Industry, Innovation and Infrastructure

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Industry, Innovation and Infrastructure

Definition

Build resilient infrastructure, promote inclusive and sustainable industrialization

and foster innovation

Targets:

 Develop quality, reliable, sustainable and resilient infrastructure, including

regional and trans border infrastructure, to support economic development

and human well-being, with a focus on affordable and equitable access for all.

 By 2030, upgrade infrastructure and retrofit industries to make them

sustainable, with increased resource-use efficiency and greater adoption of

clean and environmentally sound technologies and industrial processes, with

all countries taking action in accordance with their respective capabilities

 Enhance scientific research, upgrade the technological capabilities of

industrial sectors in all countries, in particular developing countries,

including, by 2030, encouraging innovation and substantially increasing the

number of research and development workers per 1 million people and public

and private research and development spending

List of Policy Changes and Cuts:

 Terminated the contract of Ontario’s Chief Scientist

 Reduced funding to STEM cell research institutes

 Reduced funding to Artificial Intelligence Institutes

 Reduced funding to Ontario Trillium Foundation

Analysis:

The focus of policy and funding changes listed under this Sustainable

Development Goal relates to efforts to cultivate innovation, to invest in both the

technology and science industries, and grow the digital economy.

One of the first announcements that relates to this SDG was terminating the

contract of Ontario’s first Chief Scientist, appointed in 2017. The responsibilities

of the position were to provide science-based advice on matters ranging from

climate change and agriculture to the potential effects of technologies such as

artificial intelligence. Recognizing that it was a new position, the benefit of having

evidence-based decision making to help design policies was a breakthrough for the

growth of science and innovation in this province. Essentially eliminating the

position, since a replacement has not been named, is a step backwards in the

growth of our industries.

There were also reductions in funding for various institutes that specialize in

science, as well as technology and innovation. Stem cell research institutes, which

utilize stem cell discoveries to develop treatments that are both medically and

commercially viable, have experienced cuts to their budgets. The provincial

government has also reduced funding to the Ontario Centers of Excellence, which

helps innovative companies secure funding through various entry programs. In

terms of Artificial Intelligence institutes, both the Vector Institute and the

Canadian Institute for Advanced Research (CIFAR) had funding significantly

reduced. The Vector Institute focuses on machine and deep learning, and the

funding reduction was to a program that helped accelerate growth in professional

applied masters’ graduates in Artificial Intelligence (AI). CIFAR has been leading

work on exploring the economic, legal, ethical and social perspectives on AI. The

funding reductions also applied to the MaRS Discovery District, a large innovation

hub that runs programs for startups, and houses research labs for various sectors.

The Ontario Trillium Foundation, a provincial government agency that provides

funding to not-for-profit organizations and charities in Ontario to help launch

projects and cover costs for major renovations and upgrades, had 13 per cent of its

overall budget reduced.

It can be speculated that the reduction of funds, leading to fewer jobs, may impact

those who are underrepresented in the innovation sector, such as women and

radicalized people. These populations often experience disparities in employment,

and the narrowing of opportunities will only perpetuate these inequalities further

and affect health outcomes. The decrease in investment in innovation, science and

technology is ill-advised during a time where allocating more funding to these

sectors may help produce solutions to address inequity, sustainability and

resilience in Ontario.

Promoting industry

Goal 9 promotes inclusive and sustainable industrialization. Manufacturing value

added (MVA) is an indicator for assessing a country’s industrialization, and

MVA’s share in gross domestic product (GDP) measures the role of manufacturing

in the economy. Worldwide, MVA as a share of GDP has been declining for more

than two decades, from 21 percent in 1995 to 15 percent in 2014, in contrast to the

rise in the share of services. It was lowest in Sub-Saharan Africa (11 percent) of

regions with data available for 2015. By comparison, it was 16 percent in Europe

and Central Asia, 16 percent in South Asia, and 14 percent in Latin America and

the Caribbean. MVA per capita shows a similar pattern. It was $3,114 per person

in Europe and Central Asia in 2015, $1,123 in Latin America and the Caribbean,
and just $144 per person in Sub-Saharan Africa. Sub-Saharan Africa also had

considerable variation among countries (figure 9a). Equatorial Guinea, Mauritius,

and Swaziland had the highest MVA per capita at $2,124, $1,209, and $1,188 in

2015, while most countries in the region recorded less than $200.

Supporting rural markets and services

Investment in reliable, sustainable, and resilient infrastructure can provide remote

populations with access to services (target 9.1). With better roads, farmers can

bring produce to markets more efficiently, and families can more easily get to

schools, hospitals, and other facilities. Enhancing rural road connectivity also helps

in the long term by elevating agricultural productivity, business profitability, and

employment. The rural access index (RAI) measures the proportion of people

within two kilometers of an all-season road—a reasonable walking distance for

people’s normal economic and social purposes. RAIs are currently available for

eight countries in Africa and Asia (figure 9d), integrating population data from

censuses, surveys, social media, and administrative systems with satellite and other

spatial datasets to produce high-resolution population distribution data. In addition

to traditional road assessment surveys, road quality or “road roughness” data are

captured through smartphone apps while driving matched with high-resolution

satellite imagery. Around 174 million rural dwellers in the eight countries lack
good access to roads, of a total population of more than 461.7 million. Access

varies according to population density, degree of urbanization, and level of

economic development, and the rural access index ranges from 87 percent in

Bangladesh to 17 percent in Zambia (figures 9b and 9c). But due to a much larger

population, the number of people without access in Bangladesh (16 million) is

more than twice that in Zambia (7 million). Of the eight countries.

