By Lynn Ockersz
If Sri Lanka is to match the prosperity of the more dynamic economies of Asia, such as Singapore, it would need to get into product innovation in a big way and attach top priority to the stepped-up generation of Research and Development and knowledge services. An inability to do this could very well spell dire economic failure. Eastern Europe’s vast economic decline is explainable in these terms. It is quite some time since even Britain has stopped innovating in a major way. Thus are several economies of the West facing a deceleration in economic growth and prosperity.
These cautionary observations come from no less a person than Niranjan de Silva Deva Aditya (Nirj Deva), the Lankan -born Vice President of the International Development Committee of the European Parliament. Deva Aditya is also the chairman of the European Parliament Delegation to the Korean Peninsular. Besides, he is a former Member of the UK Government and a former Member of the UK Parliament.
Speaking to The Island Financial Review recently in an exclusive, wide-ranging interview on the eve of the launching of the ‘Grande Gourmet at Nirj’s’ restaurant in Colombo, Deva Aditya said that there is no risk-taking culture among Sri Lanka’s entrepreneurs. ‘If you don’t innovate and energetically market, you die, he warned.
Deva Aditya was equally emphatic that local banks do not usually help in promoting risk-taking business entrepreneurship in this country. ‘If you formulate an innovative business idea and ask your local bank for a loan to start-up, you are usually asked for your house as collateral.’ This is a disincentive to the launching of innovative business ventures with interesting possibilities. How does business prosper in these conditions, he questioned.
On the other hand, the US remains the world’s number one inventor and business innovator. Since World War Two the most momentous inventions, including those in the ITC field, have come from the US. These have helped in transforming lives the world over. If an inventor or a business entrepreneur approaches a US bank with a feasible idea or a business plan of promise, the banker’s usual response is: ‘Wow! How much do you want?’ This ought to be the spirit among all relevant business development quarters in Sri Lanka too. ‘Wow! How much do you want? This should be the key question on the lips of these sections, to a good business idea, To learn some of these smart business ideas, here you can learn more about how team building in escape rooms encourages team members to support one another.
Extracts of interview:
Q: In terms of economic development, what are the prospects of Sri Lanka reaching ‘Singapore status’?
Singapore has a vast human capital. They have a highly educated work force and this is a key to their prosperity. They don’t have any natural resources worth speaking of. They are compelled to import even water. What they sell is their education; that is their brains.
Q:Do you, then, consider Singapore a good development model for Sri Lanka in these respects?
Sri Lanka has the brains. Our people are among the brightest and most intelligent among the world’s work forces. But we don’t have disciplined, knowledgeable brains. Academically, I don’t know what gets taught in Lankan universities, but whatever is taught does not get translated into practical things.
Q:What would you propose by way of higher education reforms for Sri Lanka?
Greater technical education and vocational skills are essential. Much more practical-oriented courses where people use their brains and hands for wealth-creation must be developed. That is the first stage. Then, the whole electronics business must come in, with IT and software, which is all brain stuff. New methods of communication and contact must be evolved at this stage.
We have to move to a knowledge-based economy. We have moved from an agriculture based economy to a more middle income, services-based one. But these services are mainly human services and not knowledge-based. We earn money from sending our labour to the Middle East. But this is physical labour. We have some logistical services here, such as those involving the ports, for example, where you transport goods here and there. But these are not knowledge-based activities. This is mainly the use of human labour. We have an apparel industry, but here too it’s only labour based. This is a different model to that found in Singapore, which involves using one’s grey matter of the brain to give high value-added goods and services to the world. We are not anywhere there.
It is through innovation that we could bring into being a knowledge-based economy. When the UK economy was at its peak, from the 1830s to the early decades of the last century, it came out with a significant invention every 10 years. The steam engine, the railway, gas, electricity, telephones, the motor car, the chemical industry and flight: these created millions of new jobs, helped in wealth creation and made Britain the richest country.
Unfortunately, we in the UK and the EU have stopped innovating. The mobile phone and the computer are two of the most important inventions to come out since World War Two. But these are US inventions. Internet, Microsoft, Apple, mobile phones etc, all invented in an innovative culture, the US. It is the US which is innovating most, followed by South Korea. But if you stop producing, innovating and marketing you die. This has happened to Europe now. This is attributable in the main to over-regulation and the lack of risk-taking entrepreneurship.
Innovation is absent in South Asia. I don’t know what Sri Lanka has invented. You have to take a risk and someone with the capital, like a bank, must back you up by readily financing your project. If you have a brilliant business idea, you should be able to talk about it to a bank, for instance, and the bank should provide you with the capital, taking a risk in the process, in case the project fails. But this back-up and risk-taking are generally absent in Sri Lanka. There are no risk entrepreneurs in this country at all. Wow! How much do you want? is not in Sri Lanka. Local banks and financiers are usually not prone to risk-taking. If you ask them for start-up capital they ask you for your house! But until and unless you create a risk-taking culture among the entrepreneurial class and other relevant sections in Sri Lanka, you cannot become a ‘Singapore country’.
Q:Don’t you think Sri Lanka’s so-called development is lop-sided, considering our dependence on mainly services?
We can bumble along as a middle income country, trapped in the middle income rut until eternity. Or we can get out of it and become a highly developed country like Singapore. But to think we can become a country like Singapore by mysteriously getting on to a magic carpet and flying is absurd (laughs). You ought to have the steps to climb the ladder of development. We have to create those steps. You have to create a risk-taking culture. If you don’t create this you won’t have prosperity.