Unformatted text preview: Research and Technology Competence for a
Sustainable Development in the BRICS Countries Study of the Fraunhofer Institute for
Systems and Innovation Research for the
German Council for Sustainable Development Rainer Walz
Jan Peuckert Rainer Walz
Jan Peuckert Research and Technology
Competence for a Sustainable
Development in the BRICS Countries
collaborators A. Enzmann, R. Frietsch, N. Helfrich, F. MarscheiderWeidemann, J. Rager, C. Sartorius, M. Strauch, Fraunhofer ISI as well as
Han Xiaoding, Fraunhofer Representative Office Beijing;
Can Wang, Tsinghua University, Dep. of Env. Science and Engineering;
Leena Srivastava, The Energy and Resources Institute TERI (Delhi);
Vitaly Gorokhov, Deutsch-Russ. Kolleg, Univ. Karlsruhe/Moscow State
Ricardo Rose, Deutsch-Brasilianische Auslandshandelskammer;
Reinie Biesenbach, Global Research Alliance (GRA), Pretoria Karlsruhe, May 2008 Preface
Sustainable development represents a growing challenge for science. Science is
responsible for informing us about the type and extent of global problems concerning
the climate, the environment, energy supply and the social dimension of
"development". It is expected to develop locally effective solutions for global social
problems of high complexity. Results from research and science have contributed
significantly to being able to better predict our paths into the future in the sense of
scenarios, for example, regarding climate change. Analyses such as those by the
Intergovernmental Panel on Climate Change (IPCC) or the Stern Report on the
expected future costs of climate change present us with clear opportunities and ways
to achieve a turnabout, but also with the consequences of a failure to act.
We need a guiding line in order to be able to construct the foundations for an informed
debate from the data, models and measurements. The concept of sustainable
development is necessary in order to make the right decisions for our future under
uncertain conditions. Which are the technologies to invest in? Where will new, as yet
unknown and unexplored fields emerge? One example: Is science able to show us a
way to use CO2 as a raw material and not regard it as waste? Science is working
Given the many open questions, risks, opportunities, demands and decisions to be
made: It remains undisputed that the necessary reorganization of our society will not
• technological and social innovations,
• thinking in processes and institutional developments,
• the integration of solutions from politics, science and the economy.
The burdens imposed by modernization upon the environment and society are not only
challenges for highly industrialized countries which are concerned with decoupling
environmental and resource consumption from economic processes. Fast growing
economies with an increase of GDP of more than 8% per year have long been causing
serious and dramatic damages to the environment and the social cohesion of societies
which eat up a large part of the welfare impacts. This results in increasing resource
scarcity and rising prices for raw materials as well as a loss of biodiversity. To manage
a global turnaround in the direction of sustainable development, a fundamental role will
be played by building up research and knowledge capacities in sustainability when
shaping our ties with developing and newly industrializing countries.
Against this background, the German Council for Sustainable Development together
with the GTZ (Gesellschaft für Technische Zusammenarbeit GmbH) conducted a
dialogue about sustainability and growth with large emerging economies and transition countries in 2005. The result was that the Council for Sustainable Development
recommended the German federal government to give this kind of dialogue initiative
more scope in its national sustainability policy. The German Federal Ministry for
Education and Research has followed this advice and is continuing a dialogue project
in cooperation with the German Development Institute (DIE) with the title "Dialogue 4S:
Sustainable Solutions - Science for Sustainability - International Dialogue of the BMBF
on sustainability research". This aims to break open the thematic restriction and widen
the focus of Germany's technology and research competence in sustainability.
To lay the ground for and, at the same time, provide an impulse for this research
dialogue, the Council for Sustainable Development commissioned a comparative study
by the Fraunhofer Institute for Systems and Innovation Research (FhG ISI) to analyse
the technological performance and scientific competence in Brazil, Russia, India,
China, South Africa (BRICS) and Germany, the results of which are now available. Six
selected sustainability topics were subjected to a critical inventory and supplemented
by German companies' experiences of cooperation in BRICS countries. For the first
time, the study puts the global responsibility of Germany's research competence to the
test. Germany has a responsibility to act as partner in structuring the economic
development in developing countries and emerging economies in a sustainable way by
allowing them access to its knowledge and technical solutions. The future markets of
these countries will increasingly determine the demand for research results on
sustainability. The international orientation of the research landscape and the coming
together and interaction of different cultural systems, experiences and access to
knowledge and technology development ultimately represent a source for the
development of innovations.
The Council would like to thank all those who made this study possible with their
contributions, discussions and cooperation. Special thanks go to the scientists in the
partner countries and the private-sector experts in globally active German companies.
The Council also gratefully acknowledges the well-founded and broad analysis of the
research and innovation systems by the authors at the Fraunhofer Institute for Systems
and Innovation Research.
