················································································ 16
5. Panel Discussion Research Methodology ············································· 23
Chapter 3. Socioeconomic Framework Conditions & Needs ················· 24
1. Geography, History and Political Regimes ········································· 24
2. MDGs: Population and Education ························································ 26
3. Economy Driven by Natural Resources and FDI ······························· 27
4. Summary and Implications ··································································· 32
Chapter 4. Review of Existing Policies ·················································· 35
1. 7th Five-year Socioeconomic Development Plan 2011 ······················ 34
2. Investment Promotion Law 2010 ·························································· 39
3. Agricultural Development Strategy 2020 & Agricultural
Master Plan 2010 ··················································································· 40
4. Education Sector Development Plan 2011-2015 ································· 42
5. Science & Technology Policy ································································ 46
6. Summary and Implications ···································································· 51
Chapter 5. Results & Analysis of Field Survey Interviews &
Pilot Survey ··········································································· 55
1. Introduction ····························································································· 55
2. Field Survey of S&T-related Organizations in Lao PDR ················· 56
A. Government ························································································· 57
B. University ···························································································· 66
C. Research Organizations ····································································· 68
D. Non-government Organizations ························································ 71
E. Industry ······························································································· 72
3. Pilot Survey of S&T-related Stakeholders ········································· 76
4. Summary and Implications ··································································· 79
Chapter 6. Diagnosis of Innovation System and Suggested Solutions
···························································································· 82
1. Diagnosis ································································································· 82
2. Suggested Solutions ··············································································· 86
3. Possible Business Models Suggested ··················································· 88
A. Tech Spillover from FDI (NT2) ························································ 88
B. Tech Localization for Import Substitution (Dao-Heuang Group)
············································································································· 89
C. Tech Localization for Export Promotion
(Pharmaceutical Factory No. 2) ······················································· 89
D. Tech Customization for Domestic Market (ETL) ··························· 90
Chapter 7. Action Plan ··········································································· 92
1. Priority Setting ······················································································· 96
2. Program Design ······················································································ 99
A. Strategic STI Infrastructure ··························································· 100
B. Strategic Human Resource Development ······································· 103
3. Governance ···························································································· 105
4. Financing ······························································································· 107
5. Milestones ······························································································ 108
Chapter 8. Conclusion and Lessons ······················································ 110
1. Conclusion ······························································································ 110
2. Lessons Learned ···················································································· 115
References ······························································································ 117
Appendix
Appendix 1. Agenda for a field visit to NIS Stakeholders, Lao PDR
······························································································· 120
Appendix 2. National Innovation System of Lao PDR Diagnosis &
STI Strategy Development 2013 ········································ 125
Appendix 3. Consultative Workshop on Open Innovation
Platform 2013 ······································································ 128
Appendix 4. Pilot Survey for Priority-setting Process ······················· 131
Appendix 5. Brainstorming Workshop on STI Strategic
Action Planning 2014 ·························································· 141
Appendix 6. Millennium Development Goals ········································· 144
Summary ································································································ 149
｜List of Tables｜
Table 2-1: Types of Roadmaps ··································································· 17
Table 3-1: Human Resource Development Indicators, 2011 ··················· 27
Table 3-2: Export Structure in Percentages ··········································· 31
Table 4-1: GDP per Capita (plan vs. actual) ·········································· 36
Table 4-2: Comparison of Actual and Targeted GDP Growth Rate in the
Sixth Plan (2006-2010) ··························································· 37
Table 4-3: Share of Labor by Sector ······················································· 43
Table 4-4: Education Expenditure by Level/Area ·································· 45
Table 4-5: Action Programs for 2011-2015 ············································· 48
Table 4-6: STI-related Policies ································································· 53
Table 5-1: Stakeholders Visited ································································ 56
Table 5-2: Budget Allocation for STI ······················································· 63
Table 5-3: Stakeholders Surveyed ···························································· 75
Table 7-1: Target Products and Sectors ·················································· 95
Table 7-2: Green Vehicle-related Technologies ···································· 102
｜List of Figures｜
Figure 1-1: Project Activities ······································································ 4
Figure 2-1: Population Related Statistics ·················································· 9
Figure 2-2: STI Strategy Development Principles ·································· 13
Figure 2-3: 3C/3A Diagnosis ····································································· 15
Figure 2-4: 3C/3A Solution ········································································ 15
Figure 2-5: Driving Mechanism ································································· 18
Figure 2-6: Governance Mechanism ·························································· 19
Figure 2-7: Possible Flow of the Priority-setting Process ·················· 20
Figure 2-8: Possible Program Design Process ········································· 21
Figure 2-9: Elements of Designing Governance and Funding
Mechanisms ············································································· 22
Figure 3-1: Timeline of Lao PDR History ··············································· 25
Figure 3-2 Population of Lao PDR in 1995 ············································· 26
Figure 3-3 Population of Lao PDR in 2013 ············································· 26
Figure 3-4: Change in GDP Composition ················································· 27
Figure 3-5: GDP by Sector, 2011 ······························································ 28
Figure 3-6: Industry & Manufacturing Growth ······································ 29
Figure 3-7: Average Share of Value Added, Industrial Sector
2006-2010 ··············································································· 29
Figure 3-8: Lao PDR’s exports (% of GDP) ············································ 30
Figure 3-9: Foreign Exchange & FDI ······················································· 31
Figure 4-1: Human Resources Strategy in Lao PDR ····························· 42
Figure 4-2: Education Sector Development Plan 2011-2015 Budget by
Source ······················································································ 46
Figure 4-3: STI Policy of Lao PDR ·························································· 49
Figure 5-1: S&T Institution History ························································· 57
Figure 5-2: Budget Allocation by Agencies in FY 2013-2014 ·············· 64
Figure 5-3: Analysis of Human Resource Development System ··········· 67
Figure 5-4: Analysis of R&D System ····················································· 69
Figure 5-5: Structure of AHP Survey ······················································ 76
Figure 6-1: Diagnosis of Poverty ······························································ 82
Figure 6-2: Diagnosis of Natural Resource Trap ··································· 83
Figure 6-3: Diagnosis of HRD Policy Gap ··············································· 84
Figure 6-4: Diagnosis of Research Isolation ··········································· 85
Figure 6-5: Overview of Diagnosis ··························································· 86
Figure 6-6: Potential Solutions ································································· 87
Figure 6-7: Tech Spillover from FDI ······················································· 88
Figure 6-8: Tech Localization for Import Substitution ························· 89
Figure 6-9: Tech Localization for Export Promotion ····························· 90
Figure 6-10: Tech Customization for Domestic Market ························· 91
Figure 7-1: Rationale for Alternative Action Planning ························· 93
Figure 7-2: Twin Engines for Green Growth Alternative Industry
platform ··················································································· 97
Summary i
｜Summary｜
The international development community is currently discussing the Post-2015
Sustainable Development Goals, (SDGs, successors to the UN Millennium
Development Goals) exploring ways to include means to ensure sustainability of
programs, specifically by incorporating STI policies into planning and strategies. This
policy research examines how Lao PDR can apply STI strategically to their policies
to improve their performance, especially given the highly limited availability of
resources. Although some have placed it in the lower-middle income bracket, Lao
PDR needs further growth measured by several indicators. While this research takes
a holistic view, the strategies that will be put forward attempt to ensure that the
policies and their impacts have lasting effects. The goal is to have the newly built
capacity help create sustainable processes within the “system” of Lao PDR, specifically
the innovation system. In particular, it uses Korean experience to guide the STI
strategy development.
The elevation of Lao PDR to lower-middle income was the result of natural
resource-based growth. Its economy is dependent on the mining and hydroelectricity
sectors for its foreign income. In order to maintain its growth and make it more
sustainable, it must develop its industries and move towards higher-value production
by improving its innovation system. At the moment, policies focus on developing
management capacity without a comprehensive view of industry or R&D. Each line
ministry has been pursuing its goals individually, which has created inconsistencies
in overall planning.
The main goal of this project is to increase the absorptive capacity of Lao PDR
and its stakeholders through diagnoses, prescribed solutions, collective priority setting,
and an action plan. In order to overcome the limitations that exist in the system,
collective priorities will enable coordination and greater scale with limited resources.
It is necessary to create relevant programs that are tailored to the business models
identified and are within the potential capabilities of stakeholders. Industry limitations
are generally recognized, but specific alignment between policies and capabilities must
be improved to ensure that necessary capacities are acquired or developed.
In addition to its domestic resources and capabilities, the strategic plans and
programs should integrate Lao PDR into global and regional networks, including
R&D and production supply chains. Lao PDR is already working with several bilateral
ii STI Strategies for Poverty Reduction: The Case of Lao PDR
and multilateral agencies to develop various sectors. The prescribed holistic solution
coordinates these efforts across inter-ministerial activities. The project itself includes
interactions with stakeholders from the Republic of Korea and Chinese Taipei under
the UN framework. The action plan was developed to be compatible with the SDG
framework.
This report describes the research that was conducted to diagnose the bottlenecks
and constraints that exist in the innovation system of Lao PDR and suggests solutions
to overcome those limitations. The methodology described below is based on lessons
learned from the Korean development experience. The experience has been distilled
into principles that are applied to the solutions and crafted into an action plan based
on an industrial platform.
Methodology
This study uses the 3C/3A Approach, a methodology developed by STEPI to
diagnose and prescribe roadmaps to address bottlenecks found in an innovation system
and to allow low-income countries to develop their economies. The 3C diagnosis in
the name refers to Componentization, Contextualization, and Conceptualization.
Componentization involves identifying the different bottlenecks and constraints in the
system. Contextualization creates an understanding of each component within the
framework conditions of the country. In the third stage, Conceptualization forms a
plausible explanation of root causes, on which stakeholders reach consensus in a
coordinated fashion. The solution makes up the second half of the name. The 3A
prescribed solution is an Articulation of Action-oriented Actor-based strategy.
The objective is to create a strategic roadmap using holistic diagnosis, future- oriented
solutions and intuitive analysis. The approach uses these principles, drawn from the
Korean development experience. The principles are used to understand why and how
policy can be applied to development goals using STI. Generally, the goal of the
Approach is to ensure relevance, coherence and consistency of policies to ensure that
it is most efficient and effective at dealing with innovation within the economy. Yet,
given the lack of accessible indicators, it was necessary to use more intuitive techniques
to gather and interpret information and to build consensus, in particular through the
use of panel discussions and brainstorming. The methodology is described in this
chapter to be applied in the case of Lao PDR in the following chapters.
Summary iii
Diagnosis
While the innovation system in Lao PDR has certain resources and capabilities,
it should fully apply these to build its capacities. Its natural resources are most valued
in the system and include hydropower, minerals and metals, and agriculture, and
forestry products. These resources drive economic growth and provide the large
majority of economic output. However, this development process is supported by
official development assistance (ODA) and foreign direct investment (FDI) policies
rather than domestic factors. This limitation has led to shortcomings in research
and development (R&D), human resource development (HRD), and governance
policies. While the statistical research conducted showed that Lao PDR has a small
market with limited human resources, the field survey confirmed and expanded the
information that the study could use for the diagnosis of the innovation system.
Additionally, the pilot survey suggested that stakeholders prefer domestic sources
of support over ODA.
The holistic diagnosis for Lao PDR is based on a review of literature and available
data, field visits, pilot survey, and panel discussions with STI-related stakeholders. There
are four bottlenecks that block economic development, illustrated in the figure below:
poverty and natural resource traps, education policy and labor market gaps, and the
structural bottleneck of industry-science relations (ISR), or their isolation. The small
population and its lower middle-income status tend to keep the country in poverty
due to a lack of economies of scale. The country’s recent discovery and extraction
of natural resources has been able to propel growth but will need industrialization and
technological advancement to continue and to increase its rate of growth. The experience
of other countries suggests that industrialization is not automatic.
There is a gap between education output and policies that may contribute to
industrialization. Education programs have not been transformed along with the
economy. As the population grows, the demand for education increases along with
it. The economy has demands for education, particularly with respect to skills required
to increase productive output. Policies are not tied to industrial growth, which may
be influenced by the international community.
Moreover, demand for industry-related policies is unlikely given that research is
isolated from industry and that human resource development is not well aligned with
commercial needs. Research isolation is inevitable given the poor state of the existing
STI infrastructure. A low-income country is bound to have poor R&D research,
and the lack of policy relevance will prolong the situation. Here, foreign funding
has influenced the areas of research development making them less sustainable.
iv STI Strategies for Poverty Reduction: The Case of Lao PDR
The holistic diagnosis also enables the policies to be coherent with each other
across the economy. The review of policies indicated that, although they are
appropriate from a ministerial perspective, they do not fully meet the needs to create
sustainable economic growth. The economy still has an immature market with weak
industrial players that find it difficult to build capacity and competitiveness because
some necessary policies are missing, and others may inadvertently hinder growth
(e.g. causing “Dutch disease”). The policy effects are overly focused on generating
income through increased inputs and should attempt to diversify industrial sources
of revenue. There has been limited growth in industry and manufacturing growth.
Other sectors of the economy must be strengthened in order to ensure long-term
economic sustainability.
Moreover, the policies suffer from a lack of overall coherence and relevance. The
ministries each pursue separate goals. Their policies do not necessarily relate to one
another, or lack coherency. From this holistic perspective, the plans also lack relevance
to industrialization. For example, education sector goals have been successful in
meeting the output goals that have been set, with influence from the international
community. These general education attainments, however, do not meet the needs
of industry, especially in mining and energy, where the economy is growing. Current
planning relies on the National University of Laos without providing sufficient
resources.
Summary v
Recommended Solutions
A holistic view of the bottlenecks attempts suggest future policy that remedies
the bottlenecks in conjunction, so that development can progress as smoothly as
possible. The present focus on human resource development must respond to
industrial needs as well as general education to be successful. Responsibilities and
resources must be allocated efficiently so that stakeholders are efficiently tasked with
necessary functions within the system.
The future-oriented solutions attempt to build capacities that are required for
long-term sustainability. To efficiently allocate resources for industrialization,
industrial targets are suggested so that different components of the innovation system
can be coordinated. Target industries are suggested to enable multiple sectors to
achieve economies of scale and scope. In the figure below, the industrial platform
is supported by programs that develop the STI infrastructure including strategic
mission research and human resource development. STI infrastructure is necessary
to provide a supply of technology and R&D to generate future technology. Since
there is highly limited STI infrastructure, strategic mission research is suggested to
overcome the initial absence of R&D. Mission research that supports development
of technologies for the industrial platform will help firms that lack innovation capacity
to move to higher value-added products. With higher value-added products, the firms
should develop greater capacity to sustain innovative activities.
vi STI Strategies for Poverty Reduction: The Case of Lao PDR
In order to enable coordination of these various stakeholders and activities, a
governance mechanism is proposed. Through the implementation of various policies
on top of the industrial platform, the government can help industry overcome the
lack of coordination that has not been provided through financial markets.
Furthermore, the existing capacities in industry should be incorporated into the
industry platform. During the field visit, four business models that demonstrate
potential industrial capacities for industrialization were identified: technology spillover
from FDI, tech localization for import substitution, tech localization for export
promotion and tech customization for the domestic market.
Action Plan
The proposed solutions are translated into an action plan that serves multiple
purposes. The first is to codify the actions that can be easily transmitted to
stakeholders. An action plan facilitates the process of ensuring that stakeholders are
capable of executing the planned projects and supports leadership to provide sufficient
resources to enable implementation. Another purpose of creating the action plan
is to translate concepts into milestones that clearly articulate what needs to be done
in a given timeframe. In this way, it becomes a coordination mechanism that also
helps stakeholders reach consensus on a direction in which to move forward.
In crafting the action plan, an industry platform is proposed to connect
stakeholders and to unify them in a common purpose of developing the necessary
components of the innovation system. The existing policy framework will not
effectively handle the bottlenecks to industrialization (see figure below). Policies are
divided between ministries with differing goals, which means that the resources are
further diluted. Since Lao PDR already lacks scale, these bottlenecks are further
exacerbated. The differences in sector targets demonstrate the lack of policy coherence
and relevance.
Summary vii
As an alternative, green energy and green vehicles are proposed as an industry
platform to create greater economies of scale and scope. The new industry platform
necessitates new priorities that provide common goals for stakeholders. Green energy
can be driven by a dual engine of bio-energy and hydropower, which are possible
given the available natural resources. Green energy and green vehicles require greater
amounts of R&D to enable industrialization. These industries provide a platform
that will support other sectors, such as green agriculture and green tourism.
Appropriate policies will help the industries develop SMEs through production supply
chain and service provider development.
To enable industrialization, specific programs are designed to provide missing
components in the innovation system. Strategic STI infrastructure and HRD are
proposed as the main programs. STI infrastructure is meant to provide the necessary
resources to enable R&D. This includes mission research that fills in capability gaps
in the system, especially the lack of industrial R&D. Industrial policies should
encourage the growth of manufacturing to support green vehicles and green energy.
Strategic HRD is also necessary to provide the needed manpower for the new
industries. Additional policies should support development of academic R&D and
physical infrastructure with inter-ministerial coordination, which requires a
coordinating governance mechanism. The action plan should include details on
financing and milestones in order to be complete. These elements will enable the
various stakeholders to work in coordination with one another and also to intuitively
make decisions towards the goals agreed upon.
viii STI Strategies for Poverty Reduction: The Case of Lao PDR
The first implementation milestone is to form a taskforce team to verify and
validate the proposed industrial platform. Afterwards, a global power utility solution
provider can be found to support development of capacity. Since this stakeholder
is missing from Lao PDR, a foreign multinational corporation (MNC) should be
engaged to build R&D, HRD, and SME capacities. MNCs can provide expertise,
technology, and global reach that will increase the speed that these sectors will
develop. Policymakers should work as an intermediary to create favorable
environments that attract MNCs to work in the economy and with local producers.
At the same time, the government should help local producers balance the power
structures that exist between stakeholders of unequal capabilities.
Conclusion
Lao PDR faces several bottlenecks including poverty and natural resource traps,
misalignment of industry and research, and policy gaps. System resources include
income from minerals and energy. The 3C/3A Diagnosis and Prescription suggests
that strategic planning in R&D and HRD should be coordinated on relevant and
consistent goals targeting a dual energy-driven green industry platform. A steering
governance mechanism must be created to coordinate these elements.
The current capacities of the stakeholders reside predominantly with the
government and international organizations, but there are some companies that also
demonstrate initial capacities in some sectors. To be competitive, stakeholders must
be able to add value through their industrial activities. Institutional policies and
programs can be created to develop R&D and HRD that support industrial sectors.
The programs will include transfer of knowledge and technology to support the
development and capacity building of stakeholders.
This research provides mechanisms through an industry platform that enables the
Government of Lao PDR to direct and coordinate programs and activities. A holistic
diagnosis puts multiple bottlenecks into perspective, so that a future-oriented solution
can be incorporated into the industry platform. These are devised into the action
plan provided.
Summary ix
Lessons Learned
● Alternatives to conventional benchmarking, such as brainstorming panel
discussions, are necessary to overcome shortcomings in the innovation system.
Additionally, customized planning is necessary to create an action plan that
is future-oriented, holistic, and consistent.
● Socioeconomic conditions may lead to poverty traps. Lao PDR stakeholders
demonstrate that many development strategies have been absorbed, but
implementation has led to piecemeal policies that lack the holistic strategy
required to overcome these traps. The strategies lack sufficient
market-orientation, which leaves industry non-competitive in the global market.
A holistic approach may be necessary to more adequately address environmental
protection, education, and labor issues.
● Industrialization strategies are necessary and include the need to build STI
infrastructure including R&D and HRD.
● Each sector in the economy must have objectives that are distinct and
complementary to its counterparts. Previous policies did not adequately
consider stakeholder capacities. Directives were given to ministries without
ensuring they had the resources to complete policy aims.
Chapter 1 Introduction 1
｜Chapter 1│Introduction
1. Purpose and Background
The international development community has discussed and debated how global
poverty should be addressed for decades. STI policies have become more popular
as of late, especially as the impacts of R&D have correlated with economies’ abilities
to grow, bringing people out of poverty. In particular, the UN Millennium
Development Goals (MDGs) are reaching their 15-year milestone and are revisited
in the Post-2015 Sustainable Development Goals (SDGs). The Post-2015 SDGs are
currently being discussed to include means to ensure the sustainability of programs,
specifically by incorporating STI policies into planning and strategies.
This policy research examines how Lao PDR can apply STI strategically to their
Developed Country status in development circles as measured by several indicators.
From a financial perspective—that is, from the vantage point of institutions such
as the World Bank and the International Monetary Fund—some suggest that the
country has already graduated. From a perspective that takes a broader humanitarian
view, Lao PDR may still need further growth. While this research takes a holistic
view, the strategies that will be put forward attempt to ensure that the policies and
their impacts have lasting effects, meaning that the capacity built helps to create
sustainable processes within the “system” of Lao PDR, specifically the innovation
system.
The research uses a unique methodology called the 3C/3A Approach to understand
the limitations and bottlenecks that may prevent Lao PDR from achieving its
economic development goals, particularly in the industrial processes that generate
the economic capacity that supports other elements within the system. The 3C/3A
Approach draws from Korean experiences in applying STI policies to transform itself
from one of the poorest countries in the world to an advanced economy.
Furthermore, the understanding takes place in a contextualized position within the
framework conditions that Lao PDR faces. The suggestions include how obstacles
can be overcome through policy from a developing country perspective.
By examining the process through which Korea was able to develop its economy,
principles can be drawn to develop appropriate policies to developing country
contexts today. Lao PDR is one of the countries to which this project applies these
principles.
ii STI Strategies for Poverty Reduction: The Case of Lao PDR
2. Research Partnership and Milestones
Research Partnership
The project was initiated in partnership with the Science and Technology Policy
Institute (STEPI) and the Asian-Pacific Centre for Transfer of Technology (APCTT).
The aim of the project was to assist LDCs to build endogenous STI capacities through
strategic STI policy. The Department of Technology and Innovation (DTI) at the
Ministry of Science and Technology (MOST) has been the Lao PDR in-country
partner at the second and third stages of the project. The Ministry of Education,
Science and Technology (MEST, later the Ministry of Science, ICT, and Future
Planning or MSIP) partially funded the field surveys and workshops.
STEPI provides its experience in applying STI planning and policymaking to
development to build similar capacity in developing countries. STEPI previously
worked in a similar capacity with several other developing countries such as Egypt,
Ethiopia, Indonesia, the Philippines, Tunisia, and Vietnam. By examining the policies,
and more importantly, the policy planning and strategies implemented in Korea during
its economic expansion, STEPI builds capacities in developing countries by providing
lessons learned from that period.
APCTT is an agency under the United Nations Economic and Social Commission
for Asia and the Pacific (ESCAP). APCTT offers a network within the S&T
community among the Asia-Pacific. Its network provides an infrastructure that is
in place to reach out to developing countries. Some of the STI needs of developing
countries have been identified through existing programs at APCTT and its partners.
Originally, the project planned to begin working with Lao PDR during the first
phase of the project. The National Agency for Science and Technology (NAST)
was the lead partner in Lao PDR but given changes in the political structure in
the government, the project began with another country. In that interim, NAST
evolved into the MOST, which represented greater institutionalization within the
government with its own Minister in the Cabinet. With the Ministry in place, DTI
provided the in-country expertise and partnership contact to continue with the project
as planned.
Partial funding for the project comes from the UNDP and is administered by
the Office of South-South Cooperation (OSSC). The project monitoring and
evaluation reporting includes the evaluation requirements of the UNDP and OSSC,
which include proscribed development indicators.
Chapter 1 Introduction 3
Research Milestones
Although there was a preliminary trip in 2011,1) the first phase of the project
in Lao PDR began in earnest with a field trip to Vientiane in March 2013. During
the 2013 visit, a team from STEPI and APCTT went to several sites to meet with
various stakeholders in industry, government and academia (see Appendix 1). Based
on literature and a statistical review coupled with the information gathered during
the field visits, a diagnosis of the Lao innovation system was made. The diagnosis
considered the socioeconomic needs of Lao PDR, and the solutions focused on
supporting industrial development through missing institutions, including a
governance mechanism that enabled coordination with other sectors of the economy.
The project activities are summarized for 2013-2014 (see Figure 1-1). Following
the field visit, a pilot questionnaire survey was administered from May to July 2013
to stakeholders across the economy (see Appendix 4). Government composed about
31%, research institutes about 11% and university, industry and NGOs each about
15% of the fifty-five respondents. The survey design reflected the relative importance
of project goals such as industrial promotion, technology development and
acquisition, policy, implementation, and the role of government. The responses,
however, were insufficiently discriminated, providing unreliable data for AHP analysis.
In fact, most responses across all categories suggested that all aspects needed to
be improved. The only consistent response was that human resource development
(HRD) through universities was most emphasized, which is also consistent with the
core development strategy of the government.
1) The results of the preliminary field survey were published in Lee, et al., (2011).
iv STI Strategies for Poverty Reduction: The Case of Lao PDR
Figure 1-1: Project Activities
In October 2013, a national workshop was held in Vientiane, Lao PDR, to
disseminate the results of the diagnosis of the field study and survey (see Appendix
2). At the workshop, STEPI and APCTT, along with Lao MOST, presented various
aspects of the Lao innovation system to stakeholders. Local stakeholders in Lao PDR
hosted the National Workshop on National Innovation System of Lao PDR Diagnosis
and STI Strategy Development. There were 78 participants who attended the two-day
workshop. The participants represented government, industry, universities, and
research sectors. A second field survey was taken during the same visit in October
2013. Additional stakeholders were visited to supplement the previous research.
In November 2013, the results of the Lao innovation diagnosis and strategy
development were also presented at the APCTT Technical Committee Meeting in
Kuala Lumpur, Malaysia (see Appendix 3). The participation in this meeting was
meant to disseminate information and strengthen regional networks.
A brainstorming panel workshop was held in May 2014 in order to develop an
action plan that included priority setting, program and governance design, and
milestone setting (see Appendix 5). To realign priorities, the current process was
considered in the global and domestic contexts. Stakeholders’ capacities and interests
were evaluated under current programs and other environmental conditions to devise
programs and governance. Preliminary milestones were also suggested based on
resources available domestically and internationally.
Chapter 2 Research Framework & Methodology 5
｜Chapter 2│Research Framework &
Methodology
This study uses the 3C/3A Approach, a methodology developed by STEPI to
diagnose and prescribe roadmaps to address bottlenecks found in an innovation
system and allow poor countries to develop their economies. The objective is to
create a strategic roadmap using holistic diagnosis, future-oriented solutions and
intuitive analysis (Lee et al, 2013). The approach uses principles drawn from the
Korean development experience. The principles are used to understand why and
how policy can be applied to development goals using STI. Generally, the goal of
the Approach is to ensure relevance, coherence and consistency of policies to ensure
that they are most efficient and effective at dealing with innovation within the
economy. The methodology is described in this chapter to be applied in the case
of Lao PDR in the following chapters.
1. Poverty, STI, and Lao PDR
Before detailing the research framework and methodology, we examine the
fundamental rationale for examining economic development drivers in the low-income
development context: the eradication of poverty. Although Lao PDR has technically
graduated from low-income status by some definitions,2) it still faces many issues
of poverty, even when considering the prevailing measures used, the Millennium
Development Goals (MDGs).3)
The MDGs provided the development community two important tools to address
poverty: a refocusing on a specific definition of poverty and an introduction of metrics
that can be used to understand whether goals were being met. The MDGs shifted
the dialogue towards understanding what elements of extreme poverty meant and
what should be targeted. MDG1, MDG4, MDG5 and MDG6 are measures of health
outcomes that significantly impact overall development. MDG2 and MDG3 are social
2) Using the Atlas method to calculate GNI per capita, the World Bank raised the categorization of Lao
PDR from low income to lower-middle income (World Bank, 2011).
3) See Appendix 6: Millennium Development Goals
vi STI Strategies for Poverty Reduction: The Case of Lao PDR
indicators that have been tied to humanitarian development and economic growth.
MDG7 is a measure of environmental concerns for development. The last target,
MDG8, focuses on the framework that exists and relates the different parts and
stakeholders. The indicators provide practical measures by which to evaluate progress
that is made by development programs.
Poverty and health have significant impacts on development as measured through
the MDG indicators. Poverty limits any country’s ability to address the healthcare
issues that its populace faces because health professionals, programs and the necessary
infrastructure have financial costs. Limitations in healthcare outcomes also affect the
ability of a country to meet the financial obligations of running its healthcare system
and other parts of the economy in several ways (Conroy, Blackie, Whiteside, Malewezi,
& Sachs, 2006). Labor will be unproductive or less productive if people are not
healthy. Children that experience stunted growth will have lower lifetime productivity.
Parents that must spend time caring for their sick children are unable to work.
Orphans will also increase demands on the system and be less productive in the
future if their needs are unmet.
While the effects of poverty are understood to have significant and compounding
impacts on societies that face high levels of poverty, there is great debate as to
exactly what remedies should be implemented. Several critics suggest that the
development community and its programs have done more harm than good, but
others believe that poverty traps can be overcome through institutional corrections.
Sachs (2007) suggested that poverty is a self-perpetuating phenomenon that needs
to be addressed at the root causes that require certain types of capital to enable
economic growth.4) The international community can provide a minimum amount
of aid to enable the extreme poor to reach the minimum amount of capital necessary
to begin their ascent from poverty. As the head of the Millennium Project, Sachs’s
views guided the crafting of the MDGs.
In the Bottom Billion, Collier (2007) suggests poverty traps that keep many of the
extreme poor at the bottom of the development pyramid.5) Two of these traps can
4) Without the necessary capital to move up the economic ladder, following generations have even less capital
needed to escape poverty.
5) Using empirical studies, Collier identifies four poverty traps: Conflict, Natural Resource, Landlocked with
Bad Neighbors, and Bad Governance in a Small Country. The traps that are identified suggest concentrations
of power and levels of corruption that do not exist in Lao PDR. Nonetheless, some of the conditions
that exist that enable and have led to abuses of power in other countries can be found. Although the
solutions offered by this research differs in the instruments proposed by Collier (i.e. aid, military intervention,
laws and charters, and trade policy). Both approaches seek institutional remedies but focus on different
Chapter 2 Research Framework & Methodology 7
be seen in the Lao economy to lesser degrees. The natural resource trap suggests
that when a country is endowed with natural resources, those resources can create
systems that lead to rent-seeking. Lao PDR also suffers from its landlocked position
and its small economy. These two characteristics make it difficult for the economy
to gain a foothold on the development process. Landlocked countries require greater
infrastructure to reach outside markets, which increases costs. At the same time,
Lao PDR is partially constrained by the markets that are available in neighboring
countries. In other words, it is not only limited because it is landlocked, but also
because its lack of access to markets constrain economic development.
The impact of the MDGs can be summarized as having been only partially
successful.6) The current discussion about the form of the Post-2015 MDG
Framework seems to have reached a general consensus on this opinion. The patterns
shown through the MDG indicators demonstrate that that the MDGs in and of
themselves have not had an enormous impact on development processes. One of
the main shortcomings that has been pointed out is the lack of STI elements that
underpin economic development.7)
While Lao PDR has indeed managed to increase its GDP per capita, this growth
has been resource-driven. The inherent problem with this is that it is unsustainable
because these resources not only have natural limits of scarcity but also because
the rate of economic growth based on natural resources will not achieve the increases
needed to become a developed country.8) Cozzens and Kaplinsky (2009) consider
inequality and innovation as a framework to address development and innovation.
They suggest investing in capacity building that increases absorptive capacity, which
begins with education but ultimately builds through rent-rich sectors of the global
value chain. These suggestions are meant to stimulate STI-driven growth.
areas of the economic system.
6) See Appendix 6 for a list of the UN MDGs.
7) One of the main focuses of the Post-2015 Agenda is to better incorporate STI in implementation of goals
and programs. The details of this, however, are still being determined. The results of consultations will
be available at the end of 2014.
8) While these issues are captured the idea of a “middle-income trap,” Dani Rodrik (2011) explores some
of the divergence that has occurred in his book The Globalization Paradox.
viii STI Strategies for Poverty Reduction: The Case of Lao PDR
2. International Frameworks: Post-2015 & ASEAN
th
The 7th National Socioeconomic Development Policy (7 NSEDP) explicitly states
the achievements of the MDGs among the four overarching goals that must be met
to graduate from the status of LDC and achieve sustainable socioeconomic
development. Since the international community is moving towards the Post-2015
Framework, reviewing the international context is necessary in order to position Lao
PDR in a broader context. Two international contexts will be reviewed: the Post-2015
Framework and the ASEAN 2015 Vision. Prior to reviewing the Post-2015
Framework, it is necessary to review the contribution of the MDGs. Despite the
fact that the MDGs were subject to myriad criticisms, it is widely acknowledged
that the MDGs galvanized international efforts to fight against poverty and inequality.
A. Post-2015 Framework
The perceived strengths of the MDGs are that they are simple, easily communicated
goals that served as tools for advocacy by recognizing the special needs of developing
countries. The time-bound quantitative targets, coupled with 21 targets and a series
of measurable indicators for each target, have contributed to improving the
coordination of the statistical system at differing levels (national/regional/
international).
The MDGs also provided a common framework that improved coordination
among actors by prioritizing the eradication of poverty as the ultimate goal of the
international community. However, the MDGs were criticized in perpetuating the
donor-centric agenda, overemphasizing the financial resource gaps to the detriment
of institutional capacity building, set for rather rigid national policy agendas that did
not sufficiently allow policy room tailored to country specific context, and an
on-track/off-track measure9) of the progress that failed to take account of the
different initial levels of development. The impact of the MDGs is so far unclear.
Critics claim that the goal of halving the rate of extreme poverty was the result
of rapid economic growth, especially in China, rather than the MDGs. A cursory
look at the infant mortality rate suggests that the fall in mortality was already occurring
(see Figure 2-1). There is no significant change in the mortality rate after the
implementation of the MDGs in 2005.
9) As part of evaluations of MDGs, countries were given “report cards” where each goal was evaluated as
being on- or off-track to meet the goal by 2015.
Chapter 2 Research Framework & Methodology 9
Figure 2-1: Population Related Statistics
Source: World Bank, 2013
Although the discussions for a Post-2015 framework are still ongoing, the vision
for Post-2015 lies in the renewed commitment for multilateral initiative through global
partnerships for development. The proposed integrative framework for such
multilateral initiatives rests upon the core fundamental values of the UN and the
four dimensions of a holistic approach. Conforming to the easily communicated goals
and framework of the MDGs, the new framework seeks a structural transformation
for both developing and developed countries.
Whereas the MDGs had focused on easy-to-fix issues that generate immediate
changes, the Post-2015 vision intends to be more inclusive and holistic in addressing
the issues of poverty and inequality. In order to compensate for the deficiencies
of the MDGs notably in its silence on “how” to achieve the MDGs, the proposed
framework has incorporated a set of enablers that are more specific and thus can
act as guidelines for enhanced policy coherence and achieve the unfinished MDGs
(UN, 2012b; UN, 2012c).
