FROM COMPETITIVENESS TO INCLUSIVENESS:CHALLENGES FOR SOUTHEAST ASIA

UNIVERSITIES AND RESEARCH COUNCILS

By Preeda Chaiyanajit and Pun-Arj Chairatana1

Sub-theme: Global challenges and possibility of emergence of‘Asian Innovation System’

Abstract

Poverty, mortality, health, education, equality, epidemic, andenvironment are more relevant to the present and future ofinnovation system (IS) than ever. These grand challenges aredrivers to for innovation for inclusive development (IID) tobe an alternative instrument of inclusion. It can beconsidered as a new concept in science, technology, andinnovation for STI policymakers and scholars and policy makersin Southeast Asia and other emerging economies. Furthermore,it can be seen as an extension of existing Asian InnovationSystem (AIS) that, up till now, mainly focus oncompetitiveness, economic growth and wealth creation. Twomajor institutions within the innovation system, namelyuniversities and research councils (U-RC) have beencontinuously facilitating economic-led innovation developmentthrough research and education, but these knowledge generatingbodies engage with an informal setting in an indirect andrestricted manner. As a result, an assessment of the currentawareness within this U-RCs linkage on IID through examiningactivities that are potentially related to this emergingsetting is crucial and timely.

This paper illustrates the preliminary finding from theOnline-Delphi studies of the “Cross-national Survey onUniversity and Research Council Roles on Southeast AsiaInclusive Development and Innovation” project that covers five

1 Noviscape Consulting Group – Corresponding email: pc@noviscape.com

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countries, namely Indonesia, Malaysia, the Philippines,Thailand and Vietnam. It explores the possibility of proposingan Inclusive Innovation System (IIS) concept that canpotentially respond to global challenges and while beingrelevant to Southeast Asia context. According to the study,the majority of stakeholders are not familiar with IIDalthough there have been ongoing different subsystems thatresonate this particular stream. With a vast developmentalstage of institutional set-up and similar grand challengesamong the countries in focus, the AIS is facing with anincreasing complexity through a social demand and itsconventional rigidity in order to expand its horizon to coverthe dimension of inclusiveness.

Keywords: Innovation for inclusive development; researchsystem; university; research council; informal sector;inclusive innovation system; Southeast Asia

1. IntroductionPoverty, infant mortality, health, epidemics, education,inequality, and environment are among the major challengesthat the global economy is coping with. These issues affectthe developmental gap define as widening social and economic“exclusion” that negatively affects an individual quality oflife, equity, and social cohesion. Recently, innovation forinclusive development (IID) has gained momentum among keyinternational development agencies like Organization forEconomic Co-operation and Development (OECD) and InternationalDevelopment Research Centre (IDRC) as a tool for the provisionof opportunities and empowerment of underprivileged people inorder to enhance their “inclusiveness”. While, “inclusivedevelopment” is a strategy that addresses economic and socialinequalities and exclusion by providing marginalized andvulnerable people and groups with the opportunity tocontribute to the process and benefit from its outcomes,inclusiveness is still a vague concept. In this paper, weconsider it as an approach or effort to include the people

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facing social exclusion where “social exclusion” is defined aslacking or being denied of access to resources, rights, goods,and services as well as having the inability to participate inthe normal relationships and activities, available to themajority of people in a society, whether in economic, social,cultural or political arenas into a system generally providedfor society at large in terms of ability to access andopportunities for participation and decision making(Chairatana and Carrillo, 2012).2

In this context, IID can be defined as “innovations thatimprove people’s lives by transforming knowledge into new orimproved ways of doing things in a place where or (by peoplefor whom) they have not been used before” (Adapted from IDRC,2011).3 With transforming knowledge being one of IID mainelements, universities, research councils (RC) or equivalentinstitutions such as research centers or institutes and theirlinkages are key as knowledge producers, intermediaries,brokers and funders that can direct research to impact andbenefit vulnerable groups of people. The significant unit ofanalysis includes research councils and their linkages touniversities in addition to the conventional triple-helix ofuniversity-industry-government research relations.

