POLICY BRIEF
as personal loans (not as infrastructure funding) to be paid back over seven years. There are also limits on how much overseas borrowing you can introduce into a project, and taxes are discouragingly high. But there is hope; India has recently introduced more incentives, and taxation is currently under review. In addition to this, the recent visit to India by British Prime Minister David Cameron led to an agreement on an Indo-British CEO forum. This could be a way of working together to overcome some of the current trade barriers, and incentivize overseas investment for much-needed renewable energy. We are trying to raise funds from the UK, but here we tend to fall between grant givers and investment committees. Investment committees of foundations and charities are often charged with seeking the highest possible market return. What we at TCW are offering is an investment with modest financial returns, but with very significant, even essential, social benefits. More investors, whether in businesses, foundations or government departments, need to consider missionrelated investment. In our case, the instrument (carbon credits) available to projects like ours is challenging, and at times dysfunctional. The fiscal and financial incentives are coming, but are all too often too slow, and the financial sector can sweep these away through the lack of infrastructure funding and high interest rates. The easiest solution would be for investors to consider trading off a smaller financial return for a much larger social and environmental return. Mission-related investment is littleknown or used, but it could make a significant difference to the crucial deployment of renewable energy. n
Promoting industry’s innovation capacities By LYNN K. MYTELKA, a Professorial Fellow at the Maastricht Economic and Social Research and Training Centre (UNU-MERIT) in the Netherlands. Innovation is a process of learning, adaptation and change in technology, organizational structures and institutional practices, in which the application of knowledge plays a central role. In industry, especially in developing countries, it consists of the process by which firms create and use knowledge to master and implement the design, development, and production of goods and services that are new to them – irrespective of whether they are new to their competitors, their countries, or the world. Access to knowledge and information, the capacity to reverse-engineer existing products, to absorb and adapt imported technologies, transfer knowledge from universities and research institutes to producers or end users, and networking to solve technological problems, are all parts of an innovation process. Tomorrow’s industrial processes will need to be energy and water-efficient, resilient, and sustainable. Strengthening the innovation capacity of industry is essential in meeting these objectives. Many national and international organizations have promoted research with a view to enhancing the competitiveness and innovation capacities of industry. A review of case studies of a number of international institutions,
active in Europe, Asia, and Africa, and of their role in strengthening national innovation systems, finds that the way to support and promote the industrial development of developing countries has changed considerably over the course of the last three or four decades. In the present context, access to a wide range of knowledge inputs, an emphasis on continuous learning and innovation in both new and traditional industrial sectors, and networking and collaboration through knowledge exchanges, joint research and technology partnerships, have all emerged as critical elements in the contemporary portfolio of industrial innovation support programmes and policy instruments. So, too, has the importance of engaging in a continuous process of dialogue and evaluation that enables the overall programme to meet its objectives through adaptive changes in the centres themselves, as well as in their activities. Some examples from three of the case studies: l The International Institute for Software Technology (UNU-IIST), located in China, Macao SAR, is one of the research and training centres of the United Nations University. UNU-IIST's mission is to help developing countries strengthen their education and research in computer science and their ability to produce computer software. The UNU-IIST experience is a good example of how a centre that was not designed as a ‰
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