The goals of the Post-2015 Framework aim at creating an enabling international
environment to ensure that globalization becomes a positive force for all and a
two-way structure that embodies both the global framework and the country-specific
local conditions. The dimensions for a renewed multilateral initiative are the following:
to enhance collective action with more emphasis on the ownership of developing
countries and clear distribution of tasks, to engage with newly emerged actors, to
seek innovative sources of finance other than ODA, to increase accountability of
stakeholders, and to devise measurable indicators for improved monitoring and
x STI Strategies for Poverty Reduction: The Case of Lao PDR
assessment of the multilateral initiative.
The relevancy of STI and Intellectual Property Rights (IPR) is more pronounced
in the Post-2015 Framework. Although access to STI is a cross-cutting issue that
underpins all development dimensions, STI was not explicitly included as a goal in
the MDGs. The Post-2015 Framework sheds more light in the contribution of
creativity and innovation as the driving mechanisms in overcoming the more complex
and interconnected challenges of the future. The Rio+20 Conference and 2013
ECOSOC Ministerial Review also recognized the significance of STI as a vehicle
for addressing socioeconomic challenges and as a prerequisite for overcoming the
poverty trap (UN, 2013a; UN, 2013c).
Strengthening STI capacity building will generate a virtuous cycle of prosperity;
improved STI capacity will create more jobs and employment in quality as well as
quantity, increase productive capacity, and eventually contribute to economic growth.
With respect to food security, STI can increase agricultural productivity in a
sustainable manner without increasing land use. Food security is a critical issue for
developing countries such as Lao PDR, whose economy still relies on the agricultural
sector and the child stunting rate is above forty percent for children under five
resulting from undernourishment (UN, 2013d). STI can also help in transitioning
from a fossil fuel-based economy to an environmentally friendly one, and also cope
with the issue of climate change, natural disaster risk management and preservation
of biodiversity.
Lao PDR can clearly benefit from the Post-2015 agenda but Lao needs to align
its policies with the rapidly changing environment. A review of the international
context poses the following implications for Lao PDR.
First, Lao needs to reorient priority setting and milestoning to build STI capacity.
The assessment of STI-related policies has shown that overall, the level of
implementation of the policies was low, and that low technology absorptive capacity
can be cited as one of the reasons behind such poor implementation. Strengthening
the capacity building of STI requires the following elements: adoption of an integrated
national STI strategy, mobilization of efforts to mainstream STI into policies in order
to realize sustainable growth and ultimately seek structural transformation with an
emphasis on industrialization and economic diversification.
Second, Lao PDR needs to develop a concrete mechanism to translate policy into
implementation. As the Post-2015 Framework calls for collective action, the successful
implementation of policies will depend on the proactive ownership from the Lao
Chapter 2 Research Framework & Methodology 11
PDR government in formulating the necessary strategic initiative, and alignment of
ODA policy that promotes capacity building in STI.
B. ASEAN context: ASEAN Economic Community (AEC)
At the summit held in Vientiane in 1997, the ASEAN leaders adopted the ASEAN
Vision 2020 based on a shared vision, and resolved to establish an ASEAN
Community by 2020. The ASEAN Community is comprised of three pillars that
work in tandem: ASEAN Political-Security Community (APSC), ASEAN Economic
Community (AEC), and ASEAN Socio-Cultural Community (ASCC). The Vientiane
Action Program has sought to realize the ASEAN Community by laying down the
goals and strategies to make one community.
In 2007, the blueprint for AEC was adopted to accelerate the establishment of
ASEAN Community by 2015 by providing the specific measures and schedule for
the implementation process (ASEAN Secretariat, 2009). Among the three pillars, the
AEC envisages the following dimensions: single-market and production base,
competitive production base, equitable economic development and integration into
the global economy. The potential of AEC as a single market amounts nearly to
USD 3 trillion in GDP10) with 600 million consumers to be integrated into the global
economy.
The prominent feature of the AEC is the promotion of the free flow of not
only goods, services, and investment but also capital and skilled labor. The benefits
of AEC are thus numerous. AEC increases the size of the market. Lao PDR, being
at the center of economic and transport corridors, can trade within ASEAN but
also other countries (Australia, New Zealand, China, Japan, Korea, and India) and
thus gain from economies of scale. The reduction of tariffs for import duty is also
significant. For example, the reduction of tariffs lines under ASEAN Free Trade
Area (AFTA) and Common Effective Preferential Tariff (CEPT) are on average near
zero for the Original ASEAN Member States (AMS) and 2.6 % for the newer AMS
(ADBI, 2013). The establishment of AEC also intends to enhance the manufacturing
sector and facilitate technology transfer by making ASEAN a hub for FTA networks
in the region. Also, enhancing internal connectivity by strengthening transport
networks reduce transaction costs for importing and exporting products.
AEC can also bring about challenges that Lao PDR will need to overcome. As
10) Thinking Globally, Prospering Regionally-ASEAN Economic Community 2015, 2014
xii STI Strategies for Poverty Reduction: The Case of Lao PDR
ASEAN becomes one community Lao PDR will enjoy a greater pool of talents from
the inflow of high-skilled workers. However, the inflow of talent mobility can be
ambivalent since foreign workers can present as a threat for the local workers that
lack competitive capacities. The entry of foreign companies can also strain local
business performance and exacerbate inequality by creating social tensions. Overall,
the sudden inflow of goods, services, investment, and capital can overwhelm the
government’s ability to manage market institutions and policies by undermining the
creation of jobs and backfire against its economy. With little time remaining to the
integration of Lao economy into ASEAN, Lao PDR is at a crossroads. ASEAN
can be double-edged and Lao needs a robust basis that should be based upon a
thorough review of its capabilities to maneuver through both international and
regional contexts for the benefit of its economy.
3. 3C/3A Approach
Countries around the world face increasing uncertainty and heightened complexity
as technology advances. Additionally, they have different endowments of natural
resources and political infrastructures from diverse histories. The Korean experience
provides one perspective for overcoming these challenges that provide a set of
principles from which other developing countries can draw lessons to develop their
own policies today. Benchmarking practices have been prevalent but incapable of
improving economies. Lao PDR had its innovation system diagnosed and solutions
have been provided to provide STI strategy. Figure 2-2 represents how the STI
strategy development principles were developed from the Korean experience.
Chapter 2 Research Framework & Methodology 13
Figure 2-2: STI Strategy Development Principles
The Korean development experience includes principles that can be used to create
a driving mechanism that enable the building of capacity in science and industry,
which were too weak to provide sufficient innovation. The principles that can be
drawn from this experience include a holistic approach for prioritization, intuitive
decision making and future-oriented goals reached through a common pathway
(Figure 2-2). A holistic approach to prioritization of focus areas was used to consider
the larger picture of what was necessary for innovation in South Korea. This top-down
approach enabled more efficient use and allocation of scarce resources in targeted
areas that leveraged growth. These holistic targets enabled stakeholders to intuitively
make decisions, which reduced demand on the governing capabilities while still
enabling assured execution and consensus building. The future-oriented goals
calculated risk of key industries that were necessary for a sustainable future. It also
provided a pathway to reach the goals which minimized uncertainties.
Korea was able to develop structural capacities in its research and industrial sectors
by providing policies that guided different stakeholders to common goals that lead
to economic advancement for the country. The first element was to provide a
future-oriented vision and goals that enabled long-term coordination of a growing
number of stakeholders. At first, a small group of stakeholders provided individual
cases of innovation that could be spread nationwide. Additionally, the future-oriented
vision and goals enabled the stakeholders to adapt collectively as demands changed
and cumulative capacities grew.
xiv STI Strategies for Poverty Reduction: The Case of Lao PDR
In order to develop the economy, the Korean government specifically targeted
six industries that were expected to grow in global demand in spite of the lack of
R&D and HR for them. It implemented several programs, which can be considered
part of an overall driving mechanism, to compensate. The government was the only
stakeholder that had the capacity to drive innovation by using Korea Institute of
Science and Technology (KIST) and other government research institutes (GRIs)
as technology windows for target industries in the 1970s. Since universities and firms
lacked R&D capacity, the Korean government created GRIs specifically to assist
industry to absorb the technological knowhow necessary for the machinery needed
to move up the value chain for target industries. Consortia were used to distribute
risk in the 1980s. The government funded research through GRIs and universities
that worked to meet industry needs, including suppliers and assemblers. In the
following decade, this evolved into a system where industrial R&D was capable of
working without government support; in fact, many of the larger companies eschewed
support in order to manage intellectual property more closely. Government support
then shifted towards fundamental research. The driving mechanism provided the
ability to adjust policies as the needs of the innovation system changed.
Yet, developing countries cannot directly adopt the same policies that Korea used
because they face different contexts today from when Korea was at similar stages
of development. Historical, cultural, and geographical differences in framework
conditions provide different resources and constraints that enable and/or limit
economies. Similarly, the external global STI contexts have changed. For example,
trade and intellectual property are more strictly regulated than in the past. The
differences in framework conditions require a separate diagnosis for each country
before attempting to identify development solutions. 3C Diagnosis provides a
three-stage process of Componentization, Contextualization, and Conceptualization
(see Figure 2-3). Componentization identifies components of system weaknesses and
bottlenecks by overviewing symptoms of the entire system. Contextualization
considers the various components that limit the proper functioning of the system.
The symptoms are considered holistically to enable structured and heuristic
understanding of systemic problems. Conceptualization synthesizes the componentized
and contextualized problems to provide explanations that are agreed upon through
consensus. It also enables stakeholders to formulate common solutions to the systemic
problems that exist and find a 3A Prescription (see Figure 2-4).
Chapter 2 Research Framework & Methodology 15
Figure 2-3: 3C/3A Diagnosis
Source: Lee et al., 2013
The lessons that can be drawn by developing countries are that they must consider
their present framework conditions and plan accordingly. This report suggests a 3C
Diagnosis of a country’s innovation system and provides a 3A Solution to address
bottlenecks and constraints found in the diagnosis. The 3C/3A Approach finds
leverage points that can provide greater returns on investments.11) In other words,
scarce resources can be applied more effectively in target industries while alleviating
bottlenecks and avoiding constraints that exist in the system.
Figure 2-4: 3C/3A Solution
Source: Lee et al., 2013
11) For further elaboration on the 3C/3A Approach, see Lee et al. (2013).
xvi STI Strategies for Poverty Reduction: The Case of Lao PDR
4. Action Planning
STEPI and the Department of Technology and Innovation, Ministry of Science
and Technology, Lao PDR, held a workshop to begin preparing the implementable
action plans suggested through the 3C/3A prescribed solution (see Appendix 5).
Action planning is based on STI strategy that is meant to develop a driving mechanism
in specific industrial innovation platforms. One of the primary goals of the action
planning process is to shift priority setting from individual line ministries to collective
priorities that can be directed towards common goals.
The action plan is a form of STI strategy roadmap. The concept of a roadmap
is a strategic plan that defines a vision and allocates resources for stakeholders to
reach a specific development goal. Roadmaps have evolved from technology
roadmaps and innovation roadmaps. In the 1960s and 1970s, firms such as Corning
and Motorola developed technology roadmaps to develop new products more rapidly
and efficiently. The process was later codified by Garcia and Bray (1997) of the
US Sandia National Labs. Many of the elements identified have been common to
subsequent approaches to roadmapping including identifying critical resources,
leadership, needs and environmental factors; matching these resources and
stakeholders; and evaluating the process iteratively to revise the plan. At the firm
level, technologies are developed through planning and resource allocation. This
necessarily included limited scale as defined by the firm, and secrecy to limit the
flow of information and proprietary knowledge. Innovation roadmaps are developed
at the sector level and can even be nationally driven. The nature of these interactions
involved multiple stakeholders from the sector and those related to it. This meant
that the interactions were often open-sourced. Additionally, the outcome of the
innovation roadmap was an “innovative” environment and infrastructure that would
drive innovation, especially for a common national goal.
The STI strategy roadmap is defined at the national level and provides
innovation-driven policies and programs. It focuses on the elements of the national
innovation system to provide sustainable economic growth. The 3C/3A Approach
attempts to provide a diagnosis and solution to reach sustainable development goals
to enable Lao PDR to develop its economy through its endogenous capacity with
the support of bilateral and international partners. Within the context of this project,
policies should be relevant, coherent and consistent for holistic and future-oriented
goals.
Chapter 2 Research Framework & Methodology 17
Table 2-1: Types of Roadmaps
Type
Level
Outcome
Technology
Roadmap
Firm
Sector
Innovation
Roadmap
Industry “Innovation”
including environment
sector;
national- & infrastructure
driven
STI Strategic National
Roadmap
Technology
(i.e. product)
Innovation-driven
policy &
programs/projects
Features
Drivers
Secrecy
Speed
Limited scale
Leadership
Resources
Technological
capabilities
Market strategy
Open source
innovation
Multi-stakeholder
National challenge
Industry collaboration
Sectoral human
resource development
R&D collaboration
National innovation
Sustainable economic
growth Relevance,
Coherence &
Consistence
Holistic &
future-oriented
International
collaboration
HR mobility
Governance
Financing
Global positioning
Each type of roadmap also has different drivers that influence the success of the
outcomes. For technology roadmaps, leadership, resources, technological capabilities
and market strategy are important factors that should be managed through the
roadmap. The innovation roadmaps also consider these drivers but must consider
them from different perspectives. Industry collaboration is necessary cross-sectorally
and in R&D and even HRD. By extension, these are important for the STI strategy
roadmap as well. Likewise, additional considerations must be taken. International
aspects are important when considering collaboration, human resource mobility, and
financing. Moreover, when planning, it is necessary to consider governance
mechanisms of stakeholders and financial resource allocation. The aspects of different
types of roadmaps are organized in Table 2-1.
The different drivers of performance have varying influences on different elements
of the action plan. For instance, STI priority setting involves leadership in industry
and government, which requires consideration of their management capacities to set
targets for industry and technology. Program design involves an understanding of
resources and target markets. Resources include raw materials, capital and labor, which
require different approaches and stakeholders. Governance and financing elements
must also consider the implementation and coordination of these various factors,
which come from different sources.
xviii STI Strategies for Poverty Reduction: The Case of Lao PDR
Translating the 3C/3A Diagnosis into an action plan involves identifying these
different drivers but also coordinating them through a driving mechanism (see Figure
2-5). When the core drivers and implementing stakeholders are identified, the
governance mechanism must operate along the networks that exist or are created
between the drivers and stakeholders. The prescribed solution is articulated in an
action plan that should be defined through consensus so that stakeholders work
more towards a common goal that meet collective priorities. Since developing
countries like Lao PDR have limited resources, policy packages can be considered
to drive stakeholders and resources more efficiently towards the common goal.
Figure 2-5: Driving Mechanism
The action plan and driving mechanism needs to set priorities among the goals
and targets that are identified as leverage points in the economy (see Figure 2-6).
While leverage points provide sector targets that will provide greater returns to be
used to build further capacity, the limitations in resources requires that priorities
are set to utilize those resources more efficiently and effectively. It is necessary to
identify the core drivers and implementing stakeholders within the sectors that can
be used as leverage points. Then a network or consortium mechanism is necessary
to govern interaction between them. Once these are identified, the governing
implements can be designed appropriately.
Chapter 2 Research Framework & Methodology 19
Figure 2-6: Governance Mechanism
Priorities should target industries and technologies that will ensure higher
probabilities of sustainable economic growth. Planners must consider whether the
targets are sustainable and whether they will catalyze further growth. Policymakers
must also consider industries depending on the resources that they have available
as inputs. These resources include whether the industry already exists in the economy
and whether or not a champion can be identified in it. At the same time, they should
consider whether a market exists for an industry and whether or not it is accessible.
For social considerations, the industry should also be a good source of jobs. Policies
should be able to help increase the value added to the industry through its programs.
The priority-setting process does not need to be linear but should take several
aspects into consideration. Figure 2-7 below demonstrates a possible flow of the
priority-setting process for a given industry sector. Once a given sector and related
technologies are prioritized, the planning can move to program design. If the criteria
for priority setting are not met, planners should consider choosing an alternative
industry to pursue. Before setting new priorities for an action plan, however, the
existing priorities and processes must be examined in order to prevent new
bottlenecks from being inherent. The objective of the priority-setting process is to
ensure that specific requirements defined through national policies are met including
future-oriented necessity, feasibility, and poverty alleviation.
xx STI Strategies for Poverty Reduction: The Case of Lao PDR
Figure 2-7: Possible Flow of the Priority-setting Process
Program design should make sure that the programs are appropriate to meet the
goals and targets prioritized. By identifying the resources, the program design can
be used to tap into those resources for maximum effect. Yet, resources that are
deemed necessary but missing must also be planned for acquisition or development.
These resources are held in the capacities of stakeholders and technology.
Stakeholders in industry must be capable of managing supply chains, related services
and production. These processes may be supported by R&D stakeholders in public
research institutes and universities that provide technology absorption and extension
capabilities. Technology that is to be acquired or developed can be found in hardware,
software and knowhow. Hardware is technology that is embedded in capital. Software
is intellectual property. Knowhow or expertise is technology expertise that is held
in labor skills acquired through HRD systems.
The following flowchart (Figure 2-8) demonstrates a possible decision-making
process when designing programs involving the identification of stakeholders and
resources for the selected industry target. The stakeholders should be considered
from the existing actors, especially in industry. If there are industrial stakeholders,
their capacities should be measured. It may be necessary to identify a champion
Chapter 2 Research Framework & Methodology 21
from them. While assistance may be available from international partners,
policymakers should consider whether or not the domestic industry is functional
because inclusion of other players requires some sacrifice of autonomy. Similar to
taking stock of the existing stakeholders, it is necessary to identify whether resources
are available. Since Lao PDR is a developing country with natural resources, it should
build from what it has. As technology and R&D capacities are evaluated, programs
should be designed to fill in the gaps that are necessary to reach the goals that
have been set. Likewise, HRD programs should be designed to provide capacity
in areas that are necessary to reach the selected targets.
Figure 2-8: Possible Program Design Process
Once the programs are designed, it is necessary to identify governance and
financing mechanisms. Governance is handled through institutions, which includes
agencies and policies. Typically, a lead agency must be identified so that accountability
can be assigned. Governing mechanisms must be created if they do not already exist.
Programs also need to have sufficient funding to be successful. The sources of
financing are critical to success as well because there may be additional institutions
that are involved when accepting funds from certain sources. This means that
financing policies must be considered beyond absolute amounts. Cozzens and
xxii STI Strategies for Poverty Reduction: The Case of Lao PDR
Kaplinsky (2009) recommend FDI policies that promote the following: “invest on
long-term, stable basis; provide good working conditions; build local skills; do not
off-load environmental costs; maximize good jobs; and work as much as possible
with local firms and suppliers.”
The diagram below (Figure 2-9) shows some elements that might be considered
when designing governance and funding mechanisms. For governance design, it is
important to identify those agencies and policies that are relevant to the industry
and related innovation system. While many agency stakeholders will exist, there should
be a main stakeholder selected to drive forward the necessary goals with
accountability. The mechanism itself needs to provide means to implement and
coordinate the various projects and actors. It is necessary to ensure a balance of
accountability and autonomy so that stakeholders are able to fulfill their missions
independently. Additionally, the planning of governance needs to ensure continuity
with sufficient resources. A monitoring and evaluation system is necessary for
evidence-based decision-making, especially longitudinally. Funding should be sourced
effectively and again weighed against autonomy that may be sacrificed with external
funding from development assistance and foreign direct investment.
Figure 2-9: Elements of Designing Governance and Funding Mechanisms
Chapter 2 Research Framework & Methodology 23
5. Panel Discussion Research Methodology
The methodology is guided through principles of intuitive decision-making across
the methodology and process, holistic diagnosis, and future-oriented solutions. The
study used a variety of techniques to diagnose the problems in the system including
statistical analysis, policy review, field visits, pilot survey, and brainstorming panel
discussions. The number of techniques meant to overcome the lack of existing
information regarding innovation in Lao PDR, where the word itself is a new concept.
STI indicators were sparse, as might be expected from a country still developing
its S&T infrastructure. Since many stakeholders are still developing capacities, survey
responses lacked variation that might have provided greater insight; intuitive
decision-making becomes possible and preferable. Thus, the brainstorming panel
discussions were used to conceptualize the diagnosis, its solution, and prescribed
action plan through consensus.
The 3C/3A Approach identified necessary programs to overcome bottlenecks and
constraints to address R&D and human resource capacities. The diagnosis was holistic
to avoid creating additional bottlenecks with narrowly defined solutions. Instead,
future-oriented solutions are sought so that relevance and consistency can be
maintained over the long term, reinforcing the practicality of intuitive decision-making.
During the Lao PDR workshop, stakeholders gathered to identify an industry platform
where a driving mechanism can be established. Stakeholders tentatively adopted green
transportation as the industry platform, which will be elaborated further in Chapter
7. The institutions and stakeholders are identified and programs to develop and govern
the industry are considered.
xxiv STI Strategies for Poverty Reduction: The Case of Lao PDR
｜Chapter 3│Socioeconomic Framework
Conditions & Needs
Before solutions to the bottlenecks in the innovation system in Lao PDR can
be addressed, it is necessary to understand the framework conditions that exist. The
first step in the diagnosis will identify the conditions that policies must consider
to accept as initial conditions or to try to correct. The socioeconomic framework
conditions will be reviewed in this chapter.
1. Geography, History and Political Regimes
In 2012, Lao PDR had a population of 6.6 million, which makes it the least densely
populated country in Southeast Asia.12) It is also one of the poorest countries in
the region.13) The GDP per capita has recently crossed the thousand dollar (USD)
threshold, moving it from low- to lower-middle income status.14) Its geography and
history create political conditions that must be considered when creating policies
because they may hinder implementation.
Lao PDR suffers from geographic conditions that have been shown to aggravate
its poverty. While all countries began similarly, Lao PDR is still largely an agrarian
society. While a shrinking portion of the economy, most of the population still
employs subsistence farming. The country is mountainous and tropical, which creates
difficult conditions to transfer technology and to establish infrastructure for transport,
communication, and public works. Additionally, it is landlocked, which makes
accessing trade of goods expensive because they can only be transported over land
or by air. Moreover, as Lao PDR builds transportation infrastructure over land, the
government must rely on neighboring countries to connect its network to enable
12) In 2012, Lao PDR had a population density of less than thirty people per square meter. Myanmar, the
next least densely populated, had more than twice as many people per square kilometer. Of the countries
represented at the Lao Workshop in 2013 (i.e. Bangladesh, Lao PDR and Nepal), Lao PDR had the
largest area but the smallest population.
13) It is often grouped with Cambodia, Myanmar and Vietnam, which have been referred to as CLMV. Vietnam,
however, has been growing rapidly and less frequently associated with the other group.
14) Its GDP per capita was USD 1,260 in 2012 (World Bank, 2013)
Chapter 3 Socioeconomic Framework Conditions & Needs 25
trade. The country’s geographic isolation and topological factors make it unlikely
that agricultural growth would effectively develop the economy. Even this does not
consider the trade policies that must be in place to enable firms to compete in the
market without being overburdened with business costs and tariffs.
Following China, its giant neighbor to the north, the Government of Lao PDR
started applying socialist market economic policies. The recent moves have roots
in its geo-political history, which includes many different aspects that are still relevant
today (see Figure 3-1). The feudal political structure lasted until the colonial period
when the French occupied what was known as Indochina. Lao PDR emerged from
the colonial period after the Second World War. After a short semi-royalist period,
there was a creation of a new revolutionary political framework, which resulted in
the Socialist regime governing since 1975. The same framework exists today but
with market-oriented elements. Lao PDR started integrating into the global economy
and joined the WTO in 2013. As a member of ASEAN, it has been integrating
into the larger regional bloc, which officially opens as an economic community in
2015. Inclusion in these global frameworks requires higher standards and greater
inputs along with it.15)
Figure 3-1: Timeline of Lao PDR History
Lao PDR still has vestiges of its history seen in its society, international relations
and domestic policies. Much of its rural population is still engaged in agrarian life.
It still maintains many ties with both French and former Soviet institutions. For
instance, France supports Lao PDR through ODA at higher levels than non-colonial
countries. Also, many joint research projects involve former Soviet and other Socialist
countries. Many of its collaborative and international development ties are with
countries that share historical ties. Cultural and physical proximities have increasingly
integrated it with China, Thailand and Vietnam. Internally, its political structure still
15) Although there is a stipulation for least developed countries from immediately applying trade regulations,
those clauses are quickly coming to the end of the terms. For instance, under both WTO and ASEAN
Economic Community agreements, trade in certain goods like garments is protected until 2015 but have
been gradually phasing out since 2010.
xxvi STI Strategies for Poverty Reduction: The Case of Lao PDR
has strong central authority while being concerned with needs of remote and minority
populations. At the moment, the largest shift that it must contend with is its market
orientation because its history has left its industry incapable of competing in the
global economy.
This study includes these geographic and historic components in its diagnosis and
strategic roadmapping.
2. MDGs: Population and Education
In general, the labor economy has been greatly affected by international
development goals, largely defined by the Millennium Development Goals16) since
they were created in 2000. The Lao population has grown threefold in the past-half
century and demand for education has grown along with it. (see Figure 3-2, Figure
3-3) According to the 2005 Census, the population increased at an annual rate of
2.1%. Moreover, the population growth is placing pressure on the rest of the political
infrastructure. The Census showed that nearly forty percent of the population was
school age, 0-14 years (Lao Statistics Bureau, 2005).
Figure 3-2 Population of Lao PDR in 1995 Figure 3-3 Population of Lao PDR in 2013
Source: World Bank, 2013
According to the World Bank (see Table 3-1), over ninety percent of students
in the relevant age group are completing primary education and over forty-five percent
are completing secondary school. As described later in the field survey chapter, we
found that these statistics were not sufficient to meet industry demands. As potential
skilled workers, vocational students were only 0.4 percent of secondary graduates.
As of 2002, there were only 15.8 R&D researchers per million, which represents
16) See Appendix 6: Millennium Development Goals
Chapter 3 Socioeconomic Framework Conditions & Needs 27
a low number of highly-skilled workers available. Lao HRD policies, which are
reviewed in the next chapter, need to be adapted to meet the new needs of the
economy.
Table 3-1: Human Resource Development Indicators, 2011
School enrollment, tertiary (% gross)
17.7
School enrollment, secondary (% gross)
45.8
Primary completion rate, total (% of relevant age group)
92.6
Secondary, vocational pupils
Secondary, pupils
2,147
490,290
Adult Literacy Rate (%, 2005)
72.7
R&D Researchers (per million, 2002)
15.8
Source: World Bank, 2013
3. Economy Driven by Natural Resources and FDI
The change in the political economy of Lao PDR coincides with significant changes
in the economy. Its sectoral composition shifted from an agrarian economy to industry
and services, but these have focused primarily on mining and electricity. While the
income generated from these sectors has been significant enough to change the
income status of Lao PDR, there are some concerns that should be highlighted.
Although the economic gains have been dramatic, they have been largely based on
resource inputs. Other aspects of the economy show possible signs of neglect
including industrial manufacturing, HRD and “Dutch disease.”17)
The composition of the economy has rapidly shifted from an economy that was
dominated by agriculture (i.e. more than half of GDP) up until the turn of the
millennium to one that is more evenly distributed with services and industry (see
Figure 3-4). In 2011, agriculture, services and industry were each about a third of
the economy (see Figure 3-5). Whereas agriculture has steadily declined, the other
sectors both grew quickly. Services has steadily grown and jumped as a proportion
of the economy in 2000. Industry, on the other hand, has not grown as quickly
in relation to the rest of the economy.
Figure 3-4: Change in GDP Composition
17) In late 1950s, the Netherlands began exporting recently discovered natural gas. This large inflow of income
led to inflation of its currency, which in turn increased labor costs and weakened competitiveness in
manufactured goods. Similar phenomena of are now referred to as “Dutch disease.”
xxviii STI Strategies for Poverty Reduction: The Case of Lao PDR
Source: World Bank, 2013
Figure 3-5: GDP by Sector, 2011
Source: World Bank, 2013
A closer look at industry shows that it did not begin rapidly growing until around
2004-5. If manufacturing growth is distinguished from the rest of industry, its rate
of growth has been almost stagnant in comparison (see Figure 3-8). The main drivers
of industry growth were not in manufacturing but rather in mineral extraction and
electricity generation. In a short time, these two factors have remarkably changed
industry. The discovery of minerals like copper and gold has transformed the
economy.
Chapter 3 Socioeconomic Framework Conditions & Needs 29
Figure 3-6: Industry & Manufacturing Growth
Source: World Bank, 2013
Almost the entire industry share of the economy is based on these mining and
energy sectors. Mining and exploration is the largest share of industry, but many
other sectors are related to these industries, including construction and processing
(see Figure 3-7). Electricity and Nampapa18) are utilities that are regulated by the
government. Hydroelectric dams have been built using a public-private partnership
model, financed by international banks to supply neighboring countries power.19)
Figure 3-7: Average Share of Value Added, Industrial Sector 2006-2010
Source: Ministry of Planning and Investment, 2011
18) Nampapa is the water supply utility.
19) Cases on hydroelectricity generation and electricity distribution can be found in Chapter 5.
xxx STI Strategies for Poverty Reduction: The Case of Lao PDR
Since the economy opened, exports from Lao PDR have grown to over a third
of GDP (see Figure 3-8). Dropping by nearly a tenth of GDP each time, its growth
rates plummeted during the global crises of 1997-8 and 2007-8. Such volatility suggests
a heightened vulnerability to these types of external shocks.
Figure 3-8: Lao PDR’s exports (% of GDP)
Source: World Bank, 2013
In recent years, exports shifted heavily towards mining, which comprised almost
half of all exports in 2009 (see Table 3-2). Previously one of its dominant export
products, garments shrank from a fifth to nearly a tenth of exports. A report by
the National Statistics Centre (2007) found that competition increased, and predicted
a drop in garment export prices and revenue with the phase-out of the Agreement
on Textiles and Clothing in 2008, which gave LDCs preferential treatment under
trade regulations. A nearly 50 percent drop in garments as a percentage of exports
in 2009 suggests that Lao PDR suffered a loss as expected. Hydroelectricity was
another economic driver before the discovery and extraction of minerals. It is mostly
exported to neighboring countries including China, Vietnam and principally Thailand.
Growth in this sector has been predetermined by agreements made in partnership
with multilateral banks.
Chapter 3 Socioeconomic Framework Conditions & Needs 31
Table 3-2: Export Structure in Percentages
Export Commodity
2005
2006
2007
2008
2009
Wood
14.13
11.09
9.71
6.02
4.9
Coffee
1.35
1.11
3.13
1.69
2.25
Agriculture NTFP
3.65
2.52
1.8
4.82
9.06
Others
3.74
2.72
2.52
2.6
15.43
Garment
20.04
14.45
13.69
23.45
12.7
Electricity
17.81
11.47
9.13
9.89
9.97
Mining
39.16
56.55
59.94
51.44
45.26
Note: Non-timber forestry products (NTFP)
Source: Ministry of Planning and Investment, 2011
“Dutch disease” also explains this phenomenon. The effect of this trade structure
and foreign investment is that other Lao exports become less competitive in global
markets. As Lao PDR increases its global trade ties, its levels of foreign direct
investment (FDI) have increased as well (see Figure 3-9). When inflows of foreign
investments increased in 2004-5, the Lao Kip strengthened. These investments are
mostly related to the same industries, hydroelectricity and mining. According to the
7th National Economic Development Plan, the total revenue from mining for the
previous period (2006-2010) was 16,772 billion Lao Kip (LAK) and averaged 19.91%
annual growth. Investments made in the sector totaled about USD 2.5 billion. The
economy invested USD 3.0 billion in hydroelectricity from 2006-2009, which was
projected to earn USD 303 million per year.
Figure 3-9: Foreign Exchange & FDI
Source: World Bank, 2013
xxxii STI Strategies for Poverty Reduction: The Case of Lao PDR
As more FDI is attracted to Lao PDR, the more difficult it will be for its industry
to diversify its exports. Few other exports have been able to match these levels
of growth.20) In particular, mining income overshadows the other export areas
including electricity. International aid is another common source of foreign income
that can distort industry production.
While Lao PDR has benefited from FDI to develop its extractive resources, other
forms of international trade regulation will have additional effects that should be
monitored (Ministry of Planning and Investment, 2013). The WTO and ASEAN
Economic Community will increase the levels of competition that Laotian companies
will have to contend with in the market. Furthermore, natural resource dependence
also means that the economy is highly sensitive to potential volatility that those
commodities may face. For instance, if the price of metals were to drop, then the
economy would likely be set back because it is highly dependent on specific sectors.
Meanwhile, other sectors such as manufacturing have been losing their
competitiveness.
Programs based on overseas development aid (ODA) should also be considered
for industry distorting effects. Closer examination may be needed to ensure that
crowding out does not occur, which involves close partnership with international
donors and their awareness. Public-private partnership may also provide a means
to overcome or at least realign priorities to minimize these effects.
4. Summary and Implications
The socioeconomic framework conditions that exist in Lao PDR have elements
that are similar to other developing countries, especially lower-income developing
countries, yet are unique to it. These factors should be considered before creating
policy measures that may meet obstacles that can be avoided or overcome if
understood beforehand.
The geography and history of Lao PDR provide both resources and constraints
that must be contended with for successful implementation of any policy. Its
geographic isolation creates barriers that could be handled through policy mechanisms.
Technologies should be evaluated for their appropriateness to the terrain, especially
20) The export commodity category “Others” in table 3-2 grew significantly in 2009 but the report does
not specify what the other products are. These should be analyzed more carefully to see if there is potential
to expand growth through value addition.
Chapter 3 Socioeconomic Framework Conditions & Needs 33
in certain sectors like agriculture. Domestically, routes for transporting its own goods
and people must also be supported to enable its economy to function properly.
Furthermore, while every country must deal build infrastructure to enable its
citizens and firms to operate within its borders, being a landlocked country means
that there are limitations to trade. Lao PDR can work with its neighbors to build
infrastructure to connect it to its neighbors to facilitate trade or it can concentrate
on goods and services that can be easily transported electronically or by air. These
and other issues must be handled when dealing with international affairs issues,
especially as they relate to trade since it heavily influences the economy. The Lao
government still has capabilities that remain from its colonial and socialist ties.
Against this backdrop, Lao PDR must contend with societal issues. Issues of
poverty must be dealt with, especially in remote and rural populations. While advances
were made against MDGs, policies must draw from the same limited resources to
handle a broader range of issues. As health outcomes of the population improve
and education goals are achieved, systemic objectives should be established to ensure
that these advances are capitalized on. For instance, as greater numbers finish primary
and secondary school, graduates need additional attention. Education policy should
consider what will happen to these young people, whether they continue to pursue
higher education or enter the workforce. Both actions can be improved through
policy responses, which will be considered in later chapters.
