Sri Lanka with its 1% of high-tech merchandise in manufactured exports continues to be in 2IR. Anybody visiting a tea manufacturing facility, or a garment manufacturing facility will observe that the entire manufacturing course of is operated manually through the use of electricity-powered machines. However they’re the most important export earners for the nation – Pic by Shehan Gunasekara
- Key insights from presentation at webinar hosted by NSF
From digital natives to world residents
To apprise ourselves of the current state of world know-how and the place we’re heading, I’ve borrowed some ideas from a tech-Guru, ex-President of Thailand based mostly Asian Institute of Know-how, Professor Worsak Kanok-Nukulchai. In an handle delivered earlier than the Royal Society of Thailand – that nation’s counterpart of Nationwide Science Basis in Sri Lanka – Worsak emphasised the necessity for changing Thais from digital natives to world residents.
That was the issue confronted by Thailand with its excessive web penetration. In 2020, it stood at 75% of inhabitants. However with an web penetration of lower than 30% of inhabitants, Sri Lanka’s problem is slightly completely different. Sri Lanka has to transform its digitally illiterates to digital natives first earlier than considering of constructing its inhabitants world residents.
Thailand versus Sri Lanka
Each Thailand and Sri Lanka have the identical financial purpose right this moment. That’s to change into a wealthy nation inside the subsequent era. After all, Thailand with a per capita GDP of $ 7,800 in 2019 and categorised as an higher middle-income nation, has began the race a lot forward of Sri Lanka. In distinction, Sri Lanka continues to be on the threshold of becoming a member of that group with a per capita earnings of about $ 3,900, only a half of what Thais are incomes on common. Worse, Sri Lanka was elevated to an higher middle-income nation in June 2019, however it was a short-lived expertise because the nation was pushed again to a decrease middle-income nation one yr later. Complicating the matter, on account of financial disruption brought on by COVID-19 pandemic, Sri Lanka’s state of affairs is predicted to worsen in 2020.
Excessive-tech merchandise in manufactured exports
Thailand is quick turning into an industrial powerhouse with about 23% of its manufactured exports representing high-tech exports in 2018 in line with World Financial institution information. The comparable determine for Sri Lanka is rather less than 1%. Therefore, the problem for Thailand is to consolidate its energy within the export market. Sri Lanka is simply an toddler on this commerce and, subsequently, has to first crawl on knees earlier than beginning to stroll on its two ft. However there’s a promise for Sri Lanka.
That’s as a result of inclusiveness of know-how which the futurist Peter Diamandis has referred to as ‘democratisation of digitisation’. Accordingly, an toddler right this moment can rise rapidly on its ft and begin working together with different racers with out ready for therefore a few years to get itself prepared for the race.
Know-how’s exponential development
Worsak has famous that ranging from 2020, the world will transfer at an exponential fee from the present digital age to synthetic intelligence (AI) age to achieve maturity by about 2100. Know-how has disrupted the world forcing folks to desert what that they had been doing for ages for brand new issues which have been extra environment friendly and efficient. Some examples utilized by Worsak have been the disruption of slide rule by scientific calculator, movie digital camera by digital digital camera, landline telephones by sensible cell phones, handbook typewriters by phrase processors, fossil vitality by photo voltaic vitality, bodily banks by digital banks, and many others.
He additionally has referred to a mind-boggling prediction achieved by Ray Kurzweil of Singularity Hub concerning the tempo of replication of human mind. AI right this moment can replicate solely the mind of a mouse. However by 2025, it should replicate a human mind and by 2055, brains of all of the human beings.
Know-how has not been that a lot of a marvel some 70 years in the past. We have been in a position to get up from sleep peacefully in 1950 with out being agitated, puzzled, or feared by the world on the market. However by 2050, Worsak has concluded, it is going to be a very completely different story. We’ll get up to a world like a newly born child helpless and never understanding what to do. Therefore, Worsak has suggested us to prepare now itself to face this disruptive and unknown world tomorrow.
World is now in Trade 4.0
That is an eye-opening recommendation for Sri Lanka. With respect to financial system, the globe has now moved to Fourth Industrial Revolution or 4IR Trade 4.0. 4IR is a time period coined by Klaus Schwab, convenor of the Davos based mostly World Financial Discussion board, in a ebook he printed in 2017 below the identical title. He had studied the rising applied sciences on the earth for a few decade and famous a major change going down within the technological base. By wanting on the historical past of the economic revolution, he had noticed three earlier phases.
