This dominance is likely to continue and expand in the foreseeable future, although the private sector in the developing world is not yet significantly contributing to research and development. Actually, it is important to recognize that in many developing nations the most important entities involved in research and development may well be publicly owned for-profit entities, which frequently have the capacity to be viable partners in ventures of research and development and may be quite competitive in regional markets.
The indigenous industrial sector, whether private or public, is especially important to the economic growth of developing nations: its activities create greater employment opportunities for skilled workers, along with increased demand for scientific and engineering education. Thus a positive-feedback mechanism can be established for greater knowledge, more entrepreneurship, additional products and services, a continuing increase in employment opportunities, and a consequent demand for yet more knowledge.
While many decry the inability of countries in the developing world to create such mechanisms, it is worth noting that some of the greatest success stories of our time - Singapore, South Korea, and Taiwan - are cases in which harmonization with globalizing trends was extensive. And the national policies of these countries not only favored export promotion but set high priorities for the education and research and development that would make it possible. Such national commitments have served these countries well; in South Korea, for example, per-capita income rose from US$1,325 in 1960 to US$11,022 in 1998 (in constant 1995 dollars). Even more stunning, that nation today outspends both Italy and Canada in research and development.17 Southeast Asian countries hope to follow a similar path.
The actual influence of a nation's for-profit private sector is strongly affected by an enabling environment for business. And investment in research and development by for-profit firms is heavily dependent on the existence of strong intellectual property protection for patents, allowing a company to make a financial return on their S&T investments. But the enormous urge to patent has also created a litigious environment and complex rules that are difficult to follow. In addition, this trend is increasingly fomenting secrecy in research and a limitation of access to scientific and engineering data. This not only stymies serious debate on ethical questions - those regarding the 'the new biology,' for example (Section 5.3) - but as the tools of research themselves become patented it limits the ability to do public-good research.18 Meanwhile, as the current notions of intellectual property rights are being challenged by the digital technologies of the information and communications revolution, the availability of new electronic hardware and software - so integral to the spread of science and technology capacity in many areas of the world - is much less than what it should be.
To assure that these situations play out constructively, the existing intellectual property regimes should be revisited in order to ensure adequate returns to the innovators while providing for the needs of the developing nations and stimulating public-good research.
Issues related to the private sector's role in building S&T capacity, and to that goal's dependence on pragmatic policies regarding intellectual property rights, are discussed in the following three sections. They address frameworks for the public-private interface; public-private partnerships; and collaborations with the international private sector.