TY - JOUR
T1 - The private sector in agricultural research systems
T2 - will it fill the gap?
AU - Pray, Carl E.
AU - Umali-Deininger, Dina
N1 - Funding Information:
revenues.’I n general,t heseM NCs consider6 to 7% of revenue as the minimum investment necessary to ensure an acceptable level of competitivenessi n the market place (James, 1996).F unding from the privatec apitalm arketi s unusual, although firms occasionallyb orrow for buildings and equipment.S ome firms get small amountso f funding from governmentg rants( see section on policies). Small, start-up companies which specialize in research are rare in developingc ountries.I ntellectual propertyr ights in developing countries are usually not strong enough to attractt he funding neededt o finance researchb y small firms. In the United States,a large share of agriculturalr esearcha nd medical biotechnologyi s conductedb y small firms that spin off from university,g overnmentr esearcho r other firms.’ In a few developing countries, venture capital firms are emerging. In India, there are 13 venture capital firms - including some that are owned by government banks, whose total investmentsi n the biotechnology sector amountedt o about $7.8 million or 4.5% of total venture capital investments (Verma, 1997).” A recents urveyo f privates ectors ources of funding in Colombia, Ecuador and Jamaica
Funding Information:
Several new and innovative types of public-privatep artnershipsin agriculturalr esearchh ave developed in recent years to capitalize on complementarities in funding and research implementationc apacitiesT. hese include public-private joint ventures, public-private research corporations, private research foundation funding of public institutes, and public sector funding of private for-profit and non-profit (including NGOs) researcht hrough competitive grant funds. In Argentina, the Instituto National de Technologia Agropecuaria adopted a new policy that permits the institute to enter into joint venturesw ith private agriculturalf irms for the developmento f innovations (Trigo, 1993). Contractuala greementss pecifyt he technicala nd financial contributionso f each as well as the IPR sharing arrangements for the resulting knowledgea nd technologies.‘4 Private researchf oundations are taking on a bigger role in some developingc ountries.T hese foundations are non-profit organizations that fund and/or conduct agricultural research and technology transfer. Foundation activities may include financing public and privater esearcha nd conducting research and technology transfer (Coutu and O’Donnell, 1991; Trigo, 1993; Weatherly and Warnken, 1994; Falconi and Elliott, 1995; Echeverria, Trigo and Byerlee, 1996; Ramachangdran, 1997). Some private foundations such as Fundacion al Servicio de1 Agricultor and Fundacion Polar in Venezuela, Fundacion Hondurea de Znvestigacion Agricola in Honduras) and the MS. SwaminathanR esearch Foundation and the Bharatiya Agro-industries Foundation in India conduct their own research. These foundation were endowed funding by privates ectord onors,a lthought hey may conduct research with funding from governmentsa nd international donors. Other foundations,s uch as Fundacion para el Desarollo Agropecuatio in Ecuador, Fundacion para el Desarollo Agrope-cuario in Peru, Jamaica Agricultural Research Program,” and the Agricultural Development Foundation in the Dominican Republic do not conduct research, but through grants and contracts,s upportr esearchu ndertakenb y public and private institutions. In some special cases, such as the Fundacion Chile and ArgenINTA, the foundation’s activities extends beyond researcht o linking scientific and technological capabilities with R&D needs and investment projects.W ith declining public researchf unding, private research foundations could play an important role in helping to fill the research funding gap.
PY - 1998/6
Y1 - 1998/6
N2 - This article examines whether the private sector can fill the gap of declining public research in developing countries. Economic theory suggests private for-profit research will focus on areas where returns to research are appropriable and reasonable profits are generated. Actual private for-profit research activities concentrate on countries and industries with large markets, appropriable returns, strong science infrastructure, and favorable government policies. Governments and donors can promote private research by easing constraints to private entry and operations. But, if governments stop funding research on public goods and technologies with limited market potential, the private sector is unlikely to fill the gap completely.
AB - This article examines whether the private sector can fill the gap of declining public research in developing countries. Economic theory suggests private for-profit research will focus on areas where returns to research are appropriable and reasonable profits are generated. Actual private for-profit research activities concentrate on countries and industries with large markets, appropriable returns, strong science infrastructure, and favorable government policies. Governments and donors can promote private research by easing constraints to private entry and operations. But, if governments stop funding research on public goods and technologies with limited market potential, the private sector is unlikely to fill the gap completely.
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U2 - 10.1016/S0305-750X(98)00040-0
DO - 10.1016/S0305-750X(98)00040-0
M3 - Article
AN - SCOPUS:0032101491
SN - 0305-750X
VL - 26
SP - 1127
EP - 1148
JO - World Development
JF - World Development
IS - 6
ER -