The First Industrial Revolution or 1IR or Trade 1.0 had occurred some 300 years in the past. In 1IR, industrial manufacturing was mechanised mainly through the use of steam-power or waterpower. Then, some 100 years in the past, the Second Industrial Revolution or 2IR or Trade 2.0 occurred by introducing electrical energy for mass manufacturing. The third section of business revolution, code-named 3IR or Trade 3.0, started to disrupt the world some 50 years in the past by introducing superior data and communication know-how or ICT and electronics for automation of business processes. The brand new merchandise that we use on a day-to-day foundation like web, world broad net, cell phone, Google search engine, and laptops and tablets have been launched to the world throughout this section of business.
However the world didn’t need to keep there. By the second decade of the twenty first century, a fourth revolution, code-named 4IR or Trade 4.0, was taking form disrupting even the brand new merchandise and manufacturing processes that had been supplied to us by Trade 3.0. In 4IR, we discuss Cyber Bodily System, AI, machine studying, Web of Issues, robotic surgical procedures, and many others.
Sri Lanka’s neighbours to the East are transferring quick towards Trade 4.0
Some international locations have moved into 4IR and lots of are at its doorstep. A rule of thumb to gauge whether or not a rustic has entered 4IR is to take a look at the high-tech element in its manufactured exports. If that element is 40% or above, that nation is already in 4IR. Desk 1 presents the element of high-tech merchandise in manufactured exports of some chosen international locations. It’s famous that international locations like Malaysia, Vietnam, the Philippines, Singapore, and Hong Kong are already in 4IR. The international locations like China, South Korea, and Thailand are transferring quick towards that purpose.
Sri Lanka ought to leapfrog from Trade 2.0 to Trade 4.0
Sri Lanka with its 1% of high-tech merchandise in manufactured exports continues to be in 2IR. Anybody visiting a tea manufacturing facility, or a garment manufacturing facility will observe that the entire manufacturing course of is operated manually through the use of electricity-powered machines. However they’re the most important export earners for the nation. However this shouldn’t be taken as a disappointment. That’s as a result of it offers an area of 99% for Sri Lanka to maneuver up within the ladder to be a high-tech manufacturing nation. All it has to do is to undertake an acceptable coverage bundle persistently to take the nation by way of that rugged path.
However there’s a problem to be met. That problem is since Sri Lanka is presently in 2IR, the way it ought to leapfrog straight to 4IR bypassing 3IR. That is tough however not unattainable. In right this moment’s superior studying, adoption and adaptation strategies, a nation needn’t transfer forward by following the steps one after the opposite. It may possibly quick monitor by leaping a number of steps at a time. Subsequently, for Sri Lanka to achieve 4IR inside the subsequent decade or so just isn’t an impossibility.
Sri Lanka’s plan to change into a high-tech hub shouldn’t be a mere want
The Authorities’s dedication to transform Sri Lanka to a high-tech hub was pronounced in Finances 2021. Related bulletins have been made by the earlier Authorities additionally in its financial coverage statements. Nevertheless, and not using a concrete plan to realize that purpose, they simply remained a want that had not gone past paper. The current Authorities can keep away from making the identical mistake by going for a time-bound motion plan and sticking to it persistently. This wants a number of steps to be adopted.
Want for making ready a street map
Step 1 would be the preparation of a street map to transform Sri Lanka to a high-tech economic system. The street map ought to clearly spell out the goals, methods, inputs for use, key milestones and ultimate deliverable merchandise. Vietnam which has at current a excessive high-tech element in its manufactured exports had ready such a street map in 2019 to finish the nation’s transmission to 4IR by 2030 (out there at: https://english.mic.gov.vn/Pages/TinTuc/139776/Proactively-participating-in-Industry-4.0.html ).
Vietnam had launched into its journey to be a 4IR nation a couple of years again by introducing science, know-how, and inventive innovation to its manufacturing construction. The brand new street map can have a number of milestones to move in that journey. One such milestone is to enhance its rating within the International Innovation Index or GII to be inside high 40 international locations by 2030. That is an eye-opener for Sri Lanka since it’s ranked at 101 out of 131 international locations in GII. One other milestone aspired by Vietnam is to extend the scale of the digital economic system to 30% of GDP, whereas rising labour productiveness by 7.5% each year. It additionally plans to make broadband entry inclusive by 2030. For that, it plans to finish the digitisation of the entire society, companies, and the federal government.
