Introduction

The evolution of agricultural innovation systems (AIS) in East Asian countries is typically aligned with the development of each country’s agri-food sector and overall economy (figure 3.2). Countries can be divided roughly into three groups regarding their chosen strategy to foster productivity and sustainability and their overall institutional readiness to generate and adopt innovations. The groups are as follows.

The upper-middle-income countries (upper MICs) of China, Malaysia, and Thailand are more urbanized, and their agricultural share of gross domestic product (GDP) has decreased (table 1.1). They have greater research and development (R&D) spending (apart from Thailand), emphasize innovation and technology in their strategies,1 and benefit from relatively strong private sector–led innovation activity, with actors ranging from large multinationals in input and food sectors to smaller start-ups and entrepreneurs in e-services, input supply, and trade. This private sector activity is also reflected in foreign direct investment (FDI) to the agriculture sector. All three countries have net FDI outflows (table 1.2). Since acceding to the World Trade Organization in 2001, China has gradually shifted from being a net exporter of food to a net importer of food (globally, the largest importer since 2014). China’s productivity challenge is also partly addressed through significant net FDI to agriculture.2

The mid-range MICs of Indonesia, the Philippines, and Vietnam are urbanizing; but their agriculture sectors are less developed. Agriculture’s share of the economy has also declined, but the sector is less sophisticated (less value added, lower private sector activity). Countries’ visions and strategies are not always aligned with investment in agricultural R&D and innovation. For instance, both Indonesia and Vietnam emphasize innovation-driven sector development and growth; however, the gap between the vision and reality is still wide. Private sector activity, although important and increasing, particularly for plantation crops, is also more limited in volume and nature.

The lower MICs of Cambodia, the Lao People’s Democratic Republic, and Myanmar are predominantly rural; and the agriculture sector plays an important role in their economies. They lag behind their neighbors in vision and strategy as well as the reality on the ground. Sector activities rely