Innovation For Growth

Innovation is a driving force of human evolution. It not only generates new ideas but also transforms them into new products and services. It is a scientific enquiry that gives birth to new and efficient technology. Unlike creativity, innovation leads to inventions having practical and commercial values. It entails knowledge, experiment, and enhanced technology, goods and business models. Without scientific innovation, the agriculture and industrial revolutions could not have taken place. As the world is on the cusp of fifth industrial revolution, innovation has become a crucial element in further advancing human society technologically, economically and socially. The country can achieve economic prosperity only when industrial innovation is carried out through the collaboration among industry, academia and research centres. Such joint efforts spur technological entrepreneurship necessary for the business start-ups. Nonetheless, it also requires human capital, investment and enabling legal and infrastructural support.

Despite adoption of appropriate policies and measures to encourage innovation, Nepal has not seen its role in developing agriculture, industry and service sector as desired. This is a reason why the contribution of the industrial sector to national economy is merely 10 per cent while agriculture’s around 25 per cent. On the other hand, service sector contributes to GDP a whooping 62 per cent. Industry and agriculture represent the core economic component in terms of job creation and revenue generation but when these two sectors stagnate, it hampers the growth of real economy and the people’s purchasing power. The bleak scenario of the innovation is manifested by fewer number of registrations of patents and designs at the Department of Industry (DoI). According to a news report of this daily, only one patent and 31 designs were registered at the DoI in nine months of the current fiscal year while no patent and only 23 designs were registered in the previous year.

In 2019, the government had unveiled National Science, Technology and Innovation Policy, which, among others, seeks to involve academic institutions and private sector in research, technology development and innovation. The current fiscal year’s budget has provisions of free company registration, renewal and tax discount for start-ups, Rs. 2.5 million loan at 1 per cent interest, non-collateral loan for small and medium enterprises, commercial agriculture, women entrepreneurs and returnee migrant workers. The government has also set up Rs. 1 billion challenge fund to support the potential entrepreneurs. However, the challenges lie in the implementation of all these announcements. The notion of public-private cooperation to run innovation centres at universities has not been fully materialised. Consequently, the start-ups are facing teething troubles in operating their businesses. 

Various stakeholders call for amending legal provisions pertaining to intellectual property rights, land use and industrial enterprises so as to create an atmosphere conducive for research and innovation. It is imperative to bring a policy to promote areas and products of comparative advantage such as information and communication technology, bio-tech and academia. In order to bring in foreign innovators, they need to be provided fiscal incentives. The lack of innovation has made manufacturing a risky sector, with many industrialists shifting to trade that is comparatively secure. Foreign direct investment (FDI) also promotes innovation through the technology transfer. But only large companies have the potential to encourage innovation. Hence priority should be given to a tie-up between the industry and academia, which can introduce a new course on innovation and entrepreneurship.