In section 2, this paper elaborates on how social dimensionhas evolved and driven an emerging paradigm shift ofinnovation system from achieving economic prosperity to socialprosperity. Then, it explains 7 drivers behind the movementsin section 3. The methodology used to assess the perception ofU-RC on IID is shown in section 4. The preliminary results andfindings from selected Southeast Asian universities andresearch councils’ perception on IID are illustrated insection 5. Finally, section 6 concludes that conventionalinnovation system has left people with economic and social

2 Chairatana, P.-A. and Carrillo, J. (2012). Project framework for UNIID-SEA.

3 IDRC (2011). Innovation for Inclusive Development Program Prospectusfor 2011-2016 Public version.

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disparity, and income inequality in both developing anddeveloped countries while there are movements and drivingforces that challenge such system to shift in order to be moresocial-oriented and inclusive. Also these driving forces andtheir current perception on IID are challenges foruniversities and research councils to go beyond wealthcreation and competition.

2. Social Dimension of Innovation SystemEconomic slump, poverty, disparity and inequality have longbeen persistent global issues for decades. Variousorganizations from public and private sector have sought waysto address these issues and, although progress has beenachieved, the problems remain. One consequence has been that,since the beginning of new Millennium, there has been anexpansion of innovation system (IS) paradigm from onlyfocusing on a competitiveness to embrace the inclusiveness.

Social Cohesion

Lundvall (2002) discusses the need for social cohesion andpoints out that advanced IS derives from a demand to createprosperity in an effective and collaborative manner. Thislearning economy and social cohesiveness concept, or Aalborgversion of IS, was later extended by merging developmentstudies ideology to accommodate the institutional set-up indeveloping and other catching-up economies.

The social dimension within a conventional innovation systemcan be seen as a success ingredient of Danish innovationsystem with its combination of wealth creation with socialcohesion (Lundvall, 2002).4 Though the Nordic countries aresmall and this can be seen as a handicap, Lundvall emphasizesthat interaction and trust are critical factors of successfulinnovations in those countries. With that mindset, innovativefirms engage more with other firms and employees take more

4 Lundvall, B.-A. (2002). Innovation, Growth and Social Cohesion: The Danish Model. Edward Elgar, Cheltenham, UK.

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active part in processes of technical and organizationalchange.

“Innovations are new combinations and they come out of diversity.Innovation involves the creation of new knowledge. At the sametime most innovations are new combinations of old insights. Theycome out of an interaction where people with different talents,interests, insights and experience get together in opencommunication willing to share their knowledge with others.Innovation processes that neglect the needs of users are inefficient.Science based innovations that are not supported by experiencebased learning are not successful. Therefore innovations are bestseen as outcomes of ‘collective entrepreneurship’. It means thatgeneralized trust among people meeting at the market place andparticipatory democracy in working life contribute to innovation.”5

Thus this reflects social cohesion is an indispensable elementamong key actors in the innovation system that drives theeconomy as a whole without leaving anyone behind.

Social entrepreneurs and enterprises

Some of the emerging key players in this social-oriented ISinclude social entrepreneurs and social enterprises(Chairatana, 2011).6 This social innovation system (SIS) arguesthat there are not only business firm that actively engage onan innovation process, but also entrepreneurs and enterprisesthat adopt social-business model into the center of theireconomic activities. The paper illustrates on how newcomersenter into a well-established IS and bridge formal andinformal innovation dimensions for further analysis (SeeFIGURE 1).

FIGURE 1

5 Lundvall, B.-A. (2009). The Future of Innovation in The Learning Economy,http://thefutureofinnovation.org/contributions/view/470/the_future_of_innovation_in_the_learning_economy6 Chairanata, P.-A. (2011). Policy and Implementation Research for

driving Social Enterprises in Thailand.

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Source: Chairatana (2011), adapted from Malerba, F. (2002) Sectoral systems ofinnovation and production, Research policy 31, 247-264

Chairatana (2011)7 introduces the rise of new key playerscontributing to social-oriented innovations involving socialenterprise and social entrepreneurship. The concept of socialenterprise represents a paradigm shift from the conventionalcapitalism to a friendlier with global community and society.The main goal of the concept is to adjust the mainstreamcapitalism seeking maximization of profit which causesselfishness and intense competition to foster collaborationand social support while achieving optimization of profit.Supporting social economy and social enterprise is a systemicoperation emphasizing the flow of knowledge and cooperationbetween relevant institutions and individuals to create

7 The policy research project supported by Thai Social Enterprise Office (TSEO) whose priority is to stimulate cooperation among social enterprises and develop their networks in Thailand.