The Lao economy is quickly transitioning from its low income status but this
growth has been heavily—almost solely—reliant on income generated through natural
resources and foreign investment. The government budget is also supported by
development aid. This situation is not sustainable and places the economy in a
vulnerable position. The natural endowment is not infinite and commodity prices
of minerals can be volatile. ODA can also swing depending on changing attitudes
or more likely on the changing fortunes of benefactors. The global financial crisis
demonstrates how rich countries’ aid can be affected by domestic conditions.
Since hydroelectricity and mining generated the greatest revenue for the country,
the Government of Lao PDR responded by providing political, legal and physical
infrastructure to support these industries, as will be seen in the subsequent chapters.
This response is to be expected, but this report will suggest that it should be tempered
to balance other concerns in the economy. As mentioned, manufacturing and
industrial policies in general should strive to diversify industries that will defend
against volatility that is inherent in concentration in limited sectors.
xxxiv STI Strategies for Poverty Reduction: The Case of Lao PDR
Policies in Lao PDR and global policies affecting the country continue to evolve.
Having climbed income levels, Lao PDR will qualify for lower levels of foreign aid.
Officials surmised as much and shifted their strategies towards being self-sufficient.
Natural resource-based income is directed towards development efforts. As described
later, the plans recognize the need for industrialization, including attempts to leverage
agriculture, but additional steps must be taken. While shrinking, foreign aid is still
available, so it should be used effectively. A legacy of a strong central authority and
ministerial cooperation can be maximized when implementing economic growth
policies at the national level. As will be discussed in the chapter on Diagnosis of
Innovation System and Suggested Solutions, maximization suggests strengthening
governing capabilities to ensure consistent, coherent and cohesive policies.
This report provides STI strategies that can be used to improve implementation
of innovation policies. The Government of Lao PDR can use its central authority
and newfound revenue streams to build additional capacity in its industrial and
research sectors. Furthermore, international partnerships and ODA funding21) can
be used to transform the economy. Additionally, suggestions will include strategies
that balance nationally driven goals against those directed from abroad.
21) The 7th National Economic Development Plan expects ODA to make up about a quarter of national
investments and to be spent on achieving the MDG goals.
Chapter 4 Review of Existing Policies 35
｜Chapter 4│Review of Existing Policies
Understanding how the government of Lao PDR responds to its existing
socioeconomic conditions is important, so the study team reviewed several policies
that affected STI policies:
●
●
●
●
●
●
7th Five-year Socioeconomic Development Plan 2011
Innovation Promotion Law 2010
Agricultural Development Plan 2010
Agricultural Master Plan 2010
Education Sector Development Plan 2011
Science & Technology Policy 2003
These policies reflected the main objectives for the country and included STI
programs for the goals outlined in the policies. Although innovation is a new concept
for Lao officials, it has been quickly accepted as a necessary component of
policymaking.
In general, there were clear socioeconomic goals stated in the policies that included
HRD and education, health, environment and resources and industry (i.e. export and
manufacturing) issues. The associated governance included good coordination and
restructured ministries as necessary.
In the following sections, the existing policies are evaluated for relevance,
consistency and coherence to identify points that can be corrected in future
policymaking as it relates to STI strategy. Overall, the policy intent is to use income
generated from the country’s natural resources to develop core capacity, which is
defined as human resource development as implemented through education policy.
The policy analysis that follows will specifically highlight factors that relate to, or
are driven by, the socioeconomic demands outlined in Chapter 3. The diagnosis also
suggests that the policies call for remedies that are beyond the implementation
capabilities of industry and its related stakeholders. Industry is limited in its production
capacity and government agencies have little experience in industrial promotion. The
resulting implementation has limited relevance for industry. For instance, basic
education is insufficient to provide the necessary human resources for the existing
industries in Lao PDR.
xxxvi STI Strategies for Poverty Reduction: The Case of Lao PDR
1. 7th Five-year Socioeconomic Development Plan 2011
The Lao government creates 5-year development plans with which to direct their
ministries and agencies in their activities to advance the country. The government
is in the middle of the latest plan, the 7th National Five-year Socioeconomic
th
Development Plan 2011 (7 NSEDP). The first half of the plan is an analysis of
the previous plan and the second half provides the actual goals and strategies that
are to be implemented during the five years of the plan.
The 7th NSEDP reviewed its predecessor, the 6th NSEDP, for its achievements
and constraints that were found to limit further possible achievements. The main
goals that were achieved in relation to this study were that a reduction in poverty,
economic participation in the international market and STI and strategic partnership
expanded. GDP per capita grew faster than planned in the 6th NSEDP, well exceeding
its targets and accelerating with each year (see Table 4-1). By the end of 2010, actual
GDP per capita had surpassed planned growth by nearly thirty percent. Furthermore,
the distribution of income growth and education attainment was unevenly distributed
among the provinces.
Table 4-1: GDP per Capita (plan vs. actual)
Source: Ministry of Planning and Investment, 2011
When examining the targets set for industrial growth, average growth by sector
increased healthily for agriculture and services. Industry, however, just missed its
annual growth target (see Table 4-2). Within services, the financial sector was
strengthened as a result of increased demand due to higher rates of foreign investment.
Technology absorption rates are low in manufacturing, farming, and mining.
Chapter 4 Review of Existing Policies 37
Table 4-2: Comparison of Actual and Targeted GDP Growth Rate in the Sixth Plan
(2006-2010)
Source: Ministry of Planning and Investment, 2011
Authors of the 7th NSEDP found that the main constraints in the 6th NSEDP
were the country’s weak economic base, global economic crises and pressure from
neighboring countries. The weak economic base constrains the economy because
there are few financial resources that can be drawn from to support other parts
of the economy. It also encompasses human resources and the educational
infrastructure that are available. Lack of infrastructure and policy coordination
complicated implementation of programs, which meant that objectives were difficult
to achieve. The global economic crises are another constraint, just as the country’s
institutions are beginning to formally extend their ties internationally. Already limited
in their size and capabilities, exporting firms are less able to expand businesses since
crises limit global consumption. Yet, participation in global trade agreements like
the WTO TRIPS increases their exposure to competition.22) Pressure from
neighboring countries continued to increase, especially for material resources.
As the global economy develops, Lao PDR is not isolated in this experience because
competition for resources has increased around the world. That it starts with fewer
resources makes the competition that much more difficult. The 7th NSEDP has
set specific goals and strategies to combat the constraints identified and take advantage
of an expected global economic recovery and increased integration. There are four
overall goals for the Plan:
22) Lao PDR ratified WTO membership and fully joined on 2 February 2013.
xxxviii STI Strategies for Poverty Reduction: The Case of Lao PDR
● Maintain economic growth in a stable and progressive manner at more than
8% per year. GDP per capita estimation for 2015 is about US$ 1,700 per
person per year at current prices.
● Achieve MDGs (including poverty reduction) and parity with ASEAN
Community by 2015, acquire modern technologies and infrastructure, and
establish a diverse economic foundation to move the country out of its Least
Developed Country status in 2020.
● Ensure sustainable development by integrating economic development with
socio-cultural development and environment protection to the nation’s
advantage.
● Ensure political stability, fairness, and order in the society and maintain public
security, and open for regional and international integration.
Specific macroeconomic targets are set. The plan sets industry share of GDP to
39% by 2015 and expects exports to grow by 18% per annum. The plan similarly
targets 15% of GDP for manufacturing, which must grow 13% growth annually
to meet this target. Inflation is expected to remain below 5%. In the labor force,
new additions to the agricultural sector would be about 210,000, to the industrial
sector 14,000, and to the service sector 53,000. In total about 55,000 workers would
be added per year for the five years of the Plan.
While ODA will provide 25% of national investments, 35% of total investment
will be put into social expenditures. This is a seven-fold increase that specifically
targets the MDGs. While the government and credit sectors are expected to contribute
about 10% of investments each, over half of investments are expected from private
domestic and foreign sources. About 35% of these investments will be made in
infrastructure including construction. That leaves just under a third of investments
for the economic sector. Furthermore, sales of state assets are expected to provide
12% of domestic revenue.
The sectors that have been strategically targeted are rice, livestock, hyrdoelectricity,
mining, tourism and infrastructure (i.e. transport, electricity, water, and ICT). Social,
environmental and international integration targets are also set closely following
MDGs. These targets and sectors are where STI policies are most pertinent. They
can be used to accelerate the rate of export and manufacturing, targeting specific
economic sectors to implement S&T strategies. The targets and strategies highlight
the importance of STI and specifically mention tech transfer, science research,
Chapter 4 Review of Existing Policies 39
intellectual property rights/protection (IPR/IPP), standards, new environment-friendly
technologies for farmers, and e-governance.
Transparency, monitoring and evaluation, and information systems would provide
greater management capacity. For instance, establishing a domestic system to ensure
quality and safety standards can be used to improve industrial output. These may
be complicated by plans to incorporate externally imposed regulation of intellectual
property policies necessitated by the country’s elevation to the WTO and other
international agreements. While necessary, these may impose difficulties in the short
run.23)
One plan is to transfer appropriate technologies to farmers, which increases
value-adding capabilities to a large segment of the workforce. Since farmers mostly
rely on manual and animal labor, the policy is a fundamental step in the right direction.
Other strategies such as tech transfer and science research are meant to compensate
for missing capacity but do not fully incorporate capacity-building measures. Policies
that are related to STI but not under MOST seek to improve business environments
and strengthen links between planning and budgeting. Coordination mechanisms are
necessary horizontally and vertically to improve government agencies at different
levels. These policies must go further to address the innovation system bottlenecks
that Lao PDR faces, especially when linking planning and implementation at the
national and sub-national levels. In chapter 7, suggestions are provided to improve
on existing STI policymaking.
2. Investment Promotion Law 2010 (Ministry of Industry and Commerce, 2010)
The Investment Promotion Law 2010 was created to help encourage foreign
investors in Lao PDR. It was drafted and implemented by the Ministry of Planning
and Investment and largely supplements laws on special economic zones (SEZs).
Starting in 2003, these SEZs were established near the borders of China and Thailand.
Some provisions that are stipulated in the latest policy are that foreign entities must
cooperate with a domestic entity, especially since foreign partners are limited by how
much real property they are able to own. Foreign investors can set up businesses
with one billion kip in minimum capital. The law also created a “One-stop” service
office to help facilitate paperwork for foreign investors. Investors are also given
23) For more on this discussion, see Making Globalization Work (Stiglitz, 2006).
xl STI Strategies for Poverty Reduction: The Case of Lao PDR
concession warrantees for electricity, land and minerals between USD 10,000 and
100,000. There are also fiscal incentives for businesses including a one-year tax
exemption for new products and R&D within three years of investment. There is
also a customs exemption for import of equipment.
In general, these policies have been successful in promoting FDI rather than R&D.
As expected, FDI continues to increase. On the other hand, the rate of R&D
investment has not been affected as much. Equipment may be imported tax-free
but that equipment will not necessarily bring the necessary technical expertise and
service support with it. It may be difficult for companies, especially those with little
experience in R&D with few human and capital resources, to take advantage of the
tax exemptions in the short time provided. When considering the policies that are
related to STI, it is necessary to reconsider how to apply FDI and technology transfer
policies.
3. Agricultural Development Strategy 2020 & Agricultural Master Plan 2010
Together, the Agricultural Development Strategy 2020 (Ministry of Agriculture and
Forestry, 2010) and the Agricultural Master Plan 2010 (Ministry of Agriculture and
Forestry, 2010) outline the approaches to economic development in relation to
agriculture. The Development Strategy provides the long-term framework and goals
for agriculture within the economy (Ministry of Agriculture and Forestry, 2011). The
Master Plan provides more specific analysis and objectives that can be monitored
and evaluated.
The Development Strategy is focused on improving agricultural output under
increased global integration to increase economic growth, especially as a means to
address rural poverty since most of the country is engaged in agricultural production.
Its analysis found that there were major issues and trends that it must contend with
in order to improve agricultural output. The three major challenges that were
presented were climate change, financial risk management and higher market entry
barriers. The first two present increased uncertainty in nature and in markets,
respectively. The third primarily results from increased global integration and its
implications such as higher standards, market trends and regulations. It also suggests
that “new agriculture” trends provide new markets in organic and fair trade agriculture.
The strategy will also employ cooperative groups and organizations to disseminate
Chapter 4 Review of Existing Policies 41
market-friendly business skills and techniques to small-holder farmers. A value-chain
governing mechanism is also expected to manage activities between stakeholders.
In short, the plan states that production will be increased through the application
of capital. The capital will be sourced through technology transfer and adaptation,
which will be supported through public investment and foreign investment.
The Master Plan provides details on what specific programs will be used to achieve
the strategic goals in the Development Strategy. This review focused on the research
and extension program (Program 7) because it is the STI-based mechanism most
relevant to this report. The main actor is specified as the National Agriculture and
Forestry Research Institute (NAFRI), which is tasked with the main projects of
implementing an ICT network, promoting associations and managing climate change
and biodiversity. The target areas for research were also identified as crops, livestock,
forestry and aquaculture and fisheries. The Plan directly addresses agricultural R&D:
Public investments in agricultural research, development, and technology
transfer…are deficient. Research and extension services tend to be
dependent on development…investment to enhance capacity in agricultural
science and technology remains low. Although the need to build agricultural
competitiveness through regional initiatives in research, training, and
extension through existing institutions are encouraged by development
partners, progress remains slow. (p. 55)
The Development Strategy is ambitiously comprehensive because it focuses on
domestic issues but also considers global challenges. They also use ICT-oriented
approaches that should enable greater reach and facilitate implementation. The Master
Plan may overreach in the sense that it may incorporate too broad a mandate than
is feasible given Lao capabilities. Even if it were built robustly and used to its
maximum potential, ICT alone will not sufficiently boost agricultural output.
Fundamentally, the plan attempts to increase output through an increase of inputs,
but the country does not have the resources to increase those inputs. While it is
necessary to technologically increase productivity, there are elements missing from
a functional, robust innovation system required for a sustained increase.
xlii STI Strategies for Poverty Reduction: The Case of Lao PDR
4. Education Sector Development Plan 2011-2015
Education and HRD is now the main focus for economic development in Lao
PDR since it is necessary for the industrialization and modernization of the economy.
The core capacity-building strategy is embodied in the National HRD Strategy and
encompasses a wide-range of issues (see Figure 4-1). The issues include expected
issues such as demographic change, education policy, and labor, but they also include
broader topics like migration, gender, and industry concerns. The Education Sector
Development Plan (ESDP) 2011-2015 (Ministry of Education and Sports, 2011)
provides education programs and their analysis as part of the 7th NSEDP. A change
in the education sector began during the education reform outlined in the National
Education System Reform Strategy 2006-2015 (Ministry of Education and Sports,
2006). Education reform was necessary as part of HRD needed to industrialize and
modernize the economy.
Figure 4-1: Human Resources Strategy in Lao PDR
Source: Phonephoet, B. 2014
Chapter 4 Review of Existing Policies 43
The ESDP evaluated the progress towards the goals stated in the Reform Strategy
and Education Sector Development Framework. The management of the education
system was improved in planning, financing and evaluation, which were specifically
targeted in the Strategy and Framework. They also focused on pre-primary and
primary education because they are emphasized by the Millennium Development
Goals. Teaching quality and graduation rates were also stressed in planning and
programs. The ESDP 2006-2010 was built on three pillars that focused on increasing
preschool enrollment rates, improving schooling environment, and focusing on poor
districts. The preschool enrollment rate increased from 8.2% to 22.2%. Primary
education enrollment reached 95.2% in 2012 according to the MDG Progress Report
2013, close to achieving its MDG 2 set to 98% net enrollment ratio. The schooling
environment achievements include improvements in general quality, gender equality,
community engagement, and teacher quality in preschool and primary education. To
help meet the needs of the poorest districts, the Education Standards and Quality
Assurance and Inclusive Education Centres were established. Since educational
development was planned linearly, it was unexpected that university graduation rates
already surpassed 2015 targets.
Although the numerical targets were reached in primary education, secondary
education goals were missed. In fact, secondary, tertiary and vocational educations
were not included in the planning. The educational system was found to not meet
the needs of the labor market. The output of skilled workers is still low and out
of balance with the market (see Table 4-3). The shares of labor for agriculture and
service are higher than the targets set by the Education Sector Development Plans.
The share of labor in industry has increased by less than a percentage point to 5.5%
and remains well short of its 9.3% target.
Table 4-3: Share of Labor by Sector
Year
Estimate
No.
Sector
1
Agriculture-forestry
2
Industry
4.8 %
5.5 %
9.3 %
3
Service
16.7 %
19.5 %
16.9 %
2005
2010
2006-2010
78.5 %
75.1 %
73.9 %
Source: Calculations based on Population Censuses 2005 and NSEDP VI, as printed in NSEDP VII, 2011
xliv STI Strategies for Poverty Reduction: The Case of Lao PDR
Tied to industry, vocational schools were not properly incorporated into plans.
Vocational students equal less than half a percentage of all secondary school graduates.
Even within this population, TVET programs tend to be biased towards business
studies rather than trade-related courses. The program bias is related to student
preference of white-collar jobs over technical training. Tertiary education growth has
the same bias in its growth because students view university education as a means
to obtain non-labor intensive jobs (i.e. not farming or manufacturing) or possibly
emigrate.24)
The current ESDP has expanded its scope to address the following policy priorities:
● HRD measures consistent with the demands for national development in each
phase, a focus on national education system reform, improved equitable access
to and quality of education at all levels
● An increasing emphasis on teacher development, teacher employment, teacher
incentives and teacher societal responsibilities
● Improved vocational education and training to respond to labor market demand
● Improvement to the organizational structure of education and education
administration including enforcement of the new education law (Ministry of
Education and Sports, 2007)
● Strengthened inspection and monitoring of the education system and,
● More effective use of development partner resources and increased cooperation
between the development partners and government.
The new programs aim to increase equitable access through ICT and upgrade
educational infrastructure. Programs will continue to provide training and education
to teachers and instructors. These generalized programs do not seem to correct the
shortcomings of the previous plans. There are few details that are provided on how
the projects will actually be implemented. In general, implementation schemes are
falling short because they are still overly focused on primary education (see Table
4-4). There is a low conversion rate of students from primary to secondary schooling.
24) According to UIS (2012), 37.2% of the tertiary-educated population left Lao PDR in 2000.
Chapter 4 Review of Existing Policies 45
Table 4-4: Education Expenditure by Level/Area
Expenditure
2012
2013
2014
Early Childhood &
Primary Education
455,436
404,204
482,257
433,064
426,004 2,200,965
33%
Secondary Education
218,369
220,701
217,219
239,069
260,637 1,155,996
17%
TVET
209,862
209,129
205,629
208,029
152,370
985,020
15%
Higher Education
165,424
170,824
160,624
160,624
164,249
821,745
12%
Teacher Education
61,055
60,226
84,373
113,321
113,321
432,296
6%
Nonformal education
18,740
17,322
16,217
16,172
16,172
84,622
1%
700
700
700
700
700
3,500
0.05%
Physical & Art
Education
34,012
32,869
28,004
25,789
21,701
142,374
2%
Inclusive Education
86,073
79,749
70,341
58,927
47,727
342,817
5%
Administration
99,487
100,337
106,890
100,770
148,770
556,254
8%
Private Education
2015
Total
Percent
share
2011
Source: Ministry of Education and Sports, 2011
In addition to funding, monitoring and evaluation is weak, which makes it difficult
for planners to properly provide programs to address educational needs, especially
across provincial and district levels. The lack of goals for different levels of education
may partially explain this shortcoming. The ESDP will establish Committee and
Working Groups, which will include resources that will fund implementation
processes, provide general guidelines, and delineation of responsibilities. The
guidelines will have to be evaluated against the overall goals and objectives that are
set by the ESDP.
The education budget is also dependent on foreign aid. The government aims
to increase educational expenditure to 25% from 18% (see Figure 4-2). This may
still be ambitious because the government budget only covered a tenth of expenditures
in 1990. International organizations and bilateral aid provide the large majority of
education funding in Lao PDR. Therefore, it is unlikely that the missions and goals
of those organizations can be ignored, especially when these organizations are still
listed as the primary funders of future programs.
xlvi STI Strategies for Poverty Reduction: The Case of Lao PDR
Figure 4-2: Education Sector Development Plan 2011-2015 Budget by Source
Source: Ministry of Education and Sports, 2011
In addition to the funding, monitoring and evaluation, and other implementation
problems highlighted, there are several bottlenecks and constraints that still exist in
the planning and implementation. Potential issues arise from differing objectives
including the difficulty of holistic planning for the Government of Lao PDR.
International agencies tend to focus on subsector approaches, which may be
redundant or neglect certain areas required for systemic progress, particularly when
they are not fully contextualized to Lao PDR. Further, ODA can be volatile depending
on foreign government largesse and economic performance. If funding sources are
vulnerable, planning cannot be long-term and implementation will suffer when
funding abruptly stops.
5. Science & Technology Policy
STI policies are known to help economies develop faster, which can also lead
to poverty alleviation. In fact, most global poverty reduction achieved recently has
been attributed to rapid economic growth (Chen and Ravallion, 2008; Kenny and
Sumner, 2011). Since robust STI indicators (ex. R&D personnel, hi-tech exports,
and patent applications) are unavailable, the Science and Technology Policy 2003
(National Agency of Science and Technology, 2003) and current policies of the
Ministry of Science and Technology are analyzed in order to assess S&T policy
initiatives.
Chapter 4 Review of Existing Policies 47
Although the Ministry is working on updating Lao STI laws, the Science and
Technology Policy 2003 is the last general STI legislation enacted nationally. The
Policy acknowledges the advantages that S&T provides in developing the economy,
especially in its ability to alleviate poverty. It also recognizes that STI is limited by
the rest of the economy because R&D capacities typically require higher levels of
resources. To remedy these deficiencies in technology, expertise and infrastructure,
the legislation emphasizes technology management, specifically tech transfer,
evaluation and planning. By importing technology, the economy can produce new
or improve existing goods and services in agriculture and secondary industry. It also
calls for increased infrastructure and human resources development.
The Policy outlined five main goals of S&T policy. The first goal was to improve
R&D to ensure the mobilization of STI resources. The second was to upgrade
education for higher STI knowledge aimed to serve agricultural, industrial and services
development contributing to the poverty reduction strategic program and to the
industrialization and modernization of the country. The third was to strengthen
coordination and cooperation between different sectors and research institutions to
ensure the participation of production sectors and the scientific community for
maximizing the country’s benefits from S&T. The fourth was to upgrade and
strengthen the public’s STI and engineering knowledge, and the last was to essentially
promote the adaptation and technological innovation system. These STI goals were
meant to be accomplished through increased funding and international cooperation.
The primary mechanism for policy implementation was setting the target for gross
expenditures in R&D (GERD) between four and five percent. The increased spending
was meant to support human resources development and applied and adaptive
technology acquisition. The target sectors were to be agriculture, tourism,
energy/environment and ICT. The policy also called for a reorganization of
government agencies and international cooperation to compensate for weak capacity.
The cooperation was more development-oriented than STI-oriented since it identified
development agencies25) as potential partner agencies.
The Ministry is currently implementing action programs that will strengthen R&D,
management, and HRD capacities (see Table 4-5). R&D infrastructure broadly focuses
on developing the innovation system in Lao PDR. The innovation system is to be
developed by increasing capacities in R&D and HRD so that jobs are available for
25) Specifically, UNDP, UNESCO, JICA, KOICA, and SIDA were listed in the policy.
xlviii STI Strategies for Poverty Reduction: The Case of Lao PDR
researchers. STI management will review policies to increase technology transfer and
program assessment. Industry sectors are targeted for development. Some
mechanisms are specified including infrastructure development (e.g. ICT and
intellectual property rights), new agencies (e.g. STI foundation and national research
institutes), and measures (e.g. decrees, policies, and an exposition). Future plans target
new innovative sectors, SMEs, and research-industry linkages.
Table 4-5: Action Programs for 2011-2015
R&D
Infrastructure
∙ Develop innovation system.
∙ Improvement of research capability of NRI
∙ Improve and develop intellectual property infrastructure for R&D.
∙ Improve the ICT infrastructure and network (Fiber Optic as Backbone,
PLC, Wireless)
∙ Increase knowledge and competence of STI.
∙ Create jobs for Excellent researchers.
∙ Improvement of curriculum of STI in different education level and
various schools
∙ Promote the learning of STI.
∙ Increase quantity and competition by sending researchers to abroad.
STI
Management
Review & Formulation of:
∙ Transfer of technology policy, decree and law
∙ Technology assessment and appraisal in various investment projects
∙ Development of policy, plan, programs and Projects on the international
basis.
∙ Technology management for sustainable development Regulation
∙ Creation of STI Foundation
∙ Decrees on Congratulation and delivery of award for Excellent STI
and on the sanction for guilty persons.
∙ Define the National S&T day (S&T Exposition)
Priority areas:
∙ Agriculture, industry, tourism and service provider
Science Technology
∙ Engineering (ICT, agricultural production & industry)
and Innovation
∙ Bio-technology
HRD
∙ Renewable energy
∙ Formation of traditional industries’ professional and technical
∙ Support the establishment of various National Research Institutes (NRIs).
Creation of National
∙ Encourage and Promote Research and Development for Goods
S&T Research
Production.
Institute
∙ Promote the linkage between Industries and NRIs.
Collaborative
∙ MOST shall play an important and supporting Roles for the elaboration
of various projects in different Ministries and Research institutions
which provided by Law on S&T.
Chapter 4 Review of Existing Policies 49
Possible Future
Plans
∙ Renewable energy (e.g. bio-fuel, solar)
∙ ICT development (e.g. e-learning, e-commerce)
∙ Develop Biotechnology
∙ Green health (e.g. traditional medicine)
∙ Provide assistance to SMEs by improving and using new and updated
technologies.
∙ Links between Producers (industries) and Researchers
∙ Sustainable Tourism Development.
∙ Operate (1%) Budget allocated by the National Assembly that should
be shared with other Sectors involved in the Development of STI.
Measures for the ∙ The National Strategic Plan on S&T Development to the 2013-2020
Implementation of
and Vision 2030 shall be promulgated throughout the country for good
S&T Policy
understanding for plans, programs and projects formulation.
∙ This National Strategic Plan shall be implemented effectively by State
and Public Organizations.
Source: Phommaxay, K, 2014
At the workshop in May 2014, MOST presented STI strategic plans that encompass
social, economic, and environmental policy as defined in the Education, Policy-Security,
Industry Production, Agriculture, Infrastructure, and Health Plans (see Figure 4-3).
These plans intend to align inter-ministerial concerns through a single STI strategic
plan. Social, economic and environmental policies as defined through different sectors
of government are expected to come together through the unified plan.
Figure 4-3: STI Policy of Lao PDR
Source: Phommaxay, K, 2014
l STI Strategies for Poverty Reduction: The Case of Lao PDR
All of the plans demonstrate a clear absorption of lessons that the international
community (including this projects’ researchers) have imparted in the past. The
importance of STI is well understood and the overall concepts are clearly articulated
in the plans. Analysis of these policies, however, suggests that the policies will be
unsuccessful because of bottlenecks, particularly in implementation.
Most of the policies defined desirable goals but did not provide proper
implementation and resources. For instance, budget goals were set based on
international benchmarks, but the GERD targets were missed at the higher and lower
levels.26) Budget targets are difficult to reach if income is not considered alongside
expenditures. Industry-sector targets can provide greater income if they add a high
level of value, but the economy may lack the requisite R&D and HR capacities to
be successful. Other strategies outlined were unclear as to how the goals would be
achieved. Most of the S&T aspects of the original goals were unachieved, since they
largely remain the same a decade later. The programs were not contextualized to
the conditions the country faced, because the capabilities and resources were not
thoroughly reviewed. General research institutes cannot provide industrial R&D for
targeted industries, especially when they are highly technology-driven (as is the case
in biotechnology and renewable energy). The plans for increasing higher-skilled human
resources that are required for R&D were missing because Lao society required a
change of attitude, so programs to promote the appreciation of R&D were
implemented instead.
To transform the STI plans, strategic elements must be incorporated into an
implementation mechanism that has a clear mission and addresses issues based on a
holistic diagnosis. For example, targeting renewable energy or biotechnology may be
a viable option for Lao PDR if plans are strategically developed and resources are
cohesively allocated. If renewable energy is targeted without strategically developing the
innovation system, the only production that is possible is appropriate technology that
will not provide income or economies of scale enabling sustainable economic
development. Rather, systemic solutions should be provided that enable industrial actors
to access R&D and HR necessary to create a vibrant industry. Developing these system
components over time requires a coordination mechanism as well.
26) Many countries miss these benchmark targets, which was particularly ambitious at 4-5% of GDP. Among
OECD countries, which have higher rates of R&D investment, only Israel invested over four percent
of its GDP in R&D in 2011. Only five other countries invested more than three percent. OECD. (OECD,
2013).
Chapter 4 Review of Existing Policies 51
6. Summary and Implications
Lao PDR has instituted comprehensive policies to address its socioeconomic
development needs, which are described in its 7th NSEDP and detailed in sector
plans covered in this chapter. The overarching themes of the plans have focused
on the highest revenue-generating sectors and are aware of the need for HRD,
infrastructure and S&T to not only boost growth but also to ensure its sustainability.
This approach has led to policies that increase foreign investment in mining and
hydroelectricity, which enable investments in education and infrastructure. The
economy has grown rapidly due to this resource input strategy but it is not
economically, socially or environmentally sustainable. Therefore, policies should be
altered to correct this shortcoming.
Since the government has been successful at generating income based on resources
and foreign investment, it has shifted its attention to HRD through education. This
is a pragmatic approach since Lao PDR’s population is growing and wants to
transform from an agrarian society. Many policies, however, do not have direct
industry impacts or may even negatively impact industrial capabilities. There are few
quality jobs27) in the market for students completing their education as planned.
Industry and service jobs still face low levels of productivity and have trouble finding
the necessary skilled workforce. Moreover, the policies do not address the
socioeconomic needs that are outlined by their own goals, which stakeholders lack
the capacity to meet.
The current attempts to leverage S&T are similar to other government policies,
which attempt to monetize the countries’ resource wealth in minerals and energy
through foreign investment. These investments are meant to industrialize the economy
and add value to production in targeted sectors that focus on commodities. This
strategy does not suggest how to keep programmatic sustainability, which appropriate
STI policies can achieve. The STI approaches that are specified are building ICT
to disseminate information, transferring technology, promoting R&D, protecting
intellectual property, enforcing standards, conserving ecology and minimizing climate
change. Building infrastructure for transport and ICT are necessary for the potential
economy but these projects are supported by ODA, so they are also unsustainable.
By promoting tech transfer without developing indigenous R&D capacity, the system
will find itself in a middle-income trap where it is dependent on foreign technology
27) Quality jobs refer to higher paying jobs that require higher skills.
lii STI Strategies for Poverty Reduction: The Case of Lao PDR
that is increasingly expensive for domestic industry. Investment in a research network
would increase participation in jointly published journal articles but not strengthen
research capacity. Although establishing intellectual property and standards schemes
enables the economy to operate more smoothly within global frameworks, it does
not automatically industrialize the economy or add value to production processes.
The same is true for environmental concerns. On the contrary, these complex
technology management systems may impose costs when there is little technology
to manage.
The NSEDP provides the comprehensive directions for national plans in Lao PDR
including various sectors such as investment, education, agriculture, and S&T. It
provides the general framework for which all the other plans are supposed to follow
and coordinate with. In addition to the NSEDP, additional STI-related policies were
reviewed. Investment Promotion was evaluated to understand what industries were
the targets of investment. The Agricultural Strategy and Plan were considered because
of the importance of agricultural research in Lao PDR. The Educational Sector Plan
is important because of the emphasis the current government places on HRD to
meet the needs of economic development. S&T policy is obviously evaluated given
the nature of this report and the goals, strategies, planning, and implementation
programs that are suggested in Chapters 7 and 8. The purpose, measures, and
assessment are summarized in Table 4-6.
Chapter 4 Review of Existing Policies 53
Table 4-6: STI-related Policies
Investment
Promotion
Law 2010
Purpose
Measures
Attract and
provide
enabling
environment
for domestic
and foreign
investment
Agricultural
Development
Strategy 2020
Agricultural
Master Plan
2015
Education
Sector
Development
Plan 2011
National S&T
Policy 2003
Long-term
Education as
Program-based
framework
core of HRD,
Promote S&T
for the
approach for
implementation
to accelerate
development of implementation
of 7th NSEDP
of
sustainable
the sector
in relation to
Development
economy
Aims at
education
Strategy
increased
sector
productivity
Facilitate
Support
Optimizing
investment:
alignment of
resource
provision of
context within
Focus on
Investment in
allocation
concession
NSEDP
Implementatio attaining access R&D (4-5%)
warranties, tax
Seeking new
to primary
Building
n of 8 programs
exemption,
opportunities:
(Program 7:
education
infrastructure
one-stop
organic
Research &
service office to
products, fair
Extension)
facilitate
trade
investment
Low progress
Improved
(deficient
planning
Focused on
public
structure
Unrealistic goal
investment,
natural
Functioning
of GERD
Low
aid dependent
Assessment
resources
but not relevant
Plan
implementation
Promotes FDI
research,
to generate unimplemented
deficient
rather R&D
technicians and
capacity
skilled workers
building)
The government ministries are well-coordinated and willing to implement STI
strategies but future strategies, planning, and implementation programs should correct
bottlenecks and constraints that exist. While the NSEDP coordinates all other policies,
they are still found to be fragmented for a few reasons. Stakeholders lack capacity
to meet goals, which are not well-aligned with the socioeconomic needs of the
country. In education, the dependence on donor funding demonstrates a lack of
capacity in governance, management and funding but also creates fragmented goals
and programs. Industrialization through mechanization and R&D is also hindered
by inadequate planning that focuses on immediate problems of funding and
liv STI Strategies for Poverty Reduction: The Case of Lao PDR
infrastructure but lacks future-oriented goals to guide strategy from the start.
At the moment, the policies do not have strong, future-oriented plans to increase
value added through innovation. The Ministry of Science and Technology was
established and can be used to coordinate and steer inchoate STI policies from a
centralized authority. To strengthen these policies, target sectors should be identified
as leverage points to maximize effects of policy planning. The system should also
be aligned to improve these impacts. Education and R&D policies should be
augmented to ensure that the industry and service sectors are able to find the skills
they need to function well in the global economy. Starting with ASEAN, industrial
policies should also be expanded to include export promotion to broaden the market.
While the concept of using new sources of income to build core capacity is correct,
the policies need to be realigned to achieve their goals. They should have a stronger
industrial focus to boost the necessary institutions necessary for industrial growth.
