Regional overview : Asia and the Pacific

UNESCO Science Report: Towards 2030

This vast region encompassing three-fifths (59%) of humanity and close to half of global economic output (45%) and expenditure on research and development (R&D, 42%) is home to both some of the world’s most dynamic technological powerhouses and, in its inner Asian and Pacific Ocean confines, more peripheral participants in the global march towards economies more rooted in knowledge and less reliant on raw materials.

China alone has been largely responsible for the growing weight of Asia in research and development (R&D): Its world share has increased for several key indicators:

Domestic expenditure on R&D:                      2007: 10.2%,  2013: 19.6%

Researchers:                                                 2009: 16.7%,  2013: 19.1%

Scientific publications:                                    2008: 9.9%,  2014: 20.2%

Triadic patents
(European, Japanese, US patent offices):      2002: 0.5%,   2012: 3.6%

 

China is poised to become the world’s leading scientific publisher by 2016 (in terms of volume), according to the Thomson Reuter’s Web of Science database, but its ambition to become a truly innovation-driven economy by 2020 is being tested by the present slow global growth environment.

The other Asian country that has made great strides in recent years is the Republic of Korea, with the following progress recorded for its world share of:

Domestic expenditure on R&D:                      2007: 3.42%,  2013: 4.4%

Researchers:                                                 2007: 3.5%,  2013: 4.1%

Scientific publications:                                    2008: 3.2%,  2014: 4.0%

Triadic patents
(European, Japanese, US patent offices):     2002: 2.8%,   2012: 5.5%

 

Over the past five years, the Republic of Korea has become one the most research-intensive economies in the world: Gross domestic expenditure on R&D (GERD) represented 4.15% of GDP in 2013. The volume of Korean high-tech exports (US 143 million) is higher that of Japan (US $110 million). Six out of ten high-tech exports fall into the category of electronics and telecommunications. Although the Republic of Korea came through the global financial crisis of 2008–2009 remarkably unscathed, it is now concerned about maintaining its competitiveness amid increasingly intense competition from China and Japan.

The fact is that the Republic of Korea has outgrown its ‘catch-up’ model. The Park administration is pursuing her predecessor’s goal of low carbon, green growth but also emphasizing the creative economy, in an effort to revitalize the manufacturing sector through the emergence of new creative industries and a ‘cultural revolution’ towards entrepreneurship.

The government is also eager to correct the impression that the Republic of Korea made the transition from a poor, agricultural country to an industrial giant through imitation alone. Between 2001 and 2011, the Republic of Korea increased the share of basic research from 11% to 18% of total research expenditure. In 2011, it established a high-profile research complex in Daejeon, the International Science Business Belt, which houses 18 universities and several science parks and dozens of public and private research centres, including ‘the jewel in the crown’, a heavy ion accelerator due for completion in 2021. The Institute for Basic Science is due to open in 2016 on the premises. The ultimate aim is to build a city combining science, education, culture and art.

The government’s shift towards promoting basic research, entrepreneurship and creative industries is reflected in its Third Basic Plan for Science and Technology, 2013–2017, which also allocates 35% of the government budget to supporting strategic industries in growth areas such as solar energy and space launch vehicles.

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Policy-makers in Japan have adopted a wide range of measures in the past five years to tackle three urgent challenges: an ageing labour force, the energy crisis caused by the Fukushima disaster and the country’s anaemic growth engine. Whereas Japan remains one of the most R&D-intensive manufacturing economies in the world – with a GERD/GDP ratio of 3.49% in 2013 – some indicators are in the red. Although Japan has one of the highest ratios of researchers per 10 000 inhabitants in the world, the number of master’s and PhD students has been dropping. This trend has been exacerbated by the cutbacks in research spending effected by private enterprises since 2009, as a consequence of the economic crisis.

In 2011, Japan recorded a trade deficit for the first time since 1980. This was partly due to a drop in exports, combined with a rise in oil and gas imports after nuclear power plants were halted following the Fukushima disaster. This deficit has become chronic, fuelled by the weak competitiveness of Japanese manufacturers in the global market, the transfer of their factories overseas and high prices for oil and other natural commodities. The government has taken steps since November 2012 to attract FDI. Meanwhile, a drastic depreciation of the yen and lower oil prices since mid-2014 have encouraged private enterprises to bring their factories back to Japan.

Japan is one of the rare countries where the volume of scientific publications declined between 2008 and 2014, even in engineering, physics and chemistry. Japan’s world share of R&D has dropped for all but one key indicator: in 2012, it still held three out of ten triadic patents in the world:

 

Domestic expenditure on R&D:                      2007: 12.4%,  2013: 9.6%

Researchers:                                                 2007: 10.7%,  2013: 8.5%

Scientific publications:                                    2008: 7.4%,  2014: 5.8%

Triadic patents
(European, Japanese, US patent offices):     2002: 30.0%,   2012: 29.6%

The number of new university start-ups has dropped sharply from a peak of 252 in 2004 to just 52 in 2013. This trend partly reflects the maturation of university– industry relationships in Japan but it has also inspired the government to launch a series of schemes to foster university–industry collaboration. The novelty of these schemes is that they recognize the need to finance the entire value chain.

