Reaching Greater Heights in Innovations: A Sri Lankan Perspective

This year the world celebrates its 15th Intellectual Property (IP) Day on April 26th. Since 2001, the World IP day has focused on how IP contributes to innovations and creations, which ultimately help shape the world. Moreover, the day provides an opportunity to encourage people to think about the role played by IP in their day-to-day lives and its importance in stimulating a country’s economic growth and wellbeing.

 

In the process of development, the human mind and innovations play a significant role. Thus, every country recognizes the importance of encouraging innovations and creations and simultaneously protects the intellects of its people. Sri Lanka too has introduced a number of policies and programmes to drive innovations and foster creations while offering protection. However, Sri Lanka is still far behind in the number of innovative outputs and in creating a strong protection mechanism for inventions.

 

Sri Lanka at a Glance

 

There are several indicators to measure the level of innovation and creativity within a country. The expenditure on research and development is one of the main indicators to identify a country’s support for innovations and creations. In Sri Lanka, Gross Expenditure on Research and Development (GERD) as a percentage of the GDP was 0.16 % in 2010. This was a 30% increase from 0.11% recorded in 2008.

 

The public sector contributes the most towards Research and Development (R&D) in Sri Lanka (nearly 56%).  In most developing countries, the public sector provides a higher percentage of a country’s total investments in R&D. Public investment is essential in R&D as markets fail due to difficulty in assuring profits for investors. However, most developed countries have overcome the issue of private investments in R&D by providing effective protection via strong Intellectual Property Rights (IPRs) systems.

 

In Sri Lanka, GERD is high in agriculture sciences (33.1 %) followed by R&D expenditure on engineering & technologies (20.2%), natural sciences (12.1%), social sciences & humanities (6.6%) etc., (Figure 1). A majority of the R&D expenditure in the agricultural sector is spent on crop production, soil science, variety improvement, etc. In terms of commodities, a greater share of R&D was allocated to rice, plantation crops, fruits and vegetables in 2010.

 

Figure1_Innovation_IPS

 

The most common and formal methods in protecting innovations and intellectual property rights in Sri Lanka are trademarks followed by patents and copyrights (Figure 2). It is noted that a high number of patents is issued for food and beverage process technology, innovations in IT and telecommunications, and agricultural system and developments. Trademarks are popular in Sri Lanka as several enterprises and products enter the market daily and these trademarks differentiate the goods and services sold by them.

 

Figure2_ProtectingIPR_IPS

 

Sri Lanka in the Global Context

The Global Innovation Index 2014 (GII) has ranked Sri Lanka at 105th place out of 143 countries in the world. According to the GII rankings, when compared to other South Asian countries, Sri Lanka is placed third, after India (76th), and Bhutan (86th). Bangladesh (129th) and Pakistan (134th) are ranked much lower. Switzerland, United Kingdom and Sweden are ranked on top while Singapore and China are ranked 7th and 10th, respectively.

 

Table1_IP_IPS

R&D expenditure in Sri Lanka is low compared to some selected countries in Asia (Table 1). Developed countries spend more than 2% of their GDP on R&D activities. The GERD benchmark figure for developing countries is 1 %and Sri Lanka significantly falls short of this figure.

 

 What Needs to be Done?

 

Sri Lanka has seen an increase in R&D expenditure since 2008. This has resulted in a significant increase in the country’s innovation indicators.However, when compared to other developing countries such as China, Malaysia, Thailand, and India Sri Lanka is lagging behind in the number of innovations and protection of innovations.

There are several policies and programmes introduced by several ministries to improve innovations in Sri Lanka. The National Biotechnology Policy, Science, Technology and Innovation Strategy for Sri Lanka 2011-2015 are among such policies/programmes. However, the effective implementation of these remains questionable.

 

Coordination

The link between the ministry, institutes and universities on research, science and technology is weak. This was highlighted in a recent report on ‘Integrating Intellectual Property into Innovation Policy Formulation in Sri Lanka” by the National Intellectual Property Office – Sri Lanka. The introduced policies and programmes are implemented in isolation by different institutes and organizations. Therefore, it is of utmost importance to improve coordination between research, science and technology institutions. A separate institute may help to better formulate, monitor, manage and coordinate innovation policies and programmes in the country.

 

Incentives

Simultaneously, it is vital to motivate private sector investments in R&D by way of introducing tax deductions/low tax rates, better investment climate, strong IPRs system, etc. Further, an innovation voucher system can be introduced to enhance collaboration between research institutes and the industry. Introducing a reward system to inventors will be another effective means to encourage innovations.