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dynamics and positive impacts driving social transformationthrough existing and emerging economic activities.

Figure 1 depicts the diagram of social innovation system (SIS)consisting of 3 levels of social units: 1) Sector of socialenterprise, 2) Social enterprise and 3) Socialentrepreneur/innovator that interact with each other withinsocial economy, whose existence relies on a flow of socialinnovation. Main role and activity of these social units is toproduce social innovation in a form of product, process orservice innovation which eventually becomes innovation forpublic services through shared perception, advocacy, law orregulation, activities and integration as well as knowledge,learning process and technology between stakeholders andnetworks in order to drive social economy that can co-existwith other economic systems (Chairatana, 2011). This, in turn,emphasizes the need for conventional innovation system toshift in order to facilitate new types of stakeholders andactors in the social-oriented economy.

Inclusive System of Innovation

The Globelics embraced inclusiveness on its thematic report on“Learning, Innovation and Inclusive Development” with theconcept widely used among international organizations such asthe World Bank and the United Nations as well as increasinglyappearing in documents produced by donor organizations such asIDRC (Canada), Sida (Sweden), Danida (Denmark) and Norida(Norway). Recently, Globelics Thematic report introducedinclusiveness involved in innovation, development as well asinnovation system.8 Globelics perceives “inclusive systems ofinnovation” in two different frameworks (Johnson and Andersen,2012):

1) A positive analysis framework looks at specificcomponents of systems of innovation such as the nature of

8 Johnson, B. and Andersen, A. D. (2012). Learning, Innovation and Inclusive Development: New perspectives on economic development strategy and development aid, Globelics Thematic Report 2011/12.

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the institutions regulating the interaction betweeninnovations; the manner in which innovation activitiesuse tacit knowledge and their location withincommunities, regions and cities; and their business-oriented specialization pattern, i.e. the products andservices, the competences and capabilities.

2) A normative framework focuses on how to make the systemmore inclusive by involving two different elements:producing more inclusive innovation for betterment of thebottom of the pyramid and enhancing inclusiveness onperformance for all sorts of innovation.

In this sense, it is aligned with Lundvall’s work thatemphasizes the importance of social cohesion among workforcesin a learning economy like Denmark. Ideally we don’t want toleave behind those with fewer opportunities to learn. The samegoes for the social classes, ethnic groups and regions thathave been left behind and remain excluded from contributing toeconomic growth and from its fruit (Johnson and Andersen,2012).

Thus, we could see three separate evolutions of socialdimension in innovation system: social cohesion, socialentrepreneurship and inclusive systems of innovation. Nextsection we discuss what could possibly be the drivers to suchmovements.

3. Global challenges as Drivers for Change for Innovation System

There are 7 main driving forces behind a shift of IS paradigmthat we discussed above with a special reference to theSoutheast Asia, namely 1) regional economic and socialdisparity 2) green growth and economy 3) climate change 4)changing consumption behavior 5) informality 6) new povertyand 7) social networking. These drivers can be seen as anevolving factor that critically impacts and challenges theexisting paradigm of IS which has a little say on social andhuman development.

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Economic and Social Disparity in Southeast Asia: An Innovation System Dilemma

After the new Millennium, Southeast Asia has enjoyed economicgrowth and improved living quality, which can be seen from aconstant increase in the GDP and Human Development Index(HDI)9. Yet that still leaves countries in the region withrelatively unimpressive Gini-coefficient10 (See Table 1).According to ILO (2010), the below figures mean thesecountries have high inequality of income distribution (Gini:high inequality – 35 and extreme inequality - 50) with thepoorest 20 percent of the population receiving only 6.9 percent of the country’s total income while the richest 10 percent enjoy 26.1 per cent. This translates into large incomegaps between population groups. Assuming that the per capitaincome is $10,000 and the Gini-coefficient is 0.35, therichest 10 per cent of the population would receive averageincome of $26,114 per year, but the poorest 20 per cent wouldhave an annual income of only $3,450.11

