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In Abdelkader Djeflat « Building Innovation Systems in Africa : Experiences from the Maghreb »

Adonis & Abbey – UK - 2010 – 313 pages

Complex innovation systems in Maghreb Countries and the challenges of

partnership with Europe.

Abdelkader DJEFLAT

Maghtech – Clerse (CNRS UMR 8019)

University of Lille – France

Abdelkader.djeflat@univ-lille1.fr

Introduction

Like many other Developing countries, MCs face enhanced competition, vanishing trade barriers,

more stringent intellectual property regimes and deeper concern for the environment. In the face of

these new challenges, viable NIS and competence building are yet to be reached in this era of

transition for the development of competitive national economies. All these complementary though

competing requirements raise questions with regards to the National System of Innovation, both

theoretically and empirically. From a theoretical point of view, it is important to question this policy

instrument with regards to its applicability to LDCs, knowing that it emerged under specific

conditions of high levels of technology mastery and accumulation. From an empirical point of view,

the implementation of innovation policy in Maghreb countries raises several questions related to the

effectiveness of existing NIS in promoting innovation and to the prospects for future policy. Of

particular concern for transition strategies is how well such strategies are adapted to rapidly changing

global techno-economic circumstances and their opening up to the free trade zone with Europe by the

year 2010, bearing in mind the progressive loss of traditional areas of comparative advantages of the

sub-region, namely through relatively low labour costs and rich natural resource endowment. These

are no longer essential for accumulation and growth in the context of the unfolding global techno-

economic paradigm (Djeflat 1997).

The NIS constitutes a useful and practical tool to analyse the weaknesses and the achievements of the

innovation policy adopted by MCs. Nonetheless, from the empirical work we have done on

innovation in MCs, it appears that the NIS in its purest form, with the three poles approach, may not

capture all the complexity of the specific situation of MCs, economies which are largely in a transition

stage to full market economy. NIS thus needs to be examined in the light of certain parameters which

include, in particular, excessive openness to the world economy, the variety of institutions and the

relative neglect of local needs.

The unavoidable questions are: how can the conventional NIS be adapted to Maghreb countries, and

how effective might it be in helping these countries face innovation-based competition, notably from

Europe? The main objective of this chapter is therefore to analyse the weaknesses of the innovation

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system of MCs using the conventional NIS model and to bring out the specificities of a more adapted

system of innovation, taking into account their current situation and notably the increasing ties they

have with Europe. In this endeavour, we will analyse the performance of NSIs in Maghreb Countries

and the problems met in a first part. The second part will propose a revised NIS approach to

incorporate specificities with regards to the situation of MCs. Finally, the third part will address the

issue of the potential effect of partnership with Europe on the NIS and how best this association can

provide the right impetus to make it more effective for MCs.

I. Performances of the National System of Innovation in Maghreb countries

The national innovation system (NIS) has benefited from a vast and varied literature in recent

years: Freeman (1982), Von Hippel (1976), Gilles (1978), Mowery and Rosenberg (1998), Nelson

(1993), Nelson and Winter (1993) and Niosi and Faucher (1991) amongst others. Various aspects

were examined : the role of R&D departments in firms, the process of technological innovation,

the important historical works of science, the concept of the ‘technical system’, the role of science,

the role of the State in promoting technological innovation, the importance of technical alliances

and co-operation agreements among countries etc.

Three spheres are identified in the basic model; the productive sphere, the training and education

sphere, and the research sphere. Coordination is essential between these spheres if the system is to

work. Social and political institutions and economic policies are factors behind the homogeneity of

the system. The integrated approach to the NIS was, however, put forward by Lundvall (1985) and

revised in the nineties for LDCs. Figure 1 indicates the three main interdependent components

which make up the NIS:

Figure 1: National Innovation System

Scientific and technical training sphere

Industrial sphere

(x) (y)

Research and Development sphere

(z)

NATIONAL INNOVATION SYSTEM

EXTERIOR

(a) (I)

(1)

(2) (3) (II) (c) (b) (II)

The national dimension is essential in NIS inasmuch as technological development and flows of S&T

products and services are more frequent within the national boundaries than with the external world.

Interactions are essentially between producers and users of innovation (Lundvall 1992) combined with

specific relations between social and political institutions, and supported by national policies of

coordination and funding of R&D. Various aspects were examined: the role of R&D departments in

firms, the process of technological innovation, the important historical works of science, the concept of

the ‘technical system’, the role of science, the role of the State in promoting technological innovation,

the importance of technical alliances and co-operation agreements among countries, etc. Several

contributions have used the input-output approach as a way to evaluate the performance of systems

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of innovation (Andersson 2000). This approach was also adopted to analyse innovation systems in

LDCs (Calestous 2004). We will use it here, having had the opportunity to use it on various occasions

in the past. (Djeflat 2002)

1.1. The output of NIS: R&D Policy and Innovation performances

The issue of performance in innovation has mobilised a great deal of attention in the last few years.

Several ways have been used to measure performance from single indicators to a whole set of

parameters giving a real mapping (OECD 2005). The effectiveness of measuring performance using

conventional indicators is a highly debated issue (Perrin and Abdelmalki 1998), as available figures

give little scope for sophistication. The classical indicators of R&D, namely patents, scientific

publications and exports of high technology products appear in our case to be more feasible.

Andersson et al. (2005) used them to assess the innovation system in Morocco.

Patents: The number of patents registered by MCs at the local patent offices in the last three decades of

the industrialization process remains relatively low. In Algeria 7930 patents were registered over a

twenty-year period (1966-1986) at an average rate of 397 per year. The share of nationals did not

exceed an average of 3 %, while 97 % were held by foreign firms (INAPI 1979/1988). Comparatively, a

small country such as Switzerland obtained more than 20,000 patents on average per year in the same

period. From a sectoral point of view, it appears that the most active and efficient sectors in Morocco

are medicine (16 %) and chemistry (43 %), while pharmacy in Algeria and textiles in Tunisia appear to

take the lead. While patents are one of the indicators usually chosen to benchmark innovation, in MCs

a large proportion of this innovative activity appears to be of the incremental type and is not easily

patented. Innovation in Maghreb enterprises can also thrive on informal R&D, although the

magnitude of informal R&D is not fully documented.

Publications: In terms of publications, out of 1229 articles published by Maghrebians during 1981-86,

only 5.1 % of the articles were concerned with engineering and technology, a relatively poor

performance compared to Newly Industrialized Countries (NICs) rates. Publications in international

journals on S&T remain relatively limited: 0.32 % for Maghreb as a whole compared to 0.96 % for

Latin America and 2.86 % for Asia. Maghrebian publications are predominantly in the areas of

chemistry and physics (Zahlan 1998). This is a result of a variety of factors (which will be examined

later) and which are of a policy nature but also related to local conditions. Nonetheless, in recent years

some progress has been made by some countries such as Morocco which managed to publish 1365

papers in reputable journals in the 1999-2001 period, not far behind Malaysia, which published 1457

scientific papers, but still far away from emergent countries such as Brazil: 19350 papers during the

same period1.

