Innovation for Sustainable Development: Need for an Effective “Government-University-Industry-Development Organizations (GUIDE)” Partnership

Innovation for Sustainable Development: Need for an Effective “Government-University-Industry-Development Organizations (GUIDE)” Partnership

September 24, 2016

By Md. Rashedur Rahman

The role of technology and innovation (both radical and incremental) is key to transform an economy. In the first half of the nineteenth century Germany turned to UK and Belgium for new machinery and skilled workers; while now they are one of the largest suppliers of machineries and have one of the best pools of skilled workforce in the world. Similarly, USA, Japan, and France also achieved their developed country status due to their customized focus on innovation.

Global Ranking and Innovation

Switzerland, Sweden, and United Kingdom (UK) ranked as top 1, 2, and 3 innovative countries in the Global Innovation Index (GII) 2016 that assesses countries’ innovative activities using 82 indicators. BCG’s study on the global innovative companies revealed that 79% of the companies consider innovation as the top most priority or top-three priorities.  The same study pointed that out of the top 50 innovative companies, 29 were from US, 11 were from Europe, and 10 were from Asia. These companies were into the list because of their speed in innovation, applying the lean principles in their R&D processes, enabled technology in innovation, and adjacent growth i.e. developing new products in nearby markets that lead to incremental profitable growth. Taking a look at the top 100 innovative universities in the world focusing on academic papers on basic research and patent filings shows that 9 of the top 10 universities are from USA, Stanford University topping the list (Reuters).

An analysis of these data shows one thing, among others, common that the rankings are dominated by the developed countries. Bangladesh’s position in these rankings is quite unimpressive as she is ranked 129 among 141 countries in GII 2015, and not a single company or university is named as globally innovative company or university.

Vision 2041, innovation, and need for strategic and effective partnerships

Government of Bangladesh (GoB) has made an overarching vision to be a developed country by 2041, and has rightly pointed out the need and importance of investment in innovation into the 7th Five Year Plan (7FYP). However, success lies in developing an inclusive framework for innovation and effective implementation of the innovation policy through a strategic and effective partnership between different stakeholders. The role played by these stakeholders is complementary in nature and an effective collaboration between them is a must not only to achieve the Vision: 2041 and Sustainable Development Goals (SDGs), but also to overcome various challenges like risks  rooted  in the withdrawal of LDC Pharma IP Waiver Until 2033, global climate Change risks, and international security and terrorism, etc.

Lessons from best practices: Country’s Innovation Experience

If we observe the characteristics of different developed countries’ institutional context that affect the innovation pattern we find that these countries have a long tradition of scientific education, patterns of basic research funding, linkages with foreign research institutions, high degree of commercial orientation of academia, smooth labor mobility, effective venture capital system and national technology policy in place. The core features of the USA, Japan and Germany’s innovation system are:

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While each country has its own unique route to success, they share some commonality in their approaches to development e.g. regime’s support to innovation, strong linkage between basic and applied research through an effective partnership with universities and industries. One example is the establishment by the US government of Engineering Research Centers (ERC), a university-led institution developed through the National Science Foundation (NSF), Directorate of Engineering to develop new technology etc. Till now, there are 47 ERC established (18 ERC as 1st generation; 22 ERC as 2nd generation; and 17 ERC as 3rd generation). Japan also invested heavily in innovation through establishing various national research institutions (e.g. RIKEN, The Science Council) and working closely with industry in modernizing the Japanese economy.

Lessons from best practices: Industry and University (IU) Collaboration

An effective collaboration between industry and university (IU helps develop practical skills and knowledge necessary to excel in the market; promote entrepreneurship (e.g. start-ups and spin-offs); exploit synergies and complementariness of scientific and technological capabilities; foster commercialization of public R&D outcomes; and increase labor mobility between private and public sector. In Chile and Colombia, the Industry-University partnership increased the number of new products introduced in the market and patents. Other examples go: Microsoft-Cisco-University of Melbourne’s partnership overcame general skepticism that collaborative problem solving skills and digital literacy could be accurately measured using computer based tools; partnership between BP’s Energy Biosciences Institute and University of California, Berkeley helped to develop next generation bio-fuels and reduce the impact of fossil fuels on global warming;  Audi AG’s partnership with University of Munich supported 100 PHD students working on technology and innovation issues vital to Audi’s competitiveness; JPMorgan Chase (JPMC) and Syacuse University (SU) partnered to prepare students for technology careers in global organizations; P&G’s partnership with University of Cincinnati, and Caterpillar’s partnership with University of Illinois at Urbana-Champaign to establish “Simulation Center”.