Policymakers must also correct for the lack of experience regarding industry
promotion. Correcting these aspects will make policy outcomes more relevant for
industry and more effective for economic growth. Outside consulting can be used
to provide necessary expertise and experience to develop processes to design necessary
programs and objectives.
Chapter 5 Results & Analysis of Field Survey Interviews & Pilot Survey 55
｜Chapter 5│Results & Analysis of Field
Survey Interviews & Pilot Survey
1. Introduction
As part of the project, the study team visited Lao PDR in March and October
2013.28) The study included interviews with experts and officials at STI-related
organizations in industry, academia, research and government. Innovation is a
relatively new concept in Lao PDR, but the government has readily embraced the
idea of using STI policies to advance its economy. The Ministry of Science and
Technology was established in 2011 and has since worked to incorporate STI
strategies into policymaking. While the planning aspects of the central government
are well coordinated, the signals primarily come from a narrow range of sectors.
The following sections will provide an overview of the findings from the field survey,
during which the research team diagnosed the stakeholders within the innovation
system.
The various stakeholders are expected to provide certain functions within the
innovation system to allow for innovation or increased value in production of goods
and provision of services (see Table 5-1).
28) Some members of the research team visited Lao PDR in 2011. Notes from the previous visit were also
used.
lvi STI Strategies for Poverty Reduction: The Case of Lao PDR
Table 5-1: Stakeholders Visited
Industry
Dao-Heuang Group
ETL
Nam Theun 2 Power Company
Pharmaceutical Factory No. 2
Lao National Chamber of Commerce &
Industry
Lao Organic Product Association
University/Research Institutes
National University of Laos
Agriculture & Forestry Research Institute
National Institute of Public Health
Water Resource & Environment Research
Institute
Ministries
Science & Technology
Planning & Investment
Mines & Energy
Industry & Commerce
Education & Sports
2. Field Survey of S&T-related Organizations in Lao PDR
Because science and technology is important for socioeconomic growth, the
government established main organizations and institutions to undertake R&D. In
1967, the Geology and Minerals Department was established to undertake the major
tasks of managing and developing the minerals industry and providing technical views
upon the request of local and foreign investors intending to establish manufacturing
companies. The State Committee for Science and Technology was established in 1982
and was renamed the Science, Technology and Environment Agency as a coordinating
point to ensure the implementation of science and technology activities in service
to the national socioeconomic development.
Lao PDR founded 3 research stations in 1985 with different roles. NaPhok Station
was established for developing plants and rice varieties in the plain field and
mountainous zone, Salakham Station was set up for R&D of varieties and to analyze
plants disease and insects, and NongTeng Center was founded for R&D of fish
species. The National Scientific Technique Committee was established in 1987. In
1999, the Agricultural and Forestry Research Institute was established with 10 research
centers, projects, stations and experimental centers in the provinces and districts
nationwide to conduct research related to the plantation, livestock, fishery, forestry,
agricultural irrigation, meteorology and inundation. In 2000, the Health Science
Chapter 5 Results & Analysis of Field Survey Interviews & Pilot Survey 57
Institutes was established with 7 research centers to develop research on health science
for improving the analysis of the disease, prevention and treatment system and health
promotion in order to ensure good health and long life. The National Authority
of Science & Technology (NAST) was formed in 2007 and restructured into the
Ministry of Science & Technology (MOST) in 2011. The details are shown in Figure
5-1.
Figure 5-1: S&T Institution History
Source: Phommaxay, K, 2014
The S&T-related organizations that were visited are described in the following
sections divided by sector.
A. Government
Lao government officials have been able to enact many of their plans in recent
history because the economy has been growing briskly thanks to revenues generated
by natural resources. Overall, the government has focused on alleviating poverty.
Yet, economic growth presents a different set of problems that are associated with
increased income. Most of the agencies with which the study team met were interested
in addressing the overall development goals of the country through human resources.
An immediate concern that ran across all agencies was employment.
Another issue that all of the ministries were concerned with was how to include
lviii STI Strategies for Poverty Reduction: The Case of Lao PDR
rural and remote populations in their development plans, which encompass
investment and finance. A similar but distinct question was how to decentralize certain
aspects of governance including project financing. Some revenue-generating projects
provide 30% of income to local governments and 70% to the central government.
Local governments also authorize environmental certification for certain project plans.
All of the ministries that were met clearly expressed strong coordination between
the different sectors. This section will describe more specific responsibilities of these
ministries and how they handle STI policies.
∎ Ministry of Industry & Commerce (MIC)
The Ministry of Industry & Commerce is the government agency responsible for
handling industrial affairs and trade. Since most companies are either state-owned
or receive government support, policies are highly important to industrial
development. For instance, polices are being formed to add value for mining products
and to attract foreign direct investment to Lao PDR.
When Lao PDR opened its economy in 1988, foreign companies from Hong Kong
and Thailand opened factories by importing machinery to the country. Today, Lao
heavy industry concentrates on hydroelectricity and manufacturing, which attracts the
most FDI and technology. The mining sector uses these to process exported ore.
While still under review during the study visit, the new industrial policy is expected
to have certain characteristics. It will have 5 priority sectors: agriculture, garments,
construction equipment & products, finished wood products (ex. furniture) and
automotive parts. Target industries include herbal medicines and coffee. This policy
will support early stages of industry focusing on assembly of imported components.
Since 99% of companies are small and medium-sized enterprises and only 0.2% large
firms, the policy will focus on SMEs. Post-harvesting technology will also be a focus
particularly for tech transfer because the SMEs are mostly owned by farmers. The
policy will focus on the domestic market because exports are too competitive and
the private sector does not understand innovation.
The Lao National Chamber of Commerce and Industry (LNCCI) joined the
discussion with MIC, demonstrating the close relationship that the organizations
share. The Chamber was established in 1989 as an independent body which represents
the business community in Lao PDR. It serves as an interface between state and
private enterprises and represents industry across all agencies. It is the largest and
most representative business community in Lao PDR.
Chapter 5 Results & Analysis of Field Survey Interviews & Pilot Survey 59
∎ Ministry of Energy & Mines (MEM)
The Ministry of Energy and Mines became a prominent agency because the sectors
it administers generate the greatest amount of income in Lao PDR. This also centrally
positions the ministry to the rest of the government and influences many of the
development policies that are formulated.
The ministry works closely with other parts of the government including the
Ministry of Education and Sports (MES), Ministry of Agriculture and Forestry (MAF)
and the Ministry of Finance (MOF). Governed by the MES, the Steering Committee
of Education includes the Secretary of MEM. The committee has been tasked with
several responsibilities. It is developing a curriculum for long-term capacity through
universities and the general education system, including evaluation of the system
including vocational and university study. Evaluation will also include analysis of
demand from the market and society. Policies that affect the energy and mining
industry impacts on the environment are coordinated with MAF, which evaluates
environmental impact. Therefore, the two ministries work closely on these matters.
Internally, MEM is divided into different departments that are responsible for
sectors that fall under the ministry’s domain. The study team met with representatives
from the Department of Energy, Department of Renewable Energy and Department
of Mining.
One of the main responsibilities of the Department of Energy is to ensure the
provision of electricity. It is mandated to provide coverage to the entire country
but depends on external sources to meet these demands. In order to engage the
private sector, including foreign investment, companies are given concession
agreements. For example, foreign direct investment is managed through integrated
power producer arrangements, which provide timeframes and regulations such as
penalties for late completion. The agreements also require that unskilled labor must
be local. While they can come from abroad, equipment and skilled labor should
have a domestic/international source ratio of 20/80 that must increase gradually.
The budget must also include elements of capacity building of domestic supply to
help meet this demand. One HRD program is the EDL Training Center,29) which
provides technical training and certification.
As part of the country’s commitment to environmental sustainability, the
government created the Department of Renewable Energy. Although it has programs
29) Electricité du Lao (EDL) is a national public utility provider.
lx STI Strategies for Poverty Reduction: The Case of Lao PDR
in biomass, biogas, solar and wind energy, the hydropower sector holds the main
policy objectives in economic development, environmental and social development
sustainability. Since 80% of the rural population currently depends on charcoal for
cooking, the primary renewable energy goals are accessibility and affordability. The
energy distribution system is expanding quickly and aims to attach mini-grids to the
national grid. Most of the electricity would be used for heating and cooking systems.
There are also programs in solar homes, small hydro systems and technologies
developed for remote areas.
The Department of Mining oversees the single largest sector of the economy.
It recognizes that there are still difficulties that exist in the industry. There is a big
gap between the education levels provided through domestic and international
training. Safety is another problem that is targeted by regulatory and educational
policies. Local authorities are increasingly responsible for implementation of these
and other programs such as standardization.
Most ministries have turned to international aid and cooperation in order to meet
developmental demands. These departments similarly used bilateral and multilateral
interactions to fulfill their obligations. The World Bank has supported projects in
education and energy infrastructure, especially to reach remote populations. Some
programs support bilateral interactions including educating students and training staff
abroad. While some train in countries like Korea, Japan, China and Germany, others
train closer to home in ASEAN countries such as Thailand, Vietnam, and Indonesia.30)
The Lao government recognizes the shift in the development climate and wants
to develop sustainable programs. Programmatic sustainability is sought through
diversifying sources of ODA and through self-sufficiency. Bilateral support for
education programs comes from Japan,31) Germany and even Thailand. The Thai
government also sponsors cooking stove projects in rural areas, which specifically
replaces World Bank funding. Another World Bank-funded project supports solar
home energy systems in remote areas until 2014. The expansion of the electricity
grid and energy sources will offset need for continued support. There is also a fund
that is being created to support finance of rural area renewable energy projects. While
the government is experimenting with tax incentives for rural investment, banks
30) In the Department of Mining alone, 30-40 ministry staff members are participating in the program.
31) JICA supports projects to develop technical standards, which includes budgets for training and monitoring.
Its projects also support local authority capacity building. Its projects also support local authority capacity
building.
Chapter 5 Results & Analysis of Field Survey Interviews & Pilot Survey 61
typically will not support those companies with energy projects that are less than
50MW.
While the ministry has several plans in place, there are still some areas in which
it is uncertain how to proceed. One is standards, specifically how to improve local
standards to meet international regulations. Also, while recognizing the need to
localize supply chains in mining and energy, Lao PDR does not have the heavy
industry capacity needed for these sectors. Import-substitution programs were
attempted in parts, transformers and equipment. Technical skill training also
demonstrates an area that needs to be improved. The EDL Training Center is the
only organization that provides industry training. The Hydro Power and Mining
Learning Center was recently established to expand the number of skilled workers.
Some recognized limitations of existing HRD programs are that they are reactive
or provide only technical skills, which result in slow implementation or capability
gaps. For instance, management skills are missing in the economy, which creates
a dependence on outside sources of knowledge.
∎ Ministry of Planning & Investment (MPI)
The Ministry of Planning and Investment must manage projects internationally,
nationally and with district offices. The ministry works with the National Investment
Committee to approve projects nationally. The ministry also works with districts on
sector projects. Local authorities implement projects directly by providing foreign
investors information and services in a “one-stop shop.”
Like the rest of the government, the Ministry of Planning and Investment32) has
focused on the main industries driving the economy, namely mining and energy.
There are 7 departments within the Ministry: planning, one-stop shop for companies,
training, legal affairs, administration, international investment cooperation and
investment promotion. One of the departments created to help facilitate investor
activity is the “one-stop shop” that provides all functions that an investor might
need.33) ODA is another source of investment for the government. It is well-known
that it is a significant portion of ministry budgets.
32) When the study team met with the Ministry of Planning and Investment, the conversation was kept informal
to facilitate discussion.
33) The “One-stop Shop” is actually housed in the Ministry of Planning and Investment and the window
is the first thing noticed upon entering the building.
lxii STI Strategies for Poverty Reduction: The Case of Lao PDR
During the second field visit, the study team visited the Department of Investment
at the Ministry of Planning and Investment because it was directly responsible for
negotiations dealing with foreign investors. The department responsibilities are to
promote investment, attract FDI & domestic investment, evaluate investment
proposals,34) consider background, financial and experience and to provide licenses.
The Department mostly supports small, local businesses because supporting largescale business, i.e. hydropower, is impossible due to insufficient capacity or demand.
There are a few STI products that are promoted like importing turbines and
transmission lines for NT2. Yet, EDL gets only 10% of electricity from NT2 so
the ability to develop domestic companies is constrained.
The ministry has been developing its capacity to plan development considering
a wide range of aspects. The government is mid-way through its 5 year plan, which
tries to balance industrial development with environmental sustainability and social
welfare (including education). Historically, the military is given much attention,
especially given the country’s ties with the former Soviet Union, whose base was
built on military capabilities. A more contemporary concern is how integration into
organizations like the WTO and the ASEAN Economic Community (AEC) will
impact development in the country. Another problem is how to deal with illicit drugs
and managing opium cultivation and slash-and-burn practices.
In comparison to neighboring countries, the Lao economy is perceived to be weak.
To move it forward, the government would like to develop at least one product
that can drive the economy but progress in this area has been slow. Infrastructure
projects, especially dams, have drawn the most investment, including government
spending, ODA and FDI. While hydropower is a source of revenue and power,
there are limitations. There is limited potential for scale up and energy is still
unavailable when rainfall is low.
In general, the international community has been supportive of technology
promotion, so the ministry must consider how to distribute these types of funds.
Policy to improve productivity, however, has not used terms like “innovation” and
“national innovation systems”, which are new to the ministry and even the language
itself.35) Therefore, STI policy is not generally considered. Since STI is typically
overlooked, many policies attempt to increase inputs by attracting investments, i.e.
34) Natural resource projects require a presentation/negotiation on benefits for establishing business.
35) This fact came up in discussions with several officials from Lao PDR. The National Workshop in October
also included tangential talks regarding this.
Chapter 5 Results & Analysis of Field Survey Interviews & Pilot Survey 63
FDI. Since the Ministry of Science and Technology (MOST) is still new, there are
few regulations and laws that govern technology. It still needs to develop its
institutional capabilities such as enforcing standards. Its mission is still unclear to
some officials at MPI.
However, agriculture still employs about 70% of the workforce, so most policies
seek to increase agricultural productivity, which reaches only 27% of possible output.
Technology promotion in agricultural sector is important but it is still weak.
∎ Ministry of Finance
The STI budget is allocated by MPI and approved by the National Assembly
each year. Before that, MOST prepares an STI budget to present to the Ministry
of Finance (MOF), which reviews and allocates it based on guiding principles set
in the law and related regulations. Moreover, 1% of capital expenditure in each fiscal
year is allocated for the STI fund and other sources as stipulated in current Science
and Technology Law.
Managed by the Ministry of Finance, the STI budget is spread between the National
Social Science Council, National Science Council, National Agriculture and Forestry
Research Institute (NAFRI) and the Ministry of Science & Technology (Figure 5-2).
Additionally, the STI Fund for R&D is meant to provide 1% of capital expenditure
through domestic revenue and other sources of funding (e.g. ODA, grants, fees,
etc.; see Table 5-2.). In the 2012/2013 budget, the Lao central government found
liquidity to be a problem that limited its ability to meet the STI Fund target. The
following year, the financial situation improved through budget cuts but was
insufficient to meet the funding goal. Expenditures were cut by 1% of GDP
across-the-board in the second half of 2013 to reduce budget deficits and improve
liquidity.
Table 5-2: Budget Allocation for STI
2011-2012
2012-2013
2013-2014
Capital expenditure
2,200
2,985
3,300
STI
22
22
22
%
1.00
0.74
0.67
Note: in billions of Lao kip.
Source: Soulivath, S, 2014
lxiv STI Strategies for Poverty Reduction: The Case of Lao PDR
Figure 5-2: Budget Allocation by Agencies in FY 2013-2014
Source: Soulivath, S, 2014
MOF set up its fiscal development strategy to 2025 and vision to 2030 and decided
to support the 8th Socio-Economic Development Plan for 2016-2020 including STI.
Their goal is to improve revenue collection and expenditure management. With better
fiscal position, higher budget allocation to STI is expected.
∎ Ministry of Science & Technology (National Authority for Science &
Technology)
Originally formed as the Science Committee for S&T, the National Authority for
Science & Technology (NAST) was moved under the Prime Minister’s Office in
2007. NAST acted as a secretary to the central government and manages S&T,
intellectual property (IP), standardization and metrology, even formulating legislation.
It later evolved into the Ministry of Science & Technology (MOST), a new ministry
within the Lao government as of 2012. The central agency works with the local
governments through the Provincial Department for Science and Technology (PDST).
Since its creation, MOST has also moved further to build its capacity. During
the first field visit in the spring of 2013, several STI functions such as IPR and
e-government were managed by other ministries, i.e. the Ministries of Commerce
and Post & Communications, and several research institutes were managed by other
ministries. The Ministry of Commerce still handles IPR as part of the WTO
Trade-related Aspects of Intellectual Property (TRIPs) Agreement and FDI36). By
the second field visit, the ministry had consolidated several STI functions under its
36) In 2011, Ministry of Post & Communication has taken over the administration of an e-government software
project funded by Chinese ($35M loan) and with master planning support from India.
Chapter 5 Results & Analysis of Field Survey Interviews & Pilot Survey 65
authority. It opened its Department of Intellectual Property and administered the
Renewable Energy and New Materials Institute, Biotechnology & Ecology Institute37)
and Computer Technology & Electronics Institute38) (CTEI). Under CTEI, there
are software development programs to establish learning enterprises, language
localization, and e-government software for national and provincial use.
Nationally, the ministry will operate in coordination with the Science Council. The
Science Council is also a new government institution under formation. It will provide
project funds and establish priorities. As part of project monitoring and evaluation,
evaluation will happen periodically every 2-3 years and decisions will be based on
efficacy.
Despite a limited budget and lack of awareness of its mission and priorities in
the rest of the government, the ministry has managed to accomplish much. Since
its establishment, it has submitted several laws to the National Assembly. Its first
two proposed laws were on intellectual property and electronic transactions. Another
law was designed to encourage socioeconomic development and ease integration into
the regional and international arena, especially in relation to the ASEAN Economic
Community.
The ministry is responsible for international STI cooperation and for establishing
a standards regime, including international requirements defined by organizations such
as the WTO. Given current capabilities, MOST prefers bilateral cooperation because
it is simpler. Lao PDR collaborates with South Korea, China, India, EU and other
ASEAN countries. Its collaboration attempts to overcome its shortcomings in R&D
capacity and funding. The Lao MOST has an MOU with the Vietnamese MOST
to facilitate collaboration between the countries at the national level. This
collaboration is also enabled by the similar levels of development and governing
systems in both countries. China and India have also provided support technology
support to Lao PDR.
∎ Ministry of Sports & Education (MSE)
The Ministry of Sports and Education (MSE) is a prime agency for development
37) Originally reporting to the Ministry of Agriculture, the Biotechnology & Ecology Institute has 6 divisions:
the directorate, biotechnology, genetic resources, chemical technology and technical services. It was
established in early 2013. It has 4 programmatic units: data information, tech transfer, biodiversity database,
and conversion.
38) There are 30 staff members at CTEI including non-technical personnel.
lxvi STI Strategies for Poverty Reduction: The Case of Lao PDR
according to core capacity-building plans. In discussions, core capacity for
development was primarily human resource capacities that would enable industry to
produce higher levels of output and technology. Its current plan will i) achieve
cohesion between education and sports, ii) link industrial demand to supply, and
iii) link demand and supply to national development strategies.
Although the Ministry of Labor heads a committee to develop policies on HRD,
a perceived bottleneck is that the education system does not provide the necessary
labor for industry. The ministry tries to address the concession agreement requirement
that foreign companies must hire up to 80% of its labor domestically. Despite growth
in mining and hydropower, companies are unable to find the necessary skilled labor.
If this is not addressed, industry will face continued problems.
The ministry recognizes that most Laotians are living on subsistence agriculture.
These farmers most are considered small companies, which makes formulating
policies for microenterprises difficult. Previously, educational strategy focused on
primary education and expected a linear progression into secondary education. The
strategy neglected vocational (TVET) and higher education. Newer programs try to
better understand TVET demand and target a vocational workforce by providing
vouchers and training in automotive, construction, business service and furniture
sectors to meet future needs. The ministry is also integrating ICT into education,
especially to reach remote populations. A cyber university program (e-learning
university) was initiated with support from KOICA.
The ministry is working on HRD programs with the Asian Development Bank
and the World Bank. One ADB project assists the placement of workers in difficult,
dirty and dangerous jobs because most want to go into white collar jobs like banking.
Like other government ministries, S&T policy is not widely recognized and requires
in-depth discussions and explanation.
B. University
There is only one national university in Lao PDR, the National University of Laos.
The study team visited the university to understand the position and process of higher
education in the country. The university sits at the apex of the education system
and is not a source of R&D for the economy. It largely responds to student demands
and thus provides skills in areas that feed into white-collar jobs in the service industry
(see Figure 5-3).
The students that pursue careers outside of agriculture have preferred the service
Chapter 5 Results & Analysis of Field Survey Interviews & Pilot Survey 67
sector over industry, as described in Chapter 3. Students from the primary education
system have increasingly gone on to secondary education. A small percentage of
secondary schooling is comprised of vocational training. Of those that continue into
secondary education, a higher number have pursued tertiary education than expected.
The preferred areas of study are typically office-oriented such as business administration
and marketing. The job market, however, has few of these jobs available.
Figure 5-3: Analysis of Human Resource Development System
∎ National University of Laos (NUL)
The National University of Laos (NUL) was established in 1996 by consolidating
departments from existing colleges into 11 faculties on eight campuses in Vientiane.
It currently provides bachelors’ and a few masters’ degree programs. There are also
joint PhD programs with Vietnamese and Chinese universities. The primary object
of the university is to improve education quality, which is still not at international
levels (both professors and students).39) The World Bank is working with the
government and the university to build education capacity.
University enrollment has ballooned to over 30,000 in less than two decades. There
has been an increasingly large number of students enrolling with over 20,000 students
starting in recent years. Class sizes are too large and teaching quality has suffered.
39) Cambodia and Laos were found to still be at a disadvantage when evaluated for ASEAN integration.
lxviii STI Strategies for Poverty Reduction: The Case of Lao PDR
Professors have little time to conduct research. In addition to upgrading facilities
and equipment, target reforms include developing HR and research capacity.
Although the university administration recognizes that relying excessively on
collaboration weakens implementation, stopgap measures to compensate for research
capacity and quality include using international cooperation. The university is part
of the ASEAN University Network and has created around 100 memorandums of
understanding (MOUs) with research entities in 23 countries.
While they are focusing on improving education and research quality first,
government leaders also understand the importance of industry and university
interaction. There are initiatives to improve industrial relations but students favor
white collar jobs in business and IT located in Vientiane that are oversaturated. There
is growing demand for engineers, especially mechanical, IT, electrical and civil
engineers. Before fully leveraging industry-oriented education, current engineering
programs need to be improved. English speaking skills is another important matter
for building capacity.
There are some initiatives that have started to target industry. The department
of engineering began requiring students to undergo practical training at companies.
Additionally, the department meets every 3 months to discuss methodology and
curriculum. This is an opportunity for industry to improve manpower. The Lao
Incubation Center was created to allow new graduates to develop business skills,
training and funding. There is an IT focus which was proposed to be expanded
to include more subjects. An industry unit is needed to manage this and other
industry-related activities such as job fairs. Other possible areas to focus university
R&D for industry include processing of agriculture such as dried fruit, maize for
animal feed, and cricket preservation for food products.
C. Research Organizations
Research organizations typically provide sources of science and technology (S&T)
for an economy. When research institutes are funded by the government, the resulting
S&T is a public good that should provide general benefits to the economy. In Lao
PDR, this often takes the form of data that is provided to international NGOs that
look for indicators regarding the environment, education, or public health. The
bottleneck that is seen here is that this type of research is difficult to transform
into development into commercial products and services. Korea provides an
interesting contrast because its public research institutes were specifically created to
Chapter 5 Results & Analysis of Field Survey Interviews & Pilot Survey 69
assist industry transfer technology from foreign sources and to build its endogenous
capacities.
The research institutes in Lao PDR do not directly support the development of
its economy. The dependence on foreign sources of funding suggests that these
organizations directly or indirectly influence the research activities of the institutes.
In this case, the research activities are confined to data collection on biodiversity,
climate change, education, and health. The needs of industry are not met because
firms are incapable of performing R&D or lack the financial resources to generate
demand (see Figure 5-4).
Figure 5-4: Analysis of R&D System
∎ Agriculture and Forestry Research Institute
The National Agriculture and Forestry Research Institute (NAFRI) of Lao PDR
was established with a donation from the French government in the 1970s. Its early
research focused on soil, but after 1989 it shifted its main mission to include economic
development and biodiversity. Today, its research specializes in rice and has over
14,000 samples, which is second only to India, and its outreach programs include
education programs on biodiversity in elementary school curricula. Since agriculture
is still the base of the economy for most of the population, this sector is central
to plans for poverty alleviation. Since 1999, NAFRI has worked to increase farmer
productivity.
As the primary implantation agency for research support for economic development
under the Agriculture Development Master Plan, NAFRI has some programs focus
lxx STI Strategies for Poverty Reduction: The Case of Lao PDR
on adaptive technologies to localize and conserve agriculture like machinery that can
increase productivity and prevent soil erosion. It also trains farmers and conducts
policy research on subjects like the impact of rubber cultivation. Current programs
are looking to target agricultural products that can be sold to neighboring countries.
Animal feed is one of these products that can be transported to Thailand, Vietnam
or China. Forestry is another area of focus for policy studies. Forest diversity requires
wider study for its environmental and economic impacts which are derived from
competing uses of the resources. Forests provide lumber and non-timber forestry
products like honey, but it also uses land that might otherwise be used for farming,
which is a concern for food security. Rice and coffee are crops that are obvious
commodities that can also be researched and developed.
NAFRI’s international collaboration projects tend to focus on biodiversity
including CIRAD (French Agriculture Research for Development), the Conservation
Network of Southeast Asia (CONSEA) and the Mekong River Commission. Work
with the latter includes monitoring the impacts of hydropower dams on the river
and its environment. NAFRI also works on biodiversity research with the
Agrobiodiversity Institute, a collaboration between Lao PDR and the Swiss Agency
for Development and Cooperation.
∎ Institute for Educational Administration Development (IEAD)
The Institute for Educational Administration Development was established in 2011
with the function and mission to provide short training for the whole country
including provincial education services. The Institute analyzes education equity and
quality, which are emphasized by the Education Sector Development Plan. The
institute is developing training and higher education programs for education
administrators, teachers and instructors. The institute has also been tasked with
building infrastructure and establishing ICT programs to increase accessibility. There
are still human resource and financing limitations in the education sector. UNESCO
supports the development and implementation of e-learning projects. The Chinese
government and companies are supporting the Lao Ministry of Education and Sports
in education in order to create a stream of human resources for Chinese firms based
in the special economic zones.
Chapter 5 Results & Analysis of Field Survey Interviews & Pilot Survey 71
∎ Renewable Energy & New Materials Institute, Ministry of Science & Technology
The Renewable Energy and New Materials Institute (REMI), under the Ministry
of Science and Technology, conducts research on biogas and biodiesel. The institute’s
mission addresses social problems rather than industrial or economic ones. As a
new research institute, the institute is beginning to research how to apply appropriate
technology in these areas. For instance, biofuel stove technology is imported from
China and Nepal to decrease dependence on charcoal, which causes greater health
complications.
While it collaborates with domestic and international organizations, the institute
institute focuses on appropriate technologies that reduce emissions. It cooperates
with a domestic association to disseminate and install the technology to rural areas.
Despite lacking any PhD researchers, REMI does not collaborate with universities
that might increase the output level of R&D. Research areas are separated, so the
institute does not collaborate with universities or other parts of the government.
The National University of Laos handles research on HRD and the Ministry of Energy
and Mines focuses on energy and policy issues, even for renewable energy projects.
Since there is a shortage of experts in alternative energy and mechanical engineering,
foreign experts are generally used for knowledge transfer and to bridge gaps in human
resources. There is no industry interaction but some companies carry out their own
research.
D. Non-government Organizations
∎ Nam Theun 2 Power Company (NT2)
Nam Theun 2 Power Company is the first hydroelectric dam project in Lao PDR
that was made possible through a public-private partnership guaranteed by the World
Bank. Although it has a potential of 6000 GWH, the dam was not economically
viable because the domestic economy was only able to use less than five percent
of its output. To begin, the project required private sector assurance and distributed
risk among twenty-seven institutions. The hydroelectric dam project started by
guaranteeing to provide ninety-five percent of its electricity for export. Thai EGAT,
the electricity company of Thailand, became the guaranteed buyer at a set price.
In order to begin operating, Nam Theun 2 imported technology and expertise.
The concession agreements became the mechanism that enforced and provided
financing and technology for the project. With all the international partners involved,
lxxii STI Strategies for Poverty Reduction: The Case of Lao PDR
the agreements were also a means to introduce best practices to Laotian industry
and government. In addition to the financial, labor and technology specifications,
the agreements instituted social welfare provisions for the affected populations.
E. Industry
∎ Dao-Heuang Group
Headquartered in Vientiane, the Dao-Heuang Group is a conglomerate that
specializes in import-export and consumer goods. It began as an importing company
that supplied international goods to the domestic market and exporting raw materials
abroad. The founder of the Dao-Heuang Group originally developed business plans
based on exposure and knowledge of foreign business management. It now has dutyfree shops at airports and border checkpoints. Since Lao PDR is landlocked, the
Dao-Heuang Group targets neighboring country markets, mainly with sugar, instant
coffee and organic foods. Plans also include expansion into pharmaceuticals.
Coffee is one of the Dao-Heuang Group’s principal consumer products. The
business model is based on the Vietnamese coffee industry. Local coffee is sourced
from domestic farmers. In order to develop its production capacity, instant-drying
technology was imported from Denmark. The company financed the venture using
bank loans. In order to access skilled labor to operate and maintain the technology,
Vietnamese workers are employed. The company has also been supported with
government policies including tax exemptions for exports and land concessions.
Restrictions on foreign ownership of property also encouraged foreign direct
investment to partner with companies like Dao-Heuang.
∎ Electricité du Lao (EDL)
Electricité du Lao is a state-owned utility company under the Ministry of Energy
and Mines that autonomously manages the hydroelectric production in the country.
Lao PDR uses international agreements to meet market demand for electricity.
The agreements are used to arrange financing, technology and expertise to facilitate
the functioning of its electricity infrastructure. The government is expanding its
infrastructure and was advised to build a smart grid. Feasibility studies are being
conducted using technology supplied by US companies. Pilot projects are held in
industrial zones with funding from China. The next stage of the project will
commence in 2015.
Chapter 5 Results & Analysis of Field Survey Interviews & Pilot Survey 73
Hydroelectric dams were first established using public-private partnership models
that enabled their construction. All dams are suppliers to Electricité du Lao. Electricity
generation is handled internally and externally through independent and small power
producers. There is usually a surplus of electricity but it is seasonal, so Lao PDR
must import during the dry season. Electricité du Lao buys electricity from companies
that construct the dams but does not work directly with construction companies
from the dam.
The company supplies electricity to Lao PDR nationally and exports to neighboring
countries. There is limited capacity to meet household demand but ninety percent
of the population is connected to the grid. Industry is the main consumer of electricity,
especially in the industrial zones. Companies that consume to most electricity are
mainly steel-rolling factories, hotels and other manufacturing firms. Many companies
are under Chinese control through investment/land ownership, which is why China
funds related projects.
∎ ETL
ETL provides telephone and internet communications services in Lao PDR.
Although it is a state-owned enterprise, ETL operates independently from the
government. The technology for the hardware and software infrastructure was
acquired from abroad through licensing. Since it began, it has been growing quickly
in subscribership and in the number of services, focused on the domestic market.
Through advertising and market development (i.e. new services), it targets tourists
and young users. It mainly licenses its technology in an attempt to keep up with
the rapid pace of global technology.
ETL is expanding its services to increase its market appeal, especially for young
Laotians and tourists. SMS is currently limited by Lao language availability and literacy.
There are in-house and outsourced customization services being developed but there
are few suppliers and experts who have the technical capabilities. These limitations
also extend to policy, which creates an environment that allows the company to
operate more freely but also fails to support necessary infrastructure required for
growth. Policy can encumber the company by imposing regulations that are difficult
to meet. For instance, ETL is expected to provide universal coverage throughout
the country but this means that it must enter markets that are not profitable. HRD
is an area that requires attention for the company to become more competitive
because the education system does not provide needed skills for the company to
lxxiv STI Strategies for Poverty Reduction: The Case of Lao PDR
operate fully.
∎ Pharmaceutical Company No. 2
The Pharmaceutical Company No. 2 is a state-owned enterprise that uses imported
machinery at two factories to produce 200 medicines for four hospitals. The Ministry
of Health manages factory production goals, which now includes integration into
the ASEAN Community. A new factory is planned in anticipation. It develops the
formulas domestically but originated in the former Soviet Union and Germany. The
company currently produces vaccines but cannot expand its production. The company
employs twenty pharmacists, who are trained at the pharmacy college at the medical
school and an herbal medical school in Lao PDR.
3. Pilot Survey of S&T-related Stakeholders
The national workshop was held in October 2013 in collaboration with the DOST
of the Laotian government. Prior to the workshop, a pilot survey was conducted
and circulated to 55 experts from different sectors including the government,
university, research institute, industry, international organizations and NGOs. In the
form of multiple-choice, the pilot survey was conducted during the months of
May-July 2013 in order to identify the main sectorial STI priorities by asking the
respondents to select key criteria and alternatives for industrial promotion,
development and acquisition of technology, funding sources, policy-making
organizations, major actors for implementation and role of government, and policy
measures. The survey form and results can be found in Appendix 4 of this report.
Table 5-3 below shows the list of the survey’s responding organizations.
Chapter 5 Results & Analysis of Field Survey Interviews & Pilot Survey 75
Table 5-3: Stakeholders Surveyed
Sector
Organization
Ministry of Planning and Investment
Ministry of Agriculture and Forestry
Ministry of Industry and Commerce
Government
Ministry of Science and Technology
Ministry of Education and Sports
Ministry of Information Culture and Tourism
Ministry of Energy and Mines
National University of Lao
University
University of Health Sciences
Souksavath College
Sengsavanh College
National Economic Research Institute
Research
Institute
National Agriculture and Forestry Research Institute
Research Institute for Educational Sciences
Dao Heuang Group
Industry
Nam Theun 2 Power Company
Venture International Joint Stock Company
Phoubia Mining Company
Care International
NGO
Oxfam International
Child Fund International
Handicap International
Lao National Unexploded Ordnance (UXO) Programme
Food and Agriculture Organization
International
organization
United Nations Population Fund
United Nations Office on Drug and Crime
World Health Organization
Initially, a second survey was planned utilizing the Analytical Hierarchy Process
(AHP) method based on the key criteria and alternatives derived from the pilot survey.
