Study "Research and Technology Competence for a Sustainable

Transcrição

Research and Technology Competence for a
Sustainable Development in the BRICS Countries
Study of the Fraunhofer Institute for
Systems and Innovation Research for the
German Council for Sustainable Development
Rainer Walz
Katrin Ostertag
Wolfgang Eichhammer
Nele Glienke
Arlette Jappe-Heinze
Wilhelm Mannsbart
Jan Peuckert
Rainer Walz
Katrin Ostertag
Wolfgang Eichhammer
Nele Glienke
Arlette Jappe-Heinze
Wilhelm Mannsbart
Jan Peuckert
Research and Technology
Competence for a Sustainable
Development in the BRICS Countries
collaborators A. Enzmann, R. Frietsch, N. Helfrich, F. MarscheiderWeidemann, J. Rager, C. Sartorius, M. Strauch, Fraunhofer ISI as well as
Han Xiaoding, Fraunhofer Representative Office Beijing;
Can Wang, Tsinghua University, Dep. of Env. Science and Engineering;
Leena Srivastava, The Energy and Resources Institute TERI (Delhi);
Vitaly Gorokhov, Deutsch-Russ. Kolleg, Univ. Karlsruhe/Moscow State
University
Ricardo Rose, Deutsch-Brasilianische Auslandshandelskammer;
Reinie Biesenbach, Global Research Alliance (GRA), Pretoria
Karlsruhe, May 2008
Preface
Sustainable development represents a growing challenge for science. Science is
responsible for informing us about the type and extent of global problems concerning
the climate, the environment, energy supply and the social dimension of
"development". It is expected to develop locally effective solutions for global social
problems of high complexity. Results from research and science have contributed
significantly to being able to better predict our paths into the future in the sense of
scenarios, for example, regarding climate change. Analyses such as those by the
Intergovernmental Panel on Climate Change (IPCC) or the Stern Report on the
expected future costs of climate change present us with clear opportunities and ways
to achieve a turnabout, but also with the consequences of a failure to act.
We need a guiding line in order to be able to construct the foundations for an informed
debate from the data, models and measurements. The concept of sustainable
development is necessary in order to make the right decisions for our future under
uncertain conditions. Which are the technologies to invest in? Where will new, as yet
unknown and unexplored fields emerge? One example: Is science able to show us a
way to use CO2 as a raw material and not regard it as waste? Science is working
towards Utopia.
Given the many open questions, risks, opportunities, demands and decisions to be
made: It remains undisputed that the necessary reorganization of our society will not
succeed without
• technological and social innovations,
• thinking in processes and institutional developments,
• the integration of solutions from politics, science and the economy.
The burdens imposed by modernization upon the environment and society are not only
challenges for highly industrialized countries which are concerned with decoupling
environmental and resource consumption from economic processes. Fast growing
economies with an increase of GDP of more than 8% per year have long been causing
serious and dramatic damages to the environment and the social cohesion of societies
which eat up a large part of the welfare impacts. This results in increasing resource
scarcity and rising prices for raw materials as well as a loss of biodiversity. To manage
a global turnaround in the direction of sustainable development, a fundamental role will
be played by building up research and knowledge capacities in sustainability when
shaping our ties with developing and newly industrializing countries.
Against this background, the German Council for Sustainable Development together
with the GTZ (Gesellschaft für Technische Zusammenarbeit GmbH) conducted a
dialogue about sustainability and growth with large emerging economies and transition
countries in 2005. The result was that the Council for Sustainable Development
recommended the German federal government to give this kind of dialogue initiative
more scope in its national sustainability policy. The German Federal Ministry for
Education and Research has followed this advice and is continuing a dialogue project
in cooperation with the German Development Institute (DIE) with the title "Dialogue 4S:
Sustainable Solutions - Science for Sustainability - International Dialogue of the BMBF
on sustainability research". This aims to break open the thematic restriction and widen
the focus of Germany's technology and research competence in sustainability.
To lay the ground for and, at the same time, provide an impulse for this research
dialogue, the Council for Sustainable Development commissioned a comparative study
by the Fraunhofer Institute for Systems and Innovation Research (FhG ISI) to analyse
the technological performance and scientific competence in Brazil, Russia, India,
China, South Africa (BRICS) and Germany, the results of which are now available. Six
selected sustainability topics were subjected to a critical inventory and supplemented
by German companies' experiences of cooperation in BRICS countries. For the first
time, the study puts the global responsibility of Germany's research competence to the
test. Germany has a responsibility to act as partner in structuring the economic
development in developing countries and emerging economies in a sustainable way by
allowing them access to its knowledge and technical solutions. The future markets of
these countries will increasingly determine the demand for research results on
sustainability. The international orientation of the research landscape and the coming
together and interaction of different cultural systems, experiences and access to
knowledge and technology development ultimately represent a source for the
development of innovations.
The Council would like to thank all those who made this study possible with their
contributions, discussions and cooperation. Special thanks go to the scientists in the
partner countries and the private-sector experts in globally active German companies.
The Council also gratefully acknowledges the well-founded and broad analysis of the
research and innovation systems by the authors at the Fraunhofer Institute for Systems
and Innovation Research.
On behalf of the German Council for Sustainable Development
Dr. Günther Bachmann, Secretary General
Executive Summary
i
Executive Summary
Against the backdrop of the fast development in rapidly growing economies, the
challenge presented by sustainable development is becoming more and more urgent
from a global perspective. Taking the strong and increasing links between many
transformation and newly industrialising countries (NIC) and Germany into account
raises the question of how to design these links so that they promote global
sustainability. In the context of the further development of the European Research
Area, the EU is also emphasising the objective of contributing to sustainable
development through increased Science and Technology (S&T) cooperation with
rapidly growing economies. This is the background to the initiative launched by the
Federal Ministry for Research and Education (BMBF) together with the German
Council for Sustainable Development (Rat für Nachhaltige Entwicklung, RNE) entitled
“Sustainability Solutions through Research in Brazil, Russia, India, China, South Africa
plus Germany”. Within this context, this report determines the research and
technological competence in the BRICS countries plus Germany in six selected fields
of sustainability:
1.
Renewable energies and CO2-free fossil energies as two key – and partly
competing – technologies for supplying energy,
2.
Energy efficiency in buildings,
3.
Water technologies (supply and waste water disposal systems),
4.
Material efficiency,
5.
Transport infrastructure and mobility, as well as
6.
Accelerating the diffusion and innovation processes in the 5 above fields of
technology as a cross-cutting topic.
The study follows a “Systems of Sustainability Innovations Approach”. It focuses on the
relations between general framework conditions, the research system, technological
capability and the conditions for technology diffusion and cooperation. It is increasingly
recognised that, within the scope of catch-up processes, the absorption of developed
technologies, building the capacity to further develop these technologies and to bring
them to international markets are not separate phenomena, but closely interlinked. The
following questions are examined:
• Outlining the general framework conditions in the countries with regard to the
readiness to adopt new technologies and implementing innovation activities.
• Analysis of research institutions and main fields of research in the six sustainability
fields in the BRICS countries as well as a statistical evaluation of German research
activities.
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Executive Summary
• Analysis of (technological) capability in the sustainability fields using innovation
indicators.
• Analysis of the cooperation experiences of German companies from the perspective
of the actors involved in order to supplement the statements resulting from the more
indicator-based analyses.
The data on quantitative innovation capacity give a first indication of the general
conditions for innovation. The volume of national R&D expenditure, the sectoral
share of the R&D expenditure of industry or the number of scientists is much higher in
China than in the other BRICS countries. As far as the specific values are concerned,
the BRICS countries are on a similar level, except for India, which lags behind. Based
on the main indicator of R&D intensity, however, there is still a clear gap between
BRICS and OECD countries.
Figure 1
Survey based profile of general innovation conditions for
sustainability innovations
1. Human resources
2. Technology absorption
3. Innovation friendliness
4. Environmental protection
Russia
China
Brazil
South Africa
India
Germany
The analysis of general framework conditions for innovation also makes use of the
survey results of the International Institute for Management Development (IMD) and
the World Economic Forum (WEF). The indicators are bundled into four fields: human
resources, technological absorption, innovation friendliness and importance of
environmental protection. Germany has the best general conditions for (sustainable)
innovation in all four categories. India and South Africa are ranked as the BRICS
countries with the best starting conditions. However, environmental protection is not
particularly marked in India and South Africa's biggest problem is the availability of
Executive Summary
iii
human resources. The conditions in Brazil and China are less favourable. In Brazil
there are clear deficiencies in innovation friendliness, especially regarding the
regulations governing start-ups. China’s problems cannot be limited to a single factor of
influence. The general framework conditions are assessed as being the least
favourable for Russia.
Although the share of the BRICS countries in consolidated German direct
investments is still small, their large domestic market potentials and the opportunities
for growth make it likely that they will increasingly become the preferred locations for
new investments of German companies. This is supported by evidence for the
attractiveness of these countries in the relevant surveys, the importance they already
have in global shares and their increasing shares in annual German direct investments.
Different aspects are of particular relevance in the different BRICS countries:
• Brazil’s strengths are in its raw materials and agricultural sector which lead to new
direct investments and supplement its long established investments – for instance in
the automotive sector.
• In Russia, energy and raw materials form the main base for direct investments.
• In India, the service sector is very attractive including services beyond IT services.
Indian industry is currently still in a development phase.
• In spite of many risk factors, China clearly leads in receiving capital inflows from all
over the world, whereby the main emphasis is on industry. This corresponds to a
strategy – often referred to as 'extended workbench' – to build up production
capacities in China, in order to gain not only comparative cost advantages but also
access to a gigantic and rapidly expanding domestic market.
• In South Africa, foreign direct investments have played an important role in making
vehicle construction more significant.
In none of the five BRICS countries does the research and innovation policy
specifically target the decoupling of environmental and resource consumption from
economic development. The primary objective in all BRICS countries is to promote
innovation in the corporate sector. With a few exceptions, there are no separate
institutions specifically dedicated to sustainability research in the science and
technology (ST) policy of the countries regarded. Sustainability does not constitute an
autonomous field of research support; if it is covered at all, this takes place within
general research and innovation policy measures. Applied R&D is often directly linked
with government investment measures, primarily where infrastructure investments in
energy, water and transport are concerned.
There are no reliable figures on the main areas of promotion within the sustainability
fields which could be used for comparisons beyond the five countries. Based on the
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Executive Summary
qualitative estimates of the experts questioned, the following national strengths are
highlighted:
• Brazil: renewable energies from biomass followed by R&D on water management.
• Russia: more efficient conversion of primary energy as well as R&D on hydrogen
technologies.
• India: diffusion of decentralised, renewable energy sources; sustainability and
fighting poverty.
• China: development of renewable energies; efficiency standards for buildings;
research in transport sector but without clear reference to environmental issues.
• South Africa: R&D on water management; extensive activities are also planned in
public rail transport.
The lack of young scientists is a decisive obstacle to capacity development in
sustainability research - and in public research in general - in all the BRICS countries,
except China. Especially against the backdrop of strong economic growth and the
related career opportunities offered in the private sector, a career in scientific research
is comparatively unappealing in these countries. At the same time, domestic
companies lack the absorption capacity for highly qualified graduates.
The technological capability of the BRICS+G countries is examined with the help of
patent and foreign trade indicators. On the one hand, this is a methodology which is
well established in reporting technological performance; on the other hand, for the first
time the focus is on sustainability-relevant technologies in economies outside the
OECD so that the methodology had to be modified in various ways. For example, the
technologies relevant to sustainability had to be identified in the patent and foreign
trade classification. In order to cope with the international scope of analysis, the data
searches concentrate on transnational patent applications and global trade which
encompasses all the countries. The strong position of Germany is already apparent
from the fact that 20 % of international patents and 15 % of global exports in the
sustainability-relevant technologies regarded originate here. It is clear that Germany
has enormous potential and, at the same time, the global responsibility to provide
knowledge and technologies needed for sustainable development at a global level.
The shares of BRICS countries in the identified patents for sustainability technologies
range from a few tenths of a per cent to 1 % for China. China has the highest exports
of sustainability-relevant technologies of all the BRICS countries, followed by Brazil. In
both countries, the world trade shares are considerably higher than the patent shares.
This indicates that both countries are quite active in foreign trade, but that this is
grounded on a below average knowledge base. The characterisation of the two
Executive Summary
v
countries as “extended workbench” (China) or “resource supplier” (Brazil) thus also
applies to a certain extent to sustainability-relevant technologies. When looking at the
figures as a ratio to the number of inhabitants, it is noticeable that activities with regard
to sustainability technologies in India are lower compared with the other BRICS
countries. This is evidence for the overall substantial gap in economic development
which India still shows at present compared with the other BRICS countries.
Figure 2:
Share of BRICS+G countries in global exports and international
patents for the sum of the 5 sustainability fields regarded
10.0%
25%
values BRICS
15%
5.0%
10%
2.5%
values DE
20%
7.5%
5%
0.0%
0%
BR
patent share
CN
IN
world trade share
RU
patent share DE
ZA
DE
world trade share DE
The relevance of the sustainability technologies in each respective country is also
revealed in its specialisation profile. This shows the technological capability of the
sustainability technologies for each country compared with the average of all
technologies. Positive values indicate an above average activity of the country
regarding sustainability-relevant technologies, negative values a below average one.
The results show clear differences between the countries:
• Brazil has been specialising on sustainability technologies in both knowledge
competences and international trade.
• Russia shows considerable knowledge competences, but weaknesses in converting
these into internationally competitive technologies.
• Overall, sustainability-relevant technologies play a below average role in India.
• Overall, sustainability-relevant technologies play an almost average role in China.
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Executive Summary
• South Africa has been specialising on sustainability technologies with regard to
knowledge competence, but this is only converted into an average trade
specialisation.
• Germany is not only a key player in sustainability technologies in absolute numbers;
the specialisation profile shows that these technologies form a stronghold of
German knowledge competence and international trade.
Figure 3:
Specialisation patterns of BRICS+G countries for all 5 sustainability
fields regarded
sustainability technologies regarded
specialisation exports
100
BR
CN
IN
0
RU
ZA
DE
-100
-100
0
specialisation patents
100
Fraunhofer ISI
Germany achieves above average specialisation in all the regarded fields. However,
the aggregated values disguise the fact that there are considerable differences
between the five technological sustainability fields in the respective BRICS countries.
For instance, the individual countries show clear emphases in developing
competences. Brazil specialises in renewable raw materials, among others; South
Africa in material efficiency and mobility technologies. China’s performance in the
building sector and mobility technologies is above average. On the other hand, the
BRICS countries also show similarities. There are high patent activities in water
technologies, but there is still a considerable dependency on imports to cover domestic
demand. A similar picture emerges for energy sources with regard to the significance of
technology imports for the BRICS countries. To this extent, these two areas at present
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vii
reflect the classical picture of technology transfer, where countries such as Germany
act as the supplier of know-how and technology and the BRICS countries as
technology takers. However, the recent massive upward trend in patent activities especially in China and to a smaller extent in India – makes it seem very realistic that
the BRICS countries will become more heavily involved in technology development in
this segment in the foreseeable future.
The capacity to accelerate diffusion and innovation processes was examined with the
aid of a publication analysis of social science-related sustainability research as well
as with case studies and interviews. The publication analysis showed above average
performance for South Africa. All the other countries regarded - also Germany – only
show below average activity in this field.
The interviews with companies and other institutions focus on mechanisms which can
contribute to accelerating diffusion and innovation processes in the direction of
sustainability. Regulation almost always emerged as a necessary framework condition
for the formation of strong market demand. The relevance of the regulations of leading
industrial nations in the BRICS countries is especially noticeable, above and beyond
the respective national regulation context. The example of water-based coatings shows
that German automobile manufacturers apply German laws in their overseas branches
as well, unless local regulations are even stricter. International spillover effects are also
triggered by the fact that, within the framework of supply chain management, exporting
companies from BRICS countries are subject to the demands – sometimes including
legal requirements – of their foreign clients. In general, a process of globalisation can
be observed at the level of the origin and the impact of environmentally-relevant
regulation which also has repercussions on the strategy formation of German
companies. This refers to the necessity but also the opportunities which may lie in the
development and standardisation of regulation in international cooperation.
Besides these acceleration mechanisms, which are features of the public sector, there
is another market-related "door opener" for technology transfer to BRICS countries.
Outfitters tend to follow their German clients who establish branches abroad in BRICS.
The interviews showed indications that similar mechanisms can also result in
corresponding actor constellations between the BRICS countries against the
background of increasing South-South cooperation.
Numerous obstacles have to be removed if innovation and diffusion processes are to
be accelerated. In several cases it has become clear that the company-external
environment plays a particularly important role here. This concerns the value chain to
start with, i. e. the network of upstream suppliers, service providers and customers
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Executive Summary
within which the company is embedded. If specific products or actors are missing here,
it could be that necessary complementary inputs to the application of a technology are
not available. The task of guaranteeing a suitable environment with regard to
embedding the innovation into the value chain (to the extent that this is possible) is
often not taken seriously enough, according to the statements made in the interviews in
the BRICS countries. Situations then result in which – partly through publicly forced
demand – certain products are present on the market, but can only achieve positive
environmental effects to a limited extent on account of a lack of embedding in the
system as whole.
Those interviewed also report differences in mentality as an obstacle to cooperation
between BRICS and Germany. These are revealed especially in questions concerning
organisation and quality assurance as well as the implementation of environmental
regulations. Generally, environmental awareness was found to be only weakly
developed. Those questioned would like greater involvement of the German embassies
or German politicians in passing on contacts, supporting the construction of local
networks and setting up platforms for product presentations (e.g. trade fairs), especially
as increased activities on the part of rival countries are being observed in this domain.
Overall, the results clearly show an excellent starting position of Germany as a
potential technology supplier in cooperation with BRICS countries. In the BRICS
countries, the sustainability fields regarded do not actually represent key areas of
national competence and development strategies, but there are numerous points of
contact and considerable dynamics in the development of absorptive capacities.
However, all the BRICS countries are facing the challenge that competence on its own
does not guarantee environmental improvement or a strong export position. In contrast
to Germany, the capability within the BRICS countries is much more heterogeneous
and there are some disparities in the competences between the different elements of
the innovation system. The emergence of a consistent competence profile is thus one
of the most urgent tasks in the BRICS countries.
Political support of cooperation efforts should consider the different cooperation
constellations and the respective strategies of the actors involved. In the fields in which
the competence of BRICS countries is weak, the demand for these kinds of
technologies is often a bottleneck factor. Policies could support the exchange of
experience by designing environmental policy measures and building up absorptive
capacities. Cooperation frequently occurs in those areas in which competence building
in the BRICS countries is still taking place but has already led to considerable capacity
increases. Especially in small and medium-sized companies there is then uncertainty
about how the protection of intellectual property can best be guaranteed during
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ix
cooperation under these conditions. Intensified support and advice on the dangers but
also on the existing opportunities to successfully assert companies' own rights would
be helpful here. Other starting points for policy measures concern cooperation in the
field of policy formulation. An important beginning is exchanging experiences of how
sustainability topics are integrated into shaping research priorities in the individual
countries. Another topic is the coordination of the individual policy fields since the
systematic strengthening of the research and technology competence which is
essential for sustainable development is the subject of several policy fields. Finally,
from a strategic viewpoint, it should be considered that the policy design of such a
complex domain requires monitoring of the respective strengths and weaknesses and
their modifications. It should therefore be analysed which periodically recurrent
information requirements are necessary for a systematic policy design to strengthen
the research and technology competence for sustainable development.
Table of Contents
I
Table of Contents
Preface................................................................................................................ i
Executive Summary........................................................................................... i
1
2
3
Introduction................................................................................................. 1
1.1
Objectives and Terms of Reference ............................................ 1
1.2
Conceptional Background and Structure of the Report ............... 3
Framework Conditions............................................................................... 8
2.1
Basic Data on Innovation Capacity.............................................. 8
2.2
Analysis of the Regulatory Regime............................................ 10
2.2.1
Methodology .............................................................................. 10
2.2.2
Human Resources..................................................................... 12
2.2.3
Technology Absorption .............................................................. 13
2.2.4
Innovation-friendliness............................................................... 14
2.2.5
Status of Environmental Protection ........................................... 16
2.2.6
Summing Up.............................................................................. 17
2.3
Direct Investments..................................................................... 20
2.3.1
Global Direct Investments.......................................................... 20
2.3.2
Direct Investments of German Companies in the BRICS
States ........................................................................................ 23
2.3.3
Summing Up.............................................................................. 25
Research Programmes ............................................................................ 27
3.1
Research Programmes in the BRICS Countries........................ 27
3.1.1
Methodology .............................................................................. 27
3.1.2
An Overview of the BRICS Country Profiles .............................. 29
3.1.2.1
Brazil.......................................................................................... 29
3.1.2.2
Russia........................................................................................ 30
II
4
5
Table of Contents
3.1.2.3
India ...........................................................................................32
3.1.2.4
China .........................................................................................33
3.1.2.5
South Africa ...............................................................................35
3.1.3
Summing Up ..............................................................................36
3.2
Sustainability Research in Germany..........................................37
3.2.1
Data Basis and Analytical Methods ...........................................38
3.2.2
Research Activities in the Selected Subject Areas ....................40
3.2.3
Focuses within the Subject Areas..............................................43
Capability in the Selected Sustainability Fields.....................................48
4.1
Technological Sustainability Fields ............................................48
4.1.1
Methodology ..............................................................................48
4.1.2
Renewable Energies and CCS ..................................................52
4.1.3
Energy Efficiency in Buildings....................................................58
4.1.4
Water Services ..........................................................................62
4.1.5
Material Efficiency......................................................................67
4.1.6
Transport Infrastructure and Mobility .........................................71
4.1.7
Summary of All the Sustainability Fields Examined ...................76
4.2
Capability in Non-Technical Sustainability Research.................78
Analysis of Diffusion and Innovation Processes...................................85
5.1
Objective and Methodology .......................................................85
5.2
Results by Topic ........................................................................87
5.2.1
Renewable Energies and CCS ..................................................87
5.2.1.1
Market Potentials in BRICS .......................................................87
5.2.1.2
Market Players...........................................................................89
5.2.1.3
Knowledge Base........................................................................91
5.2.1.4
Experiences in Germany............................................................91
5.2.1.5
The Role of CDM for Renewable Energies in BRICS ................92
5.2.1.6
Summary ...................................................................................93
5.2.2
Energy Efficiency in Buildings....................................................94
Table of Contents
III
5.2.2.1
Market Potentials for and Obstacles to Energy-Efficient
Building...................................................................................... 94
5.2.2.2
Drivers of Demand..................................................................... 96
5.2.2.3
Market Players........................................................................... 97
5.2.2.4
Summary ................................................................................... 98
5.2.3
Water Services .......................................................................... 99
5.2.3.1
Framework Conditions in BRICS ............................................... 99
5.2.3.2
Customers in BRICS ............................................................... 100
5.2.3.3
Other Market Players in BRICS ............................................... 101
5.2.3.4
Experiences in Germany and Prospects for BRICS ................ 102
5.2.3.5
Summary ................................................................................. 103
5.2.4
Material Efficiency ................................................................... 103
5.2.4.1
Drivers of and Obstacles to Demand in BRICS for WaterBased Coatings in the Automobile Industry ............................. 103
5.2.4.2
Actor Structures in Water-Based Surface Coating
Systems................................................................................... 104
5.2.4.3
Utilisation of Shredder Residues in Germany .......................... 105
5.2.4.4
Utilisation of Shredder Residues in BRICS.............................. 106
5.2.4.5
Summary ................................................................................. 107
5.2.5
Mobility and Logistics .............................................................. 108
5.2.5.1
Demand for Synthetic Biofuels in BRICS................................. 108
5.2.5.2
Cooperation between Germany and the BRICS
Countries to Produce Synthetic Biofuels.................................. 109
5.2.5.3
Diffusion of Synthetic Biofuels in Germany.............................. 111
5.2.5.4
Regulation of and Demand for Low-Emission Heavy
Good Vehicles (HGVs) ............................................................ 112
5.2.5.5
Supply Structure for Low-Emission HGVs ............................... 114
5.2.5.6
Demand for Rail Transport Systems in China.......................... 115
5.2.5.7
Obstacles to Cooperation in China Based on the
Example of Rail Transport Systems ........................................ 116
5.2.5.8
Supply of and Demand for CO2-Neutral Logistics
Services................................................................................... 117
5.2.5.9
Summary ................................................................................. 119
5.3
Results spanning more than one sustainability field ................ 120
IV
6
7
Table of Contents
5.3.1
Financing .................................................................................120
5.3.2
Clean Development Mechanism (CDM)...................................124
5.3.3
The United Nations Cleaner Production Programme...............126
5.4
Summary of the interview results.............................................129
General Summing Up and Conclusions ...............................................132
6.1
Brazil........................................................................................132
6.2
Russia......................................................................................134
6.3
India .........................................................................................137
6.4
China .......................................................................................139
6.5
South Africa .............................................................................143
6.6
Germany ..................................................................................146
6.7
Conclusions for Cooperations..................................................147
Literature .................................................................................................151
Table of Contents
V
Figures
Figure 1-1:
Systems of Sustainability Innovation ...............................................5
Figure 2-1:
Sub-sector Profiles and Total Ranking of the Factor Human
Resources .....................................................................................12
Figure 2-2:
Sub-sector Profiles and Total Ranking of the Factor
Technology Absorption..................................................................14
Figure 2-3:
Sub-sector Profiles and Total Ranking of the Factor
Innovation Friendliness..................................................................16
Figure 2-4:
Indicators and Total Ranking of the Factor Environmental
Protection ......................................................................................17
Figure 2-5:
sustainability iInnovations..............................................................18
Figure 2-6:
Annual Direct Investments and Accumulated Stocks of
BRICS Countries* in the Year 2005 (US $ m)................................21
Figure 3-1:
Groups Receiving Project Promotion acc. to Subject Areas
2003-2005 .....................................................................................42
Figure 4-1:
Shares of the BRICS+G countries in international patents
and the world exports of industrial goods.......................................52
Figure 4-2:
Share of BRICS+G countries in world exports and
international patents in the field of “renewable energies and
CCS” .............................................................................................54
Figure 4-3:
Specialisation pattern of the BRICS+G countries in
renewable energies and CCS........................................................55
Figure 4-4:
Share of the exports of BRICS+G countries in the field of
"Renewable energy sources and CCS" to other BRICS+G
countries in %................................................................................57
Figure 4-5:
Shares of the BRICS+G countries in global exports and
international patents in the field of energy-efficient
buildings ........................................................................................59
Figure 4-6:
Specialisation pattern of the BRICS+G countries in energyefficient buildings...........................................................................61
Figure 4-7:
Share of exports of the BRICS+G countries in energyefficient buildings to other BRICS+G countries in % ......................62
Figure 4-8:
Shares of the BRICS+G countries in world exports and
international patents in the field of water........................................64
VI
Table of Contents
Figure 4-9:
Specialisation of the BRICS+G countries in the field of
water............................................................................................. 65
Figure 4-10:
Share of exports of the BRICS+G countries in the field of
water to other BRICS+G countries in % ........................................ 66
Figure 4-11:
international patents in material efficiency..................................... 68
Figure 4-12:
Specialisation of the BRICS+G countries in material
efficiency....................................................................................... 69
Figure 4-13:
Share of exports of the BRICS+G countries in material
efficiency to other BRICS+G countries in % .................................. 70
Figure 4-14:
international patents in the field of mobility.................................... 72
Figure 4-15:
Specialisations of BRICS+G countries in the field of
mobility ......................................................................................... 73
Figure 4-16:
Share of BRICS+G countries' exports in the field of mobility
to other BRICS+G countries in %.................................................. 75
Figure 4-17:
international patents for all 5 sustainability fields examined .......... 77
Figure 4-18:
Specialisation of the BRICS+G countries in all 5
sustainability fields ........................................................................ 78
Figure 4-19:
Publication figures in six fields of social science
sustainability research, 2001 - 2005.............................................. 82
Figure 4-20:
Specialisation of the BRICS+G countries in publications of
social science sustainability research, 2001 - 2005....................... 84
Figure 6-1:
Specialisation of Brazil in the Selected Sustainability Fields ....... 133
Figure 6-2:
Specialisation of Russia in the Selected Sustainability
Fields .......................................................................................... 135
Figure 6-3:
Specialisation of India in the Selected Sustainability Fields......... 138
Figure 6-4:
Specialisation of China in the Selected Sustainability Fields ....... 141
Figure 6-5:
Specialisation of South Africa in the Selected Sustainability
Fields .......................................................................................... 144
Figure 6-6:
Specialisation of Germany in the Selected Sustainability
Fields .......................................................................................... 146
Table of Contents
VII
Tables
Table 2-1:
Basic Data on Innovative Capacity in the BRICS+G
Countries, 2004 ...............................................................................9
Table 2-2:
Strengths and Weaknesses of the BRICS countries*.....................19
Table 2-3:
German Direct Investments in BRICS Countries in
Manufacturing Industry; in € m (sum 2003 to 2005).......................25
Table 3-1:
Research Projects in Germany according to Ufordat
database, 2003-2005 ....................................................................41
Table 3-2:
R&D Funds for Projects beginning in 2003-2005 according
to Foekat .......................................................................................41
Table 3-3:
Research Projects according to Technology Field in
Ufordat, 2003-2005 .......................................................................45
Table 3-4:
Funding Priorities according to Technology Areas, Foekat
2003-2005 .....................................................................................46
Table 4-1:
Publications of the BRICS+G countries 2003 and 1993.................80
Table 4-2:
Sustainability topics in social science research in BRICS+G
countries........................................................................................81
Table 5–1:
Most important potentials for renewable energies according
to interview results.........................................................................88
Table 5-2:
Emission standards for HGVs in BRICS+G .................................113
VIII
Table of Contents
Annex
A
Annex.......................................................................................................157
A.1
Annex to Section 2.2................................................................157
A.2
Annex to Section 2.3................................................................162
A.3
Sustainability Research in the BRICS Countries:
Individual Country Profiles .......................................................164
A.3.1
Brazil........................................................................................164
A.3.1.1
The Brazilian innovation system ..............................................164
A.3.1.2
Core themes of sustainability research in Brazil ......................167
A.3.1.3
Research funding agencies .....................................................171
A.3.1.4
Leading research organisations...............................................174
A.3.2
Russia......................................................................................176
A.3.2.1
The Russian innovation system ...............................................176
A.3.2.2
Core themes of sustainability research in the Russian
Federation................................................................................179
A.3.2.3
A.3.2.4
A.3.3
India .........................................................................................186
A.3.3.1
The Indian innovation system ..................................................186
A.3.3.2
Core themes of sustainability research in India .......................188
A.3.3.3
A.3.3.4
A.3.3.5
Importance of R&D for sustainability – expert views ................197
A.3.4
China .......................................................................................201
A.3.4.1
The Chinese innovation system...............................................201
A.3.4.2
Core themes of sustainability research in China......................203
A.3.4.3
A.3.4.4
A.3.5
South Africa .............................................................................210
A.3.5.1
The South African innovation system.......................................210
A.3.5.2
Core themes of sustainability research in South Africa............213
Table of Contents
IX
A.3.5.3
Research funding agencies ..................................................... 217
A.3.5.4
Leading research organisations............................................... 220
A.3.6
References for Country Reports .............................................. 222
A.3.7
Contributing Experts ................................................................ 224
A.3.7.1
Brazil........................................................................................ 224
A.3.7.2
Russia...................................................................................... 225
A.3.7.3
India......................................................................................... 227
A.3.7.4
China ....................................................................................... 229
A.3.7.5
South Africa ............................................................................. 230
A.4
Annex to Section 4.1 ............................................................... 232
A.5
Annex to Section 4.2 ............................................................... 242
A.6
Annex to Chapter 5.................................................................. 243
A.6.1
Overview of important discussion points with companies
and experts.............................................................................. 243
A.6.2
Overview of the actors interviewed and the innovations
observed.................................................................................. 244
1 Introduction
1
Introduction
1.1
Objectives and Terms of Reference
1
Against the backdrop of the extremely fast development of rapidly growing economies,
the challenge presented by sustainable development is becoming increasingly urgent,
from a global perspective. The question arising in this context is how economic growth
in the transformation countries and newly industrialising countries (NIC) can be so
shaped that the attainment of sustainability goals in the ecological, social and
economic dimensions is not undermined. Simultaneously, achieving sustainable
development also makes great demands of industrialised countries like Germany.
Germany is therefore developing its research and knowledge competences in a
direction which contributes to questions of global resources and sustainability. If the
strong and constantly increasing links between many transformation and newly
industrialzing countries and Germany are considered, the question arises of how to
design these links so that they promote global sustainability. At the same time, in its
Green Book on the further development of the European Research Area, the EU
(2007) emphasises the target of contributing to sustainable development through
intensified science and technology (S&T) cooperation with the fast growing economies.
Against this background, the Federal Ministry for Education and Research, in
collaboration with the Council for Sustainable Development, launched an initiative
entitled "Sustainability Solutions through Research in Brazil, Russia, India, China,
South Africa plus Germany". The goal of this initiative is to exchange experiences
about sustainability strategies and sustainability research among the participating
countries, in order to utilise the potentials and results of sustainability research even
more efficiently.
The study's target is to determine the research and technology competences in the
BRICS countries and Germany in six selected fields of sustainability
1.
renewable energies and CO2-neutral fossil energies as two key – and partly
competing – technologies in the field of energy,
2.
energy efficiency in buildings as an important sub-area of energy efficiency,
3.
water technologies (supply and waste water disposal systems),
4.
material efficiency,
5.
transport infrastructure and mobility, as well as
6.
acceleration of the diffusion and innovation processes in the 5 above mentioned
technology fields as a cross-cutting issue.
2
1 Introduction
A reference basis should thus be created for identifying and implementing
(cooperation) potentials to increase mutual knowledge and technology transfer
between the BRICS states and Germany. The specialisation patterns of the countries
and the experiences with cooperations gleaned up to now will be compared.
The following tasks result from these objectives, namelý to:
• Outline the general framework conditions in the countries with regard to their
willingness to adopt new technologies and implement innovation activities.
• Analyse research institutions and main research areas in the six sustainability fields
in the BRICS countries as well as a statistical evaluation of German research
activities (in these fields).
• Analyse (technological) capability in the above mentioned sustainability fields.
• Evaluate the cooperation experiences of German companies with the BRICS
countries in the selected sustainability fields.
Cooperations were undertaken with a number of research institutions in the BRICS
countries, in order to analyse the research institutions and main focuses in the six
selected sustainability fields. Furthermore, the questionnaire developed in this context
was sent to a number of institutions and individuals, in order to base assessments of
this field on as broad a foundation as possible. At this point we would like to express
our thanks to these persons for their collaboration. The analysis of the direct
investments was made possible by a special evaluation which the Bundesbank kindly
placed at our disposal. Our special thanks, however, go to the 27 companies and
institutions that were willing to be interviewed in connection with the fourth task. They
all contributed decisively to the success of this study by providing their valuable
information.
The structure of the final report essentially mirrors the above sketched tasks. For a
better understanding of the structure of the report, these chapters will be preceded by a
short sketch of the conceptual framework which serves as heuristic for the questions
discussed here and establishes the connections between the individual chapters. In
order to make the report more readable, numerous empirical details have been
transferred to the Annex and only essential findings are presented in the main body of
text.
1 Introduction
1.2
3
Conceptional Background and Structure of the Report
The environmental problems in the rapidly growing economies are becoming more
acute and global environmental problems cannot be tackled without timely action in
these countries. Thus anchoring the idea of sustainability in the economic development
process as early as possible is gaining enormous significance. For the development
process in the rapidly growing economies, the hope has been expressed that global
objectives, such as stabilising the concentration of greenhouse gases or improving
water infrastructure can be achieved through knowledge transfer and technology
cooperations. Conceptionally, this matches the environmental-economic concept of
"Tunneling through the Environmental Kuznets Curve" (cf. Munashinghe 1999; Walz/
Meyer-Krahmer 2003).
When assessing potentials for knowledge transfer and possibilities of technological
cooperations, questions concerning the knowledge-intensity of the technologies and
the differences in the knowledge base between the countries emerge as important
factors. Since the end of the 1980s, the important role of complementary capabilities
has been the object of scientific discussion, with catchphrases such as social or
absorptive capacity (Abramovitz 1986; Cohen/Levinthal 1990). The results of the
knowledge management research (cf. e.g. Nonaka/ Takeuchi 1995; Hipp 2000), as well
the research into economic catching-up processes (cf. e. g. Nelson 2004; Fagerberg/
Godinho 2005) have further intensified the significance of the absorptive capacity. At
the same time, it must be borne in mind that measuring absorptive capacity remains a
problem which can only be partially solved, as numerous influential factors can only be
quantified with difficulty. Besides the knowledge- and technology-based factors,
openness to new solutions, complementary branch clusters and the availability of userproducer interactions which favour fast learning processes are important factors (cf.
Fagerberg 1995). It is more and more acknowledged that the absorption of developed
technologies and the development of abilities to further advance these technologies
and their international marketing are closely interwoven (Nelson 2007). Knowledge
generation, which can be used for the further technical development of products, and
successes in international competition thus also become a yardstick of absorptive
capacity, particularly as they also indirectly infer openness to new solutions and
international developments.
Policies to promote knowledge transfer and technology cooperations must be in the
interests of the participating political institutions. For the countries in the economic
catching-up process, reduction of environmental pollution and availability of technology
to build up modern infrastructure systems are important rationales. The economic
significance of sustainability innovations also plays a role for countries oriented towards
4
1 Introduction
foreign trade. The goals of the EU sustainability strategy, the High-tech Strategy of the
German federal government, or the initiatives of the German Environment Ministry
regarding an "ecological industrial policy" are all based on the logic of first mover
advantages: an intensified (national) strategy in the corresponding technology and
policy field, according to this argumentation, leads to the first mover countries
specialising early in providing the goods necessary for this. In a subsequent extension
of the international demand for these goods, these countries are then in a position to
assert themselves against international competition, thanks to their early specialisation
and the innovation lead they attained.
In order to realise these first mover advantages, domestic suppliers must demonstrate
long-lasting competitive advantages in the corresponding technologies. Here the
conditions for establishing so-called lead markets play an important role. Establishing
not easily transferable industrial clusters which consist in combining technological
capability with demand that is open to innovations and favours early learning effects
and their integration in differentiated production structures, are decisive pre-conditions
for the success of a national innovation system (cf. Meyer-Krahmer 2004,
Beise/Rennings 2005, Walz 2005; Jacob et al. 2005, Walz 2006). Besides the marketrelated factors and adaptable regulations, the technological capability of the
technologies regarded and the competitiveness of complementary branch clusters are
key conditions.
The discussion about setting up lead markets has concentrated up to now primarily on
the industrialised countries. In the recent past, however, increases in technological
capabilities have also been ascertained in the rapidly growing economies: "During the
last decade, the playing field in the international innovation competition is no longer
being recruited only from the industrialised western countries, but has been greatly
extended through the integration of the European periphery as well as the Asian
catching-up countries, including China and India" (TLF 2006, p. 48). Thus they are
increasingly in a position to build up a lead market position on their own. In connection
with the integration of sustainability innovations in the economic catching-up
processes, Walz/Meyer-Krahmer (2003) propose the thesis that the rapidly growing
economies could display a particularly high potential to establish lead markets,
especially with sustainability innovations. Background for this are a greater significance
of regulation-dependent demand as well as less path dependencies, as the structures
have not yet become as rigid as in "old" industrialised countries. With the prospect of
lead markets for sustainability innovations emerging in the BRICS countries, the
interest of these countries could change dramatically: sustainability technologies would
not only become an element of technological modernisation and establishment of a
domestic infrastructure, but also object of a world-market-oriented export strategy and
1 Introduction
5
would experience an enormous increase in importance within the catching-up strategy
of the countries involved.
For both strategies – knowledge transfer and establishing lead market positions – it is
necessary that corresponding competences are developed and a well functioning
innovation system is founded. Thus the heuristic of the innovation system, which more
recent innovation research calls on to explain innovation activity (cf. e. g. Carlsson et
al. 2002; Lundvall et al. 2002, Edquist 2005), also gains relevance for the analysis of
sustainability innovations in catching-up processes. Newer forms of the "systems of
innovation approach" emphasise a disaggregated analysis on a sectoral or
technological level (Malerba 2005), as well as consideration of the functions of an
innovation system which could facilitate a comparative systematisation between the
countries (Smits/Kuhlmann 2004; Hekkert et al. 2007). Main tenet of this concept is that
the production and diffusion of new solutions depend crucially on the interplay of the
different actors in the innovation process. With regard to sustainability innovations, a
triple regulatory challenge exists (Walz 2007), because environmental policy and
infrastructure specific needs must be accounted for in addition to the R&D needs. This
results in a specific “systems of sustainability innovation” approach (see Figure 1-1). In
the framework of this heuristic, soft context factors (e. g. situative conditions for policy
design and impacts) and aspects of a demand-oriented innovation policy (ISI 2006) can
be analysed.
Systems of Sustainability Innovation
International trade
Market
Regulation
Demand for sustainability
technologies
Environmental
problems
resource
availability
Environmental
regulation
Public utility regulation
Industrial
competences
System in
sustainability
technologies
Research
research
related
System
to sustainability
technologies
General framework conditions
for innovations
Policycoordination
Industrial policy
Context factors
for policy design
and impacts
R&D Policy
Internationale policies
Figure 1-1:
6
1 Introduction
For the following analysis of the six sustainability fields – Renewable Energies and
Carbon Capture and Storage (CCS), Energy Efficiency in Buildings, Material Efficiency,
Transport/Mobility, Water Technologies (Supply and Waste Water Disposal Systems),
as well as Acceleration of Diffusion and Innovation Processes – in the BRICS+G
countries, the following should be stated:
• The general framework conditions for innovations also influence the execution of
sustainability innovations. Besides the availability of human resources and other
aspects of the knowledge base, subjects like environmental regulations in the sense
of a demand-oriented innovation policy play a role. Other themes such as
receptiveness to new ideas, which in the wider sense can be classified as social
absorptive capacity, can be added. Furthermore, the knowledge base and
technology availability in general are very strongly influenced by foreign direct
investment. These topics will be dealt with in Chapter 2.
• The research system and R&D policies in the relevant sustainability fields are
important components of the "system of sustainability innovations" in the countries
investigated. Their prime function is to build up and continually improve a
corresponding knowledge base in the countries. This subject complex is the main
topic of Chapter 3.
• Developing technological competences in the sustainability fields being examined is
a key indicator not only for the absorptive capacity of sustainability technologies, but
also the starting situation with regard to building up lead market positions. In
addition, international patents and successes in foreign trade in particular indicate to
what extent a country is already able to 'open up' internationally in the respective
technology field. These topics will be examined in Section 4.1.
• The sixth chosen core topic of sustainability deals with the acceleration of diffusion
and innovation processes as a cross-cutting question complex. The diffusion of
sustainability innovations depends to a great degree on political and societal
framework conditions. Accordingly, social science sustainability research examines
the institutional and actor constellations which contribute to, or hamper, sustainable
development, as well as how societies deal with environmental risks. This field
which is more strongly influenced by social sciences can also be interpreted as an
activity to increase the absorptive capacity of new technologies in the own country.
Therefore, performance in social science sustainability research will be investigated,
using a publication analysis, to supplement the examination of performance in the
technically defined sustainability fields (Section 4.2).
• The analysis of German enterprises' experiences with cooperations is intended to
complement the statements elaborated from the strongly indicator-based analyses
from an actor's perspective. Due to the different methodological approaches and the
highly disaggregated analysis level, this "corresponding perspective" must always
remain cursory and cannot be statististically representative. On the other hand, it
offers the possibility to capture all mentioned influential factors in their interplay/
1 Introduction
7
interaction and to obtain, at least partially, qualitative estimates of how the
innovation systems function. It offers an appropriate starting point to proceed
beyond the quantitative, measurement-based perspective of the indicator-based
analyses. The results from this methodological approach are the subject of Chapter
5.
• The work presented in Chapters 2 to 5 analyses the competences and operative
capabilities for a sustainable development in the countries investigated, each from a
different viewpoint. Conclusions will be drawn in Chapter 6, whereby the different
analytical levels for the individual countries will be integrated and starting points for
cooperation will be worked out.
8
2 Framework Conditions
2
Framework Conditions
2.1
Basic Data on Innovation Capacity
In this section we provide an overview of fundamental indicators of the innovative
capacity of the BRICS countries. This information will serve to make as up-to-date a
comparison as possible of the five countries with regard to national R&D expenditure
(gross domestic expenditure on R&D (GERD)), its financing sources according to main
sectors (government, business enterprise sector, from abroad), the R&D intensity of
the economy (GERD as a percentage of gross domestic product GDP), the number of
R&D personnel and researchers, as well as the internationally visible scientific
publications. Indicator selection is oriented towards the OECD S&T reporting system.
Relevant national sources were consulted for Brazil and India. For the sake of
comparison, the statistics for Germany are also quoted in each case.
As far as the absolute level of R&D expenditures is concerned, China is without doubt
the dominant BRICS country. The R&D expenditures are many times higher than the
level reached in the other BRICS states. If one considers the specific figures, however,
a more differentiated picture appears. The R&D intensity is highest in China and
Russia and exceeds that of the other three BRICS countries by approx. 50 %. This can
be traced back to developments since the mid 1990s. Whereas the R&D intensity in
China and Russia just about doubled, only modest increases were registered in India
and Brazil. Nevertheless, even the leading BRICS countries are still far removed from
the level of the industrialised countries. The R&D intensity in Germany, for instance, is
still approximately double that of China.
As regards the financing sources of the R&D expenditures, China and South Africa
display the greatest similarities with the industrialised countries. In both of these BRICS
countries the business enterprise sector, similar to Germany, finances the lion's share
of R&D. In Brazil and Russia, the government is admittedly the most important source
of funding, but the share of business enterprise R&D expenditures is also considerable.
By contrast, the R&D activities in India are still largely dominated by the government
alone.
Table 2-1:
9
Basic Data on Innovative Capacity in the BRICS+G Countries, 2004
Brazil
Russia
India
China
South
Africa
Germany
Population 1000
GDP (current prices
US $ m)
183,913
603,973
143,850
581,447
1,079,721
691,163
1,296,157
1,931,710
45,509
212,777
82,501
2,458,889
GERD (PPP $ m)
GERD per capita
(PPP $)
R&D intensity
(GERD/ GDP in %)
13,494
73.4
16,669.7
115.9
21,7087
20.1
93,992
72.5
4,029.7
88.5
59,115
716.5
0.83
1.15
0.78a
1.23
0.87
2.49
39.9
31.1**
19.8
65.7
54.8
671
57.9
No data
60.6
7.6
75.3
No data
26.6
1.3
34
10.9
30.4
2.3
157,595
951,569
296,300b
(pers.)
1.152,617
29,080
472,533
84,979
477,647***
93,800b
(pers.)
926,252
14.131
268,942
141
821****
136
479
66
109
0.46
3.32****
0.09
0.71
0.31
3.26
8,684
1.24
15,782
2.26
12,774
1.83
29,186
4.18
2,364
0.34
44,305
6.34
14
27
18
15
11
18
0.10
0.03****
0.14
0.03
0.17
0.16
GERD acc. to financing
sources
GERD enterprise
sector (%)
GERD state (%)
GERD from abroad (%)
R&D employees (fulltime equivalents)
Scientists (full-time
equivalents)
Scientist intensity
(pers./ $ bn GDP)
Scientist density
(pers./1000 pop.)
a
Publications in SCI
Share in SCI publicaa
tions worldwide (%)
Publication intensity
(publ./ $ bn GDP)
Publication frequency
(publ./scientist)
a
a
a = 2003; b = 2000;
Sources: OECD Main Science and Technology Indicators 2006; World Development Indicators, World Bank 2006; Science Citation Index (SCI): US
National Science Board: Science & Engineering Indicators 2006 (fractioned classification of articles to countries). Brazil: Federal Ministry of Science
and Technology MCT. India: NSTMIS Department of S&T, Government of India.
**
Contains funds from the business sector and non-budgetary public funds.
***
Goskomstat names a lower number of scientists: 409,300 in 2003, of whom only 102,451 (25 %) are highly qualified scientists, i. e. doctoral
candidates or those with doctorates (cited acc. to OECD, 2005: 33).
**** The high scientist density in Russia is relativised, if one considers the data of Goskomstat on the numbers of highly qualified scientists (foot
note ***), simultaneously the frequency of publication rises.
With regard to scientist density (number of scientists per 1000 population), Russia
approximately reaches the German indicator level and thus lies very clearly ahead of
China. The other BRICS countries follow – once again separated by a wide margin –
with India bringing up the rear. Russia's lead is relativised if Russian sources for the
number of highly qualified scientists are considered (Goskomstat). Measured by the
number of publications per scientists (publication frequency), the highest incidence of
10
publication emerges for South Africa and India – both reach figures which are
comparable with those of Germany, whilst China and Russia lie far behind the field.
These opposing effects result in – with the exception of Russia – an apparent similarity
in the publication intensity (publications per $ bn. GDP) in the BRICS countries. Russia
admittedly still lies clearly ahead in numbers of publicatons per researcher, but the
margin has clearly decreased in the past years and China in particular has made
considerable advances in this area.
On the whole, it can be stated that China indubitably displays the greatest innovative
capacity among the BRICS countries. Compared with India, this can be explained by a
higher per capita income with at the same time higher research intensity per unit of
GDP. Compared with the other BRICS countries, China shows, on the one hand,
similar structures of innovative capacity. On the other hand, since the beginning of the
1990s China has simultaneously shown the most dynamic increase in innovative
capacity (Krawczyk et al. 2007), so that China's strength is is not merely an effect of its
size. Despite all their successes in the catching-up process, with regard to their specific
innovative capacity, the BRICS countries are still clearly far removed from the leading
industrialised states, in particular for the dimension of R&D intensity.
2.2
Analysis of the Regulatory Regime
2.2.1
Methodology
The regulatory regime influences societies' innovative capacity and willingness to
innovate in many ways. In the following, the framework conditions which affect national
innovation capacity as a whole, namely human resources, the pre-conditions for
technology absorption and innovation friendliness, are scrutinised. Furthermore, with
the societal integration of environmental protection we consider an influential factor
which refers specifically to sustainability innovations in the technology fields studied.
The following aspects form the backdrop for the observation of these four influential
factors:
• Innovations can only be implemented if highly educated/trained employees within
the companies can grasp new findings and convert them into innovative products
and services. But the absorptive capacity of a national economy to integrate foreign
innovations also pre-supposes a solid knowledge base which makes possible the
understanding and adaption of the new technologies to the specific requirements of
the country.
• The transfer and diffusion of innovations depend on the technological absorptive
capacity of the companies. Important aspects here are the sub-areas networking of
11
firms, conducting own research and development in the enterprises and
aggressiveness in absorbing foreign technologies.
• The government can promote technology exchange with partners abroad by means
of innovation-friendly regulation. Which regulations promote innovations, however, is
very controversially discussed. Some pre-conditions are undisputed. Access to
corresponding financing sources, for example, is indispensable for the market
introduction of innovations. In addition, in the context of the "systems of innovation
approach“, not only must supplier-side regulations be taken into account, but also
those concerning demand. For this reason, the demand side will also be examined
as a sub-area of the factor innovation-friendliness.
• The investigation of environmental protection in the economy and politics of a
country is based on the assumption that its strong embeddedness positively
influences the transferability of innovations in the environmental technology fields
studied.
When interpreting the results, the difficulties inherent in this methodological approach
must be kept in mind. The analysis is based on the indicators for economic
competitiveness published by the World Competitiveness Center of the International
Institute for Management Development (IMD) and in the framework of the Global
Competitiveness Report 2006-2007 of the World Economic Forum (WEF). They consist
for the most part of subjective estimates by international economic experts and
industrial associations gathered from surveys. The results are thus potentially biased
by specifically posed questions and the choice of questionees. Political opinions of the
surveying organisations may have an influence on the data. This is especially important
when it concerns the assessment of regulatory interventions. In addition, the estimates
may reflect different social backgrounds and experiences of the questionees. Even with
the few hard data, considerable differences can be ascertained between the two
surveys which can probably be explained by different measurement concepts.
In order to make the data from different origins comparable, they are transformed on a
standard scale between 1 and 7. While implicitly assuming the equal importance of the
individual indicators, the mean values of the thematically grouped scaled indicators are
formed in a two-step procedure. First of all, the single indicators are summarised to
form sub-sector indicators. The exact composition of the sub-sector indicators is
explained in the Annex. The results are presented in the form of a spider plot, whereby
high values (in the outer area of the diagram) point to an estimated high performance
of the country in the sub-sector concerned. By means of aggregating the sub-sector
indicators, the resulting total ranking for each of the four influential factors is presented
in the bar chart.
12
The selected methodology facilitates a clear country comparison of the framework
conditions for each factor, on the one hand, and permits a more precise analysis of the
national strengths and weaknesses in the subordinate sub-sector levels, on the other
hand.
2.2.2
Human Resources
The following two sub-sectors were analysed to evaluate human resources:
• Availability of human resources: the availability of human resources is not only a
pre-condition for innovation activities, but also for a successful integration of foreign
technologies. Various estimates of the availability of qualified workers, in particular
of engineers and scientists, serve as indicators here.
• Willingness of the firms to invest in the education and further training of the
employees: especially in the case of technologies with a high share of implicit
knowledge, a long-term commitment of the employee and active education and
further training are necessary for knowledge accumulation. The results of surveys
on the extent of further education in the companies and on the availability of relevant
services are taken as indicators for this.
Figure 2-1:
Sub-sector Profiles and Total Ranking of the Factor Human
Resources
Education and further
training
Availability
China
Germany
Russia
India
S outh Afric a
Brazil
China
Russia
South
Brazil
India
Germany
Africa
For the single indicators of the availability of engineers, scientists and qualified
workers, the interviewed experts came to the conclusion that the availability of human
resources best meets industry's requirements in India. In this sub-sector, Germany lies
behind India, in particular due to the limited availability of engineers. The availability of
qualified workers is judged to be especially problematical in South Africa. The survey
13
results on the availability of human resources relativise the results from Section 2.1 to a
certain extent. Although for China a relatively high, and for India a low scientist density
was reported, the labour supply in China appears to fall short of market requirements to
a much greater extent, according to the opinion of economic experts. This may be
explained on the one hand by differences in the level of demand or by quality
differences in education/training. On the other hand, language barriers may restrict the
number of qualified workers.
Staff education and further training, measured by the survey results on the extent of
further education measures in the companies and corresponding services offered, is
not nearly so pronounced in the rapidly growing economies as in Germany. South
Africa lies in second place behind Germany in this area and thus compensates for the
extreme lack of qualified workers with regard to the total ranking of the factor human
resources. Russia loses ground by contrast especially in this sub-sector.
On the whole, Germany ranks ahead of India for the factor human resources. Brazil,
South Africa, China and finally Russia follow these two countries, despite entirely
different problematical situations, after a relatively large gap.
2.2.3
Technology Absorption
The following sub-sectors will be considered in order to assess the absorptive capacity:
• Firm networks: the formation of company cooperations promotes technological
diffusion. The presence of national suppliers indicates the existence of enterprise
clusters, which can potentially facilitate technology transfer e. g. due to intensive
user-producer relationships and transaction cost reductions.
• Technology transfer: estimates of the significance of foreign direct investments
(FDI) and licensing in the appropriation of new technologies, as well as the capacity
and aggressiveness of the firms in the absorption of other people's technologies, will
be interpreted as indicators for the receptiveness of industry to technology transfer.
• Research and development in enterprises: own research and development
favour the successful integration of "foreign" technologies. On the one hand, the
absorptive capacities are strengthened, in that the understanding and the abilities to
adapt the technologies to the local needs are raised; on the other hand, the
negotiation position for foreign licences is stronger if one can credibly threaten to
produce an alternative, own development.
The indicators point to a relatively weak networking of firms in Russia, China and
Brazil. India and South Africa lead the BRICS states in this field, but the difference to
German industry is considerable. The broadly based networking of its actors may well
be one of the particular strengths of Germany's innovation landscape.
14
Technology transfer as a source of new technologies apparently plays a more
significant role in India, South Africa and Brazil than in China and in particular Russia. It
appears plausible that this form of technology appropriation is less characteristic for
Germany, as high national competence in technology development already exists here.
Also in the area of in-company R&D, all the rapidly growing economies lie far behind
the German level, not only as far as the experts' assessment of the innovative capacity
and R&D expenditures of the firms are concerned, but also in the question of legal
promotion of development and application of new technologies. India leads the BRICS
countries in this area, while Russia brings up the rear.
Figure 2-2:
Sub-sector Profiles and Total Ranking of the Factor Technology
Absorption
Research and development in enterprises
Russia
Technology transfer
Firm networks
Germany
China
India
Brazil
South Africa
Russia
China
Brazil
South
India
Germany
Africa
Germany's lead is relatively clear for the factor 'Technology Absorption', in particular
due to the high degree of networking and pronounced in-house R&D. India does best in
the BRICS country group, whereby the higher assessment of technology transfer
should be underlined. South Africa, Brazil and China follow thereafter at regular
intervals. Russia is clearly in last place in all sub-sectors and thus in the total
judgement too.
