The role of invention in economic development

4 June 2015 06:41 am - 0 - {{hitsCtrl.values.hits}}

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Sri Lanka, having eradicated terrorism, is now on the track towards development.

Even though the country has many achievements such as being the nation having the highest literacy level in the region, it has been unable to fully harness developmental opportunities.

"The proper coordination between universities and private sector companies is essential for accelerating the number of inventions in the country"

There was an era during which it was believed wealth or the development of a country totally depends on its natural resources, labor force and capital.
However, some countries have proved that development can be accelerated and wealth can be created by inventive and innovative efforts. For an instance, Switzerland has no natural resources and has a small population, and yet Switzerland is not only one of the leading industrialized countries in the world but also ranked at the top in the Global Innovation Index (GII) in 2014. This tells us a different story. Hence, it is absolutely imperative to widely discuss the role of invention in the Sri Lankan economic development process.

What it means
Before going into detail, it is important to get an idea of what invention and innovation mean.

Invention is simply an act of inventing something for the first time. Furthermore, it is a novel idea which comes out of science or technical background.
A patent needs to be obtained, so that the inventor can prove it is a new idea and not copied from any other invention. Making an invention commercial can be simply called innovation. This has to be introduced as a process in which the invention is turned into a marketable product or service which really meets the needs of customers, resulting in making profits.

Eco-system
Necessity is the mother of invention, while invention is the mother of economic development. It is up to the government to create the eco-system supported by the private sector where inventors can grow themselves.

Developing economies like ours can never afford to financially support all the inventors. That is why, the role of the private sector is to be emphasized in this regard.

Several indicators are used to measure the level of innovation in a country among which Global Innovation Index (GII) is important and recognized.

When analyzing the data related to Sri Lanka’s innovation level, it can be seen that the country has gradually gone down in the rankings of GII. Sri Lanka was positioned at 94th in 2012, at 98th in 2013 and was ranked at 105th in 2014. We, as a nation, cannot be happy about the rankings, as the nation has lost all its rankings year by year.

These decreasing rankings clearly reflect the country’s inability to create a population with innovative capabilities, and poor allocation of resources for research and development (R&D).

Moreover, it will send a clear signal to investors that this is not the country that they are looking for. We can no longer boast about literacy rate and free education so and so forth, as they are not capable of attracting FDIs in the 21st century.

Being innovative is considered to be a primary factor today for an economy to be competitive. With the high market competition, business organizations are required to be more innovative than in any other era. Be it a country or a business, the one that spends on R&D and always invents something new, will be the winner in this competition.

Lagging behind
When compared to other developing countries such as China, Malaysia, Thailand, and India, Sri Lanka is lagging behind in the number of innovations and protection of innovations. Innovation can be impossible without research.

Hence, a private-public mixed delivery system has been a must. The government ought to take the leadership and encourage private sector companies in this regard. A majority of expenditure on R&D is made for the agricultural sector. The country, being an agricultural economy, should not neglect agricultural researches. But, at the same time, country has to be focused on industrial researches as well. The government can motivate private sector companies by introducing some tax relief on R&D. Furthermore, the proper coordination between universities and private sector companies is essential for accelerating the number of inventions in the country. Research projects which are funded by private sector and carried out by Universities can deliver better results.
The prevailing peaceful environment is a blessing for inventions. Sri Lanka has a large number of rural schools that do not have an access to Science education which can be considered a primary factor in making inventions.

With the introduction of open economic policies, people’s innovative mentality seems to have disappeared. However, it is when a country makes more inventions that the country can produce more and export more. Japanese economy and most recently, South Korean economy are the best examples given in this respect. If not for Toyota, Honda and many more inventions, the Japanese economy would never have been like this. The invention is the mother of economic development which is a formula that can be applied in Sri Lankan economy as well.

(Amila Muthukutti holds a BA in Economics from the University of Colombo and can be reached at amilasmiles@gmail.com.)

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The role of invention in economic development

"The proper coordination between universities and private sector companies is essential for accelerating the number of inventions in the country"

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