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Science and technology not the lone drivers of economic growth

| Updated: May 31, 2019 21:11:14

Science and technology not the lone drivers of economic growth

There is a common perception that science and technology competence is the key to drive economic growth. Upon reaching middle-income status exploiting labour and raw material, developing countries are advised to invest in acquiring science and technology capability to graduate as developed countries. Unfortunately, there is no essential correlation among scientific advancement, technology inventions and innovations creating new wealth.  The pathway from scientific discoveries and technological inventions to innovations fuelling economic growth requires risk-taking entrepreneurial initiatives and long journey of incremental innovations.

THE RUSSIAN CASE: Russia is a highly natural resource-rich country. The money flowing from oil and minerals fuels the economy. In the last century, largely to meet political aspirations, Russia financed scientific research. As a result, unlike other natural resource-based economies, Russia is blessed with a strong scientific community. Russian scientists have been the authors of some of the great discoveries of the past century. Such excellent scientific discoveries could have been leveraged for developing diversified, high technology economy; but unfortunately, it did not happen. So, why Russia's economy did not benefit from an array of scientific discoveries to fuel economic growth is a question worth looking into. The lesson could be quite valuable for countries increasing investment for science and technology with the hope that such investment would lead to prosperity.

RUSSIA'S DISCOVERIES FAILED TO POWER THRIVING INNOVATION ECONOMY: Despite Russia's brilliant track record in science over the last century, discoveries had not been translated into technological products that sell widely in international markets and contribute to the wealth, and also stability of the country. After succeeding in remarkable technology inventions, why is the country still struggling to figure out how to modernise the economy is a question. Here are a few examples of Russia's impressive scientific discoveries and inventions:

LASER: Two Russians received Nobel Prize for the discovery of laser. Around this scientific progress, an array of laser technology-based products has been innovated. According to LaserFocusWorld, global revenue from the laser in 2018 was expected to reach $18 billion. Moreover, laser devices are also forming technology core of many disruptive innovations such as 3D printing for material additive manufacturing and self-driving cars. Russia could have developed an innovation cluster around this scientific achievement and invention. Unfortunately, Japanese, American and German companies are dominating the laser innovation market.

ELECTRIC LIGHT BUB AND SOLID STATE LIGHTING: Without having even a second thought, we undoubtedly give credit to Edison for the invention of the light bulb. But Russians built working electric light bulbs before Thomas Edison did. Due to the lack of entrepreneurial capacity of Russians to pursue commercial innovations around that invention, Edison's company took over the market without facing any competition from Russians. Similarly, modern light emitting diode based solid-state bulb causing disruption to Edison's filament bulb and subsequent fluorescent ones has its root in Russian science. As part of crystal detectors work for radio receivers, Oleg Losev constructed a light-emitting diode (LED) in 1927. Unlike British Marconi Engineer who observed solid-state emission in 1907, Losev was the first to investigate the effect, proposed a theory of how it worked and envisioned practical applications. Losev patented the "Light Relay" and foresaw its use in telecommunications. Despite such early success, Russian firms could not succeed to be known as suppliers of LED light bulbs and other similar innovations. Japanese and European makers are now dominating this business.

RADIO WAVES, ARTIFICIAL SATELLITE AND COMPUTER: Before Guglielmo Marconi, Russians transmitted radio waves.  In a March 24, 1896 demonstration, Popov used radio waves to transmit a message between different campus buildings in St. Petersburg.  Russian's Sputnik story, starting the space age, is known to all of us. The former Soviet Union launched it into an elliptical low Earth orbit on October 4, 1957. Russians also built the first digital electronic computer in Europe. Despite making a significant scientific contribution and demonstrating the potential of new possibilities, Russians could not succeed in turning those scientific accomplishments and technology inventions into large-scale innovation industries. On the other hand, several countries in the world, including the USA, succeeded in developing large economic clusters around each of them.

Still, to date, Russians are wondering about how to develop a Silicon Valley type innovation cluster. During a visit of senior academic administrators of MIT, as stated by Prof. Loren Graham, "Russians constantly quizzed us on how they could match MIT in developing the next big thing." Already they created the beginning of many 'big things', but they could not turn those beginnings into innovation success stories, driving economic growth.

FREEDOM OF COMPETITION AND ENTREPRENEURSHIP: Russians scientist and engineers were bright, and undoubtedly, they showed remarkable performance in discovering scientific principles and inventing technologies. Mostly, they were performing all those great acts under state sponsorship as salaried employees. They were absorbed in opening new grounds of science and technology. But those accomplishments were not succeeding to innovate solutions to improve consumers' lives. Taking scientific progress and technology inventions needed entrepreneurship and risk-taking investments in a globally competitive environment. In the absence of freedom, competition, and fairness, Russians failed to reap the benefit from all those great opportunities.  

MANAGING TECHNOLOGY AND INNOVATION REQUIRES UNIQUE COMPETENCE: Building a profitable business out of innovations around  inventions requires a different level of competence. It's not about how things work; it's about how to create consumer and producer surpluses by developing as well as improving products. In doing so, science and technology are just looked upon as tools to keep improving the quality and reducing the cost.

INVARIABLE TECHNOLOGY INVENTION SUPPORTS PRIMITIVE PRODUCT: Irrespective of the greatness of technology, in early stage, every invention supports a very primitive form of innovations. And such primitive innovations end up in generating loss-making revenue. The urgency of turning this loss into profit begins a long journey of advancing as well as developing complementary technologies to support the addition and improvement of ideas. At each stage, incremental progress is made. Some of the key areas of incremental progression are: 1. increasing reliability, 2. delegating roles from electro-mechanical to electronics and software, 3. reducing components, and 4. increasing automation. Often such exercise does not sound highly creative, but in reality such activities are at the core of incremental improvement for commercial successes of innovations.

From the note of the visit of MIT delegation, it appears that Russians are still looking for great next new technology to fulfil the dream of creating a high-tech economy. There is no doubt that they need to take advantage of emerging technologies. But to turn that potential into new wealth, they need to focus on transforming the governance pattern, and most importantly, to nurture the unique technology and innovation management competence among large segments of people who matter to take ideas to market at profit. In retrospect, Russia's journey gives us the lesson that getting hands-on technologies but rejecting the economics, technology, innovation management and political principles would not lead to the modernisation of the economy.

M Rokonuzzaman Ph.D is academic and researcher on technology, innovation and policy. zaman.


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