2.2.4
Innovation-friendliness
In order to assess the innovation-friendliness of the framework conditions, the following
sub-sectors were investigated:
• Regulations governing start-ups: the facilitation of company start-ups tends also
to promote the introduction and diffusion of innovations. In order to judge the
founding expenses, on the one hand 'hard' data on the length and number of
15
approval procedures, and on the other hand survey results on the founding
friendliness of regulations will be taken into account.
• Innovation financing: the introduction of innovations is characterised by the need
for capital and, in part, high risks. Access to corresponding financing sources thus
promotes the use of new technologies. In order to pass judgement, statements
about access to venture capital, survey results on the general financing situation
regarding innovations, as well as the access to loans will be referred to.
• Innovation-friendly demand: the discriminating attitude of potential buyers has
special significance for the success of innovations in the market. Well-informed
buyers, who, besides the product price, take performance characteristics and
product innovativeness into account in their buying decisions, promote the turnover
and thus the diffusion of innovations. The public procurement system is a means for
the government to positively influence demand. For this reason, the experts'
assessments of the significance of quality and degree of innovation are referred to
as decision-making criteria in public procurement. Demanding standards should
promote innovations, although their impact is not undisputed.
Brazil lies far behind all the other countries in regulating start-up firms. While start-ups
in Russia are particularly unbureaucratic and the legal framework in India and China
appear to be particularly founder-friendly, Germany, due to a relatively bad evaluation
of the latter, appears only in fourth place in the IMD survey.
Germany leads in innovation financing, just ahead of India. China, Russia and Brazil
occupy the last positions at about equal level while in China general innovation
financing is regarded as relatively good in the IMD survey, given the reported very bad/
limited access to credits/ loans and venture capital.
Germany has the highest quality in private and governmental demand as well as the
most stringent standards and therefore lies in first place in the sub-sector of innovationfriendly demand. Regulative standards are clearly less demanding in all the other
countries. When judging these survey results, it must be remembered that high
regulative standards are sometimes categorised as hindering innovation by champions
of a free market economy. The influence of technological regulation on innovations is
regarded in India, China and South Africa in the IMD survey as more innovationfriendly than in Germany. Correspondingly, China, whose regulative standards are the
lowest, compensates for its low marks for private buyer behaviour and standards
somewhat via this indicator. Russia lies in the sub-sector innovation-friendly demand
clearly in last place.
On the whole, Germany displays the most innovation-friendly framework conditions.
The difference to India and South Africa is however not so clear-cut as with other
factors. Russia and China follow at a greater interval. The framework conditions in
Brazil are obviously the least conducive to innovations.
16
Due to diverging opinions about the impact of certain regulative interventions, which
are also reflected conclusively in the survey results, the total ranking in the area
'Innovation-friendliness' depends to a great degree on the selection and weighting of
the underlying single indicators. Taking indicators of different origins as a basis by
giving equal weight leads to a levelling of the differences at the expense of clearer
national differences.
Figure 2-3:
Sub-sector Profiles and Total Ranking of the Factor Innovation
Friendliness
Innovation-friendly demand
Brazil
Innovation financing
Regulation of start-ups
Germany
Russia
India
China
South Africa
Brazil
Russia
China
South
India
Germany
Africa
2.2.5
Status of Environmental Protection
As an approach to the question of the societal embeddedness of the notion of
environmental protection, single indicators were examined for the following subaspects:
• Environmental protection in enterprises: here expert opinion was sought in the
question whether health, safety and environmental aspects are appropriately met by
the enterprises and how frequently measures to protect the environment are
undertaken by industry.
• Environmental regulation: state pressure on industry to adopt sustainability
technologies is increased by means of stringent environmental regulation. This
indicator is also formed on the basis of subjective survey results, although we
cannot reconstruct to what extent the answers refer merely to the legal state-of-theart or also to the actual implementation of environmental legislation.
According to the IMD survey, South Africa is the country apart from Germany where
the enterprises obviously place the most value on health, safety and environmental
17
aspects. Brazil, India and China are all in midfield. Despite comparably formulated
questions, the data for China with IMD and WEF are miles apart. According to the WEF
survey, environmental protection measures by the enterprises are rather few and far
between in China. The IMD survey, on the contrary, confirms that Chinese enterprise
managers take (rather) adequate account of health, safety and environmental aspects.
According to both surveys, environmental aspects have the least status in Russian
companies.
As far as the stringency of environmental regulation is concerned, Brazil leads the
BRICS states, followed by South Africa and India. Environmental regulation is
categorised as very lax in Russia and China, especially by comparison with Germany,
which has by far the strictest environmental regulations.
Figure 2-4:
Indicators and Total Ranking of the Factor Environmental Protection
Stringency of environmental regulations
Russia
Protection of ecosystems by business
Health, safety & environmental concerns
Germany
China
South Africa
India
Brazil
Russia
China
India
Brazil
South
Germany
Africa
On the whole, as regards the environmental protection factor, Germany lies far ahead
of South Africa which leads the BRICS countries. This striking difference stems
essentially from the more stringent environmental regulations in Germany. In Russia
environmental protection is clearly of lower significance than in all the other countries
studied.
2.2.6
Summing Up
Germany thus possesses the best general framework conditions for (sustainable)
innovations in all four investigated factors. The clearest lead can be seen in
environmental protection. For human resources and innovation-friendliness, however,
the framework conditions in India almost match Germany's.
18
Figure 2-5:
sustainability iInnovations
1. Human Resources
2. Technology Absorption
3. Innovation-friendliness
4. Environmental Protection
Russia
China
Brazil
South Africa
India
Germany
It must be underlined that India and South Africa are the BRICS countries with the best
pre-conditions for innovation transfer. In India, however, environmental protection is not
particularly developed. Stricter environmental regulation could clearly improve the
framework conditions for sustainability innovations here. In South Africa, the greatest
problem lies in the availability of human resources, while on the other hand
environmental protection is ascribed the greatest significance among the BRICS
countries. A consistent improvement of the education and (vocational) training system
promises the most success here.
Brazil and China make up the lower midfield. In Brazil, large deficits in the factor
innovation-friendliness are striking, especially in regulating start-ups. Faster and
unbureaucratic approval processes for company start-ups could clearly improve the
framework conditions for the transfer of sustainability innovations. China's problems
cannot be limited to a single influential factor: with human resources it is the availability,
with technology transfer the relatively poor networking and lack of R&D capacities as
well as innovative abilities of the enterprises, with innovation-friendliness deficits can
be discerned in the access to loans and venture capital and in the quality of private
demand, while a lax environmental regulation regime limits the significance of
sustainability innovations.
19
Russia's general framework conditions for the transfer of sustainability innovations are
the worst of all the countries considered here. Only for the factors human resources,
and that only because of the (still) existing stocks of qualified workers, scientists and
engineers, as well as for the factor innovation-friendliness, due to a low founding input
with regard to time for start-up and number of approval procedures, can Russia keep
up with the other BRICS countries. The greatest improvement potentials lie in
strengthening the absorptive capacities and embedding the concept of environmental
protection in society.
The analysis thus shows widely differing national pre-conditions for a successful
innovation transfer in the area of sustainability. Strengths and weaknesses of each
national innovation system should be taken into account when designing an effective
cooperation policy. The reservation must be repeated that these results are based on
surveys of experts, in which choice and different basic conceptions – e. g. with regard
to the expected impact of regulations – can influence the results.
Table 2-2:
Strengths and Weaknesses of the BRICS countries*
Human
Technology
Innovation-
Environmental
Resources
Absorption
friendliness
Protection
India
+
+
+
(-)
South
Africa
(-)
(o)
+
+
Brazil
(o)
(o)
-
+
China
-
(o)
(+)
(o)
Russia
(+)
-
(+)
-
Country
*Brackets characterise relative strengths (+) or weaknesses (-) or the average (o) with reference to own performance
20
2.3
Direct Investments
Direct investments make the integration of new technologies possible. They form an
important source of technological absorption. A number of direct investors strive to
advance sustainable development in their entrepreneurial activities abroad.1 Therefore,
the development of direct investments (foreign direct investments (FDI) as "outflows"
and "inflows") in the BRICS countries will be analysed first of all. With regard to the
interlinking of the BRICS countries with Germany, the development of German direct
investment relationships with these countries will then be shown. The flows between
Germany and the BRICS countries will be regarded in this context and sectoral focuses
will be determined.
2.3.1
Global Direct Investments
From the "World Investment Report 2006" of the UN Trade and Development
Organisation UNCTAD (2006) about worldwide FDI in 2005 (incl. takeovers and
fusions, M&A, mergers & acquisitions) it emerges that for the global inflows of direct
investments to the BRICS states, China (without Hongkong) lies far ahead of Brazil and
Russia. India und South Africa by contrast have received the lowest inflows. China was
ahead of Brazil and Russia also with inward stocks in 2005. The accumulated
investments for South Africa are momentarily still clearly higher than for India.
The high inflows to China also concur with the assessment of the "FDI Confidence
Index Ende 2005" (A.T. Kearney 2006), in which China takes first place among the
most attractive locations competing for international direct investments. On the other
hand, in Section 2.2 it was found that China's framework conditions are less
outstanding. The great attractiveness for direct investments must therefore be
considerably influenced by other factors. China's great significance as a domestic
market and active Chinese politics in the form of e. g. high import duties and
regulations to protect Chinese enterprises must also be mentioned. Additionally, the
strategy of international companies to achieve comparative cost advantages by
outsourcing production, in order to improve price competitiveness, also plays a role.
India occupies place 2 in the FDI Confidence Index, which has however not yet been
reflected in the level of currently realised FDI. Although no complete opening of all
branches for direct investments has taken place, a clear rise is already expected for the
1
In Germany, for example, at present 24 multi-nationally active enterprises and
organisations are members in the Econsense Forum Sustainable Development of German
Industry. See also the remarks in Chapter 5 on the adoption of German environmental
standards in foreign production plants.
21
future (bfai 2006b). Russia and Brazil occupy places 6 and 7, and South Africa is not
included in the field of the best 25 countries. For purposes of comparison, the USA
occupies place 3 and Germany lies in ninth place.
Figure 2-6:
Annual Direct Investments and Accumulated Stocks of BRICS
Countries* in the Year 2005 (US $ m)
Accumulated Stock
(US $ bn)
Annual FDI
(US $ bn)
80
300
70
250
60
200
50
40
150
30
100
20
50
10
0
0
BR
Inflow
RU
FDI in other countries
IN
CN
Stock of FDI at home
ZA
Stock of FDI abroad
Source: Data from UNCTAD 2006
* China without Hongkong
In global FDI outflows, i.e. the direct investments from the BRICS states in other
countries, Russia and China exhibited the largest amounts in 2005. By contrast, the
direct investments transacted by enterprises from Brazil, India und South Africa are
distinctly lower (Figure 2-6). In accumulated outflows, the Russian Federation is clearly
ahead in 2005, followed by Brazil and China.
The lion's share of total global direct investments in 2005 was allotted to the area
services (examples: financial sector, trade, telecommunications, real estate, recently
also private equity/hedge fund investments). With the exception of the area "resourcebased manufacturing", the share of industry as a whole declined compared to 2004.
The primary sector (above all the oil industry) is still a focus of attention. Transnational
transactions were mostly undertaken by private enterprises, although stated-owned
enterprises are increasingly appearing as investors abroad – for instance, from China.
22
In the BRICS countries where these activities have intensified in the last decade,
different sectors are found as base for direct investments:
• The agricultural and raw materials sector is very important in Brazil,
• Russia profits from its raw materials/ sources of energy (involvement of international
oil and gas concerns),
• India relies on knowledge-based service sectors (e. g. off-shore services in the ICT
area),
• China already has a broad industrial base (great interest in "more advanced
technologies"), and
• South Africa heads the ranking list of FDI inflows in Africa; main focuses are
transport technologies, in particular the automobile sector (UNCTAD 2006).
In direct investments, the activities between the developing economies are becoming
increasingly significant. At over US $ 334 bn, these states notched up a record value in
inflows in 2005, but at the same time also gained increasing significance as investors
(around US $ 117 bn), mainly to secure raw materials. The capital flows in the
developing countries come to approx. 70 % from Asia, where the number of multinational enterprises has distinctly increased within the last decade (Rabe 2006), so that
many new multi-national companies originate in these countries (Müller 2006).
Within this group of countries, Chinese investments and diplomatic activities have
greatly increased in the past, above all in South America, Asia and Africa. Strong
company groups have been formed which with government support are attempting to
assert themselves in the world market by buying up cross-border enterprises ("going
global strategy" UNCTAD 2006). China's direct investments in Africa in 2006 were
estimated at US $ 6.6 bn. Oil and raw material projects or also complete solutions for
infrastructure plans are involved (Drechsler/Hoffbauer 2007).
Indian and Brazilian firms also expanded internationally (example: steel branch). South
Africa pursues an intensive collaboration, not only with Brazil and India, but also with
China (Federal German Foreign Office 2006c). In Brazil, there is still an enormous
need for investment in the country's infrastructure. Already existing business
relationships with other BRICS countries should gain importance in the future. In the
case of Russia, foreign direct investments in "strategic branches" (e. g. energy)
admittedly are made more difficult, while on the other hand, a stronger international
interlinking of large concerns is foreseeable (Handelsblatt, 31.01.07).
2.3.2
23
Direct Investments of German Companies in the BRICS
States
The share of the BRICS countries in the consolidated German FDI abroad has grown
since 2002 from 2.8 % to 3.5 % (2004: € 23.6 bn). In absolute figures the growth is
about 29 %, whereby the direct-investment/ equity capital in Russia, South Africa and
China increased at an above average rate in this time period. Among the BRICS
countries, China (without Hong Kong) is clearly in the lead in 2004 receiving 36 % of
German FDI to the BRICS countries. Brazil follows with approx. 25 %, whereby the
main focus of the direct investments here lay prior to 2002, and Russia and South
Africa, with 16 % and 15 % respectively. India holds a share at present of less than 9 %
of German FDI to the BRICS countries.
German direct investments in the BRICS countries amounted to € 4.5 bn in 2005 and
came to approx. 13 % of total German direct investments. This figure lies clearly above
that of the consolidated shares, which further highlights the increasing significance of
the BRICS countries for German direct investments. Above all, the transactions in
China rose sharply in 2005. It became clear that India is also becoming more
interesting for German direct investments. Brazil is much more significant than South
Africa. In the case of the Russia, German equity capital was influenced by high
liquidation values from 2003 until 2005.
Of the total of € 345 bn in consolidated foreign direct investments in Germany, in 2004
the largest share fell to the EU partner countries (€ 242 bn) and the countries of North
America (€ 52.5 bn). The share of the BRICS countries was approx. 1 %. By individual
investor countries, South Africa (€ 1 bn) is ahead of Russia (€ 0.9 bn), with China (€
0.2 bn), Brazil (€ 0.1 bn) and India (< € 0.1 bn) following far behind.
The most important countries transferring foreign direct investments to Germany in
2005 were the EU states, Switzerland and South Korea. The sum of the transactions
from the BRICS countries were in total only relatively small, as in previous years (2004:
€ 0.37 bn, 2005: € 0.12 bn). In view of the fact that the number of multi-national
enterprises in these states is growing, a distinct rise in activities is to be expected in the
years to come (see UNCTAD 2006).
The Deutsche Bundesbank carried out a sectoral special evaluation of the direct
investments between Germany and the BRICS countries, based on the balance of
payments statistics from 2002 until 2005 for this project.2 Main focuses of this
2
Re-invested profits are not considered hereby; see Annex on definitions, methodological
remarks and detailed presentation, as well as Deutsche Bundesbank 2006.
24
evaluation are manufacturing industry, energy and water supply, the building industry,
trade and the transport sector. The banking and insurance industries, the areas "real
estate, housing, letting, services" as well as public budgets and private households and
other services were not taken into account.
In manufacturing industry, the total sum of German direct investments abroad in 2005
amounted to around € 3 bn, according to the Deutsche Bundesbank statistics. The sum
for the BRICS countries amounted to over € 2.5 bn (sum 2003 until 2005: € 4.7 bn).
Thus the significance of the BRICS countries for the direct investments of
manufacturing industry is much higher than the average of all direct investments. Main
target countries were China (focuses: vehicle construction, chemical industry and
mechanical engineering) and Brazil (vehicle construction and rubber and synthetic
goods). Thus direct investments of almost € 4 bn were made in these two countries
alone (see Table 2-3).
Considerable direct investments in vehicle construction were also effected in Russia.
German manufacturers decided in 2006 to invest in assembly plants in the locations
Russia and India. In South Africa the liquidation of FDI by manufacturing industry
appeared to predominate in the year 2005, but this does not seem to be a general
effect, as comparison with the previous years shows. The automobile branch is the
main industrial sector for transactions with South Africa; German car makers have also
committed themselves in this market, besides a number of other international
manufacturers. A number of automobile supplier firms have also established
themselves here in the past years. Between 1995 and 2005, car production clearly
increased on the whole and some of the manufacturers there have announced a
stronger export orientation for their models to Europe, North America and Asia in the
future (UNCTAD 2006). The other branches in South Africa are not the focus of
German direct investments. Liquidation of FDI have even been observed on the
average of the last 3 years.
The involvement of German industry in the BRICS countries demonstrated by the
Deutsche Bundesbank was rather low in the areas energy and water supply as well as
in the building sector and in the transport infrastructure sector (the categories land
transport/ transport in pipelines, shipping and aviation were recorded) in 2004 and
2005. The direct investments in trade were concentrated above all in China. Brazil also
played a role herein in the year 2004.
Table 2-3:
25
German Direct Investments in BRICS Countries in Manufacturing
Industry; in € m (sum 2003 to 2005)
Status: May 2006,
(without re-invested
profits)
Manufacturing
Industry
Thereof selected
branches:
- Vehicle constr.
- Mechanical eng.
- Chemical ind.
- Rubber,
synthetic goods
- Others
Sum BRICS
states
4732
Brazil
Russ.
Federation
1312
India
509
209
R
China
(without
Hongkong)
2673
South Africa
29
1950
557
767
247
931
52
47
143
142
58
150
57
-16
77
34
0
792
358
587
55
101
12
R
-51
R
-8
1211
139
102
114
881
-25
R
Remark: R = repatriations (withdrawal of existing German direct investments exceeds new direct
investments)
Source: Deutsche Bundesbank 2006, 2006b
2.3.3
Summing Up
Although the share of the BRICS countries in consolidated German direct investments
is still small, with their large domestic market potentials and overall economic growth
opportunities they should increasingly become preferred new investment locations for
German enterprises. Not only the great attractiveness of these countries in relevant
surveys and their actual importance in worldwide direct investments, but also the
increasing shares in annual German direct investments speak in favour of this
happening. However, different aspects are particularly relevant in each BRICS country:
• China, despite many risk factors, clearly occupies a top position with inflows from
the whole world, whereby the emphasis lies in the industrial area (AHK/GIC 2006).
This corresponds to a strategy – often referred to as 'extended workbench' – to build
up production capacities in China, in order to gain not only comparative cost
advantages but also access to a gigantic and rapidly expanding domestic market.
With the simultaneous technological upgrading in the domestic market and the
emergence of large enterprises in China, companies from China are also appearing
as investors in foreign markets with increasing frequency, often in connection with
safeguarding access to raw materials (bfai 2006a).
• Whereas the service sector in China is still under-developed, this area above all is
very attractive in India, even beyond IT services. Indian industry is presently in a
phase of building up capacities. As far as the the level of prior foreign direct
investments is concerned, it must be taken into account that India has pursued
rather restrictive policies for many years.
26
• Brazil's special strengths are in the raw material and agricultural areas, which lead
to new direct investments and complement the long established equity interests –
for instance, in the automobile area.
• The energy and raw material sectors are the central basis for direct investment
activities in the Russia.
• In South Africa vehicle construction has gained in importance, whereby large foreign
enterprises have played a significant role.
Manufacturing industry (vehicle construction and chemicals) dominates in the direct
investments in the BRICS countries, whereas areas such as energy and water supply,
construction industry or transport have not played a role up to now. A stronger
orientation towards sustainability calls for large investments in the coming years (e. g.
in China). Good chances for foreign firms are seen, above all in the environmental and
energy sector. Conversely, the share of the BRICS countries' foreign direct investments
in Germany has only been small till now. Examples in the steel sector and with wind
power plants, however, show that in future increased activity can be reckoned with on
the part of enterprises from the BRICS states.
3 Research Programme
3
Research Programmes
3.1
Research Programmes in the BRICS Countries
3.1.1
Methodology
27
The application conditions for sustainable technologies and their further development
possibilities depend greatly on the performance of the research system. For each of the
BRICS countries a "country profile sustainability research" was drawn up, which
examined the following questions with reference to the six selected topic fields:
1.
What status do sustainability research themes have in the framework of national
science, technology and innovation policy?
2.
Which national agencies (e. g. ministries, foundations) provide funding for R&D in
the six thematic fields and on what scale (financially)?
3.
Which universities and research institutions are attributed a leading position
within the country?
The analysis of "research programmes" refers to direct government research funding,
i. e. in the first instance those institutions will be considered which allocate funds in the
form of R&D projects, subsidies or scholarships directly to beneficiaries from science
and enterprises. However, the state financing of universities and research institutions,
i.e. institutional research funding, usually amounts to a considerably larger share of
national R&D expenditures than R&D project funding. Information on the leading
research institutions was included for this reason. Indirect R&D funding instruments are
not considered, such as e. g. R&D promotion through tax concessions. These are as a
rule not tailored to single R&D thematic fields, but target entrepreneurial innovation
activity, independent of branch membership, so that in this area no specific impacts on
the sustainabilty fields are to be expected.
Only few R&D programmes in the BRICS countries were specially developed for
problems of sustainability research. The South African Water Research Commission or
the sectoral R&D funds in the energy, water and transport sector in Brazil, for instance,
are among the exceptions. Mostly the sustainability topics are integrated into general,
technology-independent funding instruments.
Great value was laid in the analysis on all available information which sheds light on
the financial magnitude and thematic priorities of R&D programmes. However, the data
on government R&D expenditures are usually documented and published only on a
highly aggregated level. For this reason, only in few cases statements are possible on
the disaggregated level of the single thematic fields.
28
The country profiles provide an up-to-date overview of actors, research themes and
areas research needs in the BRICS countries. An analysis of this topic was not
available up to now. It provides valuable indications of salience of research results from
Germany to the individual BRICS countries and can thus serve as starting point for
follow-on activities on S&T collaboration.
Sustainability research in the BRICS countries was analysed on the basis of three
different sources of information:
• Assessment of literature, i. e. scientific publications and above all "grey" literature on
science, technology and innovation policy in the individual BRICS countries.
• Analysis of statistics on science and technology (S&T statistics) from international
(OECD) and national sources (national ministries).
• Survey of selected S&T experts in each BRICS country.
Whereas literature and S&T statistics contain background information on national
innovation policies, these sources provide little systematic information about
sustainability research up to now. For this reason, the cooperation with experts in the
BRICS countries forms the heart of the investigation.
The cooperation partners for each BRICS country were partly recruited through existing
contacts, and partly identified and contacted through searches in relevant national
research institutions. The German embassies in the BRICS countries were also
contacted. Most cooperation partners are scientists from the BRICS countries with
expertise in one of the technological themes concerned in this study. A complete list of
the experts can be found in the Appendix.
In order to collect structured information, an open questionnaire in German and English
was formulated and was mailed to the experts in October and November 2006,
together with a project description and a description of the thematic fields. An example
of the questionnaire is included in the Appendix.
Some questionnaires were completed by individual scientists, while other expertises
were collated by our main contact persons and already integrate the estimates of a
whole group of experts. The total of ca. 100 persons who contributed information and
evaluations to the expertises are named in Appendix A.3.7.
Due to the variety and heterogeneity of the information gathered, the evaluation and
synthesis together constituted a separate working step. The results of the country
analysis were summarised per country in a ca. 10 page "country profile sustainability
research" report, which is divided into four sections:
1.
background information on the national innovation system
2.
core subjects of sustainability research (according to our six topics)
3.
national R&D funding agencies and programmes, and
4.
the most important national research institutions (according to subject fields).
29
The detailed country profile for each BRICS country is found in Appendix A.3.
3.1.2
An Overview of the BRICS Country Profiles
In the following, the most significant findings of the country profiles on sustainabililty
research for each BRICS country are summarised and the importance of the single
sustainability areas within each research system will be elaborated. The detailed
country profiles are in the Appendix. The names and institutions of the participating
country experts are also listed here, as well as a copy of the questionnaire for the
country experts.
3.1.2.1
Brazil
The Brazilian research system exhibits a distinct specialisation pattern, which differs
clearly from the research focuses in traditional industrialised countries: over 70 % of all
scientific publications can be classified in the three large categories agronomy, life
sciences, medicine and health care sciences. Further 11 % are "exact sciences and
geo-sciences", but only 9 % are engineering sciences. Since the 1980s, university
education in Brazil has been greatly expanded, but only a small share of the highly
qualified scientists is employed in enterprises up to now.
In order to guarantee a more stable financing of R&D, the instrument "sectoral funds"
was introduced in Brazil in 2001. These sectoral funds are fed by special taxes on
technology-intensive branches and natural-resource exploiting industries. This tax
money is dedicated exclusively to promote sector-related R&D. They contribute a
considerable share to the total government financing of R&D. The main focuses and
priorities of research promotion are fixed for each fund individually by the Brazilian
Science and Technology Ministry (MCT) in cooperation with authorities of the sector
involved and research funding agencies.
Of main interest for the present study are the sector funds in the energy, water and
transport areas: CT-Energ (R&D in the energy sector, especially energy efficiency of
end use), CT-Hidro (R&D on water resources and water management), CT-Aero (R&D
in aeronautics), CT-Aquaviário (R&D in water transport and waterways), CT-Transport
(R&D in transport infrastructure and logistics). The institute "Centro de Gestão e
30
Estudos Estratégicos" (CGEE) has investigated research needs on behalf of the
Ministry MCT in the areas energy and water resources.
The following picture emerges with regard to the significance of the single sustainability
fields:
• Field (1) Renewable Energy and CCS: biomass is the outstanding R&D topic in
Brazil, among others, the breeding of new sugar cane varieties for ethanol
production, ethanol production from cellulosic biomass and sugar cane gasification
to produce energy with gas turbines. Further subjects are water power, solar
electricity and wind energy.
• Field (2) Energy Efficiency in Buildings: in the framework of the federal energysaving programme PROCEL-EDIFICA, a research association of the national
energy supplier Eletrobrás with leading Brazilian universities has been established
to research the subject "Thermic Comfort and Energy Efficiency" (e. g. passive
cooling).
• Field (3) Water Supply and Waste Water Disposal: the framework planning for the
sectoral fund CT-Hidro foresees the following R&D priorities among others: (a)
integrated water management in cities, (b) knowledge of the most important
Brazilian water ecosystems with reference to sustainable development, (c) water
management in river basins: institutional and technical solutions, (d) climate and
environmental variabilities and their prognosis in water systems, (e) modern
equipment to monitor the state of water systems. One of the greatest challenges
linked with rapid urbanisation is the occurrence of flooding in cities, and in this
context, the construction of waste water disposal systems and rubbish disposal. The
development needs for water supply were documented in depth in studies during
recent years, according to the CGEE.
• Field (5) Mobility and Logistics: the great importance of field 5 can already be
gauged by the fact that three sectoral R&D funds have been established. Aviation is
one of Brazil's internationally recognised R&D competences, with Embraer as the
national champion. A distinct orientation towards sustainability cannot be
ascertained in Brazilian transport research, according to available information;
infrastructure expansion, modern traffic information and logistics systems and
increasing road safety have priority.
3.1.2.2
Russia
Research and innovation politcy is not an independent, coherent policy field in Russia
yet. The research system is characterised by considerable fragmentation and
overlapping without synergies between different ministries and research institutions
(OECD, 2001, 2005). An integration of sustainability targets in technology and
innovation policy could hardly be determined up to now. At national level, the allocation
of funds for technological R&D is mainly determined by the Ministry for Economic
Development and Trade. The gigantic Ministry for Industry and Energy that is
31
practically responsible for the entire military and civilian industries has developed an
energy strategy for Russia until 2020 and has an in-house institute working on
questions of energy strategy.
The country profile in the Appendix contains an overview of federal goal-oriented
programmes in Russia in the five selected sustainability fields. According to this, the
largest investment sums until 2010 are foreseen for the programmes "Energy-efficient
Economy" (US $ 16 bn) and "Modernisation of the Transport System" (US $ 12 bn),
whereby the financial means are predominantly raised by the Russian regional
administrations. Distinctly smaller programmes exist in the areas "Ecology and Natural
Resources" (among others, protection of Lake Baikal and ecological restauration of the
Volga), "Energy-efficient Buildings" and "Water Resources". All these programmes
however are investment programmes, in which R&D expenditures play a quantitatively
subordinate role.
For the most important federal R&D programme, eight strategically significant
technology fields were identified and approved by President Putin as "Priorities in
Science and Technology". The two priority fields "Energy Technology and Energy
Efficiency" and "Transport, Air and Space Travel Systems" have a direct reference to
the thematic fields of this study; otherwise defence and security research, high
technologies and raw materials exploitation take pride of place in the national R&D
strategy.
The following picture of the ranking in importance of the sustainability fields emerges:
• Field (1) Renewable Energy and CCS: this subject field is a priority in the national
R&D strategy. According to the Russian experts, the efficiency in energy production
(conversion of primary energy) and the development of smaller hydroelectric plants
are among the top-priority research themes. Also the development of hydrogen
technology and fuel cells tie in with existing competence fields of Russian research,
as e.g. the "fuel cell targeted initiative" in the International Science and Technology
Centre (ISTC) makes clear. The ISTC is an international non-proliferation
programme.
• Field (2) Energy Efficiency in Buildings: the efficiency of heating supply in Russia is
the subject of one of 12 innovation-policy "mega projects", which the Russian
government awarded in 2002, in order to accelerate knowledge transfer from
publicly funded research institutions. The project volume should amount to a total of
RUB 1.8 bn.
• Field (3) Water Supply and Waste Water Disposal: this field is gaining importance at
present because of increasing water pollution.
• Field (4) Material Efficiency: the Federal Centre for Geoecological Systems is
presently developing a national waste database as part of a waste register, as well
as policy recommendations on waste disposal charges. One of the 12 R&D mega
32
projects from the year 2002 deals with the "increasing the effectivity of treating solid
waste" (RUB 427.5 m).
• Field (5) Mobility and Logistics: top priority of the national R&D strategy is to
modernise the transport infrastructure for automobile traffic, especially in the
agglomerations Moscow and St. Petersburg.
• Field (6) Socio-economic Research on Sustainability Innovations: in this field hardly
any internationally visible research has taken place in Russia (see 4.2).
3.1.2.3
India
Indian research is predominantly government-led and is therefore mainly directed
towards state goals. Over 43 % of the total national R&D expenditures in 2002 were
divided among four ministries or authorities in the areas defence, space, agriculture
and atomic energy. On the other hand, less than 20 % of the R&D expenditures come
from the business enterprise sector. For the fields of this study, the Department of
Science & Technology (DST) should be named as the Ministry responsible for civil
science and technology policy, as well as the Council of Scientific and Industrial
Research (CSIR), the largest Indian research organisation. International donor
agencies also play an important role for sustainabilty-related R&D (e. g. World Bank,
UNDP, USAID, GTZ).
In India, a separate ministry is dedicated to renewable energies (MNES). However, the
MNES hardly promotes R&D, but is mainly responsible for the diffusion of renewable
energies. The priority goals of Indian politics in this area are a basic supply of energy
through renewable energy sources and a decentralised energy supply in rural and
urban areas. The Ministry has declared as its goal to provide 10 % of the additional
capacity in the whole of India from networked renewable sources by 2012. A rise in
energy needs by 350% is predicted for the coming two decades.
The following priorities hold in the single sustainability fields:
• Field (1) Renewable Energy and CCS: according to experts' estimates, India already
disposes of considerable capacity, as far as the production of energy systems, a
qualified work force and R&D are concerned. An essential goal in national
technology development and adaptation consists in reducing the costs of renewable
energy sources. Besides wind power, the increase of efficiency and environmental
compatibility in the energetic utilisation of biomass has become increasingly
recognised an an important subject for R&D in the past years, as burning biomass
constitutes a high share of primary energy consumption of private households in
India.
• Field (2) Energy Efficiency in Buildings: the development and diffusion of standards
and best practices (building codes, energy audits, simulation software), as well as
the qualification of personnel to conduct and supervise appropriate measures are
33
the main emphasis. Important additional research subjects, according to experts'
assessments, are the development of new construction materials and simulation
models which are better adapted to the architectural and climatic conditions in India.
• Field (3) Water Supply and Waste Water Disposal: primary goal is the access to
clean drinking water for all citizens. R&D is needed in the areas water quality/ waste
water treatment; materials and tunnel building technologies in hydraulic engineering;
increased water efficiency in all sectors, including the diffusion of water-efficient
techniques in agriculture; rain water management in the countryside, but above all in
some large cities; development of a flood water strategy in endangered river areas;
sustainable, decentralised water supply systems.
• Field (4) Material Efficiency: one example is the use of fly ash to manufacture stones
and cement for the building industry; old iron, paper and textiles are recycled.
Various industries use waste products from agriculture as fuel. R&D is needed in,
among others, the disposal and exploitation of electronic equipment and waste and
in the utilisation of further recycling products in the building sector.
• Field (5) Mobility and Logistics: the Indian experts emphasise the urgency to
develop a sustainable transport system. Due to the economic development and
urbanisation, the volume of transport in all forms, including non-motorised transport,
is greatly increasing. Systematic R&D efforts in this direction have not yet been
made, according to the experts. In some cities with extreme air pollution, natural gas
(compressed natural gas CNG/ liquefied natural gas LNG) is being used as fuel.
• Field (6) Socio-economic Research on Sustainability Innovations: one of the most
important barriers to the diffusion of sustainability innovations is the widespread lack
of highly qualified workers. The experts underline the connection between
sustainability and fighting poverty, for example through micro-credits, the promotion
of "small" innovations and the entrepreneurial independence of women.
3.1.2.4
China
Of all the five BRICS countries, China has by far the largest national innovation system
and the highest growth dynamic in R&D expenditures. In China ten times as many
scientists work as in India or Brazil and double as many as in Russia. In the past years,
the R&D activity of the business enterprise sector has greatly increased and lies in the
meantime at two-thirds of gross domestic R&D expenditures. With the "National Outline
for Mid- and Long-term S&T Development Planning (2006-2020)", the Chinese
government is pursuing the declared goal to catch up with the innovation-based
economies by the year 2020. However, up to now the predominant share of R&D
activity has been concentrated on experimental development; basic research is only
very weakly represented.
The most significant national R&D funding programmes are the so-called "National
Basic Research Programme (973)", the "High-tech R&D Programme (863)" and the
34
"National Key Technologies R&D Programme", which are described in more detail in
the Appendix. The National Natural Science Foundation of China (NSFC) was
established taking the American NSF as its model, to promote research in the natural
sciences based on peer review.
The important aspects in the single sustainability fields are seen in the following
overview:
• Field (1) Renewable Energy and CCS: the Chinese government plans to raise the
share of renewable energies to 15 % of the primary energy consumption by 2020.
The Renewable Energy Law of 2006 commits electricity providers to obtain
electricity from RE and offers financial incentives for development plans in this area.
Renewable energies are promoted by the two most important state R&D
programmes, the National Basic Research Programme (973) and the Hightechnology R&D Programme (863), as well as by the National Natural Science
Foundation (NSFC). The main focuses of the R&D promotion are: water power, wind
energy, solar power, fuel cells, geothermal energy and wave power.
• Field (2) Energy Efficiency in Buildings: central heatiing and cooling systems play an
important role in China's towns and cities. The National Development and Reform
Commission in its "Medium- and Long-term Plan of Energy Conservation" attached
major importance to energy efficiency in buildings. Besides numerous large-scale
demonstration projects, the building standards are being raised step by step.
International cooperations were initiated with the German federal government
(Ministry of Transport), among other partners.
• Field (3) Water Supply and Waste Water Disposal: water shortage is being
perceived in China in the meantime as the most urgent environmental problem. A
large number of sewage treatment plants are presently being built on China's east
coast and more are planned. Considerable R&D efforts are invested in the planning
and construction of the largest water transfer project which was begun in 2002, in
which the Yangtze River will be linked to the city of Beijing. The most important
research fields in the water area are water supply, sewage treatment, water supply
and waste water disposal in cities, as well as waste disposal. The subject of
resource efficiency has only recently gained importance. R&D promotion in the
water area is the object of the National Basic Research Programme (973), the
National Natural Science Foundation (NSFC), and of the R&D Programme "National
Key Technologies".
• Field (4) Material Efficiency: R&D on circular economy and recycling, respectively
the re-use of metals, are promoted by the National Basic Research Programme
(973) and the National Natural Science Foundation (NSFC). The adequate disposal
of industrial waste is an unsolved environmental problem.
• Field (5) Mobility and Logistics: in the next 20 years the course will be set for
China's future transport infrastructure. Transport infrastructure and logistics is
therefore a top-priority research field of the High-technology R&D Programme (863),
35
which also contains R&D for energy efficiency of vehicles, alternative fuels and
emissions reduction.
• Field (6) Socio-economic Research on Sustainability Innovations: research activities
on the quantitative performance of the Chinese innovation system, on environmental
economics and on integrating environmental planning in town planning exist. A
topical subject is also the "socialist" building and regional development planning in
rural areas.
3.1.2.5
South Africa
Notable institutional reforms have taken place in South Africa's research and
technology policy after the end of the apartheid regime. Innovation policy is oriented
today towards the concept of the national innovation system. A significant component
of the reform policy is the development of new missions for science, technology and
innovation policy. Biotechnology, new production technologies, information and
communication technologies and resource-based industries (including agriculture and
energy) were defined as strategic R&D areas. As a result of this new orientation, policy
strategy papers abound, among them the National R&D Strategy (DST, 2002), as well
as strategies for water policies and transport policies.
The most significant research funding institutions in South Africa are the National
Research Foundation and the National Innovation Fund, which promotes the innovative
capacity of industry. In addition, the water sector has its own funding agency. The
Water Research Commission's mission is to promote R&D and to create R&D capacity
for sustainable water management. The National Innovation Fund promotes R&D in all
five technological subject fields.
Regarding the priorities in the single sustainability fields, the following picture emerges:
• Field (1) Renewable Energy and CCS: the government plans to install 10,000 GWh
of renewable energies by 2013, mainly by means of biomass, wind, solar power and
small hydropower plants. Technologies which are going to be deployed first due to
market maturity and resource availability are sugar cane bagasse, landfill gas, small
hydropower plants and solar power for warm water supply in commercial and
residential buildings.
• Field (2) Energy Efficiency in Buildings: in South Africa an energy-efficiency strategy
was passed in 2005 which includes building efficiency. The goal of 15 % reduction
of energy consumption was stipulated for commercial buildings, for residential
buildings correspondingly 10 %; by 2015.
• Field (3) Water Supply and Waste Water Disposal: the Water Research Commission
(WRC) promotes R&D in four "key strategic areas": of water resource management
(30 % of the funds in 2006), water-linked eco-systems (12 %), water use and waste
36
treatment (33 %), water utilisation in agriculture (19 %). In addition, an initiative of
the Ministry for Water Affairs and Forestry exists to coordinate R&D efforts to protect
groundwater, in which mining companies, representatives of industry and research
organisations participate.
• Field (4) Materials Efficiency: production technology is one of the new technology
missions of South African innovation policy. This contains among others the
promotion of a National Cleaner Production Centre (NCPC), which is aimed at small
and medium-sized enterprises. Waste recycling is carried out mainly by small
companies, but there are collection systems for metal and paper. R&D activities
exist also in the area of reclaiming minerals from landfills.
• Field (5) Mobility and Logistics: public transport systems are under-developed, so
that motorised passenger transport is limited to automobiles, above all in rich urban
districts. The offer of public means of transport for the rural population is inadequate
and goods traffic is concentrated on roads. The National Land Transport Strategy
(2006-11) therefore foresees extensive new investments in building rail transport
infrastructure, among other measures.
• Field (6) Socio-economic Research on Sustainability Innovations: one of eight
"focus areas" of the National Research Foundation (NRF) is the subject area
"Sustainable Livelihood and Poverty Eradication". This consists among other topics
in research on community-based natural resource management. The national R&D
strategy emphasises the significance of social-science research for capacity building
and developing innovative ability.
3.1.3
Summing Up
In none of the five countries is innovation policy specially directed towards separating
environmental and resource consumption from the economic development process.
The priority target in all BRICS countries is the promotion of innovative activities in the
business sector. Apart from a few exceptions, sustainability research is not
institutionalised in dedicated R&D funding agencies or R&D programmes, which means
it does not represent an independent field for research policy, but is at best covered by
general research and innovation policy measures. Conducting applied R&D is
frequently linked directly with government investment programmes, above all with
infrastructure investment in the areas of energy, water and transport.
China plays in a different league from the other BRICS countries, as far as the amount
of national R&D expenditures, the sectoral share of R&D expenditures contributed by
industry, and the number of scientists are concerned. Accordingly, the R&D activities in
the thematic fields are on a quantitatively higher level, above all in the sectors
Renewable Energy Sources, Energy Efficiency in Buildings and Mobility. Nevertheless,
there is still only little internationally competitive basic research in China yet.
37
Reliable statistics on funding priorities within the six sustainability fields, which would
allow comparisons between the five countries, are neither available nor can be
expected, in view of the institutional structures. Based on the qualitative estimates of
the experts, the following national strengths are to be emphasised:
• Brazil: renewable energies from biomass, followed (after a gap) by R&D in water
management.
• Russia: more efficient conversion of primary energy, as well as R&D in hydrogen
technologies.
• India: diffusion of decentralised, renewable energy sources; sustainability and
poverty eradication (field 6).
• China: political goal to expand renewable energies by 2020, therefore research
emphases on water power, wind power, solar, and fuel cells; raising of the efficiency
standards in buildings and research activity in the transport sector. Challenge how to
avoid problems from concentration on a few national R&D priorities.
• South Africa: R&D in water management, considerable new investments are
additionally planned in public rail transport.
In all the BRICS countries, except China, the lack of a next generation of scientists is a
crucial barrier to developing capacity in sustainability research in particular and in
public research in general. Against the background of strong economic growth and
related career opportunities in the private sector, a scientific career in these countries is
regarded as comparatively less attractive. Simultaneously, the domestic enterprises
lack the absorptive capacity for highly qualified graduates.
3.2
Sustainability Research in Germany
This section presents a study of the German research competences in the six
sustainability fields. The analysis is based on two databases, the environmental
research database of the Federal Environment Agency (Ufordat), as well as the
Research Funding Catalogue of the BMBF (Foekat). Ufordat describes environmentoriented research projects in the German-language area, Foekat contains information
about project funding by the BMBF and partly also of the BMWi and BMU. The analysis
of ongoing research projects and expenditures for research and development (R&D
expenditures) refer to the input side of the research and innovation process, while
intermediary, respectively output, indicators such as patents and foreign trade data will
be considered in the subsequent chapters.
The majority of the research projects studied here is completely or in part financed with
government funds. With the concentration on R&D financed by government sources,
38
however, the study covers only a segment of the research competences in Germany,
even if a large share of the projects investigated are conducted by firms. In 2004 a total
of € 55.4 bn was spent on R&D in Germany, of which 69 % was spent by the business
enterprise sector and 30 % by public authorities (Bufo, 2006). However, it must be
assumed that the proportion of government R&D expenditures is higher for the
development of environmental technologies than for the average of all technology
fields. An important role of the state in environment-related research derives not only
from the preventive function of the state in environmental protection. The increase in
environmental efficiency of industrial processes is a forward-looking element of
technological performance. But due to the widespread market failure in price setting of
environmental resources, the incentives for firms to invest in environment technology
R&D is frequently inadequate.
Research projects depict the activity of research organisations and companies and are
therefore suitable as indicators of their current competences and thematic interests.
However, funding in form of research projects represents only a part of the total
government R&D expenditures. On the whole, in 2005 the federal government invested
€ 9 bn in R&D, of which € 3.46 bn (38 %) went to institutional research funding (Bufo,
2006). In the year 2005, BMBF project funding at € 1.92 bn amounted to 25 % of the
R&D expenditures of the BMBF. Basic research which is conducted in organisations
with a high share of institutional funding, as e. g. in institutes of the Max Planck Society
or the Helmholtz Centres, is not completely reproduced by the indicator "research
projects". Complementing the R&D expenditures by output indicators like the patent
applications described in Chapter 4 is therefore particularly important.
3.2.1
Data Basis and Analytical Methods
The environmental research database Ufordat of the Federal Environment Agency and
the BMBF research funding catalogue Foekat were utilised to analyse priorities of
German research funding in sustainability fields. Both data sources display a high
degree of overlapping, but they are not identical. Foekat contains information on R&D
project funding, R&D commissions and studies of the BMBF and in individual areas
also R&D project funding on the part of the Federal Ministry of Economics and
Technology (BMWi) and The Federal Ministry of the Environment (BMU). Ufordat
describes environment-related research projects in the whole German-speaking area
and also contains projects which are financially supported by other institutions, such as
e. g. the Deutsche Bundestiftung Umwelt (German Foundation for the Environment),
the EU Commission or federal state ministries. The advantage of Ufordat thus consists
in the breadth of data captured. One disadvantage of the database Ufordat is that data
39
on the financial project volume are only available for some of the projects. For this
reason, comparisons of financial volume will be based on Foekat.
The analysis refers to six selected themes of sustainability and differentiates several
sub-fields for each thematic field over and above that. For methodological reasons, the
definition of these technology fields was performed separately for both databases. For
Ufordat the field definition is based on a database-own classification system and a
thesaurus of pre-determined key words (descriptors). Each sub-field was differentiated
by an appropriate combination of classes and descriptors and each thematic complex
is described by a combination of sub-fields. A complete list of the sub-fields in Ufordat
can be found in Table 3-3. In the case of the research funding catalogue Foekat, the
field definition is based on the BMBF "Leistungsplan-Systematik" (LP), a taxonomy of
funding areas. Each sub-field was demarcated by a suitable combination of LP classes
and summarised with other sub-fields into one thematic field. The complete list of the
sub-fields in Foekat including the accompanying LP figures is depicted in Table 3-4. In
the differentiation according to key words in Ufordat, a partial overlapping of the subfields occurs because the same key words appear in different usage contexts. The field
definition in Foekat by contrast is free from overlaps.
Most subject fields can be well portrayed in this way, substantive difficulties in
demarcation exist only for the field "Material Efficiency". Material efficiency is a core
concept of sustainability research, but not a uniform technology field. Innovations and
research breakthroughs to increase material efficiency can be realised with different
technologies and occur in the most widely varied product or production-processoriented research fields. In Ufordat we distinguish the three sub-fields "Recycling",
"Renewable Raw Materials" and "Material-efficient Production Processes and
Products". In Foekat the existing definition of material efficiency is based mainly on the
LP classes F280 "Integrated Environmental Protection in Branches", also other
categories like lightweight construction, bionics and "Technological Key Innovations for
System Change" play a role. In this way an essential part of material efficiency projects
is captured in Germany, but single relevant projects can also crop up in other funding
areas, e. g. in microsystem technology or materials research, without these categories
being assigned to the area of material efficiency as a whole.
Compared to Foekat, the database Ufordat admittedly offers a broader basis to capture
socio-economic research on sustainability innovations. However, here too an exact
demarcation of social-science sustainability research is not possible. In order to
operationalise the question, the two sub-categories "Environmental Innovation
Research" and "Environmental Policy Instruments" will be utilised, which can be
differentiated in Ufordat on the basis of key words. In contrast, the research promotion
40
collected in Foekat as "socio-economic" in the investigated period concentrates
predominantly on the activities gathered in the LP category F150 "Cross-sectional
Tasks in Research for Sustainability" (Table 3-4).
The analysis of research funds in Foekat is based on a cross-section of all research
projects which were begun in the years 2003-2005. Projects which were carried out
during the observation period but were begun before the beginning of 2003 were not
taken into account. Conversely, the duration periods of the projects frequently extend
beyond the end of the year 2005. In the following section the superordinated subject
fields of sustainability will first be compared. The number of research projects, the
shares of different R&D funding institutions, the volume of research funding and the
distribution of projects and funds to groups of recipients are presented. In the following
section, the distribution of research projects respectively research funds to the subareas of all six areas is depicted. On this basis, conclusions can be drawn about recent
priorities of publicly financed sustainability research in Germany.
3.2.2
Research Activities in the Selected Subject Areas
Table 3-1 compares the six superordinated subject areas with regard to the number of
research projects in Ufordat as well as the share of selected funding institutions. A total
of 1,764 projects beginning in the period 2003-2005 were recorded in which recipients
of funds from Germany participated. The largest subject areas are the fields "Water
Supply and Waste Water Disposal" with 31 % and "Renewable Energies and CO2neutral Fossil Energies" with 25 % of the projects. The areas "Material Efficiency" and
"Mobility and Logistics" each amount to 21 %, 9 % are allotted to "Energy Efficiency in
Buildings" and 7 % to "Socio-economic Research". Some projects can be classified in
several areas, so that the sum of all fields is greater than 100 %.
Around two-thirds of the Ufordat projects are being financed by the three Federal
Ministries BMBF, BMU and BMWi, each of which has different focuses. In the areas
water and material efficiency, the research projects are more stongly concentrated in
the BMBF, while the BMU plays a significant role in research into renewable energies.
The BMWi, on the other hand, focuses mainly on the areas mobility/ logistics and
energy efficiency in buildings. One important funding institution is also the German
Federal Foundation for the Environment (DBU) with 17 % of the total of recorded
projects. On the other hand, the German Research Association (DFG) plays a
subordinate role, with only 3 % of the projects, which can be explained by the mainly
applied-research orientation of the technology areas covered. On average, 28 % of the
projects are funded by institutions other than those mentioned above, including federal
state (Länder) ministries.
Table 3-1:
41
Research Projects in Germany according to Ufordat database, 20032005
Share of selected funding institutions in all projects (in %)
Technology areas
Projects
Σ
Renewable energies and
CO2-neutral fossil energies3
444
100
22
36
Energy efficiency in
buildings
166
100
18
Water supply and waste
water disposal
554
100
Material efficiency
372
Mobility and logistics
BMBF
BMU
BMWi
DBU
DFG
EU
Others
5
15
2
3
17
8
27
30
0
2
15
43
4
2
14
3
4
29
100
37
11
3
17
2
6
24
387
100
28
11
15
9
2
6
28
Socio-econ. research on
132
100
24
38
3
2
2
5
27
Total
(6 subject areas)
1 64
100
37
19
8
17
3
5
28
Source: Ufordat, Fraunhofer ISI survey, database host STN
Table 3-2:
R&D Funds for Projects beginning in 2003-2005 according to Foekat
R&D ex
penditures
in € m
Share of
R&D expenditures
(in %)
Number of
projects **
Share of
projects
(in %)
Ø project
volumes**
in € 1 000
CO2-neutral fossil energies
247,75
46.3
291
26.2
851
Energy efficiency in buildings
41,25
7.7
102
9.2
404
Water supply and
waste water disposal
64,41
12.0
254
2.,8
254
Technology areas
Material efficiency
57,27
10.7
209
18.8
274
111,60
20.9
243
21.9
459
Socio-economic research on
12,79
2.4
13
1.2
984
Total
535,06
100
1112
100
481
Source: BMBF research funding catalogue Foekat, survey Fraunhofer ISI;
http://oas2.ip.kp.dlr.de/foekat/foekat/foekat.
** The single projects are often sub-projects of larger joint projects. The figures on average project
volumes refer in these cases to the allocation to individual research organisations or enterprises (individual
allocation recipients).
A comparison of the project numbers does not allow meaningful statements about the
financial priorities of research funding because the project budgets vary. The Ufordat
3
Of the total of 444 projects, 52 (12 %) could classified unter the field "Carbon
Sequestration", the others investigated renewable energies.
42
database contains data on project volume only for some of the projects and is therefore
supplemented by data on R&D expenditures from Foekat. Table 3-2 presents priorities
of research funding in a comparison of the six subject areas. The definition of the
subject areas is based on the funding taxonomy of the BMBF
(Leistungsplansystematik, LP). In the observation period 2003-2005, projects with a
total volume of € 535 m were begun in all six areas. This dimension corresponds to
9.4 % of the project funding of the BMBF in the same time period. Clearly in the lead is
the subject area "Renewable Energies and CO2-neutral Fossil Energies" with a share
of 46.3 %, mainly provided by the BMU, followed by "Mobility and Logistics" with 21 %,
with the BMWi allocating funds. A mere 2 % of the funds are allotted to the area "Socioeconomic Research on Sustainability Innovations".
Figure 3-1:
Groups Receiving Project Promotion acc. to Subject Areas
2003-2005
0%
20%
40%
60%
80%
100%
Energy efficiency in
buildings
Water services (supply and
disposal)
Material efficiency
Mobility and Logistics
Socio-economic research
Total
Industry
Non-university research
Universities
Others
Source: BMBF research funding catalogue Foekat, analysis by Fraunhofer ISI
Figure 3-1 compares the share of different recipients by the technology areas,
differentiated according to the recipient groups industry, non-university research
organisations, higher education institutions (universities and advanced technical
colleges) and others (e. g. associations). The analysis shows which actors within the
innovation system possess competences in sustainability research. Following aspects
are to be emphasised:
43
• The rather low share of universities with only 17.5 % of the total project funding is
striking; the universities play a more significant role only in the field of water supply
and waste water disposal.
• The share of project funds to enterprises varies considerably; it is highest in the area
mobility and logistics, followed by the areas renewable energies and material
efficiency. These fluctuations reflect different purposes of the policy instruments
(e. g. instruments to promote research consortia).
The institutional differentiation of the research landscape into universities and nonuniversity research organisations plays a significant role – above and beyond project
funding – for the future development of research competence in Germany. For the next
generation of researchers are mainly educated in Germany in universities, but today
the universities are basically provided with much less financial resources for research
than the non-university research organisations (Heinze, Kuhlmann 2006). Moreover,
the non-university research sector is differentiated into organisations with different
organisational models, performance incentives and mission profiles (Helmholtz
Centres, institutes of the Fraunhofer Society, Max Planck Society and Leibniz
Association). Many subject areas of environmental research are integrated today in the
Helmholtz Centres which were originally founded as nuclear research organisations
(e. g. UFZ in Leipzig-Halle, Research Centre Karlsruhe, GSF-Forschungszentrum für
Umwelt und Gesundheit, Neuherberg). However, the present assessment does not
permit meaningful, differentiated statements for the different organisations in nonuniversity research.
3.2.3
Focuses within the Subject Areas
The following tables describe the focuses of project-based research funding within the
six subject areas. Table 3-3 presents the number of research projects according to
sub-areas, based on searches in Ufordat. Table 3-4 contains information on
expenditures according to technology field, as well as graphic depictions of the share of
the total volume for the corresponding subject area. For methodological reasons the
sub-fields in Ufordat and Foekat are not identically defined, both definitions serve as
complementary descriptions.
Measured in absolute frequencies, the following focuses can be determined for the
research projects already begun: in area (1) "Renewable Energies and CO2-neutral
Fossil Energies", most projects are carried out in photovoltaics and wind energy. CO2
sequestration in the observation period amounted to approx. 12 % of the projects, but
the financial volume for this subject area rose in 2006. In subject area (2) "Energy
Efficiency in Buildings" the focus lies on research into heating systems (above all
44
heating plants and heat pumps), followed by room air conditioning. In area (3) "Water
Supply and Waste Water Disposal" protection against flooding is the most frequent
research field (30.5 % of the projects), followed by water supply and waste water
disposal (both fields show overlapping) and decentralised water management. In
subject area (4) "Material Efficiency", the research projects are evenly distributed over
the three sub-categories recycling, renewable raw materials (above all wood, followed
by rapeseed) and material-efficient production processes and products (above all,
projects on eco-friendly products, integrated environmental protection technology and
eco-balancing). In area (5) "Mobility and Logistics" emissions reduction and vehicles
are the most frequent sub-categories, followed by research on infrastructure (above all
roads and road construction). The most frequent key words for the alternative fuels are
natural gas and electric engines. In area (6) "Socio-economic Research on
Sustainability Innovations" it emerged that a number of projects are being conducted
mainly on environmental policy instruments, but also on environmental innovation
research.
