The National Innovation Agency (NIA) was established by Act No.22 of 2019 of Parliament to build and sustain a national innovation ecosystem, coordinating efforts between ministries, institutions, and the private sector to take innovations from idea to market.
As the NIA’s work progresses, one of its key challenges remains fostering a belief in innovation as a driver for economic transformation, moving away from a commodity mindset towards value addition and securing a stronger position in the global value chain.
Speaking to The Sunday Morning Business, NIA Chief Innovation Officer Prof. Ajith de Alwis elaborated on how the agency facilitated businesses.
Following are excerpts:
How does the NIA support businesses?
The goal of the NIA is to transform businesses of all sizes. We aim to instil an innovation mindset in business owners, whether they run large enterprises, Small and Medium-sized Enterprises (SMEs), or startups.
One of Sri Lanka’s long-standing issues is the lack of economic diversification. We have neglected both the internal market and the expansion of our export basket, often treating the two differently. In the context of innovation, however, that distinction becomes irrelevant.
One of our objectives is to emphasise the role of Intellectual Property (IP) in the national wealth equation. While capturing IP is important, the process of thinking about, protecting, and expanding it is crucial for economic security.
Securing IP empowers and enables businesses to thrive. This applies not only for SMEs but for everyone. Many organisations, even large-scale ones, are content with standard operations and stable cash flow, but they rarely strive for improvement.
Even the biggest businesses in Sri Lanka often lack substantial IP portfolios. They may talk about brand value, but their presence in the global arena remains limited.
Two exceptional examples of Sri Lankan companies in this regard are Dilmah and MAS. MAS, in particular, has secured over 100 international patents and operates with a global mindset, leading to some of the most innovative workplaces in the world. We want to see this behaviour extend to businesses of all sizes.
What is Sri Lanka’s design economy?
One of the most crucial aspects of a design economy is human capital. Empowered and knowledgeable individuals foster creativity.
If we adopt a design mindset, we can secure designs, which opens the door to earning royalties without producing goods internally. For example, Apple products are designed in California but assembled in China, with California benefiting more from the IP.
Sri Lanka can leverage its creativity and knowledge advantage by focusing on securing IP and monetising it globally. Protecting IP, whether through patents, industrial designs, or copyrights, is just one part of the process. The other part is turning that creativity into revenue. Sadly, this is where we have often failed. Many innovations here have not been monetised, or worse, have been monetised by other parties.
As a country, we need more people who can turn creative ideas into revenue streams. For instance, the University of Colombo’s ‘Bio Clean’ project now generates revenue, with the university receiving cheques as a result of its work. That is an example of design thinking in action.
How does the NIA facilitate research?
We facilitate the monetisation of research – ‘Research into Rupees’. Our first priority is fostering creativity and supporting both individuals and institutions in that pursuit. The second priority is helping convert research into economic value, turning research into rupees.
We see a lot of research being conducted but often without a focus on monetisation. Researchers may be content with publishing their work, believing that their primary role is to conduct research. However, in today’s world, the economic return only comes when research is monetised.
We have introduced two initiatives to address this. One is the ‘Dolphin Tech Pitch’ that we initiated, which focuses on developing antivenom. Currently, Sri Lanka imports antivenom, which is both expensive and inefficient, causing significant health complications and economic burdens. The research done at the University of Peradeniya in this area is promising, but we need to ensure that it continues toward a clear goal; without monetisation, this research will not translate into economic benefits.
In some economies, there is close collaboration between researchers and entrepreneurs, transforming research into products. While invention is often an individual effort, innovation is a team endeavour. The role of the NIA is to facilitate that teamwork, something that is often missing in Sri Lanka. Here, businesspeople rarely engage with universities to explore new research. This is a gap we need to address.
Entrepreneurs in Sri Lanka should be focused on doing things differently and generating profit. Unfortunately, we still have an ‘island mentality,’ focusing too much on import substitution.
What we promote is a world-class mindset, as knowledge is available, and if we foster the right mentality, the results will follow. While individual players might shine, society as a whole will not thrive unless we facilitate systemic transformation. Otherwise, the benefits of our creativity will flow to other economies.
The ecosystem requires greater connectivity. We need people to conduct research, invest, and find innovative financing techniques. Unfortunately, the venture capital and angel investor scene is quite small here.
Improving the startup ecosystem is essential. India, for instance, has more than 100 unicorns, each valued at over a billion dollars. These unicorns have transformed India’s economy, while we are yet to see similar possibilities. A unicorn is created when an idea is developed, the IP is monetised, an investor comes in, and the product is scaled. That’s the kind of thinking we are continuously pushing for.