The AHP was chosen to identify the priorities in order to address Lao PDR
socioeconomic needs. AHP is a method first developed in the 1970s and has been
extensively applied since then. AHP facilitates the process of prioritization among
lxxvi STI Strategies for Poverty Reduction: The Case of Lao PDR
conflicting issues by decomposing the problem into a hierarchical structure. Four
discussion models were developed decomposing it into four levels: objective (level
1), criteria 1 (level 2), criteria 2 (level 3) and alternative (level 4). Figure 5-5 below
is an illustrative structure of the AHP.
The results of the pilot survey were presented during the STI Strategy workshop
held in October 2013 in Vientiane, Lao PDR. However, due to complications arisen
from the survey, the AHP survey (main survey) was discontinued for reasons
mentioned later in this section. Instead, a brainstorming discussion was organized
to set STI priorities. Despite the fact that the AHP was discontinued, implications
can be drawn from the establishment of the four sets of discussion models.
Figure 5-5: Structure of AHP Survey
As can be seen from the figure above, based on the results of the pilot survey
four discussion models were developed intended to identify the priority areas for
Lao PDR. The comparison of different pairings of key criteria and alternatives would
have identified which of the pairings would successfully satisfy the needs of Lao
PDR.
In order for Lao PDR to promote its industrialization, upon setting the objective
a discussion model was devised by posing the following questions:
● Why does the Laotian economy want to promote its industry?
● How is Lao PDR going to promote it?
● What area needs to be promoted?
Chapter 5 Results & Analysis of Field Survey Interviews & Pilot Survey 77
The pairing of creation of added value in the agricultural sector successively scored
4.3 and 4.4, ranking highest among other criteria and alternatives, whereas the issue
of cheap labor and the pharmaceutical sector ranked lowest by respectively ranking
both 3.4. Although the alternatives dimension has shown a stratified result showing
which option best suited Lao PDR, in case of the criteria other recommended issues
such as the creation of jobs, market opportunity, adoption of export industrialization
or import substitution also ranked fairly high, reaching near 4.0 and rendering the
results less meaningful.
Second, with regard to the aim of developing and acquiring technology, the second
discussion model was developed. Questions that were discussed are the following:
● Why does Lao PDR need to develop technology?
● How can Lao PDR secure its development and acquisition?
● What kind of technology needs to be promoted?
The reason behind the need to develop technology was to enable sustainable
development of Lao PDR and acquiring hydro technology was prioritized, scoring
4.4 and 4.1. Surprisingly, the issue of developing absorptive capacity ranked lowest
when in fact sustainable development and its absorptive capacity goes hand in hand.
With regard to the type of technology that needs to be promoted, biotechnology
ranked lowest by scoring 3.8, which is understandable taking into account Lao PDR’s
insufficient investment in the pharmaceutical sector.
Third, for the priority setting concerned with funding sources, the role of
government as a policy-making organization and major actors for implementation
scheme was devised. The process was based on the following questions that are:
●
●
●
●
How can limited resources be utilized efficiently and effectively?
What funding principle is important?
Where can funding come from?
Who will be responsible for implementation?
In order to boost the Laotian economy, the issue using funding effectively was
deemed most pressing by scoring 4.4, followed by sustainability and ownership,
whereas its scale received less attention. As an alternative, public investment ranked
first and ODA ranked lowest due to its issue of volatility and unpredictability.
Regarding the policy-making role of government, three proposed criteria, funding
lxxviii STI Strategies for Poverty Reduction: The Case of Lao PDR
management leadership, general leadership, and financial procurement ability, ranged
above 4.0 whereas its role in mediation and vision ranked lowest. The Ministry of
Education & Sports and the Ministry of Planning & Investment were identified as
key institutions within the Laotian government. Even while acknowledging the
complexity related to the governance, the results highlight the confusion within the
Laotian government. Universities were perceived as the major actors for
implementation by scoring 4.4 followed by research institutes and private companies,
while the role of the government was in designing the policies.
Last but not least, the fourth discussion model is concerned with identifying the
measure and policies that will boost the Laotian economy. The model was set upon
the following questions:
● What coordination mechanism is better?
● Which measure is the priority for Lao PDR’s STI-based economic development
plan?
Although at first glance the role given to universities as major actors for
implementation can be perceived an outlier, the perception of universities as the
main actor for implementation is aligned when considering the fact that all have
emphasized the HRD program as the priority measure area followed by research
institutes. The results imply that lack of HRD was clearly perceived as a constraint
in achieving the proposed objectives, which explains why universities were
consistently ranked as the primary actor to achieve them. HRD is the key for Lao
PDR to graduate from its status of LDC and overcome poverty. It is the responsibility
of the university to generate high-quality education and necessary human resources
that will meet the needs of the country.
Contrary to the intention of identifying the best pairing that would allow Lao
PDR to satisfy its needs, overall the results of AHP have proven to be unreliable
due to numerous reasons. First, priorities greatly differed depending on the
organization the respondents were affiliated with. Second, the majority of respondents
responded that almost all the proposed criteria and alternatives needed improvement,
making hierarchical structuring and comparison of pairings difficult and irrelevant.
The results of AHP have shown that regardless of the objective in concern, the
ranking among proposed criteria and alternatives clustered between 3.5 and 4.5.
Also, despite the fact that a significant number of organizations participated in
the survey, international organizations did not provide feedback. However, the results
Chapter 5 Results & Analysis of Field Survey Interviews & Pilot Survey 79
have shown that lack of HRD was clearly perceived as a constraint in achieving
the proposed objectives. Universities were consistently ranked as the primary actor
to achieve the objectives followed by research institutes. Private companies were
consistently ranked at the bottom, possibly in recognition of the weakness of industrial
actors.
Although the results of the survey did not provide a definitive answer that would
best fit Laotian circumstances, insights can be drawn from the pilot survey and
discussion models established for AHP. The purpose of conducting AHP is not
only to find the best pair but also to understand the underlying problem. The fact
that most of the responses were tilted towards areas “to be improved” means that
there is insufficient alignment among the stakeholders constraining the comparative
method of pairings of the AHP. This is the reason the second survey was
discontinued. For instance, lack of alignment is visible from the results of the second
discussion model in which the purpose of acquiring technology was to sustain the
Laotian economy in the long term. However Lao PDR will not meet its objective
unless it tries to diversify its industry rather than persisting to rely on its primary
industries, mining and electricity. For Lao PDR to attain a sustainable economy the
criteria of developing technological absorptive capacity should have been prioritized.
4. Summary and Implications
The main coordinating body in the central government is the Ministry of Planning
and Investment (MPI). For the National Strategy 2020 currently being developed,
the core capacity-building policy focuses on human resource development (HRD).
The major STI stakeholders in Lao PDR were visited and surveyed to understand
their relationships and gauge their capacities to fulfill their functions under the policies.
While the statistical research conducted showed that Lao PDR has a small market
with limited human resources, the field survey confirmed and expanded the
information that the study could use for the diagnosis of the innovation system.
While several stakeholders had some capacity, others did not and will require programs
that will help bridge the gap to enable achievement of policy goals.
The research found several bottlenecks of the innovation system in Lao PDR.
Firms are dependent on imported technology and human resources. Even in
manufacturing and processing, capital is imported at a premium. The supply chain
lxxx STI Strategies for Poverty Reduction: The Case of Lao PDR
is also weak because there are few providers that can be found in the system. Similarly,
competitive financing is typically unavailable to Lao companies. Yet, R&D capacity
found in the research institutes and university are highly limited and do not meet
the needs of industry. NAFRI focuses on agricultural research that largely remains
in repositories rather than support industrialization. REMI conducts research to absorb
technologies supported by foreign donors but do not improve competitiveness. Rather
than improving their market position, firms become ensconced in low-value sectors.
Most stakeholders are narrowly focused on their sectors with weak linkages between
them. The policies described in the previous chapter have not fully addressed the
needs of the stakeholders.
As the mechanism that coordinates the different parts of government, the National
Socioeconomic Development Plan defines objectives and resources to implement
programs. Various ministries work with the stakeholders in the sectors for which
they are responsible. For the HRD plan, the Ministry of Education and Sports (MES)
interacts directly with non-government actors like the National University of Laos
(NUL). The pilot survey also confirmed the expected role of the University in the
economy. Past implementation of HRD programs have focused on basic education
and higher education was neglected in spite of increased demand. This has left the
main agent in higher education overwhelmed with its teaching responsibilities and
incapable of meeting research goals.
Industry is uncompetitive in the global market, which means it cannot serve as
an engine of the economy. Firms developed capacities in certain areas40) but are
otherwise constrained in their capacities. These constraints stem from a lack of
innovation capacity. Normally, this might be overcome through interactions with
universities or R&D institutes. NUL, the largest university, has no research capacity.
In economically advanced countries, markets are used to coordinate activities
between stakeholders but this is absent in developing economies like Lao PDR. These
market failures result in weak sources of R&D, which is required for innovation.
The R&D institutes have fewer resources and capacities, which are dependent on
international non-profit and donor organizations. Other industrial actors that are
based on public-private partnership (PPP) are also isolated from domestic actors
and dependent on international aid. Through the pilot survey, stakeholders said that
they prefer domestic sources of support over ODA. Some stakeholders have failed
40) These will be expanded on in the next chapter
Chapter 5 Results & Analysis of Field Survey Interviews & Pilot Survey 81
to develop sources of innovation, which may suggest that they are overly influenced
by donor objectives.
The implication of this research is that policies should support industrialization
activities by adding value through STI infrastructure including mission research and
HRD. Increasing added value requires innovation capacity that is missing. By targeting
specific technologies, Lao PDR may be more successful at localizing them through
mission research and HRD programs.
lxxxii STI Strategies for Poverty Reduction: The Case of Lao PDR
｜Chapter 6│Diagnosis of Innovation
System and Suggested Solutions
1. Diagnosis
Lao PDR has been caught in a poverty trap and only recently began to develop
its economy. In order for this to be economically sustainable, the government should
address certain bottlenecks in the Lao innovation system. This section diagnoses the
bottlenecks within the innovation system that need to be addressed. The initial stage
of development that all countries face is that of an agrarian society. Until recently,
Lao PDR was one of the world’s least developed countries (see Figure 6-1). Its
small population is still dominated by peasantry that survives on subsistence farming.
Trade and budget deficits prohibit the government from effectively developing the
economy, especially industry. Without minimum economic growth, the country is
stuck in a poverty trap.
Figure 6-1: Diagnosis of Poverty
The Lao economy has been able to increase its income by exploiting its natural
resources. Fortunately, it has an abundance of resources that have become highly
valuable in the global economy such as copper and hydroelectricity. These resources
Chapter 6 Diagnosis of Innovation System and Suggested Solutions 83
have been exported to global consumers. In the case of energy, the World Bank
and neighboring Thailand have provided the financing and FDI for the technology
and infrastructure necessary for the industry as well. Exports, however, have caused
“Dutch disease” that drives up the prices of Lao goods and services in the global
market by increasing the value of its currency. The result of a stronger kip is that
manufacturing and other exports are less competitive. Since companies cannot
compete, they are less able to provide quality jobs. This forms a sort of natural
resources trap41) (see Figure 6-2).
Figure 6-2: Diagnosis of Natural Resource Trap
Another notable accomplishment of Lao PDR is fulfilling many of its UN
Millennium Development Goals, namely decreasing its infant mortality and increasing
its primary education levels. The two factors have led to increased levels of enrollment
in secondary and tertiary education. These increased pressures on the education
system have overburdened the university system. Tertiary education has not been
able to keep pace because there are insufficient professors available to teach and
train young people entering schools. This means that there are inadequately trained
41) In contrast to Collier’s natural resources trap, foreign investors have greater influence on finance and
its policies that distort the rest of the economy’s ability to develop capacities in industry, HR, and R&D.
lxxxiv STI Strategies for Poverty Reduction: The Case of Lao PDR
and insufficient skilled workers feeding into the workforce. Engineers are needed
in the booming sectors of mining and electricity but the supply in these fields are
limited. Instead, students prefer white collar business jobs in Vientiane. These jobs,
however, are saturated. There is a policy gap between the education output and the
job market (see Figure 6-3).
Figure 6-3: Diagnosis of HRD Policy Gap
Another structural bottleneck is the isolation of industry and science relationship
(ISR). While universities educate the workforce, they also provide research to the
innovation system. However, professors are unable to perform research functions
of their job and within the innovation system of Lao PDR. Further, the lack of
funds from within Lao PDR means that the research that is performed is funded
through foreign contracts. These contracts are generally in agriculture, health and
the environment, which are interests of foreign donors. This type of research does
not generally support industry demands, so the research community is further isolated
from industry. Thus, industry is still left with an uncompetitive, non-improving
product but is isolated from research that might improve it (see Figure 6-4).
Chapter 6 Diagnosis of Innovation System and Suggested Solutions 85
Figure 6-4: Diagnosis of Research Isolation
The Lao government, often with the support of international agencies, has pursued
several approaches to improve the economy. Government leaders of Lao PDR have
set their policies to improve the economy through a focus on HRD. The planning
has been highly coordinated and involves different branches of government such
as the Ministries of Education & Sports, Industry & Commerce, Mines & Energy
and Science & Technology. The Ministry of Education & Sports leads the
development of the HRD plan through macroeconomic approaches, which are
necessary given the deficiencies found in HR, education and market.
These policies are in line with the Millennium Development Goals (MDGs), which
primarily focused on health and education, especially related to the young. The
difference is that the MDGs lacked programmatic sustainability and industrial aspects.
The HRD focus may be seen as an attempt to correct this but may still fall short
since STI elements are limited. These shortcomings are seen in Lao PDR and the
MDG results in general.42) In other words, the bottlenecks were neglected and
problems persisted.
The policy plans also target specific industrial areas that have immediate strategic
42) Architects of the next stage of MDGs are focusing on Sustainable Development Goals (SDGs) in attempt
to address these shortcomings.
lxxxvi STI Strategies for Poverty Reduction: The Case of Lao PDR
importance, i.e. mining, energy and agriculture. Because most of the population still
works in it, agriculture is central to poverty-alleviating schemes. Mining and energy
have higher importance because they draw high amounts of foreign direct investment
and are principally responsible for the largest part of the economic growth that the
country has experienced in the past decade.
While growth has occurred rapidly, it has occurred without much direct
involvement of policy interventions. Policymakers have allowed foreign investors to
create infrastructure to enable the creation of many sectors in mining and energy.
They have little experience beyond this initial stage of market creation. Goals that
ministry officials shared included trying to use new revenue to promote industry
and trying to develop HR (through tertiary education). The plans, however, tended
to be vague in implementation and or not focused on core capacities. Moreover,
these conditions generally reinforced each other creating vicious circles.
2. Suggested Solutions
The diagnosis identified the bottlenecks that keep the Lao economy from
developing: poverty, natural resource trap, isolation of industry R&D, and policy
gaps between education and the market (see Figure 6-5).
Figure 6-5: Overview of Diagnosis
Chapter 6 Diagnosis of Innovation System and Suggested Solutions 87
To address these bottlenecks, several solutions are suggested (see Figure 6-6)
●
●
●
●
Targeting products for industrial promotion and job creation
Creating STI infrastructure programs including mission research
Supporting strategic HRD programs
Using policy measures (procurement and resource mobilization) through a
steering governance mechanism
Figure 6-6: Potential Solutions
The solutions aim to reduce poverty through industrial promotion and job creation,
which would provide greater income and economic growth. In order to accomplish
this, products need to be identified for industry. Since the domestic market is too
small to support this naturally, export goods can provide demand. However, industry
lacks the capacity to be competitive in exports to the global market. Therefore, it
is necessary to provide R&D and human resource support to enable the firms to
take part in the global value chain. As part of STI infrastructure building, mission
research programs would be created to fill the void created by isolation of industrial
R&D. Strategic HRD programs would similarly provide the necessary skilled workers
for the targeted products. To coordinate these elements, a governance mechanism
to steer the policies and resources must be created. This mechanism would identify
the resources available domestically and internationally to direct towards necessary
programs including research and procurement.
lxxxviii STI Strategies for Poverty Reduction: The Case of Lao PDR
3. Possible Business Models Suggested
The field survey uncovered four possible business models in the Lao economy.
These models were analyzed to see which would enable growth and what bottlenecks
need to be corrected to improve business flows.
A. Tech Spillover from FDI (NT2)
Nam Theun 2 is a public-private partnership that exemplifies technology spillover
as a result of foreign direct investment (see Figure 6-7). The project created several
positive socioeconomic effects, not least of which was positive economic growth.
The impact on industry has been direct and indirect. A direct effect is that
infrastructure that has been built has been developed directly for export. While ODA
bridges some of the gaps, it is still necessary to consider building out infrastructure
that serves the domestic market. Spillover has not occurred as readily since the
economy lacks capacity in human resources and technology, which has created a
dependence on imported manpower and components. The same is true for the finance
market since there is little domestic financing available.
While hydroelectric power is a renewable energy source, it has limited scalability.
The mining industry follows a similar development pattern but is dependent on scarce
resources. Both of these industries cause harmful effects to the environment, which
can be compensated for at best.
Figure 6-7: Tech Spillover from FDI
Chapter 6 Diagnosis of Innovation System and Suggested Solutions 89
B. Tech Localization for Import Substitution (Dao-Heuang Group)
The Dao-Heuang Group is a successful company that began in primary industry
selling sugar along the technology localization for import substitution (see Figure
6-8). It has since expanded to include other products, coffee in particular. Its growth
has been dependent on weak competition domestically. The government has been
able to provide the company with concessions and favorable regulations. While this
protection may have been necessary early on, it leaves the company ill-suited for
increased global competition, especially in the shadow of the ASEAN Community.
The rest of the economy is more negatively affected because there is a weak
production chain. Since the company has grown vertically, there are few suppliers
that have been built around this fledgling conglomerate. Not only is the company
dependent on imported technology but the innovation system also has few players
that might have provided more capacities. Since the products have been largely sold
domestically, the global competitiveness of the company and its products is uncertain.
Figure 6-8: Tech Localization for Import Substitution
C. Tech Localization for Export Promotion (Pharmaceutical Factory No. 2)
Pharmaceutical Factory No. 2 is a state-owned company that uses technology
localization to promote exports (see Figure 6-9). While its primary consumers are
currently domestic hospitals, the recent addition of a factory to expand into ASEAN
markets demonstrates its export promotion strategy. There are several obstacles that
exist that will make its foray into exports difficult. Since it is a state-owned company,
it operates in a monopoly system where it faces little competition. Its technology
xc STI Strategies for Poverty Reduction: The Case of Lao PDR
must continue to be imported because the innovation system cannot support
independent development of new drug formulas or API (active pharmaceutical
ingredient). The HRD process keeps this system caught in this position for the
foreseeable future. The company has scarcely any sources of R&D. The industrial
innovation system produced few or possibly no suppliers in the production chain,
which might have provided alternate sources of innovation.
Figure 6-9: Tech Localization for Export Promotion
D. Tech Customization for Domestic Market (ETL)
The final industry model is tech customization for the domestic market, which
is exemplified by ETL (see Figure 6-10). The company has been given certain
advantages by the government such as funding and regulatory support. The
government uses procurement of ETL service to provide guaranteed demand. Like
the economy in general, the company is dependent on imported technology, which
it receives through licensing. While the company seeks to develop new innovative
products and services, it is limited by the R&D capacity that is available. The
government mandate for universal coverage also exposes the company to
unsustainable financing because the market is too small to support customization
of its products.
Chapter 6 Diagnosis of Innovation System and Suggested Solutions 91
Figure 6-10: Tech Customization for Domestic Market
xcii STI Strategies for Poverty Reduction: The Case of Lao PDR
｜Chapter 7│Action Plan
The problems that Lao PDR faces are similar to many LDCs. The study of Lao
PDR included statistical and policy reviews, field and pilot surveys, and panel
discussions. The statistical review revealed the socioeconomic conditions and needs
of the country. The policy review and field survey uncovered the institutional STI
frameworks. The pilot survey attempted to gather statistical data on the priorities
of stakeholders. The results found that capacities were wanting, that comprehensive
policies were desired, and that the main stakeholders are government agencies and
the university. To compensate for the shortcomings, a brainstorming panel discussion
(see Appendix 5) was held to digest the data and to formulate a diagnosis, a
prescription, and an action plan.
Development concepts including STI-based ones are familiar to its policymakers.
An action plan will provide the responsible stakeholders in Lao PDR the ability
to practically work towards resolving and meeting their socioeconomic issues and
needs. Although R&D and HRD programs currently exist in Lao PDR, they are
not well aligned with governance and financing. Policies are FDI-focused and
resource-driven. Further, target sectors do not provide the necessary sustainable
growth to enable the economy to escape from poverty. The action plan proposed
in this chapter requires an industry platform that still needs to be defined to fully
understand what STI stakeholders are necessary and how their capacity must be built
through program design. Industry stakeholders are the focus of STI planning for
an innovative system. As described, government stakeholders are the main actors
at present because the other sectors have limited capacity.
Chapter 7 Action Plan 93
Figure 7-1: Rationale for Alternative Action Planning
Note: MPI = Ministry of Planning and Investment; NSEDP = National Socioeconomic Development Plan;
MES = Ministry of Education and Sports; MEM = Ministry of Energy and Mines; MIC = Ministry of
Industry and Commerce; MOST = Ministry of Science and Technology.
At the moment, the Lao economy is focused in electricity, mining and agricultural
and forestry products. Additional programs include motor bicycle assembly and
tourism. The current economic development plans involve several key actors: MPI,
MES, MEM, and MIC (see Figure 7-1). MPI is the ministry responsible for planning
the overall strategy that encompasses education, health, and the environment, which
are implemented by other parts of the government. The establishment of a committee
on HRD combines income generated through sectors governed by MME but headed
by MES. Generally, industrial development is managed by MIC to strengthen
processes to add value to target industries. An action plan is designed and proposed
to coordinate some of the agencies that were identified as integral to the successful
transition and overcoming the limitations in the system.
The diagnosis, however, suggests that the plan following MPI priorities lack
consistency and relevance and will not overcome the problems of economic scale
and scope, which prohibits its competition in global markets. As a corrective measure,
MOST is tasked with the responsibility to champion sectors that will enable economic
growth through an industry platform, which provides greater economies of scale and
scope. Using the industry platform, MPI can align different segments of the
government to improve consistency. MOST would be tasked with ensuring relevance
xciv STI Strategies for Poverty Reduction: The Case of Lao PDR
to industrialization for economic growth. An action plan is suggested that first sets
priorities to transition the innovation system towards sustainable development by
identifying a target industry platform, Twin Engines for a Green Growth Alternative.
A new action plan is proposed with programs to overcome the diagnosed bottlenecks
and constraints.
1. Priority Setting
While the 7th NSEDP clearly states comprehensive goals, it has shortcomings
when evaluated with the 3C/3A Approach. There is a future-oriented goal but they
are all related to environmental sustainability. The Plan targets the MDGs and
identifies mining and energy as sectors to promote through FDI. While these goals
and policies are consistent at the national level, the differences between provinces
suggest that policy implementation is inconsistent at the sub-national level. The main
approaches that the policies pursue are to build infrastructure, to diversify the
economy and to attain stage of industrialization and modernization. Healthcare,
education and the environment are mentioned throughout the plan, which
demonstrates the influence of the international development community. Yet, the
mining and energy sectors are the most immediately profitable and most easily attract
foreign direct investment. The strategy used, however, is weakly linked to
industrialization and is not contextualized to policy needs. One of the outcomes
is that manufacturing growth has not kept pace with its targets. Ultimately, the Plan
does not enable stakeholders to overcome the structural limitations in the economic
system.
The small population and low income status of the country lead to structural
limitations that are addressed through government intervention. Although MPI
coordinates the overall priority setting at the national level, the diagnosis shows that
the current process of priority setting is separated by line ministry. MPI plans to
build industrial capacity in agriculture and mining and energy but the other ministries’
priorities differ. As illustrated in Figure 7-1, different ministries have highlighted
different areas to focus on. This aggravates the lack of scale economies and low
competitiveness that exist in the economy, making expansion through exports more
difficult. The prescription calls for the clustering of priorities in a holistic manner
to improve cohesiveness and consistency. When considering the diagnosis of the
Chapter 7 Action Plan 95
Lao innovation system, actors in government, research and industry have been
considered to realign priorities based on a new industry platform.
The line ministries have formulated priorities based on similar methodologies,
largely focusing on supply-side considerations such as available natural resources.
Priorities in the Lao economy are natural resources in the industrial and agricultural
sectors and attempt to meet societal needs (see Table 7-1). The main exports are
industrial products, agricultural products and wood products. Most imports are for
agricultural productivity to meet public needs. Investment is being provided to
hydropower, mining, agriculture, infrastructure and garments. Industrial wood
plantation and wood processing are another industry of emphasis. The five industry
targets may not have sufficient market, especially since programs have not been
aligned across the economy.
Table 7-1: Target Products and Sectors
Category
Products
Export Products
Industrial Products (electricity, Lao beer, gold, tin, motor bicycle),
Agricultural Products (coffee, tobacco), Wood Products (round logs,
semi and finished wood products), Non-timber Forestry Products
Import Products
Agricultural Equipment
Investment Sectors
Hydro Power, Mining, Agriculture, Infrastructure (road, bridge, telecom,
network), Garments, Industrial Wood Plantation (sugar cane, Jatropha,
Agar)
Source: Phommaxay, K, 2014
The strategic sectors have limited industrial impact for two reasons. The first reason
is that the sectors themselves have bottlenecks and constraints to economic growth.
The other reason is that the strategies adopted do not specifically build technical
capacity in the economy. Agricultural sectors (i.e. rice and livestock) are targeted
because most of the population still works in subsistence farming. The strategic
planning of this lacks sustainable growth aspects through market and technology
acquisition. While attempting to achieve sustainable growth in non-resource
dependent sectors, greater market analysis is necessary.
While it was not named as one of the target industries by the ministries, tourism
is consistently, if loosely, targeted as a service sector that has room for growth, yet
the planning must ensure added value. For instance, the number of tourists that
visited Lao PDR increased from 173,000 in 2001 to 1,786,000 in 2011. However,
xcvi STI Strategies for Poverty Reduction: The Case of Lao PDR
the receipts per arrival dropped from USD 624 to USD 231 (UIS, 2012). The
agriculture and tourism industries have primarily attempted to increase output without
necessarily considering adding value. Without added value, these sectoral policies will
chase diminishing rates of return.
The other sectors (i.e. electricity, mining and infrastructure) have been highly
profitable; in fact, they have driven economic growth. Yet, the sustainability of the
policies that support these industries is questionable. Mining and electricity are boons
for the economy but resources are limited. Metal ore is scarce and has associated
environmental costs. Hydroelectricity is not scalable and the sites that provide the
greatest returns are already used. As a landlocked country, it is necessary to build
transport and ICT infrastructure to connect Lao PDR intra-nationally and
internationally. Both FDI and ODA policies have been used in these sectors but
the strategy does not address the future needs of the economy. For instance, most
of the financing that is accessed is put back into the industries themselves (cf. the
growth in infrastructure).
The targets and mechanisms differ by ministry, so the policy impacts are limited.
The core capacity-building scheme that depends on cooperation between MEM and
MES tends to support basic education starting with primary schools. The increase
in output will not provide the necessary workforce that is currently being developed
by industry. MIC has a bifurcated approach between FDI-driven and natural
resource-based sectors. The second of these may be supported by the general
education policies pursued but the result will not provide high-value production that
might spur economic growth. MOST has focused on developing the weak R&D
base in appropriate technologies in renewable energy and ICT infrastructure. Biofuel
burning cook stoves are the main focus of R&D in renewable energy. Structural
and industry limitations do not enable an economic transformation that will boost
economic growth. In fact, the sector is unsustainable without external support, usually
found in international donations.
During the action planning workshop held in May 2014, the industrial sectors
were considered for alternative industry platforms. The motorbike industry is based
on component and part assembly for exports. Agricultural productivity equipment
and organic products are targeted to meet food security and economic market needs
but the value added is not high and the labor supply is insufficient. For agriculture
to become less labor-intensive, it is necessary to incorporate technology. Wood
industry has the necessary resources but the economy lacks design capabilities. The
Chapter 7 Action Plan 97
construction industry is focused on infrastructure for dams and roads, so it might
be targeted. Related industries are cement and steel but while the cement industry
exists in Lao PDR, steel does not. Further, construction is an energy-intensive industry
so it cannot be entered and expanded easily. These industries do not readily provide
economic returns, and lack other strategic benefits necessary to pursue them.
As an alternative to varied sector targets, a national economic green growth policy
is proposed to help align policy coordination. To promote green growth, two
industries are proposed as part of the industry platform: green transportation and
green energy. Green industry is supported by the general objective to pursue
environmentally friendly socioeconomic activities. The platform industries are
interrelated and drive other segments of the economy. Green transportation and
energy are mutually reinforcing and support the growth of manufacturing, transport
and sustainable tourism sectors (see Figure 7-2). Thus the Green Growth Alternative
is tentatively adopted as an industrial platform target but the components of this
system are not sufficient in Lao PDR.43)
Figure 7-2: Twin Engines for Green Growth Alternative Industry platform
43) Continued discussions may consider what components are necessary and how to meet that need. Having
a target industry enables policies to be designed using this potential scenario to work from.
xcviii STI Strategies for Poverty Reduction: The Case of Lao PDR
This foundation can serve as an industry platform to overcome the scope and
scale limitations that exist and to enable global markets entry. Green energy is
complementary to transportation and other industries. Hydropower infrastructure
already exists so it is incorporated into the Green Growth Alternative. Bio-waste
and hydropower provide twin engines for the green growth platform. Bio-waste can
be converted into bio-energy and hydropower can be used for green vehicles.
Infrastructure support programs can include industrial zones, infrastructure, academic
programs, and tech transfer to build STI capacity. These platforms will feed into
the development of green vehicles, manufacturing and power utilities, which will
support other sectors like tourism, agriculture, and food processing, in turn (see Figure
7-2). It engages manufacturing and service industries that create jobs and meet export
demands.
To overcome bottlenecks in the system, institutional constraints including
stakeholder capabilities must be considered when selecting priorities and designing
programs. The objectives are to stimulate and disseminate STI results and
productivity, direct activities toward STI activities, upgrade scientists’ capacity, and
provide infrastructure including physical and educational infrastructure. These
activities should be coordinated and the system should be provided with the resources
necessary to achieve the goals.
Successful industrialization requires capacities in industry, research, and human
resources. STI infrastructure including technology and HRD are necessary to enable
industrialization. Industrial capacities must be considered to encourage development
of core business functions, manufacturing capabilities, and absorption of technology.
Priorities for the programs should focus on creating specific capacities in areas that
enable the industry platform of green energy and green vehicles. They should target
necessary industrial activities that become increasingly more sophisticated.
A global power utility solution provider can increase capacity-building efforts but
there are none readily available in Lao PDR. By partnering with a foreign power
utility solution provider, weak local capacity can be complemented and its capacity
built. Interactions with multinational companies can be supported and managed
through consortia to engage local universities and SMEs, where capacity building
is necessary.
Broader STI-related policies like FDI and industrial zones must also be coordinated
with the various ministries responsible. Current policies that attract FDI can be aligned
with other STI-driven programs. ODA programs may also augment these activities.
Chapter 7 Action Plan 99
2. Program Design
Since Lao PDR suffers from a lack of scale and scope that causes weak
competitiveness, an innovation platform industry can be used to provide scale and
scope to overcome this limitation. It cannot focus on an individual industry because
the Lao economy is too limited by structural limitations. By combining industries,
the economy may find the scale and scope to compete in overseas markets. The
program design should focus on elements that add value, target export
industrialization, and create jobs. They should also recognize that infant industries
must be accorded some form of protection, i.e. import substitution, temporarily.
Green energy and transportation can serve as the platform industry to create value
and build foundation and infrastructure. Energy and transportation are institutions
that provide general purpose technologies that support other industries. Energy is
one of the most important drivers of an economy but has negative externalities or
impacts on the economy that are not fiscally accounted for. Green energy removes
or lessens the concerns regarding externalities when they are renewable and/or reduce
the amount of carbon released into the atmosphere. Hydroelectricity is already being
produced in Lao PDR, which means that there is a domestic source and infrastructure
in place. Therefore infrastructure is necessary to convert it into a power source for
green vehicles. Bio-waste is another form of green energy that is available. These
two energy sources provide the twin engines for green growth. The platform can
drive related industries in the tourism, service, ICT-based and green manufacturing
sectors.
Programs must target absorptive capacities of stakeholders, particularly industry.
These are embodied in strategic STI infrastructure including mission research and
HRD. Infrastructure development and HRD programs require a driving mechanism
to coordinate various elements of the system. Programs can be developed to help
build the necessary capacity to reach the sustainable economic goals through an
industry platform. The platform industries have specific technologies and skills
required to function. Preliminary studies in marketing, production supply chain, R&D,
and other sectors must be done to determine what capabilities exist and are required.
If possible, technologies can be transferred and skills gaps filled through training
and collaboration programs. The stakeholders’ capabilities should be inventoried to
encourage those with greater abilities and provide capacity building for those that
are absent. Since Lao PDR lacks the experience to develop these on its own, missing
c STI Strategies for Poverty Reduction: The Case of Lao PDR
capacities can be provided through international consultants and capacity-building
programs in STI infrastructure and HRD.
Technologies that can be used to support this platform include electric vehicles,
intelligent power drive and components, and green energy system and components.
R&D capacities required are SME automation and agricultural engineering. Examples
of green transportation include GFM neighborhood green vehicles and personal rapid
transit systems. GFM neighborhood green vehicles can be used for utility and tourist
industries. Personal rapid transit provides smaller scale rapid transit suited for Lao
population.
To initiate the platform industry Lao PDR can begin with identifying the domestic
and foreign stakeholders that wish to participate. For example, Taiwan had cooperated
with UN and WB for developing and transferring the necessary technologies. Upon
identification of stakeholders organizing consortiums can be helpful in scaling up
approaches, the Smart City Forum44) can also contribute in terms of capacity building,
HR, etc. Project milestones can start with a small pilot case at universities that are
each given specific development programs. Simultaneously, a national program can
develop the framework, stakeholders and training/education systems.
A. Strategic STI Infrastructure
The underlying infrastructure is the focus of development because they affect the
overall economy and several industries broadly. Institutions operate across an
economy’s infrastructure but STI infrastructure is currently missing in Lao PDR.
Without infrastructure, the economy and its industry cannot add value to its products
and services, which is especially necessary for competitiveness in the global market.
After visiting several institutions, few stakeholders demonstrated capabilities or
facilities to conduct research to produce science and technology for innovation.