When comparing the absolute frequencies in Table 3-3 it must be taken into account
that the average project volumes can differ substantially, according to area. For
instance, the projects in the water cluster are on average distinctly smaller than those
in the field of renewable energies (cf. Table 3-2 last column). Thus the differentiation of
the subject areas according to the research funding catalogue is a significant
supplementary source of information. One striking finding in Table 3-4 is that research
funds are concentrated on two to three sub-areas - in all six subject areas more than
half of the funds, even up to two-thirds. In a purely quantitative analysis, these
technology fields represent the priorities of the project-based research funding during
the observation period.
The concentration of the research funding on priority areas is also clear in the share of
the Top 6 in the total expenditures in the 44 sub-fields studied: it amounts to around
50 % (€ 277.9 m). The Top 6 all stem from the two areas Renewable Energies
(photovoltaics, fuel cells, wind, and geothermal energy) and Transport/ Mobility
(propulsion (aviation), earth-bound transport systems). This illustrates the high current
significance of these two fields within the German R&D funding projects. By
comparison: in the same period, the BMBF invested a total of € 98.6 m in nuclear
energy research (without the disposal of nuclear engineering plants) and € 346.2 m for
nuclear fusion research.
Table 3-3:
45
Research Projects according to Technology Field in Ufordat, 2003-2005
Technology field
No.
Share %
Photovoltaics (incl. thermal solar energy)
Wind energy
Water energy
Biomass
Geothermal energy
Renewable energies and CO2-neutral fossil energies
154
107
18
79
42
52
444
34.7
24.1
4.1
17.8
9.5
11.7
100
Building envelope
Heating systems
Room air conditioning
Lighting
Measurement and control technology in buildings
32
98
49
5
24
166
19.3
59.0
29.5
3.0
14.5
100
Water supply
Waste water disposal
Decentralised water management
Efficiency of water utilisation
Water utilisation in agriculture
Flood control measures
Water services (supply and waste water disposal)
153
125
134
29
26
169
554
27.6
22.6
24.2
5.2
4.7
30.5
100
Recycling
Renewable raw materials
Material-efficient production processes and products
Material efficiency
138
122
140
372
37.1
32.8
37.6
100
Vehicles (road, rail, air travel, water)
Propulsion
Infrastructure (road, rail, airports, waterways)
Emission reduction (waste gases and noise)
Alternative fuels
118
62
106
122
60
387
30.5
16.0
27.4
31.5
15.5
100
Environmental innovation research
Environmental policy instruments
Socio-economic research on sustainability innovations
51
81
132
38.6
61.4
100
Total topics
Total Germany
1 764
4 434
Source: Ufordat, analysis by Fraunhofer ISI, database Host STN.
46
Table 3-4:
Funding Priorities according to Technology Areas, Foekat 2003-2005
LP
Technology area
Number
€m
Renewable energies and CO2-neutral fossil
energies
E210
Photovoltaics
E22231
Fuel cells – development
E212
Wind energy
E216
Geothermal energy
E214
Solar utilisation in southern climate
conditions
E217
Cross-sectional activities in renewable
energies
O12080
Geotechnol. for CO2 transformation
E22232
Fuel cells – demonstration
Sum
E243
Solar-optimised building
Rational energy use and solar energy
utilisation in households and by small
E241
users
Energy-optimised improvement of
E244
building substance
F21040
Needs in fields of leisure/ living
Sum
Water services
disposal)
F12025
F12013
F13030
F13010
F13060
F12022
F13040
F13020
F12020
F13050
Sum
(supply
and
waste
water
Decentralised water supply and
waste water disposal
Water protection technologies
Communal sewage/ waste water
Water supply
Analytical sensors,
measurement processes and models
Development of sustainable
water technologies
Industrial waste water
Water re-use
Sustainable treatment of the resource
water
Sewage sludge
Shares in technology area
(in descending order as on the left)
2%
88.1
63.4
35.9
28.7
7%
2%
1%
36%
12%
17.2
14%
5.5
5.5
3.3
247.7
26%
€m
22.8
1%
19%
10.1
7.7
0.6
41.2
55%
25%
€m
5%
1%
7%
20.8
18.3
8.6
8.4
13%
4.5
13%
3.0
0.6
0.1
0.0
0.0
64.4
Source: BMBF promotional catalogue, Fraunhofer ISI survey.
33%
28%
LP Number
Technology field
Material efficiency
F23010
Technological key innovations for
system change
F28050
Integrated environmental protection
system (IP) in metal–producing and
metal-processing industries
L12110
Lightweight construction
F28030
IP chemicals and synthetics
F28060
IP electrical/ electronic industry
K01510
Sustainable bioproduction
F28040
IP textile and leather industry
F28083
IP packaging industry
F28085
IP in further branches/ topic fields
F28020
IP agriculture and food
F28070
IPbuilding trade, glass and ceramic
industry
F28010
IP timber and furniture industry
K01610
Bionics
Sum
M01040
Environmentally
compatible
propulsion (aeronautics)
N010
Earth-bound integrated transport
systems
N030
Goods transport
N040
Environment- and resource-friendly
N020
Passenger transport
N060
Better understanding mobility and
transport
Sum
Socio-economic research on sustainability
innovations
F150
Cross-sectional tasks in sustainability
research
F240
Business models for a sustainable
market economy
F270
Bases and framework conditions for
sustainable management
Sum
47
€m
Shares in technology area
(in descending order as on the left)
3%
3% 1%
5%
14.8
27%
5%
9.6
8.2
8.1
3.2
3.0
3.0
2.7
1.8
1.7
5%
6%
17%
14%
14%
0.7
0.3
0.1
57.3
€m
9%
1%
34.8
31%
13%
27.2
24.2
14.1
9.9
22%
1,4
111.6
€m
24%
1%
3%
12.4
0.3
0.1
12.8
96%
Total
535.1
48
4 Capability
4
Capability in the Selected Sustainability Fields
4.1
Technological Sustainability Fields
4.1.1
Methodology
Technological capability addresses a construct which is not directly measurable. It is
therefore necessary to find indicators which at least come close to describing it. A
widely accepted system to do so adapts indicators from various sub-fields of the
innovation process (see Grupp 1998). This section refers to patents as R&D output or
intermediary indicators on the one hand, which are presumed to describe the direct
result of the R&D process. At the same time they are assumed to be an early indicator
for future technological development. On the other hand, foreign trade indicators are
constructed which belong to the class of output indicators. They focus more on the
application and diffusion of technologies in R&D-intensive product markets.
It is true that sustainability-relevant technologies are also applied with the aim of
reducing environmental pollution. Thus, on the one hand, they show an affinity with
traditional environmental technologies. On the other hand, they go far beyond the
classical definition of environmental technologies which in the past have focussed on
end-of-pipe strategies and which have dominated the studies done so far on recording
environmental activities. In the sustainability domains regarded here, energy, water and
transport infrastructures are main focal points as are efficiency strategies in energy
consumption in buildings and material consumption. They are the subject matter of a
modernisation strategy in which environmental protection and economic sustainability
are achieved simultaneously with the same technology. Unlike the traditional environmental technologies, no internationally comparable convention has emerged so far for
the sustainability-relevant technologies regarded here, which could be used to define
and classify the technologies in the patent and economic statistics. Therefore it is
necessary to come up with a definition tailored to the specific data situation. The
methodology, as in the previous approaches (DIW/ISI/Roland Berger 2007), follows a
'potential approach', in which the sustainability-relevant technologies comprise those
goods which could serve environmental protection and the modernisation of the subject
areas mentioned or refer to technological knowledge with a similar base. This approach
thus focuses not on the actually realised application for environmental protection, but
on the technological capability which could be mobilised for environmentally-friendly
production processes and products in the selected fields.4
4
See Legler et al. 2006, p. 19-22 for further explanations of the potential approach. In
several sustainability-relevant technologies it is therefore especially necessary to question
the pollution reducing effects of an increased use of the technologies. Examples for this
are, e. g. propulsion technologies or the use of first generation biofuels.
4 Capability
49
The problem with empirical studies is that they have to define their subject area
empirically and draw on suitable measurement concepts and databases for the subject
of interest. This study's main subject of interest is the technological capability of the
BRICS countries in the five selected sustainability fields. These technologies are
neither a patent class nor a specific trade classification which can be easily detected.
Thus, for each technology, it was necessary to identify the key technological concepts
and segments. They were transformed into specific search concepts for the patent data
and classification schemes for the trade data. This required an enormous amount of
work and substantial engineering skills. For some technologies, the classification had
to start from scratch, for others it was possible to partly build on experiences gathered
in previous studies:
• Within the scope of the reports on the technological performance of Germany (TLF),
traditional end-of-pipe environmental sectors were regarded with a focus on
Germany and the OECD countries.
• Within the study by Legler et al. (2006), these traditional end-of-pipe environmental
technologies were supplemented by renewable energy sources and a few selected
energy efficiency technologies; the focus was on the foreign trade of Germany and
the OECD countries.
• Within the study "Wirtschaftsfaktor Umweltschutz: Weiterführende Analysen zu
Innovationen" (DIW/ISI/Roland Berger 2007), four selected sustainability fields were
examined (renewable energies, energy efficiency, transport and water); the
innovation indicators here focussed on Germany without international comparisons.
With this study, for the first time, interest centres on the capability in the BRICS
countries. Directing the analysis at the BRICS countries requires greater consideration
of patent applications which do not only target the European market and a focus on the
foreign trade of non-OECD countries. This made it necessary to modify the
measurement concepts used in the above mentioned studies:
• The patent searches primarily draw on patent applications at the World Intellectual
Property Organization and thus international patents. In this way, a method of
mapping international patents is employed which does not target individual markets
such as Europe but is much more transnational in character. The BRICS countries'
patents identified in this way reveal those segments in which patent applicants are
already taking a broader international perspective. The years 2000-2004 were
chosen as the period of study so that a statistically more reliable population is
achieved in which chance fluctuations in individual years are evened out. In addition,
the available data on national patents in the BRICS countries were analysed in
sensitivity analyses in order to be able to take into account any distortions resulting
from concentrating on international patents. However, national patent data was only
completely available electronically for Brazil, Russia and China. In those cases in
which major deviations become visible between the pattern of national patent
50
4 Capability
activity and that of international patent applications, this is commented on in the text
during the interpretation.
• The database UN-COMTRADE is referred to for foreign trade figures. This is not
limited to trade with OECD countries, but also covers South-South trade relations. In
contrast to other analyses therefore, world trade is not only based on foreign trade
flows in which OECD nations are involved, but encompasses the whole world. In
addition, the classification of the technologies was structured according to the
Harmonised System (HS) 2002. This foreign trade classification allows more
detailed and thus more targeted disaggregation compared with the older
classifications common in international comparisons (Standard International Trade
Classification (SITC)).5 Nevertheless, this foreign trade classification still has many
limitations in the level of disaggregation which make the application of the above
sketched potential approach indispensable. The data are based on the year 2005.
The shares in global activity of the countries examined are used for both the patent
applications and foreign trade:
• International patent applications are researched and the shares of the BRICS
countries and Germany in these calculated.
• In foreign trade, the world trade shares (WTS) are calculated, i.e. the shares of the
respective countries' exports in world exports.
Both the patent shares and the world trade shares are influenced by the size and
general development of the country. It is therefore common to additionally construct
specialisation indicators. These indicate the position of the technologies and goods of
particular interest in relation to the average of all technologies and goods within the
country regarded. Positive specialisation values show that the competence of the
country in this field is above average, relative to the average of all technologies and
goods. These specialisation indicators are constructed for both patents and foreign
trade. They are standardised such that the indicators lie between -100 (extremely
unfavourable specialisation) and +100 (extremely high specialisation), where a value of
0 corresponds to an average specialisation:6
• For patents, the revealed patent advantage (RPA) is calculated which compares the
patent share of the country regarded in the sustainability technology with the patent
5
The HS 2002 is even more aggregated than the German foreign trade classification, but
this can only be used to analyse German foreign trade.
6
See Grupp, Schmoch (1992) on the method. In the literature, foreign trade indicators
sometimes do without standardising the specialisation indicators in the interval -100 to
+100 (see, e. g. Legler et al. 2006 and Krawcyzk et al. 2007), which - in addition to other
classification and data-based differences - makes it more difficult to compare the results.
This kind of approach has, among others, the drawback that it hinders a comparison of the
specialisation in foreign trade specialisation with that in patents.
4 Capability
51
shares of the country in all technologies. The RPA assumes a positive value if there
is an above average patent share for the sustainability field. This means that, within
the respective country, a disproportionately large number of patents are being
applied for in the sustainability fields and therefore – compared with the other fields
of technology – the national knowledge in this area is above average.
• The RCA (Revealed Comparative Advantage) takes both imports and exports into
account and thus counts as a comprehensive indicator of the foreign trade position.
It indicates to what extent the import/export relation of a country in the examined
sustainability technologies deviates from the import/export relation of the country in
all industrial goods. Positive signs indicate comparative advantages - a strong
international competitive position of the regarded sustainability technologies in the
country regarded. However, the RCA is difficult to interpret if special factors have an
influence on imports which do not concern the technological capability. Examples for
this are import peaks due to sudden surges in demand which exceed domestic
capacities or extremely low imports because of import restrictions. For this reason,
the revealed export advantage (RXA) is also constructed, which neglects the import
side. Positive values here show that the world trade share of the country in the
respective good is above the average world trade share of the country. In the report,
the specialisation in foreign trade is mainly discussed based on the RXA, but
information is also given on the RCA in the Annex. Cases in which the RXA deviates
strongly from the RCA are addressed in the text.
To be able to better classify the results for the sustainability fields in the subsequent
paragraphs, the shares of the BRICS countries and Germany in all international patent
applications and global foreign trade for all industrial goods are listed to start with.
These form the benchmark for judging whether the respective country has developed a
specialisation in the sustainability fields examined or not. At the same time, these
results already illustrate differences in the absolute capacity level between the
countries. The BRICS countries have a share of 2.7 % based on all the patents
registered in the database; Germany has 17 %. The world trade share of Germany in
all world exports amounts to about 10 % - Germany is the market leader worldwide
ahead of the USA (9.4 %) and China (7.9 %). Because of these different dimensions,
Germany's patent and world trade shares are shown on a separate axis in Figure 4-1.
52
4 Capability
Shares of the BRICS+G countries in international patents and the
world exports of industrial goods
10%
20%
8%
16%
6%
12%
4%
8%
2%
4%
0%
0%
BR
patent shares
CN
WTS
IN
patent shares DE
RU
ZA
shares DE
shares BRICS
Figure 4-1:
DE
WTS DE
These variables show considerable dynamics over time. Parallel to the increasing
recognition of the WTO rules governing Intellectual Property Rights – for example
China signed the TRIPS agreement at the beginning of the century – the number of
patent applications has also risen. These increased fivefold within five years in India
and China and by a third in Germany and Russia during the same period. In Brazil and
South Africa, the increase in this period was approx. 50 %. The world trade shares of
the BRICS+G countries remained more or less the same for South Africa, rose slightly
for Germany and Brazil and grew considerably for Russia, India and China.
These indicators give a differentiated picture of the technological performance. It must
be noted at all times that an individual indicator value on its own only has restricted
explanatory power. For instance, no comparative statements can be made about the
absolute competence of countries from, e. g. comparing specialisation patterns; this
requires knowledge of the absolute figures in the sense of patent and global trade
shares. It is also important which trends underlie the indicator values and which overall
picture results, especially whether strengths and weaknesses in the research results
(patents) correlate with economic realisations (foreign trade) or whether there are
contradictory developments.
4.1.2
Renewable Energies and CCS
According to analyses of the International Energy Agency IEA (World Energy Outlook
2006) the demand for primary energy in its baseline scenario will grow by more than
50 % between 2003 and 2030. Whereas fossil energy sources increase by 1.4 % on
average, renewable energy sources grow by more than 6 %, albeit from a much lower
4 Capability
53
level. More than two thirds of the increase will occur outside the traditional industrial
countries and, in 2030, half the primary energy demand will be from countries like
China, India and Brazil. Fossil fuels will continue to dominate demand (81 % of the
primary energy demand in 2030 will be met by fossil sources, more than in 2003). As a
consequence of the high demand for primary energy, CO2 emissions will increase by
52 % and further propel the greenhouse effect. The share of coal will fall slightly from
24 to 23 %; but coal use will increase in absolute terms by 44 %. China and India, both
countries with large coal reserves, are responsible for two thirds of this increase which
is driven primarily by electricity generation in these countries. According to estimates of
the IEA, 17,000 billion US $ will have to be invested in the energy sector by 2030, half
of this in developing countries and emerging economies. Besides reducing the
demand, this development offers renewable energies an opportunity. The market for
renewables will increase more than fivefold compared to the present. Manufacturing
companies are expecting increasing market potentials even in the short to medium
term (DIW/ISI/Roland Berger 2007). It is already apparent today that the BRICS
countries India (wind power), China (solar power) and Brazil (biofuel use) could also
have important relevance as production locations. Despite this, on account of the high
share of fossil fuels and especially of coal in power generation up to 2030, the question
arises of how CO2 emissions from fossil sources can be curbed using CO2 capture and
storage (CCS). The possible conflict between renewable energies and CCS must not
be overlooked, since both technologies are competing for important future markets in
the energy supply sector.
In detail, the following technologies were examined in the field of renewable energies
and CCS:
• Renewable energies: PV installations, solar thermal installations (including solar
thermal power generation and solar water heating), wind power and hydropower
plants (incl. wave and tidal power).
• CO2-capture and storage (CCS): pre- and post-combustion technologies for CO2caputre were examined as well as oxycombustion (oxyfuel), which increases the
CO2-concentration in the exhaust gas (no nitrogen shares) and thus makes other
separation concepts possible. Important technologies in this context are coal and
biomass gasification, gas purification and the water-gas shift reaction (including
suitable catalysts) as well as modifications in power stations, mainly in gas turbines
or in boiler design.
The joint share of the BRICS countries in world patents in renewable energies and
CCS is just under 3 %. This is lower than Germany's share of 19 % by a factor of 7.
China and Russia have the largest shares among the BRICS countries followed by
India and South Africa. Brazil has a very low share in world patents.
54
4 Capability
Together, the BRICS countries reach a world trade share of almost 7 % in foreign trade
(Germany: almost 15 %). China is the leader among the BRICS countries with about
5.5 % followed after a large gap by India with 0.6 %. Germany’s outstanding
competence in the technologies regarded here is very apparent from this comparison
of the absolute patents and exports.
Figure 4-2:
Share of BRICS+G countries in world exports and international
patents in the field of “renewable energies and CCS”
20%
6%
15%
4%
3%
10%
2%
shares DE
shares BRICS
5%
5%
1%
0%
0%
BR
patent share
CN
IN
world trade share
RU
patent share DE
ZA
DE
The specialisations in patents and foreign trade are shown in Figure 4-3 in the form of
a multidimensional chart. Countries with positive specialisation in both areas are shown
in the upper right quadrant. If, in contrast, both areas are below average, the country is
shown in the bottom left quadrant close to the coordinate origin. A positive patent
specialisation but negative export specialisation means a country will appear at the
bottom right, and in the upper left quadrant for negative patent but positive export
specialisation. This type of diagram has the advantage that countries which share a
similar specialisation pattern appear close to each other graphically so that comparison
is possible "at a glance".
Of the BRICS countries, only Russia and South Africa show a positive patent
specialisation similar to Germany. It can be concluded for India, China and Brazil that
the technologies regarded are not part of their main areas of competence. However,
renewable energies and CCS show a slightly higher relevance at the Chinese/Brazilian
patent offices which somewhat qualifies this below average patent activity. In addition it
can be seen that China's specialisation is improving over time. The BRICS countries
have a below average export situation, while Germany has disproportionately high
exports in total. However, particular care must be taken when interpreting Germany's
4 Capability
55
figures because the good export situation is overlapped by even stronger import
dynamics (see the technology-specific comments below) so that a below average
foreign trade position results for the RCA indicator. A similar, but much less conclusive
effect, also results for China. The massive development of energy capacities taking
place here probably plays a key role in its substantial imports. The reverse is true for
India: the imports here are comparatively low. Compared with China, probably stronger
efforts are put into national energy solutions here.
Figure 4-3:
Specialisation pattern of the BRICS+G countries in renewable
energies and CCS
renewable energies and CCS
100
BR
CN
IN
0
RU
ZA
DE
-100
-100
0
100
Fraunhofer ISI
These aggregated figures conceal some clear differences between the technologies:
• Brazil shows above average competence in hydropower which is not surprising
considering the extremely high share of this energy source (over 80 %) in total
electricity generation. Average patent specialisation is achieved in wind energy; the
many excellent wind power locations in Brazil have led to the first national activities
but so far not to any above average competence building. For all the other
technologies regarded in this field, the indicators show below average
specialisations.
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• China's competence in hydropower and solar thermal energy is above average. The
field of solar cells stands out in particular: China has managed to achieve an export
share of almost 10 % with only a slightly positive patent specialisation, but imports
many of these goods at the same time, similar to the other technologies regarded
here. China has certainly managed to establish itself in world trade in this
technology even if this involves low-price solar cells of sometimes poorer quality.
Despite intensive discussion and the enormous potentials of CCS – given the
predicted number of coal power stations to be built – so far no competence is
apparent in this field in China.
• In patents India shows, similar to China, above average activities in hydropower and
solar thermal power. Export specialisation in wind power systems was achieved for
the first time in 2005; Suzlon, the leading Indian manufacturer, certainly played an
important role here with its increasing international activities.
• Russia has above average competence in the fields of solar thermal power, wind
power and CCS. The many years of Russian experience in the field of coal
gasification have a strong positive effect on the latter. Nevertheless, the export
activities in these fields are in no way able to reach the average level which is
dominated by oil and gas exports.
• Solar thermal power, hydropower and CCS also constitute main areas of
competence in South Africa. The latter is mainly due to the domestic coal reserves
and the competence in coal gasification, which were already being pushed during
the period of apartheid for self-sufficiency reasons.
• In Germany, almost all the renewable energy technologies are areas with an above
average patent specialisation. The exception is photovoltaics – the patent share of
Germany here is about 15 % compared with the approx. 30 % of market leader
Japan. At the same time, the foreign trade specialisation of Germany – measured by
the RCA – is clearly negative in solar cells, there is a considerable excess of imports
here. Looking at the export side also reveals a negative specialisation, albeit a much
less obvious one. However, care should be taken in interpreting this result: It is true
that photovoltaics does indeed still have below average specialisation, but at the
same time, the enormous surge in domestic demand triggered by the German
Renewable Energy Sources Act (EEG) and the accompanying but delayed
subsequent build-up of production capacities must be considered. Up to now, the
growth in domestic demand has been so strong that the production of German
companies has been more strongly channelled towards the home market and
additional imports have been brought in from abroad on top of this. The situation
resembles that of wind power in which Germany also used to show negative
specialisations in the past, but has since advanced to assume world market
leadership with the parallel expansion of the market and domestic production
capacities with export and patent shares of more than 30 % each. When taking into
account these special factors, the prospects for the competitiveness of German
suppliers in the sector of renewable energy sources are therefore very good. In
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57
Germany, CCS technologies belong to those with an above average patent
specialisation. The export specialisation is also positive in this field in Germany.
Germany clearly has specialisation advantages here.
Overall it can be shown that the BRICS countries are especially strong in hydropower,
which represents a more traditional technology and has already been in use for some
time in these countries and in solar thermal power, which is the least high-tech of all
the technologies regarded. There are other additional individual areas, particularly solar
cells in China, wind power in India and CCS in South Africa and Russia.
Using foreign trade statistics, it can be calculated which share of the total exports of
each BRICS+G country is exported to the other BRICS+G countries. The higher this
figure, the more important the BRICS+G countries group is as a target market for the
respective country. The calculations reveal that approx. 50 % of India's total exports in
the field of "Renewable energy sources and CCS" are exported to the other BRICS+G
countries. This share is between 20 and 30 % for Russia, China and Brazil, too.
Germany is the most important customer for India and China. Furthermore, China
represents a main export market for Russia and Brazil.
Figure 4-4:
Share of the exports of BRICS+G countries in the field of
"Renewable energy sources and CCS" to other BRICS+G countries
in %
60%
50%
40%
30%
20%
10%
0%
Brazil
China
Germany
India
Russia
South
Africa
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The significance of the individual technologies for trade between the BRICS+G
countries varies by country. The following main technologies can be determined for the
individual countries:
• Brazil: water turbines to China;
• Russia: hydropower and power station components, India and China are important
customers;
• India: solar cells, mainly to Germany;
• China: solar cells to Germany, power station technologies to India;
• South Africa: hydropower followed by power station technologies, but at a
comparatively low level;
• Germany: power station technologies (especially to China) and water turbines, in
which all the countries are involved.
Overall, it is clear that the more traditional technologies of power stations and
hydropower dominate the trade among the BRICS+G countries, as well as the exports
of solar cells to Germany. In contrast, solar thermal power plants – a technological
strength of the BRICS countries – tend to be exported to non-BRICS+G countries. A
similar picture emerges for wind power installations from Germany; so far the BRICS
countries have played a subordinate role as an export market here. With the
considerable expansion plans for renewable energy sources and the substantial
potential for CCS, especially in the coal producing countries of India and China, this
field can certainly be regarded as an essential one in which Germany can do justice to
its global responsibility through intensive cooperation in the future.
4.1.3
Energy Efficiency in Buildings
Today, buildings, including their infrastructure and the electrical appliances used in
them, have a share of 39 % in final energy demand worldwide with the tendency to
decrease slightly to 2030 (IEA World Energy Outlook 2006). In absolute terms,
however, this still represents a 50 % increase in the energy consumption in residential
buildings and commercial buildings. There is estimated to be a high market potential in
the field of energy efficiency in buildings. Western Europe is the most important market
for German manufacturers, followed by Eastern Europe and Russia (DIW/ISI/Berger
2007).
On account of the often milder climate zones of developing countries, the share in final
energy consumption is somewhat lower than the global average. However the BRICS
countries have a broad spread of climate zones, even within one country like China: In
the northern regions, the climate is similar to Finland, whereas the climate in the south
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59
of the country is characterised by subtropical and tropical influences. Still, even in
countries with hot climate zones, the energy consumption in buildings is increasing due
to the growing use of air conditioning. This has the effect of increasing precisely the
type of electricity consumption which has a strong effect on primary energy. Poorly
insulated (and poorly shaded) air conditioned buildings in hot zones often consume as
much or even more energy than well insulated ones in cold regions.
In detail, the following technologies are examined in energy-efficient buildings:
• Building services engineering: efficient building services engineering, insulated
glass, efficient heating systems, and heat pumps. Systems for room air conditioning,
lighting and building automation.
• Efficient electrical appliances covering all the common bulk appliances in
households.
The joint share of the BRICS countries in worldwide patents in the field of energyefficient buildings is just over 2 %. In comparison, Germany’s share in this field is 18 %.
Of all the BRICS countries, China is clearly in the lead in patents. Russia comes next
with a much lower share. The shares of the other BRICS countries are around 0.25 %
or below. In foreign trade, there is a world trade share of about 14 % for the BRICS
countries, exactly the same as for Germany. China has by far the biggest share among
the BRICS countries. Brazil, India and Russia follow after a large gap with world trade
shares in this field of under half a per cent, respectively.
Figure 4-5:
Shares of the BRICS+G countries in global exports and
international patents in the field of energy-efficient buildings
14%
20%
15%
10%
8%
10%
6%
4%
values DE
values BRICS
12%
5%
2%
0%
0%
BR
CN
patent share
IN
world trade share
RU
patent share DE
ZA
DE
The specialisations in patents and exports are illustrated in Figure 4-6 in the form of a
multidimensional chart. It is noticeable that China and Germany, on the one hand, and
Brazil, Russia and South Africa, on the other, have similar specialisation patterns.
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Germany and China are both clearly above average in exports and slightly below
average in patents; the specialisation is even more apparent when looking at China's
national patents. As is clear from the patent shares described above, behind the same
patent specialisation there is a different level in Germany with a much higher absolute
patent activity. This implies that Germany achieves its export success in the higher
quality and higher priced segment with correspondingly high energy efficiency,
whereas China is more successful in the market segment characterised by price
competition. Overall this interpretation suggests that China could mobilise considerable
capabilities for a more sustainable design of the building sector, but at the same time
that there is still a substantial gap between potential and actual applications for
increasing building efficiency. Nevertheless, the national patent activities in China are
even more marked than the international ones. This indicates that China is already
undertaking large efforts in this specific sector to expand its knowledge base. For
Brazil, Russia and South Africa, it generally applies that they have a below average
performance in the building sector. In fact, patent specialisation is average, so that
knowledge does exist which could be made use of, but the technologies examined are
among the weakest in foreign trade. In India, the technology knowledge base is very
weak – compared with India's average values – and, at the same time, there is below
average export specialisation.
There are several differences in the individual segments in the sector of building
efficiency. This does not apply so much to Germany but to some other BRICS
countries:
• In Brazil, building services engineering is stronger than energy-efficient appliances
in both patents and foreign trade.
• Positive patent specialisation for Russia indicates greater competence in energyefficient appliances than in building services engineering.
• India shows an almost average specialisation in energy-efficient appliances, but is
very poorly positioned for building services engineering.
• China has a stronger position in patents, but a simultaneously weaker one in exports
for appliances than for building services engineering. Air conditioning technologies
play a particular role in export successes here; indeed some are already accusing
Chinese manufacturers of following a predatory pricing strategy. As the interview
results in Chapter 5 show, it has to be challenged whether Chinese products
contribute to an efficient use of energy or not. The claim outlined above that these
capabilities could be more strongly applied to increasing energy efficiency in
buildings is probably correct, particularly as far as building services engineering is
concerned.
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61
• Competence in building services engineering is almost average in South Africa and
thus much stronger than the very weak field of energy-efficient appliances.
Figure 4-6:
Specialisation pattern of the BRICS+G countries in energy-efficient
buildings
energy-efficient buildings
100
BR
CN
IN
0
RU
ZA
DE
-100
-100
0
100
Fraunhofer ISI
Between 3 and 14 % of exports are to trading partners from the BRICS+G countries.
The BRICS+G countries are still the most important partners for India, but at a lower
level of relevance. They play a very minor role for South Africa and Brazil.
The trade between the BRICS+G countries is mainly characterised by the exchange of
electrical products for rational energy use. Other technologies to be mentioned include
exports of thermal insulation products from Germany and China to Russia, and of
heating systems from Germany to Russia. Of the goods regarded, air conditioning
systems are important export goods for China, but these only play a minor role in trade
among the BRICS countries.
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Figure 4-7:
Share of exports of the BRICS+G countries in energy-efficient
buildings to other BRICS+G countries in %
16%
14%
12%
10%
8%
6%
4%
2%
0%
Brazil
4.1.4
China
Germany
India
Russia
South Africa
Water Services
None of the BRICS countries is predominantly arid. Still, there are dry regions in
Northern India and South Africa as well as in Western China, in which the population
may suffer absolute water shortages under certain conditions. The starting situation is
characterised by an often abundant but also irregular supply of water over the year and
by the fact that existing water sources are so polluted due to high population densities,
especially in agglomerations, and unchecked economic activities in connection with
raw materials production, commerce and small industry that they can no longer be
used as drinking water without further treatment. Alongside the off-take of freshwater
with the help of wells and the purification of various water resources (e. g. surface
waters) with the aid of filters, the reduction of emissions to water is thus of the greatest
importance. Even in those towns which possess sewer systems, these are often in a
poor condition, not sufficient with regard to capacity and catchment area and
wastewaters are sometimes channelled into the existing receiving water bodies without
prior treatment. An additional problem, above all in Brazil, China and parts of India, are
the annual recurrent floods which render every conventional, central wastewater
infrastructure inoperable. Another point concerning water pollution is the widespread
wastage of water which can be traced back to a lack of technology, but also a lack of
incentive structures (i. e. low water prices).
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Water technologies will become increasingly significant in the future. This is due to a
combination of accumulating reinvestment demand in the countries with established
water infrastructures and additional demand from the countries which are undergoing
rapid economic development. Business consultants expect market potential growth
rates of up to 10 %/a (see DIW/ISI/Berger 2007).
The following technologies are examined in detail:
• Water supply covers both the transportation and treatment of raw water (including
seawater) and its distribution to private and commercial consumers. Important
technologies are physical-chemical processes and – especially with regard to
decentralised water supply and closing water cycles – membrane-based filter
technologies for water treatment. Other aspects range from the construction and
maintenance of water supply and wastewater disposal infrastructures to pumps,
valves, water pipes and water containers.
• Sewage disposal covers both conducting the wastewater from where it is
discharged and purifying it. Wastewater treatment processes form the core element
of sewage disposal and are aimed at the purification of water with the help of
mechanical, chemical and biological processes which are integrated into the design
of sewage treatment plants and adapted to the respective conditions. Decentralised
approaches were also included like small sewage plants, if applicable in
combination with membrane filtration. Wastewater pipes and pumps and the
disposal of the accumulated sewage sludge also come under this heading.
• Increasing the efficiency of water consumption is a decisive element of pro-active
water management which does not restrict the challenge of supplying sufficient
quantities of high quality water to the supply-side alone. In households, besides
household appliances (washing machines and dishwashers), water-efficient fittings
play an important role. In agriculture, efficient irrigation technologies are particularly
relevant.
• Extreme weather events which will probably occur more often in the course of an
expected climate shift place increasing demands on managing all the components of
water infrastructure. These include structural flood protection and instruments to
measure liquid (rainwater) levels and flows as well as the transmission and
processing of the collected data.
The combined share of the BRICS countries in world patents for sustainable water
technologies is almost 3 % and thus less than a fifth of the annual patents from
Germany. China has the largest share among the BRICS countries with 1 %. India,
Russia and South Africa follow each with about half a percent, Brazil's share is 0.3 %.
This situation appears different, however, when looked at over time. While Russia has
lost patent shares, a substantial increase can be seen for China, India and Brazil.
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For foreign trade, the world trade share of about 8.5 % indicates a greater importance
of the BRICS countries. China has the biggest share with almost 8 %; the other
countries have a share of 0.5 %. There has been a continuous increase in China's
world trade share over the last 10 years whereas the share for the other BRICS
countries has remained more or less constant.
Evaluating the pattern of specialisation shows a three-way split. Apart from China, all
the BRICS countries have above-average specialisation in patents with below average
exports at the same time. This indicates that the increasing importance of this topic is
being recognised in these countries. However, there is still an insufficient
implementation of knowledge competences in competitive production and process
technology so that there has been no expansion into international markets; indeed on
the contrary, substantial shares of the required technologies are still being imported.
China has average specialisation. The increasing patent numbers give the impression
that China has begun to substantially increase its knowledge base which is also
supported by the disproportionately high national patent activity. Germany clearly
shows positive specialisation particularly in exports. In spite of the lack of a system
leader from the German water sector, the numerous component manufacturers from
Germany have succeeded here in bringing their long experience with water
technologies to the international market.
Shares of the BRICS+G countries in world exports and international
patents in the field of water
10.0%
20%
7.5%
15%
5.0%
10%
2.5%
5%
0.0%
0%
BR
patent share
CN
IN
world trade share
RU
patent share DE
ZA
DE
values DE
values BRICS
Figure 4-8:
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65
Figure 4-9:
Specialisation of the BRICS+G countries in the field of water
water
100
BR
CN
IN
0
RU
ZA
DE
-100
-100
0
100
Fraunhofer ISI
The following strengths and weaknesses result for the individual countries within the
water technologies examined:
• Brazil has a slightly stronger position in the segment of water supply and sewage
disposal than in water use efficiency and the weaker flood protection.
• The above average patent activities in Russia are solely due to the segments water
supply and flood protection. The weak position in foreign trade is a feature of all the
water technology segments.
• India is also stronger in water supply and wastewater disposal than in flood
protection. Within water supply, the sub-segment of seawater desalination should be
highlighted. Here, in contrast to all the other water technologies, India even achieves
above average export successes.
• China is comparatively active in the water sector on average but flood protection
really stands out. On the one hand this represents a clearly above average field for
patent activities; on the other hand, China's position in exports is relatively weak,
particularly in this field. This pattern is compatible with the high national importance
attached to this topic. Here, knowledge skills are being expanded and market
strategies are oriented first and foremost at the home market and less at foreign
ones.
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• In South Africa, the patent activities in wastewater disposal and water supply are
clearly above average. Water treatment technologies should be highlighted within
this segment. This is the only sub-sector within water technologies for which South
Africa manages to generate above average export shares.
• Germany's clearly above average activities are spread comparatively homogenously
across the individual sub-segments. Only the patent activities in water supply
technologies lag somewhat behind the other three segments.
Between 6 % of the exports for South Africa and 14 % for India are to trading partners
from the BRICS+G countries. Of the BRICS+G countries, Germany is by far the most
important export market for Brazil, China and South Africa; Russia and India, in
contrast, export more to China.
Figure 4-10:
Share of exports of the BRICS+G countries in the field of water to
other BRICS+G countries in %
16%
14%
12%
10%
8%
6%
4%
2%
0%
Brazil
China
Germany
India
Russia
South Africa
Water supply technologies deserve particular mention in the trade between the
BRICS+G countries followed by wastewater technologies. No clear patterns can be
discerned with regard to the target countries. On the one hand, China and Russia are
important markets for the technologies; on the other, suppliers also export individual
components to Germany.
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4.1.5
67
Material Efficiency
Efficiency analyses and optimisation approaches in companies usually concentrate on
the cost factor of personnel costs. However the gross production costs in
manufacturing contain alongside personnel costs also material and energy costs,
depreciations and rents as well as other costs. There is an increasing public awareness
of the significance of material efficiency. In the field of material efficiency, the
technology segments "renewable raw materials", "raw material and material-efficient
production processes", and "recycling" are regarded as the starting points for raising
material efficiency. In this field, renewable raw materials are the most important both in
patents and world trade.
• Many industrial sectors have a long tradition of using renewable raw materials.
While in the past, products based on renewable materials were often displaced by
fossil-based products (e. g. celluloid, linoleum), recently more and more attention is
being paid to renewable-based products because of raw material and degradability
considerations. Both chemical raw materials should be listed here (e. g. sugars and
starches, oils and fats) and products based on renewable raw materials (e. g.
polymers, adhesives, varnishes, coatings and construction materials).
• Recycling is also part of the field of material efficiency. Here, the segments covered
included the detection, separation and sorting of waste and its material recycling.
• The technology field of raw material and material-efficient products with the
fundamental idea of designing products as environmentally-friendly as possible
represents a compilation of different measures. These include technologies such as,
e. g. lightweight construction, lifespan extension, fibre reinforcement or corrosion
protection and also more recent service sector concepts (e. g. car sharing, print-ondemand). However, there are considerable difficulties here with collecting the
necessary statistics.
• The field of raw material and material-efficient production processes also
incorporates various sub-aspects such as optimising the production processes (e. g.
by reducing wastage or by standardising quality), a better utilisation of appliances,
systems and specialised machinery or optimisations which affect the whole of the
value added chain. These are also aspects which were only able to be partially
researched.
The share of all BRICS countries in worldwide patents in the field of material efficiency
is just over 4 %. Germany reaches 17 % here. Of the BRICS countries, China has the
largest shares followed by Russia and then India and Brazil, which are on the same
level. As regards exports, the BRICS countries have a global trade share of almost
7 %. The biggest share at 3 % is accorded to China, closely followed by Brazil with
2 %. Germany has about 15 % here.
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All BRICS countries show positive patent specialisation; this is the most apparent in
Brazil, but also clearly visible in South Africa and Russia. However, the situation does
change over time. While India and China have shown the strongest growth in patents
over the last few years, this growth is the weakest in Russia and South Africa. With
regard to exports, there is a two-way split into countries with strong exports on the one
hand, namely Brazil and South Africa, and India, China and Russia, on the other. In
Brazil, the above average patent activities are probably also linked with other export
successes, while in India and China, they are more likely to be explained by the efforts
made to build up domestic production and increase competences in processing.
In Germany, the patent specialisation is slightly above average. The exports are almost
double the imports - this indicates a clear specialisation in material-efficient
technologies.
patents in material efficiency
4%
20%
3%
15%
2%
10%
1%
5%
0%
values DE
values BRICS
Figure 4-11:
0%
BR
CN
patent share
IN
world trade share
RU
patent share DE
ZA
DE
These aggregated figures disguise large differences between the individual segments:
• The activities in Brazil are dominated by renewable raw materials. The world trade
share here is over 8 %. There is also a very high patent specialisation. The
comparison with national patent activities makes it clear that a disproportionately
high number of international patents are being registered for renewable raw
materials, which underlines the international orientation in this field. In the other
three areas of material efficiency, there is a divergence between positive patent and
negative export specialisation. The build-up of national competence is thus
underway but without this having led to any significant international marketing.
• China and India have negative export specialisation in all the examined areas of
material efficiency. However, there are positive patent specialisations for renewable
raw materials and raw materials and material-efficient products or production
processes. This indicates that there are efforts being made in these sub-sectors to
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69
build up the domestic knowledge base. Patent activities in recycling are below
average; this implies that this sector is still being operated as a "low tech" one in
China and India. Production processes show a slightly better performance than the
other fields in China, while this is the case for renewable raw materials in India.
• There are above average patent activities taking place in all four subsectors of
material efficiency in Russia; at the same time, there is very negative export
specialisation. Recycling has the best performance, regenerative raw materials the
worst.
• In South Africa, there is a clear two-way split: the country shows above average
competence in recycling and renewable raw materials, but is below average in raw
material and material-efficient production processes and products.
• In Germany, renewable raw materials are not one of the sectors with above average
specialisation either in patents or in exports; considerable amounts are imported
here. The opposite is true for recycling: Many years of political efforts in this field
can be seen in the above average output in patents and foreign trade. There are
clear specialisation advantages in exports also for raw material and material-efficient
production processes and products.
Figure 4-12:
Specialisation of the BRICS+G countries in material efficiency
material efficiency
100
BR
CN
IN
0
RU
ZA
DE
-100
-100
0
100
Fraunhofer ISI
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Based on all the BRICS countries it can be stated that raw material and materialefficient products and production processes are among the weaker and regenerative
raw materials among the stronger areas. Brazil, in particular, has an outstanding
starting position here.
More than 25 % of Brazilian and South African exports are to trading partners in the
BRICS+G countries but their target countries are very different: While China, Russia
and to some extent India are the most important BRICS+G-export countries for Brazil;
for South Africa, Germany leads by a long chalk. For the other countries, the relevant
figure is just over or just under 10 %.
Figure 4-13:
Share of exports of the BRICS+G countries in material efficiency to
other BRICS+G countries in %
30%
25%
20%
15%
10%
5%
0%
Brazil
China
Germany
India
Russia
South Africa
The significance of the individual technologies for trade among the BRICS+G countries
varies for the respective countries. The following main conclusions can be drawn for
each country:
• Brazil: renewable raw materials, which are mainly exported to Russia, India and
China;
• China: slight priorities in production processes, its exports are relatively evenly
spread across BRICS+G trading partners;
• India: low level in terms of quantities, although the exports in renewable raw
materials to China are a bit higher;
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71
• Russia: exports of recycling technologies (especially material detection) and of
secondary steel to China and India;
• South Africa: relevant for parts for recycling plants, mainly for material separation,
which are primarily exported to Germany;
• Germany: exports of recycling plants to China and Russia; furthermore, exports in
raw material and material-efficient products (mainly for corrosion protection) to
China and Russia.
Overall, important export goods comprise renewable raw materials (Brazil), recycling
technologies (Germany, South Africa) and some secondary materials; the main import
countries are China, India and, to some extent, Russia.
4.1.6
Transport Infrastructure and Mobility
Satisfying mobility needs also represents a main challenge in the BRICS-countries.
Sustainable transport policy has to be based on several pillars: Technological
improvements in propulsion systems and fuels, on the one hand, and shifting traffic to
more environmentally-friendly alternatives, on the other. This can be done via improved
service offers and the appropriate intermodality management of transport services and
interoperability, especially of rail transport. The biggest pressure to act is seen in
improving environmental conditions and reducing congestion in the large and rapidly
growing cities of Central and South America and Asia, as well as in guaranteeing
sufficient capacities and improving transport safety in global maritime and air transport
because of the enormous growth here. The market volume for mobility technologies is
estimated at 360 billion Euro worldwide, which means that investment in these
technologies harbours considerable potentials for economic success (see
DIW/ISI/Roland Berger 2007).
The technologies in the field of sustainable mobility are grouped into five sectors for
detailed analysis:
• Vehicle engineering: lightweight construction, multifunctionality and attractiveness
of rail vehicles and their advanced compatibility with road transport for easier
incorporation into logistics chains, continued improvements in aerodynamics and
general increase in the size of transport containers.
• Propulsion technology and fuels: Hybrid propulsion systems for short-term
emission avoidance and as a bridging technology to purely electrical motors, mobile
fuel cells, regenerative production and storage of hydrogen and electrical energy as
well as the continuous improvement of the efficiency of combustion engines and jet
propulsion.7
7
However, competence in propulsion technologies does not necessarily result in the
achievement of environmental goals (e. g. reducing the specific CO2 emissions), but can
also be used to enhance performance.
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• Infrastructures and transport systems: separate rail systems for the
transportation of passengers and goods, expanding ports, traffic control in built-up
areas as well as telematic-based information and mobility management to shift
demand to environmentally-friendly transport systems.
• Emissions reduction: Further development of filters and catalytic converters and
their use in rail and shipping as well as noise reduction techniques for all types of
transport.
• Biofuels: biodiesel, bioethanol and technologies relevant for the manufacturing of
second generation biofuels (biomass to liquid (BTL)).8 Since international foreign
trade classification does not yet identify biofuels as such, only those subsectors
which target necessary technologies or preliminary products were able to be
evaluated here.
Measured by the development in patent applications, the greatest dynamics are seen
in propulsion and emission reduction technologies, alternative fuels and, to a lesser
extent, vehicle engineering. In contrast to this, transport infrastructures show a more
constant patent development.
patents in the field of mobility
10.0%
20%
7.5%
15%
5.0%
10%
2.5%
5%
0.0%
values DE
values BRICS
Figure 4-14:
0%
BR
CN
patent share
IN
world trade share
RU
patent share DE
ZA
DE
The combined share of BRICS countries in global patents is just over 2 % and thus
about one tenth of the annual patents from Germany alone. Russia and China hold the
biggest shares among the BRICS countries. A world trade share of about 12 % shows
the greater significance of the BRICS countries in foreign trade. Here, the share of
BRICS countries in the identified, sustainability-relevant mobility technologies almost
equals that of Germany, which is about 13 %. China has the largest share of the
8
Biofuels are, however, not necessarily environmentally-friendly; see SRU 2007.
4 Capability
73
BRICS countries with over 9 %, followed by Brazil with 2 %. In both countries, exports
are more than double the imports.
The assessment of specialisations shows a very different picture. Germany enjoys
above average success in the mobility field in both patents and foreign trade. The
reverse is true for India: Below average specialisations in patents and foreign trade
here indicate weak performance in this field. In Russia and South Africa, there is in fact
above average competence, but this does not show through in foreign trade. In these
countries, the activities seem to be more concentrated on the respective home market
and, in addition, are currently showing signs of slowing down in Russia. In Brazil and
China, in contrast, the indicators suggest a below average knowledge base, which is,
however, accompanied by clear successes in foreign trade. In China, in particular,
there have also been considerable increases in patent activities and export shares over
time.
Figure 4-15:
Specialisations of BRICS+G countries in the field of mobility
mobility
100
BR
CN
IN
0
RU
ZA
DE
-100
-100
0
100
Fraunhofer ISI
These aggregated figures disguise some clear differences between the individual
segments. A differentiated analysis is appropriate here, especially for Brazil. Brazil
shows considerable capacity, primarily in the field of first generation biofuels and also
assumes an internationally significant position here with an export share of over 10 %.
However, looking at its patents, the overall slightly below average specialisation can be
74
4 Capability
traced back to poor performance in second generation biofuels (BTL). This indicates
that Brazil has to augment its efforts in order to safeguard its position. Brazil also
shows above average capability in vehicle engineering, especially where foreign trade
is concerned. Here, there is a national aviation champion, Embraer, which exists
alongside large international automobile manufacturers. The situation is very different
in emissions reduction: Brazil's performance is below average here. These results
reflect the corporate strategies of foreign vehicle manufacturers, who have been
producing cars in Brazil for a long time for exports to other countries, but still acquire
considerable parts of the knowledge basis internationally rather than generating this in
Brazil. But it also becomes clear that the existing competence in the transport sector in
Brazil has to be applied even more systematically to the realisation of environmentalfriendly solutions.
The following results were found for the other countries:
• No significant specialisation advantages can be discerned in the patent activities in
China. On the other hand, China is highly specialised in foreign trade, above all in
vehicle engineering (in rail vehicles, too). China seems to function as an extended
workbench here with a build-up of production for the world market – under the
participation of numerous foreign direct investments – but no complementary
development of the knowledge base to the same extent. The strong growth in patent
activities, however, is a sign of China’s efforts to bring this about.
• With a few exceptions (biofuels), India is not particularly specialised in the
sustainability-relevant mobility technologies. An automobile industry is being
developed in India, but this is focussed on the national market and is less oriented
towards international technology standards which are decisive for exports.
• An above average patent but below average export specialisation results for Russia
in the mobility sector. In the field of biofuels, the above average patent situation
should be viewed in the context of Russia’s competence in coal gasification, which
is also relevant for second generation biofuels (BTL). The field of emissions
reduction is characterised by below average competence.
• In South Africa, the country’s competence in connection with coal gasification has
also resulted in a good starting position for BTL technologies, especially as Sasol is
an internationally active company here. On the other hand, activities in the field of
traditional emissions reduction are below average.
• Germany is well positioned in most segments of the sustainability-relevant mobility
technologies. There is above average competence in combustion motors, in
particular, and also in rail vehicles and rail infrastructure. But Germany also shows
above average patent and foreign trade activities in traditional emission reduction
technologies. Within biofuels, a less favourable performance for ethanol is
compensated for by a better starting position in the promising second generation
fuels.
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75
Based on all the BRICS countries it can be concluded that emissions reduction is
among the weaker and biofuels among the stronger fields of activity. In Germany,
mobility technologies form a general main focus of technological capability. However, in
general it is true that there is considerable tension between technological competence
and environmental pollution in the mobility sector. A high technological competence
does not automatically result here in environmentally-friendlier solutions.
South Africa exports more than 30 % to trade partners from the BRICS+G countries.
By far the biggest share of this is to Germany. For the other BRICS countries, other
export markets are of greater importance; the corresponding figures here are only
between 5 and 10 % of the exports.
Figure 4-16:
Share of BRICS+G countries' exports in the field of mobility to other
BRICS+G countries in %
35%
30%
25%
20%
15%
10%
5%
0%
Brazil
China
Germany
India
Russia
South Africa
The following main points emerge for trade among the BRICS+G countries:
• Brazil: export of propulsion technologies, mainly to Germany, as well as classifiable
preliminary products for biofuels;
• Russia: overall lower importance, no clear focus among the technologies (although
there are hardly any emissions reduction technologies), target countries are mainly
China and India;
• India: overall lower importance, drives and vehicle engineering are the strongest
without clear national focal points;
• China: vehicle engineering and design, mainly to Germany;
• South Africa: propulsion technologies mainly to Germany;
• Germany: propulsion technologies; China is far and away the biggest importer within
the BRICS countries.
76
4.1.7
4 Capability
Summary of All the Sustainability Fields Examined
This section analyses the performance of the examined countries for all the
technologies regarded. The strong position of Germany is already obvious in that 20 %
of international patents and 15 % of world exports in the regarded sustainability
technologies originate in Germany. This emphasises the enormous potential and at the
same time the global responsibility of Germany in supplying technologies for
sustainable development.
The shares of the BRICS countries in the patents range from a few tenths of a per cent
up to 1 % for China. Of the BRICS countries, China has the highest exports of
sustainability-relevant technologies followed by Brazil. The much higher world trade
shares in both countries relative to their patent shares make it clear that both countries
are indeed actively engaged in foreign trade but from a below average knowledge
base. The characterisation of the two countries as “extended workbench” or resource
supplier (Brazil) thus also applies to a certain extent to the sustainability-relevant
technologies regarded. When looking at the absolute figures – in proportion to
population – the relatively low international relevance of India is noticeable compared
with the other BRICS countries. This is evidence for the overall gap in economic
development which India still shows compared with the other BRICS countries.
The significance of the regarded sustainability technologies within each individual
country is revealed in its specialisation profile. This shows the technological
performance of the sustainability technologies for each country compared with the
average of all technologies. The results reveal clear differences between the countries:
• Brazil has been specialising on sustainability technologies in both knowledge
competences and international trade.
• Russia shows considerable knowledge competences, but weaknesses in converting
these into internationally competitive technologies.
• Overall, sustainability-relevant technologies play a below average role in India.
• Overall, sustainability-relevant technologies play an almost average role in China.
• South Africa has been specialising on sustainability technologies with regard to
knowledge competence, but this is only converted into an average trade
specialisation.
• Germany is not only a key player in sustainability technologies in absolute numbers;
the specialisation profile shows that these technologies form a stronghold of
German knowledge competence and international trade.
Whereas Germany achieves above average specialisation in all the regarded fields,
these aggregated values tend to disguise the fact that there are some considerable
4 Capability
77
differences between the five technological sustainability fields in the respective BRICS
countries. For instance, the individual countries show clear emphases in building
competences. Both Brazil and South Africa specialise mainly in the fields of material
efficiency and mobility technologies (Brazil above all in renewable raw materials).
China’s performance in the building sector and mobility technologies is above average.
On the other hand, the BRICS countries also show similar patterns, e. g. there are high
patent activities in water technologies, but still a considerable dependency on imports
to cover domestic demand. A similar picture emerges for energy sources with regard to
the significance of technology imports for the BRICS countries. To this extent, these
two areas at present reflect the classical case of technology transfer where countries
such as Germany act as the technology provider and the BRICS countries as
technology receivers. However, the recent strong upward trend in patent activities especially in China and to a smaller extent in India – makes it seem realistic that the
BRICS countries will become more heavily involved in technology development in this
segment as well in the foreseeable future.
Figure 4-17:
patents for all 5 sustainability fields examined
25%
10.0%
values BRICS
15%
5.0%
10%
2.5%
5%
0.0%
0%
BR
patent share
CN
IN
world trade share
RU
patent share DE
ZA
DE
values DE
20%
7.5%
78
4 Capability
Figure 4-18:
Specialisation of the BRICS+G countries in all 5 sustainability fields
sustainability technologies regarded
100
BR
CN
IN
0
RU
ZA
DE
-100
-100
0
4.2
100
Fraunhofer ISI
Capability in Non-Technical Sustainability Research
Technologies which increase the efficiency of environmental consumption create
additional scope for economic growth with limited environmental resources. However,
the research conducted up to now shows that the spread of sustainability innovations
depends to a large degree on political and social framework conditions. Among the
most important of these is the strategic orientation of environmental innovation policy.
This should have ambitious targets which can, however, be reckoned with in the long
term by those addressed by the policy (companies and consumers) and stable
framework conditions (see, e. g. Klemmer et al. 1999 or Jänicke/Jacob 2006).
Accordingly, the political and economic research of environmental innovation studies
the social conditions for the origin and diffusion of environmental innovations. More
generally, sustainability research in the social sciences examines the institutions and
actor constellations which contribute to or impede sustainable development as well as
how societies handle environmental risks.
This chapter examines the capability of the BRICS+G countries in sustainability
research. The analysis contains a bibliometric comparison of national publications. Six
4 Capability
79
science fields were defined within the topic "social science-related sustainability
research": (1) Environment and society, (2) Environmental economics, (3) Energy
policy, (4) Environmental policy (excluding energy), (5) Urbanisation and environmental
planning, (6) Environmental awareness. In view of the overall limited data on social
scientific aspects of sustainability research, an exclusive focus on the fields of
environmental innovation and diffusion research would have been too narrow for the
planned country comparison.
Defining the fields is oriented on the availability of international journals which
specialise in certain sustainability topics. The field "Environment and Society" is
characterised by a comprehensive, transdisciplinary perspective as is expressed, for
example, in the title of the journal "Gaia – Ecological Perspectives for Science and
Society". The fields of "Energy policy" and "Urbanisation and Environmental planning"
address policy fields which are very important internationally, whereas the fields
"Environmental economics" and "Environmental policy" follow a disciplinary
differentiation. The field of "Environmental awareness" covers research on
environmental psychology, environmental ethics and changing social values.
The bibliometric analysis is based on the publication databases of the Institute for
Scientific Information and on the Social Science Citation Index (SSCI) in particular. The
fields were defined using a selection of relevant specialist journals. The SSCI contains
approx. 1,700 journals from about 50 social science disciplines and research fields.
Several suitable journals were also added from the Science Citation Index Expanded
(SCI). The SCI is a multidisciplinary database with approx. 5,900 natural science and
technical journals. A total of 46 journals were included in the research, of which 37
journals contained publications corresponding to the search criteria. All publications of
the type scientific article, book review, review and editorial were taken into account in
the sample of journals in the period 2001 - 2005. A complete list of the science fields
and journals can be found in the Annex Table Annex A.5-1.
