Continued economic development in a developing country is based on the import of knowledge, technology, by its people, its R&D organisations, to produce new and creative products and services and the generation of new knowledge, which drives the continuum of innovation, of economic development. However, the import of knowledge, even the subsequent creation of knowledge, is insufficient, though necessary, to economic development.
Many years ago I introduced the idea of creating a national innovation system, which I dubbed the Innovation Diamond. This was to be an undertaking of the triad, the government, research and development institutions and an embryonic private sector (since the current private sector had no interest in higher risk investment, necessary if the economy is to be diversified).
The Diamond’s four points were: centres of excellence, finance, test market/market intelligence, small and medium sized businesses (SMEs) with co-ordinating organisations that included intellectual property management/ legal. Given the absence of private sector funding for higher risk ventures upon which the Diamond was focused, government would become the investor of last resort in an attempt to teach the private sector about innovative entrepreneurship as it built the embryonic SMEs.
Hence government’s crucial role was to provide both grant and prototype funding and the venture capital required for start-up and to take the company to an IPO on the local stock market; the process that should teach the resident private sector.
Still, there is a view that the government should not be directly involved in the economy, should act as a facilitator – should provide tax and other incentives, industrial parks, agricultural access roads and in particular improve the “ease of doing business” locally.
Consider the digital smart phone, which today everyone seeks as a necessity of life, a product that has made the likes of Apple and Samsung economic behemoths. Indeed, much of the credit for this highly successful innovation has gone to Steve Jobs of Apple. But what is forgotten are the technologies upon which the smart phone is based – miniature microprocessors, memory chips, solid state hard drives, liquid crystal displays, lithium batteries, the Internet, cellular networks, GPS, touch screens, etc.
Hence, the foundation institution in the development of the iPhone was not Apple, nor Steve Jobs, but in many cases the government of the US – the key technologies were all supported in their development by governments and in particular the US government (Reference: Tim Harford; The iPhone at 10: How the Smart Phone Became so Smart, BBC News- Business 26/12/16). So much so that the Triple Helix, the triad of R&D institutions, governments and the private sector is claimed by Etzkowitz to be the general model across developed and developing countries for economic progress.
Even in the early days I was careful to point out that if any institution in the Diamond was missing the attempt at economic development via innovation would fail. Unfortunately, recent experience has proved me correct. Consider the following.
The Faculty of Engineering, UWI, even with its restricted finances, was able to produce three international patents – the G-Pan, PHI and a high efficiency controller for DC motors – i.e. some semblance of a centre of excellence exists at UWI.
Because of the lack of venture capital, of market development, none of these have been commercialized – so much so that a fledgling SME that sought to exploit the motor controller in transportation collapsed; it was unable to get financial support. All of this occurred in an environment where the various financial support institutions – ExportTT, CARIRI, NEDCO, InvestTT – exist!
The last government of Trinidad and Tobago introduced the idea of “i2i” followed by the present government’s Entrepreneurial Talent Grant; competitions to reward the general public for ideas that are judged, in the latter case by the current low risk private sector, to be innovative and hence could be commercialised. In both of these cases the in depth intellectual influence of centres of excellence is absent, the finances are limited and co-ordinated marketing and market development are minimal.
Little is really expected of these competitions with respect to diversification of the magnitude required to take over from the energy sector in the long term. One important aspect that is encouraged by centres of excellence is clustering, which such competitions are unable to duplicate.
Still, there is talk about making this country, Trinidad and Tobago, less dependent on imported food, even to build the capacity to export indigenous agricultural products.
This is reminiscent of when Brazil attempted to feed its people. It created in 1973, EMBRAPA, a centre of excellence and an agricultural innovation system. Today Brazil is one of the largest exporters of food in the world and its centre of excellence employs hundreds of PhDs.
It is worth noting also the innovative use of salt water and solar energy for desalination to grow vegetables in the Australian desert. We have no such innovation system.
Maybe oil and gas prices and their productions will increase soon and the good times will return to the Trinidad and Tobago plantation. Economic sustainability however, is about constructing an economic model that includes a national innovation system.
Mary K King