Through the driving mechanism designed for the proposed industry platform, strategic
STI infrastructure programs can be designed to meet the necessary capacity that
is required to develop the related industries. The main purpose of STI infrastructure
is to provide R&D that firms require for higher value-adding activities. To develop
capacities and bridge missing capabilities, STI infrastructure would enable domestic
firms to bring overseas technology and integrate them with local technologies to
44) In 2014, the People’s Republic of China initiated this forum under the APEC Working Group for Policy
Partnership on Science, Technology, and Innovation. The forum aims to connect stakeholders to discuss
important issues like the development of Smart Cities.
Chapter 7 Action Plan 101
enable the industry platform of green vehicles and green energy. Strategic STI
infrastructure includes mission research to provide the necessary R&D for the industry
platform, especially in the long term. Each component of the platform requires
different capacities but also boosts different sectors of the economy.
Since STI infrastructure is limited in Lao PDR, a multinational corporation (MNC)
can provide capacity and spur construction of necessary infrastructure. The industrial
platform would require a power utility provider to fulfill this role. Engaging this
stakeholder, programs can be established to build infrastructure to support this
industry. The MNC would also provide technology and guidance necessary for the
infrastructure. Related academic programs could be initiated in tandem so that STI
capacity is developed. STI capacity is provided by research universities and institutes.
They serve the dual purpose of generating necessary R&D and skilled manpower.
Firms that are in the green agriculture and food processing industries should be
targeted for industrial development. Technology development focuses on modernizing
and localizing foreign technology. Lao PDR should encourage research in areas that
are already possible and technology transfer in the short run and it should develop
STI infrastructure in the long run. In order to accomplish this, an impact assessment
must be completed for STI readiness and improvement that target value creation
for economic growth, social quality and environmental sustainability.
Related technologies range from low- to high-tech. Simpler technologies may
already be available or made available given existing skills and resources in Lao PDR
but more advanced technologies can be integrated through foreign sources. In the
case of green transportation, there are several technologies that are relevant to
successful development and functioning of the sector including navigation, power
and control, location-based telematics service, low-carbon or bio-based material, and
energy storage (i.e. batteries). These technologies should be supported with related
research (see Table 7-2). When considering the R&D and academic capabilities to
produce the necessary technologies endogenously, the stakeholders in Lao PDR may
not or may partially have the required capacity. Some research areas like geographic
data, automation and assembly, tourism content data, and charging/discharging
technology can begin immediately given current research capacity. Other research
areas like carbon rating, energy ratings, bio-based manufacturing, and system assembly
can be augmented through international consultants in the short term while longer
term R&D systems are developed.
cii STI Strategies for Poverty Reduction: The Case of Lao PDR
Table 7-2: Green Vehicle-related Technologies
Technology
Sub-technology(ies)/Research Area(s)
Navigation
Geographic data*
Power & control
Automation & assembly*
Location-based telematics service
Tourism content data linked to telecom companies*
Low-carbon or bio-based material
Carbon rating
Energy rating (consumption is expected to grow)
Bio-based manufacturing
Energy storage (e.g. batteries)
Charging/discharging technology*
Recycling control (regulation)
System assembly
Note: Starred (*) technologies are those that Lao PDR already has capacity to begin developing.
R&D capacities can be developed through programs that target necessary R&D
areas through mission research. While many universities serve the dual purpose of
educating students and performing research, NUL is overburdened with education
duties. Professors have no time to conduct research. The research institutes that
were visited also had a lack of expertise and facilities. Therefore, they must either
be given greater resources to enable research activities or another source of R&D
should be identified and mission research programs created. Once these capacities
are identified, sources of the technology and capacity building can be found
domestically and through bilateral channels. MNCs and NGOs can be targeted as
sources of foreign technology and expertise. Mission research programs should focus
on transferring knowledge through the STI infrastructure that provides sustained
R&D output to domestic stakeholders. NT2 is already providing foreign expertise
but institutions beyond the concession agreements must be built to support the
localization of capabilities. Bilateral partners might include research institutes or
universities in Chinese Taipei or Korea. For instance, the Green Energy Development
Center at Feng-Chia University is developing methods to convert bio-waste to
bio-energy in Chinese Taipei. Other capacities like recycling control are more readily
replicable through regulation policies.
Chapter 7 Action Plan 103
Box 1: Green Energy Development Center
Originally founded as the Research Center for Energy and Resources in 2000, Feng-Chia
University’s Green Energy Development Center (GEDC) is a research institute comprised
of 10 professors, 15 staff, and around 60 students. The main themes of the research are
anaerobic bio-hydrogen production with key technologies in culture enrichment, high-rate
three-phase bioreactor, molecular biological technology, and pilot-plants. Based on the
established key technologies, the GEDC is leading bio-hydrogen production rate in the world
by constructing a Bio-H2 Gas Station in Feng Chia University campus in 2011. From 2005,
GEDC started to receive R&D investment and cooperated with number of institutes such
as the Bureau of Energy, National Science Council, and Ministry of Science and Technology
to work on bio-hydrogen energy technology. With successful research results, they were able
to commercialize new products.
Source: Green Energy Development Center website, accessed on October 10, 2014 at
http://www.greenenergy.fcu.edu.tw/wSite/mp?mp=303104
B. Strategic Human Resource Development
HRD strategies are already the focus of central plans. Yet, the Ministry of
Education and Sports (MES) has already outperformed goals laid out in the national
economic development plan. The shortcoming is readily understood because its goals
are based on the MDGs rather than meeting its local demands. NUL was the only
national university in Lao PDR, and it was not performing research that would
significantly improve industrialization. Still, the policy review, field visit interviews,
and pilot survey found that most stakeholders expect the University to manage and
implement many of the targets outlined in HRD policies. Again, resources need to
be provided either to the University or another agency that is tasked with fulfilling
these goals. Similar to STI infrastructure, HRD should be institutionalized to provide
a steady flow of skilled labor to the economy. As part of the holistic strategies of
the action plan, HRD should be targeted in alignment with financial, material
resources, and other elements within overall economic development.
Like the STI infrastructure program, Lao PDR should consider different types
of skills needed from unskilled to high expertise when designing HRD programs.
The types of skills vary across the industries as well. Managers, coordinators,
administrators, technicians, engineers, researchers, scientists, etc. are necessary for
any industry. There are programs that already serve as sources of some of these
but a comprehensive evaluation is needed. Less sophisticated requirements may rely
on general education programs that are within current capacities of the HRD system
civ STI Strategies for Poverty Reduction: The Case of Lao PDR
in Lao PDR. Where it lacks the professors and experts to meet the demands of
the industries under the industry platform, international experts can be brought in
to help train workers needed immediately and teachers who will produce the next
generation of students.
The HRD program can serve as a framework to labor forecast demand and devise
projects that align the education and training systems to provide the necessary
workforce. It is necessary to create mechanisms for coordination and sharing
responsibilities between stakeholders, for evaluation and monitoring, and for
awareness (e.g. “scientific day”). Economic and employment issues need to be
understood to be included in the HRD strategy, so needs assessments should be
conducted in cooperation with the Ministry of Labor. MES can act as a coordinator
to have other ministries define the needs across the economy.
The surveys might include labor demand, income and social equity information
as part of monitoring and evaluation. To ensure that the statistics system devised
is comprehensive, reviews of productivity and migration statistics are needed including
internal (provincial) and external (international) categories and movements. The
Ministry of Industry and Trade should capture the HR needs of firms, especially
those that are targeted for innovation-driven growth. Ministry of Science &
Technology should conduct study of STI-related labor needs to drive labor demand
for public and private sectors.
The field survey interviews and pilot survey responses suggested that the National
University of Laos has high expectations to meet. Yet, the diagnosis of the University
suggests that it does not have the capacity to meet the demands placed on it. It
may be necessary to designate a specific department or create a new body to manage
the HRD programs to be developed. Additional resources must be allocated to the
body so that it has the means to accomplish its clearly defined goals. If technicians
are required, vocational schools may more nimbly adapt to provide the necessary
output in a short period of time, especially for the technologies that exist or can
be transferred. The University may be used in conjunction in such a scheme to
provide higher level skills for those areas that the economy does not yet have the
means to generate the necessary skills. Programs can be designed to leverage
international cooperation and exchange programs to meet these needs more quickly
and develop infrastructure to produce these skills in the long run.
Implementation should include cooperation between government, industry and
academia, possibly through public-private partnership. The Ministry of Education and
Chapter 7 Action Plan 105
Sports agreed to implement strategically targeted HRD programs with interaction
with DTI/MOST. Its current plan will i) achieve cohesion between education and
sports, ii) link industrial demand to supply, and iii) link demand and supply to national
development strategies. Consortia with MNCs can provide an alternative route to
develop necessary skills and manpower in target industries. The HRD plan will also
improve use of technical and vocational education and training programs to meet
industrial demand for labor. On-the-job training programs that involve MNCs, local
SMEs, and the University can be used to develop necessary skills to directly meet
industry demands. The expectation of these early programs should produce future
leaders in the new industries.
3. Governance
The current governance mechanism is embodied in the new education initiative,
which is led by MES as directed by MPI. This mechanism, however, does not have
aligned priorities that might enable MES to successfully direct inter-ministerial
activities. The priorities are individually focused, which has not provided momentum
to transform the system. Capital expenditures on infrastructure have focused on
construction of dams for hydropower. Even MES lacks a focus for its HRD plans.
Governance should holistically align priorities from different sectors. As described
in Section 2, an industry platform is insufficient to ensure a successful action plan.
A governance mechanism is required to coordinate and direct the activities of the
industry platform.
The governance mechanism should connect stakeholders in a common network
or implementation platforms that include management instruments. Part of the driving
mechanism should ensure that they are capable of working towards common goals,
which is more easily done if the priorities are well aligned. Domestic stakeholders
include government agencies, universities, R&D institutes, NGOs, associations, and
companies. The ministries are responsible for facilitating and coordinating the
different stakeholders. A lead agency should be designated and made responsible
for the coordination of activities between the stakeholders. The role of each ministry
is important to the execution of the action plan. The Ministry of Energy and Mines
is one of the focal points of planning because most of the domestic income is derived
from these sectors. The Ministry of Education and Sports is responsible for executing
cvi STI Strategies for Poverty Reduction: The Case of Lao PDR
the core strategy for HRD. The Ministry of Industry and Commerce is highlighted
here as a necessary agency for creating sustained economic development through
industrial policies. Other ministries may have to be added depending on the chosen
industry; in this case the Ministry of Transport is necessary for a green vehicle
program. Lastly, the Ministry of Science and Technology is tasked with coordinating
the different elements as they relate to STI strategy, which targets existing industries.
These stakeholders are responsible for the governance and implementation of the
programs in strategic STI infrastructure and HRD, which should be laid out in the
planning done by MPI.
Because industry stakeholders have limited capacities, engaging MNCs can provide
missing capacities. MNCs can be a source of finance, employment, technology, and
leadership. Government directed interactions with MNCs can help SMEs more
successfully absorb and develop capacities. Policies will also be necessary to ensure
that the institutions that are put in place are beneficial for all stakeholders involved.
These institutions can determine whether the industrial dynamics lead to economic
development or resource exploitation.
For stakeholders in other sectors of the economy, a consortium can be considered
as a platform to link government, university, research, and industry. It would also
link local-level concerns to national HRD priorities. NUL and MOST research centers
should be included and evaluated. When creating the consortium, the stakeholders
in industry and research must be evaluated for their interests, relevance, and capacities
to meet the objectives that are expected from each. Industry stakeholders will likely
require criteria that will identify potential stakeholders that can develop the necessary
functions and skills to operate in the market with minimal support. The evaluation
may determine that some new stakeholders will have to be established if incumbents
are inadequate. The consortium can also act as a conduit to international stakeholders
to coordinate domestic efforts.
The platform is still insufficient for successful innovation to occur in Lao PDR
because its system is still not mature enough to accurately read market signals. As
part of the consortium, MOST can act as the lead agency to drive innovation-based
policy. Since there are several line ministries and economic actors involved, MOST
is well-positioned to integrate and assimilate the different concerns into a coherent
action plan. As the central point for stakeholder interaction, the Ministry can access
the necessary information for decision-making regarding STI policies behind the
industrial platform and coordinate inter-ministerial STI interaction. In addition to
Chapter 7 Action Plan 107
its interactions with domestic stakeholders, MOST can also be responsible for
coordinating efforts of foreign partners in regards to STI.
The international consortium provides greater resources and capacity to implement
programs. A Lao-initiated consortium program for STI infrastructure might include
some of the following program components from outside of Lao PDR. Policy support
can be used to provide short-term supply for university professors to bolster R&D
and HRD capabilities. A solution provider (e.g. utility, content service, or telecom)
or multinational corporation might provide the necessary technology framework.
Multilateral institutions like the UN or the World Bank can interact through the
consortium providing expert consulting and financing.
Once these initial programs are developed, other policies can be considered to
expand the projects. For instance, special economic zones can be used to help transfer
technology (i.e. capital and knowhow). Taxes and other financial support policies
may also be necessary.
4. Financing
The Ministry of Finance has outlined the available funding from the Lao
government, amounting to 1% of GDP capital expenditures. Funding size should
not be the single objective of financing; it must also ensure that funding is continuous
and provides sufficient autonomy. The pilot survey found that stakeholders preferred
domestic funding over other sources. There are other sources of funding that can
be used including ODA, multilateral development banks, ASEAN and bilateral
financing. Private investment from related industries can also be sought from domestic
and foreign sources. Longer-term policies might also include increased tax revenue
as a result from economic growth spurred by the economic development. Effective
finance policy will harmonize the different sources of funding but ensure that
stakeholders have sufficient resources to meet aims directed towards economic
development.
The most prominent obstacle that most stakeholders cite is a lack of financing,
so most planners also allow these constraints to define their programs. Instead, this
report suggests identifying programs and then tailoring financing schemes
appropriately. With this and the pilot survey results in mind, seed funding can be
provided for initial projects. While available financing may limit what implementation
cviii STI Strategies for Poverty Reduction: The Case of Lao PDR
can be accomplished in the short run, projects should have long-term goals that
are divided into smaller milestones that can be achieved with the financial (and other)
resources available. Moreover, once financing is allocated, it should be secure for
the length of the project.
Seed funding will be relatively smaller, and therefore more likely to be feasibly
raised domestically. Without external support, the projects will gain autonomy. Lao
PDR will also be able to manage continuity of funding if targets are lower and
gradually raised. These can be augmented through foreign aid. As seen in current
policies, international donors have been supportive of HRD and are beginning to
demonstrate a greater appreciation of STI. Yet, many current R&D areas that are
supported by aid do not drive industrial growth (e.g. clinical health research and
environmental). Financial policy can be tied to ODA to encourage R&D investment
in strategic sectors. Alternatively, research clusters could provide a mechanism for
international cooperation and financing.
5. Milestones
As part of the action plan, milestones serve as an elementary form of coordination
and governance that allows the engaged stakeholders to understand what is expected
from them and what they can expect from others. The milestones will necessarily
evolve as the project moves forward. At this initial stage of the action planning,
it is necessary to plan the milestones that are necessary to move the next stage,
which should provide financing of preliminary activities. There are several outcomes
that are identified to be used to engage necessary stakeholders and elicit funding.
DTI should initiate the consortium to implement the programs by continuing to
engage those stakeholders that are currently involved and reaching out to those
stakeholders that are necessary. DTI is expected to identify relevant stakeholders
in government, industry champions, and research. Government stakeholders have
already been engaged through the workshop but it may still be necessary to ensure
their full participation. Champions should be identified where existing and
incorporated into planning and implementation. Lobbying may be necessary for
critical stakeholders for which there are no alternatives. Later, additional industry,
investment, and research stakeholders can be included as part of the consortium.
As a preliminary step, a taskforce team for the green energy and green transportation
Chapter 7 Action Plan 109
projects should verify the rationale for the project.45) Once the rationale is accepted,
an advisory group can be formed to provide counsel to DTI in guiding the stakeholder
activities and planning. The rationale should be clearly communicated to domestic
stakeholders. As part of the consortium that targets an industry led by a global industry
stakeholder, DTI should survey industry incumbents to understand the capabilities
and resources that are available in Lao PDR.
The initial milestones that are set provide the necessary direction for stakeholder
activity. The research results will be disseminated through this report and a workshop
held in 2015. The workshop is intended to engage necessary implementing
stakeholders. The first major requirement is to have stakeholders verify the findings
of the research. In other words, agreement should be made on the industry platform.
The report46) provides guidelines for the implementation of the programs such that
they can be designed to overcome existing bottlenecks and to enable coordination
and direction by the central government across the industry platform. Implementing
stakeholders must understand what their functions and objectives are so they can
determine whether they have the requisite resources (e.g. capacities, skills, funding,
etc.). It is necessary to continuously reevaluate the progress of activities to make
sure that the long-term goals are met by short-term projects.
45) Note: Another industry platform might be found as more suitable.
46) The results of the report will be presented in January 2015 in Vientiane. This report will be published
in English and Lao to facilitate dissemination both domestically and internationally. DTI will provide
cultural contextualization along with overseeing the translation.
cx STI Strategies for Poverty Reduction: The Case of Lao PDR
｜Chapter 8│Conclusion and Lessons
1. Conclusion
Lao PDR faces several bottlenecks including poverty and natural resource traps,
misalignment of industry and research, and policy gaps. System resources include
income from minerals and energy. The 3C/3A Diagnosis and Prescription suggests
that strategic planning in R&D and HRD should be coordinated on relevant and
consistent goals targeting a dual energy-driven green industry platform. A steering
governance mechanism must be created to coordinate these elements. Although the
pilot survey results are insufficient for action planning, elements are extracted from
it to apply to action planning. University is seen as a strong implementing agent
and domestic funding is preferred over ODA. Despite these results, it is clear that
the Government of Lao PDR must develop an action plan to develop its innovation
capacities, especially those of industry. When crafting the action plan, the following
lessons learned should be applied.
The field survey provides background information for a diagnosis of the innovation
capacity within a national framework, known as a national innovation system. The
field survey was limited in scope but provides a sense of the capacities of the
incumbent stakeholders, the resources available, and the limitations within the system.
The central strategy that the Ministry of Planning and Investment currently pursues
focuses on human resources development as core capacity but it currently neglects
market needs. As the National Strategy 2020 is being developed, these needs must
be taken into consideration while also incorporating the reality of economic
integration under the WTO and ASEAN Economic Community.
The current capacities of the stakeholders reside predominantly with the
government and international organizations but there are some companies that also
demonstrate initial capacities in some sectors. While R&D and HRD capacities are
weak, the existing capacities are first examined in industry and in governance in order
to identify what gaps exist to be filled through the program design process. All of
the companies are heavily influenced by the government or even supported by the
government through funding and industrial policies.
Four companies were visited and provide examples of different types of industry
Chapter 8 Conclusion and Lessons 111
in Lao PDR. These examples demonstrate potential but also show that there are
bottlenecks that exist, preventing them from reaching that potential. Bottlenecks can
be divided into different sectors including industry, R&D/university, domestic market
and global environment. Industry has weak production chains, is dependent on
resources and imported technology and lacks management skills. R&D/Universities
have low R&D capacity and limited HRD capacity. The domestic market has low
demand, weak infrastructure and lacks financing. The global environment places high
competitive and IP regime pressures. Additionally, ODA stakeholders impose
expectations that consume resources. Government intervention is required to
overcome these bottlenecks.
The businesses are found in manufacturing and service. Companies that focus
on the production of goods include the Dae-Heuang Group and Pharmaceutical
Company No. 2. The Dae-Heuang Group focuses on meeting domestic demand
of agricultural-based goods. Pharmaceutical Company No. 2 also targets domestic
demand but intends to expand to the ASEAN market. These companies show that
there is industrial capacity in Lao PDR to manufacture secondary goods and
pharmaceutical products. On the service side, there are ETL and EDL that provide
IT and electricity generation. ETL is a national company that aims to provide frontierlevel service to the Lao population. It attempts to support a supply chain by sourcing
products and services tailored for the domestic market. EDL is the national electricity
utility company that manages energy generation and distribution.
In relation to EDL, NT2 also demonstrates the capacity that is provided through
a joint partnership with the international community. NT2 is a pilot project that
jumpstarted the hydroelectricity industry in Lao PDR. It still provides best practices
through its management and interaction with domestic stakeholders in the system.
These best practices, however, are not being distributed in a systematic way to other
parts of the economy. Institutions should be developed to maximize the value of
existing knowledge.
Management capacities are demonstrated by these companies that can be supported
through industrial policies that target growth through strategic STI. From this
standpoint, the government also demonstrates its capacities to provide support to
its industrial players and to act as an intermediary between stakeholders. All the
companies are supported through policy that provides favorable land, operations,
and/or financial provisions. Land policy is used to provide property for factories
or for concessions for necessary infrastructure. Regulations are sometimes imposed
cxii STI Strategies for Poverty Reduction: The Case of Lao PDR
to ensure that all segments of the population are served. For instance, ETL is expected
to provide service to those who do not live in market-viable areas. Its competitors
operate regionally where they find market demand competitive.
Governance capabilities also extend to managing relations with international
companies and organizations, especially in the mining and electricity industries.
Concession agreements are highly important components of policy. Different aspects
of the agreements fall under the purview of almost all the ministries. For instance,
although the Ministry of Energy and Mines is an obvious agency that deals with
the agreements, the Ministry of Education and Sports is also included in their details
to plan and provide human resources for the industry. Whereas foreign investment
is managed by the Ministry of Planning and Investment, Lao labor preferences are
enforced by the Ministry of Social Welfare. FDI policies are an instrument that
requires finance and investment decision capacity. Governance capabilities also
include the coordination between inter-ministerial agencies, which is institutionalized
through organizational structure and staff.
While the innovation system in Lao PDR has certain capabilities, it also has
resources with which it can apply those capabilities. Its natural resources are most
valued in the system and include hydropower, minerals and metals, and agriculture
and forestry products. These resources provide the large majority of economic output
as measured by GDP. The value of these products has driven the rise in GDP per
capita rapidly in the past decade (Lao Statistics Bureau, 2007). The process was
supported through ODA and FDI policies. In light of the capacities and resources
that are available, the Lao PDR system still has some limitations in R&D, HRD,
and governance policy. While the statistical research conducted showed that Lao PDR
has a small market with limited human resources, the field survey confirmed and
expanded the information that the study could use for the diagnosis of the innovation
system. Additionally, the pilot survey suggested that stakeholders prefer domestic
sources of support over ODA.
To be competitive, stakeholders must be able to add value through their industrial
activities. Increasing added value requires innovation capacity that is missing. Firms
are dependent on imported technology and human resources. In the global
pharmaceutical industry, R&D is an important component to maintain competitiveness
and value. Even in manufacturing and processing, capital is imported at a premium.
The supply chain is also weak because there are few providers that can be found
in the system. Similarly, competitive financing is typically unavailable to Lao
Chapter 8 Conclusion and Lessons 113
companies. Yet, R&D capacity found in the research institutes and university are
highly limited and do not meet the needs of industry. NAFRI focuses on agricultural
research that largely remains in repositories rather than support industrialization.
REMI conducts research to absorb technologies supported by foreign donors but
do not improve competitiveness. Rather than improving their market position, firms
become ensconced in low-value sectors. By targeting specific technologies, Lao PDR
may be more successful at localizing them through an R&D program.
Government strategies focus on HRD because skilled workers are necessary for
a successful economy. Currently, HRD is more sensitive to the goals developed by
the international community rather than the Lao economy. NUL has developed a
pilot program in software development but there is little demand in the job market
when students complete their studies. In contrast to value added to each sector,
most Laotians still work in agriculture and only a few in industry. The labor supply
that is available is still too concentrated in low skilled farming or creating highly
educated employees for white collar firms that are lacking from the economy.
Innovation-oriented policies require that systems for industrial R&D and HRD are
advanced indigenously. Industry is characterized by low innovation and low
value-addition. HRD has focused on primary education that does not respond to
demands of the labor market. Vocational centers are part of strategies undertaken
by both the Ministry of Education and Sports and the Ministry of Labor, yet the
output of these centers does not meet market needs. They produce technicians in
fields that lack growth, so coordination may be needed. The government provides
guidelines but they are not always well defined. As an example, human capacity
development does not match the direction of economic development (i.e.
hydroelectricity and mining). Instead of engineering departments, faculty in economics
is growing. The Human Resource Development Strategy formulated by the Ministry
of Education and Sports must set government priorities for future drivers of economic
growth. Some of these shortcomings are recognized and are being analyzed in the
new strategy. HRD strategies should be coordinated with other policies, i.e. industrial
policies, to ensure that the needs of the system are met.
The review of policies indicated that, although they are appropriate, they do not
fully meet the needs to create sustainable economic growth because they are too
dependent on increasing inputs into the economy to generate growth. The economy
still has an immature market with weak industrial players that find it difficult to
build capacity and competitiveness because some policies are missing and others may
cxiv STI Strategies for Poverty Reduction: The Case of Lao PDR
inadvertently hinder growth (i.e. causing “Dutch disease”). The policy effects have
limitations of being too focused on generating income through increased inputs and
should attempt to diversify industrial sources of revenue. There has been limited
growth in industry and manufacturing growth. Other sectors of the economy must
be strengthened in order to ensure long-term economic sustainability.
The central government aims to have at least one product that is competitive
in the global market. Most existing strategies are based on import-substitution but
specific sectors and business models should be targeted. It would be more sustainable
to consider business models that have higher added value and are competitive in
the global market. The domestic market is too small and therefore foreign markets
must be considered. Institutional capacities to manage, to promote sectors, and to
acquire technologies need to be developed. The Department of Science must have
planning and coordination mechanisms. As newest ministry, MOST has difficulty
convincing other stakeholders, so its capacities must also be developed beginning
with a strong rationale for its activities. By developing this rationale as part of a
driving mechanism for industry, other stakeholders can be readily involved and
coordinated. For instance, international cooperation needs to have short-, mediumand long-term goals that focus on capacities to be absorbed. Technology transfer
from universities to industry is limited, so intellectual property rights should facilitate
tech transfer. In order to encourage FDI and tech transfer, intellectual property legal
framework and management skills (i.e. licensing) are required. Absorptive capacity
is also needed in industry (i.e. machinery embedded, process technologies). Current
laws may not be appropriate for implementation and coordination.
Nonetheless, the Government of Lao PDR can prepare its economy for sustained
growth by focusing on developing its innovation capacity. The government recognizes
these changing conditions and is responding to them with policy analysis and action.
The infrastructure of Lao PDR has expanded and more strongly connects the
economy to the rest of the global economy. It used newfound income in minerals
and energy to invest in building industrial infrastructure in these sectors. The policies
are multifaceted, considering social, environmental and health in addition to economic
issues. While they have increased income from the main sources of revenue, primary
objectives of development policy ensure that local people, especially rural and affected
populations, are prioritized. Since the population has been growing steadily, it is
necessary for education policy to keep pace.
At the moment, policies focus on developing management capacity without a
Chapter 8 Conclusion and Lessons 115
comprehensive view of industry or R&D. Each line ministry has been pursuing its
goals individually, which has created inconsistencies in overall planning. The main
goal of this project is to increase absorptive capacity of Lao PDR and its stakeholders
using collective priority setting. In order to overcome the limitations that exist in
the system, collective priorities will enable coordination and greater scale with limited
resources. It is necessary to create relevant programs that are tailored to the business
models identified and within the potential capabilities of stakeholders. Industry
limitations are generally recognized but specific alignment between policies and
capabilities must be improved to ensure that necessary capacities are acquired or
developed. For instance, vocational training in hydroelectricity and mining would be
more appropriate than general education programs.
This research provides mechanisms through an industry platform that enables the
Government of Lao PDR to direct and coordinate programs and activities. A holistic
diagnosis puts multiple bottlenecks into perspective so that a future-oriented solution
can be incorporated into the industry platform. These are devised into the action
plan provided. Specific lessons that can be extracted from researching STI system
and policy in Lao PDR are listed in the next section.
2. Lessons Learned
● Since there were only a few stakeholders with significant capacity in government,
it was practical to hold discussion panels to establish an action plan to develop
an industry platform. The limited availability of statistics required a combination
of research methods, ultimately involving brainstorming discussions. The limited
capacities of stakeholders made survey results straightforward but lacking in
nuance. Responses were either unvaried calling for broad intervention or
unanimously targeting single stakeholders for action. “Innovation” is an
unfamiliar concept in Lao PDR, which suggests that consensus can be delicate
and necessary for the diagnosis, solutions, and action plan. Additionally,
customized planning is necessary to create action plan that is future-oriented,
holistic, and consistent.
● Lao PDR stakeholders demonstrate that many development strategies have been
absorbed but implementation has led to piecemeal policies that lack holistic
strategy. Policymaking is currently biased towards natural resources and
cxvi STI Strategies for Poverty Reduction: The Case of Lao PDR
MDG-related goals. Current policy targets natural resource dependent industries
with limited industrialization programs. The dominant industries are in
extraction, agriculture, and hydropower. This may turn into a natural resource
trap. Separate priorities for individual ministries have resulted in poor
implementation results, possibly because policies were not coherent with each
other. Although important, basic education and health programs had no relation
to other sectors. An aid trap may exist by proliferating priorities without
providing sufficient resources to achieve them.
● The strategies lack sufficient market-orientation. Industry has been left
non-competitive in the global market. Policies generally targeted the domestic
market, which has low economic demand due to the low-income status of
the country. An emphasis on environmental protection, likely a result of
international donor influence, equally diverts resources from economically
focused activities. Education policies focused on sectors that do not have
domestic labor demand, e.g. software and business administration. Other
sectors, however, face weak labor supply and are dependent on migrant
workers who have technical skills in hydropower or mining engineering.
● Specifically, industry lacked competitiveness, and industrialization strategies do
not adequately address it. Existing green energy programs, e.g. biofuel
cook-stoves, did not sufficiently add value to products. The available STI
infrastructure may have constrained this dynamic. The focus on the domestic
market would also constrain demand because consumers would not be able
to afford high value-added products.
● Previous policies did not adequately consider stakeholder capacities. Directives
were given to ministries without ensuring they had the resources to complete
the aims of policy. Although most stakeholders consider NUL to be the main
actor for core capacity building through HRD, the fact that NUL was struggling
to meet its current demands for educating a rapidly growing student population
may have doomed the policy to failure. In general, stakeholder responsibilities
and priorities are too concentrated and unevenly distributed. Each sector in
the economy must have its objectives to complete that are distinct and
complementary to its counterparts.
Reference 117
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cxx STI Strategies for Poverty Reduction: The Case of Lao PDR
｜Appendix 1｜Agenda for field visit to NIS
Stakeholders, Lao PDR
∎ Program
Day 1
5 March 2013
08:30–09:00 Visit Department of Technology and Innovation (DTI), MOST.
Meeting with departments of most which related to NIS, include:
The Cabinet Office, DTI, Lao Academy of science, The Science Department,
The Planning & Cooperation Department, The Intellectual Property Department,
09:00–12:00
The Standard & Metrology Department, The Renewable Energy and Biotechnology
Institute, The Biodiversity and Biotechnology Institute,
The Computer Technology and Electronic Institute.
13:30–14:00 Visit National Agriculture and Forestry Research institute (NAFRI)
14:00–16:00 Visit National University of Lao.
Day 2
6 March 2013
8:30–12:00
Visit Departments of Ministry for planning and investment, include:
The Cabinet Office, Department of Planning ,Department of Investment
Promotion, National Economic Research Institute, Evaluation Department and
others related departments.
Visit Departments of Ministry of Education and Sport, include:
The Cabinet Office, Higher Education Department, Foriegn Relation Department
13:30–14:00
The Planing & Cooperation Departments, Strategy Research and Analysis Center
Research Institute Education and Science (RIES) and others related departments.
Day 3
7 March 2013
08:30–10:00 Visit Small and Medium Entrepreneur Offfices (SMEPDO)
10:00–12:00 Visit Department of Industrial, ministry of commercial and Industry
13:30–16:00 Visit Chamber of Commerce.
Day 4
8 March 2013
08:30–10:00 Visit Lao ETL company or TV
10:00–11:00 Visit Daohieng Group company
11:00–12:00 Visit Pharmacy Number 2
13:00–16:00 Hyrdroelectricity Company
Appendix 121
∎ List of Participants
Ministry of Science and Technology, 05 March 2013, time 13:30–14:00
No.
Name
Position and Organization
1
Rhaychill SENGMANY
Deputy Director General, Renewable Energy
2
Dr. Siphone Sengculichan
Deputy Director General, DOS, MOST
3
Kinnalone SOUPHANTHONG
Deputy Director Division, Deputy planning
& International Cooperation
4
Somphavanh RADAVANH
Deputy Director Division, Ecology and
Technology (BEI)
5
Dr. Silap Boupha
Deputy Director Division, MOST
6
Khaukeo SENGINVONG
Technical, BEI
7
Mr. Ratsamy PHANTHAVONG
Deputy Director General, DIP
8
Mr. Parita SENGTIANTHR
Deputy Director-General, Technology
Computer & Electronic Institute
9
Mr. Soumana CHOULAMANY
Director-General, DTI
10
MS. Phouthasone Sinthavong
Director Division, DTI
11
N.Srinivasan
In-charge Innovation management,
APCTT-UNESCAP
12
Lee,Jeonghyop
Director STI Development Center, STEPI
13
Sira MALIPHOL
Researcher, STEPI
14
Fain Yang
Researcher, STEPI
National Agriculture and Forestry Research Institute (NAFRI), 05 March 2013
No
1
Name
Mr. Soulivanthong Kingkeo
Position and Organization
Deputy Director General, NAFRI
List name of University of Laos, 05 March 2013, time 14:00–16:00 pm
No.
Name
Position and Organization
1
Asso Prof Dr. Phetsamone Khounsavanh
2
Prof Dr. Boualin Soysouvanh
Dean, Faculty of Engineering, NUOL
3
Asso prof. Souphab Khouangvichit
Dean, Faculty of Environmental science
4
Asso Prof. Kongchay Sisouraj
Vice Dean, Faculty of Natural science
5
Asso Prof. Souphanh Pasouvong
Vice Dean, Faculty of agriculture
6
Asso Prof. Houngphet Chathavong
Dean, Faculty of Forest
7
Asso Prof. Bounheng Siharath (Ms)
Deputy director, International Relations
Dean, Faculty of Engineering, NUOL
cxxii STI Strategies for Poverty Reduction: The Case of Lao PDR
List name of Ministry of Planning and Investment, 06 March 2013, 08:30–10:00
No.
