Inventing Innovation

By HAYDN I FURLONGE

Mary King

The challenge of reconfiguring the economy for the challenges of tomorrow has placed the issue of innovation squarely on the national agenda. Invariably, however, planning for innovation, research and development are too often crafted with more zeal than commitment. The end result is all too sobering, often with the cyclical notion that a new plan is desperately needed. It is therefore worth distilling where the indigenous bottlenecks may be, and understanding what trends are taking place at the global level.
If our future is to hinge on a knowledge-based society, there are implications from the macro to individual level. Firstly, our Sir Arthur Lewis-based model for economic development meant industrialization for a country such as T&T, given its relative abundance of hydrocarbon resources. This required the acquisition of technology and expertise as ingredients for monetization. As a newly independent nation trekking its way out of the sugar cane and agriculture fields, these of course needed to be imported, and the economic space had to be attractive enough for industrialists from the developed world.
In a knowledge economy however, technology and expertise are not inputs but outputs. Expertise is the product which is used to attract and generate capital. The primordial input is therefore that which builds expertise, namely the education system and effective institutions for research, development and innovation. This represents a fundamental shift in the model for economic development, and one in which we must, as a nation, effect an implementation plan. Being creative with shifting around State portfolios, audits of past occurrences, and changing of the guards may be all necessary first steps, but a stern re-look at the overarching economic philosophy is warranted, including the relative roles of government, private sector, civil society and market forces.
At the individual level, the “expert” or “knowledge worker” (as coined by management guru Peter Drucker), is a different creature to the traditional graduate and professional. The latter spends the formative years -and sometimes all- as a subordinate with gently increasing grades of technical, financial and legal responsibility and accountability throughout his/her career. A new graduate is therefore expected to enter the workplace with mostly technical training, be it in science, medicine, engineering, finance, law, etc. The career path model of the current middle-age and prior generations involved graduating, landing a job in a burgeoning State sector, or if you are fortunate the private sector, then pursuing a Masters degree and waiting your turn to climb the corporate ladder. This must be de-glamorized.
The knowledge worker of the future T&T economy is a critical thinker, innovator, entrepreneur, risk-taker, with a sense of business acumen. He/she is not likely to be subordinate to a boss for a long period; rather he/she is a specialist with a network of associates, who uses all communication forms to build linkages with a wide range of stakeholders. The future worker is mobile, not sedentary/pigeon-holed, who can liaise with all manner and culture of peoples. To achieve this “dharma” he/she must be equipped with the right tools, skills, and most importantly the mindset. Would our secondary and tertiary level graduates qualify for this vacancy? Is our education system evolving fast enough? Indeed, the traditional schooling system that prevails may be out of sync with the needs of the future graduate of a knowledge-based innovative society. What role is there for professional bodies and associations/chambers in this transition? Are there appropriate standards to aid and guide this new transnational worker; do avenues exist for continuous learning (in classroom and via e-learning) and for connections to strategic counterparts worldwide?
Lack of money is the usual “whipping boy” for much of what cannot be accomplished; so let’s see. Indeed, T&T’s level of funding (private and State) for R&D has been less than 0.1% of GDP. Economies striving for innovativeness and entrepreneurship target a figure of at least ten times this. Even though spending in the order of US$ 300 million pales in comparison to other countries, this would mean that government and society would have to forego more pressing demands, which may themselves be more cosmetic to the nation’s goal of achieving long-term economic sustainability.
A reference point is that this figure is close to the amount used to subsidize gasoline and diesel fuels. Consequently, there seems to be enough room for a trade-off between short-term benefits versus long-term investment, if carefully managed.
Apart from contributions by oil and gas companies to R&D/tertiary education, a pool of funds from all stakeholders is needed. The right formula for use of R&D funds would have to be determined, comprising administration, infrastructure, research grant schemes (for research, development, demonstration and deployment stages), and research awards. A private sector approach would have to be instituted to gauge efficiency and effectiveness, with targets for citations, impact factors, number of patents and products commercialized, and number of successful spin-off companies. One must recognise that the expectations of investment in R&D must be tamed.

