Free download from www.hsrcpress.ac.za Published by Press Private Bag X9182, Cape Town, 8000, South Africa www.hsrcpress.ac.za First published 2008 978-0-7969-2213-7 © 2008 Human Sciences Research Council The views expressed in this publication are those of the authors. They do not necessarily reflect the views or policies of the Human Sciences Research Council (‘the Council’) or indicate that the Council endorses the views of the authors. In quoting from this publication, readers are advised to attribute the source of the information to the individual author concerned and not to the Council. Copyedited by Write Connection CC Typeset by Robin Taylor Cover by FUEL Design Print management by Greymatter & Finch Printed by LogoPrint, Cape Town Distributed in Africa by Blue Weaver : +27 (0) 21 701 4477; : +27 (0) 21 701 7302 www.oneworldbooks.com Distributed in Europe and the United Kingdom by Eurospan Distribution Services () : +44 (0) 20 7240 0856; : +44 (0) 20 7379 0609 www.eurospanbookstore.com Distributed in North America by Independent Publishers Group (IPG) -: (800) 888 4741; : +1 (312) 337 5985 www.ipgbook.com Free download from www.hsrcpress.ac.za iii List of tables iv List of figures v Acronyms and abbreviations vi Foreword ix 1 Knowledge intensification in resource-based economies 1 Jo Lorentzen 2 The development of a sugar-based plastic in Brazil 49 Léa Velho and Paulo Velho 3 The manufacture of biodegradable plastics from maize starch: a case of technological migration, adaptation and learning in South Africa 89 Marian Walker 4 Cleaning pollution: from mining to environmental remediation 125 Juana Kuramoto and Francisco Sagasti 5 Missed opportunities? A case study from South Africa’s mining sector 179 Thomas E Pogue 6 From coee production to machines for optical selection: a case of lateral migration in Costa Rica 215 Elisa Giuliani Contributors 248 Index 249 Contents Free download from www.hsrcpress.ac.za iv 1.1 Questions for semi-structured interviews 25 1.2 Profile of case studies 26 1.3 Determinants of knowledge intensification in the five case studies 38 2.1 Prices of some biodegradable plastics 71 2.2 Estimated investment in production process development 75 2.3 Research output on the development of sugar-based plastic 77 3.1 Market applications for bioplastics 96 4.1 Peru’s world ranking as a metal producer (2005) 131 4.2 Mining regions and type of metallic deposits 134 4.3 Legislation promoting mining 143 4.4 Dimensions of absorptive capacity 147 5.1 Some important dates in the development of hydraulic technologies (1965–1991) 183 5.2 Some important dates in the development of South African suppliers of hydro-hydraulic technologies (1975–2003) 197 6.1 The market for cleaning, sorting, screening and grading machines 221 6.2 Xeltron’s market share of machines for coee-bean selection 221 6.3 Technical details of Xeltron’s Genius technology 229 Tables Free download from www.hsrcpress.ac.za v 1.1 Market positioning of the resource group’s top 20 exports (2002) 11 1.2 Market positioning of East Asia’s top 20 exports (2002) 12 1.3 Co-existence of resource and knowledge economies 16 1.3 Co-evolution of resource and knowledge economies 16 1.4 The flow of knowledge between local and international companies and research institutes in the context of industrial policy frameworks 18 2.1 Evolution of the yield of sugarcane 53 2.2 Lowest cost sugar producers (2003/04) 53 2.3 Brazil’s sugarcane, sugar and ethanol production and sugar export (1970–2003) 55 2.4 World production and consumption of sugar (1983–1995) 55 3.1 Network participants and relationships 110 4.1 Metal prices (1929–1948) 129 4.2 Metallic and non-metallic operations in Peru 133 4.3 Stages in the mining process 137 6.1 Evolution of main export sectors’ shares 217 6.2 Foreign direct investment in high-technology industries during the 1990 s 218 6.3 Xeltron customer services worldwide 220 6.4 Machines for optical colour sorting by Xeltron 225 6.5 Accumulation of technological capabilities within Xeltron over time 226 Figures Free download from www.hsrcpress.ac.za vi – Agriculture and Agri-Food Canada – Anglo American Corporation – Brazilian Agency for Graduate Education – Chief executive ocer – Brazilian National Research Council – Chamber of Mines Research Organisation – Chamber of Mines of South Africa – Council for Scientific and Industrial Research – Copersucar Technology Centre – Copper – Department of Environment and Heritage / – Department of Materials at the Federal University of São Carlos – Department of Trade and Industry, United Kingdom – Emulsion hydraulic – Export processing zones – European Union – Electrowinning – Foreign direct investment – Fund for Research into Industrial Development Growth and Equity (Nedlac) – Great Britain – Gross domestic product – Gold Fields South Africa – Gold Producers’ Committee – German Technical Cooperation – Hydro-hydraulic – Hydro Power Equipment Acronyms and abbreviations Free download from www.hsrcpress.ac.za vii – Harmonised system 1996/2002 – Human Sciences Research Council – Institute of Applied Materials – Institute of Biomedical Sciences / – Institute of Biomedical Sciences of the University of São Paulo – Imperial