An effective system of innovation

Cornell University, INSEAD, and the World Intellectual Property Organization (WIPO) recently released a report on the Global Innovation Index (GII) 2015. Emphasising the key role of innovation in driving economic growth and development, this year’s GII report highlights the role of policy and institutional conditions in promoting innovation. The report also provides many lessons drawn from nations found to be as innovation achievers and outperformers.
Among the 141 economies included in the index, Pakistan ranks 131, staying on the heels of Nicaragua, Bangladesh, Nigeria, Ethiopia, and Algeria. This state of performance is obviously nowhere near Pakistan’s potential given its size, resources, and geographic location. Thus the report provides the opportunity and the knowledge base to review our innovation performance as a nation and reflect on possible avenues for improvement.
State-of-the-art knowledge about innovation in general and the GII report in particular suggest that the economic growth and development of a nation are determined by the national system of innovation on the one hand, and its culture on the other. The former relates to institutional conditions and the latter to the values, attitudes, and norms of society. Fortunately, both are interrelated and hence both can be influenced and reshaped through public policy.
The report suggests that an explicit and coherent national innovation policy mix plays a key role in the innovation performance of a nation. Several countries have realised this need and explicitly included innovation policy as part of the portfolio of a ministry. Perhaps one of the reasons behind our dismal performance is the neglect of innovation in national development plans. We can certainly benefit by explicitly incorporating innovation in our national plans and policies in light of our peculiar needs, problems, and the resource base. Accordingly, innovation policy may be included in the portfolio of one of the existing ministries, such as the Ministry of Planning, Development and Reform.
It needs to be remembered, however, that creation of a productive national system of innovation as well as the culture of innovation require incorporation of innovation in all policies and plans related to national development. Therefore, regardless of which institution steers the innovation policy plan, coordination and integration with all related institutions and policies is the key to success.
The GII report has highlighted several pillars of innovation inputs and outputs. Human capital and research is one of these. Accordingly, education and research & development (R&D) are important parts of this pillar.
Education is an important input factor because it transforms the human population into human capital that can contribute to the productive activities of the nation. Therefore, a significant part of the poor performance of Pakistan can be traced to its education system. Unfortunately, the education system in Pakistan is highly fragmented and socially stratified at the foundational (primary and secondary) as well as tertiary levels and does a poor job in fulfilling its universal purpose.
The public education system has been continuously deteriorating due to several reasons. First, the rate of growth in number of public schools and colleges has lagged far behind the rate of growth in population. This situation has been compounded due to the creation of ghost schools and ghost teachers who exist only in government records. Resultantly, a large number of children in rural areas do not have access to education.
Second, lack of growth in the number of public schools and deterioration in the quality of education in existing schools has created room for private interests to intervene. The result: mushroom growth of private schools of numerous kinds in semi-urban and urban areas. Due to the lack of proper regulation of school system, this phenomenon is negatively affecting society, including on poor stock and flow of human capital for the national system of innovation.
On the other hand, without due attention to, and investment in, foundational education, we have started to expect miracles from the higher education sector. Without proper planning about the kind of knowledge and human capital the nation needs, several sprints were made on several fronts of higher education.
First, we prompted a mushroom growth of new universities without due consideration to the supply of qualified faculty. Consequently, universities have employed under-qualified and untrained people for teaching and research. Second, universities were forced by circumstances to start numerous programmes including research degrees without properly assessing the demand for those programmes. Consequently, despite the lack of qualified faculty, universities have continued to produce research graduates and employ them as faculty and research staff, thus creating a circular flow of underdeveloped human capital.
As a result of this self-reinforcing phenomenon, the nation has ‘progressed’ in terms of the number of degree-awarding institutions and number of graduates holding advance degrees but the quality of human capital stock and flow has not improved significantly. Nor does the knowledge produced from the research programmes of universities help understand and solve the contemporary problems facing the nation.
This ‘progress’ of higher education has helped do nothing but raise the bar of academic qualifications for employment and corresponding growth in the quest for university degrees – hence the fake degree scams. In short, it may be expected that the net effect of the developments in relation to education during recent decades is negative.
Research and development (R&D) is a vital source of innovation and Pakistan has a dismal record on this account as well – with the exception of defence-related R&D. Public R&D has been largely unproductive and private R&D is scarce. This is partly due to the fact that Pakistan still lacks a culture of innovation because relevant institutions are not performing their due role. Here again, universities are important suppliers of key inputs to the R&D system of a nation, including knowledge and human capital. However, despite the fact that the nation has several engineering and technology universities, their practical contributions to R&D output of the nation are negligible.
In the short run, Pakistan can improve its innovation performance in the areas of human capital and research through at least two measures. First, universities need to take stock of their existing knowledge base and deploy it to diagnose and help solve the real problems of Pakistan in various areas. To this end, universities should engage with local industry and institutions to help identify and solve their needs and problems, particularly through their existing research programs.
Second, universities should create a culture of innovation and gear their existing training programmes to generate knowledge and skills that can help foster entrepreneurship among youth. Third, government should expand the scope of short-term training programmes in entrepreneurship among unemployed youth.
In the long run, Pakistan needs serious reforms in several areas to develop an effective national system of innovation, particularly in the subsystem that produces knowledge and prepares human capital. Unless this subsystem contributes the kind of localised knowledge and human capital that can help diagnose and solve the practical problems facing Pakistan, any vision and hope of national development is unlikely to materialise.
The writer is a doctoral fellow at UN University and Maastricht University (UNU-MERIT),
The Netherlands.
Email: m.shafique@
maastrichtuniversity.nl