High technology products and service exports: Global shifts in the structure of demand for manufactured

products are working against-raw-material based sectors and in favour of technology and skill-

intensive sectors (new materials, telecommunication equipment, electronics, computers and software,

etc.). MCs are still lagging behind in producing this kind of products. In 1995, technology intensive

manufactured exports represented 9.8% of total exports for Egypt, 20.7% for Morocco and 22.8% for

Tunisia. This compares unfavourably with the Philippines (47.4%), Thailand (48.3%), Malaysia

(66.7%), and Korea (65.7%)2 and not too unfavourably when compared to Indonesia (22.1%) and China

(31.5%). 3 With regards to world competition, MCs are in a less favourable situation than most NICs

in terms of high technology contents. MCs appear to specialise in technology-intensive products of the

primary type such as chemical products. In other words, the efforts made in integrating knowledge

1 United States Patent and Trademarks Office 2. European Patent Office. Source: USPTO, EPO, WDI (2005)

2 Calculated from PC/TAS database, 1998.

3 Both terms “high tech products” and “technology intensive products” are used for the same meaning.

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and innovation are not yielding the expected results. Neither S&T nor innovation policies followed by

all three countries nor the presence of Transnational Corporations (TNCs) have helped the domestic

innovation systems to be effective in promoting innovation.

1.2. The input approach: investments in NIS components by MCs.

New drive towards establishing effective innovation capabilities is emerging at the level of all

stakeholders and notably policy-makers. From an evolutionary perspective , the institutional

framework has been pointed out as key element of growth (Niosi 2003). Similarly the systems

approach has put emphasis on learning institutions (Lundvall 1992). Andersson et al. (2002), provide

an illustration of the innovation system, highlight the key players as individuals, local and foreign

firms, and organizations. Innovation is a result of their interaction, but also depends on the broader

framework surrounding them, including the entrepreneurial climate, financial markets, education

levels, conditions for competition and labor markets (Andersson et al. 2005). This will depend to a

great extent on the institutions and bodies put forward and on the regulatory framework which can be

considered as part of the input each system is capable of mobilising to promote innovation.

In MCs, innovation policy rested mostly on implicit policy instruments in a first stage during the

seventies and the eighties (Djeflat 1988). A second stage, which is more of an explicit nature, started in

the nineties and saw the proliferation of institutions, laws, regulations and measures to promote

innovation (Bouoiyour 2003). A quick look at this second period shows that MCs innovation policy

rested essentially on four components: the establishment of new institutions and bodies and an

appropriate regulatory framework, the building and mobilising of the necessary human potential, a

significant investment in R&D and finally, a set of measures to promote of R&D at firm level.

1.2.1. New institutions and regulatory frameworks:

The various institutions include new R&D coordinating institutions, and ministries. In Algeria, a

Ministère délégué à la Recherche Scientifique et Technologique (MDRST) was appointed in 1998 together

with orientation and coordinating bodies (Conseil National de la Recherche Scientifique), inter-

sectoral commissions and sectoral committees, the Research Co-ordination Directorate, national

agencies for university research, etc. Similarly, in Tunisia, a Secrétariat d’Etat chargé de la Recherche

Scientifique et Technologique was born in 1998, together with national commissions, directorates and

intellectual property protection agencies4. On top of that, various specialised technical centres were

created in the fields of mechanical and electrical industry, building materials, leather and textiles.

This was accompanied by funding institutions mostly using public money particularly in agriculture

and in industry. A similar institutional architecture can be found in Morocco.

From a regulatory point of view, all three MCs have promulgated specific laws for the development of

S&T. In Tunisia, three of the new laws introduced in the nineties appear to be directly linked to R&D:

Decree n°94-536 of 10 March, 1994, the new law of orientation of scientific research and technological

development no 96-6 of 31 January, 1996 and Decree no 99-11 of 4 January, 1999. While all this

legislation does not explicitly put forward the setting up of an NIS, the programmes implemented go

implicitly in that direction. According to the 1994 decree5, universities are allowed to contract directly

with local or foreign institutions for the purpose of undertaking studies and research6. In Algeria, the

4 To date about 17 private enterprises have benefited from these grants.

5 Decree, no 94-546 of 26 February, 1994.

6 30% of the proceeds are given to the researchers involved.

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law created in August, 1998,7 constitutes a real turning point, considering the detailed planning of

SRTD (Scientific Research and Technological Development) it specifies.

1.2.2. Building human capital.

Human capital policy rested essentially on education and training and on mobilizing existing human

capital. Firstly, regarding education and training, MCs have made a significant effort over the last

three decades. Government budget allocations to education and training have reached 36% of total

government expenditure. As an illustration, until the beginning of the 1990s, Morocco devoted on

average 7.3% of its GNP to education, a rate higher than many countries with the same level of

development (Bouayiour et al. 1998). A similar effort is found in the other Maghreb countries. Within

higher education, the total number of students has steadily increased over the last three decades with

a significant increase in women´s participation. Local universities offer training for degrees up to the

masters’ level in all three countries (Alcouffe 1994). The rate of graduates on average reaches 120 to

220 per thousand.

Secondly, the mobilisation of human potential has witnessed a significant shift in the nineties. This is

done through the ‘Centres of excellence’ policy adopted by MCs specialising in various fields ranging

from advanced technology to the life sciences. The number of researchers mobilised has been

increasing in all MCs: in Algeria it reached 3870 part-time and 1915 full-time in 1997 (Hardy and

Bantoux 1997). The human resources needed to implement the national SRTD programme (1998-2002)

are quite considerable: the total number of researchers was expected to grow at an average rate of

150% in the period to reach a total of 15,915 by the year 20028. Tunisia appears to have approximately

6000 academics doing part-time research (Lahzami 1998). In Morocco, there are about 10,862 part-time

researchers employed in universities, training institutes and high schools, while 2538 doctors and

engineers are involved in research activities in public or private institutions.

A study conducted by the CNCPRST (Centre National de Co-ordination et de Planification de la

Recherche Scientifique et Technique) in 1995 reveals the existence of about 910 research units and

teams within 118 institutions: 90% of these belong to the public sector (80% in universities) while 9%

are semi-public and only 1% are in the private sector. The number of R&D projects rose from 2229 in

1994 to1700 projects in 19979. In the nineties, 9534 people were employed in 126 research institutions,

19 of which were research centres. Notably, 60% came from the Ministry of Higher Education. In 1996,

the share of FTE researchers reached 44.2% in agriculture while industry had only 8.5%, basic sciences

8% and Engineering 6.3%.

1.2.3. Funding of R&D activities.

One of the major weaknesses often put forward when analyzing NIS in MCs and in MENA countries

in general, was the relatively weak, almost negligible level of R&D funding. Throughout the eighties

and the nineties, R&D expenses as a percentage of GDP did not exceed 0.30% for Tunisia (1997), 0.2%

for Morocco (1996), 0.3% for Algeria (1997). Meanwhile OECD countries reported 3.05% for Japan

(1996), 2.66% for Germany (1996) and 2.25% for France (1997). Expenditure on R&D in Morocco

amounts to 2 dollars per inhabitant per year (0.2 % of GDP in 1990). This proportion falls short of the

ones achieved by India (0.9 % in 1987), Korea (2 % in 1987), Brazil (0.6 % in 1986) and Mexico (0.6 % in

7 Law no 98-11 of 22 August, 1998 called the ‘law of orientation and Programmes dealing with the five year plan

for the development of scientific research and technological development 1998-2002’.

8 Decree no 62-98 of 24 August, 1998, (*) no specification is given as to whether they are full-time or part-time

researchers.