What are the challenges?
One of the most significant challenges we face is fostering belief in innovation. At this stage, innovation could be the remedy for our economy, but we don’t hear enough about it.
We need to focus on value addition and securing a stronger position in the global value chain, not just at the starting point with a commodity mindset but also by adding value and demonstrating that we command a unique position. This should be our goal and diversification should align with these ambitions.
For instance, countries like South Korea didn’t merely aim to survive or make incremental improvements as they focused on exponential growth, which they achieved. South Korea’s transformation was driven by mobilising people, establishing a robust research network, and celebrating milestones like securing their first US patent. India celebrated its first US patent in 1990, which was also a turning point for the country.
In Sri Lanka, however, we tend not to acknowledge the importance of patents or see them as stepping stones toward economic transformation. Believing in ourselves and internalising these goals is crucial to transforming our economy. This is challenging because it requires a level of smart work that goes beyond the conventional paths we are used to. Surviving is one thing, but true transformation demands more.
Moreover, a stronger policy framework is essential, especially in financial instruments. We have put forward several ideas for the budget after discussions with various stakeholders. We have also had discussions with the South African innovation agency and plan to meet with Sweden to link up with other innovation agencies. This collaboration ensures that our initiatives aren’t perceived as coming from just a few people from a young institution.
What is the ‘Business to People’ platform?
The goal of the ‘Business to People’ platform is to serve as a single portal for research institutes, investors, and others to showcase their ideas, developments, and products. We assess the industrial readiness level, Technology Readiness Level (TRL), and commercial readiness level from the back end. Subsequently, we push these ideas to entrepreneurs, banks, and other stakeholders for their next ventures.
We meet with banks and chambers regularly, encouraging them to invest in these innovations. By creating investment opportunities for entrepreneurs, we’re building a collection of ideas and working hard to engage banks in this process.
Eventually, the system will run automatically, with more ideas being taken up by the market. The goal isn’t just to expand the market but to encourage businesses to develop and invest in these innovations as well; this is what ‘Research into Rupees’ means. We aim to turn research into business models that attract investors and facilitate projects becoming businesses.
What are the NIA’s partnerships?
We have developed multiple partnerships for our National Entrepreneurship Development Programme. The first cohort graduated this January. Our partnership with the University of Moratuwa’s Department of Industrial Management, along with international resource personnel, has been vital.
This year, Union Bank became the programme’s sponsor and has committed to running two programmes per year. Last year, nearly 120 participants completed the certificate course, which was offered free of charge. This programme connects universities with society.
We are also working with the World Intellectual Property Organization (WIPO) to push the innovation index upwards. You will hear about the launch of the Global Innovation Index (GII) 2024 soon.
Additionally, we have partnerships with the Korean Intellectual Property Office and the Korean Innovation Promotion Agency. Through initiatives like the ‘One Village, One Brand’ programme, we aim to bring intellectual property into local activities and improve quality and standards.
Our primary objective is to connect the innovation ecosystem across both the public and private sectors. This has been slow to develop, as we must first believe in the power of connection.
What is ‘Solve Sri Lanka’?
‘Solve Sri Lanka’ has faced delays due to funding difficulties. One of the challenges lies in our cumbersome State procurement system, which also needs innovation.
‘Solve Sri Lanka’ is designed as a crowdsourcing platform where companies and individuals can report their problems. From the back end, we direct these problems to the relevant people or institutions that can provide solutions, thereby accelerating the problem-solving process.
We’re also implementing ‘Innovation Vouchers,’ especially in the SME sector. For businesses lacking capital or collateral, we assess their potential and, if promising, provide these vouchers at the final stage to support commercialisation.
‘Solve Sri Lanka’ is designed to address such problems by facilitating connections between those with challenges and those with solutions. Our role is to enable research and its transformation into economic value.
What is the future of the NIA?
Though we have a small team, it is dedicated. We hope the NIA will be utilised to its full potential.
One of our first actions was to submit a document to the Governor of the Central Bank of Sri Lanka (CBSL) on converting IP into economic value (‘IP into Rupees’). We have also formulated documents on graphite and mineral sands, pushing these initiatives with industries and ministries.
The traction for these ideas isn’t always immediate, as this path requires belief in the transformative power of innovation. We hope that the broader community will come to appreciate the significance of this approach. Innovation is a collaborative effort and the NIA seeks to be the voice that champions this cause.