What Should be the Top-10 S&T Policy Priorities for Pakistan?

The Ministry of Science and Technology (MOST) has made some good progress in the last 3-4 years in terms of its attempt to try to bring Pakistan on the software map of the world. Consequently, the world has taken note of these developments and at times even given a nod. I would certainly credit Dr. Atta ur Rehman to be first "professional" S&T Minister that Pakistan had, and for bringing about a quantum shift in the status of S&T in Pakistan (e.g. a 5000% increase in MOST budget is an ample example.) After the power transition in 1999, the MOST planners found themselves in the midst of a major transformation in the world and they did do well to ensure that Pakistan went with the wave rather than against it--as has often been the case in the past. It is, however, critical that we build upon these successes of the past few years to create a more permanent and sustainable foundation of technology-led growth for the future. I’ve tried to follow the developments as closely as a person sitting on the border of this activity possibly can. In this article, I would try to present a suggestive Top-10 List of S&T Priorities that I would hope the GOP would cosider and pursue in a very aggressive manner in the years to come. Before fleshing them out, I would like to make a couple of points vis-a-vis the reasoning behind why I think these are more important as "Public Policy Priorities" than some of the things I don’t include in my list.

The first principle I adopt for fleshing out these priorities is that of creating an enabling environment that would then allow other stakeholders (e.g. private sector, expatriates etc.) to make follow-on investments. This essentially is the principle of "market failure" which states that government should only do what markets would not do e.g. investments in university research (of which very little is done by the market, especially investment in basic research) or creating enforceable policy frameworks which the private sector doesnt have the legitimacy to do anyway.

The second principle is that of differentiating between what I would call "foundational", "critical" and "cosmetic" investments. Providing telecommunications infrastructure or a quality university system is a foundational investment. Without it the industry won’t flourish at all--no matter how many entrepreneurship awards you might create. Critical investments are those investments that might "automatically" spawn from government’s foundational invesments and are important but would take time and so the government might try to hasten the process by jumping in. university-industry collaborations or venture capital is an example. If we had a good foundation for entrepreneurship or basic research and industrial growth--these things would come up automatically but would take time and perhaps some false starts. The government might try to aid the process here by doing some light-handed policymaking and even indirect involvement. The Cosmetic Investments look good on paper and make great news--and are even necessary at times--but really are not a permanent source of competitive advantage and are really a PR thing for the government than anything else. I think of these as sub-opitmal use of government money and policymakers’ time. Let the software industry create its own Nigar Awards. Nobody becomes an entrepreneur to win a national award--they do it to make money and would do so as long as the environment is conducive for it, not because of the awards. I would place technology parks on the margin between critical and cosmetic primarily because I think they have a cosmetic effect--granted there are stories of proximity advantages of the silicon valley-type but then even SV is now rethinking its own model--nobody would locate to a software park in Pakistan just because the park exists. They would only do so if they find value for their money and the real value for money comes from foundational investments without which the parks are mere pieces of real-estate. In the presence of the two types of investments above, even cosmetic investments have value--in their absence they’re mere empty showcases.

The Third Principle applies to the basic idea of Who does what better? and then let that sector of the economy do that part of the action. Again perhaps, its an issue of degrees and not absolutes. Take venture capital, for example, There would be a tendency to say that the government should set up some venture capital funds of its own to jumpstart the process. To be honest to the idea, this has been done in some parts of the world, and with limited success. But is the government really trained to do such a thing? Can it do it well? The answer is no. Even in the US these instruments of public policy are seen with great suspicion and there is no way that GOP can do it well if Uncle Sam cannot.

So, here goes my list of Top-10 S&T Priorities--Note this only suggestive, both in terms of their order and substance, and hence there is a chance that I might have missed out a thing or two--and somebody might suggest a slightly different list.

1. Establish Property Rights (especially some kind of an Intellectual Property Regime). From the standpoint of an inventor or a company investing in R&D, property rights are important. Sometimes the push towards creating an IP regime is seen as an effort to bow down to the western world on the part of our government but we must all understand that even more than that, we need it for our own sake. Maybe we want to start from a very biased regime--one that only honors domestic innovation but not foreign innovation but it seems to me that we’re very unlikely to go much far in terms of innovation and domestic production without an established regime of property rights. We would always remain a country that is a user not a producer of technology and no company or individual would invest in R&D or creative activity because there is little hope for reaping a reward from it. To my mind, this is critical for a robust system of innovation to ultimately develop.

