Sands of innovation

The Clinton School of Public Service, University of Arkansas, one of the oldest and reputed higher education institutions of America, tweeted this week that my 2011 lecture at the Clinton School (out of 1000 lectures so far) has been the third most watched programme online.
I had spoken on the ‘Shifting Sands of Innovation and Entrepreneurship’ in which I highlighted how the economic divide is narrowing between the west and the east, and how the centre of economic gravity is slowly drifting away from the west to the east.
I spoke about the lessons the east learnt from the west and applied them to their own societies, while the west hibernated. I concluded my talk with why countries like Pakistan are doing all the right things in higher education.
Two important forces are now driving the Emerging World. The first is the explosion of information and communication technologies, including the development of next generation cellular and smart devices, and its accessibility and affordability to the population at large. The second is increased investment in higher education, research, creativity and innovation with enhanced opportunities for entrepreneurship.
Christopher Columbus, in 1492, discovered the new world by believing that the world is round. Today, we believe the world has become flat. Even President Obama in his State of the Union address said the world has “changed”. Friedman’s Flat World theory has completely revolutionised global business in the last two decades.
According to Friedman, among the 10 forces that have “flattened” the world, are the internet explosion, smart devices including the cellular phone, end of the cold war, outsourcing, offshoring, opensourcing, insourcing, and above all, reaching out across a borderless world through social networking.
As a result, it is a different world today. The global economic playing field has been levelled and equalised. Many new companies in the emerging world have been inspired to join the race for their market share.
They are redesigning entire business processes and products, and giving the developed world a run for their money. Innovation and entrepreneurship were America’s strength in its rise to becoming an economic power in the 20th Century. Today, the shifting of the economic gravity – which I called the ‘shifting of the sands’ – is a wake-up call for the American Dream.
Some of the past American success stories of innovation and entrepreneurship include companies which lay the foundation for the Silicon Valley. Companies like Hewlett Packard, Microsoft and Google, which revolutionised the internet, were born in barns, garages and basements. Historically, smart people turned to where the money was. Today, money is turning to where the smart people are.
It is now the same innovation and entrepreneurship which have become the driving forces behind emerging countries becoming economic giants. They are producing breakthroughs in everything from telecom to energy to defence. Now you can buy cell phones which are made in China and Taiwan. Call centres, including those for airline reservations and emergency care, are run in India and Pakistan.
IBM now employs more people in the developing world than in the developed one. UN World Investment Report calculates that there are now 21,500 MNCs based in the emerging world. Among the top companies, 60 percent are outsourcing to India, 27 percent are outsourcing to China, and 25 percent are outsourcing to Latin America.
The result is that innovation and entrepreneurship is changing lives in the east. While the development of the no-frill $3,000 car, and $300 laptops in the east may not be as exciting as the Corvettes and iPhones in the west, but they are certainly changing lives of billions of people. And they are becoming the catalyst for a fast-growing knowledge economy in the east.
A major block that I highlighted in my talk was that of Muslim countries, which is actually the second largest in terms of economy, after China and before India. The Muslim population is rapidly increasing, even in North America and Europe. Today, the Muslim population is about one billion, roughly the same size as India and China. According to Washington Post, by 2050, one third of the world population will be Muslim!
The GDP of the five Muslim countries in ‘western’ Asia (Pakistan, Iran, Turkey, Saudi Arabia, Egypt) is $3.4 trillion which is the same as India whose population is three times larger.
If we add two other Muslim countries of ‘Eastern’ Asia, Indonesia with a $1 trillion economy, and Malaysia with a $412 billion economy, this Muslim block totals an economy of $5 trillion, which is 50 percent more than that of India. Certain Muslim countries, like UAE and Qatar, are rapidly investing in universities and institutions of higher learning to build a knowledge-based economy.
The finale of the talk was on breakthroughs in higher education in Pakistan. During my tenure at the HEC (2009-13), by focusing on applied research, innovation and creativity, the biggest achievement was that for the first time ever, 10 Pakistani universities made it to the ranks of the Top 250 Asian Universities as per QS World University Rankings.
When I took charge in 2009, no Pakistani university was ranked globally. Despite a cut in funding to half as much as what my predecessor received, I made it my number one priority to ensure that by the time my four-year term ended, at least five universities should have made it to the top 250.
From zero ranked university in 2010, four were ranked in 2011, 6 in 2012, 7 in 2013, and by the time the 2014 results were announced at the end of my term, we had 10 in 2014. This exceeded the target set in 2009 by over 100 percent – despite the cuts in funding and the crisis the HEC was struggling through for its survival.
Pakistan can certainly create a knowledge economy by supporting education, research, creativity, innovation and entrepreneurship. All it needs is political will and a beautiful mind.

The writer is a former chairman of the Higher Education Commission.
Email: jlaghari@gmail.com