9 Government programme, July 1997, p. 98

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1986) and in the nineties by Asia (including Japan) 2.05%, Oceania 1.38%, America (2.87%) and Europe

(2.21%) (World Bank 1993).

Resources are allocated differently from one sector to the other; the largest share is taken by the

agricultural sector in the majority of MCs. The beginning of the year 2000 saw a major effort made by

the states to finance R&D. Figures for Algeria show that allocated funds increased significantly. The

R&D budget more than doubled, reaching 0.7% of GDP in 2001. The national SRTD budget voted

upon each year by the parliament is not the sole source of funds; contributions are expected from

public and private institutions, research contracts and external funding from international funding

agencies and co-operation. (Hardy & Bontoux 1997, p. 11). In Tunisia, the financing of R&D practically

doubled in the 1992-1998 period going from 33,253 DT10 (Tunisian Dinars) to 65,619 DT. In 1998, the

share of public funds reached 88%, funds from foreign institutions representing only 3.9%. An

important increase of 300% is expected from the 8th development plan to the 9th development plan 11:

44% of these funds will be allocated to the establishments belonging to the Secretariat d’Etat à la

Recherche Scientifique et à la Technologie (SERST, 1996). The same effort is found in Morocco.

Between 1998 and 2003, R&D intensity tripled in Morocco, from 0.23% to 0.75 % of GDP. This effort

was upgraded further in the 2000-2004 Development Plan12. Public research institutes and academic

institutions account for 88% of all spending. As a result, Morocco compares relatively favourably with

some other developing and newly-industrialized countries such as Argentina, Poland, Turkey or

Greece but lags behind countries such as China, Brazil, India, and the Czech Republic and, of course,

well behind OECD countries. There has been a noteworthy effort within a short period from the

private sector. Private funding went from 6% of total R&D spending in 1998/1999 to 17% in 2000/2001

making Morocco the leader in the MENA (Middle East and North African) region. All three MCs are

aiming at reaching the 1% of GDP set by UNDP as a threshold target for innovation to take off

(UNDP, Human Development Report, 2003).

1.2.4. Promoting R&D at firm level:

While a great deal of research conducted at universities is of a fundamental type, research at firm level

and in the economic sector as a whole is geared towards solving local problems. At firm level, the

effort made in the area of R&D was weaker: 10% only of total R&D funds are from enterprise budget

while 90% are funded by State. In Tunisia, internal funded R&D by enterprises does not exceed 6%. In

the agricultural sector, a limited number of centers are looking for certain varieties of crops to adapt

them to the local environment. In industry, many companies, particularly in the public sector,

established their own research units either at the sector level or within individual enterprises. This is

particularly the case for exporting industries such as phosphates in Morocco and hydrocarbons in

Algeria. However, the trend shows that private funding has been growing at a higher rate (Lahzami

1998).

From an institutional point of view, the law of August, 1998, in Algeria was geared specifically

towards enhancing firms´ capability to innovate, including both big public enterprises and private

SMEs, thus giving thus a great deal of importance to the private sector in promoting innovation for

the first time. The 1% of R&D funding targeted for 2002 by this law was aimed at fostering firm-level

innovation and university-enterprise links. On top of that, inter-sectoral research units, laboratories

10 One DT is worth roughly two USD

11 La Presse 22, October 1998, p.7

12 As an illustration of this effort, the Laboratoire Public d’Etudes et d’Essai (LPEE) saw its research budget

double during the 5 years period while the Centre national de l’énergie des sciences et techniques nucléaires

(CNESTEN) saw its budget go from 1 to 109,9 million DH during the same period.

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and research services within the productive sector were set up in some countries, where the

interaction between enterprises, branches and sectors and the education system appeared as a key

issue in the eyes of policymakers. The main objective is to get S&T research activities out of the

education system and orient them towards the productive system. This has initiated some contacts

between industry and academic research though at a minimal level. In some countries coordinating

bodies were created to achieve this effect, bodies such as Agence Nationale de Valorisation de la Recherche

et du Developpement Technologique (ANVREDET). While suffering from a host of problems and

weaknesses, these systems managed to set the basis for some innovation activities.

In Tunisia, a study of SMEs in various sectors shows that they managed to conduct relatively

successful operations through structured R&D departments (Attia and Houari 2000). Various types of

innovations took place: adaptation of the acquired technology and new product development but few

firms managed to create break-through innovations and managed to register their patents. In Algeria,

a study of a small micro enterprises show that innovative activities are found in product

improvements (48.5% of total investments), capacity stretching, new product fabrication and

replacement of old equipment. (Djeflat and Aït Habouche forthcoming).While this significant effort

shows that MCs have indeed adopted an explicit innovation policy and a voluntarist approach to

setting up innovation systems, results obtained are much beyond what one would expect but certainly

still less than satisfactory when compared to those semi-industrialized countries such as India, Brazil,

Korea and China. The problems and difficulties met which we will examine in the next section will

help us understand some of the fundamental causes.

1.3. Problems met by the NIS in Maghreb countries

Historically, industrialisation in the Maghreb involved the processing of raw materials based on the

use of a large supply of labour. Each process was often undertaken on the basis of turn-key principles

that made little room for any possible technological transfer. This was made worse by the underlying

inefficiency of the market mechanism in these countries; the preponderance of rent-seeking behaviour,

the culture of bureaucracy, and the heavy hand of governments (Benyoucef 1996). The disintegration

of NIS in the Maghreb originates from both the problems and difficulties met within each of the three

poles and in the relationships between the various poles. Nonetheless, the sub-optimal level of

technological capability building in the Maghreb is a consequence of upon the passive role played by

the State in promoting adequate NIS and its three components: education, R&D and industry, and

notably, the linkages which are vital in the functioning of the system.

At the policy level: As mentioned earlier, the Maghreb States were not able to set up NIS. The industrial

strategies adopted in Algeria and inspired from the so-called ‘industrialisation model’ (De Bernis

1966) led to various obstacles resulting both from the concept and from its bad implementation

(Djeflat 1985). The various institutions set up to promote research and innovation seen earlier, lack the

comprehensive and systemic view which NIS requires. Linkage institutions are either missing or

highly inefficient in linking up R&D to market needs, often as a result of the belief that linkages

between the various components of NIS will occur automatically, through market mechanisms.

Education policy was not matched with economic policy or economic policy with resource

endowment. Education policy just as much as the R&D function has been supply-dominated. In terms

of linkages between S&T planning policy and R&D programmes, many analysts came out with the

conclusion that R&D programmes were completely disconnected from technology policy and even

further remote from development planning policy and programmes. Even if there exists innovative

individuals or institutions, they were constrained by the absence of mechanisms, social and economic,

for developing and diffusing innovations (El Aoufi 1994).

While policy options and national choices mostly of the “volontarist” type, accounted for a large part

of the error, clear indications showed that the role played by international institutions, mostly from

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Europe and the United States, failed to trigger off and contribute to firmly establish innovation

systems in the sub-region. Using various sets of data, Lichtenberg and van Pottelsberghe de la Potterie

(1996), and Braconnier et al. (2001) found no evidence of significant spillovers from inward FDI, for

example. Worst, it appears that the role played in deepening distortions in the three components of

the NIS is considerable through notably restrictive practices, inadequate contractual arrangements,

brain drain encouragement and sub-optimal investments, in the absence of strong institutions.