Be part of world manufacturing sharing community
Step 2 entails becoming a member of the worldwide provide chain or world manufacturing sharing chain by producing inputs for merchandise which might be assembled elsewhere. In right this moment’s context, a rustic can not produce a complete product and declare that it’s made in that nation. That’s as a result of elements come from manufacturing amenities in lots of international locations. It has been discovered that Apple sources elements for iPhone from 43 international locations, whereas it’s lastly assembled in FoxConn Manufacturing unit in China. There are a number of manufacturing amenities in Sri Lanka which have already joined the worldwide manufacturing sharing chain. Two famous companies are Harness Lanka at Biyagama that provides sensors for airbags in automobiles and MAS Material at Thulhiriya that produces canvass for Nike footwear.
However the nation wants a vital pool of such companies – a sufficiently massive variety of companies that may change the form of the nation – to hitch 4IR. Vietnam in its street map for 4IR has particularly proclaimed its intention to seamlessly combine to the worldwide economic system. If that is to be attained, Sri Lanka ought to swap from the current home economic system based mostly financial development to worldwide economic system based mostly financial development methods.
Acquisition of know-how
Step 3 entails methods for buying know-how instantly to be used by the nation’s manufacturing outfits. One method to do is to get applied sciences already developed elsewhere within the globe. They may very well be mechanically acquired by attracting overseas direct investments or FDIs with a high-tech element. This was the technique adopted by South Korea and Singapore of their preliminary section of financial growth and the technique presently being pursued by Vietnam. In early Eighties, Sri Lanka bought such know-how for its attire business by way of FDIs. As we speak, clothes aren’t any extra trendy and, therefore, know-how drive ought to be for high-tech merchandise.
The necessity for R&D and advertising and marketing
Step 4 requires Sri Lanka to develop its personal know-how within the medium to long-run. This requires Sri Lanka to take a position a higher portion of its nationwide earnings in analysis and growth or R&D. In response to World Financial institution information, Sri Lanka spends solely 0,1% of GDP on R&D. That is a lot decrease even by South Asian requirements the place on common, 0.65 of GDP is spent on R&D. This expenditure needn’t essentially be incurred by the federal government. Because it has occurred in Japan, South Korea, Singapore and Hong Kong, non-public firms too ought to take part in R&D drive. As soon as new innovations are made by way of R&D, such innovations ought to be correctly marketed to allow potential entrepreneurs to supply them commercially. Austrian-American economist Joseph Schumpeter named this course of as innovation.
Convert STEM to STEAM
Step 5 is about growing the nation’s considering, inventing and modern energy by way of a correct system of training. Historically, it has been emphasised that training ought to cowl science, know-how, engineering, and arithmetic, abbreviated as STEM. However to create a inventive factor, it’s important that inventors ought to possess a inventive thoughts too. This comes from inventive Artwork. When inventive Artwork is added to STEM, it should change into STEAM. The coverage of the Authorities ought to be to vary the training, studying, coaching, and methods to mirror STEAM.
Rebranding NSF as nSTEF
I need to point out a phrase about Nationwide Science Basis or NSF too. It was created in 1969 because the apex physique in Sri Lanka to advertise science within the nation. At the moment, science included each different department and subsequently NSF correctly represented what it was meant for. As we speak, science has branched out into a number of key disciplines like know-how and engineering. Science and Know-how produce new concepts at each primary and utilized analysis degree. It’s engineering that converts these new concepts into concrete merchandise. Therefore, to symbolize NSF’s imaginative and prescient and mission correctly, as prompt by Product Design Engineer Thilak Diassanayake, NSF ought to be rebranded as Nationwide Science, Know-how, and Engineering Basis. Going by trendy development digitalising nomenclature, it may be code-named nSTEF. It may be pronounced as ENSTEF.
Comply with an ‘announce and implement’ coverage
These 5 steps are the minimal duties which the Authorities ought to accomplish to speed up Sri Lanka’s drive in the direction of a high-tech nation. Individuals right this moment are impatient as a result of the nation stays an rising nation ceaselessly. Therefore, the Authorities can not pursue ‘an announce and overlook’ coverage. It ought to announce the coverage however mustn’t enable it to be solely on paper. It ought to subsequently be an ‘announce and implement’ coverage for attaining the perfect outcomes for the nation.
(The author, a former Deputy Governor of the Central Financial institution of Sri Lanka, might be reached at email@example.com.)