The production of scientific publications is still strongly concentrated on the traditional
industrialised nations. This fact is shown particularly clearly in the SCI/SSCI because
these databases document mainly English language journals. The SCI/SSCI is
therefore more than just a neutral data basis for international comparison: As a medium
for scientific work it also represents an important channel for scientific attention.
Publications not listed in the SCI/SSCI are less likely to be noticed abroad, at least in
the West and in English-speaking countries. Publications in the SCI/SSCI are thus a
very stringent measure for scientific output because they are directed at an
international audience.
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4 Capability
The complete range of scientific competence in the BRICS+G countries is not
represented due to this focus on international publications. This is particularly valid for
non-English speaking countries such as Germany, but also for Brazil, Russia and
China. For example, the Brazilian National Council for the Development of Science and
Technology (CNPq) cites about six times as many national publications for the social
sciences as international publications in the period 2000 - 2003 (figures from the
experts' report on Brazil's profile). National journals, which have a more limited reach
due to language barriers, are known to play an important role especially in applicationoriented science and technology fields like the sustainability topics examined here.
However, suitable national publication databases are not available or can only be
compared to some extent. For this reason, even with all its limitations, the publication
analysis with SCI/SSCI still remains the best available basis for comparative country
analysis.
Table 4-1 compares the publications of the BRICS+G countries in the databases SCI
and SSCI over a period of ten years. The total number of publications recorded in the
two databases grew by 30 % in this period. The relative share of Germany and India
remained more or less unchanged, while China and Brazil showed strong growth and
there was a clear drop in the Russian share in global publications. In South Africa, the
number of absolute publications did not really alter, combined with a slight drop in the
relative share.
Table 4-1:
Total SCI+SSCI
Germany
Brazil
Russia
India
China
South Africa
Publications of the BRICS+G countries 2003 and 1993
2003
Publications Share (%)
698,726
100
44,305
6.34
8,684
1.24
15,782
2.26
12,774
1.83
29,186
4.18
2,364
0.34
1993
Publications Share (%)
540,491
100
34,103
6.31
2,885
0.53
19,659
3.64
9,763
1.81
7,566
1.40
2,377
0.44
Source: National Science Board (2006), Science & Engineering Indicators, at05-41.
Publications are assigned to countries based on the author address. The data in this Table are fractioned,
i. e. where there are addresses from different countries, only fractions of the publications are counted, e. g.
if there are 3 countries involves, each one is assigned 1/3.
Table 4-2 shows the ratio of sustainability research to total publications in the SSCI.
The number of articles makes it clear that sustainability topics are not very significant in
the social science-related research of the BRICS+G countries which is aimed at an
international audience. Only 503 publications were recorded in Germany in five years,
1.7 % of the German SSCI publications. India leads in relative terms: Sustainability
4 Capability
81
fields make up 4.2 % of its SSCI publications. Russia brings up the rear with only
0.3 %. For comparison: Research fields related to the environment in general had a
share of approx. 9.3 % of all publications in the SCI in 2002; the main focus was on
natural science research fields and not environmental technologies (Jappe 2007). In
view of the rapid environmental change, it is most likely that sustainability topics will
become increasingly important in the social sciences as well in the future.
Table 4-2:
2001-2005
Germany
Brazil
Russia
India
China
South Africa
Source:
Sustainability topics in social science research in BRICS+G countries
Total national
SSCI
publications
29,912
3,452
3,523
3,163
9,049
3,325
Social science
sustainability
publications
503
97
12
132
186
67
Share of national
SSCI publications
(%)
1.7 %
2.8 %
0.3 %
4.2 %
2.1 %
2.0 %
Share of social
science
sustainability
publications
4.2 %
0.8 %
0.1 %
1.1 %
1.5 %
0.6 %
SSCI/ SCI Web-of-Science, research and calculation Fraunhofer ISI.
Publications are assigned to countries based on author addresses. The data in this Table are counted as
whole units, i. e. if an article has several addresses from different countries then each country is assigned
1 publication. The absolute publication figures in SSCI per country in Table 4-2 can therefore not be
directly compared with the absolute figures in Table 4-1.
In total, 12,034 publications were registered for the period 2001 - 2005 in the field of
social science sustainability research. Of these, about 33 % are in "Urbanisation and
Environmental planning" followed by "Environmental economics" (25 %), "Environment
and Society" (15 %), "Energy policy" (11 %), "Environmental policy" (10 %) and
"Environmental awareness" (6 %).
Figure 4-19 shows the absolute publication figures of the BRICS+G countries in the six
fields. Germany has as many publications in social science-related sustainability
research as the other five BRICS countries together. Measured against the
international average, the field of environmental economics is strongly developed in
Germany, as it is in India. China is relatively specialised in urbanisation and has a
similar publication output in absolute numbers as Germany. In Brazil and India, the
research in energy policy is above average. There are hardly any studies of
environmental awareness in the BRICS countries. When comparing the non-technical
capability of the BRICS+G countries, it must be taken into account that the absolute
figures are often only small and for this reason may be subject to relatively large
fluctuations over time.
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4 Capability
Figure 4-19:
Publication figures in six fields of social science sustainability
research, 2001 - 2005
250
Environment & society
Environmental economics
200
Energy policy
Environmental policy
150
Urbanisation
Environmental awareness
100
50
0
Germany
Source:
Brazil
Russia
India
China
South Africa
SSCI/ SCI Web-of-Science, research and calculation, Fraunhofer ISI.
The analysis of SSCI and SCI publications illustrates the internationally visible social
science-related sustainability research in the BRICS+G countries. Although scientific
journals already exist which are devoted exclusively to sustainability research topics,
these very specialised journals still only have a very small share of total social science
publications in the SSCI. This confirms the finding that sustainability topics are still not
really counted as part of the core subject matter of the traditional social sciences of
economics, politics, sociology, cultural studies etc. In view of rapid environmental
change, however, it is very likely that sustainability topics will become increasingly
important in the social sciences. The science fields examined here still have limited
significance in the BRICS countries - in Russia, there are hardly any international
publications in the whole of the sixth field. Relatively, urbanisation and environmental
economics are the most important subjects in the BRICS countries, followed by
questions of energy policy. Innovation research publications in the narrower sense are
mainly recorded in the field of environmental economics and to some extent also in the
field of energy or environmental policy.
The limitations about the representativeness of the publication figures described above,
especially with regard to possible distortions between English-speaking and nonEnglish speaking countries, make it difficult to compare countries using absolute
4 Capability
83
figures. For instance, the shares of India and South Africa in the recorded publications
are probably disproportionately high since the language of science in these countries
makes it easier for them to publish in the English language SSCI journals than the
other countries.
This language bias can however be removed in that – in analogy to the specialisation
indicators of foreign trade (RXA) and patents (RPA) - the shares of a country in
sustainability publications can be related to the country's shares in all SSCI
publications.9 This indicator shows whether the regarded country has a
disproportionately high (values larger than zero) or low (values smaller than zero)
specialisation in social science sustainability publications.
Figure 4-20 shows the results of this indicator. In the South African research system,
social scientific sustainability research has a disproportionately high position. All the
other countries have a below average specialisation, which is particularly strongly
marked in Russia and China. Measured against international publications, social
science sustainability research in these countries is therefore weaker than the average
of all research fields.
The relevance of these results has to be seen against the background of the
challenges in all the countries regarded to change course in the direction of
sustainability. In order to accomplish this, building technological competence is an
essential condition, but not a sufficient one. Since, as transition research emphasises,
technological changes of direction have to be embedded in the socio-cultural system,
there needs to be a co-evolution of the technological, institutional and social systems
(Kemp et al. 2007). Social science-related sustainability research is particularly
concerned with changes in the latter two systems. Below average specialisation in this
field with simultaneous specialisation in technological sustainability competence raises
the question of whether it would be necessary to reflect more on the social and
institutional changes necessary for sustainable development in the countries affected.
9
The calculation algorithm is identical to that of the RPA or RXA, so that the
indicator values are also standardised to between -100 and +100.
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4 Capability
Figure 4-20:
Specialisation of the BRICS+G countries in publications of social
science sustainability research, 2001 - 2005
(
)
DE
ZA
RU
IN
CN
BR
-100
-50
0
50
100
5 Analysis of Diffusion and Innovation Processes
5
Analysis of Diffusion and Innovation Processes
5.1
Objective and Methodology
85
Sustainability innovations face many obstacles which hamper their diffusion and them
realising their potential contribution to sustainability. These difficulties are multiplied in
the global context if the aim is to tap new markets in addition to domestic ones. This
chapter analyses the experiences and estimations of German actors in this regard.
This aims to examine the sixth field more closely, that is, the question of which
mechanisms can accelerate diffusion and innovation processes in the direction of
sustainability because the largely technology-oriented statistical analyses cannot
contribute much here. Furthermore, the aim is to highlight the market and cooperation
experiences of German companies in the BRICS countries.
Qualitative interviews were selected as the empirical approach10. This seemed
appropriate since the players involved are a relatively small group and their
background experiences are to be examined as well. A guideline was developed for the
interviews, which was divided into four subject areas11:
5.
Demand side of the technology regarded in BRICS: e. g. supportive and
restrictive influences on the demand for the technology.
6.
Supply side of the technology regarded in BRICS: e. g. challenges in supply
chain management and important local cooperation partners.
7.
Knowledge base of the BRICS business relations in the business segment of the
regarded technology: e. g. estimating the knowledge lead of the company
compared with customers, suppliers and competitors and its significance for the
success of the business activity.
8.
Innovation/diffusion conditions for the regarded technology in Germany: e. g.
drivers and obstacles in the innovation and diffusion process; learning effects for
the business activity in BRICS.
In addition, the actors were asked for their opinion on how Germany is positioned in the
subject field as a whole – in an international comparison as well as with the BRICS
countries. These statements serve as a verification of the statistically based results
concerning the specialisation patterns of the BRICS countries and Germany.
10
The term "qualitative interview" is used as a synonym for "guided conversation". For
methodology, see e.g. Schnell et al. 1995.
11
A more detailed overview of the interview points is found in the Annex (see A.4.1).
86
Interview partners were selected from companies and organisations who are shown to
be leading innovators in a relevant technology in at least one of the BRICS countries.
In line with the underlying criteria, primarily integral approaches were chosen which for
methodological reasons could not be considered in the indicator-based analysis (see
Chap. 4.1). For example, we chose architecture and town planning in Topic 2 as well
as innovations which are linked with organisational measures and new business
models in Topic 5 such as, e.g. certain logistics services.
Concentrating on innovators is based on the theory that such companies
• have good knowledge of the social, marketing and regulatory mechanisms which
contribute to the acceleration of the diffusion and innovation processes,
• have market and cooperation experiences in the BRICS countries, and
• are competent in assessing the competitiveness and specialisations of Germany
and the BRICS countries.
Alongside criteria for individual candidates, all the interviews also cover the topics and
countries in general. Interview results for China are particularly numerous. This
matches the results of the analysis of direct investments (see Chap. 2.3) according to
which German companies are more involved in China than in the other BRICS
countries.
Mainly actors from the supply side of the innovations examined were selected as the
topic-specific candidates. In order to also illuminate the demand side of the regarded
technologies in the BRICS countries and to determine the potentials for cooperation
with innovative consumers, interviews were conducted on the UNIDO Cleaner
Production Programme. The generic expertise of actors from the financial sector was
used to supplement this.
Starting from these criteria, 27 companies and institutions were selected for
interviews12 in a two-stage process; these were assured that the evaluation would be
anonymous. Most of those questioned were involved in environmental and
sustainability management, sales and marketing with a focus on the country in question
or on research and development. It became clear in large companies that the country
expertise is mainly located in the local branches. In individual cases this was taken into
account by conducting telephone interviews with local branches. The interviews were
recorded, software encoded13 and evaluated anonymously. In spite of the large
12
12 interviews were held on location, the others were done by telephone.
13
The software Atlas.ti V5.0 was used to analyse the qualitative data.
87
number of interviews, the results only spotlight certain insights into the concrete market
and cooperation experiences given the wide range of questions asked. Generalisations
require further testing.
The key innovations and countries discussed in the interviews are summarised in
Annex A.6.2. A brief outline of their contribution to sustainability is also given there.
5.2
Results by Topic
5.2.1
Renewable Energies and CCS
Six interviews were conducted in this field: three in the field of renewable energies
(RE), one interview in the field of carbon capture and storage, CCS (in connection with
biofuels from renewable raw materials14) and one interview covers both fields.
Interviews focussed on wind energy, solar updraft towers, and the capture and storage
of CO2 (CCS). In addition, we conducted an interview and research on the cross-cutting
topic "Clean Development Mechanism" (CDM), which is important for the diffusion of
RE in the BRICS countries.
5.2.1.1
Market Potentials in BRICS
The demand for RE depends on the natural conditions and the corresponding potential
of the respective country as well as its energy supply situation (see Table 5–1). The
experts believe that Brazil, India and China already show increased involvement in the
use of RE for electricity generation which they could probably expand. Brazil is anxious
to become even more independent of energy imports. The market for wind energy
shows large growth here and the country is producing ethanol from biomass for
domestic use and export. For India and China, a strongly rising demand for energy
combined with a large degree of interest in diversifying the energy supply is
unanimously stated to be a driver for RE. Regular bottlenecks in India's energy supply
are the reason for the high demand for RE technologies among private companies
here. A large domestic supplier of wind plants, who is currently expanding
internationally, has already been established. In China, a market for wind energy is
currently being developed. The experts are all of the opinion that Russia and South
Africa have less interest in RE. Fossil energy sources are reasonably priced in these
countries and available in sufficient quantities. Activities in RE would raise the low
electricity prices in these countries according to the experts and are not wanted for this
14
See topic mobility and logistics
88
reason. In Russia, a bill was proposed to set fixed payments for power from renewable
energy sources and presented to the Duma in spring 2007. It is largely oriented along
the lines of the German EEG (German Renewable Energy Sources Act) and experts
believe it will probably have clear incentive effects. These efforts mirror Russia's
strategic interest in being able to increase its exports of natural gas by reducing its
domestic consumption.
Table 5–1:
Most important potentials for renewable energies according to
interview results
Country
Dominant
source
Brazil
Hydropower
energy potential for
Biomass
(esp.
bagasse from sugar
cane production)
Wind
Russia
Gas
Biomass
India
Coal
Wind
Biomass
Hydropower
China
Coal
Water
Solar thermal (in
certain regions)
Biomass
Wind
South Africa
Coal
Solar thermal
In contrast to the use of RE, CCS technologies are so far not commercially available on
a large scale and the interview partners agree that these will not achieve a significant
penetration of the market until after 2020. The experts see a high potential for the use
of CCS in BRICS countries with a coal-based energy supply, i. e. in India, China and
South Africa, and in Russia's use of natural gas. European plant operators are active in
research and demonstration projects because of expected regulations within the scope
of the European Emission Trading Scheme. The research programme COORETEC15
and one of its research projects, COORIVA, should be mentioned here. These kinds of
15
http://www.fz-juelich.de/ptj/projekte/index.php?index=1325
89
activities cannot yet be identified on the part of the BRICS countries themselves, the
experts agree that it is still too early for this. According to them, the BRICS countries
are not yet playing a role in the development of CCS.
A lot of weight is attached to legal regulations for promoting the diffusion of both fields
of technology. There is general agreement that these should give the investor planning
and investment security.16 Fixed payments are seen as the decisive driver for
electricity generation from RE (the German EEG is cited as an example of good
practice). The existing legal regulations in Brazil and India are assessed as insufficient
in this respect and the payments as uncertain. In Brazil, market protectionism makes it
even harder to access the comparatively small market for wind power. With regard to
CCS, there was general agreement that putting a price on the emission of CO2 is the
only way to promote the commercial use of this technology. An international trading
system (example EU ETS), a tax (example Norway), the use of Joint Implementation
(JI) and Clean Development Mechanism (CDM) or similar agreements after the end of
the Kyoto Protocol are cited as possible options. It is seen as important that developing
countries should profit from the experiences of industrial nations with legal regulations.
Compared with conventional technologies, RE and CCS have higher investment costs
which restrict the demand for these technologies. In the case of RE use, it is expected
that these cost disadvantages will be overcome through learning effects. For CO2
separation, these kinds of learning effects are only expected in the long term since the
technology is not yet commercially available. There was a general agreement that,
without a price on the emission of CO2, CCS will not offer any financial incentives since
it is only possible to utilise the gas on a very small scale.17 This is why all agreed that,
to start with, avoiding CO2 emissions should be promoted in the BRICS countries by
improving the efficiency of existing and new installations. The application of CCS would
only make technical and economic sense once these saving potentials have been
exploited. The learning effects achieved by then in the RE sector could result in CCS
not being applied at all in the BRICS countries.
5.2.1.2
Market Players
Most enquiries about RE projects in the BRICS countries are from domestic private
companies and project developers. International players with investment motives are
16
A negative example given here is the change in the promotion of biodiesel.
17
For example, the technology in China and Russia could become economically attractive to
a very limited extent through enhanced oil recovery or coal bed methane recovery (see
Annex A.4.2).
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turning up more frequently who invest in private funds or CDM projects. Power station
operators and the international (petro) chemical industry are potential future clients for
CCS technologies in BRICS. International conferences, publications (studies,
companies' in-house magazines) and active participation in the political process are
agreed to be important for acquiring clients in both fields of technology. Firms which
are active in conventional technology fields make use of existing contacts. The wind
power training courses offered are seen as successful for building up customer
contacts. These are requested by energy suppliers who are affected by the new legal
regulations. The local embassies are criticised for their poor performance as mediators
in passing on contacts. This makes it harder for small German companies to contact
international clients because they do not have sufficient (financial and personnel)
capacities. Large German equipment manufacturers are represented by their own local
branches in the BRICS countries. Several are cooperating with domestic partners or
working towards such long-term cooperations.18 In RE, the existing cooperations are
based on sales and marketing and partly on local production.
As far as competition is concerned, the market for RE and CO2-neutral fossil
technologies is dominated by European and large international equipment
manufacturers. The R&D of the interviewed German manufacturers takes place outside
the BRICS countries for both technologies, usually in Germany or the EU. An Indian
RE supplier conducts his R&D activities in Germany. There is little global technological
know-how in the field of CCS. What little there is tends to be concentrated in Japan, the
US and the EU. German equipment manufacturers are active in German and EU-wide
research cooperations. An expansion of the R&D activities in CCS to the BRICS
countries is considered a possible step in the long term.
There is agreement that RE plant producers choose their suppliers depending on price
and the complexity of the plant components. The raw materials and the low-cost/lowtech parts are bought from the BRICS countries or are manufactured by the BRICS
countries themselves. There are production capacities for wind energy in Brazil, India
and China, some of which are the result of German technology transfer projects. The
price advantages of the Indian products come at the cost of lower quality, which results
in greater effort for subsequent reworking. South Africa is the only African country
which is technically well positioned for the use of solar energy, but it lags far behind in
production. Complex components are purchased globally by all RE equipment
manufacturers. According to the interview partners, this supplier structure is also
18
Working together with domestic firms and the political acceptance of the projects is of
particular importance in China.
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expected for CCS in the BRICS countries. Above all, the (low-tech) plant construction
would be carried out by domestic companies. Complex components, licences and the
process design would have to be procured globally.
5.2.1.3
Knowledge Base
All the interviewees believe that German firms possess a large knowledge advantage
compared to their customers, competitors and suppliers in BRICS, which makes it
possible for them to freely expand their business activities. German technologies for
utilising RE are available in the different fields (such as wind, water, solar etc.) and on
a commercial scale. However, there is a lack of engineers in Germany and in the
BRICS countries as well to some extent. Large companies have the advantage that
they can draw on an international pool of workers of a uniformly high technical
standard.
In all the interviews, a clear distinction is made between the ability to operate a plant
and the further development of the technology. All agree that there has to be existing
basic knowledge of how to handle the technology because otherwise the
communication and the operation of the plants are problematic. The resulting need for
training in BRICS is seen by small companies as a burden since this is not part of their
core competence. Large companies have integrated this service into their portfolio in
the case of RE. This is also assumed for CCS plant construction.
According to the interview results, there are no relevant domestic development
capacities for any of the technology fields in the BRICS countries. The resident
companies are (still) a long way away from autonomous implementation of the
technologies. Only of China is it expected that it will build up its own development
capacities in the near future because of the rapid economic growth here. The
interviewees' own experiences are that Chinese workers are well qualified as far as
theory is concerned, but at present lack practical project experience. In spite of the
strong demand, German plant construction companies are cautious about upping their
project activities in China because they are worried about industrial espionage.
5.2.1.4
Experiences in Germany
All agree that the German leadership in both fields of technology results from the long
tradition of environmental protection in Germany19, which led to corresponding legal
regulations early on. It is emphasised that the successful application of the technology
19
In this context, the EU climate protection targets are also cited.
92
at home and its presentation abroad are important success factors for tapping
international markets. The extensive use of wind power in Germany, for example,
represents a competitive advantage for German industry. Since solar thermal power
stations and solar updraft towers are not commercially feasible in Germany, it is feared
that German technology could fall behind in this field. The interview partners believe
that future R&D activities could be concentrated on domestic suppliers in Brazil, India,
China and South Africa. These produce for the European market and will move on to
tap the domestic market in the course of improved framework conditions in the BRICS
countries. The necessary investment in a reference plant bears a financial risk for all
technology suppliers.
In the case of RE, the statutory promotion through the German Renewable Energy
Sources Act (EEG) is seen as a decisive driver for German technology development.
This led to innovative companies returning profits which they then channelled into
research activities. The strong research landscape in Germany is a result of this.
Especially the German wind power industry has profited from these developments. It is
the global leader in this field and Germany is globally considered to be a competence
centre. With regard to CCS, the German plant manufacturers have the know-how and
the technology in power station construction and in the gasification of solids which are
decisive for the use of CCS-technologies. German technologies could therefore
become the "export hits of the 21st century" in the field of CCS. However, it is also
pointed out that government aid and reliable legal regulations (also with regard to
permits) are necessary in order to create favourable framework conditions for
developing and testing the technology.
5.2.1.5
The Role of CDM for Renewable Energies in BRICS
The "Clean Development Mechanism" (CDM) is a political instrument which promotes
the diffusion of cleaner technologies in developing countries. One main focus of CDM
is on RE, which is why its use by German industry is examined more closely in this
section.
Brazil, India and China have large shares in total CDM projects, about two thirds are
conducted by domestic project developers with their own technologies. These are
frequently located in the field of electricity production since additional profits can be
attained via the sale of power alongside the profits from the generated certificates
(Certified Emission Reduction Units, CERs). This incentive is questionable (see
Chapter 5.3.2) especially with regard to the additionality of CDM projects. The experts
are of the opinion that German technologies have a competitive advantage in CDM
projects because their robustness and resilience lower the project risk. A good
93
technology basis for biogas projects exists in Germany which experts believe has not
been used so far. Overall, German participation in CDM projects is very low. Great
Britain, Sweden, Japan and Switzerland are the leaders in this field.
Domestic industrial associations and banks are important collaborators in the search
for project partners. They provide a good overview of developments in the host country
and have access to important information. The experts' view is that platforms are
important for German firms to present and market their technologies in the BRICS
countries (like environmental trade fairs and information functions of embassies and
chambers of foreign trade). It is pointed out that the embassies of other nations (such
as e. g. Denmark, Great Britain and Austria) are more active in this regard and that
without such means it is hard for German firms to present their technologies and find
CDM project partners.
5.2.1.6
Summary
The interview results show that legal regulations promoting RE and CCS play a
significant role. Political assertiveness and long-term planning security for the investor
are important design criteria. Regarding instrument design, the BRICS countries can
profit from an exchange of experiences with industrial nations. International
agreements are decisive for the use of CCS, for instance within the scope of post
Kyoto negotiations. However, it could be that CCS is not even applied in the BRICS
countries if RE become competitive beforehand due to learning effects.
German ambassadors and chambers of foreign trade are important "door openers" for
German business activities expanding to BRICS. It would be conceivable to offer
German companies support by, e. g. providing suitable platforms to present German
technologies and (especially within the scope of CDM) looking for project partners.
Reference installations are central to the spread of certain technologies (such as solar
thermal). It is difficult for firms to realise them since large financial volumes are
involved. This is where possibilities for cooperation open up with research institutions in
the BRICS countries.
In Germany, and increasingly in the BRICS countries, suitable skilled workers
(especially engineers) are scarce. This lack of qualified labour could be tackled with
training and exchange programmes.
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5.2.2
Five company representatives were interviewed on this topic. The topic of energyefficient building is considered very important for climatic and economic reasons
especially in China and Russia, which is why the interviews concentrated on these
countries. The main focal points are energy-efficient design and construction,
integrated planning of urban energy supply based on the example of China and
knowledge transfer about energy-efficient building to Russia. The situation in the other
BRICS countries is only looked at briefly.
5.2.2.1
Market Potentials for and Obstacles to Energy-Efficient Building
There are high potentials for energy saving in new buildings in China due to the
continued building boom taking place in this country with double digit growth rates20.
The refurbishment of existing buildings (for instance through thermal insulation) is of
secondary importance. Private home building hardly exists in China. Mainly
professional investors and project developers operate in the high-priced segment of
new building developments. They can make between 400 and 1000 % profit on the
sale of a new building21. According to the experiences of the interviewees, in spite of
these high profit margins, these professional builders are still not prepared to accept
any cut in profits due to additional costs for energy efficiency measures. Their shortterm and profit-oriented calculations result in quality deficiencies with regard to energy
consumption. It is therefore seen as important to change investors’ views in the
direction of the long-term property value retention of the buildings. The Chinese
government is currently developing efficiency standards for buildings with the
participation of US and Japanese experts. One interviewee believes that German
experiences with the energy passport are not being used enough. The experts’ opinion
is that the American influence has resulted in the topic of energy efficiency playing
practically no role in the Chinese building standards. The existing Chinese building
standards are specified in so-called "Standards books". These contain nationally
agreed and standardised construction details which have to be assembled by the
architects. There are considerable problems in implementing the legal regulations in
China. The executive authority lacks knowledge of the relevant regulations and the
overall context is often disregarded. As a result, buildings are constructed which do not
20
According to the Deutscher Energie-Agentur (German Energy Agency), by 2015 half of the
building stock in China will have been built after 2000 (Deutsche Energie-Agentur:
Energieeffizientes Bauen in China, http://www.dena.de/de/themen/international/schwerpunkt-china/projekte/projekt/bauen-in-china/: 02.05.07).
21
For comparison: In Germany, those questioned estimate the returns at between 5 and
15 %.
95
comply with the prescribed threshold values. Even some Western companies are
producing buildings of poorer quality than in their home countries. To complicate
matters further there is a regulation in China which forbids heating south of the
Yangtze, which is counterproductive to meeting space heating demand in an energyefficient way. In the course of the continued economic growth of China and the climatic
conditions in this region, tenants are increasingly heating their rooms by subsequently
installing small electrical systems. Compared with non-electrical heating systems,
these measures are inefficient from the viewpoint of primary energy consumption and,
as a result, electricity consumption in the residential sector will probably continue to
increase rapidly in China in the next few years.
There is a high saving potential in Russia due to energy efficiency measures22, which
is still largely unexploited. Because of the climatic conditions, the know-how concerning
the technical implementation of energy-efficient building was developed very early on.
Here, the main necessity is to modernise the older buildings. For historical reasons, in
many places there is no standardised municipal administration of apartment buildings.
Many apartments are privately owned without there being any structure in place in the
form of homeowners associations. The many different private interests hinder energyefficiency activities in buildings. Furthermore there is seldom a consumption-oriented
billing for energy so that there is no direct financial incentive for energy saving. In many
cases the financing of building efficiency projects is a problem for the local councils.
Innovative financing methods, for example within JI projects, are hardly used. The
German experiences made after reunification are particularly helpful in this context
since there were similar housing administration structures in the former GDR. The
German Energy Agency, dena, is heading this German-Russian exchange of
experience.
The energy consumption of a building has to be analysed with a view to the whole
system. Finding the optimum combination of several technology options is decisive
when it comes to energy efficiency. This key understanding is not yet present in Russia
and China.23 The building planning practice in China is assessed as being especially
problematic. Building projects are not planned by one body, but the architect’s designs
are given to so-called Design Offices. This patchwork procedure prevents a
comprehensive approach.
22
"According to Russia's energy strategy for 2020 the current energy consumption can be
reduced by nearly 50% if energy resources are used more efficiently". (German Energy
Agency: Focal point Russia, http://www.dena.de/en/topics/international/focal-point-russia/,
last accessed: 04.05.07)
23
According to the interviewed experts, this is only slowly becoming adopted in Germany too.
The relevant German degree courses have only appeared recently.
96
Brazil, India and South Africa offer hardly any market for thermal insulation. These
countries do not have a strategic role to play for the companies questioned. However, it
was explicitly pointed out that they could have potential in the field of energy-efficient
building because of their economic development and the associated high consumption
of raw materials.
5.2.2.2
Drivers of Demand
Those interviewed all pointed to the German legal framework24 and the funding
measures of the KfW as good practice for increasing energy efficiency in buildings and
the corresponding economic incentives. The price of energy plays an important role for
the cost effectiveness of energy efficiency measures. Energy prices are very low in
China and Russia so that the profits to be made with energy conservation measures
are low. In addition the investors and those who stand to gain from the energy
efficiency measures are usually different persons. In Germany, this dilemma can be
solved through a higher basic rent (excluding utility charges). However, the experts
believe this is not possible in China and Russia since the population are largely
ignorant of the links between energy efficiency measures and saving possibilities and
the achievable financial gain is small. In China, the emergence of a broad and
politically active middle class, which is increasingly opposed to the worsening
environmental devastation, is having a favourable impact. In contrast to this, the
growing wealth in Russia is concentrated on a narrow upper class, which hinders the
formation of a broad awareness of this topic.
Energy efficiency measures offer customers few directly recognisable economic
advantages in China and Russia. Their diffusion therefore has to be pushed using
other advantages of energy-efficient building such as improved living quality. Energysaving building is still being contested in China according to the experts and must be
promoted much more strongly through suitable marketing strategies in the public and
private sectors. Buildings designed to Western standards are seen as prestige objects
and Western building standards are regarded as quality labels in themselves. But the
necessary checks of the measures are frequently omitted. Furthermore, the experts are
of the opinion that simply copying Western building styles is usually not suited to the
respective local climatic conditions in China and does not fit in with local building
traditions. All were agreed that Western building technologies should not simply be
transferred, but adapted to the country's respective conditions together with those
affected. This process requires additional financial outlay and takes longer.
24
For example the Thermal Insulation Ordinance, the Federal Immission Control Act and the
Energy Passport. It should also be pointed out in this context that the German Energy
Conservation Ordinance is too complex and obscure for users.
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In Germany there is a long tradition of companies in the field of energy-efficient
building. The continuous progression in legal regulations since the oil shock has had
the effect of promoting this. The legal framework for energy efficiency has grown in
analogy to technological progress in Germany. This has created a corresponding
demand and resulted in German companies being able to expand over a long period
and become more professional before finally being able to break into foreign markets.
5.2.2.3
Market Players
In China, German architects compete primarily with international suppliers, especially
from the US, Canada and France. The protectionist market represents a large obstacle
to all foreign suppliers equally. Up until last year it was only possible to set up foreign
branches in China as joint ventures. Certain prohibitions in the call for tenders for large
projects exclude foreign companies from competing. It is therefore advantageous to be
resident in the country. Since the search for Chinese partners is very time consuming,
for the most part only large architectural offices are represented by branch offices in
China.
In international comparison, Germany is assessed as being a technology leader in the
sector of energy-efficient building. Based on its good technological starting position,
German industry is a leader, especially in highly complex technologies. However, to
some extent this good international position is not being successfully communicated to
foreign clients. One reason for this cited by several experts is that German companies
receive less political and financial support for expanding their business to the BRICS
countries than their international rivals. So far, German companies have been winning
clients through chance (personal) contacts. The American government’s approach, in
contrast, is described as being very pro-active.
The Chinese market often seems incomprehensible and unpredictable to German
suppliers who do not grasp how it functions or how to access it. As a consequence, it is
difficult for them to locate business partners and customers. International studies and
publications are seen as conducive to making contacts in academic circles. The
Chinese Tongji University in Shanghai is cited by all the experts as an important
cooperation partner for the topic of building efficiency. This university maintains good
contacts with Germany and is involved in many exchange activities.25 In the case of
one company, successful cooperation has been managed within the scope of a
twinned towns programme. The public demand for energy-efficient buildings can be
reinforced through good contacts to the Chinese authorities.
25 http://www.tongji.de/english/mframeen.html
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According to the experts, Chinese architects do not have sufficient know-how in the
field of energy-efficient building. In contrast to Russia, it is thought there is no
engineering tradition in this field, to some extent not even basic knowledge of energyefficient building. Autonomous R&D activities are not expected in China in the near
future. The experts did note, however, that there is continuous growth there in the level
of knowledge26.
At the level of component manufacturers, there was general agreement that there is
competition in China and Russia from cheap domestic products of low quality.
Investors in China request only Chinese components due to the price differences and
as a consequence of a directive to use national products. Long drawn-out licensing
procedures for foreign products in China represent one hurdle. In addition, there is
insufficient patent protection. Despite this, German companies are represented in the
market segment of more complex components (such as for example high-quality glass
or facade elements) in China because of the large market potential here. The raw
materials and individual parts required are shipped to China and assembled there.
Since the workers are trained by the German suppliers, the manufacturing quality is
satisfactory. Chinese suppliers also manufacture complex components but of much
poorer quality. The inferior quality of the work at building sites is a large problem in
China and Russia. In many cases, the workers do not have the necessary broader
qualifications because of a lack of suitable degree courses and job training centres.
5.2.2.4
Summary
Getting the wider population in the BRICS countries to become aware of the links
between efficiency measures and saving potentials is the starting point for the diffusion
of energy-efficient building. Since the knowledge of energy-efficient building can best
be acquired in scientific and practical exchanges within concrete project work, German
planners and architects could function as multipliers. A building project which
demonstrates the implementation of German technologies in BRICS could improve
awareness there.
With regard to China, the interview results seem to contradict the positive specialisation
figures determined in Chapter 4.1.3. This is another indication of the fact that China
does possess the competence for a more energy-efficient orientation of the building
sector, but that this would have to be mobilised for an actual increase in building
efficiency. Educating Chinese investors about the long-term advantages of energy
26 For example, more and more conferences and trade fairs are being organised in this field.
99
efficiency measures and supporting the Chinese government in improving and actually
implementing legal regulations seem to be country-specific starting points. In Russia, a
decisive starting point is the creation of framework conditions for efficiency measures in
older buildings. The German Energy Agency, dena, is active here with consulting
projects for the Russian government and local councils.
The low activities of German industry in Brazil, India and South Africa in the sector of
energy-efficient building could indicate missing framework conditions for an expansion
of German business activities to these countries. However, there is no indication from
the interviews to what extent and in which field there are market potentials in these
countries.
5.2.3
Water Services
Two interviews were conducted on the topic of water services. The interviews
concentrated on technologies for wastewater treatment in Russia and China as well as
the conditions for small treatment plants in Germany.
5.2.3.1
Framework Conditions in BRICS
In the long term, wastewater technologies are seen as having potential in all the BRICS
countries. China, in particular, has a large market. There is already a high demand for
drinking water. The markets for wastewater technologies in China and India will still be
developing in the next five years. In China, the achievable prices for wastewater
technologies are between 30 and 40 % of the European prices, which is why not many
foreign technologies are being imported at present. The general view is that
environmental protection is still of minor importance in these countries. However, there
are signs of growing pressure resulting from problems combined with an awakening
environmental awareness which could lead to a growing interest in water service
technologies in China. The achievable prices for wastewater treatment technologies in
Russia are on a European level. Here there are mainly risks of non-payment for
installations on order, which is why contracts are only being concluded with insurance
(for example via Hermes bonds).
The experts are of the opinion that good environmental legislation and its enforcement
are decisive for the diffusion of wastewater technologies. The lack of enforcement of
existing requirements is problematic in both Russia and China. In China, the licensing
and monitoring of plants is frequently dominated by corruption and a lack of
environmental awareness on the part of the authorities. In Russia, the legal
requirements in the field of water protection are often so strict that local companies
actually prefer to pay the fines. As a rule, non compliance with requirements has no
100
further consequences. It is extremely difficult for foreign companies to assess how
these requirements are monitored and sanctioned so that international concerns tend
to obey them more often than local companies do.
Knowledge transfer to China is viewed by German suppliers as a threat. The fear is
that Chinese companies will use the knowledge gained through cooperation to later
produce the technologies autonomously. In this context it is pointed out that technical
changes are implemented very quickly in China. In order to keep their knowledge lead,
German equipment manufacturers keep their Chinese cooperation partners
technologically dependent, for example by making sure that important components and
production steps come from Germany. Against this backdrop, public calls for tenders in
China are seen as a problem. Suppliers are expected to provide technological details
from the offset which are then incorporated into the tender and excluded from the
scope of the order. Since engineering services are poorly paid in China, the
consequence is that the size of the order is small compared with the value of the
knowledge revealed.
5.2.3.2
Customers in BRICS
Wastewater treatment technologies are purchased by both private and public
customers in the BRICS countries. In Russia, about two thirds of the industrial
customers are local companies, the rest are globally active regular customers. For
Russia, Brazil and China, it is generally agreed that being present on location and
adapting to country-specific conditions are of great importance for acquiring customers.
Local qualifications and training standards vary strongly and have to be taken into
account. In Russia, for example, proficiency in steel-working is very good, but poor in
plastics processing. The quality of the construction work often does not correspond to
German standards so that the plants have to be adapted accordingly. One example of
such necessary adaptation measures is that all the documents have to be available in
the national language. One problem which was mentioned in the interviews is that
there are no data available on the chemical composition of the wastewater in many
newly industrialising countries. The plants can then only be designed along the lines of
certain basic parameters (e.g. COD values). Finally, the climatic conditions and
country-specific "special requests" also have to be considered.27 Recruiting local staff
has a positive effect on the company's acceptance. However, there is often a lack of
qualified personnel. In Russia and Brazil, usually only graduates can be recruited, who
lack practical experience. In Russia, in particular, research projects are being used to
recruit local workers.
27
In Russia, for example, customers do not want a sewage plant to be visible as such from
the outside.
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The experience of one company shows that good reference projects are decisive for
market development in BRICS countries. These develop out of working together with
large international "regular customers" who are in the process of expanding and use
the same technologies at all their locations. These kinds of "lighthouse investments"
make sure the technologies are well perceived by the public and demonstrate the
possibilities of the most up-to-date technologies in the BRICS countries. It is
particularly important to have reliable and competent customers and partners on
location able to correctly operate and service the installations.
The majority of the interviewed companies operate branch offices or subsidiaries in the
BRICS countries, because the adaptation to country-specific conditions and the contact
to partners and clients are so important in wastewater technologies. The branch offices
are used for initial contacts and sales and marketing. Up until now there have been no
R&D activities in any of the countries. In one company, however sub-components are
being produced in China, because China is regarded as a market with huge potential.
There are high import duties in China which considerably diminish the achievable
prices; compared with this, paying the tax for producing on location is much cheaper. In
Brazil, the achievable prices are also below German levels28 and are further decreased
by import duties. Despite the unfavourable framework conditions one company still
managed to construct a reference installation by means of a public-private partnership,
which now represents the basis of earnings in Brazil.29
5.2.3.3
Other Market Players in BRICS
On the Russian market German plant manufacturers face international competition,
primarily from Turkey and the Benelux nations. Significant Russian capacities are not
perceived in this field. In contrast to this, local competitors are presumed in China,
since China is interested in producing its own technology.
The knowledge edge that German plant manufacturers have enjoyed up to now is cited
as being decisive for their internationalisation. Other competitive advantages of
German producers are seen in the quality of their production and products. Especially
in Eastern Europe, German products stand for quality and are preferred to local ones
for prestige reasons. Unorganised production processes in China make it harder to
locate sources of error during production. Furthermore, the European part family (i. e.
28
In the interviews, 50 to 70% lower prices were mentioned.
29
In the case of untapped markets (these do not include the BRICS countries), research
projects are mentioned as a good way of making customer contacts and becoming familiar
with country-specific customs and practices.
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measurement and control technology, fittings, valves, pumps, control panels etc.) is
seen as being more modern than the American part family. Usually, only one family is
used within a factory so that the attractiveness of the European family represents an
additional competitive advantage for German suppliers.
Commissioned by German firms, companies from the BRICS countries produce fixed
buildings and system parts on location. To some extent, the planning of these
structures is also done by partners in the target country which have to take into account
any necessary adaptations to ensure the quality of the construction work (see above).
The other parts ("core component") are imported from German or Western Europe.
Local suppliers of components are not known; reference is made to China's interest in
producing its own technology.
5.2.3.4
Experiences in Germany and Prospects for BRICS
The German Environmental Liability Act introduced the personal liability of
management and also that damages due to the environmental impacts of a plant
should be judged a statutory offence. This is cited as being a decisive trigger for a shift
in the thinking of central management among industrial customers of wastewater
technologies. Well developed environmental awareness on the part of German
authorities, industry and workers has promoted the diffusion of wastewater treatment
technologies. The experts believe that cost-covering wastewater levies in the future will
play a decisive role which is why positive effects are expected of the EU Water
Framework Directive. The German national obligation to retrofit individual properties as
well as operating schemes which offer a package of treatment including monitoring are
seen as being additionally supportive to the diffusion of decentralised small treatment
plants in Germany.
The current lack of qualified personnel is the main obstacle in Germany. Training and
further training is being forced in Germany in order to have specialised workers
available with closer ties to the companies. An additional factor hindering the diffusion
of small treatment plants are the monitoring regulations for decentralised plants which
vary from one federal state to another.
The market in the BRICS countries has not played any role up to now in the innovation
and diffusion process of small treatment plants. Developing the European market is of
top priority. In the BRICS countries there is mainly a need to catch-up in the field of
mechanical-chemical wastewater purification. This may change in the longer term
because of the low degree of connection to centralised sewer networks in the BRICS
countries.
5.2.3.5
103
Summary
Legal requirements in China and Russia are not or only insufficiently enforced. The
main reason for this is the lack of environmental awareness on the part of the domestic
industry, authorities and workers. Promoting the environmental awareness of the
different stakeholder groups in the target countries is therefore an important starting
point for the diffusion of wastewater technologies.
Direct personal contacts and the adaptation to country-specific conditions are very
important for the spread of wastewater treatment technologies in BRICS. International
companies which are in the process of expanding to BRICS countries can help to gain
a foothold here and pave the way for German technology providers. Lighthouse
investments enhance the perception of German technologies in BRICS.
It became clear that there are large differences in qualification and training between the
BRICS countries and Germany which make cooperation more difficult. A general lack
of qualified personnel in Germany is restricting the expansion activities of German
companies.
5.2.4
Material Efficiency
Two companies were interviewed on the topic of material efficiency. The main topics in
the interviews were water-based coatings in automotive coating systems as well as a
method for using shredder residues from recycling end-of-life cars and electrical
appliances.
5.2.4.1
Drivers of and Obstacles to Demand in BRICS for Water-Based
Coatings in the Automobile Industry
The automobile sector in Brazil and South Africa comprises only international car
manufacturers. These are also important players in China. The experts believe that
these international players are shaping the demand for finishing lines using waterbased coatings in the BRICS countries, since they try to apply the same technologies
as in their countries of origin in order to achieve the same quality standards, assume a
pioneering role and avoid possible reputation losses due to "environmental sins"
abroad. If German customers shift production overseas to the BRICS countries, this
can serve as a door opener and access to business there for the outfitters, too. In
China there was real competition among car manufacturers as to who would be the first
to apply water-based coatings. The knowledge level, which is comparable with
Germany, was explained by one expert by the international line-up of the customers.
The advantages of the plants are easy to communicate.
104
Russia and India are very hesitant about using water-based coatings. There are only a
few foreign manufacturers on the Indian market. Domestic Indian car makers have their
own technologies and prefer solvent-based products. There are no water-based
coatings available on the market in Russia. International paint and coating concerns
and manufacturers of coating plants are trying a joint approach here. Generally, both
markets show a tendency towards "low cost" vehicles. According to the interviewee,
German technologies are "over-engineered" and implementing simpler technical
solutions while maintaining the positive environmental effect is sometimes difficult.
Regulation is one driver of the demand for water-based coating systems in Germany
and the BRICS countries. In Germany, the Environmental Law on Pollution Control,
above all the TA Luft (Clean Air Guideline), was a main framework condition for the
development of low-emission technologies. The local branches of German concerns
also apply German laws in the BRICS countries. As a rule, these are the strictest
standards. If, in an individual case, the local requirements are stricter, then these
prevail. For example, Russia has stricter discharge values for wastewater.
5.2.4.2
Actor Structures in Water-Based Surface Coating Systems
Similar to the customer side, the producer side of water-based coating systems in the
Brazilian market is characterised by internationally active companies. Brazilian
producers do not play a role as competitors unlike China, where there is strong local
competition. To some extent, former suppliers here have developed into rivals. Even if
production cooperations are avoided for this reason, knowledge drain still occurs
because of the high fluctuation of workers. The rapid development of a company's own
knowledge base is seen as one way to effectively counter this.
Paint and coating suppliers are important upstream suppliers. A few international
companies control the market here such as, e. g. BASF or Nippon-Paint. Local
suppliers provide the sheet metal used to manufacture the coating plants, e. g. in
Brazil. Beyond this and customer relations, other contacts with local actors do not play
a role. The companies questioned do not conduct research and development in BRICS
countries; this is mainly concentrated in Germany and the US. Overall, knowledge
exchange between Germany and the BRICS countries is perceived as one-sided:
There is no feedback of the diffusion process in BRICS to Germany. Knowledge only
flows in the opposite direction.
5.2.4.3
105
Utilisation of Shredder Residues in Germany
The statements about coating systems in the automobile sector show that the
production processes in vehicle manufacturing and its preliminary stages are showing
strong signs of convergence in Germany and BRICS. However, at the end of the car's
useful life – in the recycling of end-of-life vehicles – the routes taken are very different.
In the EU, the 1999 Directive on End-of-Life Vehicles made automobile manufacturers
responsible for their correct disposal. In the meantime, there has been a sharp rise in
the prices of raw materials so that for strategic reasons scrapped vehicles now
represent an important source of (secondary) raw materials for the automobile industry
itself among others. These legal and market framework conditions have pushed the
further development of recycling technology for end-of-life vehicles in Germany. A very
good starting basis for this was the differentiated recycling system in the former GDR.
With regard to the technological knowledge base, the interviewee sees Germany as
having a long headstart. He sees a particular challenge in creating a suitable network
of suppliers and consumers, which optimally combines the individual plants from the
recycling pyramid. This has to consider country- or regional-specific material flows and
transport routes and optimise the mechanical requirements made of the individual
fractions of recycled materials by each consumer.
The technology is battling strong obstacles to its implementation. To date, no reference
plant has been able to be built in Germany. The main obstacle is that, despite the
provisions contained in the TA Siedlungsabfall (Technical Instructions on Municipal
Waste), many landfills are still open for shredder residues and represent a more cost
favourable disposal possibility. Because of considerable pressure from the sector, the
expert interviewed believes it probable that landfills will be closed to reusable waste
from 2012. Another obstacle is the movement of waste from the EU mainly to China.
According to the expert, since 1989 the quota of recycled end-of-life vehicles has
decreased from 50 % to approx. 15 - 20 %. This is explained by the cost ratio between
disposal using shredders and the comparably lower transport costs incurred for
exporting the scrap vehicles to China or India. Contradictory legal regulations such as
for example waste legislation and REACH30 are also seen to be driving waste exports.
30
Author's comment: The background to this estimation is the discussion concerning when
waste is no longer characterised as such and becomes a product in the form of a
secondary raw material. As waste it is subject to waste legislation, as a product, secondary
raw materials are subject to the REACH legislation, i. e. among other things the distributor
has to register them and supply certain information (for example material properties). The
introduction of REACH and the uncertainties about how recycling companies are affected
by it have resulted in a high degree of insecurity in the sector (www.reach.bvse.de,
26.07.2007; BDE 2006).
106
The high waste exports are seen as a problem for another reason in the interviews:
When recovering secondary raw materials from waste, recycled materials are used to
some extent, i. e. recycling companies are simultaneously the consumers of recycled
materials. If waste is exported instead of being recycled in Germany, this reduces the
demand for recycled materials accordingly. For example, it was planned to use several
fractions for slag formation in order to recover metals from electronic scrap. But the
electronic scrap was exported and purchased by China.
5.2.4.4
Utilisation of Shredder Residues in BRICS
The company interviewed had not, up until that point, exported any plants for recycling
shredder residues to the BRICS countries or produced any there. With the exception of
China, these countries are seen as being technologically far behind Germany in
recycling waste. The waste processing in China causes much greater environmental
pollution. The company interviewed expects that it will soon be confronted in all the
BRICS countries by similar regulations as those in the EU.
The company could imagine the technology being exported to Brazil and South Africa if
there is a favourable development in environmental legislation and in the total recycling
chain from disassembly through shredding and up to the consumers of the recycled
material. In South Africa and Brazil, there is already a high quality industry which the
company believes is suited for cooperatively planning a regional recycling system.
Domestic partners and the private-sector viability of the concept are seen as
preconditions for its realisation. The role of the German technology supplier would be
restricted to exports and the function of a "coach". The expert is of the opinion that only
large urban centres are possible as locations because the required supply of scrapped
vehicles and the consumers of the different recycled materials are only present in
sufficient numbers here.
One argument in favour of the expansion of the business activity to South Africa and
Brazil is the expectation that these countries will not develop into competitors for the
utilisable waste in spite of the use of advanced recycling technologies because they
possess sufficient raw materials themselves. China, in contrast, is feared as a rival for
recyclable waste, because raw materials and utilisable waste are relatively scarce
there. On the political side, China has held talks with the interviewed German
technology producer, in which it revealed an interest in the technology for recycling
shredder residues and the intention to introduce a directive on disposing of end-of-life
vehicles. Since at present there are only relatively few end-of-life vehicles occurring
there (approx. 5000 per year), the Chinese also enquired about the possibilities of
importing scrapped cars. The German company sees its objective of safeguarding the
domestic raw material supply endangered by this. Still it does not want to shut itself off
107
from developments in China but is prepared to tackle the peculiarities of this market
(among others lack of patent protection, forced joint ventures).
The demand for shredder technology by India, similar to China, is feared rather than
hoped for. The difference is that, in India, the infrastructure preconditions are not seen
as given. In Russia, too, the necessary actor structure in the recycling pyramid is not
sufficiently developed. However, Russia, in contrast to China and India, is not
perceived as being a potential rival for utilisable waste because it possesses many raw
materials of its own.
5.2.4.5
Summary
The mechanisms to accelerate innovation and diffusion processes in material efficiency
are as varied as the technologies encompassed by this field. It is conspicuous how
existing actor cooperations are used for the spread of the "key innovations" examined
here in the BRICS countries. In particular, the contacts with German customers are
used to equip their foreign branches in BRICS countries. The use of water-based
coatings is spreading in this way.
In both technology examples, diffusion is influenced by regulation. The wider effects of
German environmental regulations in the BRICS countries are particularly apparent for
water-based coating systems. They are brought about by the proactive behaviour of
internationally operating German groups which produce in compliance with German
environmental laws even abroad.
Cooperation potentials contributing to sustainability can be identified in several sectors.
Water-based coating systems need to break out of their former role as "isolated
solutions" between international equipment suppliers and automobile manufacturers.
Their transfer to the domestic automobile industries in Russia, India and China is still to
come. For this to happen, however, technically simpler solutions must be developed.
The cooperation potentials in the technology for recycling shredder residues are
overshadowed by the perceived competition for recyclable waste and secondary raw
materials between Germany and the BRICS countries, primarily China.
Finally, it should be noted that, for the actors questioned, the focus is not limited to the
BRICS countries. Alongside the BRICS countries, other emerging economies are also
important to them, e.g. the so-called "Next eleven"31, including Mexico, Iran, Turkey,
and Vietnam.
31
The "next eleven" refers to a list of 11 countries published in December 2005 by Goldman
Sachs, which could experience a similar economic upturn as the BRICS countries. The
"next eleven" comprises the following countries: Egypt, Bangladesh, Indonesia, Iran,
Mexico,
Nigeria,
Pakistan,
Philippines,
South
Korea,
Turkey,
Vietnam
(http://en.wikipedia.org/wiki/Next_Eleven, 19.12.2007).
108
5.2.5
Five companies were interviewed in the field of mobility and logistics. The main topics
discussed were renewable raw materials and their use for second generation
biofuels32, emission reduction technologies for Heavy Good Vehicles (HGVs), rail
transport systems in China and CO2-neutral logistics services. The following sections
are structured accordingly.
5.2.5.1
Demand for Synthetic Biofuels in BRICS
As in material efficiency, the raw material situation plays a key role for synthetic
biofuels (biomass-to-liquid BTL). Since this concerns a substitute for oil, high oil prices
are the driver for this technology. Technically, BTL-processes and coal liquefaction
converge and the processes are identical in the final process stage – the conversion of
synthesis gas to fuel. In addition, biomass can be added during coal liquefaction.
Countries with large coal reserves which practise (or want to) coal liquefaction are
therefore predestined for the application of BTL processes. Alongside India and South
Africa, this also applies to China: It is pursuing many development activities for coal
liquefaction using its own and imported technologies. The rapidly growing energy
demand acts as a driver for BTL which gives high political priority to issues of energy
supply. Especially in the transport sector, the expected demand on the part of the
Chinese is so large according to the person questioned that it does not seem realistic
they will be able to meet this demand with imports. Further drivers are the large
amounts of available biomass, environmental problems arising from the current
practice of burning biomass in the open and the political desire to create jobs in
agriculture in order to counter migration to the cities. In addition, the speed with which
politically desired developments are implemented in China is very high and permit
procedures are consequently unproblematic according to the experiences of the
interviewee. At the same time, the experts believe there is a problem in that the
necessary biomass logistics could quickly overload the transport network in China. The
political framework conditions for BTL will have to be put in place first before the
economic efficiency threshold can be crossed. German companies are playing a part
here by contributing their experiences with German framework conditions, supportive
policies and actors.
32
It is characteristic for these fuels that the whole plant is used and not just the fruit.
Examples are biomass-based synthetic fuels (Biomass-to-Liquid, BTL) or ethanol
production based on pulping lignocellulose. See meó et al. 2006 on distinguishing biofuels
and for more technical details.
109
India is another coal-rich country with low reserves of oil and gas. Coal gasification is
being pursued there based on German plants. First generation biofuels are also
produced. There are different estimations of the availability of biomass in India. Like
China, India is very interested in manufacturing synthetic biofuels to meet the strongly
growing demand and to create jobs in agriculture. In India as in China, the production
of fuels based on renewable raw materials is also being pursued in CDM projects (see
Section 5.3.2) with German participation.
South Africa is also a country rich in coal but poor in oil. Due to its prior policy of
apartheid and the international sanctions imposed on it as a result, the country was cut
off from imports for a long time and therefore was forced to develop other ways of
obtaining fuels. For this reason, it was already active in coal gasification early on. This
early period is seen as the nucleus for the German-South African cooperation in this
field of technology. Today, a large share of the fuel in South Africa is from coal
gasification and represents a high quality "designer fuel" which opens up very good
possibilities for emission reduction technologies in the transport sector. Based on this,
there is increasing interest now in synthetic biofuels. However, to start with, the
framework conditions, specifically the promotion of renewable energies, have to be
further developed and put into practice.
Domestic coal only plays a subordinate role in Brazil's primary energy mix. The
technical proximity of BTL to coal gasification is therefore irrelevant. Up to now, Brazil's
strength has mainly been in ethanol production. Here, similar to sugar production, large
volumes of biomass (bagasse) are leftover which could be used to produce synthetic
biofuels. As in China and India, CDM projects are drivers, but also the diversification
strategies of oil concerns and – from a political perspective - aspects of energy security
and the job effects of "home-made fuels". Russia is now beginning a substantial
number of bioethanol projects and has indicated interest in German BTL processes.
5.2.5.2
Cooperation between Germany and the BRICS Countries to
Produce Synthetic Biofuels
Reports were made of several ongoing cooperations in the field of synthetic biofuels.
The cooperation between Germany and China in biofuels is taking place within the
scope of the "German Chinese Sustainable Fuel Partnership" (GCSFP) among others.
This project is pushing the use of biofuels, synthetic fuels and hydrogen in the transport
sector in China through pilot systems and fleet vehicles for demonstration purposes
etc. The German side is made up of the Federal government and companies from the
automotive sector, the mineral oil industry, the chemical industry and systems
engineering. The German Energy Agency, dena, is providing organisational support for
110
the project. The Chinese side involves partners from the automobile industry, energy
sector, universities and associations as well as the China Automotive Technology and
Research Center (CATARC) and government authorities33.