In the education sphere: Both, the shortages of qualified workers and of scientific manpower can be

attributed to a large extent to the failures of the education system, both with regards to basic

education and basic training and graduate formation. Regarding basic education, in spite of all the

efforts made and described earlier, there were still some shortcoming both from the quantitative and

the qualitative point of view. While basic education suffers from a host of problems and the rate of

illiteracy remains high, it is at the graduate level that fundamental issues can be raised. Only a limited

proportion of the relevant age group was at university. In Morocco, the rate of graduates on average

reaches 120 to 220 per thousand in this group, which approaches that of to France, which graduated

246 per thousand in 1994. However, graduates in social sciences and humanities represented between

50 % and 60 % of the total number of graduates of higher education. Graduates in natural sciences and

technology are in a minority situation except in Algeria where 50 % were in Science and engineering.

In terms of numbers, Algeria trained 39 engineers per 100 0000 inhabitants, Morocco 11, and Tunisia

77, a relatively poor performance compared to Singapore, (360) and Mexico (358) for example (World Bank report, Washington DC, 1994). Moreover, most of these scientists and engineers were either in

universities or in ministries and public bodies and not in industry or specialised research centres.

Over the years these proportions have not improved much, showing that no one country has been

able to increase its proportion of scientists, engineers and technicians. This indicates that crisis in

policy instruments has seriously undermined one of the vital poles of NIS which is education and

training. Higher education has not been able to produce graduates suited for R&D development nor to

fully satisfy the needs of the industrial sector.

There was a lack of a clear vision regarding the role of the university in the promotion of scientific and

technological research. Views, however, differ between those who favour research within universities

and those who prefer to see applied research conducted by autonomous organisations. The

traditional split between academic research and applied research still prevails. It shows the need for

close relationships between research institutions and industry and institutions in charge of promoting

the transfer of technologies and which were non-existent in MCs (El Aoufi 1994). About a dozen of

research institutions have been reorganised over the last decade and a half in Algeria. The innovation

effect of this exercise has, however, been marginal. We have seen for example that ONRS suffered in

Algeria from the absence of diffusion of research results to the enterprises. The lack of integration

between the productive and the research systems led to the restructuring by policy- makers.

In the research sphere: Serious shortcomings can be highlighted. The personnel involved in R&D in the

MCs is on average 10 to 20 times less than in Europe (Bouayiour et al. 1998). For all countries of the

Maghreb, the number of scientists and engineers involved in R&D was less than 400 per million

inhabitants. In the same period Europe had 1735 (Bouayiour et al. 1998). There was no chapter of the

national budget for a clear statement of expenditure on R&D and scientific and technological services

due to lack of financial resources and lack of commitment on the part of policy makers in the face of

competing and more urgent demands (food, health, education) and the huge military expenses. The

total number of FTE (full time equivalent) researchers in 1996 amounted to 19,100 in the whole Arab

World, 66.3% of which were in government R&D units, 31.6% in universities. Only 2.1% were

employed in the private sector and here the rate of growth was slow (7.9% per year) as compared to

universities (11.6% per year). For the same period, the number of FTE (Full Time Equivalent)

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researchers in OECD countries amounted to an average of 4.6 per 100,000 with disparities between

countries, the highest percentage being in USA (Qasem 2000).

In universities, personnel involved in academic research do not devote more than 10% of their time to

effective research as a result of increased demographic pressure and teaching loads. In addition,

published figures show that the bulk were involved in science research while those involved in real

technological research represented between 10% and 20% for countries for which statistical figures are

available. In comparative terms, Korea had 54% in 1983. Maghrebian researchers seem to perform

better when the discipline is more abstract (physics) than when it is applied sciences (biology,

medicine). This is due to a large extent to the fact that 75% of researchers are in universities. One of the

main problems of university research is its isolation from industry, as it has a very limited and non-

institutionalized relationship with local industry (Dahmane 1994). Moreover researchers were

recruited in ministries and public bodies and not in industry or specialised research centres.

Other weaknesses include the relatively low morale and material status of researchers and their

marginalisation, low degree of stability and inadequate motivation, bad research conditions and the

indigent state of universities, the reluctance to recognize the professional credibility of researchers

forcing them to emigrate. This situation does not contribute to their stabilisation or to their motivation.

Other factors include the relatively bad research conditions, the reluctance to recognise the

professional credibility of researchers forcing them to emigrate, the criteria used for career promotion

which favour academic research and international recognition, the indigent state of universities, their

relatively low material status compared to other professions. Marginalisation is made worse by the

fact underlined earlier that in many Algeria, most industrial undertakings are owned by TNCs which

carry out their research in their parent companies rather than locally. This often constitutes an

inhibition to the development of local research. Whenever research is conducted locally, foreign

personnel are preferred to the local one. Moreover, a substantial share of the means used by

researchers in the academic world comes from Europe and particularly from France with regards to

Algeria. The quantitative and qualitative shortfall of technical support personnel for scientific and

technological activities in R&D contributed to limited efficiency of research activities.

R&D funds have suffered from misuse in MCs. Whenever budgets are allocated to R&D activities; a

great proportion is allocated to wages and salaries of the research institution’s personnel. In Morocco,

95 % of the budget goes towards wages. Similar proportions are found for Algeria. In this respect

moreover, there are concerns that the recent increase in R&D spending in Morocco largely reflects

salary increases in academia, i.e. the fact that existing R&D efforts have become more expensive,

rather than that additional R&D efforts are undertaken.

In the industry-firm sphere: At firm level, the effort made in the area of R&D is weaker: Only 10 % of

total R&D funds were from the enterprise budget while 90 % are from the State. With the exception of

Morocco, internally funded R&D by private enterprises remains relatively low (Lahzami 1998). On the

whole, data discrepancies do not allow a view of where R&D is taking place, but it confirms the

limited interest and/or capacity among enterprises in MCs for allocating resources to R&D activities.

R&D competencies are often in relatively short supply in industry as a result of high pressures on

production, which takes priority over research and innovation, as we have shown elsewhere. Other

problems include sub-optimal use of installed capacity, (between 30 % and 50 % on average), limited

capacity in local repair and maintenance of the equipment being used, the quantitative and qualitative

shortfall of technical support personnel for R&D activities, and limited support services.

Weakness of co-ordination of the NIS. A preliminary assessment of the NIS in the Algeria shows a lack

of coordination between the various spheres.

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-Education and production looked like two separate spheres with almost no intersection

and with each sphere training its necessary personnel for itself (Djeflat 1992). One sphere’s supply

of skills rarely met the other’s demand to the point that no sizeable market for skills emerged.

Technicians and professionals who were to operate the established industries were often recruited

and specially trained for the project itself with no spin off for the educational system. The firm has

consequently been “turning its back” on training and acquisition of advanced knowledge (Lahlou

1994, Amrani 1994). The education system, on the other hand, was least oriented to serving the

economy’s real needs.

-Links between R&D Centres and Industry constituted another problem. Preliminary

investigations showed the degree of integration between the different research units with the

productive sector inside each country to be extremely weak (Alcouffe 1994). As production kept on

using imported “ready-to-use” technology and with wages unrelated to productivity, there was

almost no drive for innovation and thus for technological accumulation. This problem which militated

against the accumulation process was aggravated by a number of factors, including, shortfalls in the

supply of capital for investment in the promotion of the S&T and R&D effort of Algeria. Institutional

changes seen in the early nineties looked like a restructuring of the National Research System

(Ministère de l’Enseignement Supérieur, 1982). The lack of communication between research carried

out in the universities and research centres and that carried out in industry, blocks development

prospects in certain sectors, notably in the domain of new technologies (e.g. Biotechnology) where

intense communication and proximity are crucial for success. Bodies and institutions linking up

national research structures to the users of their results are either ineffective or nonexistent.

