Ways of invigorating the innovation landscape in Sri Lanka
The Government’s recent focus on an innovation-led economy draws our attention to the ever so important aspect of intrinsic human and intellectual capital development and leverage thus ensuring an exponential growth of our economy.
File picture of a young entrepreneur Nilanga Senevirathne with his creation of an electric car called ‘Elca’.
Inventions thus could play a pivotal role in delivering upon this promise. However looking at the historic track of the number of local patents filed over the past 5-10 years the situation is not that very encouraging in the lines of achieving this end ideal. From amongst those too the ones that stride towards commercialisation too is a very small percentage not advocating the cause towards innovation.
Thus there exists a requirement to foster an Open Innovation Eco System and allied mechanisms that nurture and provide a conducive platform for inventors alike without any form of discrimination.
“Innovation i.e., the improvement of existing of the creation of entirely new products, processes, services, and business organisations models drives long run economic growth and quality of life improvements. For instance the US Department of commerce has estimated that technological innovation has been responsible for as much as 75 per cent of growth in the US economy since World War II. Innovation achieves this impact by enabling the productivity and competitiveness improvements that lie at the core of economic growth. For example the innovative use of information technology was responsible for two thirds of total factor productivity increase in US between 1995 and 2002 and virtually all of the growth of labour productivity,” according to one study (Fostering Innovation to Fast forward Growth in Sri Lanka- Institute of Policy Studies of Sri Lanka Research Studies: working paper series No 16, December 2012).
In Sri Lanka we do not see a significant number of innovations coming through from the high tech arena but there exists a large number of middle level and grass root level innovations that can provide significant value additions to the SME sector and the informal sectors of the economy. This is evident by the large number of innovations that are submitted and we are acquainted with at the National Inventions and Innovations Exhibition “Sahasak Nimevum” organised annually by the Sri Lanka Inventors Commission (SLIC).
SLIC
The SLIC is the national body that is entrusted with the task of promoting innovation in the country. Though expected to provide financial technical and legal assistance by statute, SLIC is not capable of doing that given that we lack the scale and critical mass of innovations that orchestrate potential for commercialisation.
In its operations the SLIC has observed the following reasons as the main inhibitors to the commercialisation of local inventions:
(1) Lack of Access to Capital,
(2) Lack of Access to Markets,
(3) Lack of Access to Technology, and
(4) Under developed Entrepreneurial and Business Management skills.
These could be overcome only if an enabling eco system is developed here in Sri Lanka. However a closer examination of the prevailing situation and environment makes us realise that a conducive environment for innovations doesn’t exist at present. It has been our observation as an outcome of the workshops, competitions conducted at the regional, provincial levels by the SLIC that the prevailing education system at present does not gear our young ones to look beyond the fundamental knowledge of sciences in most instances thus circumventing their urge and drive towards creativity and innovation.
Further it has been the general observation that the outcomes resulting from the initiatives and projects undertaken via our Public Research Institutes (PRI’s) too on the lines of inventions are a relatively small percentage in terms of orchestrating potential for commercialisation in contrast to the national resources and assets deployed in terms of ROI.
It is globally accepted that only 10 per cent of the innovations make commercial success due to various reasons. In that context it is not prudent for inventors seek debt capital to pursue their goal of commercialising their inventions.
The Commission and the state too is not capable of providing grants or such free capital for obvious reasons of limited financial resources and lack of other capabilities such as entrepreneurial skills thus have pursued on the lines of broad basing on its drive focussing in on private sector linkages via partnerships with private sector enterprises and investment consortiums thus providing opportunities for successful inventors to not only obtain financial but more over technology, incubation, marketing and business development know how, market access, etc in the form of mentorship much needed for their success.
On the lines of financing there must be a way for these inventors to have access to equity/risk capital wherein someone with entrepreneurial capabilities will finance a commercialisation project while sharing the risk of failure.
In developed markets this happens through Angel Investments either by individual Angel Investors who are entrepreneurs themselves or through formal Angel Funds. They invest in these business ideas or ventures with the option of exiting through the capital market by listing their stake or by converting their stake in the venture. There are many models they use to structure these relationships.