The cooperation examined in the interview is being realised via cooperation and
licensing contracts with Chinese partners since the company questioned has no
production capacities itself. The main partner for constructing a demonstration plant
with attendant research is a German-Chinese firm found via a trade fair contact. As in
other fields, there is a perceived threat that the plant will be copied. In this specific
case, the company in question is confident that the German-Chinese partner is limiting
this risk through suitable contracts with the cooperation partners. According to the
experiences of the interviewee, not all the knowledge of a company should be made
public. For the implementation it has been agreed that components will be supplied by
German firms who were also partners in pilot projects in Germany and provided
services there at their own cost. Questions concerning the biomass logistics are the
responsibility of the Chinese partner. The demonstration plant is going to be installed in
an industrial park because the infrastructure is very good in these high-tech zones.
Cooperation on the research side is now being developed with a university. Overall, the
interviewee believes China to be very good in systems engineering and engineering
capacities in general. Even if the fundamental ideas still tend to be generated in
Germany, it is expected that China will be quick to adopt and realise these concepts.
The experts see the high social status of perfect copying as the reason behind this.
They expect, however, that copying – similar to Japan – only represents one phase
which will soon turn into the development of autonomous ideas.
In South Africa, international actor relations are based on the existing links in the field
of coal gasification. There are joint R&D projects with South African companies. South
Africa does have its own development capacities, albeit still on a small scale, but has
not yet reached the stage of implementation using their own technologies. There are
also existing links to South African research institutions, the South African National
Energy Research Institute SANERI 34, is one concrete example which, among others,
is studying the available potentials for cleaner energies in South Africa. For BTL,
however, industrial research (e. g. by Sasol) is considered more important.
Those questioned have hardly any experiences of cooperation with the other BRICS
countries. According to their statements, there are no competences in Russia
33
see also http://www.dena.de/de/themen/international/schwerpunktchina/projekte/projekt/gcsfp-2/ (02.05.1007)
34
see also http://www.dst.gov.za/landscape/pubresearch/pubresearch_12.php (03.05.2007)
111
specifically targeting BTL. On account of the limited personnel capacities of the
interviewees, no cooperation projects with Russia have been launched. Further
cooperation is also still open in Brazil. The knowledge basis for producing bioethanol is
seen as given there. Processes to manufacture fuels from bagasse are being
developed on site. This is mainly being pushed at the level of universities; there have
not been any demonstration projects up to now. One interviewee estimates the
technical standard as falling well behind that of Germany.
5.2.5.3
Diffusion of Synthetic Biofuels in Germany
The experts’ viewpoint is that Germany is well positioned in BTL. Other countries' use
of biomass is moving more in the direction of electricity generation or – like the US – in
the direction of ethanol. This can be added to petrol. In the US, petrol is more
widespread than diesel. Synthetic biofuels can be promoted by setting policy targets for
obtaining renewable energies from renewable raw materials, even if the R&D activities
in Germany were already begun earlier. The challenge of reducing CO2 from vehicle
emissions is creating additional dynamics in this domain. The solution is seen in the
upstream fuel production chain.
Biodiesel producers are beginning to rethink in the direction of BTL. For them, these
processes offer the possibility to further process their residues. A recent innovation in
the actor constellation is the participation of the oil industry in BTL activities. Diesel
consumption has increased due to good diesel technology in Germany. This is why
diesel has to be additionally purchased or the refineries have to be retrofitted. Both
options are expensive. The recent interest of the oil industry in fuels from biomass is
one result of this.
Compared to the BRICS countries, the overall knowledge margin is estimated as large.
This is seen as an advantage according to the company interviewed since it promotes
the sale of a BTL plant including a compete service, which covers, e. g. questions of
raw material logistics and the adjustment of the fuel to the conditions and quality
requirements of the demand-side. Training personnel to operate the plant is also
offered. The experts attribute Germany's knowledge edge to its technical know-how in
coal gasification, which made suitable partnerships between applied research and
systems engineering possible early on. The strengths of Germany in the field of
renewable energies in contrast generate fewer synergies to BTL, according to the
interviews, because the developments are very technology-specific.
A competition for the use of the available biomass could turn out to be obstructive to
the further development of BTL. The specific problem is pointed out that the
Renewable Energy Sources Act directs biomass towards electricity generation, that is
112
the framework setting of the government is actually reinforcing the competition of use.
Generally, legal framework conditions are required to be reliable. The tax changes in
the case of biodiesel are referred to as a negative example. These have resulted in a
precarious situation for several manufacturers. Taking into account the development
period which is still necessary, those questioned believe it important to be given clarity
about the long-term support policy at an early point in time. Another factor which acts
as a brake is the rapid changeover in company owners in Germany and the associated
frequent new strategic orientation of the firms. Finally, it must be considered that the
potential for available biomass in Europe is limited. Against the background of import
demands, the experts attach particular importance to certain (interim) forms of biomass
(e. g. pyrolysis oil) because of their transportability. On the other hand, this point
actually fuels the experts' expectation that countries rich in biomass will try to build up a
larger part of the value added in their own countries. For the companies interviewed,
this makes them important candidates for cooperation in the field of BTL.
The authors of this study were very surprised that the negative environmental effects of
cultivating biomass play hardly any role in the interviews. One possible explanation for
this is that mostly plant residues were cited as biomass sources in the interviews which
so far have not been the feedstock for any other energy-related use. However, palm oil
was also mentioned specifically as a suitable form of biomass for imports. Current
studies of the WWF and SRU show that the environmental balance of this form of
biomass is clearly negative in the cultivation methods dominant today (Reinhardt et al.
2007; SRU 2007). In the expectation of continued significant imports of palm oil, which,
on top of this, are actually supported by the government via the Renewable Energy
Sources Act, they therefore recommend to introduce mandatory quality criteria for
environmentally-compatible crop cultivation.
5.2.5.4
Regulation of and Demand for Low-Emission Heavy Good
Vehicles (HGVs)
Besides CO2-neutral fuels, another important starting point for lowering the emissions
of the transport sector comprises emission reduction technologies for road vehicles.
One person questioned is of the opinion that customers from BRICS countries only
make minimum investments in exhaust emission technologies in HGVs. But they are
very well informed about the market and the available products. The German demand
and the demand of German logistics companies in BRICS countries for low pollutant
HGVs do not exceed the legally required level. They buy products according to the
local licensing requirements, i. e. for example Euro 3 vehicles in Russia, even if they
have to use Euro 4 vehicles in Germany. The vehicles used for transnational journeys
are an exception. For these, Euro 5 vehicles are offered in BRICS countries, too.
113
The demand driven by the legal emission standards for HGVs plays an important role
(see overview in 5-2). The regulation in Germany, which is very strict in an international
comparison, was judged positively by the company questioned since it gives Germany
an edge on the global market. Other incentives – in concrete terms, the toll charge
reduction which is granted in the EU and Germany for Euro 5 HGVs – ensure that
EURO 5 vehicles are already being sold even though the standard has not yet been
enforced. This has resulted in the entire market in Germany moving in the direction of
the AdBlue emission after-treatment technology because Euro 5 is only achieved with
this. However, Euro 5 vehicles which meet the standard using technologies inside the
engine will soon enter the market. The market in the US is the driver for this because
AdBlue is not permitted there and the EPA 2007 Standard which is to be introduced
there is comparable to the EURO 5.
Table 5-2:
Emission standards for HGVs in BRICS+G
• Brazil:
Euro 0/2 since 199335, Euro 4 from 1/2009
• Russia:
at present Euro 3; Euro 4 from 2010/2011
• India:
Euro 2/3, tendencies towards Euro 4
• China:
Euro 4 in cities, less strict emissions standards in rural areas.
• South Africa:
no emission regulations so far; Euro 4 from 2009/10
• Germany:
at present Euro 4 and toll reduction for Euro 5; mandatory introduction 2009
It is seen as positive that the BRICS countries are following the Euro system of
emission standards and not the US emission standards for HGVs and thus have the
same regulation basis as Europe36. However they have more lenient limits which
hinder the diffusion of low emission HGVs in BRICS. There are absolutely no emission
standards in South Africa. One of the experts questioned traced this back to the partly
justified reservations that advanced emission technologies are connected with
additional costs and reliability losses. In China, the stricter emission standards which
apply in urban built-up areas are often circumvented by Chinese transport companies
who register their trucks in outlying districts.
35
http://www.dieselnet.com/standards/br/ (Stand: 06.06.2007)
36
Standardised "vehicle homologation values" are also mentioned here. Homologation refers
to the procedure for testing the fitness of a vehicle to be licensed in a specific country.
114
As well as emission standards, the fuel quality is decisive for the actual emissions. If
quality is poor, emissions are often significantly above the valid threshold limits despite
complying with the standard. Experts' reports, for example, claim that the fuel sulphur
content in Brazil is so high that the exhaust after-treatment no longer functions; a
similar situation applies to Russia and China. In South Africa, besides domestic
"designer fuels", world market diesel is purchased in very different qualities which
makes the emission situation worse. In Germany, the sulphur content in vehicle fuel
was lowered and the quality defined. These are good prerequisites for exhaust aftertreatment.
5.2.5.5
Supply Structure for Low-Emission HGVs
The (commercial) vehicle industry is very different in the different BRICS countries.
Russia, India and China have their own large automobile industries. They produce
vehicles which are comparatively old-fashioned in technical terms. The manufacturing
costs, however, are optimised so that these vehicles are 30 - 50 % below German
vehicles’ sales prices. German HGVs can only be sold in niche markets. The company
questioned expressed the hope that the whole market will develop in the direction of
higher quality in these countries; this trend can already be observed in the passenger
vehicle sector. Domestic providers (e. g. TATA India) are trying to keep up, among
others, by strategic acquisitions of Korean vehicle producers.
In Brazil, in contrast, there are only international vehicle manufacturers. The
competitive situation is therefore seen as being similar to that in Germany or Europe.
The same is true for South Africa. The German producers are relatively well
represented here. However, the South African market is assessed as being relatively
small (approx. 20,000 commercial vehicles per year).
The materials and components necessary for production are purchased by the
company interviewed via global sourcing. The world market price for steel determines
the price of components for cast and forged parts, in addition it is not profitable to
transport these. These parts are purchased on location wherever possible. In Brazil,
this is the only field in which domestic suppliers play any role at all. Otherwise,
producers use the same suppliers as those in Germany; ones which have local
branches in Brazil. To this extent, the quality of the supplies is not regarded as critical.
In India, there is also a broad spectrum of internationally positioned suppliers. With
regard to domestic supplies for cast and forged parts, the company questioned
reported difficulties. It is true that domestic industries are strong as far as quality and
testing processes are concerned, but they are weak in stipulating test criteria. Such
situations are countered by the targeted development of suppliers, even at the risk of
115
the competition profiting from this. In South Africa, the overall price-performance ratio
of the automotive supply industry is considered less good, apart from leather and
forged parts.
Other parts purchased from BRICS countries are those with moderate technology
requirements and a high share of manual labour input such as, e. g. elastomer parts.
They are purchased from the BRICS countries within the scope of global sourcing for
facilities outside of BRICS as well. The good transportability of the parts encourages
this strategy. For electronic systems, e.g. brake systems, the competence in BRICS is
not considered sufficient. There are contacts in all the BRICS countries to supplier
organisations similar to the VDA or TÜV.37
The company interviewed counts the suppliers in Germany as one of the strengths in
the field of "sustainable mobility and logistics", from which the sector of emission
technologies is able to profit greatly. Another strength is the German regulation, which
is very demanding compared to other countries, and which has resulted in Germany
getting a headstart on the world market. Germany is seen as a specialist for emission
reductions, even if this features less strongly than it does for drive systems. There is a
fairly relaxed attitude to an improvement of the competitors in BRICS. Because the
company can compete well on the European market, this does not represent an
additional challenge.
5.2.5.6
Demand for Rail Transport Systems in China
On account of the large distances involved, China is estimated as a “pure railway
market”. The experts questioned see potentials for improvement in goods
transportation and in logistics. So far, there are hardly any free market structures in
place, but state-controlled logistics networks. German logistics companies which focus
on rail transport see an opportunity to market their know-how (e. g. the concept of
dispatcher centres) and have drawn up the first declarations of intent with the Ministry
of Railways. Another additional aspect which favours passenger rail transport is that,
especially at certain peak times, such as the Chinese New Year’s celebrations, the
number of passengers is very large. High speed lines are experiencing a boom,
because the objective is to reduce air traffic for certain routes. The experts questioned
link this with the raw material reserves of the country: China has to import crude oil in
order to produce kerosene, but has its own large resources of lignite, hard coal and
hydropower which can be used to generate electricity for high speed trains. The
37
Verband der Automobilindustrie: Quality management system for the German automobile
industry. TÜV: Technischer Überwachungs-Verein, Technical Monitoring Association
116
Chinese want a modern railway system which is also marketed in a highly professional
manner (online seat reservations, catering etc.).
With the Ministry of Railways and individual cities, the demand for rail transport
systems in China is characterised by strong involvement of public institutions.
According to the experiences of the expert interviewed, for political reasons, the
preference is for Chinese systems – independent of their quality. The company sees
increasing difficulties in placing so-called turnkey solutions on the market. There is a
limited willingness-to-pay for such an all inclusive, worry-free package which covers the
necessary technical modules (e.g. signalling equipment, overhead contact lines,
electricity supply), their systems integration and some services for operation and
maintenance (e. g. training drivers). of Systems integration and additional services are
not perceived as being necessary or adding value.
Foreign suppliers often had to contribute funding to finance large rail transport projects
in the past (see Chapter 5.3.1). Today, the Chinese banking system is strong enough
to handle financing on its own. As a rule, the (state) customer requires the realisation of
public-private partnership models. This means that the supplier has to acquire
contributions to its equity capital. Local investors are often looked for who, e.g. want to
use stations as commercial shopping centres and contribute to creating additional
passenger numbers.
5.2.5.7
Obstacles to Cooperation in China Based on the Example of Rail
Transport Systems
The obstacles to cooperation with China can be revealed based on the example of
turnkey solutions for rail transport systems. The competitive situation and the strong
knowledge drain quickly give rise to upstart new Chinese rivals (e.g. so-called design
institutes). Turnkey solutions are characterised by the systems integration provided
among other aspects. According to the experience of the interviewee, Chinese partners
believe they are ready to take over this role themselves after one or two joint projects
despite the large knowledge gap displayed by them at the beginning. The German
supplier is targeting co-operation with these new rivals in order to obtain consulting
contracts. German turnkey suppliers are only still being selected if the projects involved
are particularly difficult with tight deadline constraints.
The strong knowledge drain is promoted by the special requirement that foreign
branches may only be established in the form of joint ventures with 50 % Chinese
involvement. The experts’ experiences are that the Chinese partner is able to duplicate
what has been built up in the joint venture in another company. One interviewee also
sees the transfer of knowledge being additionally pushed by the fact that calls for
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tender require up to 80 % localised services, i.e. services have to be provided by local
suppliers or through technology transfer (e. g. in the form of licence sales) or in joint
ventures. Joint projects in rail transport are entered into in spite of the knowledge drain
and in spite of the low prospects for follow-up projects because otherwise other
(international) competitors will push in. Finally, the primary function of turnkey solutions
is as door openers for technologies from the same producer in subsequent projects.
Furthermore they are seen as an important connecting link to politics.
Operation is another obstacle to turnkey solutions in rail transport systems. The state
does not guarantee a specific number of passengers; at the same time, it controls the
ticket prices. In local transport, buses are sometimes operated in parallel. From the
viewpoint of the experts, when setting up a new route, the local authorities would have
to ensure that the concessions for existing traffic flows are not extended so that a
transfer to the new system takes place. A new model with competitive elements, the
so-called dedicated passenger line, is acting as a driver, in which owners and
operators are decoupled.
Experts view the large number of incompatibilities to be a weakness of Germany and
Europe in the sector of rail transport, e. g. in the railway control centres, signal-boxes,
the track gauge of the rail vehicles or the different degrees of electrification. In the case
of signalling equipment, however, a strength has developed from this: The political
demand for a Europe-wide transport system led to a new standardised signalling
system being developed (ETCS-Level 2). The Chinese now also want to introduce this
system. However, they are using the competitive situation between European and
Japanese suppliers to obtain cheaper offers and are profiting from their delayed
adoption of the technology.
5.2.5.8
Supply of and Demand for CO2-Neutral Logistics Services
With a view to CO2-neutral logistics services, the opinion was proffered that the market
for these is not yet mature in the BRICS countries, among other reasons because they
have not yet become actively involved in climate protection. Even in Germany, the
willingness to pay more for CO2-neutral logistics services is not very pronounced,
especially among the main customer groups of large companies. True, the pilot phase
of product introduction proceeded positively, but overall the company interviewed
judged the product’s success as rather mediocre. Opportunities are seen in online
shipping, which makes climate-neutral shipping possible and which is well visited
despite limited advertising. It is assessed as positive that the increased attention paid
to climate change is raising public awareness of this issue. From the perspective of the
company interviewed, this increases the visibility of its service and may mean a first
mover advantage in the future.
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CO2-neutral logistics services are still relatively young in the market. The company
interviewed sees itself as a pioneer. A Swedish product served as a role model; a
similar product is otherwise only offered by the UK Royal Mail. In international express
services, i. e. time-defined products, which form their own market segment, the
company is the first and so far the only provider. In the pilot phase, the cooperation
with two mail order companies which have ecologically-oriented product programmes
was of high relevance.
Offering CO2-neutral logistics services in the case studied is based on a companyinternal CO2 management with company-external and –internal projects to reduce CO2,
which are offset against the CO2 emissions of the logistics services to be neutralised.
Linked with this are complex back office processes of emissions calculation and
offsetting and of marketing. The possibilities to reduce CO2 in the logistics sector itself
are seen as very limited. According to the interviewee, so far there are no commercial
vehicles with alternative propulsion systems or especially low CO2 emissions. The
power of the demand is not sufficient to initiate a supply of low-CO2 commercial
vehicles. Talks with other logistics providers are being held in order to be in a better
position to bargain with the commercial vehicle industry. However, the manufacturer of
commercial vehicles questioned sees the solution not in the automobile industry itself,
but in CO2-neutral fuels.
The substitution of fossil fuels by renewable energies in the fleet is already the subject
of company-internal CO2 reduction projects. Corresponding projects are planned in
BRICS, where exactly these will take place is still being investigated. The framework
conditions are decisive – there has to be a public supply of alternative fuels and filling
station networks. Brazil is not suitable, however. Ethanol is already used as a standard
fuel here and does not count as an additional reduction as defined by the CO2
management of the company.
In addition, there is the possibility to offset remaining emissions through CO2 reduction
projects in other sectors. Examples for this are company-internal projects in Germany
using photovoltaics to supply the energy for a central hub and a block heating station,
or projects to increase energy efficiency. In all the projects, the CO2 reductions have to
be quantifiable and additional. Projects to reduce CO2 are also being pursued in the
BRICS countries, albeit outside the company. That means Certified Emission
Reduction Units (CERs) are drawn from CDM projects to offset CO2 emissions, but it
should be pointed out that Verified Emission Reduction Units are also explicitly
accepted38. From the viewpoint of the company questioned, the bureaucracy and
38
For the definition see the comments on the Cleaner Development Mechanism under 5.3.2.
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transaction costs associated with CERs are so high that small projects which only yield
a small number of CO2 credits are not being realised. In addition, the higher prices are
slowing the demand for CO2 credits. Examples of realised projects include a solar
energy project in India and a reafforestation project in the Amazon region in Brazil. The
latter is turning out to be difficult according to statements made in the interview
because of cultural differences. The requirement of a quantifiable measure for the CO2
reduction which also bears up under an audit is contradictory to local thinking and
mentality.
5.2.5.9
Summary
The interviewed experts agree that there is no pro-active demand for sustainable
mobility and logistics in the BRICS countries. In this field, regulation is seen in many
cases as an important driver for innovation and diffusion processes which benefit
sustainability. The setting of ambitious emission standards for trucks drives technology
development and demand. Technology development is not only influenced by the local
standards but also by the strictest international ones such as those in the US now.
The Chinese requirements for local content of production are also acting as an
accelerator even if these are seen as cutting both ways. From the company’s
perspective, their high effectiveness in guaranteeing knowledge transfer from
international suppliers to Chinese ones is not paralleled by any corresponding benefit
for the international suppliers. Cooperation projects are still being entered into despite
this due to the competition among several international suppliers.
Potentials for cooperation contributing to sustainability can be identified in three fields.
Since market forces in general do not generate sufficient demand for sustainable
mobility and logistics solutions, cooperating to develop suitable framework conditions
(e.g. minimum emission standards) could tap potentials to improve sustainability. The
prerequisite for this is that the “clean” technologies have to be embedded in a properly
functioning overall system. The interviews indicate deficiencies here which manifest
themselves in the reduced effectiveness of “clean” technologies in BRICS. Examples
for this are unsuitable fuels for exhaust gas cleaning systems, but also the deficient
execution of legal requirements or the low quality standards demanded by the
consumers, for example, of systems integration in the rail traffic system.
Finally, CDM should be examined more closely for cooperation potentials in the field of
mobility and logistics. So far, the accelerating effect of CDM in this field is restricted to
projects in the domain of alternative fuels. Especially BTL technologies offer potentials
for the BRICS countries and Germany to the same extent. The role of the BRICS
countries here is not limited to that of raw material suppliers. In fact the technology also
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serves to market the fuels on location with economic profits in the BRICS countries
themselves. Cooperation between Germany, China, India and South Africa can fall
back on German technology competence and cooperation experience in coal
gasification to further expand cooperation in the field of BTL.
5.3
Results spanning more than one sustainability field
5.3.1
Financing
Providing funding can increase the demand for and diffusion of technologies which
contribute to sustainability and can also indirectly influence the framework conditions
for the topics regarded here. The financing perspective spotlights institutional aspects
of the diffusion and innovation processes in particular. In order to include the
experience of internationally active German financial institutions which have high
relevance for the topics examined here, Internet research was used to select three
banks for interview. These represent three different market segments:
• Financial Cooperation within the scope of German development cooperation policy;
• Financing private-sector projects in developing countries under commercial
conditions, but with a focus on providing long-term, venture capital and with close
reference to Germany’s development cooperation;
• Project funding under commercial conditions in an international context.
Germany’s development cooperation is based on the concept of anchor countries.
Apart from Russia, all the BRICS countries fall under this category. Compared with
other countries, the financing possibilities are better rated for companies in BRICS,
especially in China. According to the experiences of one German company, which has
implemented turnkey projects in the transport sector in China, China now has sufficient
financial resources of its own and Chinese banks are even becoming active abroad.
There is a controversial discussion about the sense of Financial Cooperation with
China. The financial sector is also functioning fairly well in Brazil so that financial
support via long-term and venture capital now seems less necessary there.
Financial Cooperation has few connections with research. It tends to start with proven
and tested technologies and so only becomes relevant at a relatively late phase of the
innovation cycle. Bad experiences have been made with innovation programmes
whose object was to finance German companies in positioning new technologies in
developing countries. “Isolated islands without connection to the mainland” resulted
from these and there were high “free rider” effects. The projects which are at the
forefront today are still innovative in the sense of being new for the countries even if the
technologies, e. g. wind power plants, are established ones.
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Financial Cooperation plays a different role in the different topics. Commercial
financing became feasible through the new market-based organisation of the classical
infrastructure systems like energy and transport (introduction of cost-covering prices
etc.). Financial Cooperation is now concentrating on specific sectors, for example on
renewable energies in the field of energy. German bilateral Financial Cooperation is
classed alongside the World Bank as the most important capital provider for renewable
energies in developing countries. Interested governmental or parastatal institutions
from developing countries can apply for funding from the German government through
the Special Facility for Renewable Energies and Energy Efficiency. In addition,
institutions which give loans to investors in renewable energies are refinanced, for
example, the Indian Renewable Energy Development Agency IREDA.
Activities in the field of energy efficiency are traditionally related to efficient energy
generation and distribution. Some support given to the financial sector may also be
allocated to the topic of energy efficiency, if Germany refinances, for example, funding
programmes of the borrowing countries for energy-efficient buildings. However, very
few opportunities are seen for Financial Cooperation in the topic of energy efficiency in
buildings since, first of all, supply security is regarded as having greater priority and,
secondly, the institutional framework conditions (among others, ownership questions,
low energy prices) are classified as difficult.
12 % of the funds accorded for Financial Cooperation were assigned to the transport
sector from 2000 until 2005. However, in recent years the funds for the transport sector
have been characterised by a considerable decrease both in absolute and relative
terms. As a result of this, the involvement in this sector is currently focussed on only a
limited number of partner countries. The main areas are rail transport, local public
transport, the development of direct connections to shorten journey times, the
introduction of free-market principles (mainly polluter/user pays principle) as well as the
promotion of less polluting technologies. For example, in China, rail transport is being
promoted as an energy-efficient and environmentally-friendly alternative to road and air
transport. There are also activities in the fields of water management and material
efficiency. These are mainly low tech in nature. A large part of the target group of
Financial Cooperation is resident in rural areas. The main source of wastewater
pollution here is organic and experts believe it can be treated with relatively simple
technologies. In waste management, priority is placed on sealing landfills before
recycling.
In the context of Germany's development cooperation, the bank questioned rarely
finances commercial projects in the subject areas of this study. The experience of the
interviewed bank is that the opportunities to conduct projects in environmental
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technologies are rare because German small and medium-sized companies do not like
moving abroad and tend to use their own funds if they do so. The bank would like to
finance more projects in the field of renewable energies, also in order to meet the
bank’s own climate protection target.
The so-called PPP (Public-Private-Partnership) Programme gives a somewhat different
picture. These partnerships with industry link economic interests with development
cooperation goals. Cooperation takes place, for example, during the introduction of
innovative, environmentally-friendly technologies when implementing pilot installations
or in research. 425 applications were approved up to March 2007 in this programme,
around 9 % of them in the field of renewable energies and approx. 12 % in water
services. One of the questioned companies in the field of water used the PPP
programme in order to become active in a cost-effective way with a reference project in
Brazil. This reference wastewater centre is now the basis for acquiring local customers.
The number of new approvals for water projects in the PPP programme is currently
low. The share of PPP projects with direct environmental relevance amounts to about
58 % of the total. These include projects outside the topics regarded here, e. g.
projects to improve soil and to reduce pollutant emissions. There are currently no PPP
projects in the field of energy efficiency in buildings. This field is also underrepresented
in the commercial projects in total. PPP financing is relevant, however, in the fields of
renewable energies, water management and material efficiency (projects in waste
management). Financing is provided for exports to but also production in the BRICS
countries, e. g. biomass installations in Brazil and wind power plants in India.
To a certain extent, commercial project financing can influence institutional framework
conditions which are relevant for accelerating the innovation and diffusion processes
studied. One example concerns the conditions for new projects. These may involve, for
example, having to comply with national or international standards – e. g.
environmental and social standards. The financial institutions can thus support the
enforcement of (environmental) laws and can bring about a positive (environmental)
effect in this way. A different type of condition is the demand for certain examinations in
the course of approving loans. This may result in an earlier and better recognition and
consideration of the significance of environmental and social risks in the project country
but also of the advantages of promptly taken protective measures and of generating
public awareness. Finally, the financier can make his readiness to provide funds
dependent on the implementation of project-specific (e.g. environmentally-relevant)
requirements.
Another example for the influence of commercial project funding on institutional
framework conditions is the development of innovative financial services. If financing
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modes are successfully developed for a type of project in a specific country and are
proven to function well, this results in further financing requests for similar projects.
One example for this is a loan in local currency if the revenues also only occur in the
local currency in order to exclude the foreign exchange risk. Since foreign exchange
risks are relevant for investors in all the countries, such financial products are accorded
a high significance for the positive development of cooperative relations. If, however,
the conversion of currency is totally restricted, profits cannot be transferred back to
Germany. This means having to aim at a local branch and permanent business in the
foreign country which is hardly feasible for small firms.
In countries with a weak financial sector, the provision of financing is a decisive driver
for the activity of German companies on location. In such countries, the call for tenders
often already include the demand that the service provider should guarantee the
financing by, e. g. providing a letter of intent of a financier. The diffusion process is
accelerated in this way by the financing.
In Financial Cooperation, the project development is designed to be monitored longterm; this process begins at the political level. Concrete projects only result at the end
of a chain of cooperation steps starting with the definition of sector concepts and
funding programmes. The possibilities to exert influence are more far-reaching here.
The institutional and economic integration of the technology is central. The Financial
Cooperation offered is supposed to be an incentive for the borrowing country to design
framework conditions in such a way that planned projects really function, i. e. contribute
to economic sustainability, among others. For example, the framework conditions have
to guarantee that the operating costs are covered. The experts believe that the demand
for economic sustainability should not be underestimated in terms of the generation of
positive environmental effects: Win-win effects are caused through the long utilisation
of an installation and high productivity in the operating phase. Conditions are also set
for social issues. For example, a weir was financed in China and, in the course of this,
changes in the resettlement law were initialised.
Financial Cooperation funds have been decoupled from German supply interests for a
long time. However, Financial Cooperation still generates revenues for German
companies. Thanks to the high quality of German goods and services, German
companies often win international calls for tenders. With a view to their development
cooperation goals, German organisations offering Financial Cooperation exert
influence on the technical specifications in the bids and press for life cycle costs as one
criterion for awarding loans to the borrower. Overall, Germany profits from the fact that
aid tying is also no longer pursued by other countries. Compared with the funds of
German Financial Cooperation, the returns in the field of water management amount to
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up to 80 % of the costs in foreign currency; the returns are similarly high in energy and
transport. And yet the significance of Financial Cooperation for the exports of German
companies is still infinitesimal since this only involves approx. 1 billion Euro per year. In
comparison to this, German exports are almost 1000 times this amount annually.
To summarise, financial services play a large role in accelerating innovation and
diffusion processes in the subject fields regarded here. This is only missing in the topic
of energy efficiency in buildings and CCS; in the first case on account of the difficult
framework conditions for projects, in the second case, among others, because it is still
in an early phase of the innovation cycle. The accelerating effect of financial services
occurs directly by enabling projects to be implemented and indirectly by influencing
framework conditions. Bilateral Financial Cooperation is in a special position to do this
due to its policy contacts. There is a slightly contradictory view of those questioned
regarding the supply of venture capital. From the viewpoint of the banks, this function is
fulfilled, but not demanded on a large scale. From the companies’ perspective, in
contrast, there are complaints about financing problems for country reference
installations among other things because the risk cannot be covered.
5.3.2
Clean Development Mechanism (CDM)
CDM is one of the three flexible mechanisms of the Kyoto Protocol. It allows public and
private actors from industrial nations to conduct projects to reduce emissions in rapidly
growing economies and developing countries in order to generate Certified Emission
Reduction Units (CERs) in this way. CDM projects may only be carried out in countries
which do not have their own emission reduction obligations. Of the BRICS countries,
these are Brazil, India, China and South Africa. Since Russia has its own emission
reduction obligations, Joint Implementation (JI), the project-based mechanism of the
Kyoto Protocol, is of relevance here.
Through the so-called Linking Directive of the EU39, it is possible for companies subject
to the EU Emission Trading Scheme to use CERs to partially cover their emissions.40 A
39
"Directive of the European Parliament and of the Council amending Directive 2003/87/EC
establishing a scheme for greenhouse gas emission allowance trading within the
Community, in respect of the Kyoto Protocol's project mechanisms", download under:
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32004L0101:EN:NOT
40
In accordance with the revised German National Allocation Plan 2008-2012, the share of
emissions permitted to be covered by CDM or JI projects should be 20% of the installationrelated allocation amount ("Revidierter Nationaler Allokationsplan 2008-2012 für die
Bundesrepublik Deutschland", BMU, Date: 13.02.2007). Additional limits are valid for
certificates generated from CDM re- and afforestation projects. See also Betz et al. (2005).
125
cost advantage may result from this since the emission reduction costs in the rapidly
growing economies and developing countries are often much lower than in the
European Member States. CDM projects require a contribution to the sustainable
development of the host country, for instance through additional investment flows and
technology transfer. This contribution must be certified by the designated national
authority of the host country before a CDM project can be carried out.
The CDM Executive Board has international control of the CDM process and decides
whether to approve an emission reduction measure as a CDM project. The proof of the
project's additionality and the methododoly applied for determining the achieved
emissions reductions are decisive for approval.41 The additionality of a measure is
intended to ensure that the project is only conducted on account of the additional
incentive of the issuance of emission reduction credits. So that the project participants
are able to provide this proof, the Executive Board developed the so-called "Tool for
the Demonstration and Assessment of Additionality". This demands the demonstration
of certain existing barriers, for example in technology and capital procurement which
would prevent a realisation of the measure without the CDM. To determine the
achieved emissions reductions which are paid out in the form of CERs, first of all a
reference scenario, the so-called baseline, has to be developed. This indicates how the
project emissions would have evolved without the reduction measure. During the
project, the actual emissions have to be measured in a monitoring process. The
difference between the baseline and the measured real emissions determines the
amount of the generated emission reductions.42
To determine the emissions reductions, the project participants have to use the
methodologies approved by the Executive Board or apply to use a new methodology
which, after its approval by the Executive Board, is then available free of charge to all
other participants. Applications for a new methodology are lengthy processes and very
cost-intensive which is why they are only done by companies if these expect to obtain a
large share of the generated emission reduction credits. For this reason, so far, there
are only a few approved methodologies for CDM projects for specific sectors such as,
e. g. transport. The majority of approved methodologies are allotted to projects in the
41
Furthermore, the investing and the host country must conform to several formal
requirements which are stipulated by the EB (see Marrakech decisions; decision 17/CP.7 F
Number 31). Private actors can only participate in CDM if they are authorized to do so by
the designated national authority (in Germany this is the German Emissions Trading
Authority, DEHSt).
42
For details on checking additionality and determining emission reduction credits, see Betz
et al. (2005).
126
sectors energy management, waste treatment and disposal and the manufacturing
industry. Up to now, approved methodologies are largely missing in the construction
industry and in the sectors of energy distribution, transport and agriculture.43
In order to more strongly promote the sustainability contribution of reduction measures,
the WWF launched the Gold Standard in 2003. This is an additional test to the official
controls made for CDM and JI projects, which aims to guarantee real economic
benefits and additional sustainable investments in the recipient countries.44 Increased
project costs arise due to the additional proof obligations. By contrast, reduction
measures can also be carried out outside the official controls. Emission credits
generated in this way (Verified Emission Reduction Units, VERs) are generally
cheaper. Companies or private persons who are not subject to emission trading use
them to voluntary offset their emissions (see Chap. 5.2.5.8). The quality of the VERs is
only checked by the respective provider which is why they cannot be used in emissions
trading.
5.3.3
The United Nations Cleaner Production Programme
The Cleaner Production (CP) Programme of the United Nations promotes integrated
environmental protection and can thus raise the demand for the innovations examined
in this study. In order to analyse its effect, four interviews were conducted based on
Internet research, which take a closer look at the main programme of the UN and
examine national activities based on the example of Brazil.
The CP Programme was launched by UNIDO (United National Industrial Development
Organization) in cooperation with UNEP (United Nations Environment Programme) in
1994 and aims to build a bridge between competitive industrial production and
environmental concerns. It follows a comprehensive, life-cycle oriented approach and
pushes capacity building for cleaner production on a national level. National Cleaner
Production Centres NCPCs are established to do so. The centres in Brazil, China and
India were among the first 10 NCPCs to be created. Since then, a total of 35 centres
have been founded, among others, also in Russia and South Africa. The centres have
to become self-financing after initial start-up financing; this is already the case, e. g. for
Brazil. Financial sources include public funds for demonstration projects and carrying
43
See UNFCCC: Approved methodologies by scope, http://cdm.unfccc.int/Statistics/Methodologies/ApprovedMethPieChart.html (last accessed: 18.04.2007).
44
See WWF: The Gold Standard,
http://www.panda.org/about_wwf/what_we_do/climate_change/solutions/business_industry
/offsetting/gold_standard/index.cfm (Date: 18.08.2006, last accessed: 18.04.2007).
127
out programmes, e. g. of the Ministry for Science and Technology and recently also the
Ministry for the Environment.
The CP Programme is aimed first and foremost at SMEs. The main sectors in almost
every country comprise food and luxury foods, textiles and leather, chemical industry
and metal processing. There are other additional sectors which are country-specific.
The programme focuses on win-win measures: Preventive methods which avoid the
generation of pollutants and waste from the outset should replace end-of-pipe
strategies. The CP programme overlaps the "material efficiency" topic in this study, but
focuses on the reduction of classical pollutants and hazardous wastes which are not
included in the examined topics. The topics of energy efficiency in buildings and water
are affected to the extent that these involve industrial buildings or water use in industry.
In Brazil, one focus is on the construction sector: Alongside the energy efficiency of the
buildings, the efficient use of water and energy during the construction process is
propagated. Renewable energies are also the subject of the programme unlike the field
of mobility and logistics, which is hardly covered.
The CP Programme covers five core elements45:
1.
Training of CP experts: This element is accorded the highest priority. The
theoretical and practical training of CP experts covers a broad range of topics.
These range from awareness raising activities, multilateral environmental
agreements and environmental management up to (environmental and energy)
technical issues. The target group includes associations, public administrations,
research institutions and financial institutions alongside SMEs.
2.
Information dissemination: This targets providing technical information on the
available technologies for specific environmental problems and promotes the
sharing of experience and network formation.
3.
Policy advice for Cleaner Production: The NCPCs advise their respective
governments on formulating framework conditions which promote CP.
4.
Technical Assistance: Concrete potentials for CP activities are worked out at
the level of individual firms. Staff training courses conducted at the same time
aim to guarantee continuous improvement.
5.
Promoting investments in Cleaner Production: The main concerns here are to
facilitate the access to financing, also within the scope of bi- or multilateral
development cooperation and to assist in the formulation of investment projects.
The first years of the programme have shown that very large environmental effects can
be achieved with no-/low-cost-measures. This is where the primary interest of SMEs
45
see http://www.unido.org/en/doc/5136 (18.05.2007).
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and the focus of the programme in Brazil lie. SMEs primary aim in making use of the
support from the NCPC is to save costs. Regulative pressure plays only a subordinate
role for the interest in cleaner production due to a lack of enforcement of the actually
strict environmental regulations46. This is seen as being the case for other countries,
too. Foreign environmental laws are often relevant for companies wanting to export.
They have to comply with these within the scope of the supply chain management of
their foreign clients. The Brazilian ministry for the environment intends to establish
forums for cleaner production. The aim is to develop suitable policy instruments for
promoting integrated environmental protection in a participative process involving
industrial and environmental organisations, banks, universities and regional cleaner
production centres.
The UN believes it is necessary to initiate more complex measures and investments in
companies, too. Great importance is therefore attributed to procuring access to funds
(information about funding programmes, international financial institutions etc.). This
approach is viewed rather critically by the questioned Brazilian expert because it is
accompanied by increasing technology orientation and the sales of consultancy
services to SMEs. As a prerequisite for low-cost measures, he demands a permanent
change in corporate culture in the direction of resource efficiency (among others,
organisational measures, improvements in management). Only in this way will funds be
released which can be used to finance investments. The experts believe that several
hurdles stand in the way of this change, for instance that the cleaner production
approach is not very well known. Also cited are the lack of awareness of the problem
and the poor qualifications of company heads and staff. Furthermore, societal change
is thought to be necessary in which the corporate cultural change would have to be
embedded. While the Brazilians view the UN programme as favouring technological
solutions, from the viewpoint of the UN, it is the target countries´ unquestioning faith in
technology which results in too little value being given to staff qualification, training, and
management.
In general, the CP programme is implemented in cooperation with domestic partners
(e.g. universities, chambers and governments) and foreign institutions. Some projects
are also done in cooperation with internationally active – also German – (large)
companies. So-called “reference institutions” support the training of national CP
experts and the director of a NCPC. These reference institutions are dominated by
institutions from Austria, the Netherlands and Switzerland. This can be explained by
46
The Brazilian environmental law was developed based on German model with the
assistance of the GTZ. The criticism is being made, however, that it has not continued to
be developed like the German law since the withdrawal of the GTZ.
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the funding structure for the programme and its origins, in which Austria and the
Netherlands played a leading role. Those questioned stated that, specifically regarding
cooperation possibilities with Germany, German technologies presume sufficient water
availability which is often not the case in developing countries and rapidly growing
economies.
The Brazilian NCPC has contacts to universities in Africa and Latin America which are
concerned with the implementation of cleaner production. Domestic universities also
feature among the important partners of the NCPC. With its good contacts to industry,
the NCPC sees itself as a mediator between universities and companies because
experts view these actors as being separated by a large divide. To bridge this gap, the
Brazilian state Rio Grande do Sul in cooperation with the Fraunhofer Gesellschaft
founded a centre for applied research in 2000, the CETA Center of Excellence in
Advanced Technologies. Today, this centre and the NCPC share a joint director. A
stronger orientation towards technology (transfer) could be the direct output of this
cooperation for cleaner production. The CETA focuses on automation and the IT
sector. Overlaps to the topics dealt with in this study are present in those CETA
activities which are to do with automation and measurement to increase energy
efficiency in buildings or concern waste reduction, biogenic fuels and logistics
solutions.
To sum up, the UN Cleaner Production Programme plays an important supporting role
in disseminating this concept. The actual demand for the know-how and technologies
required in the implementation of cleaner production, however, depends heavily on
national framework conditions. Demand for knowledge on "soft" measures, i. e. those
which incur hardly any costs and are characterised equally by economic and
environmental benefits, is more likely. Each further step would have to be supported by
a corresponding change in the corporate culture. If cooperation potentials are to be
developed from this, it is necessary to take into account the strong cultural imprint and
the necessary societal embedding of such a corporate culture change.
5.4
Summary of the interview results
The interviews with companies and other institutions focus on mechanisms which can
help accelerate diffusion and innovation processes in the direction of sustainability.
Looking at all topics together, the following mechanisms and aspects seem to be the
main ones.
Regulation has emerged as a necessary framework condition across-the-board for the
creation of strong market demand. The relevance of the regulations of leading
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industrial nations in the BRICS countries is especially remarkable above and beyond
the respective national regulation context. The example of water-based coating
systems shows that German automobile manufacturers apply German laws in their
overseas branches as well, unless local regulations are even stricter. International
spillover effects are also triggered by the fact that, within the framework of supply chain
management, exporting companies from BRICS countries are subject to the demands
– sometimes including legal requirements – of their foreign clients.
In Germany, too, foreign standards as well as German laws influence company
strategy. In the case of low emission HGVs, the US exhaust emission standards play a
driving role for the development of the technology in Germany. In general, a process of
globalisation can be observed with respect to the emergence and the impact of
environmentally-relevant laws. This shows the necessity, but also the opportunities,
which may lie in the development and standardization of regulation in international
cooperation.
Besides these public sector related acceleration mechanisms, there is a more marketrelated "door opener" for German companies in BRICS countries. Equipment suppliers
tend to follow their German clients who establish branches abroad in BRICS, a set-up
which can be described as piggybacking into a new market. This is the case, for
example, for one of the interviewed wastewater technology companies. The interviews
show clear differences in how business relations can develop after entering a market in
this way. In the case of water services, the door opener was used to start the knowhow exchange with the local economy and to use the project realised with the German
regular customer as a lighthouse project to acquire new local clients. Piggybacking also
has an outstanding role in the automobile sector – internationally active car makers
tend to draw on their internationally active regular suppliers. However, here, the
application of environmental technology turns out to be more of an isolated bubble
among "expats". It may be possible to promote sustainability by encouraging
knowledge exchange with the local economies outside this bubble.
A slightly different kind of piggybacking should be mentioned in connection with the
South-South networking among the BRICS countries in the field of renewable energies.
In the course of expanding his business to Brazil, an Indian producer of wind power
systems brought his German partner for technical services on to the market there.
Even if it is not possible to judge whether this specific case can be generalised based
on the available information, this type of actor constellation should be considered
against the background of increasing South-South networking.
Every question concerning mechanisms to accelerate innovation and diffusion
processes is answered, at least partially, by looking at obstacles and ways to dismantle
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them. It became clear in several cases that the products – technologies or services –
regarded require a "fitting" environment in order to be effective and to contribute to
sustainability. First of all, this concerns the network of suppliers and clients in which a
product is embedded. If specific products or actors are missing here, this may mean
that necessary complementary inputs for the application of a technology are also
missing. For instance, the sale of water-based surface coating systems in Russia failed
because water-based coatings are not available on the market.
The task of guaranteeing a suitable environment politically (to the extent that this is
possible) is often not taken seriously enough, according to the statements made in the
interviews in the BRICS countries. Situations then result in which – partly through
publicly forced demand – specific products are present on the market, but can only
achieve limited positive environmental effects because they are not embedded in the
system as a whole. Emission technologies for HGVs are one example: Some countries
(e. g. Brazil or China) demand specific emission standards with which the vehicles
have to formally comply. Due to fuels with very high sulphur concentrations, however,
the actual emission values are much poorer. And yet a regulation of fuel quality is still
not being considered.
Those interviewed also report differences in mentality as an obstacle to cooperation
between BRICS and Germany. These are revealed in particular in questions
concerning organisation and quality assurance as well as the implementation of
environmental regulations. Generally, environmental awareness was found to be only
weakly developed. As the example of the surface coating system producer in Brazil
shows, the differences in mentality are partially reinforced by mainly graduates being
employed due to the local job market conditions. This results in power struggles with
experienced German workers who may have a lower formal education.
Finally, a frequently cited deficiency should be mentioned which is seen by those
interviewed as a calling for politicians and public institutions. In their eyes, the
engagement of German embassies, or more generally, of German policy makers in
passing on contacts, supporting the construction of local networks and setting up
platforms for product presentations (e.g. trade fairs) is disappointing in an international
comparison and could be stepped up.
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6 General Summing Up and Conclusions
6
General Summing Up and Conclusions
6.1
Brazil
Brazil's overall economic dynamic is distinctly lower than other BRICS countries such
as China and India. The framework conditions for innovations are characterised by a
low R&D intensity which has also increased only moderately in the past. In Brazil,
considerable deficits are striking for the factor innovation-friendliness, in particular the
regulation of start-ups. Speedier and unbureaucratic approval procedures for founding
firms could considerably improve the framework conditions for transferring
sustainability innovations. The financial sector functions relatively well in the meantime,
but problems with financing can still crop up, on account of the high real rate of interest.
Brazil's rating for country-risk assessment in the international lending business is still
rather negative.
Special strengths lie in the raw materials and agriculture sector which lead to new
direct investments. In addition, there are long established investments – for example in
the automobile area – which in the meantime have also led to foreign investments from
companies of the supply chain. However, it is criticised that the spillover effects of
these activities are too low. A further barrier to business activities in Brazil is seen in
the qualification of the workers. Young workers and graduates with theoretical
knowledge but little practical experience dominate the labour market, and there is a
lack of engineers. This fits the picture that although very good basic research is
performed in Brazil, promotional programmes to develop applied research and
development are still inadequate.
Brasilian research displays a distinct pattern of specialisation, concentrating on the
three large areas “agronomy”, “life sciences”, and “medicine and health care sciences”.
The instrument "sector funds" was introduced in Brazil in 2001 with the aim to
guarantee a more stable financing of R&D. The energy, water and transport fields are
addressed from the selected sustainability fields. Central promotional focuses are
renewable energies from biomass, followed after a considerable gap by water
management. In the transport field there were overlaps in the past with adapting
vehicles to biofuels, otherwise no clear-cut orientation of Brazilian transport research to
ecological aspects can be perceived.
The technological capability in the selected fields shows a very uneven picture for
Brazil. There is considerable specialisation in material efficiency, especially in raw
materials. Brazil has definitely specialised in this field, which also fits in well with
research competence in the agricultural area. Foreign trade is also above average in
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the sustainability-relevant mobility technologies, in particular also for ethanol. Not only
the building, but also the water sector – which is promoted by a special sectoral fund –
display an above-average generation of knowledge. However, against the backdrop of
the general innovation problems outlined above, this (knowledge) could not yet be
transformed into internationally marketable products. The electricity sector has been
dominated by the use of hydropower up to now, so that alternative technologies – not
only the use of coal, but also other, renewable energy sources – have not been an
issue till now. In this respect, the low capability in CCS and renewable energies is not
surprising. Finally, it must be noted that activities addressing innovation and diffusion
processes have been only below-average up till now.
Figure 6-1:
Specialisation of Brazil in the Selected Sustainability Fields
Brazil
100
EE+CCS
Buildings
Material
0
Water
Transport
Total
-100
-100
0
100
Fraunhofer ISI
A number of further field-specific findings can be derived from the indicator-based
results and the interviews, which provide important starting points for future
cooperation potentials:
• In the area of converting renewable energies into electricity, Brazil has a legally
prescribed feed-in tariff, which was developed with the help of German expertise. It
is intended to encourage the build-up of wind energy – Brazil has some of the most
favourable locations for wind energy worldwide – but so far has not been very
134
successful, above all as the payment is considered to be too low. High import duties
and 60 % domestic value added as conditions for receiving promotion guard against
foreign competition, but have not yet led to the development of a Brazilian industry.
The competitive situation however appears to be getting tougher, with German and
Indian suppliers planning to increase their market presence. As Brazil is increasingly
reaching the limits of its electricity system's capacity, electricity generation will
become an important topic in Brazil in the future. Cooperations in the field of
renewable energies are thus very promising, especially as Brazil is also one of the
leading countries in CDM projects.
• Brazil is one of the largest world exporters of renewable raw materials. An increase
of the real net output ratio of raw material extraction could be a significant option for
Brazil. This calls for a move towards "green chemistry". Germany could supply the
necessary knowledge base and experience in building up relevant production
capacities in cooperations here.
• Ethanol is in standard use in Brazil and is also exported. There are domestic efforts
to utilise the large biomass leftovers from ethanol production (bagasse) also to
manufacture fuel. The development of second generation biofuels is however far
removed from the German level, and has been restricted to university research till
now. This is a wide field for possible cooperations.
• In the field of water treatment,
gaining domestic customers by
however, lie 50-70 % under the
significance of the subject water
possible.
the interviewed companies have succeeded in
setting up local branches. Realisable prices,
German price level. In view of the increasing
in Brazil, further cooperations in this field seem
Environmental regulations in Brazil set relatively high standards. They were developed
partly with German support. It is criticised however that they are not being further
developed and for example are still strongly based on standard-setting regulatory
measures. The assessments of how closely these regulations are obeyed vary greatly.
Hopes are pinned to the implementation of preventive environmental laws already
passed in the year 2003 and to the current initiative of the Brazilian Ministry of the
Environment to establish forums for integrated environmental protection. Progress in
this area is regarded as crucial for increasing the importance of sustainability
technologies and also appears to be an object for cooperations.
6.2
Russia
In the basic data concerning innovative capacity, Russia's are among the best figures
for the BRICS countries and the R&D expenditures per capita are among the highest.
Also – similar to China – a remarkable rise was noted in this area since the mid 1990s.
The lion's share of R&D funding, however, is made by government, even if the share of
135
private R&D activities is considerable. The highest publication intensity within the
BRICS countries is also found in Russia. Thus Russia receives relatively good marks in
the surveys of innovation capacity for the factor human resources, but only because of
the (still) existing stock of qualified workers, scientists and engineers. Young workers
and graduates are judged ambivalently, they are perceived to have highly theoretical
knowledge, but no practical experience in the labour market. The general framework
conditions for innovations in Russia are estimated to be the worst of all BRICS, in
particular with regard to the absorptive capability for technologies and the importance
of environmental protection.
Defence and security research, high technologies and exploitation of energy sources
and raw materials are the front runners in the national R&D strategy. For the
sustainability fields considered here, energy technology, promotion of energy efficiency
in buildings as well as transportation, air and space travel systems - whereby the
modernisation of transport infrastructure is also addressed – enjoy special significance.
Figure 6-2:
Specialisation of Russia in the Selected Sustainability Fields
Russia
100
EE+CCS
Buildings
Material
0
Water
Transport
Total
-100
-100
0
100
Fraunhofer ISI
The specialisation profile for Russia shows that – with the exception of the field
buildings – the selected sustainability fields do disproportionately well in technological
research. This can be explained by the integration of the fields in the sectors chemicals
136
and mechanical engineering, in which Russia has traditionally been strong (cf.
Krawczyk et al. 2007). All areas have in common that they play a very below-average
role in Russia's export portfolio, which is dominated by the export of energy. On the
whole, it appears that the sustainability fields can build on an above-average
knowledge base, but that considerable deficits exist in the transformation into
corresponding goods. From the indicator-based results and the conducted interviews, a
number of further field-specific findings can be derived which provide significant
starting points for future cooperation potentials:
• Coal-fired power stations are very important in Russia because of the availability of
coal at home. Simultaneously, domestic knowledge competences exist which
display links to CCS technologies and which could serve as starting points for
cooperations.
• In the existing business and cooperation relationships between Germany and
Russia, energy efficiency in buildings is the most important of all the topics. In this
field, Germany's exports to Russia are already considerable. Russia needs to take
action in this field, above all in modernising old buildings. There are also significant
deficits in training skilled workers, which results in quality problems in carrying out
modernisation. Therefore relevant courses of study and training centres are urgently
required, especially as recent technological developments also call for increased
systems knowledge. In large houses with several flats there is frequently no
committee of owners which could make joint decisions, and often no detailed bills
concerning energy consumption are available either, which makes decision-making
even more difficult. Germany's similar experiences in overcoming these obstacles
after re-unification could be referred to, as the ownership and accounting structures
in the former GDR were similar to those in Russia.
• In the field mobility it should be stated that Russia – like India and China – has a
large vehicle manufacturing industry of its own. The products are not up-to-date
technically, but optimised from a cost perspective. The price level of trucks amounts
to only 30 - 50 % of the German price, for example. German solutions are regarded
as "over-engineered". On the other hand, Russia's competence in the area of
emission reduction is well below average. For German manufacturers who can offer
cost-effective solutions here without renouncing the environmental advantages,
there should be considerable potentials for cooperation.
• As far as fuels are concerned, interest in biofuels is growing. At present many
bioethanol projects have been initiated and Russia has also evinced interest in
synthetic biofuels. Spillover effects from knowledge gained from coal gasification
could emerge here, which is one of Russia's knowledge base strengths.
• Russian performance in waste water treatment is below average, there is little
competition in Russia. The market entry for German enterprises could succeed in by
supplying regular German customers, i. e. internationally active German concerns
that would apply the same waste water treatment technologies in Russia as in their
137
home territory. These plants are "lighthouse investments", with which to gain
customers among local authorities and companies.
Russia occupies a middle position in the country risk assessment rating of the BRICS
countries. Safeguards like e. g. Hermes export credit guarantees are therefore
significant aids. The legal environmental regulations are partly very strict – the
approved maximum levels of pollutants for discharging waste water for instance are
stricter than in Germany. Whether they are adhered to, however, is perceived as
arbitrary. In part the regulations of the bureaucracy go further than the status of
legislation. While Russian enterprises are prepared to risk fines as punishment, foreign
firms fear that production will be stopped in the case of violations of the law.
6.3
India
India displays considerable overall economic dynamic, but the present per capita
income lies clearly under the level of the other BRICS countries. The framework
conditions for innovations are characterised by a low R&D intensity, which in the past
has grown only moderately. Of all BRICS states, the R&D activities in India are those
most strongly dominated by the government alone.
On the other hand, surveys confirm India's outstanding framework conditions with
regard to human resources, technological absorptive capacity and innovationfriendliness. However, India has not been able to integrate itself in the worldwide
division of labour as e. g. China has done. Indian industry is momentarily still in a
constructive phase. As far as the level of direct investments is concerned, it must be
remembered that India's position in this matter was restrictive for many years. Sectoral
strengths are found in agriculture, life sciences and chemicals, as well as – although
difficult to depict in statistics – in the area of services, whereby the export of software
applications is remarkable (Krawczyk et al. 2007). Regarded historically, India is the
largest recipient country for German financial collaboration. In the more recent past,
India has been increasingly developing into a customer for commercial financing,
adequate private financial resources appear to exist. India has the second best country
risk assessment among the BRICS countries.
Indian research is strongly directed towards goals set by government. Almost half of
the entire national R&D expenditures were devoted in 2002 to the areas of defence,
space, agronomy and atomic energy. For the fields dealt with in the present study, the
Department of Science & Technology (DST) should be named above all, as the
ministry responsible for civilian science and technology policy. Furthermore, the
Council of Scientific and Industrial Research (CSIR), the largest Indian research
organisation, has to be mentioned. A research policy directed specifically towards the
138
sustainability fields analysed in this report cannot be seen. Of the sustainability fields
investigated, decentralised, renewable energy sources are those primarily promoted.
The evaluation of the specialisation indicators in the selected fields presents an
unambiguous picture: none of the selected sustainability fields belongs to the aboveaverage segments of Indian foreign trade. Starting points for an above-average
knowledge base are only found in material efficiency (e. g. for renewable raw materials)
and in water technologies (e. g. (sea water) desalination), the other areas are all
distinctly below-average. On the whole, it emerges that the fields in which India shows
particularly high capabilities offer less possibilities of docking onto sustainability fields
than in the other BRICS countries.