-The interaction between enterprises, branches and sectors and the NSI appeared as a heart

issue in the eyes of policy-makers who set the organisation of this interaction as a major objective13.

The monitoring of the NSI was not solely done by this institution.14 The main objective was to get

research out of the education system and orient it towards the productive system15. The creation of

both the Commissariat aux Energies Nouvelles (CEN) and the Commissariat à la Recherche

Scientifique et Technique (CRST) as seen earlier, were part of this restructuring plan. Their main

role was to establish links and negotiate with the users of research results. They could not however

perform adequately unlike the French ANVAR (Agence Nationale pour la Valorisation de la

Recherche) for example, which proved extremely successful in liking up R&D to market needs.

Consequently, the three poles approach implicitly used by Maghreb policy-makers to promote

innovation has not yielded the expected results and has shown its limitations. The next section will

look at the specificities of the MCs innovation system and how these can be used to work out a more

appropriate innovation policy.

II. The revised NIS approach

This section examines both in theoretical terms and in practice what approaches are likely to root the

innovation function into the development strategies of MCs. Strategies to pursue a system based

approach to construct domestic innovation capabilities seem to attract a great deal of attention,

notably because NICs appear to have to various degrees and using various ‘localised’ approaches

opted successfully for this approach.

13An important national seminar organised in 1982 under the auspices of the High Committee of S&T research. It

was attended by representatives of the various sectors and the main research actors. 14 Decree of 16 January 1983 15 Indirectly, this was also a way to limit the freedom of public enterprises and their tendency to rely too heavily

on imported technology.

11

2.1. NIS as a complex set of relationships

The NIS in its classical version is far from being a set of simple straightforward relationships. The

linearity of the system is questioned not only by theoretical contributions such as the Kline and

Rosenberg (1986) model but also by the multiple institutions and layers of decision-making involved

in minor projects of introducing new products, services or new working methods namely in the public

sector. Complex sets of relationships between the three poles exists and notably between research and

industry. The variety of links and relationships, which are built in and are necessary for innovative

activities to take place, involves necessarily several elements. As pointed out by Lundvall (1985),

elements of trust, power, and loyalty characterise these relationships. These elements of cooperation

and coordination are the only possible way to transfer the qualitative aspects much needed by

innovation, as indeed the amount of tacit knowledge imbedded in each innovative activity and cannot

be catered for by conventional contractual relationships.

Scientific and technological research brings various agencies into play (political decision-making

bodies, universities, research institutes and centres, etc.). In the Maghreb, each one appears to follow

its own logic and its own path (Djeflat 1992), which is not necessarily compatible with those of other

agencies. The productive system in the Maghreb is generally characterised by a diffuse structure. For

instance, the industrial system in Algeria consisted of less than 200 public firms in the eighties

covering the essentials of manufacturing activities without which the industry/research liaisons

appear more developed, save for the energy and petrochemical sectors. In this case, it is the

differentiation and subsequent isolation of production activities with respect to suppliers and clients

in a very bureaucratic system which has blocked possibilities for R&D spin-offs for a variety of

reasons. Not much work has been done yet to explore the degree of interaction between the activities

of the public research centres and that of the R&D of private firms. The scope for indigenous

innovation has been limited to “learning by tinkering” in the so-called ‘informal sector’. However, to

the extent that the informal sector is disorganized and irregular, it cannot be expected to provide a

robust basis for exploiting, the indigenous innovative potential for its full. This can be seen through a

first attempt made to characterize the national innovation system in Morocco (see figure 2).

Figure 1: The NIS as a Complex System

12

Source: (Zekri 1990).

2.3. The NIS as a need-driven system

In the attempt to get innovation off the ground, MCs have been trying various models and approaches

over the last two decades. Most of these were centrally engineered and monitored, as we have seen

earlier. This stemmed from the belief that public policy makers have to play a key role in the process

of creating a proper NIS. While this is true to a large extent, as shown by the Korean experience, for

example, market dynamics and notably market demands which reflects the existence of real needs is

essential. MCs were soon to realise that this is a vital ingredient missing from the whole set-up and

that “innovation push” policy has serious limitations. This missing ingredient explains to a large

extent why expected linkages between sectors did not take place at the right level. The demand for

R&D services and new and innovative products constitute the real engine for NIS to take off, to grow

and to become a self sustaining system in the framework of the systemic approach.

As shown in Figure 3, the need and the consequent demand take on several dimensions and originate

from various institutions. Higher education aimed at the accumulation of ‘knowledge capital’ can

remain of marginal significance until the economy develops a sufficiently diversified structure. The

transition is from supply push technology transfer and diffusion to need-oriented strategy of

technology development.

Figure 3: A need-driven NIS

13

One of the prerequisites is that the research capabilities is directed and prioritized to meet

domestic demand. Economic demand for new and high technology products remained relatively

important as shown, for instance by the deficit in the technological balance of payments (TBP)

which deteriorated from -87, 7 million DT in 1991 to -128million DT in 1994 (SERST report, 1996) in

the Tunisian case.

In the education and research sphere, several studies have highlighted missing links between the

education and research sphere and the productive system in LDCs, pointing to several factors

which prevent their integration in the economy as a whole (Zawdie 1996). What is important is to

strike a balance between them at different stages of economic growth. Higher education aimed at

the accumulation of ‘knowledge capital’ can remain of marginal significance until the economy

develops a sufficiently diversified structure. Activities at a higher level of development would call

for higher level skills and R & D support in order to be competitive and efficient. The role of

education in the process of growth and development is thus not simply to enhance the diffusion of

given technologies, perpetuating the ‘supply push’ syndrome, but to provide the broad basis,

what Abramowitz calls ‘social capability’. It is this process of ‘technology infusion’, rather than

technology transfer and diffusion, as per conventional thinking, which would enhance the

transition of economies from low-income to middle-income and then to high-income status. The

required change is to go from a supply push innovation dynamics to a need-oriented strategy of

R&D and innovation development. This balance is far from being reached. The growing

phenomenon of unemployed graduates in MCs, for example, reflects both the paradoxical situation

and the depth of the problem one of which the education and training system is well aware. This is

a relatively recent phenomenon in the Maghreb sub-region and, ironically enough, the rate of

unemployment is observed to be high among those with high degrees of qualification.

In the productive sphere, our analysis of the Algerian industrial model a decade and a half after its

implementation, back in the eighties, has shown that the so-called ‘industrializing-industries’

model proposed by De Bernis (1971) and effectively implemented has led to a highly disintegrated

economy, with ‘solid brick walls’ being erected between the various sectors (Djeflat 1985). The

explicit objectives of building an integrated economy with progressive intersectoral linkages could

not take place. Examples from the steel industry and metallurgical industries substantiate to a large

extent the case of push policy rather than a proper need driven dynamics. In terms of innovation,

the large scale often public enterprises had established very few R&D facilities. Often the excessive

use of packaged forms of technology acquisition put innovation needs in a secondary position.

