economic and management consultancies, were recently in the country for discussion on proposals for the development of a Technology Transfer and Development Fund. The development of the Fund is to be managed by the National Enterprises and Development Authority (NEDA) with support from the Sri Lankan German (GIZ) SME Development Programme. The strategic and operational details of the fund are being devised by SQW. The fund is expected to provide finance to firms experiencing difficulties entering and/or expanding into export markets due to lack of appropriate technologies as well as product and process innovations. The fund may also look at assisting research institutes that will look at helping firms upgrade their technologies. In addition to finance support, the fund is expected to provide technical assistance through education on technology and provide wider business management support. Ultimately, the purpose of the fund is to contribute to further economic growth and act as a catalyst to improve the wider financial and innovation eco-system. Currently SQW is consulting with a wide range of stakeholders from the public and private sectors and will look to complete the design of the fund by the end of October 2013. The Daily FT sat down with SQW Senior Economist Osman Anwar to find out more of what the fund entails By David Ebert Q: Could you tell me a little bit about SQW? A: Their history lies back in the ’80s in Cambridge University where firms started popping up around the university more on the science and technology side. SQW was the first to formalise, articulate and do research on what was known as the Cambridge phenomena; the cluster of university business interaction that happened. It was what SQW was renowned for and now it is revisiting that study as well and it is doing it for the University of Oxford. We provide evaluation and appraisal of publicly supported initiatives across various sectors. We do business plans, strategy development; we do a lot of work around universities and innovation and business start-up and growth. SQW is part of a group called the SQW Group and our sister company is Oxford Innovation which provides incubation support to technology-oriented businesses to help them grow and they’re involved in a business coaching program which helps businesses grow and make an impact. But they also run investment networks like the business angel network. So our work is for business, central government, regional agencies, providing economic analysis. Our expertise, although we cover a range of sectors and a range of organisations, is providing a specific economic analysis and experience which then gets formed into policy development essentially. So we do reports, feasibility studies, evaluation reports, appraisals, economic modelling and strategy development and fore sighting; whatever the terms of reference come out from our major clients. We’ve worked with the World Bank and IFC and other agencies as well. Q: So you’ve been here in Sri Lanka for discussions on a technology transfer and development fund. What does the fund entail? A: It’s a fund that will enable SMEs to introduce modern technologies and process innovations into their business, and thereby improve their productivity and competitiveness. It is expected that the fund will focus on growth-oriented SMEs that are exporting or wish to enter export markets. New technologies and innovation will bring value addition to their products and services. The goal of the Government is to reach the $ 4,000 per capita GDP target. There’s only so much you can do as a business in terms of your own productivity and output. What we know from international experience from the likes of South Korea, Singapore and India, etc., is that to get on a higher growth path for the economy, the important phrase here is structural change. What you need to do is introduce technology to firms and that improves their practices and adds value to the products they produce. So for example you could be a potato producing company and you only export to the international market. That is not enough and because the Sri Lankan Government is looking to develop the export sector and in particular with what they are doing with the hubs which were announced yesterday, taking that into context, and to do that we need to bring in value addition and bring structural change. Just bringing in the Fitch conference held today; what the Governor of the Central Bank was saying was that we’ve got to avoid the middle income trap that economies get into and one of the shifts in economics and economic development theories is in order to avoid that, you bring in technology. So that is our ultimate aim and for the fund to act as a catalyst to improve the wider financial and innovation ecosystem because the competitive advantage is about innovation. Technology and innovation are important drivers of development. They underpin productivity gains and improvements in competitiveness that lead to the sustained creation of wealth and the generation of employment opportunities. That’s how Western economies improve, because of how the multinational companies do things and even in the public sector it’s around innovation. There is a lot to be developed here in that wider ecosystem. The objective of the fund is not to fix everything in the public and private sector but to act as a catalyst so what we have is potentially a fund which will provide finance which is debt finance and equity; so we’re looking at equity options both public and private money from domestic and international sources. So we’re exploring opportunities there but that is tied to technology assistance which is around education because there is no point in giving a machine or technology to an SME and they don’t know how to use it. So not only about how to use it but the benefits of adapting technology so you’re wanting to create a shift, as systematic shift not only in a few SMEs but one that becomes a norm that will affect the wider sector and the focus will be growth-oriented SMEs with export potential. That’s the focus and technical assistance is tied to the finance. That’s really important and in terms of its geographical reach, we want it to be a national fund where all regions are covered and not only the Western Province. We’re looking at the north, south and east; it’s a national fund that will be available. In terms of its operational delivery we are looking at it to be an independent third-party private sector delivery mechanism, thereby there is more transparency and accountability, monitoring and evaluation, which is very important because it will have private money in which they will want to see the returns. We want the fund to not duplicate what’s already out there. As an observer of Sri Lanka, there is a cluttered landscape of various initiatives. There are so many funds and not all have been evaluated and what we don’t want to do is overlap and duplicate and create inefficiency in the system so it has to have its own USP. It will be private sector-managed. An important partner of terms of the strategic board which will oversee that is NEDA. It is important in this because the act that is in place, the legislation to set up the transfer of funds is through NEDA. It will have an important role in this but there will be private sector people on the
Posted on: Mon, 19 Aug 2013 10:14:31 +0000
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