Chemical Industries – Information and communication technology – Integrated Manufacturing Strategy – National Intellectual Property Institute – Intellectual property – intellectual property rights – Institute for Technological Research – Import substitution – Magnesium Compound Consortium – Ministerio de Energía y Minas (Ministry of Energy and Mines) – Mineral and Mining Technology Council – Minera Lizandro Proaño Sociedad Anónima (Incorporated Company) – Multinational corporation – Mining Research Division – National Research and Development Strategy – National Research Foundation – National system of innovation – Science and Technology Reform Support Programme – Andean Programme for Technological Development – Research, development and engineering – Polyhydroxyalcanoate – Polyhydroxybutyrate – Industrial Sociedad Anónima (Incorporated Company) – Polyhydroxyvalerate – Polylactic acid – Rand (South African currency) Free download from www.hsrcpress.ac.za – Research and development – Research Advisory Committee – Biotechnology subprogramme – Solvent extraction – Science, engineering and technology – Standard industrial classification – Small and medium enterprise – Sociedad Minera Pudahuel - – Solvent extraction and electrowinning – Technology and Human Resources for Industry Programme – Netherlands Organisation for Applied Scientific Research – university–industry linkages – United Kingdom – United Nations Development Programme – Usina da Pedra – United States (of America) – United States of America – US Patent and Trademark Oce – Variable Multiple Vision System Abbreviations of units of measurement °C – degree Celsius ha – hectare kg – kilogram km – kilometre ka – kilopascal m 3 – cubic metre a – megapascal – metric ton ppm – parts per million viii Free download from www.hsrcpress.ac.za Resource-based industries are often regarded as ‘old-fashioned’, particularly in respect of research and development (). While they can earn a great deal of foreign currency and contribute significantly to national wealth, they tend to have weak backward and forward linkages. A country dominated by resource-based exports may associate those industries with its economic ‘backwardness’ – falling terms of trade, the boom and bust of commodity cycles, and a lack of higher-value exports (otherwise known as the ‘resource curse’). Substantial cross-country evidence shows that minerals economies tend to grow more slowly, experience higher inflation, have greater income inequality and have large enclave-like investments with most value-add achieved in other locations. Promoting industrial diversification and building industrial capabilities should be an important public policy goal for governments seeking to encourage sustainable growth and economic participation. The backwardness associated with minerals economies can be policy induced, but need not be so. Quite a number of resource-based economies have grown wealthy by investing substantially in institutions that build domestic know-how. These economies have raised their level of productivity through knowledge-intensive investments in and around their resource industries. New technology has improved the capability to locate non-renewable resources (thereby eectively increasing its quantity) and has enabled linked industries to take root and grow. There are well-known examples where more resource has been extracted as a result of innovation. They include the Chilean grape sector; the forestry and pulp and paper sectors in Sweden and Finland, and the American, Australian, Canadian and Brazilian mining industries. These countries have also had success in generating inputs industries, from capital equipment to engineering services. Examples include the Italian ceramic tile industry, Swedish and ix Foreword Free download from www.hsrcpress.ac.za x Finnish mining and forestry capital equipment and services, or transport and logistics management arising from the flower industry in the Netherlands. A strategy of this type fuelled much of the Finnish employment revival in the mid-1990 s. Previously a major exporter of pulp and paper, Finland became an even larger exporter of environmentally friendly capital equipment servicing the pulp and paper sector globally. With this in mind, the South African Department of Science and Technology () released a national strategy in 2002, incorporating a mission statement for resource-based industries. This mission is one element of the government’s policy for promoting competitiveness, industrial diversification and sustainable economic development. It identifies key levers for promoting input industries, downstream activity and lateral linkages, using existing know-how in resource-based industries. The resource-based mission of the strategy is aimed at leveraging the know-how and technologies in resource-based industries and the development of new knowledge-based industries from them. To identify policy options that would support the resource-based mission, the commissioned preliminary research from the Human Sciences Research Council () and Mintek. These are independent, quasi-government agencies respectively responsible for public interest social sciences and mining capital equipment research. Dr Paul Jourdan (then the of Mintek) and I (at the ) jointly established a Resource-Based Technology Clusters () project aimed at informing policy for promoting and innovation in and around resource-based industries. ‘Lateral Migration’ was a central tenet of the , but it required fuller exploration. ‘Lateral migration’ refers to a situation where know-how or capabilities are developed to solve a problem in a resource-based industry, the application of which subsequently migrates to other higher-growth industries. The commissioned the to produce two sets of case studies with the aim of contributing to an initial set of principles that would guide public policy in promoting resource-based technology clusters. Free download from www.hsrcpress.ac.za [...]