Name
Position and Organization
1
Mr. Khonsavath Sitthirath
IT Officer, Cabinet office
2
Mr. Phonethavong Singhalath
Director, Investment Promotion Department
3
Mr. Kalouna
Deputy Director, Department of Planning
4
Mr. Sengmany
Deputy Director, Evaluation Department
5
Mr. Kingphet Atsanavong
Director, IT Division of Lao Statistics
Bureau
6
Mr. Fongsamout khamvalvongsa
Dept Permanent Secretary, Cabinet Office
7
Mr. Vilakone Chanthavongsa
IPD Officer, Investment Promotion
Department
8
Mr. Houmphan
Dept Director-General
9
Dr. Leebor Leebouapao
Director General, National Economic
Research Institute, MPI
Visit Daohieng Company, 06 March 2013, 10:00–12:00 am
No.
1
Name
Mr. Ninhlamay Sengmany
Position and Organization
Advisor of President, Dao-Heung Group
Company
List name of Ministry of Education and Sport, 06 March 2013, time 13:30–14:00
No.
Name & Surname
Position and Organization
1
Dr. Keomany Sisaikeo
Director Division, Dept of Higher Education
2
Mr. Ammany Nalin
Acting Director Division, External Relations
Dept
3
Mr. Phouvanh Vongsouthi
Deputy Director-General, Department of
Planning
4
Mr. Souliya Sayasinh
Deputy of Head Programme and Research,
ESICT
5
Mr. Anoupheung Keovongsa
Acting Director of PMD, Department of
Planning
6
Mrs. Haythin
Deputy Section, Department of Planning
7
Dr. Bounpanh Xaymountry
Deputy Director-General, Department of
Planning
8
Miss. Sinakhone pratoomrad
Deputy Director, Cabinet Office
9
Mr. Souksavanh
Deputy Director, Research Institute
Education of Science
Appendix 123
Visit ETL Company, Lao PDR, 06 March 2013, time 14:00–16:00 pm
No.
Name & Surname
Position and Organization
1
Mr. Khamla Syaphone
Director Division, ETL company
2
Dr. Thavisack Manodha
Director Division, ETL company
Visit Nam Theun 2 power company Limited, 07 March 2013, time 08:30–10:00 am
No.
Name & Surname
Position and Organization
1
Mr. Pat Dye
Government Affairs & Cooperate,
Communications Director, Nam Theun 2
power company Limited
2
Mr. Olay Phommavong
Regional Communications Officer, Nam
Theun 2 Power Company Limited
List name of Ministry of Energy and Mines, 07 March 2013, time 10:00–12:00
No.
Name & Surname
Position and Organization
1
Mr. Chantho Milattanaphaeng
Department Director General, IREP, MEM
2
Mr. Phimphone Latsavong
Deputy of RED, IREP, MEM
3
Mr. Vilaboun Chittanousone
Deputy Chief Director, DEB, MEM
4
Mr. Aksone Khamsavath
Director Division, DEB, MEM
5
Mr. Houmphan Vongphachan
Director Division, DEB, MEM
6
Mr. Phonepasong Sithideth
Acting Chief Director, IREP, MEM
7
Mr. Kongkham Chathavichith
Director of Division, DOM, MEM
8
Mr. Somdeth Lakhonvong
Technical Officer, DEPP, MEM
9
Miss. Amphailin Sengsoulin
Technical Officer, IREP, MEM
10
Miss. Saly Engmany
Technical Officer, IREP, MEM
IREP = Institute Renewable Energy Promotion
DEB = Department of Energy Business
DEM = Department of Energy Management
DOM = Department of mines
DEPP = Department of Energy Policy and Planning
MEM = Ministry of Energy and Mines
cxxiv STI Strategies for Poverty Reduction: The Case of Lao PDR
List name of Ministry of Commercial and Industry, 07 March 2013, time 13:30–16:00
No.
Name & Surname
Position and Organization
1
Mr. Sa Siriphong
Director, SME promotion
2
Mr. Nilanlath SRAMMANY
Officer, ERII
3
Mr. Khamphanh HEUHIUGMANY
Chief, SIC/DPC/MOIC
4
Mr. kinon Khamvisith
Deputy Director of Division, Dept. of
Industry and Handicraft
5
Ms. Sodavanh Souvannaphoum
Deputy Division, Foreign Aid Division
Department of Planning and cooperation
6
Mr. Khounekham Inthasone
Deputy Division, Dept. of foreign Trade
Policy
7
Mr. Ounheuane Plalatyotha
Officer, Dept. of Trade and Production
Promotion
8
Ms. Sengdavone Bangonesengdet
Deputy secretary general, Lao National
Chamber of Commerce and Industry
Visit Pharmacy Factory Number 2, 08 March 2013, time 10:00–12:00 pm
No.
1
Name & Surname
Mr. Phetsamone Philomluck
Position and organization
Deputy Director, Pharmacy Factory No. 2
Appendix 125
｜Appendix 2｜National Innovation System
of Lao PDR Diagnosis & STI Strategy
Development 2013
∎ Program Details
Date: 22-23 October 2013, Vientiane, Lao PDR
∎ Progam
Day 1
22 October 2013
09:00-09:30 Registration
Opening Session
09:00-09:15 Welcoming Remarks
09:15-09:30 Nanjundappa Srinivasan, APCTT
09:30-09:50 Dr. Jeong Hyop Lee, STEPI
Mr. Houmphanh Intharath, Deputy Minister of Most, Lao PDR
09:50-10:00 Photo (All Participants)
10:00-10:10 Coffee Break
Session I: NIS Overview
10:10-10:40 Promotion of National Innovation Systems in the Asia-Pacific Countries by APCTT:
The Way Forward
Nanjundappa Srinivasan, APCTT
10:40-11:10 Key Components of National Innovation Systems
Dr. Satyabrata Sahu, APCTT
11:10-11:40 Linking Science and Industry: The Case of Korea
Dr. Jeong Hyop Lee, STEPI
11:40-12:00 Discussion
12:00-13:30 Lunch
Session II: Lao NIS Linkages & Partnerships of Key Actors
13:30-14:00 Government Role in the NIS of Lao PDR
Mrs. Khamnhong Sichanthvong, DTI, MOST
14:00-14:30 Research Role in the NIS of Lao PDR
Souksavanh Phonetheva, Research Institute for Educational Sciences
Ministry of Education and Sport
cxxvi STI Strategies for Poverty Reduction: The Case of Lao PDR
14:30-14:45 Coffee Break
14:45-15:15 Industry Role in the NIS of Lao PDR
Viengsavang Thipphavong, Economic Research Institute for Trade.
Ministry of Industry and Commerce
15:15-16:00 Discussion
Day 2
23 October 2013
Session III: Diagnosis and Strategy Development of Innovation System of Lao PDR
09:00-09:30 Diagnosis and Strategy Development: The STEPI Approach
Dr. Jeong Hyop Lee, STEPI
09:30-10:20 Lao PDR NIS Socioeconomic Context, Survey Results & Policy Review
Sira Maliphol, STEPI
10:20-10:40 Coffee Break
10:40-11:10 Synthesis of Lao Innovation System Diagnosis and Strategic Direction
Dr. Jeong Hyop Lee, STEPI
11:10-12:00 Discussion: Stakeholder Elaboration on Diagnosis and Strategies
12:00-13:30 Lunch
Session IV: Benchmarking for Master Planning and Implementation
13:30-14:00 Nepal STI Implementation Strategies
Prof. Krishna Raj Shrestha, RECAST
14:00-14:30 Necessity of STI Development: Bangladesh PerspectiveMatiur Rahman, MOST,
Bangladesh (TBC)
14:30-14:50 Coffee Break
Session V: Master Plan of Technology & Innovation Development in Lao PDR: Moving Forward
with Key Stakeholders in Lao PDR
14:50-15:20 Lao PDR Pilot Questionnaire Survey Results and Analysis
Fine Yang, STEPI
15:20-16:00 Discussion
∙ Priority Setting with AHP
∙ Program Design
∙ Funding
∙ Implementation
Closing Session
16:00-16:30 Closing Remarks
Mr. Soumana Choulamany, DTI, MOST, Lao PDR
Nanjundappa Srinivasan, APCTT
Dr. Jeong Hyop Lee, STEPI
Appendix 127
∎ List of participants
No
Name
Position and organization
1
Mr. Pat Dye
Government Affair & Cooperate,
Communications Director, Nam Theun 2 power
company Limited
2
Mr. Olay Phommavong
Regional Communications officer, Nam Theun
2 power company Limited
3
Mr. Chantho Milattanaphaeng
Officer, Nam Theun 2 power company Limited
4
Mr. Phimphone Latsavong
Department Director General, Ministry of
Energy & Mines
5
Mr. Vilaboun Chittanousone
Deputy Chief Director, Ministry of Energy &
Mines
6
Mr. Aksone Khamsavath
Director Division, Ministry of Energy & Mines
7
Mr. Houmphan Vongphachan
Director Division, Ministry of Energy & Mines
8
Mr. Phonepasong Sithideth
Acting Chief Director, Ministry of Energy &
Mines
9
Mr. Kongkham Chathavichith
Director of Division, Ministry of Energy &
Mines
10
Mr. Somdeth Lakhonvong
Technical Officer, Ministry of Energy & Mines
11
Miss Amphailin Sengsoulin
Technical Officer, Ministry of Energy & Mines
12
Miss Saly Engmany
Technical Officer, Ministry of Energy & Mines
13
Mr. Sa Siriphong
Director, Ministry of Commercial and Industry
14
Mr. Nilanlath SRAMMANY
Officer, Ministry of Commercial and Industry
15
Mr. Khamphanh HEUHIUGMANY
Chief, Ministry of Commercial and Industry
16
Mr. Kinon Khamvisith
Deputy Director of Division, Ministry of
Commercial and Industry
17
Ms. Sodavanh Souvannaphoum
Deputy Division, Ministry of Commercial and
Industry
18
Mr. Khounekham Inthasone
Deputy Division, Ministry of Commercial and
Industry
19
Mr. Ounheuane Plalatyotha
Officer, Ministry of Commercial and Industry
20
Ms. Sengdavone Bangonesengdet
Deputy Secretary General, Ministry of
Commercial and Industry
21
Mr. Phetsamone Philomluck
Deputy director, Pharmacy Factory No. 2
cxxviii STI Strategies for Poverty Reduction: The Case of Lao PDR
｜Appendix 3｜Consultative Workshop on
Open Innovation Platform 2013
∎ Program details
- Date: 13-14 November 2013, Kuala Lumpur, Malaysia
- Venue: Hotel Istana, Permata Room
∎ Program
Day 1
13 November 2013
12:00–14:00 Registration of the delegates
14:30–15:30 Opening Ceremony of OIP Workshop
∙ Introduction to Workshop by Mr. Michael Williamson, Head-APCTT
∙ Speech by YBhg. Datuk Abdul Wahab Abdullah, President and CEO of MIMOS
∙ Opening Address by YBhg. Dato' Dr. Rosli Mohamed, Secretary-General of
MOSTI
15:30–15:45 Coffee Break
Session I: STI Strategy Development in the Open Innovation Policy Framework and Country
Presentation
15:45-17:00
∙ Diagnosis and Strategy Development: the STEPI Approach by Dr. Jeong Hyop
Lee, STEPI
∙ Lao PDR NIS Socioeconomic Context, Survey Results & Policy Review by
Ms. Juyoon Sun, STEPI
∙ AHP Pilot Survey for Priority-setting Process by Ms. Fine Yang, STEPI
∙ Synthesis of Lao Innovation System Diagnosis and Strategy Direction by Dr.
Jeong Hyop Lee, STEPI
17:00-18:00
Presentations on the concept of Open Innovation Platform by Member Countries
18:00
Day 2
End of Workshop
14 November 2013
Session II: Open Innovation Platform for ICT
09:00–09:45 Welcoming Remarks by YBhg. Datuk Abdul Wahab Abdullah, President and CEO
of MIMOS
09:45–10:45 Technologies Presentation and Showcase
10:45–11:00 Coffee Break
11:00–12:00 Visit to Wafer Testing Lab and Reliability Lab
12:00–14:00 Lunch
Appendix 129
Session III: OIP Business Model and the Way Forward
14:00–14:30 Proposed Business Model of MIMOS OIP by Mr Ramesh Kumar Nadarajah, Legal
Director
14:30–15:30 Panel Discussion on OIP and the Way Forward (Panel-list: YBhg. Datuk Abdul
Wahab Abdullah, Mr. Ramesh Kumar Najarajah, Dr. Masuri Othman, Dr. Jeyong
Hyop Lee, Mr. Michael Williamson, Mr. N. Srinivasan)
15:30–16:00 Tea Break
16:00–16:30 Summary of Findings and Recommendations, and Closing Remarks by Dr. Masuri
Othman, MOSTI
16:30–17:00 Certificate Presentation
17:00
End of workshop
∎ List of Participants
No.
Name
Position and Organization
1
Mr. Shahadat Hosan
Assistant Chief, Ministry of Science and
Technology
BANGLADESH
2
Professor Liu
Dongbo
Hunan Agricultural University
CHINA
3
Mr. K Kamal
Adviser and Head IT-eG & BIRD-crf,
Department of Scientific and Industrial Research, INDIA
Ministry of Science and Technology
4
Mr. Manaek
Simamora
Technology Incubation Program Coordinator,
Centre for Innovation, Indonesian Institute of INDONESIA
Sciences (LIPI)
5
Mr. Mahmoud
Molanejad
Director of International Cooperation, Iranian
Research Organization for Science and
Technology (IROST)
6
Ms. Khamnhong
Sichanthavong
Deputy Director General, Department of
Technology and Innovation, Ministry of Science LAO PDR
and Technology
7
Director, Technology Commercialization,
Mr. Masuri Othman Ministry of Science Technology & Innovation MALAYSIA
(MOSTI)
8
Ms. Sumitra
Jayaseelan
9
Assistant Secretary, international Division,
Ms. Sheela Samivellu Ministry of Science Technology and Innovation MALAYSIA
(MOSTI)
Principal Assistant Secretary, International
Division, Ministry of Science Technology and
Innovation (MOSTI)
Country
ISLAMIC
REPUBLIC OF
IRAN
MALAYSIA
cxxx STI Strategies for Poverty Reduction: The Case of Lao PDR
No.
Name
Position and Organization
Country
Executive Director, Research Centre for Applied
NEPAL
Science and Technology (RECAST)
10
Prof. Ram Prasad
Chaudhary
11
Director, Technology Application and Promotion
Mr. Edgar I. Garcia Institute (TAPI), Department of Science &
PHILIPPINES
Technology (DOST)
12
Mr. Sanghun Lee
Director, International Cooperation Division,
REPUBLIC OF
Ministry of Science, ICT and Future Planning
KOREA
(MSIP)
13
Mr. Jeong Hyop Lee
Director, Center for STI Development, Science REPUBLIC OF
and Technology Policy Institute (STEPI)
KOREA
14
Mr. Sira Maliphol
Science & Technology Policy Institute
REPUBLIC OF
KOREA
15
Ms. Fine Yang
Science & Technology Policy Institute
REPUBLIC OF
KOREA
16
Mr. A. Piyasiri
Deputy Director General, National Engineering
SRI LANKA
Research & Development Centre (NERD Centre)
17
Mr. Nuttapon
Nimmanphatcharin
Director of Office of Corporate Strategic
Planning, Thailand Institute of Scientific and
Technological Research
18
Mr. Supoj Suttirat
Ministry of Science and Technology
19
Ms. Ngan Giang
Hoang
Department of International Cooperation,
Ministry of Science and Technology
20
Mr. Anhdung
Nguyen
Official, State Agency for Technology Innovation
Vietnam
(SATI), Ministry of Science and Technology
21
Mr. Michael
Williamson
Head of APCTT
APCTT-ESCAP
22
Mr. N. Srinivasan
In-charge, Innovation Management
APCTT-ESCAP
23
Mr. N. Suryaprakash Administrative Assistant
THAILAND
THAILAND
Vietnam
APCTT-ESCAP
Appendix 131
｜Appendix 4｜Pilot Survey for Priority-
setting Process
Pilot Survey
Questionnaire Objective:
This survey is to explore STI-based industrial development solutions that can guide
Lao PDR towards resolving its socioeconomic issues such as poverty reduction,
environmental protection, and balanced industry development.
Survey Methods & Process
● Pilot Survey (May-June 2013): This multiple-choice survey identifies main
sectorial STI priorities by asking respondents to select key criteria and
alternatives.
● Survey (July-Aug 2013): This survey will utilize AHP (Analytic Hierarchy
Process) methods on the key criteria and alternatives derived from the pilot
survey.
Survey participants
The questionnaire will be circulated to key actors in the Laotian government, R&D
institutions, universities, industry, and NGOs.
cxxxii STI Strategies for Poverty Reduction: The Case of Lao PDR
1. Industry
1.1. Please rank by priority the criteria of potential new industry.
(1–Excellent, 2–Very Good, 3–Good, 4–Satisfactory, 5–To be improved)
Key Criteria
1
2
3
4
5
1. Creation of added value
2. Export industrialization
3. Import substitution
4. Cheap labor
5. Resource utilization
6. Market opportunity
7. Job creation
8. Conformity with Laotian policy objectives
9. *
10. *
* If respondents have more ideas on key criteria, please provide in the table above.
1.2. Please rank by priority the industrial sectors that can be promoted based on
the above criteria.
Alternatives
1
2
3
4
5
1. Agriculture
2. Tourism
3. Food processing
4. Textile, Clothes
5. Pharmaceutical
6. *
7. *
2. Technology
2.1. Please rank by priority the criteria in introducing new technologies to promote
industry in Laos.
Key Criteria
1. Technology localization
2. Ripple effect (economic impact)
3. Conformity with Laotian policy objectives
1
2
3
4
5
Appendix 133
Key Criteria
1
2
3
4
5
4. Sustainable development
5. Technology absorptive capacity
6. Technology development cost
7. Technology acquisition possibility
8. Cost & benefit balance
9. *
10. *
2.2. Please rank by priority the technology alternatives that can be promoted based
on the above criteria.
Alternatives
1
2
3
4
5
1. Process technology
2. Machinery technology
3. Biotechnology
4. Appropriate technology
5. Hydro technology
6. Adaptive technology
7. Mining technology
8. Post-harvesting technology
9. *
10. *
3. Policy
3.1. Please rank by priority that polices that can improve Laotian socioeconomic
issues through industry & technology development.
Alternatives
1. Human resource development
2. Technology development
3. Facility investment
4. Build infrastructure(Inc. Laboratory)
5. Promotion of partnership & linkage among
stakeholders (e.g. University, industry, and research
institutes)
1
2
3
4
5
cxxxiv STI Strategies for Poverty Reduction: The Case of Lao PDR
Alternatives
1
2
3
4
5
6. Start-up support
7. *
8. *
3.2. Please explain your reasons for the above choices or share any further opinions
or requests pertaining to STI policy in Lao PDR.
4. Policy-making organization: government
4.1. Please rank by priority the criteria that are most urgent towards resolving
Lao PDR’s socioeconomic issues.
Key Criteria
1
2
3
4
5
1. Government procurement (financial)
2. Linkage & partnership-based implementation
3. Leadership
4. Coordination
5. Providing mediation & vision
6. Attracting FDI
7. Government funding management leadership
(incl. ODA)
8. *
9. *
4.2. Please rank by importance the government agencies that play the most
influential roles in resolving Lao PDR’s socioeconomic issues.
Alternatives
1. Ministry of S&T
2. Ministry of Planning & Investment
1
2
3
4
5
Appendix 135
Alternatives
1
2
3
4
5
3. Ministry of Education & Sports
4. Ministry of Energy & Mines
5. Ministry of Industry & Commerce
6. *
7. *
5. Implementation organizations
5.1. Please rank by importance the implementation organizations that contribute
to resolving Lao PDR’s socioeconomic issues.
Alternatives
1
2
3
4
5
1. Universities
2. Research institutes
3. Private companies
4. NGOs
5. *
6. *
5.2. Please explain your reasons for the above choices or share any further opinions
or requests pertaining to STI policy in Lao PDR.
6. Funding sources
6.1. Please rank by priority the criteria of funding sources that can help Lao PDR
improve its socioeconomic issues through industry promotion.
Key Criteria
1. Investment efficiency
2. Sustainability
3. Ownership
4. Funding scale
5. Continuity of investment
6. Secure funding
7. *
8. *
1
2
3
4
5
cxxxvi STI Strategies for Poverty Reduction: The Case of Lao PDR
6.2. Please rank by importance the investing mechanisms that can effectively
support Laotian issues based on the above criteria.
Alternatives
1
2
1. Public investment
2. Private investment
3. PPP (Public Private Partnership)
4. ODA (foreign donor agency)
5. *
6. *
Survey Results:
∙ Industrial promotion to develop Lao PDR economy
Criteria
Alternatives
3
4
5
Appendix 137
∙ Technology development/development
Criteria
Alternatives
∙ Funding sources
Criteria
cxxxviii STI Strategies for Poverty Reduction: The Case of Lao PDR
Alternatives
∙ Policy making organization: Government
Appendix 139
∙ Major actors for implementation & role of government
Major actors for implementation
Policy measure
cxl STI Strategies for Poverty Reduction: The Case of Lao PDR
∙ Specific responses for priority actors & policy measure for implementation
Respondents
Government
Group
IOs
NGOs
University
Industry
Research
Institute
University
Research
Institute
NGOs
University
University
Research
Institute
HRD
HRD
HRD
HRD
HRD
HRD
Actors
Measures
1:
2:
3:
4:
5:
6:
Human resource development
Technology development
Facility investment
Build infrastructure
Promotion of partnership & linkage among stakeholders
start-up support
Appendix 141
｜Appendix 5｜Brainstorming Workshop on
STI Strategic Action Planning 2014
∎ Program Details
- Date: 26-27 May 2014
- Venue: Mercure Vientiane, Lao PDR
∎ Program
Day 1
26 May 2014
08:30–09:00 Registration
Opening Session
09:00–09:30 Welcoming Remarks
Mr. Houmphanh INTHARATH, Vice-Minister, MOST
Dr. Jeong Hyop Lee, STEPI
Dr. Satyabrata Sahu, APCTT)
09:30–09:40 Group Photo
09:40–09:50 Coffee Break
Session I: STI Strategic Road mapping Background & Guidelines
09:50–10:10 Presentation: Preliminary assessment of the current technology enabling
environment and innovation ecosystem with specific reference to sustainable
energy
Speaker: Nanjundappa Srinivasan, ESCAP-APCTT.
10:10–10:40 Presentation: Methodologies for Road mapping and Action Planning
Speaker: Jet Shu, Advisor of Dept. of Industrial Technology, MOEA, Chinese
Taipei
10:40–11:10 Presentation: Lao PDR Innovation System Diagnosis and Solutions
Speaker: Jeong Hyop Lee, STEPI, ROK
11:10–11:40 Presentation: Action Planning for STI Strategies and Policies
Speaker: Sira Maliphol, STEPI, ROK
11:40–13:00 Lunch Break (Buffet)
Session II: STI Strategic Government and Priority Setting for Lao PDR
13:30–13:50 Presentation: International Context of the Lao Innovation Initiative and Review
of Existing Policies
Speaker: Haewon Kang, STEPI, ROK
cxlii STI Strategies for Poverty Reduction: The Case of Lao PDR
13:50–14:30 Presentation: Lao PDR STI Strategic Governance, Goal and Priority Setting.
Speaker: Mr. Kongsaysy Phommasay, DG, Department of Science, MOST
14:30–15:00 Presentation: Field Survey Review: STI Stakeholders
Speaker: Sira Maliphol, STEPI, ROK
15:00–15:15 Coffee Break
15:15–17:00 Discussion: STI Priorities for Lao PDR, continued
Day 2
27 May 2014
Session III: Program Design 1 –Strategic R&D Programs for Lao PDR
08:30–09:00 Presentation: Future Direction of Technology and Innovation.
Speaker: Mrs. Khamnhong Sichanthavong, Deputy Director General, DTI
Session IV: Program Design 2 –HRD Programs for Lao PDR
09:30–10:00 Presentation: Human Resource Development Program for Lao PDR
Speaker: (Dr. Phonephet Boupha , DG, Department of Higher Education, MOES)
Session V: Financing & Milestones
10:00–10:30 Presentation: Financing of STI Strategies, Policies & Programs
Speaker: Mr. Soulivath Souvannachoumkham, Ministry of Finance
10:30–10:50 Coffee Break
Session VI: Action Planning & Milestones
10:50–12:45 Discussion: Financing & Milestones
12:45–13:00 Closing Remarks
Mr. Soumana Choulamany, DTI, MOST
Dr. Jeong Hyop Lee, STEPI
∎ List of Participants
Organization
Title
Name
1
DTI
Director General
Mr. Soumana CHOULAMANY
2
DTI-MOST
Deputy Director General
Mrs. Khamnhong
SICHANTHAVONG
3
DTI-MOST
Deputy Director General Mr. Vilaysone BOUPHALATH
4
MOST
Director of TMD
Mr. Sengchanh PHASAYASENG
5
MOST
Director of IPDD
Mr. Soulideth SOUVANNLATH
6
MOST
Director of TSID
Mr. Lanthom OUTHACHACK
7
MOST
Acting Director of PSD Mr. Khampha THONGVANHNA
8
MOST
Director of AD
Mrs. Bounthom PHOUMIN
9
MOST
Technical
Ms Houangsa HONGLIKITH
10
MOST
Technical
Mr. khonesack KHOUTAVONG
Appendix 143
Organization
Title
Name
11
MOST
Technical
Ms Phanida NARKHAVONG
12
MOST
Technical
Ms Viengvilay THONGMANYLA
13
MOST
Technical
Ms Phout PHOMYXAY
14
MOST
Technical
Ms KHUNKEO SIHAVONG
15
MOST
Technical
Mr. Phouma SYVONGXAY
16
Cabinet-MOST
Mr. Phimpha OUTHACHACK
17
MOST
Lao Academic of
Science-MOST
Ms Vatsaly MYSAVATH
18
Department of
Science-MOST
Director General
Mr. Kongsaysy PHOMMAXAY
19
Department of
Science-MOST
Mr. Khamla PHOUMINH
20
Ministry of Planning
and Investment*
21
Ministry of Industry
and Commerce
Mr. Kavin SAYAVONG
22
Department of Higher
Education - Ministry of Director General
Education and Sport
23
Ministry of Finance
24
National University of
Faculty of Engineering
Laos
Dr. Keophusone PHONHARATH
25
National University of Director of Research
Laos
office
Prof.Dr Sounthone
26
Ministry of Labor
Mr. Vanhphone
27
MOST
Mr. Khatiphone
28
MOST
Mr. Phoumpaseud SIVONGSAY
29
DTI-MOST
MS Soudchai
SENGPHATOUMVANH
30
MOST
Deputy director of
planning and cooperation Mr. Soutthiphong VONGXAIYA
division
Dr. Phonephet BOUPHA
Director of Economic and Mr. Soulivath
Fiscal Policy Division
SOUVANNACHOUMKHAM
* Note: The representative from the Ministry of Planning and Investment attended but did not sign in.
cxliv STI Strategies for Poverty Reduction: The Case of Lao PDR
｜Appendix 6｜Millennium Development
Goals
The Millennium Development Goals and targets come from the Millennium
Declaration, signed by 189 countries, including 147 heads of State and Government,
in September 2000 (http://www.un.org/millennium/declaration/ares552e.htm) and
from further agreement by member states at the 2005 World Summit (Resolution
adopted by the General Assembly - A/RES/60/1, http://www.un.org/Docs/journal
/asp/ws.asp?m=A/RES/60/1). The goals and targets are interrelated and should be
seen as a whole. They represent a partnership between the developed countries and
the developing countries “to create an environment - at the national and global levels
alike - which is conducive to development and the elimination of poverty.”
Goal 1: Eradicate Extreme Hunger and Poverty
Target 1. Halve, between 1990 and 2015, the 1. Proportion of population below $1 (1993
PPP) per day (World Bank) a*
proportion of people whose income
is less than $1 a day
2. Poverty gap ratio [incidence x depth of
poverty] (World Bank)
3. Share of poorest quintile in national
consumption (World Bank)
Target 2. Halve, between 1990 and 2015, the 4. Prevalence of underweight children under five
proportion of people who suffer
years of age (UNICEF-WHO)
from hunger
5. Proportion of population below minimum
level of dietary energy consumption (FAO)
Goal 2: Achieve Universal Primary Education
Target 3. Ensure that, by 2015, children
6. Net enrolment ratio in primary education
everywhere, boys and girls alike, will
(UNESCO)
be able to complete a full course of 7. Proportion of pupils starting grade 1 who
primary schooling
reach grade 5 (UNESCO) b*
8. Literacy rate of 15-24 year-olds (UNESCO)
Goal 3: Promote Gender Equality and Empower Women
Target 4. Eliminate gender disparity in primary 9. Ratio of girls to boys in primary, secondary
and secondary education, preferably
and tertiary education (UNESCO)
by 2005, and in all levels of education
10. Ratio of literate women to men, 15-24 years
no later than 2015
old (UNESCO)
Appendix 145
11. Share of women in wage employment in the
non-agricultural sector (ILO)
12. Proportion of seats held by women in
national parliament (IPU)
Goal 4: Reduce Child Mortality
Target 5. Reduce by two-thirds, between 1990 13. Under-five mortality rate (UNICEF-WHO)
and 2015, the under-five mortality
14. Infant mortality rate (UNICEF-WHO)
rate
15. Proportion of 1 year-old children immunized
against measles (UNICEF-WHO)
Goal 5: Improve Maternal Health
Target 6. Reduce by three-quarters, between 16. Maternal mortality ratio (UNICEF-WHO)
1990 and 2015, the maternal mortality
17. Proportion of births attended by skilled
ratio
health personnel (UNICEF-WHO)
Goal 6: Combat HIV/AIDS, Malaria and other diseases
Target 7. Have halted by 2015 and begun to 18. HIV prevalence among pregnant women
reverse the spread of HIV/AIDS
aged 15-24 years
(UNAIDS-WHO-UNICEF)
19. Condom use rate of the contraceptive
prevalence rate (UN Population Division) c*
19a. Condom use at last high-risk sex
(UNICEF-WHO)
19b. Percentage of population aged 15-24 years
with comprehensive correct knowledge of
HIV/AIDS (UNICEF-WHO) d*
19c. Contraceptive prevalence rate
(UN Population Division)
20. Ratio of school attendance of orphans to
school attendance of non-orphans aged
10-14 years (UNICEF-UNAIDS-WHO)
Target 8. Have halted by 2015 and begun to 21. Prevalence and death rates associated with
reverse the incidence of malaria and
malaria (WHO)
other major diseases
22. Proportion of population in malaria-risk
areas using effective malaria prevention and
treatment measures (UNICEF-WHO) e*
23. Prevalence and death rates associated with
tuberculosis (WHO)
24. Proportion of tuberculosis cases detected
and cured under DOTS (internationally
recommended TB control strategy) (WHO)
cxlvi STI Strategies for Poverty Reduction: The Case of Lao PDR
Goal 7: Ensure Environmental Sustainability
Target 9. Integrate the principles of sustainable 25. Proportion of land area covered by forest
development into country policies and
(FAO)
programs and reverse the loss of
26. Ratio of area protected to maintain
environmental resources
biological diversity to surface area
(UNEP-WCMC)
27. Energy use (kg oil equivalent) per $1 GDP
(PPP) (IEA, World Bank)
28. Carbon dioxide emissions per capita
(UNFCCC, UNSD) and consumption of
ozone-depleting CFCs (ODP tons)
(UNEP-Ozone Secretariat)
29. Proportion of population using solid fuels
(WHO)
Target 10. Halve, by 2015, the proportion of 30. Proportion of population with sustainable
people without sustainable access to
access to an improved water source, urban
and rural (UNICEF-WHO)
safe drinking water and basic
sanitation
31. Proportion of population with access to
improved sanitation, urban and rural
(UNICEF-WHO)
Target 11. Have achieved by 2020 a significant 32. Proportion of households with access to
improvement in the lives of at least
secure tenure (UN-HABITAT)
100 million slum dwellers
Goal 8: Develop a Global Partnership for Development
Target 12. Develop further an open, rule-based,
predictable, nondiscriminatory
trading and financial system (includes
a commitment to good governance,
development, and poverty reduction
both nationally and internationally)
Note: Some of the indicators listed below are
monitored separately for the least developed
countries, Africa, landlocked developing
countries, and small island developing states
Official development assistance (ODA)
33. Net ODA, total and to LDCs, as percentage
of OECD/Development Assistance
Target 13. Address the special needs of the Least
Committee (DAC) donors' gross national
Developed Countries (includes tariffincome (GNI)(OECD)
and quota-free access for Least
34. Proportion of total bilateral, sector-allocable
Developed Countries? exports,
ODA of OECD/DAC donors to basic
enhanced program of debt relief for
social services (basic education, primary
heavily indebted poor countries
health care, nutrition, safe water and
[HIPCs] and cancellation of official
sanitation) (OECD)
bilateral debt, and more generous
official development assistance for 35. Proportion of bilateral ODA of
countries committed to poverty
OECD/DAC donors that is untied
reduction)
(OECD)
Appendix 147
36. ODA received in landlocked developing
Target 14. Address the special needs of
countries as a proportion of their GNIs
landlocked developing countries and
(OECD)
small island developing states
(through the Program of Action for 37. ODA received in small island developing
the Sustainable Development of
States as proportion of their GNIs (OECD)
Small Island Developing States and
Market access
22nd General Assembly provisions)
38. Proportion of total developed country
imports (by value and excluding arms) from
Target 15. Deal comprehensively with the debt
developing countries and from LDCs,
problems of developing countries
admitted free of duty (UNCTAD, WTO,
through national and international
WB)
measures in order to make debt
39.
Average
tariffs imposed by developed
sustainable in the long term
countries on agricultural products and
textiles and clothing from developing
countries (UNCTAD, WTO, WB)
40. Agricultural support estimate for OECD
countries as percentage of their GDP
(OECD)
41. Proportion of ODA provided to help build
trade capacity (OECD, WTO)
Debt sustainability
42. Total number of countries that have reached
their Heavily Indebted Poor Countries
Initiative (HIPC) decision points and
number that have reached their HIPC
completion points (cumulative) (IMF World Bank)
43. Debt relief committed under HIPC initiative
(IMF-World Bank)
44. Debt service as a percentage of exports of
goods and services (IMF-World Bank)
45. Unemployment rate of young people aged
Target 16. In cooperation with developing
15-24 years, each sex and total (ILO) f*
countries, develop and implement
strategies for decent and productive
work for youth
Target 17. In cooperation with pharmaceutical 46. Proportion of population with access to
companies, provide access to
affordable essential drugs on a sustainable
affordable essential drugs in
basis (WHO)
developing countries
Target 18. In cooperation with the private
47. Telephone lines and cellular subscribers per
sector, make available the benefits
100 population (ITU)
of new technologies, especially
48. Personal computers in use per 100
information and communications
population and Internet users per 100
technologies
population (ITU)
cxlviii STI Strategies for Poverty Reduction: The Case of Lao PDR
Notes
a
For monitoring country poverty trends, indicators based on national poverty lines should
be used, where available.
b
An alternative indicator under development is "primary completion rate".
c
Among contraceptive methods, only condoms are effective in preventing HIV transmission.