Non availability of a developed venture capital market is a crucial shortcoming for inventors to commercialise their inventions in Sri Lanka. Crowd sourcing too may be an avenue to explore on these lines in fulfilling the apparent need of the hour.
The Ministry of Finance and Planning (MOFP) did institute in the past a triple-tax benefit to foster a greater platform for R&D in country with the motive also to foster greater private-public partnerships. However due to varied reasons, we do understand that the actual utility or take up of this scheme did not achieve the desired outcome.
Thus instead of over burdening the coffers of the MOFP & General Treasury we need to look at alternative mechanisms such as Angel Investments to fund inventions and R&D efforts moving forward.
The SLIC has already identified as key priorities the following in support of invigorating and fuelling innovation across the island.
1. Regional outreach and
the establishment of a
network across provinces
Beyond the exhibitions and regional evaluations conducted we believe that a continuous focus towards the nurturing should be provided to the schools, universities and tertiary thus rekindling and invigorating “Inventors Forums” in the respective provinces. The objective of this exercise is to increase awareness by means of workshops/seminars, etc, identify creativity and innovations at the grass root level and play a consultative advisory role in terms of hand holding them on their journey towards commercialisation.
In addition it is recommended that a suitable curriculum is developed in close coordination with the National Institute of Education (NIE) and introduced into teacher training and induction programmes so that it could be distilled downstream to the schools children even starting off at the primary levels thus aiding in the instilling of a culture towards creativity and innovation within the schools sector, starting off from the grass roots itself.
Exposure too should be given to scenarios from both the global and local terrains by means of showcasing success stories with adequate elaboration of inventors via means of testimonials i.e., based on their observation skills with regard to the identification of a problem, ability to come up with a fulfilling solution, the resilience of failing over and over again and/or reworking and reiterating solutions until the final desired outcome is derived in terms of a satisfying solution. We believe this will urge our future generations to explore on similar lines and help instil in them the skills and traits of an inventor.
All of the above suggested will be investments for the future whereby an innovative culture would be instilled thus paving the way forward for more innovations that would bolster our economy in the ensuing future.
2. Inventor incubators –
providing mentorship and
technology knowhow
The focus would stem around identifying high potential inventors and inventions and providing them the required know how to succeed leveraging in on likewise minded Inventor, Mentors, Professional bodies and Social Entrepreneurs, etc thus fulfilling thei dreams and making them more fully fledged in terms of marketing, business developmental and entrepreneurial skills.
3. Inventions promotions – commercialisation of inventions/
assisting in the marketing
Providing opportunities firstly for inventors to aid in their commercialisation efforts by leveraging in on alliances/partnerships formed with the private sector following in on to promote the “Adopt an Inventor Paradigm” will aid to a great extent in ensuring commercial alignment and adequate take up. A “Pull” as well as a “Push” mechanism could be adopted herein whereby pertinent market, societal or national needs could be identified and orchestrated for inventors to engage and provide suitable solutions in terms of providing them a “creative challenge” to work on which would have utility at the end. This could be considered as a “Pull” mechanism of engagement. In addition a “Push” mechanism can be adopted wherein inventions which orchestrate commercial potential could be aligned with investors and private sector institutions that have likewise interest to assess potential in terms of enriching their portfolio of offerings. In addition making use of elegant mechanisms for inventions promotions by means of web/social media promotions, media promotions and publicity, shelve space at designated out lets orchestrating the “Invented in Sri Lanka” Tag would go a long way in enabling the inventors to achieve their desired aspirations in terms of market captivation.
This would undoubtedly help the SLIC deliver upon the envisioning of the National Charter that we all rally around, reverberating the sentiments of an economic revolution led by inventions and innovations and the birth of renowned brands with a “Made in Sri Lanka” brand identity we all could be proud of.
4. Incentivising Angel Investors
In most developed markets inventors first help line for support lies with Angel Investors for their needs fulfilment. Angel Investors invest in an “idea” taking a very high risk of failure of the venture but have a firm belief in the concept and the inventor. This is further reinforced introspecting in on the gains derived by the Asian nations around us namely Singapore and Malaysia, who have made significant strides and gained successes as a result.