Challenges

Despite these successes there are a number of concerns that limit the potential benefits from the IU partnership. Priority of industry often clashes with the priority of the university. For example, focus on basic research (university) vs. applied research (industry); long time (university) vs. short term orientation (industry) in introducing patents and new products in the market; disclosing research papers/articles (university), a criterion for promotion vs. keeping it secret for strategy purpose (industry). Besides, the role of Government in innovation is limited by issues like funding constraints; priority sector investment, etc. But only by establishing certain principles/guidelines these partnerships can go a long way. While many of these lessons and best practices are applied in different context and cultures; the lessons are quite universal. However, considering the differences in political, legal, economic, infrastructural, cultural, and technology adaptation, a customization approach is possible and preferred. 

Way Forward

The dynamics of global competition have now changed significantly due to both advances in technology and reduced barriers to the free flow of goods, services, capital and people. Innovation has been incorporated as one of the 17 goals “Goal 09: Build resilient infrastructure, promote sustainable industrialization and foster innovation” under the Sustainable Development Goals (SDGs) 2030. Bangladesh with its vision to be the developed nation by 2041 needs to understand the importance of innovation along with the role played by different stakeholders.

A strategic partnership between Government-Universities-Industries-Development Organizations (GUIDE) is therefore, an effective means to realize this vision. To make this partnership effective each party needs to play their due role.

  • Government has to prioritize innovation as the top most agenda, provide funds to universities and R&D projects (e.g. innovation voucher applied in Netherlands, Ireland, and UK), protect the intellectual property rights, provide necessary infrastructure and intermediate organizations such as Technology Transfer Office, Science Parks and business incubators etc. and ensure specific support services to industry and universities. In addition, GoB should develop a separate Innovation policy and update the National Science and Technology Policy 2011 to reflect the global changes and best practices. It should also monitor and evaluate the status of the implementation of the policy.
  • Partnership between industry and universities also needs to be based on mutual benefits. A study reveals that out of the 106 projects between Industry and University, only 20% of them had major impact on the company that participated at the collaboration. Therefore, both the parties need to understand that it is a win-win situation for them if they understand each other’s priority and adjust accordingly. Companies need to align collaboration with their research and development strategy; allocate resources (capital, information, knowledge and human); develop shared vision with the universities; invest in long term-relationships; strong communication with the universities; instigate broad awareness of the initiative within the company; and develop a sense of partnership between industry and universities.
  • Universities on the other hand, should be open to ideas and thoughts of establishing a clear direction and vision; for example, to be a teaching university, a research university, or an entrepreneurial university. Collaboration can happen in any form. Universities in Bangladesh need to take immediate steps to establish Technology Transfer Offices (TTO) in their campuses. A recent good effort is that the University of Dhaka and University Grant Commission (UGC) signed a grant agreement to establish Technology Transfer Office (DUTTO) under the World Bank financed and UGC administered Higher Education Quality Enhancement Project (HEQEP). In addition, focus should be given on both basic and applied research (Pasteur type research) so that outcome from the collaboration has high impact on the company’s wealth maximization objective. Also, proper reward and incentives mechanism should be in place along with restructuring the performance measures of the researchers, and removing excessive bureaucracy or unnecessary restrictions on how researchers interact with companies. For example, in addition to number of articles and patents as promotion indicators, other criteria should be included e.g. number of consulting or R&D contracts with industry; income from patent licensing; number of spin-offs; and number of start-ups by faculty. UK, Canada, India, and Singapore have included many of these criteria in their universities. Turkey has redesigned the academic promotion rules in the universities in order to incorporate these criteria.
  • Development organizations with their global experience should share the challenges, lessons, and best practices to the stakeholders in Bangladesh in a collective manner. The stakeholders in Bangladesh while remembering these lessons and best practices as only reference point, should design and develop policy that reflects the local needs and priority.

Bangladesh will enjoy the ‘demographic dividend’, once in a life opportunity in the next 25-30 years. Therefore, to utilize this opportunity and guide the country towards a knowledge based economy, a sustainable long term strategic Government-Universities-Industry-Development Organizations (GUIDE) partnership would be an important stepping stone to development. 

About Author

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Md. Rashedur Rahman, Director, DU Innovation and Incubation Lab (DU i-Lab), and Assistant Professor, Organization Strategy and Leadership Department, University of Dhaka.

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