14

The limited needs for products and process innovation in the face of reduced competition meant

that internal capabilities for R&D were never high on the priority list of these companies.

Whenever there was a need, it was systematically oriented towards foreign suppliers. The new

policy promoting R&D in most industrial sectors is geared towards promoting innovation needs

and their orientation towards domestic capabilities within industry and the academic world. SMEs,

with limited resources to set up their own R&D facilities, can outsource their innovation to the

academic sphere, to private consulting firms or to the facilities of large scale enterprises which can

also be foreign companies. Finally, government needs for new products and services can be

satisfied by the academic sphere but also through donors and other international public agencies to

international companies.

III. The NIS as an open system and prospects for the association with Europe.

The association of MCs with Northern partners and Europe in particular takes on a particular

importance if their NIS is to be upgraded. While exchanges with Northern European countries have in

the past had a relatively limited effect on innovation in industry, the NIS cannot be disconnected from

its excessive openness towards the European one. This section will analyse this high level of openness

and raise the issue of how the association with Europe can contribute efficiently to Maghreb countries´

NIS.

3.1. NIS as an open system and its consequences on MCs

Like the industrial system, the innovation system of which it is a part, is widely open on the

international sphere. Consequently, the international sphere takes on a particularly central position, to

the extent that it could be called a ‘fourth pole’. The kind of relationships which the system manages

to build with this international sphere can determine to a large extent the coherence and the

integration of the system and therefore its efficiency in promoting innovation within LDCs. This is

more and more the case, particularly when Transnational Corporations (TNCs) in particular are

increasingly playing a central role in shaping and influencing R&D trends in the world economy

(Madoeuf et al. 1997). Figure 4 shows that the MCs system of innovation is an open system whereby

several sub-systems are in continuous interaction with the international sphere: the education and

training sub system, the research subsystem and the industrial sub-system, each one of these being

itself open on other spheres both nationally and internationally (Bes 1995).

Figure 4: The National Innovation System as an Open System

Source: Bes (1995).

15

From an empirical point of view, the interaction between the various poles and the external world

contain several features that can be illustrated through use of examples. We identify five major

sources of disturbances and disintegration of the domestic NIS in the Maghreb:

-The first parameter is the limited outsourcing of R&D locally by TNCs and its concentration in more

developed economies. In most MCs, industrial undertakings are either fully owned or have a significant

participation of TNCs. Others, largely home grown firms depend fully on TNCs for their technology.

In both situations, TNCs carry out their research in their parent companies rather than locally, even if

the problem treated relates to the local environment. This often inhibits the development of local

research capabilities, with virtually no existent implication of local competences and a relatively

limited impact on the scientific community. The steady decrease of nationally held patents in the

Tunisian case, considered the most open and the most liberal economy of the sub-region, indicates

that the Tunisian manufacturing sector is relying more and more on external innovation and less on

its own capacity.

-The second parameter is the unbalanced power structure in favour of technology suppliers and

its implications. Previous work we have done has highlighted the weak bargaining power of MC

companies when acquiring technology from foreign suppliers, and the consequent restrictive practices

and restrictive clauses (Djeflat 1987; 1988). These hold imbedded the seeds of disintegration of NIS.

Other dimensions in the interaction process contribute to making this process more complicated,

notably commitment, distance, adaptation, conflict and cooperation (Djeflat 1992; 1998; Ford and

Djeflat 1983).

-The third parameter is the domination of external funding, particularly in non-oil producing

MCs, as a result weak domestic funding. This can reach 60 % of the total research budget in some

areas (agriculture research, health etc.). A structural dependency of the national research systems

results from this situation, denying local initiative and, leading to a permanently “infant research

sector’. External debts may, over time, increase this dependency as shown by the implementation of

Structural Adjustment Programmes in North and West Africa. (Djeflat and Boidin 2002) and in East

Africa (Enos 1995).

-The fourth parameter is the outward looking research. As mentioned earlier, a great deal of MC

academic research, while being conducted locally, either tackles fundamental and abstract topics

unrelated to local needs or is conducted in collaboration with foreign counterparts and leads to joint

publications in foreign journals and reviews (Zahlan 1998). This pattern finds itself repeated in the

field of industrial research. An empirical study based on a survey of electronic firms in Algeria

showed that in the majority of cases, the research carried out locally dealt mostly with themes inspired

by the large multinational electronics companies operating locally and internationally rather than with

the problems of the infant national electronics firms.

-Finally, the fifth parameter is the so-called brain drain phenomenon: Maghreb countries have

been relying on the specialised education and training facilities of European, and to lesser extent,

American institutions to train students. Maghrebian students are present in 45 countries with a big

concentration in France, equaling 67 % of the total. This strong dependence on France raises several

specific problems. French higher education neatly separates the university, which is oriented towards

the teaching of liberal professions, and research, the Grandes Ecoles being oriented towards training

professionals in the production and management of enterprises. Many of these graduates tend to stay

in France, in Canada and more and more now, in the Unites States, contributing thus to the ‘brain

drain’. They tend to fit into the innovation systems of the host countries thus depriving their own

national systems of this precious human element. The level of openness towards Europe is doubtless

not only for geographical reasons, but also for economic, political, historical and cultural reasons. We

16

will examine in the next section that this can be also used to the benefit of what may be called an

extended NIS.

3.2. Prospects for building NIS.

The NIS is as, we have seen earlier, highly fragmented and incomplete in some countries at best

and non-existent in some others. There is a need to complete it by adopting an appropriate policy

in several spheres :

3.2.1. The Scientific and technical training system.

Structural adjustment of economies vulnerable to growth reversals would be incomplete if the

package of policies stopped short of addressing the supply side problems which account for the

stunting of growth. This has led to a major revision of the structural adjustment policy package to

accommodate the long term view of the economy through involvement of the state in capacity

building programmes aimed at enhancing production, investment, and innovation capabilities.

The role of education is absolutely crucial in this. But for education to be effective in its capacity

enhancing mission, it is important that it be matched with economic policy, so that educational

programmes could cater for the prevailing skill demand of the economy as well as providing the

technology basis for its future growth.

This means that universities will have to be reorganised and research and training programmes

defined in the light of prevailing needs in the economy. If local scientists and technologist suffer

from lack of access to up-to-date knowledge, it will be necessary to create new conditions or

procedures for retraining and upgrading of knowledge. Thus the need for proper training is

important in MCs. This implies several actions to be undertaken simultaneously: the uplifting of

existing training institutions, the modernisation of training equipment and the introduction of

modern pedagogical methods by involving deeply local competencies in designing these

programmes, and the creation of new institutions to complete the missing links.

Training of good profiles and adequate competencies is not sufficient however. There is an urgent

need to devise strategies for stabilising these competencies locally so as to reduce the brain drain.

Human resources development and mobilisation should include two groups of people : the firts

one is the intellectual Diaspora which constitutes an important vector of technology transfer as

shown in the Korean case. The second one is the returning Immigrant workers who can be used as

an important vector of technology transfer and endogenous capacity building.