Developing regional and trans border

infrastructure Reliable and frequent air transport is vital to efficient regional and

trans border infrastructure (target 9.1). Between 2000 and 2015 global air

passenger transport doubled, to reach 3.4 billion passengers, of which 1 billion

were in carriers registered in East Asia and Pacific. The region tripled its passenger

numbers between 2000 and 2015, a trend which has been driven primarily by

China. Carriers registered in North America and in Europe and Central Asia

accounted for 26 percent each of the global total. Air freight rose by almost 60

percent between 2000 and 2015, to reach 188 billion ton-km globally (figure 9e).

The share of global freight transported by carriers registered in the Middle East and

North Africa increased rapidly from 4 percent in 2000 to 15 percent in 2015. The

trend has been primarily driven by the United Arab Emirates and Qatar.
Improving resource-use efficiency Goal 9 seeks to improve resource-use efficiency

and promote greater adoption of clean and environmentally sound technologies and

industrial processes (target 9.4). Carbon dioxide (CO2) emissions per unit of GDP

capture efficiency in both energy production and consumption, along with use of

fuels and clean technologies. Global CO2 emissions per unit of GDP declined by

about one quarter during the last two decades. Only the Middle East and North

Africa showed a slight increase during this period. East Asia and Pacific has the

highest carbon intensity of GDP, despite a 13 percent decline between 1990 and

2013 The carbon intensity of GDP fell by 38 percent in North America and by 42

percent in Europe and Central Asia over the same period.

Encouraging innovation

Investing in research and development (R&D) across sectors and facilitating

innovation in science and technology are two ways that Goal 9 hopes to raise the

competitiveness of developing countries (target 9.5). R&D expenditure as a share

of GDP and the proportion of people working in R&D tend to be highest in high-

income economies. Japan invested nearly 4 percent of GDP in R&D in 2014,

higher than the shares invested in recent years by Singapore, the United States, and

other upper-middle-income economies including China, Russia, and Malaysia

(figure 9f). Japan recorded nearly 2,600 patent applications per million people in
2014, the highest of any country, indicative of its supportive environment for

innovation.

Financing small and medium-size enterprises

Access to financial services enables firms to smooth cash flows, accumulate

assets, make productive investments, and promote better use of resources (target

9.3). Yet many small enterprises around the world, formal or informal, lack the

financing they need. Enterprise surveys3 in East Asia and Pacific during 2015 and

2016 showed that, in the 10 economies surveyed, small and medium-size

enterprises are credit-constrained. In Thailand only one in ten SMEs has a loan or

line of credit, and in Vietnam fewer than one in four SMEs

The 9th Sustainable Development Goal (SDG9) pursues 3 interdependent

objectives that are fundamental to empower communities and achieve sustainable
economic growth and development around the world, without leaving anyone
behind:

 Resilient infrastructure - Develop quality, reliable, sustainable, and

resilient infrastructure, accessible for all in an affordable and equitable way
 Sustainable industries - Promote inclusive and sustainable
industrialization, with the aim of doubling industry’s share of employment
and revenue in the least developed countries (LCDs) by 2030 and improving
access to finance for small-scale industrials
 Innovation - Encourage innovation, scientific research, and technological
upgrades to make infrastructure and industries more sustainable and
respectful of the environment

According to the UN, developing countries have a huge yet underexploited

potential for industrialisation and innovation. For example, the
manufacturing value added per capita in LCDs is 45 times lower than in
Europe and, in developing countries, only 30% of agricultural production
undergoes industrial processing, compared to 98% in high-income countries.
Basic infrastructure –roads, energy grids, water and sanitation infrastructure,
and information and communication technologies – remain scarce in
developing countries: approximately 1.2 billion people don’t have access to
reliable phone services, 2.3 billion people lack access to basic sanitation, and
nearly 800 million people lack access to water. These constraints also affect
the overall productivity rates of developing countries, especially in Africa.
Moreover, unsustainable industrial processes causing high carbon dioxide
emissions too often remain the norm in developing countries.

Achieving SDG9 is an essential part of our cooperation work. Developing

better infrastructure is crucial to eventually improve human well-being and
industrial productivity and competitiveness. Through blending, we
increasingly invest in infrastructural projects that have a multiplier effect on
our partner countries’ sustainable development. We support our partner
countries’ industrial transition towards sustainable processes and
technologies, which will allow them to increase their productivity and
competitiveness, while respecting the environment. We also act to improve
access to financial services and technologies in our partner countries, in line
with our ambition to leave no one behind and foster inclusive growth.
 Our policy approach to sustainable development is broad and inclusive. Our
work on SDG9 is closely linked to other SDGs and includes credit and
research for technological advances, developing value chains, and promoting
good business practices. Our programmes have so far focused on physical
and mobile connectivity, coupled with policy and sector reform, to ensure
cost-effective investments that yield returns. Together with EU countries,
one of our priorities is to support the extension of broadband connectivity
and digital infrastructure, especially in rural areas, and to promote digital
literacy, skills, and entrepreneurship, including among women and young
people.