Create thousands of jobs from research spending

KIRAN MATHUR MOHAMMED

kmmpub@gmail.com

The Government must open the spigots and release serious money for research if it is to decisively arrest this pandemic-induced recession.

As the government manifesto states, government research spending has one of the highest returns on investment of any form of state spending. It has the potential to create thousands of short-term jobs.

But first we must relegate some investment myths to the trash heap (or better still the waste- to-energy plant) where they rightfully belong. One of the more pervasive ones is that it makes little sense spending money on developing new technologies rather than importing technology or maintaining the status quo while we “wait out” crises.

That myth has become entrenched. Companies in TT spend less than one per cent of revenue on research. The country as a whole spends less than 0.05 per cent of GDP.

The only way for countries to grow in the long term is by using more advanced technology. This is Economics 101 (though admittedly I was probably at the pub during that lecture…).

Countries can either import technology, come up with new solutions to problems or invent brand-new technologies.

Importing technology has been the easiest route so far. It is how countries from China to Ethiopia have built robust industrial bases and scored double-digit growth rates for years.

There are still huge gains on a company or individual level to be made from adapting and adopting existing technologies. But the old path to development – import machines and software and use cheap labour to export your way out – is rapidly narrowing. What has never been a terribly successful path for a middle-income country with a high cost base such as ours is becoming even less tenable.

A rise in automation is returning more work – if not more jobs – to rich countries, even as the elite firms that hold most of the world’s intellectual property hit ever higher valuations.

At the same time, the cost of collaboration and research is falling. Covid19 has reduced the premium placed on physical proximity and with it, the costs of collaboration.

These parallel trends mean that the opportunity cost of ignoring research is spiking. For the first time in TT, it makes much more immediate sense for companies and the government to directly invest in research. We must develop new, higher quality products.

Since the private sector has continually under-invested in research, the government must act as a catalyst. There are hundreds of examples of research on the cheap in developing countries: India famously launched a Mars mission for less than the budget of the Hollywood film Gravity.

The State must invest greater research and development dollars through direct grants. Private industry and the State must use all their collective powers of persuasion to pitch a grand vision to investors. It has been done before – Point Lisas has shown what is possible when the public sector unites with private minds to spin up great industry.

I have consistently argued for less state involvement in the economy, but this is one case, where the returns to taxpayer investments have been so dramatic, the State must put up some of the cash. We’ve seen it from South Korea to Senegal.

We have patents and copyright lying idle at the University of the West Indies. As government adviser Gerry Brooks has long called for, a good portion of any new cash must go towards prodding companies and decreasing the risk of commercialising new ideas. This extends to funding basic research into basic science that may seem to have no immediate practical application. To attract the best minds in applied research we need to give them some opportunity to work with people who are solving fundamental scientific problems.

Whether it is UWI’s participation in the latest covid19 trials, the Cocoa Research Centre’s work on the latest agricultural trends or the incredible work of our diaspora in fields from digital health to astrophysics, we have the talent to do frontier research.

If we as a country go with humility to cutting-edge international researchers and companies, and admit we’re starting from scratch, we can craft a compelling narrative that taps into the desire of many of the worlds brightest researchers to give back and the largest companies to burnish their double and triple bottom-line credentials (while pocketing hefty incentives).

And though many other countries possess that fine advantage of disadvantage, we have an edge: everyone wants to pick an underdog, but they also want to pick a winner. Alongside our drawbacks, we have engineering talent, ready hydrocarbons, a relatively educated population and cheap electricity. The government must act swiftly and decisively to seize that advantage and invest in research.

Kiran Mathur Mohammed is a social entrepreneur, economist and businessman. He is a former banker and a graduate of the University of Edinburgh.