Figure 6-3:
Specialisation of India in the Selected Sustainability Fields
India
100
EE+CCS
Buildings
Material
0
Water
Transport
Total
-100
-100
0
100
Fraunhofer ISI
Further field-specific findings can be derived from the interviews, which supplement the
indicator-based results and provide important starting points for future cooperation
potentials:
• For India, the interviews produced most information in the field Energy. The potential
for renewable energies is high, and the great uncertainty about the electricity supply
is a strong driver. However, the framework legislation changes constantly, so that
the basis for planning is very uncertain. India's strength is seen above all in its
139
potential for high-quality production. On the other hand, its weaknesses lie in the
long-term organisation of company processes and in working creatively. The
financing opportunities offered under CDM are utilised. India is a leader in CDM,
besides Brazil and China. A certain emphasis is laid on CDM projects in the field
biomass (above all, sugar cane or rice hulls) and in water power, but projects for
energy efficiency in industry and wind energy projects are also increasing in
number.
• Synergies could emerge with regard to CCS, in particular in view of India's rich
reserves of coal and already existing – also German-Indian - activities in this area.
However, the state of knowledge is rather low up to now, which speaks in favour of
complete package deals from German producers.
• In the automotive industry, foreign manufacturers and their suppliers are also
present in the market besides domestic producers. Indian manufacturers orient
themselves increasingly towards foreign markets, but up to now rather in the SouthSouth context. Low-cost vehicles are preferred. Ecological aspects have only little
significance. Cooperations would be necessary above all with a view to ecological
upgrading in this market segment.
• The area of biofuels is a further aspect connected with the field mobility. Biodiesel
and ethanol are already being produced. Similar to China, India is very interested in
manufacturing synthetic biofuels in order to meet the growing need for fuel. The
availability of biomass however is presently categorised as relatively limited, which
reduces the prospects of long-term cooperation. On the other hand, the area shows
possible links to the strengths in the agronomic and life science fields and thus
belongs to the potentially more promising cooperation fields.
One of the crucial weak points in India is the weak role of environmental protection.
This is manifested not only in the evaluation of the surveys of the general innovation
conditions, but also in the interviews. This corresponds with India's relatively weak
performance in the selected sustainability fields. The areas which do somewhat better
are primarily motivated by foreseeable scarcities of resources and supply bottlenecks
(energy, fuels). Stricter environmental regulations could definitely improve the
framework conditions for sustainability innovations in the other areas.
6.4
China
From the absolute R&D level, China is clearly the dominant country within the BRICS
group. The R&D expenditures amount to many times the levels of spending by the
other BRICS countries. China's R&D intensity has increased since the mid 1990s and
exceeds that of Brazil, India and South Africa by approx. 50 %. The financing structure
also corresponds largely to that of the established industrialised countries. And yet
China is also still far removed from the level of the industrialised countries. The R&D
intensity in Germany, for instance, is still about double that of China.
140
Several problems become apparent when assessing the general conditions for
innovation in China: with human resources it is the availability, with technology transfer
the relatively bad networking and lack of innovative capacities of the companies. In
innovation-friendliness, deficits can be ascertained in the access to loans and venture
capital, as well as the quality of private demand. However, the financial sector and the
availabilty of financial funds have developed very positively. The country depends less
and less on financing by foreign institutions; on the contrary, Chinese banks are
increasingly becoming involved in business abroad.
The analyses of the direct investments show an undiminished attractiveness of China
as a location. China has, despite many risk factors, a clearly leading position with the
capital inflows from all over the world, with the main emphasis placed on the industrial
sector. This corresponds to a strategy – often characterised as an 'extended
workbench' – to rapidly develop production capacities in China, in order thereby to gain
not only comparative cost advantages, but also access to an enormous and swiftly
expanding domestic market. Increasingly, (Chinese) plant construction and also
engineering capacities are gaining know-how. However, a number of weaknesses still
exist, which were also confirmed in the interviews. For instance, the focus in China is
directed more strongly to product than process innovations, which in part negatively
affects the quality of the products. The Chinese are admittedly very quick to adopt and
implement ideas, but they still have problems in realising system innovations.
The efforts to build up the Chinese research system which is characterised by
numerous programmes and increased allocation of funds, must be seen against this
background. Although no independent sustainability research has emerged as yet
within the research system, within the individual programmes numerous links can be
found to the sustainability fields investigated in this study: they concern the energy field
with regard to increasing the use of renewable energies, on the one hand. On the other
hand, the field of energy-efficient buildings represents an important object for research.
Extensive research activities are noted in the transportation field. However, in China
the problem of restricting the development of scientific capacity through concentrating
on a few national R&D priorities must be prevented.
A similar picture for the generation of new knowledge emerges for the selected
sustainability fields: the patent applications indicate a rather average activity rate, in
part they are even below average, for example transportation. On the other hand, the
selected sustainability fields belong to those in which the principle of the 'extended
workbench' is reflected in above-average foreign trade successes, such as in
transportation technologies and in the buildings field The focuses of the research
strategies can be explained with the trade performance: on the one hand areas are
141
being promoted which do well (above-average) in foreign trade (transportation
technologies, building area), which corresponds to the country's economic
development strategy on the whole, on the other hand foreseeable bottlenecks in the
supply of energy and material resources are addressed, in which the country has
demonstrated weaknesses up to now. Nevertheless, it must be stated that China's
technological capabilities have so far not been directed towards sustainability. This also
applies to socio-economic sustainability research.
Figure 6-4:
Specialisation of China in the Selected Sustainability Fields
China
100
EE+CCS
Buildings
Material
0
Water
Transport
Total
-100
-100
0
100
Fraunhofer ISI
Further field-specific findings can be derived from the interviews, which supplement the
indicator-based results and provide importants hints for future cooperation potentials:
• China has great potential in the field of renewable energies, on account of its
climate. Demand comes mainly from the private sector; however large projects can
only be accomplished politically. One advantage of the Chinese market is the very
large market volumes. The theoretical state of knowledge is categorised as very
good in this area, but practical experience is lacking. China is believed to be capable
of own R&D and the further development of the technologies only in the longer term.
However, China is already a significant actor in foreign trade with solar cells.
Cooperations which join together Chinese cost advantages in production with
German technological know-how could result in a competitive advantage.
142
• The vast coal reserves and China's development plans for coal-powered power
stations clearly delineate a high potential for CCS. The state of knowledge in China
is however rather low at present, which argues in favour of German manufacturers
offering package deals. At the same time, power station components are already an
important part of German exports to China, so that numerous actor relationships are
already in place which can be built on.
• The field of energy-efficient buildings is still relatively new in China. Until now a very
supply-oriented perspective dominated, i.e. how to meet growing energy
consumption. One large deficit is seen in the lack of quality in the building sector.
This concerns building specifications, especially in the technologies new to China
such as insulation. There is no widely available training for skilled workers. The
competence for single technologies is also not particularly developed. In addition,
the understanding for finding the optimal combination of technologies which is so
necessary for energy efficiency is missing. An integral view of a building does hardly
exist in China. Cooperation efforts should therefore address these aspects in
particular.
• In the field of mobility, it can be stated that interest in synthetic biofuels and also the
availabilty of biomass is very great in China. However, the innovation indicators do
not imply any above-average specialisation in China in these fields.
• The large distances involved make China a large market for railways – the highspeed lines in particular are booming. Simultaneously, China has specialised in the
area of track vehicles, although the knowledge base is rather below average. From
the Chinese perspective, cooperations which strengthen the knowledge base in this
area would significantly complement its own position.
• China has large domestic manufacturers in the (road) vehicle industry. Even
although they offer still simple and technically rather out-of-date products at present,
they are regarded as serious competition. The challenge consists here in applying
existing Chinese competences to make existing products more sustainable.
• From a material efficiency perspective, China plans to introduce recycling of old
vehicles. For the estimate of cooperation potentials in this field it should be borne in
mind that German actors fear that a diffusion of relevant recycling infrastructures
and technologies could lead to competition for secondary raw materials, in view of
China's growing demand for raw materials.
• The experiences of German companies in the Chinese market for waste water
treatment systems point out that environmental protection in China is not de facto
regarded with the same importance as in the official government pronouncements.
According to the interviewees' assessment, China will not have developed the
necessary market maturity in this area within the next five years. Production is
battling with inadequate process quality, but – as in other markets - Chinese
enterprises are still feared as competitors. Cooperations are therefore faced with the
challenge of how to (best) cope with this tense situation.
143
Stepping up cooperations with China must take place against the background of a
number of regulations concerning the import of foreign products, as well as the
possibilities for foreign companies to establish businesses in China and participate fully
in economic life there. In particular, regulations dealing with high import duties and
unpredictable approval procedures for foreign products belong in this category. Also,
the problematical situation concerning the enforcement of intellectual property rights
(IPR) is repeatedly mentioned.
One special weakness of China concerns the significance of environmental regulations.
The enforcement of environmental standards can on the whole be described as very
lax, according to the experiences of persons questioned, indeed perhaps the worst
among the BRICS countries. This substantially hampers realisation of the considerable
potentials to carry out sustainability innovations. This aspect should be the top-priority
starting point in the sense of a demand-oriented innovation policy.
6.5
South Africa
South Africa's R&D intensity is average for the BRICS countries, without however
corresponding growth rates in the past years. Private activities play a similar role here
as in the industrialised states. The conditions for innovation transfer are on the whole
regarded as good in South Africa. Environmental protection is accorded the greatest
significance in the surveys among the BRICS countries. In the interviews, however, this
is considerably relativised. Incomplete control of emissions is referred to, but this
appears to be changing in recent times.
The availability of human resources is regarded as South Africa's greatest problem.
The number of scientists in South Africa lies clearly below that of the other BRICS
countries. This can account for the ambivalent assessment of South African
competences in the interviews: the areas which are able to attract sufficient well-trained
personnel are almost at the OECD level, on the technical side. On the other hand, the
competences of well trained personnel is not available in many areas, which leads to
outdated production processes and negative price-performance ratios. A special
problem could be the financing of investments in South Africa. It takes last place in the
country-risk assessment rating among the BRICS countries.
Innovation policy in South Africa is oriented towards the concept of the national
innovation system. An important component is the development of new missions for
science, technology and innovation policy. Biotechnology, new production
technologies, information and communication technologies, as well as resource-based
industries (including agriculture and energy) were defined as strategic R&D areas.
144
There is an independent promotional agency for water, which underlines the
significance of this field. The National Center of Cleaner Production, which aims mainly
at SMEs which are also patricularly active in the area of waste recycling, is financed
within the framework of the focus on production technology. In addition, research in the
sense of a demand-oriented innovation policy is directly influenced also by diffusion
programmes, particularly in the area of extending renewable energies, increasing
energy efficiency in the building sector, and expanding railway transport. One special
characteristic of South Africa – in contrast to the other BRICS countries - is the
relatively high level of socio-economic research for building up capacity and
development of innovative ability.
Figure 6-5:
Specialisation of South Africa in the Selected Sustainability Fields
South Africa
100
EE+CCS
Buildings
Material
0
Water
Transport
Total
-100
-100
0
100
Fraunhofer ISI
With the exception of the buildings field, the sustainabillity fields investigated are
characterised by an above-average activity to accumulate knowledge. The field of
material efficiency stands out on account of a positive foreign trade situation, which can
be traced back primarily to regenerative raw materials and sub-areas in recycling. A
similarly strong foreign trade position can also be ascertained for sub-areas of water
treatment, even if this is overcompensated for in the whole picture of water
technologies by weaker positions in the other sub-areas.
145
From the indicator-based results and the conducted interviews, a number of further
field-specific insights can be derived which provide important hints for future
cooperation potentials:
• For the energy-relevant fields, it must be stated first of all that South Africa
possesses great reserves of coal – although of bad quality. This forms the basis for
domestic electricity production. South Africa is traditionally strong in coal
gasification. Thus, there are important links and good pre-conditions for the future
application of CCS. However, it is still open whether, and within which time horizons
CCS will become relevant there.
• The pre-conditions to set up recycling systems – among others, in the automobile
industry – are considered favourable in South Africa. In the Cleaner Production
Programme, South Africa has established so-called "Waste Minimisation Clubs".
They promote the exchange of information and experiences among companies,
focusing on preventive measures to avoid waste. Due to South Africa's
competences in sub-areas of recycling, this should be a worthwhile field for
cooperation. However, the framework conditions for recycling must be improved,
e. g. as far as environmental legislation, infrastructure and buyers are concerned.
• A great number of foreign vehicle manufacturers are present in the South African
market. The market volume is often overestimated, but is de facto relatively small.
The German firms employ the same technology as in the home country, i. e. for
example, water-based paint systems. South Africa depends to a great extent on
foreign countries for emission-reducing technologies, as there are few national
activities to foster competence-building.
• Several German-South African cooperations already exist in the area of coal
gasification, also in the R&D field. Because of the technical proximity to biomass
gasification, these cooperations can also represent starting points for cooperation in
the field of synthetic biofuels. From the South African perspective, this area bundles
especially favourable starting conditions, as the good knowledge base is supported
by already existing foreign trade experiences – Sasol is an internationally active
enterprise here – and simultaneously good links exist to the main focuses of the
national innovation strategy.
• The water field forms an independent focus of South Africa's national innovation
strategy. At the same time, South Africa demonstrates above-average capability in
the sub-area water treatment. If one considers the future challenges for South Africa
in the availability of water resources, it becomes clear that this cooperation field will
gain significance in the future and simultaneously offers good opportunities for
cooperation.
A specific problem for cooperations with South Africa is however seen in the country's
smaller sized market, compared with the other BRICS countries. South Africa played a
marginal role not only for the industrial enterprises questioned, but also for the
146
surveyed financial institutions. Directing interest towards South Africa will therefore be
a particular challenge to strengthening the cooperations.
6.6
Germany
The basic data on innovative capacity, but also the results of the framework conditions
survey have already highlighted the differences between Germany and the BRICS
countries. Then there are the differences in the levels of patent and world trade shares,
which confirm Germany's strong technological capability.
Among the six sustainability fields observed, Renewable Energies occupy a special
place in project-based research promotion, followed by the field Mobility and Logistics.
The three other selected technology fields – Energy Efficiency in Buildings, Water
Treatment Technologies and Material Efficiency – follow after a clear gap. Promotion
for research in the more socio-economically influenced questions on the other hand is
weaker by one order of magnitude.
Figure 6-6:
Specialisation of Germany in the Selected Sustainability Fields
Germany
100
EE+CCS
Buildings
Material
Water
0
Transport
Total
-100
-100
0
100
Fraunhofer ISI
147
An evaluation of the specialisation profile shows a surprisingly homogeneous picture
for Germany. In sum, all the technological fields demonstrate not only an aboveaverage patenting activity, but also an above-average export orientation. The latter
especially is to be stressed, as Germany is already an export world champion for all
goods. The only area where Germany's specialisation is below-average is in the socioeconomic questions on sustainability, measured by publication output. Here additional
need for action appears to be called for.
6.7
Conclusions for Cooperations
On the whole, the results attest Germany's outstanding starting position as a potential
technology supplier in cooperations with the BRICS countries. The sustainability fields
investigated do not form key areas of national competences and development
strategies in the BRICS states, but there are numerous linking points and – in particular
in China and India – a strong dynamic, which leads to the further growth of absorptive
capacities. In individual technology lines, good starting conditions for a further
development of the technologies in the BRICS countries and the achievement of
foreign trade successes are already visible today. However, all BRICS countries are
faced with the challenge that potential competence alone does not guarantee
environmental improvement and a strong position in foreign trade. Bottlenecks in the
area of demand for the technologies must be tackled by environmental policy
measures, and technological competences and environmental policy measures must
be coordinated simultaneously with each other.
In contrast to Germany, the technological capability within the BRICS countries is
clearly more heterogeneous. Strengths in sub-areas march hand-in-hand with
weaknesses in others. At the same time, in single sub-areas disparities are found in the
competences in the different elements of the innovation system, e. g. between the
research system, knowledge generation and implementation in economically
marketable products. The development of a consistent competence profile is among
the most urgent tasks for the BRICS countries.
The following conclusions can be drawn for the individual BRICS countries:
• In Brazil, a lead market strategy is most probably imaginable in connection with
biomass utilisation. However, this requires considerable upgrading of the
technological base and increased consideration of the requirements of a sustainable
utilisation. The technological base in the – traditionally strongly distinctive –
automobile sector is still very dependent on foreign know-how, on the other hand.
148
• In Russia, the knowledge base is (still) available, but at the same time an overall low
market implementation is to be observed. Potential strengths of Russia lie above all
in the energy- and raw-material-relevant technologies.
• India displays a great need for sustainable technologies, in particular for building up
its infrastructure. The possibilities to dock onto India's strengths however are limited,
as the priorities have already been very clearly placed in other areas. The strongest
connections are perceived to the areas of Renewable Energies and Material
Efficiency.
• China demonstrates great economic dynamics and is the dominant country within
the BRICS group of countries because of important industrial parameters. However,
there is no continuous specialisation in sustainability-relevant technologies. On the
other hand, there is a certain level of competences for all sustainability-relevant
technologies. A great challenge lies however in making greater use of the
competences towards sustainability.
• South Africa has a very good basis in some sub-areas and has strongly specialised
in knowledge accumulation in sustainability-relevant areas. On the other hand,
bottlenecks exist with human resources which considerably hinder the
implementation of these potentials.
For all BRICS countries it can be said that the significance of trade among themselves
is increasing. We may assume that this will also be the case in future with cooperations
in the science and technology area. The actor constellations for cooperations of this
kind should become essentially much more diverse and not limited to cooperations of
established industrial countries among themselves or of these countries with actors
from rapidly growing economies.
Simultaneously, it must be borne in mind that the German cooperation partners find
themselves in a certain conflict (of interest) in making cooperation decisions: on the
one hand, a cooperation opens up new markets and contributes to worldwide reduction
of environmental pollution, on the other hand, it also helps to turn potential competitors
into actual competitors on the world market more quickly. This conflict of interest –
repeatedly mentioned in the interviews – is however of varying significance to the
diverse cooperation constellations which could play a role in the formulation of
initiatives to strengthen technological cooperation. Therefore different starting points
emerge as to how policies can promote cooperations of this kind:
• In the areas where the competence of the BRICS countries is very weakly
developed, German partners can play a role as exporters of technologies. The
bottleneck factor here is often the demand for these kinds of technologies, as
relevant environmental regulations are missing or are not being enforced.
Supporting policy activities can be put in place here, firstly in the area of consultancy
and in the exchange of experiences in formulating environmental policy. Examples
149
are already found in the area of the Energy Feed-in Law for renewable energies.
Secondly, supporting regulations in financing are helpful, as the establishment of the
CDM mechanism showed, for example. Thirdly, measures which increase the
adaptive capability in the cooperation countries play an important role. The
exchange of experiences in setting up training programmes and the exchange of
qualified personnel, for example, belong in this category.
• Cooperations often take place in areas where the BRICS countries are still in the
process of building up own competences, but where considerable increases in
capacity and production for the world market – based on the know-how placed at
their disposal - have already taken place. Particularly in these cases, the above
described conflict of interest has a restrictive impact and many technology suppliers
are very hesitant to reveal their most up-to-date technological know-how. Especially
in small and medium-sized enterprises, uncertainty frequently exists about the best
way to guarantee the protection of intellectual property under these conditions. An
intensive offer of back-up and consulting about the problems, but also about the
existing possibilities to successfully enforce own property rights, would be helpful for
this target group.
• A third cooperation constellation can arise in those areas where both cooperating
countries possess considerable strengths. The rationale for collaboration can
consist here in gaining an additional edge over third party competitors in the world
market by mutually complementing existing strengths. This form of cooperation will
always very much depend on the chosen business strategies in each case.
However, in future they will be politically more in the limelight. The European Green
Book on the future direction of EU R&D policy takes as its theme not only the global
challenges in the area of a sustainable development as the object of an intensified
international collaboration of the EU. The Green Book explicitly also cites an already
achieved outstanding position of the partner as criterion for this type of collaboration
with the emerging economies.
Further points of departure for policy measures refer less to the technological areas
and actors from industry, but concern cooperation in the area of policy formulation. The
analysis of the research systems demonstrated the serious deficit that the BRICS
countries do not have an R&D policy which is specially formulated to deal with
sustainability themes. Instead, the sustainability-relevant themes are addressed as
components of sectorally defined priorities, at best. Processes for exchanging
experiences should be established, in which an appraisal can take place, together with
the participating actors, of how the sustainability topics are included in shaping
research priorities in each country and which findings are particularly relevant for a
mutual learning process. The same applies for environmental policy measures as a
central parameter which influences the demand for the sustainability technologies.
Besides the above mentioned advice on the introduction of environmental policy
measures, the question of particular relevance here is how to design innovation-friendly
150
environmental policy measures. As the systematic strengthening of the central
research and technology competences so crucial for a sustainable development is an
objective shared by several policy fields, the coordination of the individual policy fields
is of great importance. Thus the exchange of experiences about the possibilities and
difficulties of such policy coordination will also become a significant, cross-sectional
subject for cooperation.
From a strategic viewpoint it must be remembered that designing policy in such a
complex area requires monitoring of the particular strengths and weaknesses and the
changes which take place therein. In the area of innovation policy, this has led to the
development of systems such as the reports on technological capability. In
environmental policy, different approaches of environmental indicator systems are
used. It should therefore be analysed which periodically recurring information is
required to design a systematic policy to strengthen research and technology
competences aimed at sustainable development. Already today it is foreseeable that
besides information on shaping research policy towards sustainability themes and
developing technological capability in the relevant technologies, aggregated impact
evaluations of the environmental and infrastructure policies on technology development
are also required. The discussion which has sprung up recently about the development
of indexes to demonstrate the innovation-friendliness of policy interventions in an
aggregated form, should thus also gain relevance for strengthening research and
technology competence for a sustainable development.
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Annex
157
A Annex
A.1
Annex to Section 2.2
Table Annex A.1-1: Human Resources
Single Indicators
Source
Description
1.1 Availability
Availability of scientists and
engineers
WEF
Scientists and engineers in your country are (1 = non-existent or rare, 7
= widely available)
Qualified engineers
WEF
Qualified engineers are available in your labour market
Skilled labour
WEF
Skilled labour is readily available
1.2 Education and Further Training
Employee training
IMD
Employee training is a high priority in companies
The general approach of companies in your country to human
Extent of staff training
WEF
resources is
(1 = to invest little in training and employee development, 7 = to invest
heavily to attract, train and retain employees)
Local availability of specialised
research and training services
WEF
In your country, specialised research and training services are
(1 = not available, 7 = available from world class institutions)
158
Annex
Table Annex A.1-2: Technology Absorption
Single Indicators
Source
Description
2.1 Firm Networks
Technological cooperation
IMD
Technological cooperation is developed between companies
The quality of local suppliers in your country is (1 = poor as they are
Local supplier quality
WEF
inefficient and have little technological capabilities, 7 = very good as
they are internationally competitive and assist in new product and
process development)
Local suppliers in your country are (1 = largely non-existent, 7 =
Local supplier quantity
WEF
numerous and include the most important materials, components,
equipment, and services)
How is process equipment and machinery specific to your field obtained
Local availability of process
machinery
WEF
in your country? (1 = specialised process equipment and machinery are
almost always imported, 7 = specialised process equipment and
machinery are almost always locally available from capable suppliers)
2.2 Technology Transfer
Prevalence of foreign
technology licensing
Firm-level technology absorption
FDI and technology transfer
WEF
WEF
WEF
In your country, licensing of foreign technology is (1 = uncommon, 7 = a
common means of acquiring new technology)
Companies in your country are (1 = not able to absorb new technology,
7 = aggressive in absorbing new technology)
Foreign direct investment in your country (1 = brings little new
technology, 7 = is an important source of new technology)
2.3 Research and Development in the Company
Companies obtain technology (1 = exclusively from licensing or imitating
Capacity for innovation
WEF
foreign companies, 7 = by conducting formal research and pioneering
their own new products and processes)
Company spending on research
and development
Development and application
of technology
WEF
IMD
Companies in your country (1 = do not spend money on research and
development, 7 = spend heavily on research and development)
Development and application of technology are supported by the legal
environment
Annex
159
Table Annex A.1-3: Innovation-friendly Framework Conditions
Single Indicators
Source
Description
3.1 Start-up Regulations
Business start sub-index
Creation of firms
WEF
(-) Number of days required to start a business, 2005
WEF
(-) Number of procedures required to start a business, 2005
IMD
(-) Number of days to start a business
IMD
Creation of firms is supported by legislation
IMD
Funding for technological development is generally sufficient
IMD
Venture capital is easily available for business development
WEF
Entrepreneurs with innovative but risky projects can generally find
3.2 Innovation Financing
Funding for technological
development
Venture capital su-bindex
venture capital in your country (1 = not true, 7 = true)
Ease of access to loans
WEF
How easy is it to obtain a bank loan in your country with only a good
business plan and no collateral (1 = impossible, 7 = easy)
3.3 Innovation-friendly Demand
Government procurement of advanced technology products
Government purchase decisions for the procurement of advanced
WEF
technology products are (1 = based solely on price, 7 = based on
technical performance and innovativeness)
Buyers in your country are (1 = unsophisticated and make choices
Buyer sophistication
WEF
based on the lowest price, 7 = knowledgeable and demanding and buy
based on superior performance attributes)
Technological regulation
Presence of demanding
regulatory standards
IMD
Technological
regulation
supports
business
development
and
innovation
Standards on product/service quality, energy, and other regulations
WEF
(outside environmental regulations) in your country are (1 = lax or nonexistent, 7 = among the world’s most stringent)
160
Annex
Table Annex A.1-4: Environmental Protection
Single Indicators
Source
Health, safety & environmental
concerns
IMD
Description
Health, safety & environmental concerns are adequately addressed by
management
In your country, companies that harvest or process natural resources
Protection of ecosystems by
business
WEF
such as food, forest or fishery products (1 = rarely concern themselves
with the degradation of ecosystems, 7 = frequently take steps to
preserve the ecosystem they depend on)
Stringency of environmental
regulations
How stringent is your country's environmental regulation? (1 = lax
WEF
compared with that of most countries, 7 = among the world's most
stringent)
Figure Annex A.1-2: Education and
Further Training
Figure Annex A.1-1: Availability
Skilled labor
Local availability of specialized research and training services
Qualified engineers
Extent of staff training
Availability of scientists and engineers
South
Africa
China
Brazil
Russia
Employee training
Germany
India
Russia
China
Brazil
India
South
Africa
Germany
Annex
161
Figure Annex A.1-3: Networking
Local availability of process machinery
Figure Annex A.1-4: Technology
Transfer
FDI and technology transfer
Local supplier quantity
Firm-level technology absorption
Local supplier quality
Prevalence of foreign technology licensing
Technological cooperation
Russia
China
South
Brazil
India
Ge rmany
Russia
China
Brazil
Germany
Africa
South
India
Africa
Figure Annex A.1-5: R&D in Companies
Development and application of technology
Figure Annex A.1-6: Start-up
Regulations
Creation costs Subindex
Creation of firms
Company spending on research and development
Capacity for innovation
Russia
China
Brazil
South
India
Germany
Brazil
China
Germany Russia
South
India
Africa
Africa
Figure Annex A.1-7: Innovation Financing
Figure Annex A.1-8: Demand
Ease of access to loans
Presence of demanding regulatory standards
Risikokapital Subindex
Technological regulation
Funding for technological development
Buyer sophistication
Government procurement of advanced
technology products
Brazil
Russia
China
South
Africa
India
Germany
Russia
Brazil
China
South
Africa
India
Germany
162
Annex
A.2
Table Annex A.2-1: Consolidated German Direct Investments Abroad (end of year)
€ bn
All Countries (Status: 4/06)
2004
Shares
Increase (%)
2004 (%)
2002-2004
676,686
+2.0 %
BRICS States:
Brazil
5,796
24.5
+6.8 %
South Africa
3,581
15.2
+34.3 %
China (without Hongkong 1)
8,424
35.7
+30.1 %
India
2,041
8.6
+28.3 %
Russian Federation
3,773
16.0
+71.7 %
Sum BRICS States
23,615
100
+28.7 %
Share in % (all countries)
3.5
Source: Deutsche Bundesbank 2006a (direct and indirect direct investments)
Table Annex A.2-2: German Direct Investments Abroad 2003 to 2005 (€ bn; incl.
re-invested profits, capital export: -)
2003
All Countries
2004
2005
-5,470
-1,516
-36,695
Brazil
+0,408
-1,060
-0,894
South Africa
+0,223
-0,337
-0,275
PR China (without
Hongkong)
-1,558
-1,087
-2,982
India
-0,285
-0,285
-0,514
Russian Federation
+0,118
+0,643
+0,204
BRICS States
altogether
-1,094
-2,126
-4,461
BRICS States:
Source: Deutsche Bundesbank 2006b (Status: May 2006)
Annex
163
Table Annex A.2-3: Foreign Direct Investment in Germany 2003 to 2005 (€ bn;
incl. re-invested profits, capital import: +)
2003
All Countries
2004
2005
+25,873
-12,172
+26,264
Brazil
-0,070
+0,020
+0,052
South Africa
+0,111
+0,110
-0,177
PR China (without
Hongkong)
+0,308
+0,098
+0,137
India
-0,024
+0,009
+0,006
Russian Federation
+0,037
+0,130
+0,102
BRICS States altogether
+0,362
+0,367
+0,120
BRICS States:
Source: Deutsche Bundesbank 2006b (Status: May 2006)
Definitions and Methodological Remarks
Definition of the Deutsche Bundesbank: direct investiments are defined as financial relationships to
domestic and foreign enterprises in which the investor directly holds 10 % or more of the shares or voting
rights (incl. branches and operational facilities). As re-invested profits respectively losses are defined the
parts of the operating results which exceed the dividend outpayments. Included are shares in capital
including reserves, profits carried forward and losses carried forward, long-term credits as well as from
1996 also short-term finance loans and trade credits and other investments (e. g. all investments in real
property). Moreover since then raising loans by the direct investors with their daughter companies is
considered as repayment of the funds placed at their disposal by the direct investors (reverse flows).
Definitions UNCTAD (2006) and ECB (2006): "FDI components: equity capital, reinvested earnings and
intracompany loans".
Methodological Remarks: an international harmonisation of the FDI data is aspired to, on the basis of the
recommendations of the International Monetary Fund ("IMF Balance of Payments Manual") and the OECD
("Benchmark Definition of Foreign Direct Investment"). Nevertheless, the comparability of the data is not
always given. Main reasons are e. g. different FDI definitions (such as taking re-invested profits into
consideration), differences in classifications and geographical categorisations (OECD International Direct
Investment Yearbook).
164
Annex
A.3
Sustainability Research in the BRICS Countries:
Individual Country Profiles
A.3.1
Brazil
A.3.1.1
The Brazilian innovation system
Most scientific output in Brazil is produced by universities. In a recent bibliometric
overview on research institutions in Brazil, Glänzel et al. (2006a, 2006b) found that
public universities, i.e. federal and state universities, accounted for more than 80 % of
the country's total publications in the ISI database (SCI+SSCI) from 1991 to 2003.
20 % of the publications are authored by researchers affiliated with other institutions
from the public sector, mainly research institutes, hospitals, and national enterprises,
while only 5 % have authors from private sector institutions, of which private
universities play the most important part. During this period, Brazil strongly increased
the national output in scientific publications, raising from 1,766 in the year 1988 to
8,684 in 2003 in the ISI databases SCI and SSCI (NSB, 2006, see TableAnnex A.3-1).
TableAnnex A.3-1: Basic indicators of R&D resources in Brazil
Brazil
2000
2004
Population 1000
173,858
183,913
GDP (million current prices US-$)
601,732
603,973
GERD (million current PPP $)
GERD per capita (current PPP $)
GERD as a percentage of GDP
13,659
78.6
1.05
13,494
73.4
0.83
39.8
60.2
39.9
57.9
na
na
157,595
84,979
6,195
0.98
8,684
a
1.24
na
13.4
na
26.4
GERD financed by industry (%)
GERD financed by government (%)
Total R&D personnel (FTE)
Total researchers (FTE)
Scientific publications in SCI+SSCI
Scientific publications % SCI+SSCI
Foreign trade (billion US-$)
Exports of R&D-intensive goods to OECD
Imports of R&D-intensive goods from
OECD
a
a = 2003
OECD member countries until 1993, excludes Mexico, Czech Republic, Hungary, Poland, South Korea, Slovakia.
Source: Brazilian Federal Ministry for Science and Technology MCT; World Development Indicators, Worldbank 2006; Foreign trade: DIW Berlin.
Science Citation Index (SCI): US National Science Board: Science & Engineering Indicators 2006.
Annex
165
The most prolific universities in terms of international visible publications are the
University of São Paulo (USP) with 24 % of ISI publications, followed by State
University of Campinas (Unicamp), Federal University of Rio de Janeiro (UFRJ), State
University of São Paulo (UNESP), Federal University of Rio Grande do Sul and Federal
University of Minas Gerais (UFMG). The most prolific national research centres are the
Brazilian agricultural research corporation EMPRAPA and the Oswaldo Cruz
Foundation (medical research), followed by the Brazilian Center for Physical
Researches (CBPF) and the National Institute for Space Research (Glänzel et al.,
2006: 92).
However, this ranking may represent only a partial picture since most of the research
conducted in Brazil is published in national publications and often in Portuguese
language. A more comprehensive overview on publications in different fields of
knowledge is provided in TableAnnex A.3-2. According to these figures published by
the National Council for Science and Technology (CPNq), Brazilian science has a
pronounced specialization profile: 71.7 % of all national publications contribute to the
three fields of agricultural sciences, biological sciences and health sciences. 10.6 %
are other "hard sciences and earth sciences", and only 9 % pertain to engineering
sciences.
TableAnnex A.3-2: Scientific publications in Brazil from 2000 to 2003
Field
Number
of
Authors
Scientific articles
National
publications
International
publications
Published
books
Agricultural Sciences
6795
44277
12099
1944
Biological Sciences
7919
27680
31413
1209
Health Sciences
8700
46725
23899
2330
Hard Sciences and Earth
Sciences
Human Sciences
7883
17609
39587
1074
7874
25989
4407
1840
Applied Social Sciences
4625
15822
2440
1880
Engineering
8072
14856
18593
1244
Linguistics, Literature, Arts
2479
8519
1237
1635
46117
165571
105898
14618
Total **
Quelle: CNPq; ** some articles are assigned to more than one field.
One of the most important issues of the Brazilian innovation system is an insufficient
number of highly qualified scientists, especially with a natural science and engineering
background. Since the 1980s, important programmes for the expansion of university
education have been implemented. As a result, the output of Master degrees and PhDs
166
Annex
has been growing rapidly, from 3,865 Master degrees and 1,005 PhD degrees awarded
in 1987 to 27,648 and 8,094 respectively in 2003 (figures from MCT, cited after Glänzel
et al. 2006a und 2006b). Still, the number of engineering students remains
comparatively low (TableAnnex A.3-3). In the past, the completion of a PhD usually led
to a university career as there is still insufficient demand for scientists in Brazilian
industry.
TableAnnex A.3-3: Number of Researchers in Brazil 2004
Field
Biological Sciences
Health Sciences
Hard Sciences and Earth Sciences
Human Sciences
Engineering
Total
Researchers Researchers Students
(without
holding PhD
students)
9814
10600
15408
10181
15031
9444
13006
4243
77649
6968
8073
8956
8226
8187
4876
8430
2592
47973
11018
17494
15879
12563
17667
8259
17332
5094
102913
Researchers
in business
enterprises
4137
4426
5145
2386
1792
1204
3255
388
22733
Quelle: CNPq;
Brazilian innovation policy recognizes the need to enhance innovative performance of
the enterprise sector, which currently accounts for only 40 % of national R&D
expenditures. Automobile manufacture and other vehicle construction contribute the
largest share of private sector R&D. Almost 50 % of R&D expenditures in industry are
accounted for by international enterprises, yet contrary to some of the other BRICS
countries there is currently little expansion in foreign R&D investment activities
(Krawczyk et al. 2007).
The development of R&D intensity, measured as the percentage of GERD in GDP,
gives a mixed impression: The strong increase between 1994 and 2001, when R&D
intensity reached more than 1 %, has been followed by a decrease (to 1999 level) in
2004 (0.83 %) (Krawczyk et al., 2007). However, during the 1990s research funding
has been characterized by strong instabilities. More recently the situation somewhat
improved through the introduction of "sectoral funds" in 2001, research money raised
through special taxes on technology-intensive and natural resource exploiting sectors
(cf.Leite).
Annex
A.3.1.2
167
Core themes of sustainability research in Brazil
The Brazilian innovation strategy has its basic features exposed in the main national
planning document, Plano Plurianual de Ação – PPA 2004-2007. More detailed views
can be also found in the Industrial, Technology and Foreign Trade principles document,
from the Ministry of Development, Industry and Trade and the Ministry of Science and
Technology, and in the Strategic Plan from the Ministry of Science and Technology.
These documents have not adopted any detailed, separated and integrated vision of
sustainability research and technology, but they deal directly with pertinent thematic
fields.
Renewable energy and CO2-neutral fossil energies
Brazil’s energy supply has several important distinguishing aspects (World Bank,
UNEP/URC, 2006):
• Electricity supply is dominated by hydroelectric generation. On the interconnected
national grid about 90 % of generation is hydro.
• There is substantial commercial bioenergy consumption. This is dominated by fuel
wood and wood-based fuels such as charcoal and black liquor from the large pulp
industry, as well as sugar cane residues and alcohol.
• Coal use is small and is restricted to a few industries – especially iron and steel.
Most coal is imported.
• Domestic crude oil production is almost in balance with consumption - Brazil
attained net self-sufficiency in early 2006, though there is substantial international
trade in oil derivatives.
• Natural gas use is still relatively small but is growing rapidly.
The priorities of the national innovation strategies in Brazil with regard to sustainable
innovation research in renewable energies are almost all related to biomass. For liquid
fuels production, the priorities are related to developing new varieties of sugar cane for
ethanol production with higher yields and more resistant to diseases, weather
conditions etc; moving forward with ethanol production from cellulosic biomass;
improving the economics of bio-diesel production from different crops for stationary
power production and for automotive vehicles; resolving the stabilization problems of
mixing bio-diesel from different crops with mineral diesel; and moving forward with the
H-bio process, which consists of introducing vegetable oils into oil refineries for biodiesel production, which is already done by Petrobras as a pilot project. For power
production, the priorities are related to improving the economics of sugar cane
gasification for power generation in combined-cycle gas turbines. In addition, for power
production some addition innovation research is needed how to integrate wind power
generation into the national interconnected grid.
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Annex
Current R&D strengths are related to:
• Hydropower of great, average and small port: installed capacity: 80 %;
• Biomass: more of 20 % of energetic balance
• Alcohol and biofuel: intensive use of sugar cane alcohol
• Residues biomass (bagace): use for heat and energy generation
• Energy generation of wood residue
• Solid biofuel on steel industry
• Solar collector: several groups of research in solar collectors, products certification
and area of labelling
• Photovoltaics module produce – national technology: CB-Solar
PROCEL is a national programme to combat the waste of electricity, administered by
Eletrobrás, the federal holding company in the power sector. In the branch PROCELEDIFICA, Eletrobrás collaborates with 12 universities in R&D projects on thermal
comfort and energy efficiency. Among other topics, research topics include passive
cooling (bioclimatology), building simulation, thermal comfort, measurement of thermal
properties of building components.
[http://www.labeee.ufsc.br/ eletrobras/laboratorios.html]
Government programmes have achieved significant energy efficiency gains in some
areas, for example with appliance labeling programmes and in public lighting. (World
Bank, UNEP/URC, 2006).
Water supply and waste water systems
The main policy documents which relate to water supplies and sewage systems are the
Industrial, Technological and Foreign Trade Policy from the Ministry of Development,
Industry and Commerce – PITCE/MDIC, the Water Resources National Plan from the
Ministry of Environment and National Plan to Fight Water Losses and Modernization of
Sanitation System Program from the Ministry of Cities. All of them have strong links
with the energy sector in Brazil, due to the predominance of hydropower in the
Brazilian energy mix. The Centro de Gestão e Estudos Estratégicos carried out an
assessment of research and technology needs in water resource management (CGEE,
2005: Prospecção Technológica em Recursons hídricos).
After the creation of the sectoral fund CT-HIDRO (R&D in water resources and water
management) (cf. A.3.1.3, chapter sectoral funds) a framework of action was
Annex
169
developed in 2001 considering the main societal needs in water resource management
and taking into account existing investments in R&D in Brazil. According to this action
framework, the following stand out as priority areas for R&D: (a) Integrated urban water
management, especially research dealing with integration of water supply, sanitation,
drainage & flood plains and total solids; (b) knowledge of the main Brazilian freshwater
ecosystems and sustainability; (c) Water resource management at basin level,
especially institutional and technical arrangements; (d) climate and environmental
variability and forecasting in water systems; (e) modern equipments for monitoring
water system, among other main aspects.
Especially the integrated urban water management research has manifold connections
to the further development of technologies. The following challenges are emphasized:
(a) site planning and environmental certification for sustainbility cities; (b) water reuse;
(c) innovative solutions for waste treatment in large cities (52 % of Brazilian population
are in cities with more than 100,000 inhabitants, and 27 % above 500,000 inhabitants
where it is the smallest coverage of waste treatment); (d) urban drainage and total
solids management and implementation of the Integrated Urban Waters Plan.
As Prof. Tucci underlined in his questionnaire, a decisive difference between the case
of Brazil and developed countries is that in Brazil the rapid urbanization over the last
decades (50 % of urban population in 1970 to 83 % in 2000) generates floods and
environmental impacts in urban drainage which are not common in Europe. Urban
drainage and floods are serious problems which affect all countries of South America,
and are going to affect Central America, Asia and Africa, mainly due to the lack of
source control of the urbanization impacts, together with the lack of waste treatment
which has generated a cycle of contamination which in the end contaminates the water
supply basins.
Brazilian experts listed the following areas as R&D strengths in the field of water supply
and waste water systems:
• Energy efficiency in water supply and waste water systems;
• Technologies for removal of nutrients (phosphorus and nitrogen);
• Lagoas de Estabilização (stabilization lagoons);
• Reactors: aerobic and anaerobic;
• According to CGEE, extensive assessments of the water supply system have taken
place in recent years, yet little progress is made in implementation.
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Annex
Material efficiency
Brazil has strengths in the production of renewable resources as production input. This
is also reflected in the research priorities. Especially Bioplastics are mentioned as
relevant FuE-topics. Other areas are recycling of contaminated packages and the use
of renewable materials.
The document which comes closest to representing an innovation strategy for the
transport sector is a proposal by the Ministry of science and technology for the sectoral
funds CT-TRANSPORT (R&D in building and construction, road works, materials,
logistics, equipment, software for conveyance of passengers and goods). This
document also makes reference to environmental requirements and sustainability of
transport development. In total there are three sectoral funds in the field of mobility and
logistics, with the CT-AERO (R&D in aeronautics) and CT-AQUAVIÁRIO (R&D in water
transport, materials, engineering, maintenance and repair of waterways). Aviation is an
important R&D specialization, with the national champion Embraer (Empresa Brasileira
de Aeronáutica S.A.) (civil and military aviation).
The strategy for the sectoral funds lists the following R&D topics:
• Traffic flow and safety with the aim to reduce externalities
• Development and application of logistic methods and systems
• Management of transport systems
• Development of new technologies for transport infrastructure and equipment
- development and application of intelligent transport systems
- development, maintenance and diffusion of transport information systems
- use of recycled materials for roads
• Improvement of existing infrastructure through introduction of new technologies for
control and maintenance
- study on the current transport system management and externalities
- development of processes for better management of transport infrastructure
- systems for operational management of transport equipment
• Studies on the technological development of water transport, especially in the North
of Brazil
• Support of education and professional training for transport R&D
• Reduction of negative environmental impacts of traffic
Annex
171
• Improvement of management processes in transport enterprises
• Development of prediction and simulation models for transport planning
• Comparative studies on institutional and regulatory experiences, on national and
international level
• Development and evaluation of technologies and equipment aimed to improve
safety in the transport sector.
Upon request of the CNPq a document on priorities and orientations of Brazilian
research in the transport sector was produced by ANPET, the national association for
research and teaching in transport which brings together 15 universities specializing in
transport research. ANPET also publishes the Brazilian journal "Transportes"
[www.anpet.org.br].
Socio-economic research on innovations for sustainability
Detailed information on priorities has not been provided by the country experts. The
publication analysis in the report revealed that 2.8 % of Brazil’s SSCI publications can
be attributed to the socio-economic research on innovations for sustainability.
A.3.1.3
Research funding agencies
Ministry of Science and Technology (MCT)
The ministry is in charge of national S&T policy. The funding from MCT is granted
through Cnpq and FINEP and it comes mainly from the sectoral funds.
Sectoral funds
In 2001, Brazil created a scheme under which funding for research is raised and
allocated through so-called "sectoral funds". Money is raised through a tax on
companies working in technology-intensive and natural-resource exploiting sectors
such as biotechnology, energy, and fuel, and subsequently used to fund research in
this area. The instrument of sectoral funds was introduced to overcome instabilities in
government spending on R&D which characterized the 1990s, and to inject large
amounts of money into the Brazilian research and innovation system. For this reason,
the money cannot be spent for other purposes than investments in science and
technology. In 2003, 1.2 billion reais (US-$ 413 million) were raised. However, contrary
to their initial purpose, and despite opposition by scientific communities, large portions
of the sectoral budgets have been subsequently retained in treasury as national
contingency reserves (Leite, 2005). In 2005, R&D expenditures of 768.4 million reais
(US-$ 263 million) were made in connection with sectoral funds (figures from FINEP).
172
Annex
Today there are 16 funds of which 14 are tied to specific sectors, while two funds are
devoted to overarching mandates such as improvement of public research
infrastructure and fostering interaction between public research and industry. For
instance, the funding for the CT-Energ comes from 0.4 % of the liquid budget
(faturamento liquido) of the electric utilities. In 2006, there were R$ 150 million
available (income from utilities) but due to government budget cuts
(contingenciamento), only R$75 million (US-$ million 25.6) were applied. Water
Resource Fund receives 0.24 % of the energy budget of a hydropower due to
compensation from flooded area. It represents about US $ 20 millions a year. This fund
is managed by MCT in a committee with Water Agency, Water Secretary, Energy
Secretary, FINEP, CNPq and representatives from private and scientifical community.
The following sectoral funds correspond to the selected thematic fields of this study:
1.
CT-ENERG: R&D in the energy sector, particularly energy efficiency of end use.
2.
CT-PETRO: R&D in the oil and gas sector.
3.
CT-BIOTEC: R&D in biotechnology
4.
CT-HIDRO: R&D in water resources and water management.
5.
CT-AERO: R&D in aeronautics.
6.
CT-AQUAVIÁRIO: R&D in water transport, materials, engineering, maintenance
and repair of waterways.
7.
CT-TRANSPORT: R&D in building and construction, road works, materials,
logistics, equipment, software for conveyance of passengers and goods.
National Council for Scientific and Technological Development (CNPq)
CNPq is a foundation linked to the Ministry of Science and Technology. It is one of the
major public institutions for the support of STI, contributing directly to the training of
researchers – masters, doctors and specialists – in the various fields of knowledge. It
supports research through individual grants or research projects (TableAnnex A.3-4).
Detailed figures on thematic fields of sustainable innovation are not available, but the
total category of engineering research amounts to only 14 % of all funded projects in
2006.
Annex
173
TableAnnex A.3-4: Research projects supported by CNPq in 2006
Science Field
Ciências
Agrárias
Ciências
Biológicas
Ciências da
Saúde
Ciências Exatas
e da Terra
Ciências
Humanas
Ciências Sociais
Aplicadas
Engenharias
Lingüistica,
Letras e Artes
Não informado,
Project
561
20,719,861
Total
%
(US$)
Total
6,811,263 11.8
Biological Sciences
781
40,875,860
13,436,804 23.2
Health Sciences
710
40,412,137
13,284,727 23.0
Hard Sciences and Earth
Sciences
Human Sciences
450
23,234,761
7,637,989 13.2
639
11,656,226
3,831,764
6.6
399
6,634,636
2,181,011
3.8
Engineering
604
88
24,898,172
969,938
97
4329
6,614,905
176,016,495
No information
Total
Total (R$)
8,184,804 14.1
318,849 0.6
2,174,525
57,861,735
3.8
100
Source: CNPq
Research and Projects Financing – Brazilian Innovation Agency (FINEP)
FINEP is the main agency for funding research in the business enterprise sector.
FINEP is also part of the Ministry of Science and Technology. It offers grants (i.e. nonreimbursable funds) and loans, providing support throughout every stage of the
innovation process - from basic research to market development and incubation of
high-tech firms. FINEP supports a programme of research in basic sewage treatment
(PROSAB - Programa de Pesquisas em Saneamento Básico). Figures on thematic
fields of sustainable innovation were unavailable.
The State of São Paulo Research Foundation (FAPESP)
Many Brazilian states have a foundation for fostering scientific and technological
research. FAPESP was the first to be established (1962) and is the model for the rest
of the country. It is a trend-setter and policymaker, with an importance that rivals the
federal CNPq. Scholarships and grants are the traditional means offered by FAPESP to
students and researchers from the state of Sao Paulo for fostering scientific and
technological research in all areas of knowledge (Global Watch Service).
Total R&D expenditures by FAPESP in 2006: R$ 466,734,899.06.
174
Annex
A.3.1.4
Leading research organisations
Based on the responses from the country experts, the following leading research
organizations were identified:
1.
− Federal University of Rio de Janeiro (UFRJ)/Coordenação dos Programas
de Pós-graduação de Engenharia (COPPE):
o Center of Integrated Studies on Environment and Climate Changes
(CentroClima)
o Energy Planning Program (PPE)
o Laboratório Interdisciplinar de Meio Ambiente (Lima)
o Virtual Institute of Global Changes (IVIG)
− University of São Paulo (USP):
o Advanced Study Institutes (IEA)
o Electrotechnical Energy Institute (IEE) (photovoltaics)
o National Center of Biomass (CenBio)
o Engineering School Sao Carlos
− Federal University of Itajubá:
o Center of Excellency in Natural resources and Energy (Cerne)
o National Center of Small Hidro (CRPCH)
o Nucleus of thermaleletric and distributed generation studies (NEST)
− State University of Campinas
o Interdisciplinary Nucleus of Energy Planning (Nipe)
o Nucleus for supporting renewable energy projects
o Faculty of Mechanical Engineering (FEM) (renewables)
o Institute of Physics (IF)
− Federal University of Pernambuco/Brasilian Center of Wind Energy (CBEE)
o Group of Energy Studies (Green solar)
o The Brazilian Reference Center for Solar and Wind Energy
(Cresesb)
o Federal University of Pará/Energy Biomass and Environment Group
(EBMA)
− Catholic University of Rio Grande do Sul/Brazilian centre for Fotovoltaica
Solar Energy Development (CB Solar)
− Ceará/Alternative Energies Center (CENEA)
− Federal University Paraná/Group of Studies and Development of Energy
Alternatives (GEDAE)
− Centro de Tecnologia Canavieira (sugar cane)
− Instituto Agronômicl de Campinas (biomass and sugar cane)
− Escola Superior de Agricultura Luis de Queiroz (biomass and sugar cane)
− Embrapa (Agricultural R&D governmental institution) major research
institution in the area of biomass.
− Petrobras Research Center (CENPES/PETROBRAS)
− Eletrobras Research Center (CEPEL) (Photovoltaics)
Annex
175
2.
− Federal University of São Carlos (UFSC)/Laboratory of energetic efficiency
in buildings (Labeee)
− University of São Paulo
o Institute of Technological Researches (IPT)
o Architecture Faculty
− Federal University of Alagoas/Laboratory on comfort environmental
(LAbCOn)
− Brazilian Association of Energy Conservation. Service Companies
(ABESCO)
− Energetic efficiency in buildings (PROCEL-EDIFICA/ELETROBRAS)
− Application Center of Efficient Technology (CATE/CEPEL/MME)
− Post-Graduate Studies Program in Architecture (PROARQ/FAU/UFRJ)
3.
− Hidraulic Research Institute/Federal University of Rio Grande do Sul –
IPH/UFRGS
− Hidraulic Technological Foundation Centre/State University of São Paulo –
FCTH/USP
− Programme for Environmental Technology and Hidric Resources/
Department of Civil Engineer/University of Brasília – DE/UnB
− Programme of Environmental Planning and Managment/Catholic University
of Brasília – PPGA/UCB
− Programme of Post-Graduation in Civil and Environmental Engineer/
Federal University of Campina Grande – UFCG
− Federal University of Minas Gerais (UFMG)
− Federal University of Rio de Janeiro (COPPE/UFRJ)
4.
Material efficiency
o Metallurgical and Materials Engineering Program at A. L. Coimbra
Institute Graduate School and Research in Engineering
− Federal University of São Carlos (UFSCAR)
− Federal University of Santa Catarina (UFSC)
− State University of São Paulo (USP)
− State University of Campinas (Unicamp)
− Federal University of Minas Gerais (UFMG)
− Technological Foundation Centre of Minas Gerais (CETEC)
− Technological Research Institute of São Paulo (IPT)
− National Metrology Institute (Inmetro)
− Aeronautics Technological Center (CTA)
− Pontific Catholic University of Rio de Janeiro (PUC-RJ)
− Centre for Mineral Technological (CETEM)
− Federal University of Rio Grande do Sul (UFRGS)
176
Annex
5.
o Transport Engineering Program at A. L. Coimbra Institute
o Department of Geotechnology and Transport of the Faculty for Civil
Engineering, Architecture and Urbanism
− State University of São Paulo (USP)
o Transport Engineering Program at Polytechnic School
− Petrobras Research Center (CENPES/PETROBRAS)
− National Technology Institute (INT)
− Natonal Space Research Institute (INPE)
− Military Engineer Institute (IME)
− Aeronautics Technological Center (CTA)
6.
Socio-economic research on sustainable innovation
− Applied Economic Research Institue (Ipea) [www.ipea.gov.br]
− Economic Research Institute/State University of São Paulo (PROCAM-IPEUSP)
− Centre for Sustainable Development/University of Brasília (CDS/UnB)
[www.unbcds.pro.br]
− Nucleus of High Level Studies of the Amazon Region/Federal University of
Pará (NAEA/UFPA)
− Federal University of Santa Catarina (UFSC)
A.3.2
Russia
A.3.2.1
The Russian innovation system
The research system in Russia continues to be stamped by institutional heritages from
Soviet time, when R&D effort was organised in the form of the following independent
pyramids: military, research institutes of the Academy of Sciences, Ministries' institutes,
university R&D, industrial R&D departments. About 50 % of R&D efforts were devoted
to military applications, and the remainder were increasingly concentrated in the
research institutes of the Academy of Sciences and Ministries. Only a few of the largest
industrial enterprises had internal R&D departments. Universities were generally
discouraged from developing their own R&D activities, with the exception of a few
leading technical universities. Centralised planning allowed more and more resources
to be devoted to R&D with little emphasis on economic return (Global Watch Service).
Today, the bulk of R&D is still carried out in the academies and in the 52 state research
centres and financed by government. According to a recent OECD study "the public
Annex
177
R&D system remains highly fragmented (in terms of funding and steering
mechanisms), with the risk of duplication without synergies' (…) overloaded with
developmental activities as opposed to fundamental research or ambitious R&D; and
poorly connected to both the education and the market-driven production systems"
(OECD, 2005). According to the same authors, Russia's innovation performance
remains strikingly modest compared to what could be expected in light of its
accumulated stock of human capital with scientific skills and engineering know-how,
and given its overall investment in R&D.
After a collapse in the initial stage of the economic transformation, the total R&D
expenditures of Russia have grown steadily since 1993, but they remain far below most
OECD countries in terms of % of GDP (TableAnnex A.3-1). The number of R&D
personnel declined dramatically between 1989 and 1998 and has been stabilizing on a
lower level since, with a slight decline in the most recent years. Many capable
researchers have emigrated (brain-drain), although no precise numbers exist, and an
equally severe problem consists in the declining influx of young researchers due to low
salaries in state funded research organisations (Allakhverdov, Pokrovsky 2006).
Technology and innovation policy is yet no coherent policy field in Russia. The state
funding of R&D results from a combination of budgetary channels and programmes
whose objectives and priorities are set independently. Nonetheless, some recent
reforms are likely to have a major impact on the institutional landscape of public
science. In December 2006, the Russian government took control of the formerly
autonomous Russian Academy of Sciences, including control over RAS' senior
appointments, activities, budget and future structure. It is expected that the Russian
government will restructure the Academy (438 institutes in 2004), retaining merely 100200 "strategically important" institutions, while closing down or privatizing the majority
of less competitive and applied research institutes (Lachinov, 2006).
