Abstract
SDG 17 pursues capacity building through access to data, information and knowledge to support decision-making and oversight. Such guidelines embrace the economic viability and sustainability attributes that innovation must have to be called such, in the field of promoting digital innovation. Those guidelines provide a clear path to streamline efforts in this area by directing support to three crucial areas: (1) developing a market for digital innovation products and services; (2) supporting initiatives to bring about new and more efficient business models and processes; and (3) providing focused support to the generation of innovative products and services. To achieve these ends, it is proposed to establish adequate mechanisms to provide technical and financial support in each one of those areas, utilizing partners and collaboration mechanisms.
TopBackground
Main observations from success and failure stories from other donors as well as lessons learned in the implementation of innovation funding in developing countries include (Piaggesi, 2017):
- a.
International development agencies are all consistently pursuing the overall goal of reducing poverty and promoting socio-economic growth, under the guidance of the UN’s Sustainable Development Goals. For that overarching goal, digital innovation, ICT for development and technology innovation are means to achieve those goals faster, more efficiently and more widely; while they do not appear as a sector or priority activity, they are present in practically each sectoral effort and project. It is possible to say that today, digital innovation has been mainstreamed into development financing.
- b.
Innovation funding tends to be directed towards financing: (i) applications of ICT to make more efficient and reach wider audiences for sector projects, with emphasis on education, health, transportation, environment, among others; (ii) applications of ICT to increase the amount, relevance and quality of information available to beneficiaries, in order to improve decision making; (ii) e-government and government capacity building; (iv) government digital strategy development; (v) knowledge acquisition, development, and management.
- c.
Financing for basic or applied research is less common; responsibility for this type of investment is left to government intervention, if any. In practice, research and development rest with large private corporations mostly in developed countries.
- d.
Financing in support of private sector investment is rare; some investment is present for private sector (mostly small & medium enterprises) capacity building, but risk capital or equity investment is extremely rare. Identified sources of development (concessionary) financing in development countries are limited to multi-lateral banks and a couple of bi-lateral financial institutions. Financing for initial stages of product or service development (start-ups) is even less frequent, with only a handful of sources available.
Key Terms in this Chapter
Knowledge Economy (KE): The KE is an interconnected, globalized economy where knowledge resources such as know-how, expertise and intellectual property are as critical as other economic resources such as land, natural resources, or even manpower. Under this concept, Knowledge is recognized as a source of competitiveness, where value lies in innovative ideas, services, and networks, using technology as an instrument, not as an end.
Digital Innovation (DI): The DI is the application of new technologies to existing problems or practices. The process is ongoing, but it can be better understood as taking place in waves, with each way propelled by advancements in technology.
Sustainable Development Goals (SDGs): The SDGs are the blueprint to achieve a better and more sustainable future for all. They address the global challenges we face, including those related to poverty, inequality, climate, environmental degradation, prosperity, peace, and justice. The SDGs are interconnected, and the challenge is to achieve them by 2030. Technology plays an important role in achieving the SDGs.