Inequality also affects the poor in terms of the loss inpotential human development measured as the loss in theInequality-adjusted Human Development Index (IHDI)12 relativeto the HDI. UNDP and HDRO (2013) using HDI data yields robustfindings of an inverse relationship between inequality andsubsequent improvement in human development, driven mostly byinequality in health and education rather than in income. Theanalysis showed the effects of multidimensional inequality onthe HDI and each of its components (health, education andincome) due to four explanatory variables: overall inequalityin human development, inequality in life expectancy,

9 A composite measure of indicators along three dimensions: life expectancy, educational attainment and command over resources needed for a decent living.10 Southeast income inequality varies from 34 to 46.2. Indonesia is the least inequality country and Malaysia the most inequality one among those in Southeast Asia with data available.11 ILO (2010). Inequality, income shares and poverty: The practical meaningof Gini coefficients, TRAVAIL Policy Brief No.3.12 HDI value adjusted for inequalities in the three basic dimensions of human development.

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inequality in educational attainment and inequality in incomeper capita.

From this data, we can conclude that inequality holds backhuman development and retards social development.13 Jacobs etal. (1999) suggests that the level of people’s education,intensity of their aspiration and energies, quality of theirattitudes and values, skills and information comes into playwhether it is the development of the individual, family,community, nation or the whole world.14

These evidences show that not everyone in Southeast Asiaenjoys the benefits of economic-oriented innovation system andthat the vulnerable are also prevented from developing theirpotential to the fullest given the less opportunities theyhave caused by inequality.

TABLE 1 GDP, Income Gini-coefficient and Human Development Index in

ASEAN countriesGDP (current

US$Billions)a

IncomeGini-coefficientb

HumanDevelopment Index(HDI)c

Inequality-adjustedHuman

DevelopmentIndex (IHDI)c

2000 2012 2000-2010

2000

2012

2012 Overall

Loss(%)

Thailand 122.73

365.56

40.0 0.625

0.690

0.543 21.3

Philippines 81.03 250.27

43.0 0.610

0.654

0.524 19.9

Vietnam 31.17 141.6 35.6 0.5 0.6 0.531 1413 UNDP and HDRO (2013). The Rise of The South: Human Progress in a DiverseWorld, Human Development Report 2013.14 Jacobs et al. (1999). Towards a Comprehensive Theory of Social Development, In: Human Choice, World Academy of Art & Science, USA, 1999, p. 51.

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7 34 17

Malaysia 93.79 303.53

46.2 0.712

0.769

n/a n/a

Indonesia 165.02

878.04

34.0 0.540

0.629

0.514 18.3

Cambodia 3.65 14.06 37.9 0.444

0.543

0.402 25.9

Brunei 6.00 16.95 n/a 0.830

0.855

n/a n/a

Lao 1.73 9.30 36.7 0.453

0.543

0.409 24.7

Myanmar n/a n/a n/a 0.382

0.498

n/a n/a

Singapore 95.92 274.70

n/a 0.826

0.895

n/a n/a

Notes: aWorld Bank (data.worldbank.org); bData refer to the most recent yearavailable during the period specified, Human Development Report 2013; cHumanDevelopment Report 2013

Green Growth and Economy

With the impacts from natural disasters seen around the world,many economies have been forced to find ways that secure theirgrowth with sustainability while not jeopardizing the futureof their resources and environment. The idea of green economyhas been introduced as one that results in improved humanwell-being and social equity, while significantly reducingenvironmental risks and ecological scarcities. In its simplestexpression, a green economy is low-carbon, resource efficientand socially inclusive. It means that, apart from the need toprotect the environment, such economy must provide equity andinclusiveness by maintaining, enhancing, and rebuildingnatural capital as a critical economic asset and as a sourceof public benefits, especially for poor people whoselivelihoods and security depend on nature (UNEP, 2011).15 A15 UNEP (2011). Towards a Green Economy: Pathways to Sustainable Development and Poverty Eradication – A Synthesis for Policy Makers, Green Economy Report, www.unep.org/greeneconomy.

