Sri Lankan ranks 90 on global innovation index
Ecosystem already in place but disjointed
Supra-ministerial approach recommended
Technological innovation recommended for growth in fashion industry, agriculture and other sectors
Huge potential to increase productivity by utilising basic technology
By Himal Kotelawala
Creating a culture of innovation and fostering mindsets that see beyond Sri Lanka were among key points highlighted in a panel discussion on transforming the economy through technology at the Sri Lanka Economic Summit 2017 organised by the Ceylon Chamber of Commerce held yesterday.
Speaking at the event, LIRNEasia Founding Chair Prof. Rohan Samarajiva said that Sri Lanka has not diversified enough in terms of goods exports, with labour being a form of services export that generated some $ 7.2 billion in 2016. The question remains market access, he said, with obtaining the GSP Plus trade concession being the biggest achievement of late on that front.
“Even if we get market access can we respond?” he asked, adding that problems in foreign direct investment (FDI) and labour shortages contribute to an inability to respond fast.
“In this situation, the thesis is that we need to think different,” said Prof. Samarajiva, stressing that a strong focus on innovation was needed.
In 2016, Sri Lanka was at tenth in the innovation efficiency category of the Global Innovation Index, but the country is now 43 places behind Vietnam and 30 places behind India, he said, which is a problem.
«If there is a problem, there is a solution,» he said, reiterating that while it›s important to not completely do away with traditional means of doing things, a focus on innovation is essential.
“Is it not possible for this compact country to leverage its position as an adopter of new ideas - after all, we’re an island nation - but we have to provide a lot of infrastructure for this,” said Prof. Samarajiva.
Considering that Asia is where growth is going to take place (of the 10 fastest growing economies in the world, six are around the Bay of Bengal, not including Sri Lanka), he said the country can do a lot in order to attract companies to come and do research here, to create the conditions for incubation for new companies and to test products for the developing market.
“So why not use this as a launch pad for people who want to supply to this market, to see what products work,” he said.
Sri Lanka can also leverage from its strength in logistics, given Sri Lanka’s relative advantage in that regard.
For this, he said Sri Lanka needs an innovation ecosystem in terms of an interface between real markets and new products.
The country needs to consider ramping up its capabilities in data analysis and qualitative research, among other things, conveniently and at a low cost.
The Government should incentivise private firms and non-profit entities to put in place necessary elements and create a leading test-bed in the region for product and process innovation, he said, adding that marketing this initiative to local and foreign firms is also important.
«If these facilities are there but people don’t know about it it won’t make a difference,» he said. Encouraging angel and venture capital finance, promoting incubators and accelerators and providing incentives for large companies to create space for innovation, he said, would also play an important role.
Among the suggestions made by Prof. Samarajiva were to re-examine and modify underutilised tax incentives that were put in place a few years ago to promote research and development (R&D), encourage domestic high net-worth individuals and firms to enter into angel and venture financing, encourage foreign entities with expertise to consider Sri Lanka and to legislate to permit a company to have more than 50 shareholders to enable effective crowdfunding platforms similar to Kickstarter. Changing mindsets will also be key.
«Foster mindsets conducive to innovation and larger than Sri Lanka thinking,» he said.
Implementation remains the biggest obstacle to innovation, said Prof. Samarajiva.
«Our problem is not a lack of ideas, it’s not about policies, it’s about implementation. It necessarily cuts across multiple ministries. This is about innovation in general,» he said, calling for a supra-Ministerial taskforce supported by a lean management team.
Project Director, Coordinating Secretariat for Science, Technology and Innovation Prof. Ajith De Alwis, who also spoke at the event, said that Sri Lanka’s current position on the Global Innovation Index was not something the country could be proud of.
«Countries as small as Switzerland and Singapore are consistently at the top. It’s doable. Our aspiration should not be to remain in the lower middle income group,» he said.
Arguing that Sri Lanka does in fact have an ecosystem in place for innovation, Prof. De Alwis said that it›s a disjointed ecosystem. Pointing out that there are 49 research institute coming under 18 different ministries, he said that Sri Lanka is not making use of what it has.
“As a country that spends 0.1% of GDP on R&D, we’re way below than even in the lowest. The recommended is 1%. We’re talking about a tenfold increase,” he said.
Coordination is key, he said, adding that the existing ecosystem is not interconnected. The different institutions don’t talk to each other and resources are spread thin, and it’s an unfortunate situation when you don’t make use of the synergy, he said.
«We have it. We need to understand it. The private sector doesn’t understand the public sector offers. And the public sector may not understand what the private sector needs,» he said, pointing out that the private sector contributes much less to R&D than the Government does.
«Let’s make use of the resources we have,» he stated, expressing scepticism on the need for a supra-ministerial initiative.
Chief External & Corporate Affairs Officer of bKash Maj. Gen. Monir (bKash being a mobile payment gateway based in Bangladesh), who also spoke at the event, recounted the success story of e-money in Bangladesh.
«We are thinking of further innovation, so that more customers become interested in using it. It›s all about technological advancement, such as apps which would allow our semi-literate people to conduct transactions at an affordable rate,» he said.
Founder, Academy of Design, Linda Speldewinde drew from her fashionmarket.lk initiative to highlight the possibility of taking a product from the village to the global consumer using the digital space. However, she cautioned that no amount of access to online markets would be of use without an authentic product.
“We wouldn’t have been able to take this journey if we didn’t have an authentic product in the first place. As much as this digital space allows you to go directly to the consumer, you’ve got to have an authentic product to take there,” she said.
Over the next two years, said Speldewinde, Sri Lanka has a role to play in South Asia›s emerging design innovation hub. If the Government plays its cards right, she said, Sri Lanka can actually make a claim for that hub.
“The Government, working with the apparel sector, in owning that space and making a deceleration that Sri Lanka can actually be that design innovation hub, by owning that space and substantiating its position [could result in the country actually getting there],” she said.
Getting the diplomatic community involved in this regard would also prove beneficial, she said.
CIC Holdings Plc Managing Director Samantha Ranathunga, who spoke from an agricultural perspective, said that agriculture has become an item of political interest because of the large population the industry impacts. Agriculture contributes 10% to GDP, but employs 30% of the population, he said.
It creates a living and a purpose for politicians, said Ranathunga, highlighting a need to take it to a different forum and look for answers in a different platform where technological innovation may be looked into as a solution.
“Agriculture has been the bane of technology,” he said, implying that technological innovation in the industry has stagnated over the past 20 years.
“The fact that we have an exodus of youth leaving agriculture has made people take a step back and look at this issue in a different way,” he said.
Pointing out that the last three paddy seasons were a disaster, Ranathunga said that forays into technological innovation are finally being made such as weather control - even if it›s not a low tech solution as covering with a polythene sheet to keep the sun out.
«There are some initiatives currently underway, but this is a journey which has started maybe too late in the day, but it’s a journey we must go in. If we need to keep the future generations in agriculture, we have to introduce new technology. The amount of people who abandon agriculture is phenomenal. Even in rural areas the youths are away, which is a disturbing sign,» he said.
The Government, said Ranathunga, needs to collaborate with the private sector as well as individual farmers in developing new technologies, adding that it›s the only way to get out of the trap of poverty in agriculture.
Millennium IT General Manager Gehan Dias said that with regard to using technological innovation to transform the economy in a way that impacts millions of people, it needs to be looked at in two ways: invention of technologies and the application of existing technologies
«There is huge potential to radically increase productivity by introducing basic technology. There is value in thinking about how we can promote that. The State can incentivise, subsidise, etc. and promote the adoption of technology and drive productivity,» he said.
Pix by Lasantha Kumara