Since the condom use rate is only measured amongst women in union, it is supplemented
by an indicator on condom use in high-risk situations (indicator 19a) and an indicator
on HIV/AIDS knowledge (indicator 19b). Indicator 19c (contraceptive prevalence rate)
is also useful in tracking progress in other health, gender and poverty goals.
d
This indicator is defined as the percentage of population aged 15-24 who correctly identify
the two major ways of preventing the sexual transmission of HIV (using condoms and
limiting sex to one faithful, uninfected partner), who reject the two most common local
misconceptions about HIV transmission, and who know that a healthy-looking person
can transmit HIV. However, since there are currently not a sufficient number of surveys
to be able to calculate the indicator as defined above, UNICEF, in collaboration with
UNAIDS and WHO, produced two proxy indicators that represent two components of
the actual indicator. They are the following: (a) percentage of women and men 15-24 who
know that a person can protect herself from HIV infection by "consistent use of condom";
(b) percentage of women and men 15-24 who know a healthy-looking person can transmit
HIV.
e
Prevention to be measured by the percentage of children under 5 sleeping under
insecticide-treated bednets; treatment to be measured by percentage of children under 5
who are appropriately treated.
f
An improved measure of the target for future years is under development by the
International Labour Organization (ILO).
Source: UN Millennium Project
국문개요 149
국문개요
연구목적: 빈곤, 과학기술혁신 그리고 한국의 발전경험
저개발국과 개발도상국의 빈곤의 문제는 지난 수십 년 간 국제개발공동체가 지속
적으로 다루어 온 주제이다. 특히 연구개발을 통해 경제능력이 향상되고 사람들을
빈곤에서 구해낸다는 인식이 확대되면서 과학기술혁신 전략의 중요성이 더욱 부각
되었다. 그리고 지난 15년의 새천년개발목표를 마무리하고 새롭게 설정되고 있는
지속개발목표에서는 과학기술혁신 정책을 기획과 전략에 포함하기 위한 논의가 진
행되고 있다.
우리나라는 과학기술혁신 전략을 효과적으로 활용하여 경제를 발전시켜 빈곤을
극복한 경험이 있으며, 이런 경험은 과학기술혁신 개발의 좋은 귀감이 되고 있다.
기반조건과 세계환경이 달라졌지만 우리나라의 과학기술혁신의 개발경험은 오늘날
유용성이 인정되고 있다. 그러나 우리나라의 이런 경험들을 효과적이고 실행가능한
개발정책으로 전환하는 것은 쉬운 일이 아니다. 한국의 개발경험에서 도출한 시사점
을 토대로 원리를 정립하고 방법론을 개발하는 것이 필요해졌다.
이 연구는 위의 방법론을 토대로 시스템 진단, 대안 도출, 실행계획 수립 등의
과정을 통해 라오스 정부와 관련 산학연 주체들의 흡수역량을 강화하는 목적으로
추진되었다. 특히 2013년부터 2014년까지 라오스 현지 조사와 워크숍 등은 한
-UNDP 협력사업의 지원으로 이루어졌으며, UN-ESCAP의 아시아태평양기술이전
센터와 라오스 과학기술부와의 파트너십으로 진행되었다.
방법론
이 연구에서 사용한 방법론은 3C/3A 접근법이며, 3C는 Componentization,
Contextualization, Conceptualization으로 이루어지고 3A는 수행주체(Actor)와 활동
(Action)에 초점을 맞춘 계획의 정립(Articulation)으로 정의된다. 이 방법론은 저소득
국가들의 경제발전을 지원하기 위해 혁신시스템의 제약요인을 진단하고 대안을 도
cl STI Strategies for Poverty Reduction: The Case of Lao PDR
출하기 위해 고안되었다. 이 방법론은 한국의 과학기술개발 경험에서 도출한 종합적
진단, 미래지향적 대안도출 그리고 합의도출을 유도하는 직관적 분석을 기초로 하고
있다. 이 방법을 통해 정책의 관련성, 정합성 그리고 일관성을 높여 보다 효율적이고
효과적인 혁신활동의 기획과 추진을 확보하고자 하였다. 그리고 이용가능한 데이터
와 통계의 부족으로 패널토론 방식으로 라오스의 산학연관 주체들의 참여와 합의를
도출하는 직관적 기법이 많이 활용되었다.
라오스의 기반조건과 기존 정책
라오스는 최근 저개발국가의 지위를 벗어나서 저중소득국이 되었으며, 라오스의
발전은 자연자원에 기초한 성장의 결과라고 할 수 있다. 라오스 경제의 광업과 수력
발전을 통한 해외수입 의존이 높아 졌고 지속가능한 성장을 위해서는 혁신체제의
강화를 통해 라오스 경제의 산업다각화와 고부가가치화의 필요성이 부각된다. 현재
라오스 정부는 교육중심의 역량강화에 초점을 맞추고 있으며, 산업이나 연구개발에
대한 종합적인 시각은 결여된 것으로 파악된다. 개별 부처들이 추진하고 있는 목표들
은 전체적으로 정합성이 부족한 것으로 나타났다.
진단
라오스의 혁신체제에는 활용가능한 자원이 있으며 이 자원을 라오스의 지속가능
한 발전을 위한 역량으로 전환해야 한다. 라오스에서는 천연자원의 가치가 가장 높으
며, 수력발전, 광물자원, 농업 및 임업제품이 포함된다. 이들 자원들이 경제발전을
추동하였고 경제적 산출의 대부분을 차지하고 있다. 공적개발원조와 외국인직접투
자를 통해 개발과정이 견인되었으며, 라오스는 연구개발, 인력, 거버넌스 정책 등의
측면에서 제약이 높다.
통계 연구 등 문헌조사, 현장 및 설문조사 결과를 토대로 라오스 시스템을 진단한
결과 최소한 네 가지의 구조적인 제약요인이 있는 것으로 나타났다. 네 가지 제약요
인은 소농 중심의 빈곤 트랩(trap), 지하자원 의존 트랩(trap), 고용시장과 교육 간의
정책적 갭(gap), 산업과 과학 연계의 구조적인 제약 등이 그것이다. 이들 네 가지
국문개요 151
제약요인은 상호작용하면서 문제를 더욱 심각하게 만들고 있다.
구조적인 시스템 진단의 결과를 토대로 기존의 정책을 리뷰한 결과 라오스의 지속
가능한 성장을 견인할 수 있는 정책이 부재한 것으로 나타났다. 천연자원에 기초한
소득 이외의 산업 다각화를 통한 소득 다양화의 전략이 뚜렷하지 않기 때문이다.
개별 부처에서 추진하고 있는 정책들은 산업육성과 고용창출이란 측면에서 일관성
과 연관성이 낮은 것으로 파악된다.
대안
본 연구에서 도출한 대안은 라오스의 장기적인 지속가능성에 필요한 역량강화에
초점을 맞췄다. 산업화를 위한 자원의 효율적 배분을 위해 산업 타깃팅이 제안되었고
이를 통해 혁신체제의 다른 구성요소들 간의 조정이 가능하도록 하였다. 미션 연구
및 전략적 인력양성을 포함하는 과학기술혁신 인프라 프로그램을 통해 제안된 산업
의 육성이 추진된다. 그리고 다양한 이해관계자와 활동의 조정을 가능하도록 하는
거버넌스 메커니즘이 고안되었다. 현지조사를 통해 확인된 네 가지 비즈니스 모델에
대해서도 검토하였다. 외국인직접투자로부터의 기술 확산, 수입대체 기술현지화, 수
출육성 기술현지화, 내수시장 기술맞춤 모델이 그것이다.
실행계획
위에서 도출된 대안을 실행계획으로 전환하였다. 이렇게 제안된 실행계획들은
라오스의 산학연관 주체들이 계획된 프로젝트를 수행할 수 있도록 도와주고 실행에
필요한 충분한 재원조달을 위한 리더십을 강화하는데 도움이 될 것이다. 그리고 실행
계획을 수립함으로써 관련 주체들이 주어진 시간 속에서 어떤 주체들이 어떤 일을
해야 하는 지를 규정해 줌으로써 공동의 목표를 향한 자연스런 조정 메커니즘을
확보하기 위해서였다.
라오스 경제는 기본적으로 규모의 경제가 작으며, 이 문제가 산업화와 관련된
개별 정책들 간의 정합성과 연관성을 낮추는 것으로 파악되었다. 기존의 전략산업들
에 대한 비판적 검토를 통해 다양한 이해관계자와 대안산업을 연결하고 지속가능경
clii STI Strategies for Poverty Reduction: The Case of Lao PDR
제의 창출이라는 정책목표 달성을 위해 산업 플랫폼 관점의 새로운 우선순위 도출이
필요한 것으로 결론을 내렸다. 그리고 녹색에너지와 녹색교통수단을 대안적인 산업
플랫폼으로 제안하였다. 이들 플랫폼을 기반으로 녹색농업과 관광업 등 연관산업도
강화되도록 하였다.
산업화의 실행력을 높일 수 있도록 전략적 과학기술혁신 하부구조와 인력양성과
같은 구체적인 프로그램들도 고안되었다. 라오스가 보유한 자원과 역량의 제약을
고려하여 Power Utility Solution 분야의 다국적기업이 참여하는 컨소시엄 사업을
통해 라오스 대학과 중소기업들이 관련 분야의 역량을 축적하는 모델을 제안하였다.
이들 프로그램과 컨소시엄 사업의 추진이 가능하도록 범부처 거버넌스의 구상이
필요하며, 사업실행을 위해 라오스 정부 혹은 개발원조 자금의 조달을 주문하였다.
그리고 라오스 과학기술부가 주도하여 관련 부처 및 산학연관 주체가 참여하는 Task
Force Team을 구성하고 본 사업을 통해 제안된 새로운 우선순위 사업으로서 녹색에
너지와 녹색교통수단 플랫폼 사업의 타당성을 검증하기로 하였다.
연구보고서 발간 목록
SCIENCE AND TECHNOLOGY POLICY INSTITUTE
❙ 2012년
분류
정책
연구
출판물번호
출판물명
저자
정책연구 12-01
국가전략기술분야의 기술시스템 구축 및 발전방안
: 원자력기술 및 우주기술을 중심으로
조현대
정책연구 12-02
연구성과 제고를 위한 정부출연연구기관 역할 및 운영체계 효율화 방안
이민형
정책연구 12-03
공공복지 향상을 위한 과학기술정책 방향과 중점과제
서지영
정책연구 12-04
녹색기술의 확산･촉진을 위한 정책수단의 효과 분석
정기철
정책연구 12-05
기초･원천연구의 실용화 촉진 방안: 산학연협력을 중심으로
정미애
정책연구 12-06
지속가능한 과학기술혁신 거버넌스 발전 방안
성지은
정책연구 12-07
과학기술 법제 분석 및 개선방안
양승우
정책연구 12-08
연구개발투자의 경제적 효과 평가 및 예측모형 개발
이우성
정책연구 12-09
신성장동력사업 성과분석 및 정책 과제
하태정
정책연구 12-10
혁신기반 의료산업 발전 방안: 중개연구와 서비스혁신을 중심으로
김석관
정책연구 12-11
기업가 정신 고취를 통한 기술창업 활성화 방안
이윤준
정책연구 12-12
지식재산인프라 경쟁력 제고방안(1단계)
손수정
정책연구 12-13
스마트파워 기반 과학기술외교 전략
장용석
정책연구 12-14
한국 혁신체제의 동태분석과 발전전략
신태영
정책연구 12-15
과학기술을 통한 창조 복지국가 실현 방안
-'함께하는 혁신'을 위한 과학기술혁신정책-
김왕동
정책연구 12-16
과학기술인력정책의 효과성 제고 방안: 이공계 석･박사 노동시장 분석을 중심으로
홍성민
정책연구 12-17
연구소 중심의 대학연구시스템 활성화 방안
민철구
정책연구 12-18
이공계 대학원의 특성화 발전을 위한 정부지원정책 개선 방안
엄미정
정책연구 12-19
연구개발을 통한 이공계 인력양성 모델
박기범
정책연구 12-20
국가연구개발사업 투자방향 및 추진전략에 대한 정책평가
: 과학기술 하부구조 구축사업의 투자방향 및 추진전략 설정에 관한 연구
홍사균
분류
조사
연구
정책
자료
출판물번호
출판물명
저자
정책연구 12-21
한국형 과학기술혁신 ODA 전략
이정협
정책연구 12-22
농업 R&D의 이해와 성과 관리 개선을 위한 탐색적 연구
이주량
정책연구 12-23
한국 국방기술혁신체제 특성분석
이재억
정책연구 12-24
학생연구원 지원제도 개선방안
홍성민
정책연구 12-25
이공계 분야 외국인 석･박사 유학생 현황과 유치방안
엄미정
조사연구 12-01
동북아 과학기술협력 패턴 변화에 따른 대응전략: 중국을 중심으로
홍성범
조사연구 12-02
동북아 원자력 안전을 위한 과학기술 국제협력 방안 모색
김종선
조사연구 12-03
사회문제 해결형 혁신정책의 주요 이슈와 대응
송위진
조사연구 12-04
STEPI Guide 개발을 위한 기획 및 사례연구
홍성주
조사연구 12-05
지역이 주도하는 지역 연구개발 활성화 방안
윤문섭
조사연구 12-06
융합산업의 공급가치사슬 구조 변화 및 대응전략
이광호
조사연구 12-07
개인성과평가 및 보상체계에 따른 연구자 행동 변화 및 성과 분석
황석원
조사연구 12-08
창조산업의 기술 및 수요기반 미래전망
: 엔터테인먼트 산업(방송·드라마, 영화, 음악)을 중심으로
송치웅
조사연구 12-09
과학기술기반의 국가발전 미래연구 Ⅳ
박병원
조사연구 12-10
중소기업 기술혁신 역량 평가 및 글로벌 정책동향 분석(Ⅲ)
박찬수
조사연구 12-11
중국 첨단기술 모니터링 및 DB 구축사업
홍성범
조사연구 12-12
기업부문 박사인력활용 실태조사
조가원
조사연구 12-13
국가 소프트웨어 경쟁력 향상 방안 연구: SW Roadmap
박수용
조사연구 12-14
출연연구원의 비정규직 현황 분석연구
한성옥
조사연구 12-15
2012 과학기술혁신지표연구
김석현
조사연구 12-16
2012년도 한국의 기술혁신조사
하태정
정책자료 12-01
Korea’s Strategy for Development of STI Capacity
: A Historical Perspective
신태영
정책자료 12-02
대학 R&D 기반 기술창업 활성화 방안 및 정책 개선방향
손수정
❙ 2013년
분류
정책
연구
출판물번호
출판물명
저자
정책연구 13-01
과학기술혁신 촉진을 위한 부처간 연계·협력 메커니즘
이세준
정책연구 13-02
저성장시대의 효과적인 기술혁신 지원제도
성지은
정책연구 13-03
소관부처 과학기술 법제 분석 및 개선방안
양승우
정책연구 13-04
한국 과학기술혁신정책 장기 추세 분석
홍성주
정책연구 13-05
미래 신산업의 기술혁신 전망 및 발전전략: 프레임워크 개발 및 탐색적 적용
하태정
정책연구 13-06
농업의 신성장동력화를 위한 기술혁신의 역할과 기능
이주량
정책연구 13-07
기술창업의 성공조건과 지원정책
이윤준
정책연구 13-08
지식재산 인프라 글로벌 경쟁력 제고방안(Ⅱ)
손수정
정책연구 13-09
융합연구사업의 실태조사와 연구개발 특성 분석
이광호
정책연구 13-10
공공서비스와 과학기술의 연계 강화방안
서지영
정책연구 13-11
사회문제 해결형 연구개발사업 발전방안 연구
송위진
정책연구 13-12
창조도시의 혁신정책: 지속가능한 도시를 위한 시민참여형 혁신전략
송위진
정책연구 13-13
혁신 시스템 효율성 제고를 위한 중개기능 개선방안
정미애
정책연구 13-14
미래 과학기술 인재상과 이공계대학 지원정책의 전환 방향
홍성민
정책연구 13-15
정부출연연구기관의 연구지원인력 현황 및 개선방안
민철구
정책연구 13-16
대학의 지식이전 활성화를 위한 연구자 지원방안: 대학 교수의 산학협력 동기를 중심으로
김형주
정책연구 13-17
창조경제에의 국민 참여 확대를 위한 과학기술 인프라 구축방안
홍사균
정책연구 13-18
창의적 연구개발을 위한 K-APPA 시스템 구축방안
송치웅
정책연구 13-19
지역 과학기술인재의 정주 현황 및 인재-산업 연계방안
박기범
정책연구 13-20
빅데이터 기반 융합 서비스 산업 창출방안
장병열
정책연구 13-21
국가연구개발사업 관련 별도 법률 제정방안
양승우
정책연구 13-22
창의적 성과 창출을 위한 기초연구 지원관리제도 개선방안
이민형
정책연구 13-23
국가연구개발 시설･장비 관련 법제화 연구
최지선
정책연구 13-24-01
Diagnosis and Solutions for STI Strategy Development
: ASEAN Global Challenges and African Health Innovation
이정협
정책연구 13-24-02
Innovation System Diagnosis and STI Strategy Development
: The Case of Nepal
이정협
분류
조사
연구
정책
자료
출판물번호
출판물명
저자
정책연구 13-25
연구개발투자의 경제적 효과 평가 및 예측모형 개발(Ⅱ)
이우성
정책연구 13-26
정부 연구개발사업 구조 진단 및 개선방안
이민형
안두현
정책연구 13-27
청색경제(Blue Economy)의 부상과 과학기술외교의 효율적 대응전략
홍성범
이명진
정책연구 13-28
과학기술특성화대학 기술사업화 선도모델 구축
김선우
정책연구 13-29
한국 바이오벤처 20년: 역사, 현황, 발전과제
김석관
조사연구 13-01
정부 과학기술 국제협력사업 구조 진단 및 개선방안
김기국
조사연구 13-02
통일 이후 남북한 과학기술 통합전략을 위한 사례조사 연구: 독일사례를 중심으로
김종선
조사연구 13-03
주요국의 창조경제 정책 현황과 사례
김왕동
조사연구 13-04
국가대형연구시설의 체계적 구축 및 관리 효율화를 위한 실태분석 및 정책제언
조현대
조사연구 13-05
과학기술 분야 FTA 대응방안 연구
박찬수
조사연구 13-06
2013년 한국의 과학기술혁신 지표
김석현
조사연구 13-07
과학기술 기반의 국가발전 미래연구 Ⅴ
박병원
조사연구 13-08
중소기업 기술혁신 역량 평가 및 글로벌 정책동향 분석(Ⅳ)
임채윤
조사연구 13-09
2012 박사인력활동조사
조가원
조사연구 13-10
한국의 기술혁신통계조사 개선방안 연구
하태정
조사연구 13-11
중국(중화권) 첨단기술 모니터링 및 DB구축(Ⅱ)
홍성범
정책자료 13-01
과학기술 및 ICT분야의 국가경쟁력 지수 비교연구: IMD, WEF, ITU를 중심으로
강희종
정책자료 13-02
국가 미래 메가성장 동력원 발굴사업 사전기획 연구
손수정
❙ 2014년
분류
정책
연구
출판물번호
출판물명
저자
정책연구 14-01
연구성과 평가법제 분석 및 개선방안
양승우
정책연구 14-02
원천연구 성과제고 및 활용강화를 위한 성과평가체계 개선 방안
조현대
정책연구 14-03
재정 상황 변화에 대응한 연구개발 예산 및 조세지원 대응방안
황용수
정책연구 14-04
사회문제 해결형 혁신에서 사용자 참여 활성화 방안 -사회·기술시스템 전환의 관점-
송위진
정책연구 14-05
융합 비즈니스 모델 활성화 방안
이광호
정책연구 14-06
소프트웨어 활용분야별 혁신 특성 분석
김승현
정책연구 14-07
바이오 분야 규제형성과정 개선방안
이명화
정책연구 14-08
기업가정신의 국제 비교를 통한 창업 환경 진단 및 개선방안
김석관
정책연구 14-09
기술혁신형 중소기업 육성을 위한 공공구매제도 개선방안
최종화
정책연구 14-10
연구공동체의 능동적 역할 제고를 위한 발전전략과 과제
홍사균
정책연구 14-11
지역의 창조경제활동 현황과 지역혁신 정책 방향
박동배
정책연구 14-12
사회적 도전과제 해결을 위한 출연(연)의 역할과 과제
김왕동
정책연구 14-13
전환기 과학기술인재정책의 한계 및 대응방안
박기범
정책연구 14-14
이공계 대학의 창업교육 혁신방안
김선우
정책연구 14-15
생애주기형 과학기술인력 활용시스템 구축방안 -고경력 과학기술인력을 중심으로-
민철구
정책연구 14-16
글로벌 STI 플랫폼 구축방안: 창조경제와 신뢰외교를 지원하는 현지거점을 중심으로
장용석
이명진
정책연구 14-17
한·중 FTA에 대응하는 농업 R&D 정책방향
이주량
정책연구 14-18
북한의 환경기술 연구현황과 남북 과학기술 협력방안
김종선
정책연구 14-19
역동적 혁신경제 구축을 위한 지식재산 사업화 금융 활성화 방안
손수정
정책연구 14-20
제조업기반 서비스 산업 R&D 혁신전략 -제조업의 서비스화 R&D-
장병열
정책연구 14-21
기초·원천연구 투자의 성과 및 경제적 효과분석
이우성
정책연구 14-22
민간 R&D 투자 활성화를 위한 방안 연구
김승현
정책연구 14-23
선도형 R&D 전환을 위한 기초연구사업 지원체계 분석 및 개선방안
조현대
정책연구 14-24
기술가치평가 기반 국가 R&D 사업의 성과평가 및 기술료 연계 가능성 탐색연구
손수정
정책연구 14-25
위성정보 활용 촉진을 위한 효율적 기반구축 연구
강희종
분류
조사
연구
정책
자료
출판물번호
출판물명
저자
정책연구 14-26
바이오경제시대 과학기술정책의제 연구사업 (4년차)
-개인 유전체 기반 맞춤 의료의 현황과 발전 과제-
정기철
정책연구 14-27
STI Strategies for Poverty Reduction: the Case of Lao PDR
이정협
정책연구 14-28
남북 ICT 협력 추진 방안
이춘근
정책연구 14-29
대-중소기업 동반성장형 창업활성화 전략 -대기업 벤처링 활동을 중심으로-
이윤준
조사연구 14-01
정부연구개발사업의 기획시스템 개선 방안 -R&D 아키텍쳐를 중심으로-
안두현
조사연구 14-02
혁신 정책의 변화와 한국형 혁신시스템의 탐색
이정원
홍성주
조사연구 14-03
친환경에너지타운 조성을 위한 새로운 정책개입 방안
장영배
조사연구 14-04
과학기술분야 전략적 아웃소싱 서비스 활성화방안 연구
장병열
조사연구 14-05
2014 한국의 과학기술혁신 지표
김석현
조사연구 14-06
과학기술 기반의 국가발전 미래연구 Ⅵ
박병원
조사연구 14-07
중소기업 기술혁신 역량 평가 및 글로벌 정책동향 분석(Ⅴ)
임채윤
조사연구 14-08
중국(중화권) 첨단기술 모니터링 및 DB 구축사업: 신소재 분야를 중심으로
홍성범
조사연구 14-09
박사인력활동조사의 개선과 활용
조가원
조사연구 14-10
2014년도 한국기업혁신조사: 제조업 부문
조가원
조사연구 14-11
문제해결 중심 정부연구개발사업 관리체계 구축방안
이민형
조사연구 14-12
기업 내·외부 연구개발과 성과와의 관계에 관한 연구
정미애
정책자료 14-01
한국의 Young Innovators 사례 발굴 및 확산: Young Innovators 포럼 경과 보고서
김형주
정책자료 14-02
대개도국 과학기술정책협력사업
조황희
정책자료 14-03
2014년도 국제기술혁신협력사업
조황희
보고서 판매 안내
SCIENCE AND TECHNOLOGY POLICY INSTITUTE
우리 연구원은 과학기술정책 분야의 연구를 전문적으로 수행하는 정부출연연구기관으로서 과
학기술정책 연구 분야에 관심 있는 분들이 연구 성과물을 널리 이용할 수 있도록 아래와 같이
선별 판매를 하고 있습니다.
❙ 판매대상자료목록
보
고
서
명
연구책임자
면 수
∙ “과학기술과 사회”의 주요 쟁점 분석 요구
송위진
155
6,000
∙ 주요 사회적 위험에 대한 기술혁신 차원의 대응방안
이공래
291
8,000
∙ 신기술의 사회윤리적 논쟁에 관한 정책네트워크 분석
: 생명윤리와 인터넷내용규제의 입법과정을 중심으로
송성수
162
6,000
∙ 미래선도산업의 육성을 위한 중장기 기술혁신전략
이정원
255
8,000
∙ 과학기술의 질적 제고 및 불균형 완화: 정책과제 및 개선 방안
조현대
212
7,000
∙ 한국과학기술자사회의 특성 분석 - 脫추격체제로의 전환을 중심으로 -
송위진
177
6,000
∙ 중국의 혁신클러스터 특성 및 유형분석: 한국 사례와의 비교
홍성범
174
6,000
∙ 신기술 변화에 대응한 산･학･연 연구개발 파트너십의 강화 방안
황용수
176
6,000
∙ 한국국가혁신체제 발전방안 연구
송위진
206
7,000
∙ 개방형 지역혁신체제 구축을 위한 공공연구
이공래
234
7,000
∙ 세계1위 상품의 한･중･일 경쟁력 비교와 정책시사점
이정원
송종국
122
5,000
∙ 한국형 지역혁신체제의 모델과 전략 1: 지역혁신의 공간적 틀
이정협
350
9,000
∙ 기술혁신과 구조적 실업에 관한 실증연구
하태정
167
4,000
∙ BRICs 국가들의 부상과 과학기술정책 대응방안
임덕순 외
447
11,000
∙ 혁신주도형 중소기업 육성을 위한 정책: 공급가치사슬 관점에서
민철구 외
203
7,000
신태영
100
4,000
이정원 외
170
5,000
∙ 기술혁신과 경제성장: 요소대체율과 기술진보율에 관한 실증적 고찰
∙ R&D 글로벌화: 현황과 수준측정을 위한 지표개발
판매가격
보
고
서
명
연구책임자
면 수
김계수 외
248
7,000
∙ 다분야 기술융합의 혁신시스템 특성
이공래
132
5,000
∙ 제약산업의 혁신체제 개선을 위한 산학연 협력 강화 방안
김석관
250
6,000
∙ 고급 과학기술인력 양성 관련 정부지원사업의 성과평가방안
박재민
조현대
175
6,000
∙ BT분야 혁신기반 실태분석 및 선진화 방안
조현대
379
10,000
∙ 정부출연 연구기관 연구과제중심 운영제도(PBS) 대체모델 적용 연구
김계수
144
5,000
∙ R&D 프로그램의 유형별 경제성 평가 방법론 구축
황석원
122
5,000
∙ 선진 혁신클러스터 구축을 위한 가상 클러스터 활용방안
: 지리적 클러스터의 보완적 관점에서
김왕동
185
5,000
∙ 과학기술인력의 학교에서 직업으로의 이행과정 및 취업구조 분석
박재민
141
5,000
∙ 한국형 지역혁신체제의 모델과 전략: 지역혁신의 유형과 발전경로
이정협
326
8,000
∙ 지속적 경제성장을 위한 최적 R&D 집약도 도출
: 파레토 최적배분을 위한 탐색적 연구
김병우
59
4,000
∙ R&D 투자 촉진을 위한 재정지원정책의 효과분석
송종국
101
4,000
∙ 혁신클러스터의 네트워크 평가지표 개발 및 적용
: 대덕 IT 클러스터를 중심으로
김왕동
김기근
148
4,000
∙ 기술기반 문화콘텐츠 서비스업의 혁신특성과 R&D 전략
: 온라인 게임산업을 사례로
최지선 외
522
6,000
∙ 지역혁신 거버넌스의 진단과 대안 모색
: 대기업 중심 생산 집적지의 전환을 중심으로
이정협 외
290
4,000
∙ 국내외 공공연구시스템의 변천과 우리의 발전과제
조현대 외
440
6,000
∙ 미래 환경변화에 따른 HRST 정책진단 및 중장기 정책 방향
진미석 외
400
4,000
∙ 사회적 목표를 지향하는 혁신정책의 과제
송위진 외
333
4,000
∙ 사회적 목표를 지향하는 혁신정책의 과제: Synthesis Report
송위진 외
92
2,000
∙ 기초기술 연구개발투자의 경제성 분석
황석원 외
283
4,000
∙ 제조업 성장에 기여하는 R&D서비스업 육성전략
최지선 외
303
∙ R&D 서비스기업 사례연구집
최지선 외
178
∙ 정부출연연구기관의 지속가능성 분석 및 제고방안
조현대 외
376
4,000
김왕동
98
4,000
민철구 외
184
4,000
∙ 정부출연연구기관의 연구과제중심 운영체제(PBS) 개선방안 연구
∙ 공공연구조직의 창의성 영향요인 및 시사점
∙ 대학 연구기능 활성화를 위한 교육 연구 연계
판매가격
6,000
보
고
서
명
연구책임자
면 수
판매가격
∙ 한국선도산업의 혁신경로 창출능력
이공래 외
328
10,000
∙ 2005년도 한국의 기술혁신조사: 제조업
엄미정 외
608
30,000
∙ 한국의 혁신수준분석-European lnnovation
엄미정 외
157
5,000
∙ 2006년도 한국의 기술혁신조사: 서비스
엄미정 외
308
14,000
∙ 2008년도 한국의 기술혁신조사: 제조업
김현호 외
501
30,000
∙ 21세기 과학기술정책의 부문별 과제
이언오
342
9,000
∙ 일본.미국.유럽연구개발프론티어
김갑수
762
50,000
송위진 외
447
10,000
∙ 세계적 과학자의 경력과정분석과 시사점
김왕동
240
4,000
∙ 통합형 혁신정책을 위한 정책조정 방식 설계
성지은
244
4,000
∙ R&D 환경변화에 대응한 대학내 연구조직 지원정책 개선방안
엄미정
211
4,000
∙ 저탄소 녹색성장 종합평가지수 개발
유의선
211
4,000
장진규 외
262
4.000
∙ 공공연구의 산업기술혁신파급정도․효과분석 및 정책제언
조현대
218
6,000
∙ 2009년도 기술부문 과학기술혁신 지표연구
김석현
총4권
12,000
∙ 녹색기술혁신의 특성･역량분석 및 활성화 방안
장진규
323
8,000
∙ 기술혁신과 일자리 창출
이공래
220
7,000
∙ 국가 R&D사업의 경제적 타당성 평가 방법론 개선방안
황석원
170
6,000
∙ FTA 환경변화에 따른 기술 무역장벽 대응방안
하태정
182
6,000
∙ 미래지향형 과학기술 혁신 거버넌스 설계 및 개선방안
성지은
214
7,000
∙ 기초연구성과 창출 및 확산 촉진을 위한 연구시스템 개선방안
조현대
218
7.000
∙ 이공계대학의 구조변화 추세분석과 경쟁력 확보방안
민철구
250
7,000
∙ 북한의 산업기술 발전경로와 남북 산업연계 강화방안
김종선
160
6,000
∙ 2010년도 한국의 기술혁신조사
하태정
520
12,000
∙ 2010년도 과학기술 인력 통계조사․분석
엄미정
161
6,000
∙ 2010년도 기업부문 과학기술 혁신 지표연구
김석현
총5권
20,000
∙ 국가 거대과학의 뉴 프론티어 창출 전략
조현대
426
12,000
∙ 연구개발인력 경력개발과 고용촉진 전략
: 박사학위자의 민간부문 진출을 중심으로
엄미정
175
6,000
∙ 탈추격형기술혁신체제의모색
∙ 저탄소 녹색성장을 위한 과학기술정책과제
보
고
서
명
연구책임자
면 수
판매가격
∙ 지역혁신을 위한 지역대학의 역할정립과 활성화 방안
민철구
200
7,000
∙ 전염성 동물질환에 대한 과학기술적 대응방안
서지영
218
7,000
∙ 남북한 과학기술 혁신체제 연계 방안
김종선
164
6,000
∙ 다부처 R&D사업 기획 및 추진 방안
조현대
200
7,000
∙ 과학기술혁신기반 모바일생태계 발전 전략
황석원
220
7,000
∙ 지식재산비즈니스 모델 전망과 성장동력화 방안
손수정
255
7,000
∙ 스마트 전문화의 개념 및 분석틀 정립
이정협
105
6,000
∙ 2011년도 한국 서비스부문 기술혁신조사
하태정
600
13,000
∙ 기술혁신 성과지표 분석 및 DB구축사업
김석현
총5권
20,000
∙ 과학기술 법제 분석 및 개선방안
양승우
304
8,000
∙ 기업가 정신 고취를 통한 기술창업 활성화 방안
이윤준
264
7,000
∙ 연구소 중심의 대학연구시스템 활성화 방안
민철구
223
7,000
∙ 소관부처 과학기술 법제 분석 및 개선방안
: 연구개발성과의 활용 및 사업화 법제를 중심으로
양승우
261
7,000
∙ 미래 과학기술 인재상과 이공계대학 지원정책의 전환방향
홍성민
239
7,000
∙ 정부출연 연구기관의 연구지원인력 현황 및 개선 방안
민철구
142
6,000
∙ 국가연구개발사업 관련 별도 법률 제정 방안
양승우
413
8,000
∙ 연구성과 평가법제 분석 및 개선방안
양승우
232
7,000
∙ 원천연구 성과제고 및 활용강화를 위한 성과평가체계 개선 방안
조현대
186
6,000
∙ 기술혁신형 중소기업 육성을 위한 공공구매제도 개선방안
최종화
172
6,000
∙ 이공계 대학의 창업교육 혁신방안
김선우
236
7,000
∙ 생애주기형 과학기술인력 활용시스템 구축방안 -고경력 과학기술인력을 중심으로-
민철구
112
6,000
∙ 한·중 FTA에 대응하는 농업 R&D 정책방향
이주량
149
6,000
∙ 선도형 R&D 전환을 위한 기초연구사업 지원체계 분석 및 개선방안
조현대
156
6,000
∙ STI Strategies for Poverty Reduction: the Case of Lao PDR
이정협
168
6,000
∙ 2014 한국의 과학기술혁신 지표
김석현
총6권
20,000
STEPI 자료 판매코너
교보문고 정부간행물 코너
영풍문고 정부간행물 코너
북스리브로 정부간행물 코너
정부간행물판매센터 총판
(02-397-3628)
(02-399-5632)
(02-757-8991)
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