On behalf of the German Council for Sustainable Development Dr. Günther Bachmann, Secretary General Executive Summary i Executive Summary
Against the backdrop of the fast development in rapidly growing economies, the
challenge presented by sustainable development is becoming more and more urgent
from a global perspective. Taking the strong and increasing links between many
transformation and newly industrialising countries (NIC) and Germany into account
raises the question of how to design these links so that they promote global
sustainability. In the context of the further development of the European Research
Area, the EU is also emphasising the objective of contributing to sustainable
development through increased Science and Technology (S&T) cooperation with
rapidly growing economies. This is the background to the initiative launched by the
Federal Ministry for Research and Education (BMBF) together with the German
Council for Sustainable Development (Rat für Nachhaltige Entwicklung, RNE) entitled
“Sustainability Solutions through Research in Brazil, Russia, India, China, South Africa
plus Germany”. Within this context, this report determines the research and
technological competence in the BRICS countries plus Germany in six selected fields
1. Renewable energies and CO2-free fossil energies as two key – and partly
competing – technologies for supplying energy, 2. Energy efficiency in buildings, 3. Water technologies (supply and waste water disposal systems), 4. Material efficiency, 5. Transport infrastructure and mobility, as well as 6. Accelerating the diffusion and innovation processes in the 5 above fields of
technology as a cross-cutting topic. The study follows a “Systems of Sustainability Innovations Approach”. It focuses on the
relations between general framework conditions, the research system, technological
capability and the conditions for technology diffusion and cooperation. It is increasingly
recognised that, within the scope of catch-up processes, the absorption of developed
technologies, building the capacity to further develop these technologies and to bring
them to international markets are not separate phenomena, but closely interlinked. The
following questions are examined:
• Outlining the general framework conditions in the countries with regard to the readiness to adopt new technologies and implementing innovation activities.
• Analysis of research institutions and main fields of research in the six sustainability fields in the BRICS countries as well as a statistical evaluation of German research
activities. ii Executive Summary • Analysis of (technological) capability in the sustainability fields using innovation indicators.
• Analysis of the cooperation experiences of German companies from the perspective of the actors involved in order to supplement the statements resulting from the more
The data on quantitative innovation capacity give a first indication of the general
conditions for innovation. The volume of national R&D expenditure, the sectoral
share of the R&D expenditure of industry or the number of scientists is much higher in
China than in the other BRICS countries. As far as the specific values are concerned,
the BRICS countries are on a similar level, except for India, which lags behind. Based
on the main indicator of R&D intensity, however, there is still a clear gap between
BRICS and OECD countries.
Figure 1 Survey based profile of general innovation conditions for
1. Human resources
2. Technology absorption
3. Innovation friendliness
4. Environmental protection Russia China Brazil South Africa India Germany The analysis of general framework conditions for innovation also makes use of the
survey results of the International Institute for Management Development (IMD) and
the World Economic Forum (WEF). The indicators are bundled into four fields: human
resources, technological absorption, innovation friendliness and importance of
environmental protection. Germany has the best general conditions for (sustainable)
innovation in all four categories. India and South Africa are ranked as the BRICS
countries with the best starting conditions. However, environmental protection is not
particularly marked in India and South Africa's biggest problem is the availability of Executive Summary iii human resources. The conditions in Brazil and China are less favourable. In Brazil
there are clear deficiencies in innovation friendliness, especially regarding the
regulations governing start-ups. China’s problems cannot be limited to a single factor of
influence. The general framework conditions are assessed as being the least
favourable for Russia.
Although the share of the BRICS countries in consolidated German direct
investments is still small, their large domestic market potentials and the opportunities
for growth make it likely that they will increasingly become the preferred locations for
new investments of German companies. This is supported by evidence for the
attractiveness of these countries in the relevant surveys, the importance they already
have in global shares and their increasing shares in annual German direct investments.
Different aspects are of particular relevance in the different BRICS countries:
• Brazil’s strengths are in its raw materials and agricultural sector which lead to new direct investments and supplement its long established investments – for instance in
the automotive sector.
• In Russia, energy and raw materials form the main base for direct investments.
• In India, the service sector is very attractive including services beyond IT services. Indian industry is currently still in a development phase.
• In spite of many risk factors, China clearly leads in receiving capital inflows from all over the world, whereby the main emphasis is on industry. This corresponds to a
strategy – often referred to as 'extended workbench' – to build up production
capacities in China, in order to gain not only comparative cost advantages but also
access to a gigantic and rapidly expanding domestic market.
• In South Africa, foreign direct investments have played an important role in making vehicle construction more significant.
In none of the five BRICS countries does the research and innovation policy
specifically target the decoupling of environmental and resource consumption from
economic development. The primary objective in all BRICS countries is to promote
innovation in the corporate sector. With a few exceptions, there are no separate
institutions specifically dedicated to sustainability research in the science and
technology (ST) policy of the countries regarded. Sustainability does not constitute an
autonomous field of research support; if it is covered at all, this takes place within
general research and innovation policy measures. Applied R&D is often directly linked
with government investment measures, primarily where infrastructure investments in
energy, water and transport are concerned.