2. Make massive investments in the university (and basic education) system, not only in IT and Engineering faculties but also in Basic Sciences (Physics, Chemistry, Biology, Mathematics etc.) as well as in Social Sciences and Humanities. Can you imagine creating quality CS professionals with weak mathematics backgrounds? Can we create corporate visionaries without healthy minds and souls? What we need is to create a culture of scholarship and research in the universities across the board and this would take a lot of effort--it is as much as matter of money as it is of expertise. Professors who have never tasted the university research and entrepreneurship would take a long time and perhaps we would need an injection of new blood--expats returning back?--to lift up the standards. Ultimately if there is one investment that is 100% likely to pay-off big time in the long-run, it is the investment in basic and higher education and thats something we have yet to really come to terms with as a nation.

3. Support Entrepreneurship by removing impediments from the business start up process, economy-wide (not only in S&T Parks). Pakistan is one of the least conducive places to start a business. A person starting a business in Pakistan has enough to worry about already and the startup formalities shouldnt be one of them. I think the process should not take more than 7-days to a month. I, for one, dread about the prospect of having to pay a bribe to start up my own company in Pakistan and thats perhaps the most important obstacle which would either keep me away from doing it or cripple any prospects of starting a viable company. A host of other initiatives can need to be also adopted to support entrepreneurship in the country.

4. Invest in all areas of technology--without "over emphasizing" some at the expense of another. Information technology might be something that has paid off for India but do you believe Indians starved their other industries for the sake of information technology? If anything the IT revolution was based on a broad-based education investment program that started decades before they actually started reaping the rewards (look at the example of IITs which are not "IT-only" institutes). We are in a "get rich quick mindset" and although it is likely that we might be able to pick some low hanging fruits, I would be surprised if a broad-based IT revolution is going to come home. Infact, our lack of emphasis on foundational investment has already begun to pinch whatever revolution we’ve been able to create so far. Lack of faculty and "appropriately" trained techno-entrepreneurs is one example.

5. Spur Domestic Innovation by encouraging participation of domestic firms in small/large procurement contracts. I think it is absolutely wrong for GOP to expect that a local software industry would develop automatically and then give out the contract to develop National ID Cards to IBM (or some other international firm) without requiring any kind of local content or local production. I do however understand that there might be some contingencies sometimes that might require such deals to happen but in all such circumstances the government must put forth a transparent set of policy guidelines and a transparent award process that would require local capacity building and local-foreign joint ventures even if it means paying a little more for the service than would have been available without it. Another issue that I feel very deeply about atleast--especially after looking at the US innovation system--is the idea that the defense establishment should open up towards participation of civilian innovators. Maybe it is not a good idea to have a civilian firm make a missile for you in Pakistan but for small things like components of mines, radars and tank sights, I think Pakistan Army needs to support and encourage participation of civilian technical talent which would in turn build capacity and spur innovation in the private sector as well.

6. Support the provision of Risk Capital through the creation of a supportive policy regime. Risk capital is important for entrepreneurship but some proponents think of it as the only important thing. One might even argue that entrepreneurship is as much important to the success of risk capital arrangements as vice versa. Ultimately its the overall system that results in the success of one or the other element of the entire whole. There is a role of government here but to the extent of creating the right policy enviromnent--and if intervening, then intervening very creatively--something that is often absent among the bureacrats and hence should be better left to private sector. Although venture/risk capital -- especially early-stage startup capital--is often characterized as a uniquely American phenomenon, there are several examples around the world where a mix of right opportunity, right policies, right institutions and programs has enabled the risk and venture capital industries to take root.

