To devolve or not to devolve

The outcome may depend on the devolution of the Higher Education Commission.

It is rare that one gets a chance to say this, but in this case, the government has done its job in establishing a national innovation system. Now it is up to the private sector and entrepreneurs to take charge. In this article I will qualify this apparently controversial statement by looking back at what has been achieved largely through the Higher Education Commission (HEC) in recent years. I argue, echoing the HEC chairman, that it is a take-off stage for Pakistan’s national innovation system, and there is no need to announce any crash landing or grounding of the plane. The HEC must not be devolved as we need to maintain national level standards in higher education as well as continue investing in research and development through a competitive process.

The national innovation system (NIS), which began to emerge in recent years, will be considered as stillborn by future historians if the HEC devolution is carried out.

The NIS is defined as the system of interacting between private and public firms (either large or small), universities and government agencies, aiming at the production of science and technology within national borders.

Pakistan stands to reap the benefit from its enhanced investment in research and development in recent years largely made through the system of the HEC. In eight years between 1999 and 2007, Pakistan has increased R&D investment by 600 per cent which now stands at 0.7 per cent of GDP or $1.176 billion (Rs100 billion). In its 2009 report, the United Nations ESCAP acknowledged Pakistan as having achieved ‘steady growth’ in this respect and noted that its R&D relative expenditure exceeded that of several Latin American and Eastern European countries. Further, the number of researchers in Pakistan grew from 187 per million in 2005 to 310 in 2007 as per the 2008 report of United Nations Economic and Social Commission for Asia and the Pacific.

In 2007, Pakistan had higher R&D spending as a percentage of GDP than Malaysia (0.6 per cent) but slightly lower than India (0.8 per cent) and much lower than Japan (3.4 per cent). But these are encouraging numbers.

The key question is: how to ensure optimal impact of this investment on socio-economic development of the country. The answer lies in the triple helix model, which is about creative collaboration between key actors from the academia, the government and the private sector.

If innovation is considered important for business and economic development, what has held back these institutional actors and structures to creatively collaborate? Why we do not see triple helixes?

The most apparent explanation is a general coordination failure. However, this diagnosis is only symptomatic -- it does not cut into the disease. Also the answer to a general coordination failure is usually creation of another agency for coordination, which more often than not, usually fails itself.

We suggest another explanation for a coordination failure- it is the absence of strategic communication at inter- and intra-institutional levels. For instance, the Pakistan Council for Scientific and Industrial Research (PCSIR) has a pool of 250 plus scientists, and more than 20 hold PhDs. However this centre does not have any corporate profile depicting corporate capabilities and skill sets of its human resource. A product catalogues exist but quite often the private sector is looking for a particular skill rather than a specific product. In the absence of such communication tools, the potential buyers of research remain uninformed and thus an important form of triple helix does not emerge.

If the strategically important information is available, then a market will emerge, in which buyers and sellers of R&D would negotiate. In the absence of information, free markets do not emerge.

It should be emphasised that price happens to be the most important source of information for market players. Therefore the research products and research experts should be appropriately priced. Keep it free and you have free riders. Keep it expensive and you have black market. An equilibrium price structure would not only bring competition but would also improve incentives to perform as well as drive out rent seekers from the system.

Without strategic communication across the triple helix, the 100 billion rupee R&D economy remains asset rich but does not create wealth. Absence of a centrally managed system only ensures that no such communication takes place.

In the absence of a strong and centrally managed body to continue investment in the R&D, such as the Higher Education Commission, there is a strong fear that duplication of projects will become a norm. The R&D investment, when devolved, will become too isolated for experience-sharing at national level. Devolution of HEC, from the standpoint of emergence of a National Innovation System, may actually precipitate our new found hopes from the researchers’ community and may well halt the process of brain-gain.

The writer is an Economics consultant and Director Programmes and Development at the Alternate Solutions Institute, Lahore. He can be contacted at [e-mail]

Published in The Express Tribune, April 18^th,  2011.