For instance, the widespread use of hydraulic fracturing and directional drilling being used for the extraction of natural gas from shale deposits that has catapulted the US and wider gas industry today was based on research funded two decades ago, in large part by the US government. The flourish of laptop computers today came about in part by IBM’s investment in innovation during the 1970s. In other words, traditional economic hurdles are not good yardsticks by which R&D investment decisions are made.
Probably equally important as funding, is the mechanisms for R&D administration. Suffice it to say that a partnership approach is needed via a national innovation system, comprising trade associations, professional bodies, research centres, business organizations, and government agencies. Additionally, alliances for R&D are critical given our size (in terms of financial resources) and shape (meaning limited depth in expertise). India, Qatar, Kuwait and other rising research centres in the developing world are adopting this approach. By partnering with universities such as MIT, Texas A&M and Imperial College, human resource and technology development can be accelerated. Indeed there is in fact a growing trend where developing countries have the highest growth rates in R&D spending and academic results. For instance, China’s R&D investment has increased by 22% per year over the period 2004 to 2009. There appears to be a window of opportunity for countries such as T&T to enter this once elite space.
At the organisation level in the energy field, national oil and gas companies are taking the lead in R&D spending, with international oil and gas companies conceding ground. In 2009, the State-owned PetroChina is reported to have become the largest energy R&D spender surpassing the likes of Shell. Brazil’s Petroleum R&D Fund facilitates research with 75 other institutions. Petrobras is now developing its own technology and is an industry leader in deepwater subsea operations. The question we need to ask ourselves is: what technical problems do we face in the various sectors of our economy, and who do we need to partner with to solve them? This would require a collaborative initiative of energy, manufacturing, education and foreign policy.
Needless to say that entrepreneurship and clusters can develop around activities that have little to do with the latest technology; bake and shark, doubles and soca chutney have just as much potential as jerk seasoning, gyros and reggae. Nonetheless, a “post-capitalist” education system is a pre-requisite to developing a workforce to grow such businesses or the technology-based ones, given the highly global competitive environment. We therefore need to ask what sort of education system is conducive to innovation. For those of us with children in the primary and secondary levels, how much has changed for the better in terms of the methods of teaching and the curriculum? We continue to pat ourselves on the back with the notion that our education system has depth. But are graduates critical thinkers, innovators in the making, confident to face a global challenge? Or, are they crafted from the same mould? Can appropriate skills sets be developed when science and engineering concepts are taught mostly from textbooks or ageing labs?
At the tertiary level, there is much focus on increasing capacity, and this has a significant impact on building a broad educational base. However, none can argue against the need for up-dating research resources, particularly in disciplines of strategic interest. Is the curriculum tied to research taking place at the university and does it keep pace with the needs of Caribbean society? Carbon dioxide emissions mitigation, extreme weather and its impact, dissemination of renewable energy technologies, energy efficiency and conservation, cost effective transportation infrastructure, crime reduction, HIV/AIDS, waste management, water treatment are all matters with much public interest. How is the development of their solution tied to research at our universities and other organizations? The cost of waiting for and importing foreign technology and expertise must have some bearing on the decision as to how much we should invest in finding their solution ourselves.
To recap, developing a knowledge-based economy needs a fresh proactive approach. Some of the matters requiring urgent attention include the level of government financial commitment, redesign of the education system, the preferred T&T model for collaboration and oversight in R&D, niche opportunities for new businesses, and our strategic partners in innovations.

Why are these critical over what we may call the typical newspaper “headline-catcher” issues? Here is a scenario to contemplate. T&T’s economy is gas-based. Natural gas markets remain saturated for the foreseeable future. Countries with larger and more competitive hydrocarbon reserves attract limited-available foreign capital and can dominate the market. New finds in T&T are smaller and more expensive. Our energy sector begins its rapid decline due to high consumption versus replenishment rates. As a result, T&T has to import energy and hydrocarbon raw materials at some point in the lifetime of the current working class generation, or at least for certain the next one. What’s left for our economy and its people? We seem to have muddled long enough over the Vision. We need now to be pre-occupied with Action.

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