2.3.1 National systems of innovation

In recent years it has become clear that technology intermediation is needed to reduce barriers to technology transfer associated with information, management, technology, and financing. Research on technology innovation also highlights the role of intermediaries in the innovation process. They operate between users and suppliers of technology and help to create the links within networks and systems through bridging between institutions, encouraging interaction within the system and assisting with undertaking search, evaluation and dissemination tasks. They ensure that technological know-how is broadly dispersed within the system and can provide a compensating mechanism for weaknesses or "holes" in the system. The high value of technology intermediation is illustrated by many of the case studies presented throughout the Report (see for instance Box TS2).

Examples of technology intermediaries include specialised government agencies, energy-service companies, non-governmental organisations, university liaison departments, regional technology centres, research and technology organisations, electric power utilities, and cross-national networks. Non-governmental organisations in particular are playing a greater role in technology intermediation; for example, there are many cases where technology intermediation by non-governmental organisations played a key role in the success of particular technology transfer efforts for renewable energy.

The key lesson which can be learnt from the literature on technology intermediaries, is the importance of mechanisms in which actions are integrated to make them more effective. Technology transfers are influenced greatly by what have been called national systems of innovation--the institutional and organisational structures which support technological development and innovation. Governments can build or strengthen scientific and technical educational institutions and modify the form or operation of technology networks-the interrelated organisations generating, diffusing, and utilising technologies.

National systems of innovation (NSI) integrate the elements of capacity building, access to information and an enabling environment into a mechanism for EST transfer that adds up to more than the individual components. Subsystems and the quality of interconnections within them can successfully influence technology transfer. NSIs can be enhanced through partnerships sponsored by international consortia. Partnerships would be system oriented, encompass all stages of the transfer process, and ensure the participation of private and public stakeholders, including business, legal, financial and other service providers from developed and developing countries.

NSI activities may include:

• Targeted capacity building, information access and training for public and private stakeholders and support for project preparation;
• Strengthening scientific and technical educational institutions in the context of technology needs;
• Collection and assessment of specific technical, commercial, financial and legal information;
• Identification and development of solutions to technical, financial, legal, policy and other barriers to wide deployment of ESTs;
• Technology assessment, promotion of prototypes, demonstration projects and extension services through linkages between manufacturers, producers and end users;
• Innovative financial mechanisms such as public/private sector partnerships and specialised credit facilities;
• Local and regional partnerships between different stakeholders for the transfer, evaluation and adaptation to local conditions of ESTs (see for instance the TCAPP example in Box TS3);
• Market intermediary organisations, such as Energy Service Companies.

NSI offer a new solution to the challenge of technology transfer and offer a cost effective, flexible way of enhancing technology transfer. Governments and multinational organisations should consider developing programmes to support NSI activities, either individually or jointly.

Comprehensive approaches to technology transfer which incorporate many of the elements listed above are beginning to emerge on both a bilateral and multilateral basis. One such activity being conducted on a bilateral basis by the United States is the Technology Cooperation Agreement Pilot Project, known as TCAPP. A similar multilateral approach is being pursued by the Climate Technology Initiative (CTI), an activity undertaken by 23 developed country Parties and the European Commission in support of the UNFCCC. Both approaches utilize a bottom-up, collaborative process under which all relevant stakeholders are engaged to jointly determine the technology selection/practices and implementation path consistent with that country's/region's sustainable development goals for one or more sectors. These approaches require a mutual commitment to explore actions which focus on achieving climate and development benefits to the host country, with active participation of relevant government, non-government, community, and industry groups. Since the goal is to translate sectoral needs into functioning projects, consideration is given to how the projects might be best structured to encourage private sector investment, including the need for regulatory or other change within the country to foster an enabling environment.

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