 

Improve IP Protection Mechanism

 

Intellectual Property Act No.36 of 2003 is the legal framework under which IPRs are currently protected in Sri Lanka. It provides protection via patents, copyrights, industrial designs, trademarks, etc. Apart from that, Sri Lanka is a party to a number of international IPR treaties and agreements. However, Sri Lanka to-date has been unable to implement a proper mechanism to protect new plant varieties and rights of plant breeders, which is very important in enhancing innovations in the agricultural sector. Moreover, the country is still unable to introduce utility model patents, which are cheaper, and have a simple and faster registration process than patents.

 

Firstly, it is important to ensure an effective implementation of the existing IP Act. Secondly, it is imperative to implement the proposed Act of 2011 on New Plant varieties (Breeder’s Rights). Thirdly, it is a timely need to prepare a strong and a proper protection mechanism for animals and microorganism. Further, it is imperative to introduce a national policy for innovations in Sri Lanka.

 

Awareness

 

It is essential to increase awareness among the public on the importance of creativity and innovations towards a country’s economic growth while protecting third party inventions. Public awareness could be improved through the Ministry of Science and Technology, Intellectual Property Office, and other related institutions. Furthermore, increasing awareness on the importance of protecting inventions remains essential amongst researchers, universities, and scientists.

 

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  • Anush Wijesinha

    Hi Dilani, this is an interesting article on a contemporary ‘hot’ topic – innovation. Innovation is often a tricky topic to cover in a blog no doubt. But let me make a few observations/comments.

    1. Given that it was written for IPS day it may have benefited from a stronger focus on the role of IP in promoting innovation in a country – where does Sri Lanka stand? what do stakeholders feel are the key gaps?. Also, what about local IPS vs international IP – many local inventors file for local patents only, as they can’t afford international IP protection/patents – does the government have a role to play in providing grants for inventors to file IP with the USPTO or Euro Patents Office? What are the challenges for IP in an era of increasing digital innovation – making it harder to point to which part of the value chain retains the IP.

    2. You also mention that:

    “it is vital to motivate private sector investments in R&D by way of introducing tax deductions/low tax rates, better investment climate, strong IPRs system, etc. Further, an innovation voucher system can be introduced to enhance collaboration between research institutes and the industry. Introducing a reward system to inventors will be another effective means to encourage innovations”.

    It would have been more nuanced and current if you could have also included some of the work already being done and done on all these areas. For instance, Sri Lanka now has a triple tax deduction scheme for R&D, a special tax regime for R&D done by private sector in public research institutions, tax concessions for R&D done in-house, etc. Meanwhile on collaboration with industry, there are several schemes already taking place – particularly at University of Moratuwa. The GIZ ‘Travelling University’ and the University-Business Linkages programme also works on the same.

    3. You mention that:
    “A separate institute may help to better formulate, monitor, manage and coordinate innovation policies and programmes in the country”.

    However, we already have such an institution – COSTI – with an explicit mandate to formulate and coordinate across the innovation eco-system of the state. Would have been good to provide a sense of what COSTI has done so far and whether or not it has lived up to expectations – even a brief mention.

    4. Overall, I felt that the article is a bit prescriptive, and misses out mentioning some of the current initiatives/policies already in place, and your assessment on their suitability/effectiveness.

    • Dilani Hirimuthugodage

      Hi Anushka,

      Thank you for your comments. Yes, as you have mentioned linking science, technology, innovation and IPR in a blog article is tricky. Mentioning each and every aspect of three
      broad subject areas are even trickier. In this short article my main purpose was to highlight the Sri Lankan situation and compare Sri Lanka with the regional and global scenario. Further, to provide some points on what needs to be done according to my perspectives. However, whether the article is prescriptive or not is subjective. The points which you have mentioned are well-noted. Thanks.

      • Anush Wijesinha

        Hi Dilani, thanks for your reply. The issue is that much of the information used to assess Sri Lanka’s innovation scenario in this article is dated, which is why I remarked that it would have been good to refer to some things that are more recent – the new tax incentives, COSTI, etc. Of course, I fully acknowledge that some data (like GERD) is unfortunately not available since 2010. It would have been useful to allude to new government initiatives like the ‘National R&D Investment Framework’, for instance, that aims to rectify the dire R&D situation which you rightly point out – http://www.motr.gov.lk/web/index.php?option=com_content&view=article&id=238&Itemid=38&lang=en

        Also, it would be good for you to enquire further into the reason for the sudden spike in GERD in 2010 from 2008, which seems an outlier. I reckon it may have something to do with the merging of NANCO and SLINTEC in that year, and the investment on this one entity. Would be interesting to take a look.

  • Asanka Suraweera

    Hi Dilani, This is a really good one , Asanka ( Manager IT, COSTI)

  • Dilani Hirimuthugodage

    Thank you Asanka.