High-tech park: Nucleus of innovation ecosystem

Dhaka,  Tue,  27 June 2017
Published : 31 May 2017, 21:05:47

High-tech park: Nucleus of innovation ecosystem

M. Rokonuzzaman
Innovation is one of the major drivers for economic growth. It is about developing ideas for offering new products, or improving upon the processes in producing them. These ideas are usually based around emerging technologies. Ideas are developed when there is a combination of technological possibility and economic viability. Many actors with special capabilities are required to contribute, starting from idea generation to commercial exploitation. As a result, a single actor is not sufficient enough to complete the journey. Rather, a group of actors having complementary attributes need to contribute. The coexistence of these actors in close proximity is often termed as innovation ecosystem.  In an innovation ecosystem, diverse actors work in their own interest to turn ideas into profitable flow of revenue. Some of those ecosystems have grown as a closely knit fabric in certain parts of the world. The economic contribution of such ecosystems appears to be a miracle, turning farmland to innovation hotbed increasing per capita income. Policy makers are after replication of such economic success stories. One of the popular policy interventions for innovation ecosystem is to develop high-tech parks. But isolated development of such high-tech parks, particularly in developing economies, turn out to be property-based initiatives with no innovation dimension. In absence of surrounding innovation ecosystem, such high-tech parks usually result in 'high tech fantasies', isolated entrepots of low technology production that contribute little to fulfil their stated goals.

Like many other countries, Bangladesh has taken an initiative to develop high-tech parks. One of the notable sites is located at the outskirt of Dhaka; and another one is being constructed at the city centre of Jessore. To fulfil the goal of earning $5.0bn annually and creating 1m jobs by 2021, it is being reported that there is a plan to set up 12 IT parks in the country-one in each major district. At the beginning, these parks may be targeted to attract foreign direct investment in hardware manufacturing and software development. With the given history of high-tech parks in developing countries, even in some advanced ones, such initiatives may not be more than labour centric activities around high-tech jobs. Despite such likely low-tech beginning, the possibility of building innovation ecosystems around such high-tech parks should be exploited. 

It appears that there are seven major types of activities being performed in the high-tech value chain. The entry link of this value chain will vary depending on the prevailing country context. But it does not necessarily mean that upon entry, there is no scope to travel through the value chain to gradually move to higher value added segments. For example, Bangladesh's entry may be in the low-tech assembly of hardware devices or coding and testing of software in the high-tech value chain. But, in course of time, Bangladesh has the opportunity of developing ecosystem centring each high-tech park to move to higher value added segment, creating innovation economy.  

Question may be raised as to the possibilities of commercial exploitation of innovative ideas in Bangladesh. With the given global competitiveness, it may be a highly uncertain journey to succeed in global innovation space. But, the growth of component technologies has opened the opportunity to innovate for improvement of the products which are being produced now, and to enhance the processes to produce them. It is quite encouraging to note that high-tech innovation is not just limited to high-tech end user products. As a matter of fact, every production process, whether producing farm or industrial products, is subject to high-tech innovation. Even indigenous production processes like pottery or handloom could be improved by taking advantage of high-tech innovation. 

But to take the advantage of high-tech innovation, a number of activities should be carefully planned and implemented. In absence of it, labour centric low-tech beginning of high-tech park will not likely graduate to high-tech innovation ecosystem. For example, although we entered the textile industry through labour centric value addition, but despite being a major producer of finished products, we have not made virtually any progress in innovation segment of the industry. Rather, revenue earned in the textile and ready-made garments industry is either reinvested in the expansion of the same labour centric segment, or being diverted in completely different industries, such as real state, or hospitality. If we had taken smart steps, we could have been successful in developing innovation centric textile and apparel making machinery industry. As a result, in addition to low cost labour, we could have succeeded to add high value through mental capacity of our university graduates. Such success could have resulted in innovation economy, creating high paying jobs for our graduates. Similarly, although Bangladesh has become one of the largest markets of mobile handsets, reaching more than $1.0 billion import, there has been virtually no value addition. Moreover, it is quite unfortunate to observe that local firms having large revenue base in importing mobile handsets have been expanding in real-state or other disconnected industries, instead of investing in adding local value to mobile handsets. 

Therefore, it is suggested that along with the construction of high-tech or IT parks, there should be well planned activities to develop innovation ecosystem around each of those parks. Each park should be targeted to grow as the nucleus of different high-tech innovations. For example, one of them could be centre of cyber security innovation. Another one could be the breeding ground of precision farming solutions. To progress along this line, important actors should be identified and they should be empowered to play their due roles. Although universities are deemed to be important actors, their roles should be appropriately defined. Instead of encouraging universities to follow linear model of innovation, they should be rather motivated to focus on research to innovate to improve existing products and processes to produce them. We should also bring changes in policies related to trade, taxes, competitiveness, and innovation financing. Instead of making Bangladesh a market of foreign technologies, import tax on capital machinery should be rationalized to create demand of local process innovation. Similarly, a portion of subsidy and economic incentives, given to address cost of production issue facing farming or manufacturing industry, should be diverted to provide incentives to source local innovation to address the same issue. We need to reform Bangladesh Council for Scientific and Industrial Research (BCSIR) turning it to industry focused contract R&D centre. We should also upgrade research and academic institutions around each of those high-tech parks to undertake research and development activities to support innovation in targeted areas. We should also create incubation and shared R&D facilities in each of those parks. Risk capital financing issues should also be taken into consideration. The R&D grants provided by the ministry of science and technology should also be targeted to support innovation ecosystem around each of those parks. Overall economic planning should take into consideration developing and taking advantage of such high-tech park centric ecosystems. 

There might be a question about the weak base in turning high-tech or IT parks as innovation hubs in Bangladesh.  But different studies indicate that the vast majority of the successful and innovative clusters that we see today are the result of serendipitous events, and have frequently evolved from spontaneous, chance concentrations of economic activity. Despite such serendipitous emergence, their presence could be leveraged in shaping the evolution and progress of regional innovation system. Therefore, instead of waiting for well-planned activities to unfold in proper sequence, it would be prudent to plan to develop innovation ecosystem around each of the hitech parks ? to kick-start the innovation economy. To make progress along this line, we should have a very well conceived strategy and action plan. To unlock such potential, we may need to have major reform in broader economic, science and technology policies of the country. But, such reform is necessary not only to make high-tech parks innovation success stories, but also most importantly, to increase the role of total factor productivity to economic growth-to make Bangladesh a high middle-income country by 2030. 

M Rokonuzzaman Ph.D, academic, researcher and activist: Technology, Innovation and Policy, is Professor, Department of Electrical and Computer Engineering, North South University, Bangladesh. zaman.rokon.bd@gmail.com

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