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non-inclusive approach would not be sustainable as externalinterests have gained resources at the expense of localpeople’s access to the environmental assets they need fortheir living.16

However, the cost of going green may be high as it comes at apremium price compared to the non-green products and thatpresents people with barriers to fully benefit from it. Thusit is a double challenge of achieving sustainability whilealso providing social inclusion. We could say that aconventional innovation system has been driven by this to gobeyond economic prosperity and focus more on people’s well-being and happiness.

Climate change shift global supply chain

Climate change not only has economies inclined to a moresustainable approach for the sake of present and futuregenerations, it also causes disruptions to global supplychain. According to PwC (2013), climate change will have amultiplier effect on supply chain risk as it amplifies oralters existing risks. For example, in 2010, Russia suffered asevere heat wave, resulting in economic losses estimated to beUS$15bn as drought and wildfires destroyed crops, particularlywheat. The knock-on effect was export restriction on wheat inRussia, which contributed to global price increases.17

Major climate threat to global supply chains has also beenidentified by new research from the Carbon Disclosure Projectand Accenture (2013) as 70 per cent of companies believe thatclimate change has the potential to affect their revenuesignificantly, a risk which is intensified by a chasm betweenthe sustainable business practices of multinational

16 IIED (2013). Green Growth and equity must go hand in hand, http://www.iied.org/green-growth-equity-must-go-hand-hand17 PwC (2013). Business-not-as-usual: Tackling the impact of climate changeon supply chain risk, reprinted from Resilience: A journal of strategy and risk, http://www.pwc.com/gx/en/governance-risk-compliance-consulting-services/resilience/publications/business-not-as-usual.jhtml

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corporations and their suppliers.18 Thus the traditionalinnovation system has been challenged by business-not-as-usualsituations and needs to adapt new approaches to be able tomanage those risks with effectiveness.

In order to cope with such supply change disruption triggeredby climate change risks, PwC (2013) has suggested threeprinciples: 1) recognizing that the risks cannot be viewed inisolation due to their interconnectivity 2) ensuring that theappropriate risk management procedures are in place includingscenario planning and 3) developing global collaborativestrategies to deal with heightened international resourcescarcity.

Sophisticated Consumption Behavior

While supply side has been affected by risks and disruptions,the demand side has developed more awareness that results inchanging consumption behaviors. As a result of impacts fromglobal warming, consumers are modifying their behavior toreduce their environmental footprint, for example byincreasing energy and water efficiency, recycling, andavoiding brands with poor green reputations. This pattern hascontinued despite the global financial crisis and subsequenteconomic downturn (Boston Consulting Group, 2009).19 In manycases, consumers are willing to pay a premium for greenproducts, thus opening up green opportunities for business(Mintel Oxygen Report, 2010).20

In response to the new patterns of purchasing behaviors, manyconsumer products companies are implementing more efficient18 Carbon Disclosure Project and Accenture (2013). Reducing Risk and DrivingBusiness Value, CDP Supply Chain Report 2012-13, https://www.cdproject.net/en-us/news/cdp%20news%20article%20pages/major-climate-threat-to-global-supply-chains.aspx19 Boston Consulting Group (2009). Capturing the Advantage for Consumer

Companies, BCG Report 2009, p7.20 Mintel Oxygen Report (2010). Are Americans Willing to Pay More Green to Get More Green, http://www.mintel.com/press-centre/social-and-lifestyle/are-americans-willing-to-pay-more-green-to-get-more-green.

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technology and resource management practices in theiroperations and supply chains, and some are developing productsthat enable consumers to reduce their carbon impact (BSR,2011).21

Rising of informality through new institutionalization of market

For decades, a general perception on key characteristics ofinformal economy was that of an economy that utilizes simpletechnology, is limited in capital, has no fixed businesslocation, exists with quasi-legality or lack of registration,and employs little record keeping. It also has a highproportion of unrecognized and unprotected people withvolatile and low income situation that could not easily bemoved into “a formal economy,” yet they still mobilizethemselves into “an informal economy.” They actively engage ina highly flexible and loosely structured economy as “informalentrepreneurs" and have learned their business lessons fromthe success and failure of the global economy.

