- Connecting to untapped resources
The recently-concluded Sri Lanka Economic Summit 2013 had a session titled ‘Connecting to Untapped Resources’. Inclusion of this session to the summit was an initiative of the Human Resources and Education Steering Committee of the Ceylon Chamber of Commerce.
This main session followed an earlier event held by chambers titled ‘Forging partnerships with the academia’. I had the task of moderating the session and as I stated at the beginning, I am an unlikely moderator for this topic as my views are pretty extreme on this! We simply have turned a blind eye on a massive resource right under our noses and ears have only picked up complaints and negative barbs.
The prevailing journalism has pictured the system as hotbed of violence and as a non-creative entity and one may also state that the negative impacts have rubbed on some parties too who had only responded by adding more fuel to such negative fires. There is however no excuse for the university system for not responding positively and working towards becoming an institution of importance to economic growth.
Staying stifled within a graduate producing mentality has further eroded the necessary creative component of universities. Chambers offer to host university projects which had been commercialised and related demonstrations during the event – a free offer of space during a premier business event went largely unheeded and an opportunity was lost.
The session showcased many successful business university partnerships and perhaps was an eye-opener to many. Taking the story of Samahan to the pioneering Dialog-University of Moratuwa mobile technology development incubator, the session had quite a few such examples.
Some examples were about improving productivity while tackling strong unions along the way. Well I can dare state that understanding unions should be second nature to our current university system!
This really was tapping the untapped as Sri Lankan universities have laboured on with much less interaction between the private sector and universities. One could even say that the State sector which can make use of the university system for intellectual and economic inputs has failed to do so.
The picture is changing slowly with many new initiatives now coming to light. There is a growing understanding about the resources that lie untapped and universities too view their manner of existence differently. That is indeed welcome as this is a must for economic growth in the country. Hopefully the Chamber of Commerce will publish a compendium of 100 case studies of success stories which would go a long way in establishing trust and partnership.
The chamber’s initiative is laudable as they indeed do have the links to the wider business community and they themselves are privy to the difficulties facing the businesses due to lacklustre performance, increasing competition due to innovation led growth from other markets etc. The key response should be tapping the untapped!
We really do not make use of the investments made on universities. Producing graduates only to find them disappearing into greener pastures abroad is not a useful output. Even bringing graduates into an economy which constantly utters remarks that these products are not what we require and the curriculum is garbage is quite unhelpful.
It must be stated that these cannot be simply achieved through the passing of circulars but the way forward is creating that environment. The State can really support this as the model triple helix model of innovation is the tripartite linkage of universities, industry and the State.
Need for innovation
Our procedures too need to be innovative and not mere reproductions of a colonial era in drumming up linkages. Data published by the Global Competitive Index in this regard too is illuminating.
In the assessment of University-Industry collaboration for R&D, Sri Lanka stands at 73rd position among 142 countries in the 2011/12 rating and the standing has slipped to 118th position among 144 countries in the 2012/13 rating. This is one of the worst ratings for Sri Lanka and goes into influence the overall standing.
Considering however the activities at ground level, the actual rating appears to be wrong, but it is not easy to respond simply with the statement that we do not agree with this position. The printed document will influence the global decision making and our utterances from sides to the contrary will have little or no effect.
It is important that one takes charge of data and be more aggressive in understanding the ratings process. High end FDI simply will not materialise with this type of standing as the message is quite negative.
Role of the State
It is quite true that the State has offered many attractive mechanisms to enable partnerships in recent years. Sadly the industry by and large stays ignorant. During the session Dr. Suren Batagoda (Deputy Secretary Treasury) explained some key initiatives the Government has taken.
The State has moved on to offer triple tax benefit for engaging in research. Triple tax benefit has come after the double taxation benefit introduced earlier. It also supports by way of allowing lump sum depreciation on starting R&D facilities in your own organisation.
Budget speech (item 37.1 of page 47 of Budget Speech 2013) states to grant a triple deduction for research expenditure and a lump sum depreciation for capital expenditure on required equipment and development of laboratory facilities to encourage private sector engagement in research and innovation. This is indeed a strong incentive and removes the limitation of tax benefits only if State research institutes are utilised. The State perhaps cannot do better.
My request from the audience for a show of hands on who knew about these provisions did not draw any response from the floor! These would bring much-needed capital into the science and technology sector.
Investment in R&D
One must be aware that as an economy develops it is the private sector that is known to take leadership in investments in R&D. A question from the audience – what is the ideal percentage of reinvestment in R&D for a midsized company? – which was answered by Prof. Gehan Amaratunga who was the keynote speaker for the session is worthy of mention here. He stated that 5% to 10% of profits is the international standard and went on to say that 5% to standstill and another 5% for the next stage to stay ahead of the curve – important data to know.
At present it is still the State that invests in R&D – of course this is a meagre amount and well below requirements for an economy to grow through benefits from R&D investments. Our neighbour India with a one trillion economy recently triples its investments in R&D. India since independence always understood and invested in science and technology. This is completely opposite to what we have followed.
Examples from across the world are aplenty on how countries tapped into universities for economic growth. An early but a classic example is Cambridge Consultants in UK – today a globally recognised outfit. One of the strongest examples emanating from UK started with a simple objective – to “put the brains of Cambridge University at the disposal of the problems facing the British industry”.
Founded in 1960 by two Cambridge graduates – Tim Eiloart and David Southward – Cambridge Consultants was one of the UK’s first technology transfer businesses. The early work laid the foundations for what is now known as the Cambridge Phenomenon. Indeed, most of the high-tech companies in and around the city of Cambridge can trace their roots back to either Cambridge University or Cambridge Consultants. The same story can be seen in and around the Stanford University in USA – the Silicon Valley phenomena.
The kind of structures and systems around our universities – photocopy shops, cheap eateries, communication outfits and announcements for accommodation – demonstrate that we have failed to understand growth linkages between a university and a community and stopped merely at convocations. The sooner we realise these intricacies, the better the situation would be for all of us.
Tim and David indicated the value of technology transfer at an early stage and also the value of pioneering entrepreneurship and setting out with a worthy idea on your own and making a difference. The system and the environment proved to be accommodating and ready and not bureaucratic. These are elements that cripple at times the ideas surfacing in our institutes too.
Time for change
We just cannot say that these ideas are absent but in some of these generators, the will to overcome the resistance is missing, especially when a flight away beckon fertile grounds to explore and thrive. This was not a line of thought and practice neither Tim nor David and the pioneers at Stanford entertained.
Hopefully the Economic Summit session changed some minds and forged some mental bonds at least. We need a few changes in a few people and one new idea at a time can gather momentum and change the situation. Chambers too should keep up the momentum as this is an important area neglected for so long but a situation that simply cannot be continued. Hope the spark for tapping the untapped had been created. We await the explosion of outputs!
(The writer is Professor of Chemical and Process Engineering at the University of Moratuwa, Sri Lanka. With an initial BSc Chemical engineering Honours degree from Moratuwa, he proceeded to the University of Cambridge for his PhD. He is also the Director of UOM-Cargills Food Process Development Incubator at University of Moratuwa. He can be reached via email on email@example.com)