3.2.2. The productive system.

Increase in income without increase in productivity would reduce the competitive edge of exports

of labour-intensive industries. Already, these industries are dependent on imported inputs, and

financing imports often poses problems calling for policy intervention in the form of provision of

subsidies or protection in the context of individual national economies. The economy now well in

the path of liberation should enable small and medium enterprises to articulate their needs, thus

providing the demand basis for the development of research and consultancy capacity and hence

for the expansion of tertiary education. A characteristic feature of industry in the Maghreb is the

absence of large firms except in Algeria. The dominance of industry by small firms is not,

however, necessarily a cause of technological backwardness and weak productivity since the scale

effect on innovation could be overcome by the provision of appropriate policies that are largely

supportive of innovation. The development is in great need and must put the emphasis on

17

subcontracting and outsourcing whenever possible for a better technology diffusion throughout

the economy.

3.2.3. The Research and Development system.

There is a strong belief, including amongst policy makers, that most MCs have not reached the

stage of promoting their own RD activities to efficient levels. On the other hand the era of mimetic

approach, so successfully adopted by Asian countries and copying may have elapsed considering

all the barriers which are erected nowadays and which did not exist to the same extent in those

days. Experience in the Scandinavian countries, in Germany and especially in Japan, among others,

shows that state support in terms of the provision of information services and training and

decentralised laboratories to which these tasks can be devolved is crucial for R&D enterprises to

take root and bear fruits. The underlying argument here is that it would be better for MCs to adopt

well tested technologies and leave the NICs experiment with new technologies. This, however,

would diminish the weight of policy concern with R&D in the Maghreb.

The importance of R&D varies considerably according to forms of entry into the world market and

the patterns of sectoral specialisation (OECD 1989).16 It is clear that the place of MCs in the

international division of labour is in those sectors where the intensity of R&D is the weakest like

textiles and farm produce. To date, R&D has been the preserve of public sector agencies and often

of multinational enterprises (MNEs); and national innovation systems have been dominated by

interaction between public research centres and large scale firms. The French model has shown

innovation to be associated with large firms (public and private).

The future of R&D in the Maghreb is thus largely contingent on the character of the evolving

industrial structures in the Region, and more particularly, on the role of MNEs and the extent to

which the State would be keen to adjust economic policy with the view to promoting innovation

and technological progress in the Region. External help is therefore badly needed and many turn to

Europe.

A major problem of S&T policy is that when there are gaps between the products of local R&D,

import of technologies and scientific education, on the one hand, and the socio-economic

environment, on the other. Successful results can neither be expected nor realised. Hence, a basic

condition for eliciting a useful and serious contribution of national scientists & technologists

working abroad is for the government to make the existing research system work properly. This

would involve, inter alia, the provision of incentives in the form of competitive remuneration;

conducive working conditions including the provision of infrastructure and funding for R&D, and

freedom of thought. These could be built as part and parcel of a policy framework for the

promotion of S&T R&D.

Recognising the existence of R&D informal activities and integrating them within the formal R&D

systems to provide a sound basis for technological promotion in the Region is an another issue. An

16 In order to approach the strategies that could be implemented in the countries of the AMU, in particular in the

domain of R&D, we can refer to the studies inspired by the new growth theories. The reformulation retained for

the production function (Boyer & Amable 1992): Y = A * e * K * L* R, where K represents physical capital; L,

labour; R, R&D and Y, GDP. Econometric studies based on this particular form of production function suggest

the existence of substitution between capital, labour and scientific and technical knowledge. Unfortunately, there

are no robust data that would allow estimation of the coefficients and parameters of this production function for

the AMU. It is, however, possible to conjecture that in the AMU as in other LDCs, capital is rather scarce like

R&D, while labour is rather abundant. A well behaved production function assumes choice, but, in practice,

choices are made difficult by the non-malleability of physical capital.

18

alternative to pure R&D in MCs would be to resort to the adoption of old patents which are now

public domain, as in the case of the pharmaceutical industry in India, with the aim to improve on

them through incremental innovation.

3.2.4. Better integration and co-ordination between education and training, production and S&T.

The link between institutions of higher education and R & D centres, on the one hand, and

industry, on the other, could be direct where universities and R&D centres take industrial research

and consultancy contracts. It could be indirect where universities and R&D centres serve a back up

role aimed at enhancing the research and consultancy efforts of private firms engaged in the skill

intensive task of monitoring the specific needs of small and medium size industries and

providing for these needs. This approach to learn from given technologies to be able to improvise

for periodically emerging industrial needs would enhance prospects for the development of

indigenous technological capability by reducing the scale of dependence on technology transfer

from abroad. It helps industry to be competitive and efficient and education and training, a

dynamic vehicle of economic growth.

For MCs to achieve technological progress, it would be crucial for education policy to be matched

with economic policy. Education, and particularly higher education, has failed to translate into

technological progress mainly because the policy context within which it evolved has been at fault.

Reform and reorientation of higher education and liberalisation of the economy would be the

relevant starting point for rectifying the policy failures of the past and for rehabilitating the role of

S&T as a basis for sustainable economic growth in the Maghreb.

4. The prospects of partnership with Europe and its impact on Maghreb NIS.

The systemic approach to innovation, whatever its weaknesses might be, puts in any open system,

two NIS in contact. For the two systems to benefit mutually from synergies, they need to be able to

exchange innovation potential. They must be at similar levels of development and they must be fully

connected. (fig.5)

Figure 5: Two interconnected NISs

19

The situation characterizing Europe and MCs is a structural disequilibrium, whereby one system (the

European one) is dominant and fully operational whereas the other (the MCs) is incomplete,

ineffective and lacking capacity.

The Mediterranean countries in general and the MCs in particular have a strategic and an economic

importance for the EU. Peace and stability constitute a priority for the EU. Common interests exist:

it is in the interest of MCs to attract foreign investments and it is in the interest of EU countries to

have new business opportunities to manage adequately the flow of migrations. The Maghreb

geographic proximity to the EU gives it a head start to expand its share of the world market through

exposure to increased foreign competition and subsequent improvement in technical and economic

efficiency: the Maghreb-Europe relationship dates back to colonial times namely through France

and the various bilateral agreements.

4.1. The Barcelona Treaty.

The new dynamics initiated by the Euro-Mediterranean conference in Barcelona in November 1995,

opened new prospects and mobilised important funds namely the MEDA (Mediterranean)

programme to give a new impetus to European co-operation vis à vis its southern Mediterranean

partners. However, the most challenging aspect of this relationship remains without doubt the Free

Trade Zones Agreement involving Tunisia17, Morocco in a first time and Algeria in a second time

and which is aimed at the elimination of trade barriers between the two zones.

The opening up of Maghreb economies to more direct competition from European firms by the year

2010 constitute an important historical event for the sub-region as it is indeed for other

Mediterranean countries. Bringing local industry to European level constitutes therefore one of the

main concerns of Maghreb authorities currently. Other concerns are environmental issues

considering the geographical closeness and the Mediterranean Sea common to 4 out of the 5

Maghreb countries. Limited means in the field of S&T (financial, material and human) means that

external help and particularly European help badly needed. MCs turn to Europe for the acquisition

of the necessary support particularly to upgrade local industry and particularly SMEs.

