The international governance of knowledge policies: a survey

Joint work of the Centre for Technology, Innovation and Culture (University of Oslo) and of the Research Centre for International Economics (University of Rome “Sapienza”)

Edited by Helge Hveem (University of Oslo) P. Lelio Iapadre (University of L’Aquila, Johns Hopkins University – Bologna Center, and UNU-CRIS, Bruges)

Presentation for the 4th GARNET Annual ConferenceRome, 12 November 2009

Motivation and objectives Market and non-market channels of knowledge

creation and diffusion are influenced by regulatory institutions at the national and international – bilateral, regional or multilateral - level.

The survey aims at identifying the main international institutional

structures that regulate the flows of domestic knowledge accumulation and its diffusion among countries,

providing a description of their characteristics, their similarities and their contrasts,

assessing the functionality of the multi-level international governance of knowledge policies.

Contents1. Introduction2. Conceptual overview

a. The international governance of knowledge activities (Helge Hveem)b. Knowledge accumulation and international knowledge transfers (Luca

Spinesi)3. Knowledge accumulation processes

a. Education (Carl Henrik Knutsen)b. Research (Carl Henrik Knutsen)c. Innovation (Cristina Castelli)

4. International knowledge diffusion processesa. Open flow of ideas (Carl Henrik Knutsen)b. Co-operation on knowledge activities (Helge Hveem and Carl Henrik

Knutsen)c. Migration (Cristina Castelli and Lelio Iapadre)d. Foreign direct investment (Luca de Benedictis and Luca Spinesi)e. Trade in goods and services (Cristina Castelli)

Outline of survey chapters

Concepts and definitions Overview of relevant national policies International institutions

bilateral regional multilateral

Governance of the system: the interplay between different jurisdictional levels

Conclusions.

Education Focus on higher education International integration in higher education

Mobility of students and teachers Foreign affiliates of universities and provision of on-line

courses Regulatory convergence promoted by international

institutions Diffusion of best practices (peer review and country

rankings) International standards on quality assurance and

accreditation systems Improving national systems Facilitating international mobility of students and workers

Possible enforcement problems

Education Perceived trade-off between national policies

and international integration National policies

Education, growth, and societal progress Protecting cultural identities Attracting foreign students and hindering “brain drain”

International integration policies Bilateral or regional preferential agreements Non-discriminatory trade and FDI liberalisation in the

WTO context Other multilateral cooperation initiatives, such as the

OECD-UNESCO Guidelines for Quality Provision in Cross-border Higher Education

Education

International governance: the prospects Increasing international integration Problems of WTO negotiations The role of regional integration

The Bologna process model An alternative to WTO integration?

Competition among different regional systems Facilitation of multilateral negotiations

Research

International cooperation in the global research community

The role of international institutions in producing comparable data and analysis Statistics as a global public good Statistics, knowledge and policies: the

Global Project on Measuring the Progress of Societies

Research The role of intellectual property protection

Intellectual property protection is more relevant for business innovation than for basic research, which relies on free access to existing knowledge

The distinction between research and innovation is blurred

National and international institutions protecting intellectual property can affect basic research

A possible trade-off between public expenditure and intellectual property protection in the finance of research

Research International governance: the prospects

Multilateral coordination of intellectual property policies could be beneficial, provided that national differences are duly taken into account

Spontaneous cooperation among national and regional authorities is already occurring

Regional integration can help, provided that regional organisations succeed in coordinating their own members

National regulatory approaches remain different (e.g.: patents on basic research)

Innovation

National policies Subsidies and other measures aimed at

supporting business investment in innovation Regulations shaping the context in which

firms undertake innovation: the intellectual property regime

The role of international institutions Constraining the competition among national

support measures Facilitating regulatory cooperation

Innovation A stronger international regime of intellectual

property? Expected benefits

Promoting investment in innovative activities Creating a market for knowledge transfers Keeping pace with the increasingly global scope of

business activities Expected costs

Excessive monopoly power granted to protected firms Increased costs of sequential innovation in new

technology fields Distributive problems within and across countries

Innovation Differences in national policies

Range and intensity of subsidies and support measures

Choice of intellectual property protection tools Patents vs. trade secrets Copyrights or plant breeders’ rights vs. patents

Substantive requirements for patents (patentable subject matter, novelty, inventive step, industrial applicability)