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Annex
TableAnnex A.3-5: Basic indicators of R&D resources in the Russian Federation
Russian Federation
Population 1000
GDP (million current prizes US-$)
2000
146,303
259,709
2004
143,850
581,447
GERD (million current PPP US-$)
10,898.6
74.5
1.05
16,669.7
115.9
1.15
32.9
54.8
12
31.1
60.6
7.6
1,007,257
506,420
951,569
477,647
65
18,271
2.9
56
a
15,782
a
2.3
na
na
na
na
4.6
34.0
0.8
11.9
GERD financed by non-budget
public funds and industry (%)
GERD financed by abroad (%)
Total researchers (FTE)*
Triadic patent families (priority year)
Imports of R&D-intensive goods from OECD
Exports of R&D-intensive goods to Germany
Germany
a
a = 2003
Source: OECD Main Science and Technology Indicators 2006; World Development Indicators, Worldbank 2006. Foreign trade: DIW Berlin. Science
Citation Index (SCI): US National Science Board: Science & Engineering Indicators 2006.
*
Goskomstat has lower numbers of total researchers: 409300 in 2003, of which only 102451 or 25% count as highly qualified researchers, i.e.
candidates or doctors in science (cited after OECD, 2005: 33).
Another important development is the creation of "special economic zones" (SEZ) in
some of Russia's huge formerly closed science cities. The objective is to commercialize
scientific and technological capabilities and to diversify the Russian economy away
from oil toward more innovative sectors. In 2005, four locations were chosen as centres
for technology research, including the science city of Dubna and Zelenograd, both
close to Moscow, as well as St Petersburg and the Siberian City of Tomsk. Dubna is
expected to specilize in IT and nuclear physics, Zelenograd in microelectronics, St.
Petersburg in IT and analytical instrumentation, while the focus of Tomsk is on
advanced materials and nanotechnology. Two other locations in Yelabuga, Tatarstan
and the Lipetsk region in central Russia were chosen as special zones for
manufacturing. Tax breaks and other incentives are designed to attract company
investments. The federal budget for 2006 includes 8 billion roubles (277.9 million US-$)
Annex
179
for investments in infrastructure inside the special zones, and another 8 billion roubles
are expected to come from the private sector. Companies admitted to the special
zones are required to invest at least 10 million € in the zones over 20 years (Lachinov,
2005).
A.3.2.2
Core themes of sustainability research in the Russian
Federation
The "strategy to develop science and innovations in the Russian Federation until 2015"
analyzes a number of problems that Russian R&D sector is currently facing and that
are affecting Russian position in an international scientific area. Eight priority directions
were determined and approved by the President of the Russian Federation in May
2006:
• National Security and Terrorism Counteraction
• Life Systems (biomedicine and bioengineering)
• Nanosystems and nanomaterials development
• Information and communication systems
• Perspective military equipment and armament
• Rational use of natural resources
• Transportation, aviation and space systems
• Energy technologies and energy efficiency
A new Federal Programme on R&D priority directions for the period from 2007 to 2012
has adopted the same directions and has been already approved by the Government
on 06.07.2006 (cf. TableAnnex A.3-6). The Ministry of Science and Education created a
Scientific Coordination Committee which is to coordinate the process of the changes
and corrections of the R&D priority directions every 2-4 years.
One of the potential directions proposed in the Strategy 2015 is defined as “future
energy sources and energy saving technologies” and is based on the priority R&D
direction "Energy technologies and energy efficiency". Future energy technologies are
understood to mean use of biofuels, renewable energy sources, hydrogen and nuclear
energy. A sub-programme for accelerated atomic energy development could become
one of the key elements of such programme. The responsible agencies are: Ministry of
Industry and Energy, Ministry of Science and Education, Federal Agency for Atomic
Energy (Rosatom). In terms of the sustainable development the Strategy 2015 does
not make any explicit statement.
180
Annex
In 2002, the Russian government launched a set of 12 "megaprojects" as a new
instrument to mobilize knowledge of the public research sector for industrial
competitiveness. Each megaproject aims to complete a whole innovation cycle of
applied research, development, utilisation and market launch. Among the 12 projects
that were selected from a much larger number of applications, five are related to the
thematic fields of this study: Project 7 aims to develop "highly effective steam gas
power installations of more than 200 MWatt (budget funding: RUB 150 million, extra
budgetary: 318.7 million). Project 11 treats the "development and fine-tuning of
technological, organisational and financial solutions to improve the efficency of the
heating supply in Russia (budget funding: RUB 250 million, extra budgetary: 1800
million). Project 12 focuses on "raising the effectiveness of solid waste processing"
(budget funding: RUB 400 million, extra budgetary 427.5 million). Finally, project 10
treats the production of competitive diesel engines and project 5 aims at catalysts and
catalytic technologies for the production of motor fuels. There is as yet no information
available on the success of these megaprojects (OECD, 2005).
Institutions for environmental protection in the Russian Federation are weak and there
is little enforcement of existing regulation. In 2000, the restructuring of federal
environmental management responsibilities led to the elimination of the State
Committee for Environmental Protection (SEC) and the absorption of its responsibilities
into the Ministry of Natural Resources. According to a study by the World Bank, this
was the second major "downsizing" of Federation-level environmental functions, since
in 1997 the SEC replaced the former Ministry of Environment which had been
established in 1991. According to the same authors, widespread and vehement
opposition was raised at the time by environmental experts and non-governmental
groups "over integration of environmental protection responsibilities into a Ministry
whose primary goal was the development of the mining, oil and gas, and forestry
sectors" (World Bank, 2004). These reforms were accompanied by a shift in the basic
functions of compliance and enforcement, leading to a dramatic decrease in the
number of Federation-level inspectors, inspections carried out and environmental fees
collected.
A.3.2.3
Ministry for Economic Development and Trade
The Ministry for Economic Development and Trade is the most important R&D funding
agency for technology development which is pertinent to sustainable development. It
allocates resources to the "federal goal-oriented programs". These programmes target
economic development objectives, including the development of the "national
technology basis". A number of these thematic or sectoral programmes are relevant for
Annex
181
sustainable development, and some of the development and modernization oriented
programmes also contain important amounts of R&D funding (see TableAnnex A.3-6).
The federal programmes "Research and development in priority areas of the scientificindustrial complex" and "Integration of science and university education" are
administered by the Federal Agency for Research and Innovation (Ros-Nauka), the
Federal Agency for Education (Ros-Obrasovanije), and in part directly by the
Lomonosov Moscow State University. The priority areas of the former programme are
described in section A.3.2.2.
TableAnnex A.3-6: R&D expenditures in Russian federal programmes (US-$ million)
Federal goal-oriented
programme
Period
Federal budget
Budget
by
sponsors*
all
Total
47.1
R&D
11.1
Total
15,955.6
R&D
101.0
Energy efficient economy
2002-2005,
perspective
until 2010
Energy efficient buildings
2002-2010
3.0
0.4
269.4
13.4
Water resources
2002-2010
8.5
0.2
109.0
0.2
Waste (Recycling)
2002-2010
1.7
0.4
3.1
0.4
Modernization of the transport
system
2002-2010
1,828.5
1.1
11,759.4
74.5
National technology basis
(including new materials)
2002-2006
52.6
42.0
Ecology and natural resources
2002-2010
33.8
3.9
745.4
9.4
Integration of science and
university education
2002-2006
9.0
6.7
14.5
7.7
R&D in priority areas of the
scientific-industrial complex
2002-2006
517.1
485.0
687.7
655.6
R&D in priority areas of the
scientific-industrial complex
2007-2012
4,644.7
6,763.8
* Includes federal budget, regional government budgets and contributions by large companies.
Source: Ministry for Economic Development and Trade [http://faip.vpk.ru/cgi-bin/uis/faip.cgi/G1];
2004 exchange rates
Ministry for Education and Research (MES)
The Ministry for Education and Research plays no significant role in allocating research
funds to environmental innovation.
182
Annex
Ministry for Industry and Energy (MinPromEnergo)
The huge Ministry for Industry and Energy is a merger of several former Ministries and
Federal Agencies and has basically taken over responsibility for the whole defence and
civil industry. In 2003, MinPromEnergo produced an energy strategy for Russia until
2020 and in 2006 a new five-year plan for sustainable energy development. It proposes
a basic scenario that would meet power demand in 2015 in the amount of 1426 billion
kwh, and, as a probable scenario, 1600 billion kwh. Among the measures planned is a
gradual increase of the internal gas price that would bring internal revenues equal to
those from export by 2011. MinPromEnergo created an investment fund to support
innovation projects. The ministry sustains an internal research institute for energy
strategy (www.energystrategy.ru).
Russian Foundation for Basic Research (RFBR)
The Russian Foundation for Basic research was created to support funding of R&D on
a competitive basis. Among the priority research areas the following relate to
sustainable development: New materials and chemical products, transport with
alternative energy sources, ecology and rational use of nature, hydrogen energy,
renewable energies. From 2001-2006 RFBR supported an annual conference on
"Global Problems of Sustainable Development and Modern Civilization" in Moscow.
TableAnnex A.3-7: Growth of RFBR funds 2000-2007
2000
2004
2005
2006
2007
RUB million
995.62
2386.60
3360.00
4283.24
5340.00
US-$ million
34.55
82.83
116.61
148.65
185.33
2004 exchange rates
Other funding agencies for sustainability research
The International Science and Technology Centre (ISTC) was established by
international agreement in 1992 as a non-proliferation programme. The ISTC
coordinates the efforts of numerous governments, international organisations, and
private sector industries, providing weapons scientists from Russia and the former
Soviet Union new opportunities in international partnership. In 2005, ISTC funded 163
new projects in the amount of $51 million. 14 % of the ongoing research was dedicated
to the environment. Recently, ISTC started a "Fuel Cell Targeted Initiative" which seeks
to focus ISTC-related activities on the final goal of development, manufacture and
testing of a pilot power plant of five-kilowatt capacity based on fuel cell technology. This
pilot power plant will then be used as a production prototype for commercialization. The
Annex
183
selection of fuel cell technology for the first ISTC Targeted Initiative was based on the
availability of skilled teams of scientists in closed science cities, the international
importance of this technology, and an ISTC portfolio of more than 40 research projects
related to fuel cell projects (ISTC annual report 2005).
The Institute for Sustainable Communities (ISC) is a non-profit U.S. organization
operating in Russia through its representative office in Moscow. It created the nonprofit Russian foundation "Fund for Sustainable Development" (FSD) which describes
itself as "one of the few Russian organizations that combine a strong reputation for
transparency and inclusiveness in grant making with a focus on environment and
sustainable development." FSD works in the areas of energy efficiency technologies
and implementation, management of natural resources and environmental health, but
does not specifically target R&D projects. The mission of FSD is to enhance multisector interaction in fulfilling specific projects aimed at sustainable regional and
community development.
The non-governmental Ecological Vernadsky Foundation was founded in 1995 on the
initiative of a number of Russian fuel and energy complex enterprises, Russian
Academy of Medical Sciences, public and government organizations with the objective
to "formulate and realize the sustainable development concept". The foundation
regularly convenes conferences, e.g. on "Innovation technologies of the 21st century
for the rational use of nature, ecology and sustainable development" in 2004. The
Vernadsky Foundation also supports research through scholarships, awards or grants.
Examples are support for the chair of sustainable innovation development at Dubna
International University, Moscow; support for a research project on "Ecological aspects
of heat energy industry". The budget is 1.55 Mio RUB per year (53.800 US-$).
184
Annex
A.3.2.4
1.
Moscow Power Engineering Institute (Technical University) MPEI, Moscow
The largest Russian university and scientific centre in the field of power
engineering, one of the leading universities in the field of power engineering,
electrical engineering, electronics and computer sciences. Ca. 10,000 students,
ca. 500 PhD students.
Energy research institute of the Russian Academy of Sciences ERIRAS,
Moscow
Main research areas: electrical engineering, FuE for gas, petrol and coal industries
The International Science and Technology Centre ISTC established a "Fuel
Cell Targeted Initiative" in 2005 which seeks to focus ISTC-related activities on
the final goal of development, manufacture and testing of a pilot power plant of
five-kilowatt capacity based on fuel cell technology.
Norilsk Nickel Corporation and Russian Academy of Sciences
In 2004, the Norilsk Nickel Corporation invested 30 million US-$ in a collaboration with the Russian Academy of Sciences for the development of fuel cells.
This was the largest agreement of this type so far. After one year, the company
retreated due to dissatisfaction with the bureaucracy and ineffective management of RAS.
2.
Academic centre for energy efficient heat engineering (ACHEET), St. Petersburg
Energy efficiency in heat engineering and optimization of technical processes,
main research areas: mathematical modeling and energy saving programmes
for regional government agencies and firms
3.
Institute of aquatic problems of the Russian Academy of Sciences, IWP,
Moscow
Main research programmes: "Water resources as a decisive factor for long term
sustainable development of Russia", "Complex steering of the water sector"
Annex
4.
185
Material efficiency
Research Center for the Problems of Resources and Waste Management of
MinPromEnergo, Moscow
Federal Centre of Geoecological Systems at the Federal Nature Management
Supervision Service, Moscow
Research areas pertaining to material efficiency: waste regulation: development
of state waste data bank as part of the state waste cadastre; recommendations
for the improvement of charges for waste disposal and for the compensation of
environmental damage caused by unauthorized waste disposal. Participation in
the Federal Goal-oriented Programme "Destruction of Chemical Weapons"
5.
Higher School of Economics HSE, Moscow
International Centre for Logistics and study programme "Executive Logistics
Manager", with links to the National Logistic Association NLA.
Coordination Council for Logistics, founded by the Moscow Auto and Road
Institute (TU) and the Moscow Transport Institute, Moscow
Research institute of the movement of goods and wholesale markets
conjuncture ITKOR, Moscow
This joint-stock company is assign of the former state Scientific Research
Institute of Economics and Organisation of Maintenance Supply, SRI
6.
Chair of ecology and sustainable development at the International University
Moscow, Prof. Gennadi Jagodin
Chair of sustainable innovation development at Dubna International University,
Moscow, Prof. B. E. Bolshakov
Centre of Theoretical Analysis of Environmental Problems MNEPU at the
International Independent University of Environmental and Political Sciences,
Moscow, director Prof. Marfenin
MNEPU publishes the yearbook "Russia in the surrounding world" and a
regular information bulletin which distribute information on environmental issues
in Russia.
186
Annex
A.3.3
India
A.3.3.1
The Indian innovation system
Research in India is predominantly government-led. Two thirds of GERD are funded by
central government, with an additional 9 % from state governments and 5 % funded by
the higher education sector. Only 20 % are financed by the private sector. By
international standards, India's research strengths include mathematics, theoretical
physics, chemistry, molecular biology and biotechnology, nanotechnology, information
technology and space research. Agricultural research has a much larger share in India
than internationally.
TableAnnex A.3-8: Basic indicators of R&D resources in India
India
2000
2004
1,015,923
457,371
1,079,721
691,163
0.85
21.708,7
20.1
a
0.78
18.0
68.2
9.7
19.8
66.7
8.6
4.0
4.9
Total S&T manpower (graduates) 1000
Personnel in R&D organisations 1000
Researchers in R&D organisations 1000
(public and private)
7,800.2
296.3
8,087.2
na
93.8
na
Scientific publications in SCI
Scientific publications % SCI
10,047
1.6
12,774
a
1.8
na
na
na
9.1
16.1
1.3
na
2.8
Population 1000
GERD financed by private sector (%)
GERD financed by central government (%)
GERD financed by state government (%)
GERD financed by higher education sector
(%)
Germany
b
a
a = 2003; b = 2001;
Source: NSTMIS Department of S&T, Government of India; World Development Indicators, Worldbank 2006; Foreign trade: DIW Berlin; Science
Annex
187
The single most important research organisation in India is the Council for Scientific
and Industrial Research (CSIR), which runs 38 laboratories and 39 outreach centres
across the country and employs 18,250 people, including 13,340 S&T staff (2004-05).
Apart from CSIR, several autonomous research institutes are funded directly by the
Department of Science & Technology. The Indian Council of Medical Research and the
Indian Council of Agricultural Research have strong research capacities.
Until now, the best research in the country has been based at these research institutes
rather than universities. Universities excel in teaching science, but their R&D activites
are often hampered by a lack of funds and minimal equipment. Universities that excel
in research also tend to be directly funded by central government, such as the Indian
Institutes of Technology, the Indian Institute of Sciences (Bangalore) and the
Jawaharlal Nehru University (New Delhi). Some state-funded universities, such as
Delhi University and Anna University, Chennai, also have strong academic and
publication records (Global Watch Service).
Between 1995 and 2004, the average growth of Indian Gross Domestic Expenditure on
R&D (GERD) was more than 13 % per year nominally. Nevertheless, India's R&D
intensity, measured by GERD as a percentage of GDP, declined slightly after 2000 in
the light of strong economic growth and remained at a low level of only 0.8 %
(TableAnnex A.3-8). The Tenth Plan 2002-2007 provides 252.4 billion Rs. (ca. 5.6
billion US-$) for six major central government S&T departments (atomic energy, ocean
development, science & technology, biotechnology, scientific & industrial research,
space), 2.09 times the expenditures under the Ninth Plan (121 billion Rs.) The major
share of government funded research is focused on applied research and development
(TableAnnex A.3-9).
TableAnnex A.3-9: Share of government R&D expenditure by type of work, 2002-03
Type
Applied Research
Experimental
Development
Basic Research
Other Activities
Percentage
41.7
34.0
17.8
6.5
R&D expenditures by central and state government, excluding higher education and industrial R&D.
Source: NSTMIS Department of S&T, Government of India.
According to a recent survey by NSTMIS, R&D financed by the private sector is
concentrated in the fields of drugs & pharmaceuticals and transportation, followed by
chemicals (other than fertilizers), electrical & electronics equipment and information
technology (NSTMIS, 2005). Pharmaceuticals and biotechnology are the only sectors
188
Annex
where cooperations with foreign or international firms have already been practiced for
many years. Currently, one third of foreign direct investments in India go to the ITsector. Many foreign firms, especially from the U.S. set up R&D centres in India, e.g. in
the IT-cluster of Bangalore. IT services account for only 3 % of Indian GDP but make
for 50 % of national service exports (Krawczyk et al. 2007).
A.3.3.2
Core themes of sustainability research in India
The following priorities of national innovation policy are based on investigations by the
Indian experts whose contact details are given at the end of this country profile
(A.3.7.3).
Renewable Energies
According to the country experts, the innovation policy is also linked to various diffusion
targets of the technologies. The following priorities were identified:
a)
Technology mapping and benchmarking of renewable energy and renewable
energy systems.
b)
Development of standards, specifications and performance parameters of
indigenously developed products & services.
c)
Grid interactive renewable power, with the target to install around 10 % of
capacity through renewable power by 2012 and around 15 % by 2032.
d)
Non-conventional energy in urban areas: 1) Energy recovery from municipal
waste - in 423 class-I cities including 107 municipal corporations where suitable
waste is available – by 2032, 2) Solar Water heating systems - 100 % coverage
of all prospective users like hotels, hospitals etc. - by 2032, 3) 100 % coverage of
street lighting control systems by solar sensors in all cities - by 2012, Mandatory
use of solar water heating systems in some cities.
e)
Non-conventional energy in industry- 1) Energy recovery from industrial wastes
where suitable waste is available across the country – by 2032, 2) Solar Water
heating systems - 100 % coverage of potential industries - by 2032, 3)
Cogeneration - 100 % coverage of potential sugar and other biomass based
industry - by 2032.
f)
Non-conventional energy in rural areas- 1) Provision of lighting/electricity in
around 10,000 remote un-electrified census villages apart from remote hamlets of
electrified census villages – by 2012, 2) Augmentation of cooking, lighting and
motive power through renewable energy means in electrified villages – by 2032.
Annex
189
g)
Indigenous designs, development and manufacture of renewable energy
systems.
h)
Development of cheaper raw material.
i)
Development of technology for effective grid interfacing.
j)
Development of technologies for synthesis gas cleaning, technology for control of
NOx emissions during gasification, increasing the conversion efficiency.
k)
Development of 100 % producer gas engine for biomass gasification plants, biomethan.
a)
Implementation of energy conversation building codes.
b)
Development of human resource to carry out energy conservation and energy
audit activities in all sectors.
c)
Development of codes, standards and best practises for carrying out energy
conservation activities.
d)
Research in India centric building simulation softwares and materials.
e)
Development of testing standard protocols and evaluation methodolgy.
Water supply and waste water treatment
a)
Access to water for drinking purposes to all.
b)
Water quality management by improving the existing technology and supporting
the development of newer, innovative technologies such as nano-filtration
technology, etc.
c)
Promotion of new construction materials and tunneling technologies and research
on the development of economical designs for water resource projects.
d)
Improving the water efficiency in different sectors. In agricultural sector, various
techniques such as micro-irrigation, drip irrigation, sprinkler irrigation have been
proposed. Several incentives and disincentives along with proper regulations
have been identified for promoting efficient use of water resources.
e)
Promotion of various techniques for rain water harvesting in the country and
making it mandotory in some large cities of India.
f)
Development of master-plan for flood control management in flood prone basins.
g)
Development of sustainable decentralized water supply infrastructure.
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Annex
Material Efficiency
a)
Promotion of research in multidisciplinary aspects of environmental protection,
conservation and management
b)
Strengthening of R&D infrastructure facilities.
c)
Increase in process efficiency in various sectors (e.g liquor, textile).
d)
Development of new generation eco-friendly products (e.g ash bricks).
e)
Waste and e-waste management and recycling.
f)
Promoting the use of agricultural and industrial wastes in construction of building
and in other areas through incentives, excise duty exemptions.
a)
Reduce exhaust emission from automobile engines by stricter emission norms,
improved petroleum fuel quality and shift to less pollutant alternate fuel.
b)
Encourage and mandatory usage of CNG/LPG as an auto fuel in highly polluted
cities.
c)
Support research and development of technology and processes for production
ethanol/bio fuels from different renewable sources.
d)
Assist the development of vehicles propelled by alternative fuels (e.g battery
operated and hydrogen fuel).
e)
Encourage use of new materials of road construction and use of machines to
improve quality and speed of construction particularly for development of HDCs
(High Density Corridors).
f)
Augmenting the capacity of High Density Corridors (HDC) in the country in all
modes of transportation. In railways through up-gradation to higher axle loads,
up-gradation of passenger and freight terminals, construction of bypasses in
major cities, reducing the speed differentials between freight and passenger cars,
introduction of modern telecommunication and signaling systems to improve safer
and reliability, accelerate containerization, machination of track maintenance.
g)
Maintenance of infrastructure by employing high maintenance standards and
upgradation of the same.
h)
Increase in productive and economic efficiency in the field of transport.
i)
Reduction in accidents through improved safety.
j)
Alternate Fuels (bio-fuels, synthetic fuels and hydrogen) Substitution up to 10 %
oil by bio-fuels, synthetic fuels and hydrogen in transport, portable and stationary
applications by 2032. Blending of ethanol in petrol in selected cities is made
mandatory.
Annex
191
a)
Development of women as entreprenuers.
b)
Interlinking student-community from technical institutions with small-scale
industries and enterprises for sustainable development.
c)
Supporting patenting of small innovations.
d)
Development of markets for small innovations.
e)
Strengthening of scientific manpower to shoulder the responsibilities for
environmental management in the country.
f)
Sustainable transformation of agricultural sector to support the alleviation of
poverty.
g)
Provision of micro and rural credit for supporting socioeconomic development.
h)
Strengthen insitutional mechanisms for rural development.
i)
Promoting community based bio-diversity conservation and management.
j)
Adaptation for climate change issues.
k)
Capacity building of institutions for disaster management.
A.3.3.3
Central government funding is allocated through a series of five year plans and
involves a considerable number of central government agencies. Civilian science policy
is the remit of the Ministry of Science and Technology (MST), which has three main
departments, the Department of Science and Technology (DST), the Department of
Biotechnology (DBT) and the Department of Scientific and Industrial Research (DSIR)
with its vital Council for Scientific and Industrial Research (CSIR). Other agencies of
particular interest for this study are the Ministry of New and Renewable Energy (former
Ministry of Non-Conventional Energy Sources, MNES) and the Ministry of Environment
and Forests (MOEn). TableAnnex A.3-10 shows the major S&T agencies. The figures
also include institutional funding for government research organisations, as in the case
of CSIR.
A new Ministry of Earth Sciences was created in July 2006 after merger of India
Meteorological Department; National Centre for Medium Range Weather Forecasting;
Indian Institute of Tropical Meteorology, Pune and Earth Risk Evaluation Centre with
the then Ministry of Ocean Development. The Ministry’s mandate is to look after
Atmospheric Sciences, Ocean Science & Technology and Seismology in a integrated
manner.
192
Annex
The major objective of R&D financed by state governments is the development of agriculture, forestry and fishing (92.8 % of expenditures), followed by the development of
health services (2.1 %) and the promotion of industrial development (1 %) (NSTMIS,
2005).
TableAnnex A.3-10: R&D expenditure by central government S&T agencies, 2002-03
Agencies in focus for this study
Department of Science & Technology (DST)
Council of Scientific and Industrial Research
(CSIR)
Ministry of New and Renewable Energy (MNES)
Ministry of Environment and Forests (MOEn)
Other agencies*
Defence R&D Organisation (DRDO)
Department of Space (DOS)
Indian Council of Agricultural Research (ICAR)
Department of Atomic Energy (DAE)
Department of Biotechnology (DBT)
Indian Council of Medical Research (ICMR)
Department of Ocean Development (DOD)
Ministry of Information Technology
*
Rs.
million
US-$
million
5095.2
9512.5
113.2
211.4
% major
scientific
agencies
5.0
9.4
% total
GERD
123.9
2652.25
2.8
58.9
0.1
2.6
0.1
1.5
30800
21500
13700
12400
1600
1600
1400
1000
101577
684
479
305
275
36
36
32
23
2257
30.3
21.2
13.5
12.2
1.6
1.6
1.4
1
100
17.1
12
7.6
6.9
0.9
0.9
0.8
0.6
56.4
2.8
5.3
Budget figures for these agencies are approximations.
Source: NSTMIS Department of S&T, Government of India; TERI experts.
Ministry of Science and Technology (MST)
The activities of the Department of Science and Technology are primarily focused
towards scientific research, technology development, socioeconomic development,
scientific services, international cooperation and supporting autonomous S&T
institutions. It prioritises R&D in harnessing indigenous resources, material efficiency,
technologies for mitigation and management of natural hazards, industrial and scientific
R&D.
The Department of Scientific and Industrial Research DSIR is the administrative link
between the government of India and the research organisation CSIR. CSIR is
currently undergoing an organisational restructuring aimed to render the organisation
more responsive to customer and market needs, to stimulate intellectual property
management, to enhance investments in selected areas of high quality science. Faced
with an ageing workforce, CSIR seeks to become a more attractive career option for
young scientists and to enhance training of senior scientists.
Annex
193
The Ninth Plan programmes/activities of the CSIR were implemented in 16 broad
sectors, including: aerospace; biology and biotechnology; chemicals; drugs and
pharmaceuticals; earth resources and natural hazards mitigation; ecology and
environment; electronics and instrumentation; energy; food and food processing;
housing and construction; information products; leather; machinery and equipment;
minerals, metals and materials; rural development; and exports of R&D and services
(DST five year plan 2002-2007).
Ministry of New and Renewable Energy (MNES)
The broad objectives of renewable energy policy in India are to meet the minimum
energy needs through renewables, and to provide decentralised energy supply in
agriculture, industry, commercial and household sectors in rural and urban areas.
The focus of the MNES is rather on development and diffusion of renewable energy
technologies and less on research. The MNES priorities for R&D are development of
standards, protocols for deployment of renewable energy systems, which are cleaner
and cheaper. The ministry also forsees use of new raw materials for low cost
technologies as one of the priority areas.
According to MNES, in 2005, the total capacities of renewable energies reached about
7,000 MW, which is about 7 % of the country’s grid power capacity. Of this, wind
energy contributed about 4,000 MW. The ministry has set a goal of installing 10 % of
the additional power generation capacity in the country through grid connected
renewable power by 2012. Other programmes foster the electrification of remote
villages, wind power, standalone renewable energy systems (biogas and solar
photovoltaic lighting systems), solar thermal energy and energy recovery from urban
and industrial wastes. More recently, biofuels and hydrogen receive increasing
attention (see section A.3.3.2).
Ministry of Environment and Forests
The main priorities in research on innovations for sustainable developments are
reduction in pollution, regeneration of degraded areas and protection of the
environment.
Its mandate includes the conservation and survey of flora, fauna, forests and wildlife,
the prevention and control of pollution, afforestation and regeneration of degraded
areas and protection of environment, all within the larger legislative framework. The
main tools utilized for this include surveys, impact assessment, control of pollution,
regeneration programmes, support to organizations, research to find solutions and
194
Annex
training to augment the requisite manpower, collection and dissemination of
environmental information and creation of environmental awareness among all sectors
of the country's population.
Details on the content of research programmes funded by the ministry are available in
the ministry's annual reports. [http://envfor.nic.in/].
International Funding Agencies
International funding agencies play also a remarkable role for sustainability
technologies in India. The following agencies were identified in particular:
a)
Work Bank - provided about USD 200 million for National Agricultural Innovation
Projects.
b)
USAID - USD 60 million. Support being provided for carrying out R&D in areas
related to water, energy, environment and energy conservation.
c)
GTZ - provides financial support for conducting research in sustainable economic
development, energy and environmental policy.
d)
UNDP - provides financial support for projects related to energy efficiency,
access to rural energy, conservation of traditional medicinal plants, sustainability
of bio-diversity and coal bed methanation. About USD 60 million were provided
for these activities.
Annex
195
A.3.3.4
1.
Renewable energies and CO2neutral fossil energies
1. Center for Materials for Electronics Technology, Pune
2. National Physics Laboratory
3. Indian Institute of Science, Bangalore
4. Indian Institute of Tecchnology, New Delhi, Mumbai, Chennai, Guwahati, Kharagpur
5. The Energy and Resources Institute (TERI)
6. Centre for Wind Energy Technology C-WET, Chennai
7. Solar Energy Centre, New Delhi
8. Centre for Energy Technology, Osmania University, Hyderabad
9. Centre for Scientific Research, Auroville
10. Regional Research Institute, Bubaneshwar
11. HNB Garhwal University
12. Geological Survey of India, Government of India
13. West Bengal Renewable Energy Development Agency (WBREDA), West Bengal
14. National Environmental Engineering Research Institute, Nagpur
15. BHEL Limited
16. Alternate Hydro Energy Centre, Rorkee
17. Jadhavpur University, Kolkotta, West Bengal
18. Devi Ahilya Vishwavidyalaya, Indore
19. R&D Centre, Indian Oil Corporation Ltd
2.
1.Indian Institute of Technology (Mumbai and Delhi)- Various aspects of energy
efficiency in buildings including solar passive space conditioning (visual and
thermal comfort)
2. Indian Institute of Information Technology (IIIT - Hyderabad)
3. School of Planning and Architecture (New Delhi)
4. Center for Environmental Planning and Technology (CEPT – Ahmedabad)
5. The Energy and Resources Institute (TERI)
6. Development Alternatives (DA)
7. National Physics Laboratory, New Delhi
8. Malviya National Institute of Technology, Jaipur
9. School of Engineering and Environment Studies, Indore
10. Building Materials and Technology Promotion Council
11. Central Public Works Department, Government of India
12. HUDCO (Housing and Urban Development Corporation)
3.
1. Central Water and Power Research Station (CWPRS), Pune
2. National Insitute of Hydrology, Roorkee
3. National Institute of Ocean Technology, Chennai
196
Annex
4. Central Ground Water Board (CGWB)
5. India Institute of Chemical Technology, Hyderabad
6. Agharkar Research Institute
7. The Energy and Resources Institute (TERI), New Delhi
8. National Water Development Agency, New Delhi
4.
Material efficiency
1. Central Leather Research Institute, Chennai
2. Regional Research Institute, Bubaneshwar & Trivandrum
3. National Chemical Laboratory, Pune
4. Central Paper and Pulp Research Institute
5. Sardar Patel Research Institute
6. Central Electrochemical Research Institute, Karaikudi, Tamil Nadu
7. Advanced Research Centre for Powder Metallurgy and New Materials, Hyderabad
8. National Environmental Engineering Research Institute, Nagpur
9. The Energy and Resources Institute(TERI), New Delhi
10. National Productivity Council, New Delhi
11. G B Pant Institute of Himalayan Environment & Development (GBPIHED)
5.
1. School of Planning and Architecture, New Delhi
2. Indian Institute of Technology, New Delhi
3. Central Road Research Institute
4. Sardar Swaran Singh National Institute of Renewable Energy (SSS-NIRE)
5. Shri. A M M Murugappa Chettiar Rersearch Centre (MCRC), Chennai
6. Banaras Hindu University (BHU), Varanasi
7. SPIC Science Foundation, Tuticorin
8. Indian Institute of Technology, Karagpur
9. Indian Institite of Technology, Madaras, Chennai
10. Indian Institute of Petroleum, Dehradun
11. Delhi College of Engineering, New Delhi
12. Indian Oil Corporation, R&D centre, Faridabad
13. The Energy and Reosources Institute(TERI), New Delhi
6.
1. Indira Gandhi Institute of Development Research, Mumbai
2. Indian Institute of Management, Ahmedabad
3. National Innovation Foundation, Ahmedabad
4. Society for Research and Initiatives for Sustainable Technologies and Institutions
5. Department of Science and Technology, Government of India
6. Swiss Agency for Development and co-operation, New Delhi
7. Centre for Science and Environment, New Delhi
8. The Energy and Resources Institute(TERI), new Delhi
9. M S Swaminathan Research Foundation, Chennai
Annex
A.3.3.5
197
Importance of R&D for sustainability – expert views
The following tables present comments of the contributing experts on the importance of
Indian R&D in the thematic fields and subfields in this study.
TableAnnex A.3-11: Renewable energy & fossil free energy sources
Technology
Comments
Renewable
energy
The total demand for power is expected to increase 3.5 times or more in
the next two decades. This will necessitate increasing the generation
capacity in the country. Undertaking this capacity expansion in a
sustainable and environmentaly benign way will reduce harmful negative
impacts. A more concerted effort to increase the renewable- electricity
will reduce the country's dependance on imported fuel. A large
indegenous capacity in terms of manufacturing, man-power, R&D exists
in the country. This needs to be converged with acutal implementation
using appropriate policies.
The average solar insolation in the country is 6 kWh/meter2/day. At
present the photovoltaic technology is expensive and the cost of
electricity exceeds Rs.20/kWh.
Efforts to reduce costs and increase efficiency are necessary. R&D
should be focussed on developing thin-flim technology.
Solar thermal is economical for water heating. Much of its potential has
yet to be exploited. Appropriate policies need to be designed to
accelerate the exploitation of this potential. R&D should be carried out to
develop low-cost solar heaters.
India is 5th largest producer of wind power. The potential for onshore
wind power is assessed at 45,000 MW. At present the capacity utilization
in existing plants is low due to various factors. Efforts are required to
carry R&D in this prespective. The offshore wind power potential has not
yet been assessed.
Tidal Energy has been identified as an uneconomical and commercially
unviable option in India. India’s hydel resources are estimated to be
84,000 MW at 60 % load factor. Efforts are required to tap the available
resources (mainly in north-eastern states, Uttaranchal and Himachal
Pradesh). Proper Ecological, socio-economic research has to be conducted to reduce the negative impact while realizing this potential in the
country. While tidal/wave technologies are less important, this is not the
case with small hydro which is being harnessed vigourously.
Bio-mass is the major domestic fuel for cooking. It provides 1/3rd of the
country's primary energy needs. Efforts are required to improve the
efficiency and convenience of using biomass. Establishment of
sustainable fuelwood plantations are necessary.
350 hot springs have been identified in the country. Several pre-feasibility
tests have been carried out. However, more concerted efforts have to
take to tap the potential in this area.
Hybrid technologies are being tested and tried out in the country. The
most widly accepted technologies are: Wind-Solar hybrid, wind-diesel
hybrid and small hydro-batteries.
Research priorities should focus on the cost effectiveness of clean-coal
technologies, carbon sequestration, coal being the major energy
resource in India with the potential of providing long-term security of
supply.
Photovoltaic
energy
Solar thermal
energy (heat or
electricity)
Wind power
Water (incl. also
e. g. tidal or
wave) power
Biomass
Geothermal
energy
System
integration
Carbon CS
198
Annex
TableAnnex A.3-12: Energy efficient buildings
Technology
Comments
Building shell
Use of new materials in building construction have to be promoted after
carrying out intensive research
Heating systems
Industries should be encouraged to use CHP systems. A large number of
industries have already installed such systems in India
Air conditioning
Use of passive cooling methods can be promote
Lighting
Use of low-wattage CFL, T5 tubes
Measurement
and control
engineering
Development of simulation tools with specific applicability to Indian
conditions
TableAnnex A.3-13: Water supply and sewage systems
Technology
Comments
Water supply
Supply of drinking water has been identified as a priority in the National
Water Policy. Research in developing water supply systems as integration of canals and rivers is underway. Financial support is provided by the
Central Government.
Waste water and
sewage systems
Sewage control and sanitation has been identified as a priority by the
Central Government. However, no significant research is being undertaken in this respect in the country.
Decentral water
infrastructure
Several programmes supported by the central government are operating
in the country to improve the water infrastructure in the country.
Development of sustainable, decentralized water infrastructure across
the country has been identified as a priority area for several reasons.
Rain water
harvesting and
management
Adoption of rain-water harvest and management techniques across the
country is important to off-set water scarcity witnessed in many parts of
the country.
Water use
efficiency
India's water resources are sufficient to meet its future demand; however
it lacks the ability to effectively utilize the available water resources. If
effective policy instruments and technological advances are made, India
will be in a better position to meet the 20-40 percent increase in water
requirment that is expected over the next 20 years.
Water use in
agriculture
Enormous potential exists for effecient and productive use of water in the
agricultural sector.
Flood
management
Proposals to link major rivers have been initiated to channelize surplus
water in flood probe regions to drought prone regions in the country. This
would prevent the occurance of catastrophic events on the one hand and
probably increase the arable land in the country
Annex
199
TableAnnex A.3-14: Material efficiency
Technology
Comments
Recycling
Development and use of coal-fly ash as a raw material for making bricks
and cements is underway. Several scrap metal industries are operating in
India which make use of scrap metal for various end products. Other
wastes like paper and textiles are also being recycled.
Renewable
resources
Several industries at present are making use of agro-residues as fuel.
Material efficient
production
processes and
products
National productivity council has taken a major step towards increase in
process efficiency and cleaner processes with waste minimization. More of
such steps are needed.
TableAnnex A.3-15: Mobility and Logistics
Technology
Comments
Mobility and
logistics
India's economic growth to a large extent depends on the transportation
infrastructure. Rising population combined with increasing urbanization
will exert pressure on the nation’s current transportation and logistic
systems. This will necessitate extensive research and development in
this sector.
Vehicles (road,
rail, air, water)
Two important modes of transport for India are the roadways and
railways. Efforts to increase their carrying capacity in a sustainable
manner are required for sustainable development. It is important to shift
frieght transportation from road to rail, to save fuel and reduce emissions.
Similarly efficient public transport is required to reduce personal vehicles
on the road.
Drives
Research in innovative drive concepts is underway.
Infrastructure
(road, rail, air,
water)
Infrastructure constraints are increasingly being felt across the transport
sector. Research into developing a sustainable transport-system is
lacking in the country. More importantly, research and development of
infrastructure for non-motorized modes of transport are lacking. This is of
great importance to India as the population using this mode of transport
is expected to increase in great numbers.
Emission
reduction
Rising pollution level in major Indian cities has been a cause of concern.
Introduction of CNG as a fuel for public transportation in the nation’s
capital was a welcome relief. Efforts to introduce EURO IV are being
planned for the year 2010.
Alternative fuels
Though there is a directive from the government for promoting the usage
of alternative fuels for transport, no deadline for actualizing the
implementation of the same has been set till date.
200
Annex
TableAnnex A.3-16: Socio-economic research on innovations for sustainable
development
Technology
Comments
Socioeconomic
research on
innovations for
sustainable
development
The role of public, financial, R&D, market and design institutions in
building a value chain and providing back up support for socio-economic
research is important. There is a serious shortage of qualified people in
various institutions (only 157 million scientists and engineers are
engaged in R&D activities in the country) and this directly influences the
innovative capability of the nation. More efforts are required to increase
the skill-base of the country.
Barriers and drivers for
environmental
innovation
Economic barriers, lack of awareness and institutional barriers have to be
overcome. The complexity of behavioural patterns has to be understood
in depth to fuse innovation and sustainable development in the country.
Market
development and
diffusion of
environmental
innovations
Inefficient and improper linkages between technology development and
technology application have resulted in non-conducive markets.
Developing proper linkages between research and bussiness is
necessary for sustainable innovation and development.
Innovation
systems and
innovation policy
Creating an environment in which entrepreneurship can flourish at all
levels is essential to support innovation in the country. Incentives for
innovations, accountability towards innovators to generate more efficient
and competitive livelihood support measures are necessary.
Environmental
Policy
Development strategies have to be tuned to the ecological concerns that
in turn ensure that threats and trade-offs are appropriately evaluated at
every stage.
TableAnnex A.3-17: System integration across technological areas
Technology
Comments
System
integration
across
technological
areas
There are existing examples of interlinkages between renewable energy
and buildings as natural resources are used in sustainable buildings.
Energy water
nexus
USAID has financed USD 10 million for a project on water energy nexus.
This project aims to build an understanding of the water-energy nexus
among policy makers, utility managers, farmers, urban industries and
residential customers; Act as a resource and catalyst for behavior
change in water policy, distribution and use; Introduce technologies and
methodologies to industry professionals to improve distribution and
decrease loss; Foster efficient urban and rural water and energy usage;
Advance sustainable financing practices for utility providers; Demonstrate
approaches for making services commercially viable – decreasing public
reliance on subsidies.
More such efforts need to be done recognising the nexus between
various other sectors too.
Annex
201
A.3.4
China
A.3.4.1
The Chinese innovation system
The largest research organisation in China is the Chinese Academy of Science (CAS).
It runs a nationwide system of over 100 research institutes and a prestigious research
university (the University of Science and Technology of China at Hefei, Anhui).
Research funding at the institute level is a combination coming from CAS
Headquarters, the Ministry of Science and Technology (MOST) and the National
Natural Science Foundation of China (NSFC) (Hsiung, 2002). In addition, CAS
institutes earn varying amounts of money owning and operating spin-off enterprises.
Several ministries also fund their own Academies, smaller in scale than CAS.
Although there are over 1,100 higher education establishments (not including adult
education) in China, only a few of the top 10-20 are well known outside China. Only a
minority carry out significant amounts of research. Much of China's R&D effort is
carried out in specialised Research Institutes. According to Global Watch Service,
about 50 % of China's R&D funds are spent in China's 6,000 research institutes,
funded at national, provincial and county level. State Key Laboratories are prestigious
research groups that have made a successful bid to the State Planning and
Development Commission (SPDC) for designation as SKL in their field of research.
A specific feature of the emerging Chinese innovation system is university-run
enterprises (UREs) (also enterprises run by research institutes). According to Eun et al.
(2006), UREs in China differ from the university spin-offs common in the US and other
industrialized countries in that way that they are typically established, staffed, funded
and managerially controlled by the universities and are usually endowed with the de
facto right to exclusively take advantage of the mother institutions' various assets.
UREs are widespread in China. According to the Chinese Ministry of Education (cited
by Eun et al., 2006), in 2001 there were 5,039 UREs in China of which 40 were listed
on the stock markets in Mainland China and Hong Kong.
China is experiencing a phase of very rapid R&D expansion. Between 1995 and 2004,
Gross domestic expenditures on R&D (GERD) have grown by approximately 20 %
annually. After a relative decline in the first half of the 1990s, the research intensity,
measured as GERD percentage of GDP, increased from 0.58 in 1996 to 1.23 in 2004.
Thus, while Chinese R&D intensity is still much lower than the average of OECD
countries (2.26 in 2004), the absolute volume of R&D expansion clearly places China in
the top position among the BRICS countries. Most of China's R&D activities are
concentrated in a few large cities.
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Annex
TableAnnex A.3-18: Basic indicators of R&D resources in China
China
2000
2004
Population 1000
1,262,645
1,198,480
1,296,157
1,931,710
44,777.1
35.5
0.9
93,992
72.5
1.23
57.6
33.4
2.7
65.7
26.6
1.3
922,131
695,062
1,152,617
926,252
87
18,142
2.9
177
a
29,186
a
4.2
na
na
na
221.7
115.2
22.9
na
19.7
Total researchers (FTE)
Germany
a
a = 2003;
Source: OECD Main Science and Technology Indicators 2006; World Development Indicators, Worldbank 2006; Foreign trade: DIW Berlin. Science
Since the mid-1990s the distribution of R&D between the government and private
sectors changed significantly. In 1995, 50 % of R&D expenditures were invested by
government sources, while less than a decade later already two thirds of R&D
expenditures are coming from industry. The industry branches with the largest share of
R&D expenditures are electronics, vehicle construction, electrical engineering, and
mechanical engineering. A lot of Chinese research is still devoted to the appropriation
and advancement of imported technology. Almost three quarters of Chinese R&D
expenditures are dedicated to experimental development, with a further 20 % for
applied research and only 5 % for basic research. A strong orientation towards applied
research and experimental development with only a small portion of basic research
(6 %) are also observed in universities and specialized research institutes. (Krawczyk
et al., 2007).
Chinese R&D policy places a strong emphasis on innovation and the commercialization
of R&D results. In the "National Outline for Medium and Long Term S&T Development
Annex
203
Planning (2006 -2020)”, the Chinese government concentrates a considerable portion
of its R&D investments on a limited number of research areas to achieve "more
breakthroughs in less time" (MOST). Critics of this approach are concerned that longterm planning and concentration of government R&D investments on megaprojects
could reduce the flexibility of the Chinese innovation system in the face of rapid
scientific and technological development and is harmful to scientific creativity and
bottom-up competition of ideas (Hao Xin, Gong Yidong, 2006).
A.3.4.2
Core themes of sustainability research in China
Renewable energy and CO2-neutral energy sources
In recent years, in response to the rapid growth of energy consumption and
corresponding environmental problems, China has initiated a number of special
programmes and action-plans to improve the energy efficiency and change energy
consumption structure in the country. In 2003, China's renewable energy consumption
accounted for only 3 percent of the country's total energy consumption
(RenewableEnergyAccess, 9 March 2005). The government plans to raise this figure to
15 percent in 2020 as a proportion of primary energy. In 2002, the Ministry of Science
and Technology of China promulgated the "Science and Technology Outline for
Sustainable Development (2001-2010)". Clean energy and renewable energy is one of
the priority areas. In the year of 2004, National Development and Reform Commission
launched the "Medium and Long-term Plan of Energy Conservation". In this plan which
covers two phases, 2005-2010 and 2010-2020, detailed energy conservation targets
were set up. Key actions and comprehensive policy measures were put forward, as
well as 10 key energy conservation projects.
In January 2006 a "Renewable Energy Law" entered into force. It requires power grid
operators to purchase resources from registered renewable energy producers. The law
also offers financial incentives, such as a national fund to foster renewable energy
development, and discounted lending and tax preferences for renewable energy
projects (RenewableEnergyAccess, 9 March 2005). The government lists renewable
energies, including hydroelectricity, wind power, solar energy, geothermal energy and
marine energy, as a preferential area for hi-tech development and hi-tech industrial
development, and allocates funding for the scientific and technical research.
In China, central heating systems or systems with a combination of heat, cooling and
electricity generation play an important role. The heated surface in Chinese cities
equals more than 2.5 billion m². Large cities as Guangzhou, Beijing and Shanghai even
204
Annex
employ central cooling systems. For example, the central cooling system of the
university district of Guangzhou is the number 2 in international comparison. In the
Medium and Long-term Plan of Energy Conservation of the National Development and
Reform Commission, Architecture, commercial and civil energy is one of the key
energy conservation fields. Apart from numerous large demonstration projects, the
standards for buildings are gradually being raised. Recently, many research activities
and international cooperations have been initiated. In September 2006, the German
Federal Minister of Transport, Building and Urban Affairs, visited China in preparation
of a bilateral government agreement in cooperation for energy efficiency with a focus
on buildings.
More than 60 % of Chinese cities have no waste water systems, and there is practically
no waste water treatment in rural areas. More than half of the most important Chinese
rivers are considered to be extremely polluted. In the cities, 90 % of surface and 50 %
of ground water are heavily polluted. It is estimated that half of the population have no
access to safe drinking water. Water use by firms and households is extremely
inefficient. Water shortage is meanwhile perceived by many people as China's most
pressing environmental problem. A large number of water treatment plants are being
planned or built at China's East coast (Schmitt, 2005). Significant R&D activites are
involved in the design of the massive water transfer project to connect the Yangtze
River with the city of Beijing which was begun in 2002. The main working areas of R&D
institutions are water supply, wastewater treatment, water and wastewater systems in
cities, and garbage disposal. More recently the topic of resource efficiency is gaining
more importance.
Material efficiency
The Ministry of Science and Technology embraces the concept of a "circular economy"
as a priority for research and innovation, yet information on R&D priorities in this sector
is incomplete as there is no clear conceptual distinction between technologies for
environmental protection as opposed to cleaner production technologies or cleaner
products. Treatment of industrial wastes is an urgent environmental problem.
The next 20 years are the key time for the development of Chinese transportation.
Many important projects will be constructed such as high-speed railway, urban railway
transportation system, highway, flight between cities etc. Many problenms such as
Annex
205
energy demand, traffic jams, and transport security must be solved. So the research
field of mordern transportation is alredy an important field in the 863 programme in 11th
5-Years plan. Many universities and research organisations have been investing much
for that, and already get a strong capacity on rail transportation control, intelligent
transportation and transportation organisation.
Socio-economic research on sustainable innovation in China is mostly taken charge in
institutes and universities.The focus in innovation research is on R&D input and related
performance measures. There is also some research on environmental economics and
on the integration of environmental planning into urban planning. Construction in the
countryside is a more recent topic of planning research.
A.3.4.3
The organizations listed below administer most civilian science and engineering
research in China, although the Ministries of Defense, Health, Agriculture and the State
Forestry Administration and other economic agencies also have significant research
operations under their direct management. The Ministry of Education oversees and
funds all universities in the country.
Ministry of Science and Technology (MOST)
The Ministry of Science and Technology (MOST) provides policy guidance on the S&T
systemic reform agenda, and provides funds for major national S&T programmes,
including the National Basic Research (973) Programme, the High-Tech R&D (863)
Programme and the National Key Technologies R&D Programme. In 2006, the new
S&T plan was published, the "National Outline for Medium and Long Term S&T
Development Planning (2006 -2020)”. One distinct feature of the Plan is the adoption of
innovation as a new national strategy and the goal of advancing China to the rank of
innovation-oriented countries by 2020. During the 10th five year period (2001-2005),
the government allocated an investment of 20 billion RMB (2.4 billion US-$) to 12
"megaprojects", with the expectation that this strong concentration of resources
produces "more breakthroughs in a shorter period of time" (MOST). Strong
prioritizations have also been made in the research plan for 2006-2020. The favored
research areas include (non-comprehensive list): protein science, quantum research,
nanotechnology, development and reproductive biology, next-generation broadband,
large-scale oil and gas explotation, transgenic plant breeding, drug development and
manned moon exploration (Hao Xin, Gong Yidong, 2006).
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Annex
National Basic Research (973) Programme
The purpose of the National Basic Research Programme is to strengthen basic
research in line with national strategic targets. According to MOST, the "strategic
objective of the Program is to mobilize China’s scientific talents in conducting
innovative research on major scientific issues in agriculture, energy, information,
resources and environment, population and health, materials, and related areas." The
budget of the 973 Programme attained ca. 1 billion RMB in 2005 (ca. 120 million US-$).
According to the contributing experts from Tsinghua University (A.3.6), the National
Basic Research Programme supports sustainabilitiy research in the thematic fields
listed in TableAnnex A.3-19. With regard to energy, an important focus of this
programme is the geological distribution and exploitation of coal, oil and gas in China,
as well as the development of cleaner, more efficient coal technologies.
TableAnnex A.3-19: Sustainability research supported by the Chinese National Basic
Research Programme
Thematic field
Renewable energy
Basic research supported by 973 Programme
− Renewable energy in large scale
− PV cells with low cost and long life
− Developing wind energy and biomass energy
− Advanced theory and methodology of energy saving,
especially in high-energy consumption areas
− Materials for efficient energy transport
− Water recycling and high efficiency use of water resources in
areas with water shortage
water systems
Material efficiency
−
Circular economy and resource recovery
−
Urban transportation, logistics and engineering safety
High-Tech R&D (863) Programme
The National High Technology R&D Programme aims at the "forefront of world
technology development" and seeks to "intensify innovation efforts and realize strategic
transitions from pacing front-runners to focusing on 'leap-frog' development" (MOST).
The government budget of this programme amounts to ca. 1.5 billion RMB in 2005 (ca.
180 million US-$). Yet total R&D funding is significantly higher since funding under this
programme usually comes from various channels including government, industry and
society.
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207
TableAnnex A.3-20: R&D areas of the 863 programme in 2002
R&D area
Information technology
Biotechnology and advanced agriculture
Advanced materials
Advanced manufacturing and automation
Energy (including nuclear energy and clean coal)
Resources and environment (with focus on the exploitation and
monitoring of marine resources and environmental pollution)
Source
Share of 863 R&D
expenditure
20 %
33 %
17 %
10 %
14 %
6%
MOST, 863 annual report 2002.
According to the contributing experts, The High-Tech R&D programme currently
supports R&D on a MW-scale grid-connected photovoltaic system and on
demonstration systems for power generation with solar energy. In the field of mobility
and logistics, the programme supports R&D on energy efficient vehicles and alternative
fuels, as well as R&D for controlling vehicle emissions.
National Key Technologies R&D Programme
The National Key Technologies R&D Programme is geared to demands of economic
construction and social development. According to MOST, the programme "focuses on
promoting technical upgrading and restructuring of industries, and tackling major
technical issues concerning public welfare". The programme also supports selected
megaprojects which, according to the contributing experts, include research on watersaving forms of agriculture and on the management of water pollution.
National Natural Science Foundation of China (NSFC)
The National Natural Science Foundation of China (NSFC) funds peer-reviewed basic
and applied research in natural science fields. Principal grant awardees are Chinese
universities and CAS research institutes. The budget of the foundation amounts to ca.
3 billion RMD/year (ca. 361 million US-$). The NSFC cooperates with the German DFG
in the Sino-German Center for Research Promotion.
According to the contributing experts from Tsinghua University (A.3.6), the NSFC
supports sustainabilitiy research in the thematic fields listed in TableAnnex A.3-21.
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Annex
TableAnnex A.3-21: Sustainability research supported by the National Natural Science
Foundation of China
Thematic field
Renewable energy
R&D supported by NSFC
− Solar cells
− Energy storage technology
− Fuel cells
− Energy safety and energy policy
− Solar energy utilization
− Biomass energy utilization
− Water resource management in constructing a resourceeconomical society
water systems
Material efficiency
A.3.4.4
1.
−
−
Recycling
Secondary utilization of metallurgical resources
− Tsinghua University, Institute of Nuclear and New Energy Technology;
www.inet.tsinghua.edu.cn
− Energy Research Institute of National Development and Reform
Commission; www.eri.org.cn
− Zhejiang University
− Xi'an Jiaotong University
Companies with important R&D activities in this thematic field (field 1):
China Petroleum & Chemical Corporation, www.sinopec.com; Tianwei Yingli
New Energy Resources Co., Ltd., www.yinglisolar.com/en/
2.
− Tsinghua University, School of Architecture;
http://arch.tsinghua.edu.cn/chs/eng
− Tongji University, College of Construction
− Southern China University of Technology
− Chinese Academy of Building Research, Institute of Construction Physics;
www.cabr.ac.cn
− Xi'an University of Architecture and Technology
Heat pump technology has shown rapid development in China. Institutes with
strong competences in this area, also in the area of system integration, include
the Haerbin Institute of Technology, Tongji University, Chinese Academy of
Building research.
Beijing Morden Group; Beijing Fenshang Co.; Nanjing Langshi Co.; Fousun
Group; www.fosun.com/cn/index/
Annex
209
3.
− Tsinghua University, Department of Environmental Science and
Engineering; http://env.tsinghua.edu.cn/Eng/
− Tongji University
− Haerbin Institute of Technology
− China Institute of Water Resources and Hydropower Research;
www.iwhr.com
− Chongqing University
− Chinese Plan Institute
− Central and Southern China Municipal Engineering Design & Research
Institute
− Beijing General Municipal Engineering Design & Research Institute
− Shanghai Municipal Engineering Design General Institute
− Different design and plan institutes for water and wastwater etc.
The example of water research capacity at Tongji University:
The College of Environmental Engineering of Tongji University has more than
50 professors, and Institute of Environmental Science, State Key Lab etc.