It seems to be a mission impossible to have full formality ofthe informal sector. Partly, this is because of the increasingcomplexity in business transactions, interdependency and thechanging role from being only business of the poor andcriminal to an alternative social safety net when the globaleconomy goes wrong. Many catching-up economies have tried toformalize this sector for some time. Particularly, somegovernments in Southeast Asia are increasingly adding moremeasures and regulations to the informal economy in order tointegrate taxable activities into a gross domestic product(GDP) calculation.22 In the informal economy, not onlyenterprises engage with business-oriented innovation processbut also entrepreneurs and individuals. Thus it has introduced21 BSR (2011). Adapting to Climate Change: A Guide for the Consumer Products Industry, BSR Report http://www.bsr.org/en/our-insights/report-view/adapting-to-climate-change-a-guide-for-the-consumer-products-industry.22 Chairatana, P.-A. (2011). Informal Economy and Innovation, Trendnovation Southeast newsletter Issue 14, http://www.trendsoutheast.org/opinion/2011/11/7/informal-economy-and-innovation

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new types of players that the traditional innovation systemhas never encountered before.

Poverty and middle class transformation in advanced countries

Switzerland, Sweden, UK, Netherlands and the United Stated areranked top 5 in the Global Innovation Index 2013 rankings.23

Yet income inequality has been rising in almost everydeveloped country over the last 30 years.24 The level of incomeinequality stretches much higher in the U.S. than in the otherdeveloped countries of Europe and North America – it is notonly high but rising. The new World of Work Report 2013 by ILOplaces the U.S. Gini coefficient at 47.7, almost halfwaytowards the end where the richest gets everything and thepoorest gets nothing. By comparison, the levels of inequalityin the other 25 developed countries studied all fall in a bandbetween 20 and 35. The report concludes that the middle classin the U.S. and around the world is suffering from long-termunemployment, weakening job quality, and workers dropping outof the labor market. The 2008-2009 global recessions have madethe situation even further worsened.25

This implies that the conventional innovation system has notbeen able to lessen a gap of prolonged income inequality indeveloped nations and also causes butterfly effects todeveloping countries.

Social networking as new enabling technology for user and producer innovationmanagement (Sixth gen)

Social networking has become a new, promising tool that powersproductivity and innovation process beyond closed or open

23 Global Innovation Index 2013 Report, http://www.globalinnovationindex.org . 24 The Income Inequality Boom: It’s Real and It’s Everywhere, http://www.theatlantic.com/business/archive/2011/12/the-income-inequality-boom-its-real-and-its-everywhere/249561/25 ILO (2013). Repairing the economic and social fabric, World of Work Report 2013, http://www.ilo.org/global/research/global-reports/world-of-work/2013/WCMS_214476/lang--en/index.htm

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innovation. According to Wired (2013), social media sites suchas Facebook, LinkedIn and Twitter are by now so engrained inour personal lives that it is only a matter of time beforethey become part of our work lives in a larger extent. When itcomes to adoption, the terms “social business” and “enterprisesocial networking” can help re-align the way one think aboutsocial tools used in the workplace.26 McKinsey Global Institute(MGI) (2012) reported that companies that use social mediainternally can reduce the time employees spend searching forcompany information as much as 35 percent and it also findsthat twice as much potential value lies in using social toolsto enhance communications, knowledge sharing, andcollaboration within and across enterprises. MGI’s estimatessuggest that by fully implementing social technologies,companies have an opportunity to raise the productivity ofinteraction workers – high-skill knowledge workers, includingmanagers and professionals – by 20-25 per cent.27

Social tools could become the sixth generation of innovationmodels. As the fifth generation innovation process is aresponse to the continuing high levels of risk and uncertaintyin innovation, Nesta (2007) indicates that new technologiescould herald a new generation innovation process, because theyare driven by enhanced opportunities to utilize creativity andideas distributed among many diverse actors inside and outsidethe firm, and optimize not only the creation and diffusion ofnew products and services, and the processes by which they areproduced and delivered, but also the most effective strategiesfor delivering value.28

26 Wired (2013). Redefining Social Networking, Innovation Insights, http://www.wired.com/insights/2013/03/redefining-social-networking/.27 McKinsey Global Institute (2012). The social economy: Unlocking value and productivity through social technologies, http://www.mckinsey.com/insights/high_tech_telecoms_internet/the_social_economy . 28 Nesta (2007). Innovation Technology: How new technologies are changing the way we innovate, Provacation 05, http://www.nesta.org.uk/library/documents/Innovation-technology.pdf.