There are no reliable figures on the main areas of promotion within the sustainability
fields which could be used for comparisons beyond the five countries. Based on the iv Executive Summary qualitative estimates of the experts questioned, the following national strengths are
• Brazil: renewable energies from biomass followed by R&D on water management.
• Russia: more efficient conversion of primary energy as well as R&D on hydrogen
• India: diffusion of decentralised, renewable energy sources; sustainability and
• China: development of renewable energies; efficiency standards for buildings;
research in transport sector but without clear reference to environmental issues.
• South Africa: R&D on water management; extensive activities are also planned in
public rail transport.
The lack of young scientists is a decisive obstacle to capacity development in
sustainability research - and in public research in general - in all the BRICS countries,
except China. Especially against the backdrop of strong economic growth and the
related career opportunities offered in the private sector, a career in scientific research
is comparatively unappealing in these countries. At the same time, domestic
companies lack the absorption capacity for highly qualified graduates.
The technological capability of the BRICS+G countries is examined with the help of
patent and foreign trade indicators. On the one hand, this is a methodology which is
well established in reporting technological performance; on the other hand, for the first
time the focus is on sustainability-relevant technologies in economies outside the
OECD so that the methodology had to be modified in various ways. For example, the
technologies relevant to sustainability had to be identified in the patent and foreign
trade classification. In order to cope with the international scope of analysis, the data
searches concentrate on transnational patent applications and global trade which
encompasses all the countries. The strong position of Germany is already apparent
from the fact that 20 % of international patents and 15 % of global exports in the
sustainability-relevant technologies regarded originate here. It is clear that Germany
has enormous potential and, at the same time, the global responsibility to provide
knowledge and technologies needed for sustainable development at a global level.
The shares of BRICS countries in the identified patents for sustainability technologies
range from a few tenths of a per cent to 1 % for China. China has the highest exports
of sustainability-relevant technologies of all the BRICS countries, followed by Brazil. In
both countries, the world trade shares are considerably higher than the patent shares.
This indicates that both countries are quite active in foreign trade, but that this is
grounded on a below average knowledge base. The characterisation of the two Executive Summary v countries as “extended workbench” (China) or “resource supplier” (Brazil) thus also
applies to a certain extent to sustainability-relevant technologies. When looking at the
figures as a ratio to the number of inhabitants, it is noticeable that activities with regard
to sustainability technologies in India are lower compared with the other BRICS
countries. This is evidence for the overall substantial gap in economic development
which India still shows at present compared with the other BRICS countries.
Figure 2: Share of BRICS+G countries in global exports and international
patents for the sum of the 5 sustainability fields regarded 10.0% 25% values BRICS 15%
2.5% values DE 20% 7.5% 5% 0.0% 0%
patent share CN IN world trade share RU
patent share DE ZA DE world trade share DE The relevance of the sustainability technologies in each respective country is also
revealed in its specialisation profile. This shows the technological capability of the
sustainability technologies for each country compared with the average of all
technologies. Positive values indicate an above average activity of the country
regarding sustainability-relevant technologies, negative values a below average one.
The results show clear differences between the countries:
• Brazil has been specialising on sustainability technologies in both knowledge competences and international trade.
• Russia shows considerable knowledge competences, but weaknesses in converting these into internationally competitive technologies.
• Overall, sustainability-relevant technologies play a below average role in India.
• Overall, sustainability-relevant technologies play an almost average role in China. vi Executive Summary • South Africa has been specialising on sustainability technologies with regard to knowledge competence, but this is only converted into an average trade
• Germany is not only a key player in sustainability technologies in absolute numbers; the specialisation profile shows that these technologies form a stronghold of
German knowledge competence and international trade.
Figure 3: Specialisation patterns of BRICS+G countries for all 5 sustainability
fields regarded sustainability technologies regarded specialisation exports 100 BR
specialisation patents 100
Fraunhofer ISI Germany achieves above average specialisation in all the regarded fields. However,
the aggregated values disguise the fact that there are considerable differences
between the five technological sustainability fields in the respective BRICS countries.
For instance, the individual countries show clear emphases in developing
competences. Brazil specialises in renewable raw materials, among others; South
Africa in material efficiency and mobility technologies. China’s performance in the
building sector and mobility technologies is above average. On the other hand, the
BRICS countries also show similarities. There are high patent activities in water
technologies, but there is still a considerable dependency on imports to cover domestic
demand. A similar picture emerges for energy sources with regard to the significance of
technology imports for the BRICS countries. To this extent, these two areas at present Executive Summary vii reflect the classical picture of technology transfer, where countries such as Germany
act as the supplier of know-how and technology and the BRICS countries as
technology takers. However, the recent massive upward trend in patent activities especially in China and to a smaller extent in India – makes it seem very realistic that
the BRICS countries will become more heavily involved in technology development in
this segment in the foreseeable future.
The capacity to accelerate diffusion and innovation processes was examined wi...
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