AID-FINANCED INNOVATION CAN PLAY A BIG PART IN GLOBAL DEVELOPMENT
Aid resources have played a vital part in developing and rolling out technologies and innovations that have had a significant impact on productivity and the quality of life— from Norman Borlaug’s work on the dwarf and resistant plant varieties of the green revolution supported by the Rockefeller Foundation through the advance market commitment for the pneumococcal vaccine supported by Gavi to the UK Department for International Development’s (DFID) backing for the development of M-PESA mobile finance in Kenya. The economic returns to such advances can be huge. DFID’s M-Pesa investment was only £1 million; annual mobile payments in the country are now worth over 50 percent of Kenya’s GDP.
UK Aid for R&D is Big Compared to Other Donors, but Small Compared to Total R&D
At £738 million, official reporting suggests the UK spends nearly four times as much on research funded by official development assistance (ODA) than the next largest donor (France) and as much as the next 15 countries combined. On the other hand, total UK R&D spending alone is about £35 billion. And donor finance will be a comparatively small part of overall research finance even if it is successfully focused on developing country priorities: low- and middle-income R&D spending totals $470 billion (although an estimate for low-income countries alone would be closer to $9 billion). Looking at specific priorities, a dated estimate of annual neglected tropical diseases research spending is about $3.2 billion. Solar power attracted $10 billion of R&D spending in 2018.