Policy recommendations to integrate Environmentally Sound Technologies (ESTs) into National Innovation Systems (NIS) in Latin America and the Caribbean

Publication date: 22 October 2020 | Report language: ES

How can the brown technologies of today be turned into green technologies of tomorrow, supporting countries’ ambitions to reach their nationally determined contributions or NDCs? Promoting the development and uptake of such Environmentally Sound Technologies (EST) is only likely to happen through a systemic approach, combining support to innovation processes, with ambitous environmental goals. Innovation policies and the implementation of Sustainable Development Goals depend on and shape each other. It goes without saying that the deployment and diffusion of ESTs is going to be key to our capacity to reach out climate change commitments and Sustainable Development Goals. There is a full fledged recognition of the importance of technological innovation to fighting climate change, as well as sustainable development as a whole. Sustainable development and innovation are intimately linked. As such, Agenda 2030 demands a fundamental rethinking of innovation policy, in terms of its objectives, instruments and processes.

The study and publication are built on the premises that the devleopment and uptake of ESTs, through national innovation systems, is a desirable good. So the question is how can this be achieved from a policy standpoint? The answer to this question is far from being straightforward given that policy solutions must address two challenges simultaneously: the market failures which are commonly associated to innovation; as well as those commonly associated to the devleopment and uptake of environmental protection and climate change measures. On top of this, the policy and political context in many Latin American and Caribbean countries is not fully favorable to doing so. For instance, National Innovation Systems in the region still suffer from strong bottlenecks and weaknesses; and remain environmentally-blind to a significant extent. In addition, investing public resources to support a better intergration of ESTs into national innovation systems is not only technically complex, but also politically risky. 

In spite of this, the urgency of climate change and the negative effects linked to it, means that this policy challenge needs to be tackled head-on. This study sheds light on some of the ways through which a virtuous cycle can be created in order to put innovation at the service of the fight against climate change. This virtous cycle starts with the strengthening of National Innovation Systems through the introduction and development of a policy framework and mix which are tailored to the specificities of the promotion of ESTs. 

This study addresses NIS under the consideration that they are composed of four subsystems: the policy and regulatory framework subsystem; the education and research subsystem; th productive subsystem; and the subsystem of intermediation and transfer of technology and knowledge. The relationships and processes of development, transfer, absorption and adaptation of technologies are the result of the participation and interaction of different actors in the different subsystems. Based on this, the recommendations stemming from this study look at ways in which each of these sub-systems and the interactions among them can be improved, in light of impacting climate action and sustainable development. 

The policy recommendations that are made are mainly addressed to decision-makers at the national level. They urge national governments to review and reformulate their vision, objectives and goals, as well as policy frameworks and processes for the formulation and implementation of strategies and measures to promote innovation. In this way, innovation is given an essential role in the implementation of Agenda 2030 and in particular the objectives related to climate change. In other words, the objectives of innovation policies that have an impact should not only seek economic development but also integrate social and environmental sustainability objectives.

The integration of ESTs into NIS requires deliberate NIS development and strengthening strategies. To this end, a combination of policy measures is recommended including horizontal policies seeking to create the necessary framework conditions to structurally strengthen NIS and thus favour TER integration processes (creating enabling regulatory frameworks and increase availability of funding for ESTs); vertical policies selectively oriented towards sectors that each country has prioritized (e.g. develop capacities to general ans supply ESTs and related knowledge, and stimulate the EST market and private sector investment); and measures for the development of institutional capacities required by governments to design and manage policies effectively (e.g. implement an appropriate governance structure for the implementation of mission-oriented strategies). 

However, before any measures aimed at strengthening national poicy mixes and innovation systems are introduced, there is a need  for political leadership and commitment to emerge, driven by the recognition of the social, economic and environmental advantages and benefits of driving changes in NIS to promote ESTs. Political support and leadership should be translated into a long-term vision adoptig ethical, social and environmental principles and values that are consistent with the challenges it seeks to overcome. The construction of the vision should be led from the highest political level in a participatory fashion, since it demands the coordination of different levels of government, actors and sectors of the economy, as well as a central role for the private sector and society as a whole. Finally, the vision should be fleshed out into a a “mission-oriented strategy” around a specific and clearly defined social or technological objective, that seeks to transform the economy in the long term by strengthening NIS, in a manner which is consistent with Sustainable Development Goals and NDCS.