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These major challenges demonstrates that conventional, wealthand competitiveness-oriented innovation systems have leftpeople, especially the poor with daunting barriers preventingthem from gaining the benefits of such growth and realizetheir potential due to economic and social disparity as wellas income inequality. This is a gap where a more social-oriented, inclusive innovation system could have vital rolesto play to address the issues.

Meanwhile, forces like green economy, climate change, shiftingconsumption behavior, social networking, and informality havehad the system faced with emerging and evolving issues andactors it is not accustomed to. Thus it is important forinnovation system to adjust and adapt in order to be able tocope with these new challenges in a proper and effectivemanner.

4. MethodologyThe online study using questionnaire was utilized in 5countries: Indonesia, Malaysia, Philippines, Thailand andVietnam to assess perception of U-RC personnel at executive,administrative and research and teaching level ondevelopmental issues, inclusive development, innovation, andthen innovation for inclusive development. It also exploresthe existing linkages between U-RC that may facilitateresearch work and other activities with the informal sectorand identifies incentives that are significant forstrengthening U-RC and community interaction as illustrated inFigure 2. The potential respondents were identified by nodesin those countries as experts in 7 research areas: 1) Foodsecurity, 2) Energy security, 3) Water security, 4)Biotechnology, 5) Healthcare, 6) Biodiversity and 7)Information and Communication Technology for Development(ICT4D) which are considered important for livelihoods andwell-being of the vulnerable people. The initial sample sizeat this stage is 118.

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FIGURE 2Inclusive development and U-RC linkage

5. Preliminary results and findings (As of 14 August 2013)The questionnaire composes of 5 sections: A) Inclusivedevelopment B) Innovation C) U-RC linkage D) Incentives and E)Regional research coordination. This analysis covers only thefirst 4 sections as the last section belongs to anotherproject.

Innovation for Inclusive development

On the perception of experts regarding inclusive development,innovation and IID, we asked targeted respondents on the mostimportant issues for new research and development thatuniversities and/or research councils should give priorityunder the current situation and in the next 3-5 years, themost relevant issues for inclusive development, the mostimportant characteristic of innovation, the most importantcharacteristic of innovation for inclusive development and thekey social groups that should benefit most from IID.

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The respondents considered basic needs as the mostimportant issue for current developmental research workswhich reflect issues on poverty reduction, environmentand ecosystem, and livelihoods. This is in line withtheir perception on innovation and IID to first andforemost improve people’s well-being and livelihood bymeans of knowledge transformation.

High proportion of respondents expected research thattackles poverty reduction and leveraging of livelihoodsto be relevant at the national level, while solvingenvironmental issues is of more regional consequence.

Capacity building for sustainable development reflects aregional issue on human development and empowerment. Itis surprising that this issue was given lower prioritygiven that, after all, it is the main function ofuniversities. Furthermore, issues that represent aninstitutional involvement were given even lower priorityby groups of experts. These include participatorygovernance and empowerment and access to public services,which vary from country to country.

Economic and political dimensions were emphasized as themost relevant issues for tackling an equitabledistribution of the benefit of economic growth,participation in economic activities that lead toeconomic prosperity, and meaningful participation indecision-making process.

The key social groups that should benefit the most fromIID are people at the bottom-of-the-pyramid, vulnerablegroups (children, elderly, ethnic minority, statelessetc.) and rural inhabitants and workers.

Medium-term trends on developmental issues

Looking ahead, we asked the respondents on the futuredevelopmental issues (in the next 3-5 years) that should beaddressed by universities and/or research councils.

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Basic needs for daily life were reiterated as important,involving food security and culture, health and energysecurity and vulnerability. Food and energy issues weregiven higher priority for the region, while health wasconsidered more of a national agenda.

