The Role of Universities in Bringing Continued Economic Prosperity To Sri Lanka
The Role of Universities in Bringing Continued Economic Prosperity To Sri Lanka
The countrys track record of creating prosperity shows that there is a vicious
cycle working against the country. It is therefore necessary to break this vicious
cycle if the country is to attain a significant economic growth. The challenge to
break the cycle is difficult but not impossible if proper policies are adopted.
Sri Lankas best resource is its people
The policies should recognise the countrys resource endowment and use the
most abundant resource to push the economy up on a sustained basis. Sri Lanka is
a natural resource poor country unlike some of the neighbouring countries such
as Myanmar, Malaysia or Vietnam. Hence, it cannot leverage its future growth on
natural resources. The only resource it has is its manpower which, according to
employers, is easily trainable and upgradable. And that is the resource which Sri
Lanka has to use for its future economic growth.
Empowering people is development
Economists for many years had believed that the availability of physical capital
such as buildings, roads, ports and airports, etc. would guarantee that a nation
can attain a high economic growth. The presumption made was that the human
resources available to a country could use such physical capital to produce more
goods and services to ameliorate the living conditions of people.
But development today is a wider concept than mere production of more goods
and services. It is more to do with improving the conditions of people, their ability
to sustain prosperity and the quality and nature of the freedoms they enjoy as
citizens. Thus, it actually refers to the improvement in the quality of life of people.
With better health, education and income, it will empower people to attain self-
perfection, the ultimate goal of living as human beings.
Democracy and development are interrelated
Sri Lanka had depended, for thousands of years, on international trade to bring
prosperity to its people. During the times of Sinhala kings, especially during the
reign of Parakramabahu, the Great in the 12th century CE, Sri Lanka was a leading
entrepot trading centre in the world.
In this trading model, Sri Lanka stockpiled goods imported from the rest of the
world and resold them to traders who visited the country from all other places.
This is the development strategy adopted by Singapore in the initial stage of its
economic advancement to a rich country. However, Sri Lanka cannot play the
same role today with other competitors like Dubai which has succeeded
Singapore when it switched over to an industrial powerhouse in mid 1990s.
Invent for prosperity
Yet, Sri Lanka could leverage its flexible and easily trainable human talent pool to
mark its place in the global economy today. The strategy to do so is the
acquisition of the new technology. But the acquisition of mere technology will not
help Sri Lanka unless its talent pool is capable of coming up with new inventions
the product of using human brain to come up with new ideas. This requirement
was cogently presented to Sri Lankan population in 1940s by Sinhala writer
Munidasa Kumaratunga when he emphasised that a nation that does not
continue to invent will not prosper in the world.
Ability to think is the essential quality of people
The same ideology has been presented by two modern economists, Paul Romer
and Robert Lucas in a new growth theory. According to them, human capital
should be blessed with an essential talent: ability to think and come up with new
ideas and innovations. The improvement in productivity which is essential for
sustaining a high economic growth comes from new ideas and innovations.
Innovations are simply doing old things by new methods which take fewer
resources but produce more outputs.
When inputs become scarce, improve their productivity
Paul Romer has used an example from the kitchen to explain this point. In a
kitchen, we mix inexpensive ingredients according to a recipe to cook a meal. The
cooking is constrained by the supply of ingredients and if we cook according to
the same recipe, sooner or later, we would run out of ingredients because more
meals mean more ingredients and the supply of ingredients is finite. But if we
come up with better recipes, we could still cook more meals with new ingredients
or in the case of old ingredients, with fewer ingredients.
Applying this analogy to an economy, Romer says that history teaches us that
economic growth springs from better recipes and not just from more cooking.
New recipes come from new ideas which are translated into innovations through
vigorous and rigorous research and development.
Apples iPod was a destructive invention
A good example is Apples iPod. Prior to iPod, music was available to music lovers
either through long playing or LP records or cassettes which were not portable
and limited in the number of songs that could be stored.
It is reported that the British entrepreneur Sir Richard Branson of Virgin Group
fame who himself had been involved in music business had once humorously
remarked that he would come up with a new system of music that would record
thousands of songs in a digital system and it would replace overnight the old LP
records or cassettes. This is in fact a new idea of doing old things in a new way.
This new idea led to innovation by Apple to produce iPod and make it available to
music lovers on a commercial basis.
Create and use knowledge productively
Knowledge will enable researchers, engineers and scientists to create new things
which are known as inventions. There are thousands of such inventions made by
knowledgeable people every day. But not all these inventions lead to creating a
commercially viable new product or service. For instance, there are stories of
some Sri Lankan youth inventing remarkable new products such as a sea-water
driven motor car or a multi-tasked paddy-thresher.
While such inventions have their own merit, they may not be commercially viable
at the current stage of technology due to higher cost of production compared to
available alternatives. Hence, they just remain as prototype inventions incapable
of going through an assembly line of a factory that depends on commercial
viability for its survival. Schumpeter says that these inventions are used by
entrepreneurs by converting them into commercial production lines. That process
was named by Schumpeter as innovation
Universities as creators of knowledge
Universities are the creators of knowledge in societies today. They do so by
providing higher learning to students and engaging in research and development.
But there are several prerequisites for them to perform this duty by the society.
They should embark on creating new knowledge which had not been there
earlier.
In this respect, universities should explore other avenues of continued funding for
their research programs. They should perforce link themselves with the private
sector to undertake collaborative research projects funded by the latter. It will
also solve the problem of finding entrepreneurs to transform their inventions to
commercially viable products. Since universities just sit on a massive resource
base the talent pool represented by its staff and free-thinking students it
would not be difficult for them to go for this option.
Sri Lankas universities too should take notice of the modern developments in the
global technological field and amend their curricula to suit such developments. In
that manner, they can effectively contribute to the growth momentum that has
been started by the Government today.
(W.A. Wijewardena, a former Deputy Governor of the Central Bank of Sri Lanka,
can be reached at [email protected].)
Posted by Thavam