Module 3 – Providing a Sufficient Base for Innovation


This module explores the role of skills and training and Research and Development (R&D) in the innovation process. Education matters to innovation and growth for a number of reasons. An abundant supply of low-wage, unskilled labor is no longer a successful route to rapid growth and national prosperity. In today’s world, competitiveness depends on individuals who can carry out more complex higher value-added tasks and adapt to change. Skilled individuals also complement investment and facilitate the introduction of new ideas and technologies. But delivering skills for innovation depends not only on producing the right number of skilled workers. It also requires that the system supply workers with the right knowledge, competencies and qualities -both general and specific. Put differently, skills should be demand-led, that is, they should be economically relevant to firms and appropriate for countries’ levels of development. This critical point is echoed in our case-study of Korea and India. The design of education policy aimed at fostering growth should also be informed by the principles of access and quality. The module then discusses the contentious issue of brain drain and argues that it can be transformed into a positive force so that developing countries can benefit from the increasingly global distribution of knowledge and economic activity.  

The module then turns to R&D, emphasizing that the traditional focus on rolling back the frontiers of knowledge is less important than the need to keep up with global trends and absorb existing knowledge so that it can be put to local use. Research efforts are not mutually exclusive, but the priorities of developing countries should lie somewhere in between applied research and experimental development. In concrete terms, R&D should be devoted to adapting mature technologies and solving manufacturing and prototyping products, moving over time to the generation of differentiated products through better product design and ultimately, the delivery of state-of-the-art practical outcomes. This module analyzes the major actors carrying out R&D and the policies that can promote the diffusion of knowledge, avoiding a situation in which universities become “ivory towers” divorced from the needs of the rest of the innovation system. Finally, the module touches on the complex issue of intellectual property rights and the particular trade-offs facing developing countries. 

By the end of this module you will:

  • Have listed the skills and competences demanded by the knowledge economy
  • Have discussed strategies to turn ‘brain drain’ into ‘brain circulation’
  • Have explained the importance of R&D investment as part of a successful innovation strategy
  • Have described and discussed the major incentives and mechanisms at the disposal of governments to promote responsive public and private sector research activity
  • Have defined the concept of lifelong learning, including ways to create effective learning environments - both within and beyond formal general education and across sectors
  • Have discussed real cases that outline different policy avenues for improving the skills and R&D base


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Course Material

The course material for this module includes a presentation script covering the key messages, two case studies and readings. Click on each to open. 

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