Procedural aspects (term for disclosing information; criteria to establish who is the first to invent)

Innovation Regional integration

The EU model Harmonisation of procedural and substantive

aspects of national regulations Regional offices administering a bundle of

national rights Multilateral integration

Limitations to trade-distorting subsidies to innovation

Harmonization of intellectual property protection (TRIPs)

Innovation International governance: the prospects

The national “policy space” left by multilateral institutions is being eroded by bilateral agreements

Multilateral harmonisation of procedures can favour market integration by reducing transaction costs

Harmonisation of substantive rules could lead to neglect differences in development needs

Regional integration among countries at similar levels of development could be a better option

The surveillance role of multilateral institutions (WIPO and WTO) remains fundamental

Open flow of ideas

Knowledge as a public good Barriers to the free circulation of

knowledge across countries are stronger than domestically

International institutions can help reducing these barriers

Crucial role of the communication system

Open flow of ideas International governance: the prospects

Bilateral and regional cooperation is well developed

The multilateral level is the most appropriate to agree and implement communication standards Facilitate ex-ante cooperation among national

authorities, preventing the risk that incompatible standards are involuntarily chosen

Allow mutually beneficial negotiations when national preferences about standards differ, preventing the risk that network externalities lead to the adoption of inefficient solutions

International cooperation in knowledge activities

Cooperation among research and innovation agents generates beneficial externalities and favours incremental innovation

Local innovation systems are based on spatial proximity among their actors, but develop intense international linkages

Focus on knowledge transfers between research centres and firms

International cooperation in knowledge activities International governance: the prospects

National and international institutions can favour cooperation among knowledge producers

Checking the abuse of dominant positions in knowledge cooperation networks

The subsidiarity principle suggests the priority of bilateral and regional institutions

In future, the optimal allocation of competences could change in favour of the multilateral level, as a response to the increasingly global scope of knowledge cooperation networks

Migration

International mobility of people as a channel of knowledge diffusion

“Brain drain” vs. “Brain gain” A fragmented system of

uncoordinated national policies Weak international institutions

Migration

International governance: the prospects National policies face increasing

problems in controlling migration flows Progress at the multilateral level is

unlikely Bilateral and regional institutions can

be used to experiment forms of deeper integration

Foreign Direct Investment FDI is widely considered as an important

channel of knowledge diffusion Its effects depend also on the absorption

capacity of host economies Competition regime Quality of local skills

With the partial exception of the GATS, the multilateral regime of FDI is very weak Home countries fear losses in employment Host countries fear constraints in national

industrial policies

Foreign Direct Investment

International governance: the prospects Notwithstanding the political rhetoric against

foreign multinationals, countries compete in attracting FDI

Proliferation of bilateral investment treaties: investor protection in exchange for capital inflows, without multilateral constraints

Fragmentation of the international regime and discrimination across countries

In future, the GATS model could be extended to other sectors

Trade in goods and services

Trade can be a channel of knowledge diffusion Reverse engineering on imported goods Producer-consumer interaction in services

trade International production networks

Relevant national policies Export promotion Import liberalisation, unilateral or in the

context of integration agreements

Trade in goods and services International governance: the prospects

Preferential trade agreements can lead to a fragmentation of the trading system

But sometimes represent useful experiments of deeper integration Rules of origin Trade-related investment measures Technical standards E-commerce Services

Their compatibility with the multilateral regime remains an important unresolved issue

Some concluding questions The case for an international regulation of

knowledge-related activities Can knowledge be considered as a global public

good? The case for international co-operation in knowledge

policies Spill-overs: the external dimension of national knowledge

policies Removing cultural barriers to international economic

integration International integration, knowledge diffusion, and societal

progress Possible counter-arguments: applying the subsidiarity

principle to knowledge policies

Some concluding questions

The role of regional and multilateral institutions The geographic scope of international co-

operation in knowledge activities Is regional co-operation more effective

than multilateral co-operation in promoting knowledge creation and diffusion?

Can regional integration hinder the global governance of knowledge activities?

Some concluding questions Improving the trade-off between

knowledge creation and diffusion at the international level If flexibility is required in knowledge policies, is

this true both ways? poor countries could be allowed to adopt standards

which are appropriate to their development needs rich countries could be allowed to experiment forms

of deeper integration Are open plurilateral agreements, e.g. on FDI,

better than a network of hegemonic bilateral agreements?