Tuesday Nov 26, 2024
Tuesday Nov 26, 2024
Friday, 12 July 2013 04:06 - - {{hitsCtrl.values.hits}}
Dileeka Dias, John Keells Holdings Consumer Food Sector President Jit Gunaratne and Ministry of Finance Deputy Secretary to the Treasury Dr. Suren Batagoda and was moderated by University of Moratuwa Office of Science, Technology and Innovation Project Director Prof. Ajith De Alwis.
Q: Could you give us a summary of the incentives that have been offered towards research and development so far and have the private sector fully utilised them?
Batagoda: The Government recognised the importance of investment in research and development. There are complaints that the investment in research and development is small but the Government’s strategy is that the necessary infrastructure needs to be in place first. We have recognised the importance of research and development in the last couple of budgets with many incentives being offered.
There was a further complaint that public sector research was not available to the private sector for which we introduced the triple reduction tax system for private companies that work with public sector research institutions. In addition to this, many researchers in the public sector are given incentives. If the researchers work with the private sector, 50% of the profits made can be kept by the researcher. We also offer university professors, academics and medical staff 25% salary increment as an allowance if they publish research findings in a journal.
It was said that we need 16,000 scientists. The President said why not increase this to 20,000, a move that was adopted by Parliament. We also offer many incentives to SMEs. They need technology but it is difficult for them to access it so we have asked the public sector to conduct research for SMEs. We need a research culture and investment is a big issue as well. I feel that these incentives, however, are not being fully utilised.
Q: How did the industry-university collaboration happen?
Nugawela: We are now working with six universities in different areas including product and process development and carrying out clinical trials. It all started in 1984 when the company decided to venture into standardised, quality controlled Ayurvedic pharmaceuticals. A panel of Ayurvedic physicians was not enough for the production of homogenous pharmaceuticals. We had the knowledge within the company but that was not enough so we had to look for knowledge outside.
Universities worked on healthcare products and published their research findings but this was not promoted within the industry. We approached the universities and they agreed to work with us. We worked together solved most of the problems encountered and within two to three years, we became leaders in the sector. Armed with the knowledge we had acquired, we started developing Ayurvedic products for the common cold – that was the beginning. We kept developing many products, some of which have been very successful in the global market. We have disagreements on scientific matters very often but the secret of our success is not having secrets – we respect each other.
Q: Could you say something about your experience in the industry?
Gunaratne: JKH has had interactions with universities on different levels. We interact with universities, building up in-house capabilities to do research and development. One of the sectors that have benefitted the most is the food and beverage sector.
Elephant House has a highly unionised labour force and we had issues driving productivity. We wanted to do a work study and we convinced the union to work with us on this and we engaged the help of the University of Moratuwa for this. The whole intention was to come up with something that could be implemented which was tough but the university joined our discussions with the union and some of the professors took a personal interest in it as well in order to ensure the mindset change that was required – and it worked.
Implementation was crucial to us. We figured that it was the right way to go and the results encouraged us to do more studies in two more areas after that. So far, there have been no major hiccups to talks about and it has been a good experience so far.
Q: Without any incentives in place, you collaborated with the University of Moratuwa and Dialog was a part of the formation of SLINTEC – what made you do so and what benefits have you gotten out of it?
Wijayasuriya: We commenced discussions with the university in 2005 and our objective was to attempt to break the chicken and egg cycle by bringing in some degree of private sector capital to meet the intellectual capacity available at the university. We wanted to provide the capital and motivation to the university to develop something that would end up in the industry. Furthermore, we wanted something that could be co-owned by the industry and university, so that the university too could benefit from it in the long run.
Did any of these products hit the world market and meet capacity? Not yet and I would like to say yes to at least one. Why not? The third or fourth piece puzzle was missing – the attraction of further capital and staying power globally was missing. We didn’t do our job fully as we did not focus on taking it beyond to a world market. There is no exit mechanism for the innovators and we don’t have an active capital market that soaks up capital and provides more innovation and seeding methods. Of course, there are many positives – one or two products are in the market, both in Sri Lanka and overseas, and the university was able to hire some short term international resources for its use through this. We hope that we can take it to another level.
Q: We must build bridges and understand each other and have good partnership with industries – what are your thoughts on such statements that have been made throughout this session?
Abeysekera: These are very convenient statements made by politicians which do not really address the problem. Look at the performance of Sri Lankan graduates in other segments. Many graduates abroad do brilliantly, how come they can’t do it here? There is something wrong with the total setup, not the graduates themselves. Our curricula always take a beating. Yet, compare it with Yale and Harvard and it’s not so different. The problem is not with the curricula but is in the way in which it operates.