7. Invest heavily in infrastructure to keep ahead of the curve (but invest wisely!). Infrastructure is an absolutely critical element of an S&T policy. Infact it is the most legitimate use of public sector investment (after the support of basic research). In the overall scheme of things, it is the infrastructure that really counts, ultimately, in terms of the location decisions of companies--perhaps much more than the all-time favorite tax incentives. But again, we must learn to differentiate here between what is wise investment and what is not. An effort to expand the reach of the internet to 1000 cities of Pakistan is a noble policy and should be done for its own sake but not touted as a flagship achievement that would usher in an IT-driven revolution in Pakistan.

8. Develop Basic R&D Capacity (read as Absorptive capacity to attract Expatriate PhDs back home!)--Starting from Government Laboratories and then moving towards University and Industrial Labs. When we lament the fact that Pakistan does not have quality "faculty" to teach in technical universities, the lack of an absorptive capacity in the education and research enterprise back home is the single most important factor responsible for the brain drain. From the standpoint of an good technical mind, it is entirely logical too. A country that cannot adequately absord and utilize the talents of its greatest minds is bound to lose them to those that can. I am reminded of the fact that Dr. Abdus Salam--the greatest of Pakistani minds--was forced to become a physical training instructor (PTI) at Government College Lahore after he returned from Cambridge. This is a classic catch-22 situation i.e. without quality people we would not have a quality research establishment and without quality research labs you wont attract quality people, but even then we have to find a way to do it. Developing absorptive capacity, to my mind is more important than mindlessly sending 1000s of people abroad for studies on government expense and then expecting them to comeback to a place that really has nothing to offer to them.

9. Participative, Transparent, Policy making. I think MOST does this much more than any other agency in Pakistan which is laudable. However, we need to find a balance between what is popular--among the business community--and what is beneficial. It is perfectly logical, though myopic, for enterpreneurs and businessmen to extract whatever benefits they can from the government--tax incentives, free real-estate, no duties etc. etc. you name it. But is it logical for the government to meet all those demands? Perhaps not. Our business leaders and practitioners should also be visionary enough to ask for things that would add to longer term competitiveness rather than short-term relief. These kinds of tradeoffs have to handled adroitly. Another thing that is important and might add to the credibility is transparency in this exercise. When governments get cozy with business--almost always with some, at the expense of others--and the process lacks transparency, it is inviting trouble in the sense that it creates, ill-will and lack of credibility among those who might be left out of the process. Not a good thing if your purpose in the first place was to create a positive, collaborative and entrepreneurial environment. This participative process can also be used creatively to transfer strategic insights and knowledge among the business community itself by improving networking and knowledge sharing.

10. Everything Else (Science Parks, TREMU, Virtual U, PSEB Internship Programs etc. etc.). And of course, there is always room for "everything else". But it is important to realise that these things have limited impact and that too only when other more foundational investments are present. Science Parks, Entrepreneurship Awards, Internship Programs etc. might create momentary "good feeling" and might even attract some multinationals to locate to your city but if the city does not have a good enough pool of technical manpower to support the growing operations of that company--the truth will soon be found and the good feeling would evaporate.

So thats my list--for whatever it is worth. I think, in the end I would just emphasize the fact that we should adopt and practice an evidence-based policy regime modified to suit best in our circumstances. We’ve so far tried to copy-cat India. It might happen, though, its very unlikely that we’ll be able to repeat the Indian story. And by the way the Indian story was not created overnight. Its seeds were sown decades ago. There is no guarantee that trying to follow India 30 years later, we’ll find ourselves at a similar fortunate moment in history that India found itself in 1990s. Parts of the Indian model e.g. creating a strong academic system and telecommunications infrastructure are universal and certainly make sense but to try to become a second India does not. We need to think through our own strategy and create our own model, not the Indian model executed Pakistani-style.

Another important factor is to try to develop a set of policy regime that is performance and milestones-driven. Our S&T policymakers and economic planners should be able to identify milestones (input, output, impact) at 3, 5 and 10 years down the lane and link them with tangible outcome targets (software revenues, new company formations, etc.) This would not only allow them to calibrate their policies and test their own mental models, modify them if needed as they go ahead but also inspire confidence and patience in the Pakistani public and the practitioner community. I think what we need is a set of visionary policies aimed at creating long-lasting competitive advantages and then the patience (aided by both measurability and transparency) to let it take effect and deliver.