Not a single respondent deemed water security andvulnerability a national issue but rather a worry forSoutheast Asia for the foreseeable future.

Human development and empowerment were again emphasizedfor the way forward in a form of knowledge andresilience, reflecting regional innovation, knowledge andtechnology and city and environmental resilience which isapproached differently by each nation.

University and research council linkage

On the current situation of linkages between U-RC that mayfacilitate research work and other activities with theinformal sector, we asked the respondents for the most commontype of linkages between universities and RCs in theircountry, the effectiveness of the linkage, the existence ofsupport for inclusive development research and research oninnovation, and the coverage of linkage on developmentalelements.

The most common types of linkage were 1) research fundingand/or granting schemes, 2) research co-operation(facilitate research networking, agenda setting, anddiffusion of knowledge etc.) and 3) knowledgedissemination and exchange of research findings,respectively.

More than half of respondents rated funding and grantingeffective and one-fifth rated very effective while morethan one-third voiced research co-operation and knowledgedissemination effective but almost one-third beingneutral about its effectiveness.

For the level of impact and effects of these 3 types oflinkages, respondents indicated highest impact on (a)

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creating innovations that improve people’s well-being andlivelihood by knowledge transformation. This was followedby (b) delivering innovation that has a positive impacton society (beyond economic value), (c) innovationprocesses applied to new location or geographical areasand individual and (d) people from informal sector arehighly engaged in an innovation process, respectively.

60% of respondents indicated that research councils intheir respective countries support inclusive developmentresearch but almost half rated the facilitating mechanismnormal while more than one-third said it was well-established.

Meanwhile, more than three-fourth revealed that nationalRCs support for an application of research for innovationwith 44% giving normal rating and 39% good.

Linkages with informal sector

On interaction with informal sector, we asked them on theexistence of linkage/activity and the coverage of linkage ondevelopmental elements.

58% responded that they have linkage or activity withinformal sector with 30% saying none.

Out of various activities, outreach and knowledgegeneration were selected the most likely to have elementsfor improving people’s well-being and livelihood byknowledge transformation, while training and havinginformal people as resource person were chosen thehighest to have engagement with individual and peoplefrom informal sector.

Research funding was regarded by largest number ofrespondents to involve implementation of innovationprocess in a new location. And policy recommendation wassuggested to influence an implementation of innovationthat has a positive impact directed towards society.

Barriers and incentives

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On the current barriers and incentives for U-RC to getinvolved and engage with innovation activities and informalsector development:

The respondents rated “Time constraint due to heavyteaching and administrative work” as very high obstacle.Other barriers rated from high to very low scale were“Inadequate laboratory facilities for development-oriented research”, “Collaboration with research councillimits the boundary of research topics”, “Collaborationwith research council has a negative influence on thepedagogic mission of a university” and “it is not themission of the academic researcher to collaborate withcommunity or contribute to inclusive development”,respectively.

In terms of incentives, unsurprisingly, “Funding frompublic agencies” was rated very high, followed by“Recognition of indigenous and local knowledge”,“Publications”, “International recognition, studentexchange” and “Philanthropic support and funding”.

6. ConclusionThis paper is a cross-cutting analysis of the evolution ofsocial dimension in innovation system, the forces drivingthese changes and the preliminary assessment of U-RCperception on IID. We can conclude that the conventional,economic-oriented innovation system has left people witheconomic and social disadvantages, and income inequality inboth developing and developed countries while there aremovements and driving forces that are forcing such system toshift in order to achieve growth in a more social-oriented,inclusive and sustainable manner. Within the U-RC, themajority of stakeholders are not familiar with IID althoughthere have been ongoing different subsystems that resonatewith the concepts and processes associated with IID. Accordingto our preliminary findings there is some acknowledgement ofthe importance of social and human development, but thedriving forces described above are challenges for universities

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and research councils as knowledge generators and funders.Particularly in terms of going beyond wealth creation andcompetition by giving higher priority to the developmentalissues as a part of their research functions and to createknowledge-based society with social inclusion where ideallythe excluded people, if not everyone, are not left strandedfrom the benefit of growth.

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