Given the inadequate provisioning in our nation, we at SLIC believe that luring Angel Investors would be the way forward for our growth and prosperity. Thus it would be opportune for us to have conducive policies and incentives in place to encourage Angel Investors and likes to join in and contribute towards the developmental process of our nation by investing in on our inventors.
SLIC strongly believe that by extending the Triple Tax benefit availed prior to Angel Investors will help give a boost to the inventors who want to commercialise their products and promote the concept of Angel Investment in the country thus paving way forward for growth and prosperity of our nation.
5. Technology and Inventions
SLIC and PRI’s should take stock of their current operatives and align suitable interventions in support of delivering upon the promise of an “Innovation Revolution” to the nation at large.
SLIC would have a pivotal role to play in identifying, evaluating in line with the 10×10 R&D Investment Framework priorities identified by the then Ministry of Technology and Research, filtering out innovators with “high-success” potential and aligning suitable interventions in support of their inherent needs spanning access to technology, access to capital (by means of matching with Angel Investors), access to markets in and in addition providing them with the required business acumen and skills, so as to succeed in their entrepreneurial pursuits.
6. National Priorities
The value and appreciation of the sciences as recently enunciated by several quarters to aid in the building up of a modern economy by making use of science and technological innovations is noteworthy to mention herein however taking note that such innovations do not come only through the universities and research institutions but also from the public.
Thus it is recommended that suitable structures be set up spanning the provinces/districts for example as an extended arm of the SLIC Central office located in the Metropolis of Colombo, to necessitate ongoing dissemination of information in support of nurturing an innovative culture in the regional setting as well also enabling SLIC to identify Innovations that occur in the periphery or the outskirts and regional setting. This would pave the way forward for greater emphasis focus and traction across all quarters across the Island contrary to seasonal evaluations and programs being necessitated.
Further through the above budgetary proposals it is envisaged to redirect private sector to actively promote innovations thus reducing the dependency of inventors on the national budget and state coffers. This would benefit both inventors and investors equally through such cohesive project alignments, and in turn would help entrepreneurial pursuits which would pave the way forward towards self-sustained livelihoods and the bolstering of our national economy.
In addition to fuel innovation in the public sector inventors serving in PRI’s and the other governmental and semi-governmental institutions who contribute in terms of their personal creativity and inventiveness (not organisationally mooted or aligned), should be incentivised in terms of affording them appropriate incentives following in on the prescribed circular and guidelines availed at present to motivate educational achievements and accomplishments beyond what is prescribed of the job role by granting a couple of increments at present. A special commendation too should follow from the state, in the event their inventions orchestrate potential in terms of satisfying a national need, societal problem and/or exemplify commercial gain.
Furthermore it is only prudent that we as a nation rally around stakeholders to provide their inputs to the Global Innovation Index (GII) by means of populating a Central Dashboard formulated by defining the metrices, identifying the responsible inputs sources (institutions), relegating the tasks and having an ongoing mechanism established to monitor compliance. This would help better position our motherland on the global radar in terms of Inventions and Innovations and its propensity.
7. Reaping the benefits
Thus once a conducive eco-system is instituted, appropriate policies and legislature are enacted and incentives introduced, this would aid in the following benefits to be derived as a result namely,
1. Increase in the ‘Innovation Propensity’ across our nation
2. Reduction of the burden on the government on the commercialisation endeavours of our inventors and their allied Inventions
3. Enhancement of the number of commercially successful inventions given that the investors would ensure at all costs that their own capital would not be in jeopardy
4. Birth of renowned brands with a Sri Lankan identity of “Invented in Sri Lanka”
5. Above all will help create a self perpetuating Eco-System fuelling Innovation in support of an Innovation Led Economy that would guarantee our Mother Land Growth and Prosperity
(The writer has over two decades of experience serving in both private and public enterprises in senior corporate management roles. He could be contacted on dir.ceo.slic@gmail.com)