The practices of partnership with the North by MCs over the last four decades show that the

conditions of inter-connectedness have not been fulfilled. Consequently, MCs innovation systems

have not benefitted from a real driving force from European NIS, and notably the French one, the

closest one to the Maghreb. The attempts to link up Maghreb to European technological dynamics

started in the early eighties. Three STD (science & technology development) programs (1983-1994):

STDI (1983-87), STDII (1987-91), STDIII (1991-1994) and the inco-doc (international co-operation with

developing countries: 1994-1998) have so far been initiated. However, they have engendered very

little technological capacity. Out of the 6000 research teams which were supported by the EU abroad,

the whole Mediterranean region accounted for only 289 research teams (11% of the total) while Asia

and Latin-America had 44% .The Barcelona agreement, signed in 1995, through its “economy basket”

has brought through its MEDA programme some new ideas to enhance human capacity in this

respect. The MoCo (Monitoring Committee for Science and Technology), composed of representatives

from EU and Southern Mediterranean Countries, put emphasis in 1996, on strengthening the R&D of

SMEs in the South Mediterranean area, focusing on Cyprus (Hardy and Bontoux , 1997 p. 25). Ten

years later, however, very few innovation capabilities have been built. 4.2. The European free trade agreement.

The European free trade agreement endorsed by all three MCs, is to be fully operational by 2010 and

opens new hopes and prospects for lifting Maghreb NIS. The Maghreb constitutes a huge and fast-

17 Signed in July 1995.

20

growing market to develop for European industry while Europe constitutes a massive technological

know-how and accumulated experience at the doorsteps of MCs and which may be exploited by

them. MCs expect to derive substantial benefits in terms of increasing returns and technological

spillover effects from these associations across a wide spectrum of economic activities, and to take

their fair share of the « technology for all » programme (Djeflat 1999).

Comparative advantages can easily be gained in the areas of textiles and garments, leather goods,

pharmaceuticals, and chemicals. These advantages can materialize only if innovation becomes part of

their routine practices. Consequently, European help is badly needed by MCs to upgrade their R&D

and innovation capabilities to face innovation-based competition from Europe and from elsewhere:

such help constitutes, therefore one of the main concerns of MCs authorities. A major step towards

this connectedness of the two areas is the “mise à niveau” programme.

4.3. The mise à niveau programme

The mise à niveau programme (corporate upgrading programme), which has been negotiated with all

three MCs has a full-fledged national programme to bring local industry to European levels by 2010,

thus allowing it to compete efficiently in the world market. In Tunisia, where there is the longest

experience, the number of companies included in this programme has been steadily growing (63 in

1996, 132 in 1997 and 165 in 1998), showing thus the rising interest of industry in the programme.

811 firms took part in the first phase of this program (1997-2000). Its objective is to restructure the

organization of participating companies. Some 2,000 industrial firms were to be modernized for a

combined bill of TD 2.5 billion according to estimates (The North Africa Journal 1999). The program

required a budget of 892 million Dinars of which some 120 million Dinars came from the

participating companies’ own capital. State revenues decline resulting from the free trade zone be

compensated through the ‘corporate upgrade’ assistance program provided by the EU18.

The main companies that took advantage of this modernisation initiative were firstly large

enterprises specialised in the manufacturing of building materials, ceramic, glass, as well as leather,

shoes, agribusiness and textile. The results allowed the increase by 39% of the companies combined

technical and managerial staff. Beside this specific programme, the main areas of co-operation in

MCs/EU relation appear to be basic science, information technology, energy, renewable energy,

Marine science, water, environment, agriculture and agro-food biotechnology and public health. Co-

operation is either on bilateral or multilateral basis. In general future co-operation interests appear to

match the current ones and focus on the competitiveness of SMEs, agriculture, environment and

water (Hardy and Bontoux 1997 p. 25). While R&D appears to be focused more and more the

attention of MCs, it seems to be still lacking a clear vision as to the means to fully participate in the

European research dynamics.

MCs are also in need of raising their IPR protection capacity, upgrading management and

marketing skills improving, communication infrastructures, legal and jurisdictional system, and

social protection systems, as well as winning the fight against poverty and exclusion. The three

types of co-operation which have been practised are technology transfer, acquisition of know-how

and training this later taking the highest proportion. These countries will be left behind if important

investments are not made in the services sector in them. Bilateral co-operation can also help

upgrade the technological capabilities of MCs19 as a whole. In their proximity to Europe, however,

18 The North Africa Journal, 14 February 1999 19 Snecma, a jet engine manufacturer belonging to a French state-owned industrial group is currently negotiating

with the Moroccan state-owned airline, RAM, to set a joint venture with the purpose of building engines in

Morocco. Snecma hopes to convince RAM to start the joint-venture during the first half of 1999. (North Africa

Journal : 14/02/99)

21

the MCs could expect to benefit in the same way as Mexico benefited from its proximity to the

United States.

These are all ingredients that fully contribute to a more efficient NIS. The MEDA II appears to have

made some progress by introducing ingredients of ‘mise à niveau’ in areas of S&T capacity building

without properly tackling the delicate issue of the mobility people between EU and MCs. This policy,

endorsed by European and MC decision-makers, lacks a proper systemic approach which the NIS

needs. Nonetheless, connectedness between the two systems has started with a great deal of

cooperation between academics in universities both in the teaching and the research spheres. The

“Haut Conseil de la Cooperation”, between France and Algeria, and the extension of the European

Tempus programme to MCs constitute good examples. What remain to be connected are the non

academic research sphere and, in particular, the whole productive system through joint R&D facilities,

innovative projects and common strategies to develop new markets through new products and

services.

Conclusion:

We have made an attempt to review the implementation of the NSI tool in MCs showing that the

initial three pole model did not work very effectively in developing innovation capabilities.

Nonetheless, it has proved a very useful tool in analysing in an organized and systematic way the

situation of innovation in the Maghreb. In this respect, it remains a precious instrument to

systematically investigate the strengths and weakness of innovation systems, particularly in the

developing world where NIS are suffering from various shortcomings and innovation has not

properly got off the ground.

The complexity of the situation in the Maghreb requires that a more comprehensive model is

conceived and implemented taking into account all the stakeholders and especially harnessing

innovation dynamism in the informal sector. The NIS in the Maghreb faces the challenge of being

more need-oriented and less prone to a technology push policy type of approach, as shown in the

diagram. Finally it specifies ties with Europe and a high level of openness to require that its level of

connectedness be raised so that MCs can benefit from the driving force of Europe. This of course raises

fundamental political issues beyond the aims of this work.

There are now sound bases for higher level of co-operation both intra-Maghreb, inter-Arab

countries and International co-operation. All these dimensions of co-operation need a careful study

for the elaboration of a full scale co-operation strategy for making of S&T a major engine of growth

for the whole sub-region in the future. The industrial structures resulting from economic reforms

will be characterised by the predominant role of Small and Medium enterprises of the private

sector. While being relatively more active than the big state corporations their means are limited to

undertake individually R&D. In many fields, they could benefit from joining efforts with other

SMEs from the Maghreb particularly in areas specific to the sub-region.

MCs need co-operation to attract foreign investments to face-up to direct competition from

European firms by the year 2010 while there is a growing unemployment of youth. More

specifically, there are grounds for cooperation for building and/or strengthening the institutional

framework and building the NIS. This means stabilising and upgrading the human capital and

mobilising social and political forces supportive of new S&T policy. Finally co-operation is

expected to solve the common problems such as environmental issues: e.g.: the pollution of the

Mediterranean Sea and the reduction of the digital divide.

Future research should explore the possibility of an extended NIS model fulfilling simultaneously

home complexity, need orientation and connectedness with driving engines in the world economy

22

which constitute, in our view, one of the conditions for innovation to really take off in the developing

world.

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