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Private sector research and innovation in South Asia and Africa

Policymakers and donors increasingly recognize that private investment in agricultural research is a potentially important contributor to increasing productivity and reducing poverty in developing countries. Few studies, however, have analyzed the determinants of private investment in agricultural research, either through in-country R&D or technology transfers, or the policies that incentivize private sector innovation. In an attempt to fill parts of this knowledge gap, ASTI, in close collaboration with Rutgers University and McGill University, collected and analyzed detailed information on private agricultural R&D capacity and investment trends in Bangladesh, India, Kenya, Pakistan, Senegal, South Africa, Tanzania, and Zambia.

The study examined trends in private investment in research, interactions between technology transfer and research investment, and the policies that influence private research and innovation in the agricultural sector. Despite difficulties in obtaining data that are often closely guarded by companies as trade secrets or competitive advantages, the study was able to survey several hundred companies and corporate decisionmakers across these eight countries. The findings draw on a comprehensive survey of a large number of private companies, an extensive review of the academic and non-academic literature, and key informant interviews conducted during 2009–10.

Findings indicate that across all study countries, technologies transferred from foreign sources by private companies were found to be a primary driver of innovation, especially in the areas of crop protection, agrochemicals, poultry farming, agricultural machinery, and processing. While many surveyed companies conducted some level of their own in-country research, many were also engaged in the transfer of technologies from abroad.

Despite the private sector’s important role in driving innovation in agriculture, many national governments still tend to impose limiting controls. Examples include lengthy administrative procedures required to import agricultural inputs, stringent regulations involved in registering and releasing new products, and poor tax incentives to reward companies who invest in research. These controls tend to reduce the number of new technologies available to farmers on the long run and limit the capacity of private companies to invest further in their own research.

The study provides a number of policy considerations that need to be addressed if private technology generation is to be accelerated. Nonetheless, more in-depth analysis is needed on the projected impact of changes in government policy on the levels and rates of private sector innovation, and on the relationship between private innovation and improvements in productivity and poverty.