We have a total education system which is highly competitive from the time you are born. Students learn to study for examinations. There is nothing wrong with the scientific knowledge of the graduates; it is the adaptation to the corporate sector and skills that are lacking. You can’t teach such things through courses – it’s a societal problem. Most science students here are trying to do two degrees at the same time and the result is that they never really benefit from a university education because they don’t get involved with the university community to develop the skills necessary for their success.
The whole problem begins with the school system. I was disappointed with the comment made by Minister Amunugama about the 6% towards the education system being wasted – it was a superficial thing to say. We need to expand the education system so that we can have a creative system and there needs to be investment from the Government, yet, there is no direction towards that.
We have made a move to commence a tech degree and tech stream that is supposed to solve the problem of students failing O/Level math and science. I can’t think of anything more irrational as what we should be doing is seeing why they are failing in these subjects and attack that problem instead. There are major problems and the government and academics need to forget politics and dogma, sit together and solve these issues.
Q: What do you expect from the industry in terms of productivity?
Perera: University academics can help create ways to increase productivity by providing scientific solutions through research and development as done with John Keells. We have to focus not only on technical solutions but also understand the culture of the organisation and listen to the workers, and while we are enhancing productivity, try and solve their problems and enhance their morale. In addition to that, universities can work on continuous performance development.
Q: How cost effective have some of your innovations been?
Dias: First of all, innovations don’t necessarily translate to commercial products. Where we have been successful is where there has been a cost advantage, providing a solution that was significantly less in cost than the better known commercial product. The cost aspect is very important but another aspect of this is that the industry expects some other things to come into this such as products upgrades, after sales etc. and in the current university setup, we are yet to see how that can happen – these need to be looked into when developing products for the industry.
Q: do you have a gauge on how successful the incentives offered to the private sector have been?
Batagoda: Only a few industries have used the incentives as they are not aware of them. Who should take this up – the Government or private sector? The industry must come forward as they are hungry for research and development and discuss the issue. Our imports are double our exports. High tech exports amount to only 2% and we have no choice but increase exports as soon as possible.
For that, we need science and technology and we need the private sector to work on this. The private sector must come forward and work hand-in-hand with the academics. Everyone is pointing fingers at each other but not working together. University academics must also be proactive and use the incentives offered by the Government. They also need to be made aware of the incentives being offered to them
The Government provides more than 10% of revenue to education which is a reasonable amount. In addition to that, we provide all these incentives. The private sector needs to add their input to the proposed policies for the education sector. The Government is willing to provide adequate funding if the proposals are solid.
Nugewala: I agree that the private sector and academics need to work together. There is now more awareness about the need for universities to interact with the private sector. However, we need to have a method for this interaction to take place and what is most important is good, personal understanding between key individuals. When the industry supported our research, there were no strings attached as they understood it would be useful to them in the future and this has paid off. Relevant areas, for not only the short term but also the long term, must be picked and invested in by the private sector.
Batagoda: 6% of GDP for education is not doable. However, every other proposal that has come from the industry has been implemented in the Budget.
Q: What is the ideal percentage of reinvestment in research and development for a medium sized company?
Amaratunga: 5% to 10% of profits is the international standard. 5% to stand still and another 5% for the next stage to say ahead of the curve.
Q: How could we generate more collaboration between universities and private sector?
Wijayasuriya: The country is producing excellent brains across most disciplines. A joint effort is required by the Government, academia and the private sector to build a future for these people and this is no easy task – what needs to be done? If in Silicon Valley, 50% of them will end up millionaires because they would be in a more enabling ecosystem. Our ecosystem is a product that we have created and in this, they can’t work to their true potential.
We are trying our best through many collaborations and attempts to break this cycle and create an ecosystem to reward these people. There are successful Sri Lankans in Silicon Valley but they didn’t go through our university system. What will generate the required research and development climate? One way is for a rich government to pump large proportions of the GDP into research and development. Yet, it’s not fair to expect the Government to do that as we have more basic disparities to bridge at the moment. The other source is industry and commerce where people put money behind inventors and then inventors cash out – that’s what a place like Silicon Valley does.
India does not have a great private sector investor environment, even with its scale. We don’t have to despair over this as in the digital world, there are no geographical barriers – we need to think global and be brave about putting our ideas forward for global consumption. We aren’t facilitating our inventors and innovations to go global. Today’s idea is tomorrow’s commonplace practice so we need to be bold enough to put our ideas out there – the private sector has not done enough by any means towards this.
