By Catherine Jewell, Communications Division, and Sacha Wunsch-Vincent, Economics and Statistics Division, WIPO
The 2017 edition of the Global Innovation Index (GII 2017), published in June, comes at a time of renewed global economic momentum. But investment and productivity levels remain at historical lows. Laying the foundations for innovation-driven development is more important than ever. Only by sustaining investment in innovation will it be possible to turn the current cyclical upswing into sustained economic growth.
In the aftermath of the global financial crisis of 2009, global research and development (R&D) growth fell but its worst effects were successfully countered by effective innovation policies. However, with investment in public R&D flattening and growth in business R&D slowing, there is no room for complacency.
Measuring innovation performance
GII 2017 measures the innovation performance of 127 countries. It offers policymakers a snapshot of the strengths of national innovation ecosystems as well as areas where there is scope for improvement. Now in its 10th edition, the GII underlines the global nature of innovation and also demonstrates that its ability to support national economic development is often limited by weaknesses in, for example, human capital, infrastructure, or market sophistication.
GII 2017 once again highlights the persistent innovation divide between high-income and middle- and low-income economies but offers grounds for optimism. It shows that an expanding number of developing countries are performing significantly better on innovation than their current level of development would predict. Of these 17 “innovation achievers,” nine come from Sub-Saharan Africa. Low-income countries, led by Rwanda, Uganda and Malawi, are also continuing to gain ground on middle-income economies.
Innovation is a driver of growth, so policy action to foster R&D and other innovation inputs and outputs is essential. But innovation efforts are not and should not be confined to high-tech sectors. That is why GII 2017 focuses on the many innovative advances taking place in the agricultural and food systems sector.
Boosting agriculture through innovation
Agriculture is the backbone of many economies and unlocking its potential through innovation offers a promising pathway to economic development. Many factors are fuelling the innovation imperative within the sector. Beyond growing consumer demand for sustainable products and the need for producers to drive down production costs, more global issues are at play. The world’s population is expanding. By 2050 global food demand is expected to be at least 60 percent higher than 2006 levels. And competition for natural resources is increasing, exacerbated by the effects of climate change.
The stakes are high, perhaps higher than in any other field, and the statistics are compelling. Around one in nine people in the world (795 million of them) suffers from hunger, with one in four living with chronic hunger in Sub-Saharan Africa according to the International Fund for Agricultural Development, World Food Programme, and Food and Agriculture Organization of the United Nations.
Against this backdrop it is more important than ever to support the development of sustainable and inclusive agri-food innovation systems.
Innovation can avert future global food crises, but feeding the world is an increasingly complex challenge. Policymakers need to confront slow growth in agricultural productivity and bottlenecks in agricultural innovation systems, especially in low- and middle-income economies.
Our ability to enhance the performance and sustainability of agricultural food production systems globally depends on developing a deeper understanding of the linkages between innovation inputs and outputs and diffusion pathways in the sector. Only then will it be possible to fully leverage the potential of agricultural innovation, reverse persistently low levels of agricultural productivity and ensure a sustainable global food supply.
A new wave of innovation in agriculture
Notwithstanding the challenges, there is evidence of a wave of new innovative agricultural technologies spilling over from other sectors. An unprecedented convergence of biology, agronomy, plant and animal science, digitization and robotics is transforming the global agri-food value chain.
Advances in genetics, nanotechnology and biotechnology have demonstrated their ability to produce high-yielding, quality outputs and improve farm incomes. In India, for example, the adoption of genetically modified cotton (Bt cotton) resulted in production more than doubling between 2000 and 2015, with yields increasing from 278 kilograms to 511 kilograms per hectare and income from Bt cotton rising by USD 18.3 billion. However, the application of these new technologies remains controversial and their full impact on health and the environment are not yet fully understood.
Digital technologies are also transforming the sector with huge potential to boost the productivity, profitability and sustainability of all aspects of agricultural production. They are wide-ranging and include drones, autonomous vehicles, remote sensing technologies, geographic information systems, radio frequency identification (RFID) chips to monitor animal health, automated milking and feeding systems, and sensors and robots for cultivation in controlled environments such as greenhouses. The data collected through these operations promise resource optimization and productivity gains.
But uptake of these powerful technologies remains at best slow in wealthy countries and is non-existent in many developing regions, particularly Sub-Saharan Africa. In those countries many farmers have yet to benefit from earlier waves of innovation. If the full potential of the latest ag-tech is to be realized, it needs to be rolled out globally.
Overcoming innovation bottlenecks
The agri-food value chain is multi-layered and complex, and includes many different actors. Innovation occurs along the value chain, but much of it relates to improving processes and services. Strengthening the linkages at each stage of the value chain is critically important to improving productivity and efficiency. Typically, it involves a mix of both technological and non-technological innovation. Organizational innovations, such as life-long learning and the digitization of retail and logistics, can be as important as new products or processes.
