The Rationale and Role of Science, Technology and Innovation in Developing Countries and in Development Assistance

Knowledge and innovation are key drivers of socio-economic development worldwide regardless of specific development phases of countries or of their location. Competitiveness and welfare strategies of industrialised countries are based on knowledge and innovation and they upgrade innovation systems and policies accordingly. In the developing world many countries, especially large emerging economies have managed to alleviate poverty and improve welfare by investing in education, science, and innovation capabilities and institutions (hereafter STI). In numerous developing economies, however, the significance of STI and related policies for development is not well recognised and many less developed countries lack resources and expertise to set up STI. In these cases development assistance policies and funding as allocated to STI can contribute. Within this context the aim of this article is to give an overview on the role of STI for development, to STI in development aid, and to underlying analytical and practical approaches. The article first gives a short introduction on STI trends and strategies in developing countries vis-à-vis worldwide development. Second the article discusses different aspects of development aid like rationales of donors, effectiveness and impacts of aid, and integration of STI into aid policies with selected references to international and Finnish aid schemes. Among various public and private development aid (private philanthropic charitable donors, bilateral, and multilateral aid from international organisations) the article considers mainly bilateral aid. The article is based on the recent literature on the role of STI in development aid policy, and the article is intended to organize and support the outlining of VTT`s research agenda in innovation for development.