The government’s Fourth Basic Plan for Science and Technology (2011) clearly prioritizes ‘green innovation’ and innovation for a healthier life. The share of new renewables (excluding hydro-electric power) in Japan’s total electricity generation rose from 1.0% in 2008 to 2.2%in 2013. The shift towards new renewables is expected to accelerate, thanks to deregulation, tax reductions and financial assistance for private investment and R&D for renewable energy.

The Japanese aerospace industry is also branching out into aeronautics with the new Mitsubishi Regional Jet hoping to compete in the global medium-sized passenger aircraft market, thanks to its high fuel efficiency, low environmental impact and minimal noise emissions.

 

Renewable energy has also become a policy focus in Pacific Island countries, where imports of petroleum products cost 10% of GDP, on average, but can even swallow up to 30% of national income. Renewable energy sources now represent 15% of the total electricity supply in Vanuatu,37% in Samoa, 60% in Fiji and 66% in Papua New Guinea. Tokelau has even become the first country in the world to rely entirely on renewable sources of energy.

Many Asian economies are striving to adapt their science and research systems to support tomorrow’s growth areas, such as molecular biology, nanotechnology or material sciences, where innovation is more dependent on advances in basic research and therefore requires a strong emphasis on science–industry collaboration. In Malaysia, policy-makers are striving to promote the development of a skilled labour force and high value-added services to complement the country’s dynamic activity in electronic manufacturing.

The end of the commodities boom is galvanizing a host of otherwise very diverse economies to reduce their reliance on raw materials by promoting private sector investment in R&D to stimulate technology-based manufacturing. The challenge will be to maintain public investment in research and a critical mass of research personnel, since the private sector relies on the generation of new knowledge and a skilled labour market to nurture the commercial ideas of tomorrow. As to where the optimal balance lies between commercial research, on the one hand, and basic science and public good science, on the other, this has become a subject for debate in Australia, in particular. Public funding of research has shifted towards a grant system in Australia and is increasingly focusing on research relevant to the business sector, raising questions as to whether policy will be able to bridge the gap between industry’s needs and those of academia. In recent years, the university system has become the main focus for government-funded research, as opposed to the country’s public research institutions, with the government stressing oceanography and medical sciences.

Southeast Asia is tending to emphasize cross-border co-operation and mobility, be it in order to position itself as a higher education hub, as in the case of Malaysia, or to develop a regional economic community by late 2015, as in the case of the Association of Southeast Asian Nations (ASEAN), which encompasses most countries in the region. The idea is for the ASEAN Economic Community to transform the region (close to 9% of the world population) into a single production base, backed by joint programmes such as the ASEAN Plan of Action on Science, Technology and Innovation, which promotes an integrated approach to science, technology and innovation and intends to facilitate scientific mobility around the region to foster scientific co-operation and regional integration. In this spirit, Cambodia’s first National Science and Technology Master Plan 2014–2020 was launched in December 2014, with support from the Korea International Cooperation Agency; it focuses on promoting innovation in agriculture, other primary production and information and commmunication technologies (ICTs).

 

India’s business enterprise sector has become increasingly dynamic in recent years, nurtured by one of the most generous government incentive regimes for R&D in the world. However, the national commitment to R&D has stagnated at about 0.81% of GDP. In addition, overall domestic innovation in India remains heavily concentrated in just six states (out of 29) and nine industrial sectors: pharmaceuticals (28% of industrial research spending), automotive (14%), information technology (computer hardware, 10%), defence (9%), agriculture and related machinery (9%), industrial machinery (5%), chemicals (5%), biotechnology (4%) and electrical goods and electronics (3%). Whereas companies producing computer hardware tend to be foreign-owned multinational corporations, innovation in the Indian pharmaceuticals industry tends to be home-grown. India is also characterized by the emergence of ‘frugal innovation,’ with a growing local market for pro-poor inventions, such as low-cost medical devices or Tata’s latest micro-car, the Nano Twist.

Across South Asia, low government investment in R&D continues to impede the development of national innovation systems, even though great strides have been made in basic and higher education in many countries. Pakistan reached a milestone in 2012 with the adoption of its first National Science, Technology and Innovation Policy, which expressly recognizes innovation as a long-term strategy for driving economic growth.  The Pakistani government has vowed to raise domestic expenditure on R&D from 0.29% of GDP in 2013 to 1% of GDP by 2018. To do so, the private sector will need to play a much greater role than at present. Meanwhile, Bangladesh and Sri Lanka are planning to develop digital societies and Sri Lanka is developing ‘smart industry’ through the Sri Lanka Institute of Nanotechnology.

Meanwhile, Central Asia to the north is in the process of transitioning away from fully state-controlled economic and research systems. Scientific output remains low but Kazakhstan (36) has overtaken Uzbekistan (11) as the regional leader for the number of scientific publications per million inhabitants. It is also within a whisker of Uzbekistan for the number of researchers (by head count): 1046 per million inhabitants for Kazakhstan in 2013, compared to 1097 for Uzbekistan (2011 data), slightly more than the world average (1083).

Knowledge-based enterprises in Iran have been hit hard by international sanctions, which have curbed their access to high-quality equipment, export markets, research tools, raw materials and technology transfer. Despite this, the number of firms declaring R&D activities more than doubled between 2006 and 2011, from 30 935 to 64 642. It would appear that, indirectly, sanctions have accelerated the shift from a resource-based economy to one based on knowledge in Iran. Since the signing of the nuclear deal with the permanent members of the United Nations Security Council and Germany in July 2015, multinational companies have been showing keen interest in investing in Iran.

 

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