Together with Nanjing University it operates the State Key Lab for Pollution
control and resource management, and educates 31 post doc, 130 doc and
more than 300 masters, and does a lot of basic and innovative research in
different environmental fields.
The MOE Key Lab for Yangtze Water environment is also operated by Tongji
University. Its main working areas are: protection against water pollution and
water security, ecological development and security, geological and
environmental development, use and manangement of water resources, all
regarding the Yangtze river basin.
The same key lab is conducting an 863 project for development of low cost
high efficiency technologies for waste water treatment. It is also taking the
Shanghai municipal project aimed at harnessing of the Suzhou river and
participates in the International cooperation project "ecological construction
and environment protection of Chongming island". The latter includes
environmental protection planning, research on key technologies for
evironmental protection, research and realisation of demo project on
environment protection, research on evironmental management of Chongming
Island. The objective of this research is to develop strategies for sustainable
development, to develop some practical technologies and to solve the
problems.
4.
Material efficiency
− University of Science and Technology Beijing, School of Materials Science
and Engineering
− Zhejiang University, College of Materials Science and Chemical
Engineering
− State Key Laboratory of Advanced Technology for Materials Synthesis and
Processing in Wuhan University of Technology
− The National Center for Nanoscience and Technology (NCNST)
− Chinese Academy of Sciences; www.cas.ac.cn
− China Ocean Shipping (Group) Company COSCO
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5.
Annex
− Beijing Jiaotong University
− Tongji University
− South-East University
− Academy of Rail Science
− Academy of Science of Ministry of Transportation
− Research Institute for Transportation of National Development and Reform
Commission
− Research Institute of Highway, Ministry of Communications;
www.rioh.cn/head.asp
− China Automotive Technology & Research Center; www.catarc.ac.cn
− Tsinghua
University;
Institute
of
Transportation
Engineering;
http://ite.civil.edu.cn
ChangAn Vehicles- Hybrid Vehicles; www.changan.com.cn; Shanghai GDWAY
Intelligent Transportation System Corporation; www.gaodewei.com
6.
− Beijing University
− Chinese Academy of Social Sciences; www.rcsd.org.cn, e.g. Research
Center for Sustainable Development
A.3.5
South Africa
A.3.5.1
The South African innovation system
The largest research organisation in South Africa is the Council of Scientific and
Industrial Research (CSIR). CSIR is organised in five operating units: Built
Environment; Biosciences; Defence, Peace, Safety and Security; Natural Resources
and the Environment; Materials Science and Manufacturing. The CSIR receives an
annual grant from Parliament, through the Department of Science and Technology
(DST), which accounts for close to 40 % of its total income. The remainder is generated from research contracts with government departments at national, provincial and
municipal levels, the private sector and research funding agencies in South Africa and
abroad. Additional income is derived from royalties, licences and dividends from an
intellectual property (IP) portfolio and commercial companies created by the CSIR
(CSIR website).
Apart from CSIR, there are several thematically specialized research councils: the
Agricultural Research Council, the Medical Research Council, the Council for Minerals
Technology (Mintek), the Council for Geoscience and the Human Science Research
Council.
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211
In 2004 South Africa started reforming its higher education system, merging and
incorporating small universities into larger institutions. The biggest universities are the
University of Cape Town, the University of KwaZulu Natal, the University of Pretoria,
the University of Stellenbosch and the University of Witwatersrand. According to Kahn
(2006), these big five account for 70.5 % of R&D expenditures by the higher education
sector, 63.4 % of scientific publications and 45 % of PhD students in South Africa.
90 % of SCI publications of South African origin are published by universities.
One of the main threats to progress of the South African innovation system is the
"frozen demographics" of its R&D personnel. South Africa has an aging, predominantly
white male, scientific and engineering workforce. There are insufficient numbers of new
entrants, including women, to undergraduate and postgraduate S&T ranks. Universities
struggle to retain young scholars, especially black and women post-graduates, and the
research population is ageing rapidly as white 'over 50' men' advance on retirement.
Studies have uncovered several causes of this problem: lack of stability in a
transforming research environment, lack of funding, including for scholarships,
institutional cultures that are alienating to a diverse population of young scholars, lowpaid compared with the private sector and the 'brain drain'.
According to the National R&D strategy, R&D undertaken by large South African firms
shows a declining tendency, although resource based industries, i.e. agriculture, fishing
and forestry, mining and minerals, and energy production, remain critical to South
Africa: "the forces of globalisation have reduced the propensity of South African firms to
engage in the large-scale innovation that characterised earlier decades" (DST, 2002:
40). It is maintained that South Africa currently suffers from an 'Innovation Chasm'.
Consequently, one of the priorities is to enhance the innovativeness of SMEs and to
close the Innovation gap that exists between the knowledge generators and the
market. The National Advisory Council on Innovation (NACI) has been established to
advise the Minister of Science and Technology on strategies for the promotion of
technology innovation; international scientific liaison; science and technology policy
and the coordination and stimulation of the National System of Innovation.
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Annex
TableAnnex A.3-22: Basic indicators of R&D resources in South Africa
South Africa
2001
2003
a
44,000
45,509
132,878
212,777
GERD (million current PPP US-$)
3,344.4
76.0
0.73
4,029.7
88.5
0.87
55.8
36.4
6.1
54.8
34
10.9
21,196
14,182
29,080
14,131
38
2,327
0.36
38
2,364
0.34
Population 1000
Total researchers (FTE)*
a
a = 2004;
Source: OECD Main Science and Technology Indicators 2006; World Development Indicators, Worldbank 2006. Science Citation Index (SCI): US
National Science Board: Science & Engineering Indicators 2006.
Gross domestic expenditure on R&D (GERD) declined initially after the end of the
apartheid regime. By 2001, GERD had recovered to the 1991 volume in real terms and
has shown accelerated growth since then. Between 2003/04 and 2004/05 total R&D
expenditure in South Africa grew from just over 10 billion Rand to 12 billion Rand in
nominal terms representing a real annual increase of about 12.8 %. The lion's share of
R&D expenditures is devoted to applied research and experimental development
(TableAnnex A.3-23).
TableAnnex A.3-23: Gross Expenditure on R&D by type of research, 2004
Type
Basic Research
Applied Research
Experimental Development
Percentage
18.6
38.7
42.6
Source: DST (2006): National Survey of Research and Experimental Development.
While international isolation under apartheid inspired the white regime to support
research that made South Africa economically and militarily self-sufficient, it created a
highly fragmented S&T system. The consequences of such fragmentation were severe
and deeply interconnected - poor or non existent communication and coordination
Annex
213
across the system, disjuncture between the science system and the challenges of
development, and failure of the system to complete the cycle of innovation.
After the end of the apartheid regime, the South African S&T system embarked on a
path of remarkable institutional reform. A "national system of innovation" approach was
established as the framework within S&T policy and alignment would be developed and
directed towards achieving national socio-economic tagets. Part of this reform agenda
has been the development of national strategies to define new missions for science,
technology and innovation policy.
S&T missions in the apartheid era had been focused on issues such as energy, selfsufficiency, offensive and defensive armament capabilities, and a nuclear programme,
among others. Today, the following areas have been defined as new priority fields for
South African R&D efforts: Biotechnology; Advanced Manufacturing Technology;
Information & Communication Technology; Resource-Based Industries and Energy
R&D.
The new political priorities are laid down in a series of strategy documents:
• White Paper on Science and Technology - Department of Arts and Culture
September 1996
• South Africa's National R&D Strategy 2002
• Energy Efficiency Strategy of the Republic of South Africa, 2005
• Policy and Strategy for Groundwater Quality Management in South Africa Department of Water Affairs and Forestry - 2000
• National Water Resource Strategy - Department of Water Affairs and Forestry 2004
• Advanced Manufacturing Technology Strategy – 2002
• Integrated Manufacturing Strategy of the Department of Trade and Industry
• State of Logistics Survey for South Africa 2004
• Moving South Africa - Transport Strategy for 2020 - Department of Transport
A.3.5.2
Core themes of sustainability research in South Africa
The following priorities of national innovation policy are based on investigations by the
South African experts, in particular Prof. Biesenbach.
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Annex
Renewable energy and CO2-neutral fossil energies
A target has been set of 10.000 GWh of energy to be produced from renewable energy
sources (mainly from biomass, wind, solar and small-scale hydro) by 2013.
Technologies to be implemented first, based on the level of commercialisation of the
technology and natural resource availability include:
• sugar cane bagasse
• landfill gas extraction
• mini-hydroelectric schemes
• commercial and domestic solar water heaters
These technologies are to be deployed in the first phase of the target period, from 2005
to 2007. Once-off capital subsidies have been introduced to assist project developers
in implementing economically sound projects that are readily financed by financial
institutions.
According to the National R&D Strategy, many areas in South Africa have patterns of
settlement and conditions that make them unattractive for classical extension of the
electricity grid. "This reality has been somewhat submerged in the present phase of
electricity roll-out nationally. There is a need to develop local small-scale grid
capabilities and household-level energy systems that are affordable, and widely
known" (DST, 2002: 44).
To date, only a handful of countries worldwide have set comprehensive targets for
energy efficiency improvements. In South Africa an Energy Efficiency Strategy has
been approved in 2005 and efficiency in both commercial and residential buildings has
been included in this strategy, as follows - phase 1 2005 - 2008:
• Commercial and public buildings: standards for energy efficiency for buildings will be
developed and made mandatory; Energy Audits will be implemented; emphasis will
be placed on incorporating energy efficiency into building design and energy
efficient technologies will be introduced in existing buildings; demand side
management will be investigated and the use of efficient lighting systems and
possibly heat pumps.
• Residential Sector: awareness raising; appliance labeling; standards for energy
efficient housing will be made mandatory through incorporation into the National
Building Regulations. Attention will be given to the development of energy efficient
coal stoves, wood stoves and liquid fuel stoves.
Annex
215
Targets for energy demand reduction for commercial buildings is 15 % by 2015 and for
the residential sector 10 % in the same period. Support will be provided to appropriate
research and the possible adaptation of internationally available technologies and
processes.
Priorities in this domain include assessment and development of water resources,
management of human impacts on water resources, water resource protection and
policy development, estuarine, riverine and wetland processes management and
rehabilitation, wastewater and effluent treatment and reuse technology, sanitation,
health and hygiene education, water utilisation, and water resource protection. New
membrane technologies are being explored and basic pumping, purifying and
transporting of water form part of the current need. Products such as the 'play pump'
which is a roundabout for children to play on which also pumps water; a drum that rolls
for transporting water in rural areas. There is a strong focus on education and training
regarding the use of water and regarding sanitation.
Groundwater and wastewater systems are regulated by the Department of Water
Affairs and Forestry and research and the organisations that play an important part in
this area are included in the research and development initiative. These include the
mining industry, industry and research organisations. Research includes
geohydrological investigations for potential sources of groundwater contamination,
contaminated site assessment and restoration, contaminant modelling and risk
assessment, community water source protection and land-use practices. Very little
research is carried out on water reuse technologies.
A job creation initiative from the Department of Water Affairs and Forestry has been the
Working for Water Programme. This is a labour intensive process of clearing the alien
vegetation which are water hungry and depleting water resources.
According to the National Research Foundation, some of South Africa's marine
systems are showing signs of severe over-exploitation and degradation and this is
impacting significantly on biodiversity. A recent report evaluates current knowledge,
identifies data gaps and highlights future priority actions and research requirements in
marine biodiversity.
Material Efficiency
The National Advanced Manufacturing Technology Strategy (AMTS) for South Africa
was developed in 2002. This strategy was developed through extensive consultation
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Annex
within the private, public and education sectors, and care was taken to ensure strategic
fit with other national strategies and the avoidance of unnecessary duplication.
This strategy identified key issues as:
• the optimisation of scarce resources (National Laboratories, reduction of waste,
human resource development)
• development of Capacity
• local processing of raw materials
This strategy is currently being implemented.
Existing Centres of Excellence in the Automotive Sector, Product Development
Technology and Cleaner Production Technology will be strengthened and new centres
will be created in Logistics and Textile and Clothing. In addition innovation networks will
be established including an advanced metals network.
Much of the technology and innovation in this area use imported technology and skills
and much focus is now going into the development of both the technology and the skills
in South Africa.
Waste recovery is largely at the small business level but systems are in place for the
collection and recovery of waste metal, paper and also the use of materials such as flyash for road and brick building.
Some work has been done in the field of mineral recovery from waste dumps.
Private companies in the building and automotive sectors are looking at lightweight
construction and the aerospace industry is involved in the ongoing investigation of the
effective use of materials in production.
A National Land Transport Strategic Framework (2006-2011) embodies the
overarching national five-year land transport strategy developed by the Department of
Transport and outlines the following priorities which dictate research and development
agendas for the coming years:
• Planning must pay greater attention to promoting safe and efficient use of nonmotorised transport e.g. cycling
• Public transport information systems will be developed
• The informal taxi industry will be regulated and the taxi fleet recapitalised
• Reinvestment on a significant scale in rail transport infrastructure
• Improved rural development infrastructure and services
Annex
217
South Africa has the largest, best equipped ports on the African continent and the
airport infrastructure covers international, national and regional services and is
constantly being upgraded.
Challenges exist in providing adequate public transport which is currently seriously
underdeveloped leading to the almost exclusive usage of private vehicles particularly in
the affluent urban areas. Mobility of people in the rural areas is problematic. Due to
past policies three-quarters of long-haul tonnage is moved by road and logistically a
rail/road model would be far more effective - this is being investigated.
A pilot of an intelligent transport system is currently being used on a major highway and
once the results of this have been analysed further systems could be deployed.
Research on innovative low-cost road building has been conducted and partially rolled
out particularly in rural areas.
Policies are in place regarding emissions and the first bio-fuels plant is currently under
construction.
Some specific research areas in the mobility and transportation field are : public
transport planning and operations, public transport logistics, freight and logistics, urban
development and transport planning, rurual transport and technology for development,
public transport structuring model, traffic management and transport infrastructure
research including new materials and analysis of existing materials.
The national R&D strategy acknowledges the importance of social sciences for
developing innovation capability. Some expertise has been developed in integrating
across systems to assist in poverty alleviation and there is a strong focus on
Indigenous Knowledge particularly from the DST.
A.3.5.3
Department of Science and Technology (DST)
National science and technology policy is the mandate of the Department of Science
and Technology DST, although several research councils are governed by other
sectoral departments, including the Council for Agricultural Research (Department of
Agriculture), the Council for Medical Research (Department of Health), the Council for
Minerals Technology (Mintek) (Department of Minerals and Energy). The DST does not
offer funding directly to applicants but works through several funding instruments. The
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Annex
Strategic Plan of the former DACST (2002) allocates R 861 million (US-$ 133 million)
to these transfer payments for science and technology in 2004/05. 20 % of this budget
are earmarked for the National Innovation Fund, 40 % are institutional funding including
the National Research Foundation and 20 % go to other R&D related programmes,
mainly financial assistance projects.
National Research Foundation
The objective of the National Research Foundation (NRF) is to support and promote
research through funding, human resource development and the provision of the
necessary research facilities. Funding is directed at all fields of the humanities, social
and natural sciences, engineering, and technology; including indigenous knowledge.
The Strategic Plan of the DACST (2002) allocates R 263 million (US-$ 56 million) to the
NRF in 2004/05 (DACST is a precurser to DST). Two thirds of this budget plan are
current expenditures, including R&D programmes, and one third is support for seven
NRF research institutions.
According to a recent institutional review, the NRF currently translates its mandate into
four core Missions:
• High-quality human resources in substantially increased numbers;
• The generation of high-quality knowledge in prioritized areas that address national
and continental development needs;
• The utilization of knowledge, technology transfer and innovation to ensure tangible
benefits to society from the knowledge created; and
• The provision of state-of-the-art research infrastructure that is essential to develop
high-quality human resources and knowledge.
Mechanisms for funding include Scholarships and Fellowships and an Institutional
Research Development Programme (Technikon and University Research funding) and
a Technology and Human Resources for Industry programme. Through the Focus Area
Programme, NRF directs research funds to priority themes and societal needs. The
total allocation for focus area grants for 2005 was R 163.8 million (US-$ 25 million).
"Sustainable Livelihoods and Poverty Eradication" is one of currently eight focus areas,
with the aim to investigate ways of reducing vulnerability, generating sustainable
livelihoods and eradicate poverty in South African society. Among other things, this
focus area includes research in water supply and community based natural resource
management. The other sustainability related focus area is "Ecosystems &
Biodiversity", in recognition of South Africa's distinctive natural heritage and
biodiversity.
Annex
219
National Innovation Fund
The Innovation Fund (IF) is an instrument of the Department of Science and
Technology, set up in 1999, to catalyse technology innovation. It is managed by the
National Research Foundation and funds near-market and end-stage research that will
result in new intellectual property, commercial enterprises and the expansion of
existing industrial sectors. The Innovation Fund’s mandate is to promote technological
innovations that will benefit South Africa. The IF has three main funding instruments:
1.
Research and Development Grants or Investments
2.
Intellectual Property Grants or Investments, and
3.
Commercialisation (Seed Fund) Investment
Since its inception in 1999, the IF has provided R 900 million to 170 R&D projects in
various technology sectors, including health, agriculture, manufacturing, mining,
education, safety and security, energy, tourism, ICT and biotechnology. The Strategic
Plan of the DACST (2002) allocates R 167 million (US-$ 26 million) to the IF in
2004/05. There is no specific allocation of the IF’s annual budget to specific areas the
mandate is to support technological innovation in any industry or sector. Applications
for funding come from various sources, but mainly from consortiums comprising
science councils, higher education institutions, industry partners and individual
entrepreneurs.
IF investments in R&D projects in the six selected thematic fields:
1.
Renewable energies and CO2-neutral fossil energies – R 13,154,790.00 (US-$ 2
million, 2004 exchange rates)
2.
Energy efficiency in buildings – R 12,633,266.00 (US-$ 1.96 million)
3.
Water supply and waste water systems – R 8,827,000.00 (US-$ 1.37 million)
4.
Material efficiency – R 5,620,000 (US-$ 0.87 million)
5.
Mobility and logistics – R 25,000,000 (US-$ 3.87 million)
6.
Socio-economic research on innovations – none
Water Research Commission
The mandate of the Water Research Commission WRC is to support water research
and development as well as the building of a sustainable water research capacity in
South Africa. The WRC serves as the country’s water-centred knowledge ‘hub’ leading
the creation, dissemination and application of water-centred knowledge. The WRC was
established in 1971, following a period of serious water shortage. At that time, water
R&D in South Africa was limited to a few institutions and the funding level was
inadequate. There was no research coordination and an apparent neglect of some key
research fields. It was deemed to be of national importance to generate new
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Annex
knowledge and to promote the country's water research purposefully, owing to the
expectation that water would be one of South Africa's most limiting factors in the 21st
century.
Total research funding of the WRC amounts to approximately R112 million (US-$ 17.3
million) for 2006/07. Funding of research projects constitutes the largest portion of this
budget (approximately 90 %). The remaining portion is made up of allocations for
consultancies, workshops and conferences, research sponsorships and mobility
funding for capacity building. The WRC has four key strategic areas (KSAs). These
KSAs allow for multidisciplinary studies and are focused on solving problems related to
national needs and supporting society and the water sector. The allocation for 2006/07
resulted in Water Resource Management receiving 30 % of the funds, Water-Linked
Ecosystems 12 %, Water Use and Waste Management 33 % and Water Utilisation in
Agriculture 19 %. The balance of 6 % is reserved for the central fund [figures from
www.wrc.org.za].
A.3.5.4
1.
− The South African National Energy Research Institute has awarded the Energy
Chair to the University of Stellenbosch; the same University also hosts the DST
funded hub for post-graduate studies in renewable and sustainable energy
− University of the Witwatersrand
− University of Cape Town, hosts the Energy Research Centre with focus on
sustainable energy research and renewable energies
− University of Johannesburg, owns IP on photovoltaic technology
− University of Pretoria
− University of the Free State
− University of the North West
− University of South Africa
− University of the Western Cape, research on hydrogen and fuel cells
− Council for Scientific and Industrial Research, research into fuel cells, CSIR
Sustainable Development Group, focus on integration of systems
− Agricultural Research Council
− Eskom, SA's power utility supplier: research into variety of renewable
technologies
2.
− University of Cape Town
− University of Johannesburg
− Council for Scientific and Industrial Research
− South African Bureau of Standards
− University of Stellenbosch
− Agama Energy (non-governmental organisation) [http://www.agama.co.za]
Annex
221
3.
− University of Cape Town, world class Centres of Excellence in both fresh water
and marine systems
− University of Natal
− Rhodes University
− Council for Scientific and Industrial Research, both marine and fresh water
systems and considerable experience in consulting and advising global bodies
such as the World Bank
− Agricultural Research Council
− Water Research Commission, key focus point and coordinating body for African
Ministers Conference on Water
− CGIAR International Water Management Institute (IWMI)
4.
Material efficiency
− Council for Scientific and Industrial Research, strong capacity in materials
research
− National Cleaner Production Centre (NCPC), a collaborative venture between
the United Nations Development Organisation (UNIDO), the Swiss and Austrian
technical institutions, DTI and the CSIR
− Council for Mineral Technology Mintek, Advanced Material Division, e.g.
catalysis research on precious metals such as gold and platinum
− University of Stellenbosch
5.
− Council for Scientific and Industrial Research
6.
− Univeersity of the North West
− Rhodes University
− Human Sciences Research Council
222
A.3.6
Annex
References for Country Reports
Allakhverdov, A., Pokrovsky, V. (2006): Russian Science. Measuring the Hidden Cost
of a Pay Raise, Science, 312, 9 June 2006, 1456.
Anon. (2005): China Passes Renewable Energy Law. RenewableEnergyAccess, 9
march 2005 [http://www.renewableenergyaccess.com]
Department of Arts, Culture, Science and Technology DACST (2002): Strategic Plan
2002, Pretoria.
Department of Science and Technology (2002): South Africa's National R&D Strategy
August 2002. Pretoria.
Department of Science and Technology (2006): National Survey of Research and
Experimental Development (R&D) (2004/05 Fiscal Year). Pretoria.
Eun, J.-H., Lee, K., Wu, G. (2006): Explaining the "University-run enterprises" in China:
A theoretical framework for university-industry relationship in developing
countries and its application to China. Research Policy, 35, pp. 1329-1345.
Glänzel, Wolfgang, Leta, Jaqueline, Thijs, Bart (2006a): Science in Brazil. Part 1: A
macro-level comparative study. Scientometrics 67 (1) 67-86
Global Watch Service by the UK Department of Trade and Industry: Information on
S&T in Brazil, www.globalwatchservice.com; last accessed March 2006, service
discontinued by DTI.
S&T in Russia, www.globalwatchservice.com; last accessed March 2006, service
S&T in India, www.globalwatchservice.com; last accessed March 2006, service
S&T in China, www.globalwatchservice.com; last accessed March 2006, service
Hao Xin, Gong Yidong (2006): China bets big on big science. Science, 311, 17 March
2006, pp. 1548-49.
Annex
223
Hsiung, D.-I. (2002): An evaluation of China's S&T system and its impact on the
research community. A special report for the environment, science & technology
section, U.S. Embassy, Beijing, China.
Kahn, M. (2006): Setting the scene – the NST, measurement and steering.
Presentation given at the NACI International Workshop on Measuring Systems of
Innovation, Pretoria, 24-25 April 2006.
Krawczyk, O., Legler, H., Schadt, C., Frietsch, R., Schubert, T., Schumacher, D.
(2007): Die Bedeutung von Aufholländern im globalen Technologiewettbewerb.
Studien zum deutschen Innovationssystem, 21-2007. NIW, ISI, DIW.
Lachinov, M. (2005): Russia: science and technology framework. Document by the
British Embassy in Moscow, Russian Federation – Science, Environment and
Global Partnership Section.
Lachinov, M. (2006): Russian Government takes control of the Russian Academy of
Sciences (RAS). Document by the British Embassy in Moscow, Russian
Federation – Science, Environment and Global Partnership Section.
Leite, M. (2005): Legitimising Brazil's freeze of research funds. Science and
Development Network, 4 August 2005, SciDev.Net.
Leta, J., Glänzel W., Thijs, B. (2006b): Science in Brazil. Part 2: Sectoral and
institutional research profiles. Scientometrics 67 (1) 87-105.
National Science Board NSB (2006). Science and Engineering Indicators. Arlington,
U.S. National Science Foundation.
NSTMIS (2005): Research and Development Statistics 2004-05. Department of
Science and Technology, Government of India.
OECD (2005): Fostering Public-Private Partnership for Innovation in Russia.
Organisation for Economic Co-operation and Development, Paris.
Schmitt, S. (2005): Abwasserbehandlung in der VR China mit hohem Nachholbedarf.
Fairs & More Business Magazin, Nr. 1/2005, pp. 16-17.
World Bank (2004): Environmental Management in Russia: Status, Directions and
Policy Needs. World Bank Environmentally and Socially Sustainable
Development Unit, Europe and Central Asia Region.
World Bank, UNEP/URC (2006): Developing financial intermediation mechanisms for
energy efficiency projects in Brazil, China and India. Brazil country report.
224
Annex
A.3.7
Contributing Experts
A.3.7.1
Brazil
Ricardo Rose
Diretor Meio Ambiente
Câmara de Comércio e Indústria Brasil-Alemanha
Deutsch-Brasilianische Industrie- und Handelskammer
Rua Verbo Divino 1488
BR 04719-904 Sao Pãulo
www.ahkbrasil.com
with advice from
Jörg Anhalt, Instituto de Desenvolvimento Sustentával e Energias Renováveis, IDER
Laercio Couto, Rede Nacional de Biomassa Para Energia, RENABIO
Aldo Roberto Ometto, Instiuto Fábrica do Milénio, IFM
Rodrigo Quadros, Instituto para o Desenvolvimento de Energias Alternativas e da Auto
Sustentabilidade, IDEAAS,
Noélia Lúcia Simões Falcão, Instituto Nacional de Pesquisas de Amazõnia
Antonio Carlos F. Galvão, Director of CGEE
Flávio Giovanetti Albuquerque
Lélio Fellows Filho
Marcelo Khaled Poppe
Márcio de Miranda Santos
Maria Regina Gusmão
Paulo César G. Egler
all affiliated with:
Centro de Gestão e Estudos Estratégicos CGEE
Financial Center, 11º andar, Sala 1102,
CEP 70712-900
Brasília, DF
www.cgee.org.br
André Carneiro da Cunha Moutinho de Carvalho
Coordenação de Cooperação Internacional - CINT
Financiadora de Estudos e Projetos - FINEP
Praia do Flamengo, 200 - 8º andar
22210-030 - Rio de Janeiro - RJ - Brasil
Patricia Guardabassi
Centro Nacional de Referência em Biomassa CENBIO
Av. Professor Luciano Gualberto, 1289 - Cidade Universitária
CEP: 05508-010
São Paulo - SP - Brasil
www.cenbio.org.br
Annex
225
Prof. Furtado, André
Instituto de Geociências, Departamento de Política Científica e Tecnológica
State University of Campinas UNICAMP
Prof. Jannuzzi, Gilberto
Faculty of Mechanical Engineering FEM
State University of Campinas UNICAMP
Prof. Lamberts, Roberto
Departamento de Engenharia Civil
Federal University Santa Catarina (UFSC)
Prof. Orrico, Romulo
Programa de Engenharia de Transportes
Instituto Alberto Luiz Coimbra
Federal University of Rio de Janeiro (UFRJ)
Prof. Schaeffer, Roberto
Programa de Planejamento Enérgetico
Coordenação dos Programas de Pós-graduação de Engenharia COPPE
Federal University of Rio de Janeiro (UFRJ)
Prof. Tucci, Carlos E. M.
Integrated urban waters management
Universidade Federal do Rio Grande do Sul UFRGS
Former secretary of CTHidro Water Resource Fund
Former president of Brazilian Water Resource Association
A.3.7.2
Russia
The expert questionnaire was filled in by Prof. V. Gorokhov who coordinated and
integrated inputs from other experts as given below, assisted by Ms. Kaganchuk.
Prof. Dr. Vitaly G. Gorokhov
Head of the “International Research Centre for Social Consequences of Scientific and
Technological Development and Innovations” at the Moscow State University (founded
in 2006 together with the Institute for Technology Assessment and Systems Analysis of
the Forschungszentrum Karlsruhe). Prof. Dr. Vitaly G. Gorokhov is scientific
coordinator of the International Academy for Sustainable Development and
Technologies at the University of Karlsruhe (IANET, chairman Mikhail Gorbatchev) and
president of the International Institute for Global Problems of the Sustainable
Development of the International Independent University for Ecology and Political
Science (MNEPU).
226
Annex
Address:
Moscow State University
Department of Philosophy, GSP-2
Leninskie Gory
Moscow, 119992 Russia
Prof. Dr. Danilov-Danilian
President of the Institute for Water Resources Management (IWP)
of the Russian Academy of Sciences
ul. Gubkina 3
119991 Moskau,
Dr.-Ing. habil. Anatoli V. Dolgolaptev
Director General of the scientifically-technically Corporation „Kompomash“ (25
companies, Research Institute and engineering offices)
3 projezd Marjinoj Roshi 40
127018 Moskau
Sergey A. Klimanov
Director of the “Federal Centre of Geoecological Systems”
Kedrova str. 8 b.1.
117292 Moscow
Juri M. Kolotchkov
Head of Department for national research programmes and investments in the Russian
Federation Ministry for Economic Development
Russian Federation for Economic Development and Trade
1. Bverskaja- Yamskaja 1-3
125818 Moskau
Prof. Dr.-Ing. Oleg V. Syuntyurenko
Senior researcher of the All Russian Scientific and Technical Information Institute
(VINITI) of the Russian Academy of Sciences
Russia, ul. Kantemirovskaja 53-1-207
115477 Moscow
Ms Vera Kaganchuk
OOO "REHAU", Department for logistics
Warschavskoje schosse 125
Moskau
Annex
A.3.7.3
227
India
Dr. Ranjan K Bose (Field of Expertise: Mobility and Logistics),
Senior Fellow
The Energy and Resources Institute
Darbari Seth Block,
IHC Complex
Lodhi Road, New Delhi 110 003
Dr. Geetham Tewari (Field of Expertise: Mobility and Logistics)
Assistant Professor
Indian Institute of Technology
Hauz KhasNew Delhi 110 016
Kapil Kumar Narula, (Field of Expertise: Water)
Associate Director
Darbari Seth Block,
IHC ComplexLodhi Road,
New Delhi 110 003
Mr. KK Gandhi (Field of Expertise: Mobility and Logistics)
Executive Director
Society of Indian Automobile Manufacturers
Core 4B, 5th FloorIndia Habitat Centre Complex
Prof. Sarkar (Field of Expertise: Mobility and Logistics)
Head of the Department of Transport Planning
School of Planning and Architecture
4, Block B, Indraprastha Estate
New Delhi 110 002
Dr. Baskar Natarajan (Field of Expertise: Renewable Energy)
Senior Project Offier
India-Canada Environment Facility
2nd Floor Sanrakshan Bhawan10, Bhikaji Kama Place
New Delhi 110 066
Dr. S K Chopra, (Field of Expertise: Renewable Energy)
Senior Advisor
Ministry of New and Renewable Energy
CGO Complex, Block 14Lodhi Road,
New Delhi 110 003
Dr. Vidya S Batra (Field of Expertise: Materials)
Fellow
Darbari Seth Block, IHC ComplexLodhi Road,
New Delhi 110 003
228
Annex
Dr. Malini Balakrishnan (Field of Expertise: Materials),
Fellow
New Delhi 110 003
Dr. Arun P Kulshreshtha (Field of Expertise: Renewable Energy)
Director
Centre for Science and Technology of the Non-Aligned and Other Developing
Countries
(NAM S&T Centre)
Zone 6A, 2nd Floor, IHC Complex
Mr. Mahesh Vipradas (Field of Expertise: Renewable Energy)
Fellow
Darbari Seth Block, IHC Complex
Mr. Amit Kumar (Field of Expertise: Renewable Energy and environemntal
technologies)
Associate Director, Energy and Environmental technologies
New Delhi 110 003
Dr. P C Maithani (Field of Expertise: New technologies and Renewable Energy)
Director, Ministry of New and Renewable Energy
CGO Complex, Block 14Lodhi Road,
New Delhi 110 003
Dr. R K Malhotra (Field of Expertise: Fossil fuels and use of natural resources)
General Manager
Indian Oil Corporation Limited
Research and Development Centre
Sector-13, Faridabad 121 007, Haryana
Dr K S Dathathreyan (Field of Expertise: Hydrogen)
Head
Centre for Fuel Cell Technology
120, Mambakkam Main RoadMedavakkam,
Chennai 601 302, Tamil Nadu
Dr Ajay Mathur (Field of Expertise: Energy Efficiency)
Director General,
Bureau of Energy Efficiency
Ministry of Power, GOI
NBCC Towers, Hall No. IV, 2nd Floor
15, Bhikaji Cama Place, R K Puram
New Delhi 110 066
Annex
229
Dr Veena Joshi (Field of Expertise: Socio Economic Research)
Focus-in-Charge, Rural Energy & Housing
Swiss Agency for Development and Cooperation
Embassy of Switzerland
Chandragupta Marg
Chanakyapuri
New Delhi 110 021
Dr Preety Bhandari (Field of Expertise: Clean Development mechanism and emission
reductions)
Director
New Delhi 110 003
Mili Majumdar (Field of Expertise: Sustainable Buildings)
Fellow
New Delhi 110 003
A.3.7.4
China
Mr. Han Xiaoding translated our questionnaire to Chinese and collected inputs from
Profs. Xu Delong, Tang Tao, Long Weiding and Fu Yigang. Another questionnaire was
contributed by Dr. Wang Ke from Tsinghua University and his collaborators.
CAN Wang
Han Xiaoding
Chief Representative
Fraunhofer Representative Office Beijing
Unit 0606 Landmark Tower II
8 North Dongsanhuan Road
Chaoyang District
100004 Beijing, PR China
Prof. Xu Delong
Xi'an University of Architecture and Technology
710055, Xi'an, China
Prof. Tang Tao
State key laboratory for Railtransportation control and security
Beijing Jiaotong University
Shangyuancun 3,
Haidian District
100044 Beijing China
230
Annex
Prof. Long Weiding
Chinese-German College for Engineering Technology of Tongji University
Prof. Fu Yigang
College of Environmental Science and Engineering of Tongji University
Asistant president of Chongqing Three Gouge Academy
Expert group from Tsinghua University:
WANG Ke
CAI Wenjia
CUI Junlian
JIANG Dongmei
All affiliated with the Department of Environmental Science and Engineering, Tsinghua
University
FU Ping, the Ministry of Science and Technology, China
CHU Junying, Engineering Research Center for Water Resources & Ecology, Ministry
of Water Resource P. R China
A.3.7.5
South Africa
Prof. Reinie Biesenbach
GRA Nerve Centre
P. O. Box 45
The Innovation Hub
Pretoria 0087
South Africa
with advice from
Mr Steve Szewczuk - Sustainable Development Group CSIR South Africa
Department of Architecture, University of Pretoria
National Advisory Council of Innovation – Mr. Bok Marais
Chris Buckley - University of Natal
Prof. David Kaplan, University of Cape Town Graduate School of Business
Dr. Marius Claassen - Water Expert, CSIR South Africa
Water Research Commission of South Africa (publications and discussions with
researchers)
William Blankley, Human Sciences Research Council - published reports and reviews
Ms. Karen van Breukelen, Advanced Manufacturing Technology Strategy
Andries Naude, Isabel Meyer, CSIR South Africa
Research Offices - University of Witwatersrand, University of Cape Town, University of
Natal, University of South Africa, University of Pretoria, University of the Free State,
University of the North West, University of Johannesburg, University of Stellenbosch,
Rhodes University
Annex
Prof. Michael Kahn
Center for S&T and Innovation Indicators, Human Sciences Research Council
Khaya Sishuba
Director: International Relations -Europe and Middle East
Overseas Bilateral Cooperation
Department of Science and Technology DST
Private Bag x894
Pretoria, South Africa
Michael Wimmer
German Embassy Pretoria
P.O. Box 2023
0001 Pretoria, South Africa
Dr. Alan Brent
Energy, Sustainability Science and Technology Management
CSIR
231
232
Annex
A.4
Figure Annex A.4-1: Patent Shares for Renewable Energies and CCS acc. to
Technology Areas
2,5%
40%
35%
2,0%
30%
25%
1,5%
20%
1,0%
15%
10%
0,5%
5%
0,0%
0%
BR
CN
Photovoltaics
Solar thermal DE
IN
Solar thermal
Wind Power DE
RU
Wind Power
Hydro Power DE
ZA
Hydro Power
CCS DE
DE
CCS
Photovoltaics DE
Figure Annex A.4-2: World Trade Shares for Renewable Energies and CCS acc. to
Technology areas
35%
10%
9%
30%
8%
WTS
6%
20%
5%
15%
4%
3%
10%
2%
5%
1%
0%
0%
BR
RU
IN
CN
ZA
Countries
CCS
Solar collectors
Solar cells
Waterturbines
Wind power stations
DE
WTS DE
25%
7%
Annex
233
Figure Annex A.4-3: Revealed Patent Advantage (RPA) for Renewable Energies and
CCS acc. to Technology Areas
100
80
60
40
20
0
-20
-40
-60
-80
-100
BR
CN
IN
Photovoltaics
RU
Solar thermal
Wind Power
ZA
Hydro Power
DE
CCS
Figure Annex A.4-4: Revealed Comparative Advantage (RCA) for Renewable Energies
and CCS acc. to Technology Areas
100
80
60
40
RCA
20
0
-20
-40
-60
-80
-100
BR
RU
IN
CN
ZA
Countries
CCS
Solar collectors
Solar cells
Waterturbines
Wind power station
DE
234
Annex
Figure Annex A.4-5: Patent Shares in the Area Building Efficiency acc. to Technology
Areas
3,0%
20,5%
20,0%
2,5%
19,5%
2,0%
19,0%
1,5%
18,5%
1,0%
18,0%
0,5%
17,5%
17,0%
0,0%
BR
Building services engineering
CN
IN
RU
Energy-efficient appliances
ZA
Building services engineering DE
DE
Energy-efficient appliances DE
18%
16%
16%
14%
14%
12%
12%
10%
10%
8%
8%
6%
6%
4%
4%
2%
2%
WTS
18%
0%
0%
BR
RU
IN
CN
ZA
Countries
DE
WTS DE
Figure Annex A.4-6: World Trade Shares in the Area Building Efficiency acc. to
Technology Areas
Annex
235
Figure Annex A.4-7: Revealed Patent Advantage (RPA) in the Area of Building
Efficiency acc. to Technology Areas
100
80
60
40
20
0
-20
-40
-60
-80
-100
BR
CN
IN
RU
ZA
DE
Figure Annex A.4-8: Revealed Comparative Advantage (RCA) in the Area of Building
100
80
60
40
RCA
20
0
-20
-40
-60
-80
-100
BR
RU
IN
CN
Countries
ZA
DE
236
Annex
Figure Annex A.4-9: Patent Shares in the Area Water Management acc. to Technology
Areas
3,0%
25%
2,5%
20%
2,0%
15%
1,5%
10%
1,0%
5%
0,5%
0%
0,0%
BR
Water supply
Water supply DE
CN
IN
RU
Water utilisation efficienca
Water utilisation efficienca DE
ZA
Flood protection
Flood protection DE
DE
Waste-water disposal
Waste-water disposal DE
10%
20%
9%
18%
8%
16%
7%
14%
6%
12%
5%
10%
4%
8%
3%
6%
2%
4%
1%
2%
0%
0%
BR
RU
IN
CN
ZA
Countries
Flood protection
Water utilisation efficiency
Water supply
DE
WTS DE
WTS
Figure Annex A.4-10: World Trade Shares in the Area Water Management acc. to
Technology Areas
Annex
237
Figure Annex A.4-11: Relative Patent Shares (RPS) in the Area Water Management
acc. to Technology Areas
100
80
60
40
20
0
-20
-40
-60
-80
-100
-120
BR
CN
Water supply
IN
RU
Water utilisation efficienca
Flood protection
ZA
DE
Figure Annex A.4-12: Revealed Comparative Advantage (RCA) in the Area Water
Management acc. to Technology Areas
100
80
60
40
RCA
20
0
-20
-40
-60
-80
-100
BR
RU
IN
CN
ZA
Countries
Wastewater disposal
Flood protection
Water utilisation efficiency
Water supply
DE
238
Annex
Figure Annex A.4-13: Patent Shares in the Area Material Efficiency acc. to
Technology Areas
2,0%
25%
1,8%
1,6%
20%
1,4%
1,2%
15%
1,0%
0,8%
10%
0,6%
5%
0,4%
0,2%
0%
0,0%
BR
CN
Renewable raw materials DE
IN
RU
Recycling
Recycling DE
ZA
Production processes
Production processes DE
DE
Products
Products DE
10%
20%
9%
18%
8%
16%
7%
14%
6%
12%
5%
10%
4%
8%
3%
6%
2%
4%
1%
2%
0%
0%
BR
RU
IN
CN
ZA
Countries
Ecodesign
Recycling
DE
WTS DE
WTS
Figure Annex A.4-14: World Trade Shares in the Area Material Efficiency acc. to
Technology Areas
Annex
239
Figure Annex A.4-15: Relative Patent Shares (RPS) in the Area Material Efficiency
100
80
60
40
20
0
-20
-40
-60
-80
-100
BR
CN
IN
RU
Recycling
ZA
DE
Products
Figure Annex A.4-16: Revealed Comparative Advantage (RCA) in the Area Material
100
80
60
40
RCA
20
0
-20
-40
-60
-80
-100
BR
RU
IN
CN
ZA
Countries
Ecodesign
Recycling
DE
240
Annex
Figure Annex A.4-17: Patent Shares in the Area Mobility acc. to Technology Areas
2,5%
35%
30%
2,0%
25%
1,5%
20%
15%
1,0%
10%
0,5%
5%
0,0%
0%
BR
CN
IN
Drive technologies
Emission reduction
Vehicle technology and design DE
Biofuels DE
RU
Vehicle technology and design
Biofuels
Traffic infrastructure DE
ZA
DE
Traffic infrastructure
Drive technologies DE
Emission reduction DE
21%
12%
18%
10%
15%
8%
12%
6%
9%
4%
6%
2%
3%
WTS
14%
0%
0%
BR
RU
IN
CN
ZA
DE
Countries
Drive technologies
Biofuels
Emission reduction
Trafic concepts
WTS DE
Figure Annex A.4-18: World Trade Shares in the Area Mobility acc. to Technology
Areas
Annex
241
Figure Annex A.4-19: Relative Patent Shares (RPS) in the Area Mobility acc. to
Technology Areas
100
80
60
40
20
0
-20
-40
-60
-80
-100
BR
CN
Drive technologies
IN
RU
ZA
Emission reduction
DE
Biofuels
Figure Annex A.4-20: Revealed Comparative Advantage (RCA) in the Area Mobility
100
80
60
40
RCA
20
0
-20
-40
-60
-80
-100
BR
RU
IN
CN
ZA
DE
Countries
Drive technologies
Biofuels
Emission reductions
242
Annex
A.5
Table Annex A.5-1: Field Definitions of Social-economic Sustainability Research
Scientific Field
Journals in SCI and SSCI
1
Environment & Society
Annual Review of Environment and Resources; Ecology &
Society; Environment; Environmental History; Gaia-Ecological
Perspectives for Science and Society; Global Environmental
Change-Human and Policy Dimensions; Population and
Environment; Regional Environmental Change; Society &
Natural Resources; Sustainable Development
2
Environmental Economics
Ecological Economics; Environment and Development
Economics;
Environmental
&
Resource
Economics;
Environmental Impact Assessment Review; International
Journal of Life Cycle Assessment; Journal of Cleaner
Production; Journal of Environmental Economics and
Management; Journal of Industrial Ecology; Research Policy
3
Energy Policy
Energy Economics; Energy Journal; Energy Policy; Energy
Sources Part B-Economics Planning and Policy; Resource
and Energy Economics
4
Environmental Policy,
others
Climate Policy; Environmental Politics; Global Environmental
Politics; Marine Policy; Natural Resources Journal; Resources
Policy; Transportation Research Part D-Transport and the
Environment
5
Urbanisation
Environment and Planning A; Environment and Planning BPlanning and Design; Environment and Planning CGovernment and Policy; Environment and Planning D-Society
& Space; Environment and Urbanization; European Urban and
Regional Studies; Habitat International; Housing Policy
Debate; Housing Studies; International Journal of Urban and
Regional Research; Landscape and Urban Planning; Regional
Science and Urban Economics; Urban Studies
6
Environmental Awareness
Environmental Ethics; Environmental Values; Journal of
Environmental Psychology
Annex
243
A.6
Annex to Chapter 5
A.6.1
Overview of important discussion points with companies
and experts
1.
Company profile (mainly researched prior to interview)
− Characterisation of business activities in the area of the core themes regarded
(see project description)
− Characterisation of involvement in the BRICS countries and of a selected
technology of the firm (key innovation for sustainability)
2.
Demand side of the observed technology in B/R/I/C/S
− History of the business activities in BRICS with the observed technology
− Customer structure and relationships
− Influences fostering and hampering demand for the technology
3.
Supply side of the observed technology in B/R/I/C/S
− Structure and character of the suppliers
− Situation with competition
− Cooperation and R&D partners in B/R/I/C/S
4.
Knowledge base of the B/R/I/C/S business relationships/ partners in the business
field of the observed technology
− Competence profile/ status of knowledge of the B/R/I/C/S business partners in
the area of the observed technology (equal, complementary, …)
− Pre-requisites with regard to knowledge status of business partners in the BRICS
countries to ensure optimal business activity
5.
Innovation/ diffusion conditions for the observed technology in Germany
− Drivers and obstacles to the innovation and diffusion process
− Learning effects for business activity in BRICS
− Assessment and reasons for Germany's position in the whole topic field, also in
an international comparison
− Significance of Germany's position in the field on the whole for the success of the
observed technology – in Germany and the BRICS countries
Key innovation/
subject of talks
Renewable energies
Wind energy services,
offers of further
education and policy
consulting in drafting
legal promotional
measures
Development,
production and
marketing of wind power
plants, turn-key wind
farms in India
Solar updraft tower
power plants
Aufwindkraftwerke
International plant builder
Service provider in the wind
energy field
Plant builder and project
developer
Consulting engineering firm
Solar updraft tower plants utilise the greenhouse effect to
generate CO2-neutral electricity. Using solar radiation, the air
is heated under a transparent roof to create an updraft which
rises upward through a cement tower in the middle of the
plant. Turbines at the base of the tower convert the rising air
into electricity. Compared with other technologies utilising
solar energy (e.g. PV arrays), solar updraft tower stations
have the advantage that they can be built and maintained by
The optimisation of wind energy technologies through R&D
measures and the offer of integrated services in the form of
turnkey wind farms sustainably increase the efficiency and
effectiveness of wind power plants. This creates additional
benefit for the client and increases the acceptance of wind
energy utilisation to generate electricity.
The use of wind energy to generate electricity contributes to
reducing worldwide CO2-emissions and conserving
resources. The planning, execution and financing of wind
energy projects are a considerable hurdle, especially for
small and medium-sized firms. External consulting and
further education offers simplify the realisation of such
projects. In this way the use of wind energy to generate
electricity can find broader application.
Technologies to convert renewable energy sources can
supplement electricity generation from fossil energy sources
or supplant them. They contribute to a reduction of global
CO2-emissions and to conserving resources.
Contribution of innovation to sustainabilityt
Overview of the actors interviewed and the innovations observed
TOP: Renewable Energies and CCS
Enterprise
(Report)
A.6.2
India, China,
South Africa
India
Brazil, India,
China
Brazil, Russia,
India, China,
South Africa
Country focus
in interview
244
Annex
Gasification
technologies & CCS
International plant builder
Energy-saving building
3-litre house
Knowledge transfer and
market exploitation in
the area of energyefficient building
Architects' office
Building materials producer
Energy efficiency consultant
Beratungsdienstleister
Top 2: Energy Efficiency in Buildings
CDM projects in the
area of renewable
energies
Service consultant
Beratungsdienstleister for
emission trading
Knowledge transfer in the area of energy-efficient building
promotes acceptance and makes a broad application of the
concept possible.
See interview on energy-efficient building
Energy-efficient building aims to sustainably utilise energy in
buildings and in the built-up environment. Reduced energy
consumption by means of energy-efficient building lowers
the emissions which result from (burning) fossil energy
sources and thus contributes to conserving resources. At the
same time, the comfort of the user and the room climate is
improved.
By means of CCS technology, CO2 resulting from burning
fossil energy sources is separated in almost pure form and
stored in compartments of the environment which never
come into contact with the atmosphere. The contribution of
CCS to sustainability consists solely in the reduction of
worldwide CO2 emissions.
CDM makes it possible for actors from industrialised states
to conduct emission-reducing projects in NICs and
developing countries, in order to generate emissionreduction credits. The pre-condition for a CDM project is a
contribution to the sustainable development of the host
country, e.g. via additional investment flows and technology
transfer. This contribution must be certified by the
responsible national authority of the host country before a
CDM project is carried out.
firms on the spot. Solar updraft tower plants thus create a
double bonus especially for NICs and developing countries,
for they increase the domestic value added and reduce the
dependency on fossil energy sources or imported electricity.
China, Russia
China
China
Brazil, India,
China, South
Afrika
Brazil, India,
China, South
Africa
Annex
245
Integral planning of
urban energy supply –
model observation with
a Chinese town as
example
Energy supplier
Plant builder
Water-based paint
systems
Wasserlackbasis
Waste water
technologies
Plant builder
Top 4: Material efficiency
Sewage (waste water)
plants
Plant builder
Top 3: Water supply and waste water disposal
Energy-efficient building
and evaluation of energy
concepts
Research institute
For a long time, coating powder Pulverlacke was seen as the
ecologically superior alternative to wet paint systems
Nasslacksystemen. According to recent developments,
water-based paints however have several ecological
advantages over solvent-based varnishes and also coating
powder. Very thin coats possible are possible (40 micron as
opposed to 70-80 micron for coating powders) thus reducing
the number of of coats required. Water-based paint is more
easily recycled Recyclingfähigkeit ?? than coating powder.
See interview on waste water technologies
By mechanically and chemically cleansing (industrial) waste
water, careful treatment of the resource water is guaranteed
and the pollution of groundwater and the neighbouring water
ecosystems is reduced. This also has positive consequences
particularly for the local drinking water supply.
According to simulation models, taking the entire energy
supply infrastructure into account in town planning leads to
increases in energy efficiency, which exceed the sum of the
single contributions of the technological components. An
integral planning of the urban energy supply thus contributes
to conserving resources and reduces global emissions from
fossil energy sources.
The evaluation of energy concepts aims to check the set
targets for energy-efficiently planned and realised building
projects and strives for long-term improvement. In this way,
optimisation of the technologies and concepts of energyefficient building will be advanced and additional benefit will
be generated for the customer through further energy-saving
measures.
Brazil, Russia,
China, India
China
Russia
China
China
246
Annex
BIOLIQ process
b) Second generation
biofuels
International plant builder (see
also Top 1)
Post-shredder
technology for scrap
cars
Scientific expert
Top 5: Mobility and logistics
Plant builder
Second generation biofuels (biomass to liquid: BTL) utilise
the whole plant as a basis, thus considerably increasing the
energy yield compared to conventional processes (e. g.
biodiesel, ethanol). The process has technical similarities
with coal gasification and liquefaction. The properties of the
fuel can be optimally adapted to the requirements of an
internal-combustion engine ("designer fuel"), so that the
emissions are reduced. They are CO2-neutral because of the
raw material base. Thus BTL processes can make a
valuable contribution to lowering street traffic emissions. The
A challenge in using biomass lies in its low energy density
and the bulk transport required if large biomass quantities
are to be centrally processed. This is where the BIOLIQ
process comes in. The whole plant is compacted into
energetic slurry, thus forming a basic component in the
logistics of energy-efficient biomass utilisation, e. g. for its
subsequent processing into fuel.
When scrapping old vehicles, after several preliminary
stages the bodywork remaining is shredded. Iron and other
metal materials are separated for recycling, ca. 20 % of the
vehicle weight remains as shredder waste. The process
regarded here extracts further useable raw materials from
this waste. The largest share consists of the material groups
granulated materials, fibres and sand. In addition, further
metal concentrates and a recyclable PVC-rich fraction
(part?) are produced. In Europe, 2 - 3 m t of shredder
residues occurs annually from the disposal of car bodies and
other metalliferous waste like electrical household
appliances. This process thus represents a valuable source
of scondary raw materials.
The energy consumption and emissions when baking do not
apply Einbrennen. ?? However, they are not entirely solventfree like coating powders.
Brazil, India,
China
China
Brazil, India,
China, South
Africa
Annex
247
Emission-reducing
technologies for trucks
CO2-neutral logistics
services
Vehicle manufacturer
Logistics service provider
CO2-neutral logistic services are based on the premiss that
CO2 emissions linked with certain transport services are
calculated and compensated for/ offset by CO2 reductions in
company-external and –internal projects. CO2-neutral logistic
services are marketed in Germany with an additional charge/
markup. As logistic services can only be performed to a very
small extent in a CO2-neutral manner, namely if biofuels are
used, compensation takes place predominantly through CO2-
The emissions of conventional air pollutants from
commercial vehicles and their diesel engines have fallen
considerably in the past years (particulate emissions from
1990-2006 reduced by the factor 35 (97 %), for nitrogen
oxides by factor 7, with Euro 6 a factor 50 -70 compared with
1990 was realised). In order to meet the guidelines set in the
Euro-5 Norm, AdBlue technology was developed to treat
exhaust gas. It is not allowed in the USA, because it is
feared that drivers would not be able to fill up with the
required additive and actually worsen exhaust emissions.
Exhaust reduction within the engine appears promising, for it
would be very expensive to conform to the standards using
exhaust gas purification only. From 2008 the Euro-5 Norm
should be met without using the AdBlue exhaust gas
treatment. A certain mininum fuel quality is a prerequisite for
the emission-reducing technologies to be effective. The
problem of CO2 emissions will not be solved by these
approaches.
advantage over hydrogen is its compatibility with the existing
infrastructure (fuel supply and fleet of vehicles). This is
where the advocates of hydrogen vehicles see the
disadvantage: in gasifying the biomass, hydrogen could be
captured auskoppeln ?? and used in drive systems (i. e. fuel
cells), which are far more efficient than the internalcombustion engine. The range per hectare of land used for
biomass cultivation would be definitely higher with hydrogenbased systems.???
Germany
BRICS+D
248
Annex
Financing environmentrelated investment
projects in the B/R/I/C/S
states
Financial (development)
collaboration
Export financing,
commercial project
financing
Promotion of demand for
cleaner technologies via
the UN Cleaner
Production Programme
(Development aid) bank
Förderbank
Bank
UN National Cleaner Production
Center in Brasilien
(Turnkey solutions for)
railway transport
systems
Bank
Cross-sectional interviews
Systems supplier
Railway traffic systems are clearly lower in emissions than
street or air traffic, whether in short- or long-distance traffic.
They are regarded as the most environmentally compatible
means of mass transport. The efficiency and reliability of the
systems are increased through the integrated service offered
in the form of "turnkey systems". This creates additional
benefit for the customers/ passengers and greater
acceptance, and is thus a further contribution to
sustainability.
reductions outside the transport sector, e. g. by means of
projects in the renewable energies field or emission
reduction credits from projects abroad. The product presents
an interesting approach to coping with the rigidities in the
transport sector and contributes in this respect to
sustainability. It is, however, controversial to what extent the
established CO2 reductions really represent additional
reductions.
Brazil
BRICS and
others
BRICS and
others
BRICS and
others
China
Annex
249
the UN Cleaner
the UN Cleaner
the UN Cleaner
Industrial parks
Research institute (cooperation
partner of the UN National
Cleaner Production Center in
Brazil)
Scientific expert
UNIDO Cleaner Production Unit
Scientific expert
China
Brazil, Russia,
India, China,
South Africa
Brazil
Brazil
250
Annex
Annex
251
The English version of the study has already been sent to all the scientists and experts involved as well as
to the participants of the international conference on sustainability and growth in Brazil, Russia, India,
China and South Africa. It is now available to political institutions in Germany and other interested parties.
The German and English versions are available at:
http://www.nachhaltigkeitsrat.de/veroeffentlichungen/studien/?blstr=0
http://www.isi.fraunhofer.de/publ/index.htm
German Council for Sustainable Development
The German Council for Sustainable Development has the task to provide recommendations on
Germany’s sustainability policy, to suggest exemplary projects and to strengthen the topic in the public
sphere. On European level, the Council regularly exchanges experiences with other European SD bodies
on their respective national strategies through the Network of European Environmental and SD Advisory
Councils (EEAC). Informations about members and activities of the council are available under:
www.nachhaltigkeitsrat.de

Study "Research and Technology Competence for a Sustainable

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