... (mining) Knowledge intensity Figure 1.3b Co-evolution of resource and knowledge economies Resource intensity (inverse scale) Lateral migration Input industries Beneficiation Knowledge intensity creating and sustaining linkages that build bridges between the resource and the knowledge economy Figures 1.3a and 1.3b illustrate in stylised fashion the various technological trajectories 16 resource intensity, knowledge. .. the knowledge, capital goods and services sector associated with a resource- based activity are applied in areas that are not linked to resource exploitation.1 In other words, it occurs when 14 resource intensity, knowledge and development Free download from www.hsrcpress.ac.za knowledge accumulation bridges the resource and knowledge economies through linkages of human and other capital Examples from... electronics from paper, tyres and cable is a prime example – it is obviously easier to think about, and steer, economic development in an evolutionary fashion, in which the accumulation of knowledge is gradual and continuous, and the challenge hence lies in knowledge intensification in resource- based economies 15 Figure 1.3a Co-existence of resource and knowledge economies Resource intensity (inverse... technologies and knowledge to improve their production processes Technology and knowledge may be embodied in foreign direct investment (fdi), but they will also be generated by domestic institutions and rely on investments in ict infrastructure Ultimately, intelligent policies aided the transformation 8 resource intensity, knowledge and development Free download from www.hsrcpress.ac.za of natural resource- based... or so – since Sachs and Warner’s (1995) paper rekindled the debate – theoretical knowledge intensification in resource- based economies 5 Free download from www.hsrcpress.ac.za advances and new empirical research have signiicantly improved our understanding of how, and why, resource intensity impacts on economic development In short – and this is as intuitive as the resource curse hypothesis was counter-intuitive... for success or failure, and 2 resource intensity, knowledge and development Free download from www.hsrcpress.ac.za whether insights from a collection of case studies can inform a broader policy discussion of how best to reconcile the demands of the knowledge economy with resource- intensive endowments This chapter (which is divided into seven sections) introduces, summarises and contextualises the book... is a pattern to the knowledge intensiication of resource- based industries, it is important to understand the internal resources and external knowledge that irms draw on, regardless of the knowledge intensification in resource- based economies 23 Free download from www.hsrcpress.ac.za purposeful or accidental nature of their technological enquiry We must also understand the nature and the weight of the... combination of abundance in natural resources, sound macroeconomic policies, and economic policies aimed at generating high savings rates and productive investments can be very successful (Atkinson & Hamilton 2003) 6 resource intensity, knowledge and development Free download from www.hsrcpress.ac.za It is certainly easier to explain the uncontroversial successes of resource- based industrialisation with... about looking for and extracting value from such resources This should not detract from the important insight associated with lateral migration, however, namely that resource- based and knowledgeintensive activities may co-evolve To underline the point, if a country were to tax certain old economic activities and provide incentives for perceived new economic activities, resource- and knowledge- intensity... Restructuring and diversiication in resource- rich economies are likely to take speciic forms, however, insofar as they, at least in part, are supported by related and input industries that supply resource- based sectors with goods and services Although there is a global knowledge base for knowledge intensification in resource- based economies 9 Free download from www.hsrcpress.ac.za mining, agriculture and aquaculture, . resource and knowledge economies 16 1.3 Co-evolution of resource and knowledge economies 16 1.4 The flow of knowledge between local and international. Chilean grape sector; the forestry and pulp and paper sectors in Sweden and Finland, and the American, Australian, Canadian and Brazilian mining industries.