But farmers and producers in many middle- and low-income economies face a host of problems that impede productivity gains. These include liquidity constraints, low-quality agricultural inputs, poor information about and awareness of available technologies, and inadequate or non-existent post-harvest and distribution infrastructure.
Rapid uptake of innovative approaches to agri-food production is often inhibited by a lack of information and training. Only if farmers and other agricultural operators see the benefits of a new approach and can afford it will they consider adopting it. Agricultural extension efforts therefore need to demonstrate the business case for a new technology and provide the necessary training.
There is huge scope for farmers in low- and middle-income countries to benefit from access to digital technology and new service platforms. But this involves reaching out to them and giving them the confidence to use these tools.
Policies to foster agricultural innovation
Public authorities have a critical role to play in stimulating innovation for the development of sustainable agricultural systems. The policies they implement set the rules of the game and shape the activities of producers and others in the value chain. But all too often, innovation policies neglect traditional or natural-resource-based industries like agriculture. This is a mistake. The agri-food sector should be at the heart of every country’s national innovation strategy.
Public authorities can improve national legal and regulatory frameworks and reduce bureaucracy for farmers and producers. This streamlining process can also help to strengthen linkages between different institutional actors, and ensure greater coherence in the way policies are rolled out and government resources are deployed.
Public authorities also have a role in ensuring access to an effective IP system that encourages the uptake and use of IP rights, in support of innovation and business growth. Building greater awareness about how IP rights add value to new technologies and products is critical. Effective IP regimes allow inventors to generate a return on their investment in developing a technology or product, allowing them to invest in further innovation.
When markets are dysfunctional, it falls to policymakers to take remedial action, for example by establishing funding mechanisms to stimulate innovation in agriculture and food production. In Brazil, policymakers have created sectoral funds to foster technologies in agronomy, veterinary science, biotechnology and more, to great effect. These funds keep key players up to speed with new ag-tech developments, expand investment in tropical agricultural biotech and promote the diffusion of new agricultural technologies. But in establishing such funds, policymakers need to work closely with research institutes to support domestic R&D and ensure that research priorities are in line with local needs and circumstances.
Promoting sustainability in the agri-food sector, however, is a delicate balancing act between promoting more intensive production on the one hand and, on the other, supporting agriculture practice such as the use of efficient irrigation systems and energy-efficient product to minimize environmental impact. Again, it falls to policymakers to create an environment that ensures an appropriate balance is maintained.
Preferential taxation schemes for farmers along with programs to improve access to land and market support for promising new techniques and technologies also offer interesting options to support agri-food innovation.
Supporting an entrepreneurial approach
Policymakers can improve agricultural output and more efficient performance by encouraging producers to adopt a more entrepreneurial approach to their operations. With the right policy support, it is possible to encourage producers across the value chain to view their operations as business enterprises that involve constant innovation to cater to dynamic market demand. This sets the scene for the emergence of new, more efficient business models and creates new pathways to commercialization.
Here again, building awareness about how IP can be used to add value to agricultural outputs is important. Government programs designed to foster business development, such as StartUp India, play a pivotal role in transforming the innovation landscape for agriculture. The Startup India program, launched in 2016, supports the formation of startups, including in the agricultural sector, by facilitating access to funding, incubation and other business support services. The aim is to make the sector more profitable and exciting for future generations.
Thanks to these and other government initiatives, India’s agricultural landscape is proving fertile ground for innovators, who are coming up with a range of solutions that enable farmers to save water and energy, reduce agro-chemical usage, improve farm management systems and strengthen farmer-market linkages. Examples include ITC’s e-Choupal platform, which serves as a “digital knowledge hub” for more than four million farmers across India. And the Trringo mobile app developed by Mahindra and Mahindra, one of India’s agricultural machinery producers, enables smallholders to rent farm machinery that would not otherwise be available to them (see GII 2017, Chapter 5).
Strengthening university–industry links
A great deal of innovation occurs at the farm level and with the right support can be scaled up. Stronger links between public research institutions, entrepreneurs and local farmers can support the broad diffusion of at least the most effective grassroots innovations. Such linkages are also important in responding to demand for innovation from farmers and other agricultural operators. Strengthening university-industry partnerships will help reduce the time it takes for a new technology to move from the laboratory to the farm gate. Underpinned by clear rules on technology transfer, including the commercialization of IP outputs, these partnerships can help accelerate the transfer and uptake of new agricultural technologies.
More data required to support decision-makers
Agricultural food production systems are far smarter and more integrated than ever before. But many developing countries still lag behind. Finding appropriate solutions requires better data on the gaps in agricultural capacity and opportunities to bridge them. Such data will make it possible to monitor and evaluate agricultural innovation systems and thereby improve understanding of the types of policy initiatives required to support the development of the more productive, efficient and sustainable agricultural innovation ecosystems that we all need to feed the world in the years ahead. GII 2017 is a small step in the right direction.
