Asia-Pacific National Innovation Systems
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Workshop on National Financing of Technology Innovation

30–31 October 2012
Hanoi, Viet Nam

Organized by
Asian and Pacific Centre for Transfer of Technology (APCTT) of the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) New Delhi, India

in cooperation with and hosted by
State Agency for Technology Innovation (SATI), Ministry of Science and Technology (MOST), Government of Viet Nam

Supported by
Department of Scientific and Industrial Research (DSIR) Ministry of Science and Technology, Government of India

Brief Report
Co-organizer
State Agency for Technology Innovation (SATI), Ministry of Science and Technology (MOST), Government of Viet Nam

Background
Technology innovation entails different forms of financing at various stages of its transformation to commercial product/services. National governments have a key role to play in establishing relevant policies, financing instruments and institutional mechanisms for providing funding support to small and medium sized enterprises (SMEs). In this regard, there is a need for developing countries to recognize and understand the importance of national technology innovation policy framework to promote innovation by key actors of national innovation system – academia, R&D institutions and industries. The national governments also need to appreciate the significance of various forms of financial support required to incubate, nurture technology innovation as well as technology-based entrepreneurship, and promote exchange of knowledge and lessons learned from other countries in setting up and governing national technology innovation fund(s) to enhance innovation-based competitiveness of SMEs. Having recognized the need to strengthen its national technology innovation system through financing mechanisms, Viet Nam has recently established the State Agency for Technology Innovation (SATI) and allocated funds for promoting technology innovation. Following a request from SATI, APCTT-ESCAP organized a national technology innovation financing workshop in Viet Nam, facilitating sharing of practical experiences and learning from the experiences and best practices of other countries in the Asia-Pacific region.

The target group of the workshop included: (a) senior officials from the State Agency for Technology Innovation (SATI), Ministry of Science and Technology (MOST), Government of Viet Nam; (b) officials from Viet Nam’s national SME support agencies; and (c) senior managers from national financial institutions and banks in Viet Nam.

Objectives

  • Strengthen understanding of the importance of national technology innovation policy framework to promote innovation by key actors (academia, R&D institutions and industries) of Viet Nam;
  • Appreciate the significance of various forms of financial support required to incubate and nurture technology innovation as well as technology-based entrepreneurship; and
  • Promote exchange of knowledge and lessons learned from other countries in the establishment and governance of national technology innovation fund(s) to enhance innovation-based competitiveness of SMEs.

Major Outputs
The workshop commenced with a Welcome Address by the representative of the State Agency for Technology Innovation (SATI) followed by the Opening Address delivered by Mr. Chu Ngoc Anh, Vice-Minister of Science and Technology, Government of Viet Nam. In his opening remarks, the Minister emphasized that financing support for technology innovation is critical for the development and growth of the industry, particularly the SMEs. In this context, he stressed that Viet Nam needs to learn about best practices from other countries of the Asia-Pacific region and thus devise a viable and effective strategy for implementing its own national technology innovation financing mechanism. The inaugural address was delivered by Mr. N. Srinivasan, In-Charge of Innovation Management, APCTT-ESCAP, who highlighted the importance of innovation financing and the role of multilateral agencies. He also narrated the objectives and expected outcomes of the workshop. The participants were provided with an overview of the key components of national innovation system (NIS) in the Asia-Pacific region as well as the role of APCTT-ESCAP in building capacity of relevant stakeholders in the member countries.

During the first session, the participants were provided with a holistic view of various components of NIS and salient features of national technology innovation financing practices. The representative of Vietnam Science and Technology Evaluation Centre (VISTEC) provided an overview of the status of science, technology and innovation (STI) in Viet Nam, and potential opportunities for financing technology innovation in the country.

At the second session on ‘National Financing of Technology Innovation – Best Practices’, APCTT-ESCAP presented various approaches of national technology financing in selected Asia-Pacific countries. APCTT-ESCAP-invited experts from China, India, Republic of Korea and Viet Nam shared their national approaches and programmes in funding/financing technology innovation and entrepreneurship development. This session deliberated on the best practices, experiences and lessons learned in developing and implementing various forms of financing in the participating countries.

The third session was hosted by the National Council for Science and Technology Policy of Viet Nam in cooperation with SATI. The session deliberated on the national financing of technology innovation in Viet Nam with specific reference to the opportunities for enhancing competitiveness of SMEs. APCTT-ESCAP-invited resource persons had brain storming discussions with senior officials from SATI and the Ministry of Science and Technology on key challenges and interventions required in terms of developing new or reformation of existing financial policy framework and the delivery mechanisms that ensure access to adequate funds by innovators and technology-based enterprises. This session provided various perspectives from experts in Viet Nam about the current and possible objectives and goals of technology innovation financing and its governance for enhancing national and international competitiveness of SMEs. The panel discussion that followed focused on the road ahead in developing and managing effective and efficient national technology innovation financing programmes for SMEs in Viet Nam.

See Annex I for the programme and presentations.

Conclusions and Recommendations

  • Successful implementation of technology innovation financing programmes and schemes requires close working relationship and cooperation between two key ministries of the government – Science and Technology, and Finance. In this context, Viet Nam needs to evolve a viable working mechanism between the two ministries of the national government.
  • The framework conditions in which SMEs operate in each country are different from one another. These specific conditions should be taken into consideration before any new technology innovation financing programme is launched.
  • Technology innovation is considered as a high-risk proposition. A robust evaluation/risk management system is key to the success of technology innovation financing programmes. Technology innovation fund allocation should be evaluated by professional evaluation agencies every five or ten years to make an assessment of the results, achievements and shortcomings.
  • Technology innovation financing loans could be provided to SMEs on the basis of intellectual property (IP), patents, or titles awarded by the government.
  • Technology innovation is vital for the development of SMEs in Viet Nam. The national government in cooperation with local governments could establish innovation funds for SMEs at provincial and local levels.
  • Viet Nam noted that the budget of China’s Innofund for the Guangdong Province is of the same size as that of Viet Nam. In this context, the Vietnamese officials expressed their interest to visit the provincial Innofund offices in China to learn about the modalities and best practices being followed in financing technology innovation for SMEs.
  • For determining the success of technology innovation fund projects, there is a need to use microeconomic index, for example, estimating the amount of tax or revenue collected from the technology innovation-funded SMEs.
  • There is a need to encourage investment in hi-tech activities and smaller start-up firms with specific funds for specific target groups.

Participants

Seven national and international resource persons from APCTT-ESCAP, China, India and the Republic of Korea shared their knowledge and experiences, while about 70 national experts representing various government and private sector agencies of Viet Nam participated in the workshop.

See Annex II for the list of participants.