Building a healthy innovation ‘ecosystem’

Innovation

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Efforts to build innovation systems are too government-centric and tend to ignore a key ingredient — the private sector, says Dr. Athar Osama.

Recent years have seen a number of Islamic countries embarking on efforts to create and strengthen innovation ‘ecosystems’. But their delivery record has been mixed.

A couple of years ago, Malaysia created Agensi Inovasi Malaysia (AIM), under the Prime Minister’s office, to bridge the gaps in its innovation system. And plans are afoot in the United Arab Emirates to create an innovation agency to supplement or replace its Technology Development Committee (TDC). While in Pakistan, efforts to create the Pakistan Innovation Initiative (PII) have run into serious difficulties.

These initiatives attempt to address flaws that include the decades-long focus on science at the expense of innovation or commercialisation, and a tendency to overlook informal innovative activity, among others.

But the most important failing of the traditional approach to innovation systems in the Islamic world has been its inability to bring the private sector on board.

With the exception of Malaysia and Turkey, private sector participation in science and innovation is sub-optimal or virtually non-existent. Private-sector research and development (R&D) laboratories, which were established as an organisational form in the West in early 20th century, do not exist in most of the Islamic world.

What’s the problem?

Many recent efforts to create innovation systems in the Islamic world appear too government-centric to allow the private sector to get significantly involved. In addition, the centralised and top-down paradigm of development planning that operates in many developing countries leaves little room for initiative and genuine dialogue between stakeholders.

In the absence of dialogue, the private sector is forced into a corner, unable to contribute as a true partner for development.

The side-effects of a dominant public sector include, in addition to an over-emphasis on science, a lack of organisational flexibility and the motivation to commercialise.

Yet the private sector plays a key role in both the development and operation of innovation ecosystems.

In fact, innovation — or commercialisation of new knowledge and ideas — is almost exclusively the domain of the private sector and society at large. The role of the public sector is to support the innovation system through policy and regulation, and by funding basic and applied research.

Common voice on innovation

So how can the Islamic world move forward? The private sector needs to find a common voice to influence policy by organising itself to support and champion innovation both nationally and at the Organisation of Islamic Cooperation (OIC) level.

Raising awareness of the role of innovation within the private sector is a step in the right direction, and should be followed by building capacity for innovative activity. This is likely to be challenging at first, as the private sector in the Islamic world has traditionally focused on selling imported technology and ideas rather than producing them.

A body both driven and funded by the private sector, dedicated to promoting innovation within business, industry, and the broader society, could start to change the tide.

It could advise, document and review innovation policy; inspire, recognise and reward innovation and innovators; share best practice; push the public sector to create incentives and an environment for innovation; and create a level playing field for the private sector to participate in innovation.

The challenge is several orders of magnitude more complex at the intra-OIC level, where diverse geographies, natural endowments, public policies but also intense rivalries and often competing national interests come into play. But here too, a private sector-led platform for innovation could sidestep some of the challenges that have hampered progress.

Formula for success

Although a private sector body to champion innovation would be better placed to advance the innovation agenda, which often gets stuck in political brinksmanship, it may itself need incubating and hand-holding in the beginning. This must come from a visionary political leader or entity within the Islamic world.

The body must be a learning organisation — a ‘think-and-do tank’ of sorts — capable of breaking through disciplinary boundaries to engage with some of the leading development planners, innovators, policymakers, political leaders and scientists across the Islamic world. It will need organisational flexibility and the courage to cut across bureaucratic red-tape.

A number of privately funded non-profit foundations such as Acumen Fund, Ashoka and the World Economic Forum are good models to learn from. The right mix of flexibility, goal-orientation, incentives and performance culture provide a formula for success.

Although it is a challenge, the private sector must become a true partner in developing effective innovation ecosystems in the Islamic world. A private sector champion to drive the innovation agenda forward through a mix of business-to-business contacts and public-private partnerships must be the cornerstone of an effective strategy.

Published on 12 September 2012 on Scidev.net

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