Mar 01, 2010 (LBO) – Sri Lanka is to become a “Naval, Aviation, Commercial, Energy and Knowledge hub.” According to Basil Rajapaksa, the leader of the ruling coalition’s Gampaha District slate for the Parliamentary Elections, that District will be the site of the aviation and knowledge hubs.
What is needed to achieve this vision ? And is there any special reason for the Gampaha District being designated the site of the future knowledge hub?
What is a knowledge hub?
Singapore pioneered the practice of appending the word “hub” to various subjects and then saying that it would become Asia’s hub in medicine, knowledge, aviation, etc.. And it has not been all hot air. Singapore has succeeded in many hub-like activities. Therefore, it is not a bad source for guidance.
Singapore’s 2006 Budget Speech (http://www.mof.gov.sg/budget_2006/budget_speech/header2.html; see annex 1 for the relevant extracts) is pretty much a treatise on the subject.
The key elements are:
- To become a knowledge hub, it is necessary to produce knowledge. This requires encouragement of research and development, by private firms and within universities.
- Production of knowledge requires creative people. They must be attracted from all over the world and local people must be encouraged and facilitated in becoming creative knowledge workers.
- A hub is not simply an agglomeration of companies that produce knowledge, but that in addition these companies must be well connected to each other as well as to other hubs in a global knowledge network. Is it only the Singaporeans who are saying this? No, this is pretty much the consensus. The following definitions were taken from an academic discussion of knowledge clusters and hubs (http://mpra.ub.uni-muenchen.de/8778/1/MPRA_paper_8778.pdf):
- Knowledge clusters are agglomerations of organisations that are production-oriented. Their production is primarily directed to knowledge as output or input. Knowledge clusters have the organisational capability to drive innovations and create new industries. They are central places within an epistemic landscape, i.e. in a wider structure of knowledge production and dissemination. Examples for organisations in knowledge clusters are universities and colleges, research institutions, think tanks, government research agencies and knowledge-intensive firms.
- Knowledge hubs are not identical to knowledge clusters though they are co-located and may be nested within clusters.
- Knowledge hubs are local innovation systems that are nodes in networks of knowledge production and knowledge sharing. They are characterised by high connectedness and high internal and external networking and knowledge sharing capabilities. As meeting points of communities of knowledge and interest, knowledge hubs fulfill three major functions: to generate knowledge, to transfer knowledge to sites of application; and to transmit knowledge to other people through education and training.
What is needed to make Sri Lanka a knowledge hub?
If the broad term “hub” is used in the way that Singaporean do, to include a cluster or agglomeration, it makes sense to think of Gampaha as the location of the cluster/hub, and not the entirety of Sri Lanka. The reason why the Gampaha District got most of the foreign investment and jobs from export processing zones was because it was well connected to the port and the airport, compared to other districts, including even Colombo.
Many years of bemoaning the lack of good transportation links connecting the rest of the country to the port and the airport and we are still where we were when the export processing zones were set up in the 1980s. If anything, traffic must be moving slower because the roads have not kept up with the increase in vehicles even in the Western Province. It appears that Basil Rajapaksa, who should know as the man in charge of roads since 2004, realizes that the other districts cannot catch up with Gampaha in terms of connectivity to the airport (which is what matters for knowledge firms).
The choice of Gampaha does not address the Colombata Kiri; Apata Kekiri problem. But this Rajapaksa is eminently pragmatic. He understands that it will be difficult to create a knowledge cluster in Hambantota (as will become more evident below). Also, Gampaha is where he is running for election, not Hambantota.
After roads, one needs good telecom connectivity, especially fiber optic cables that can be used by multiple suppliers on non-discriminatory and cost-oriented. Gampaha has had cables for quite some time, but more will be needed if the cluster, in the form of a special zone, is being set up there. It did not take too long to get the earlier designated IT zone in Malambe connected through fiber, so this should not be a big problem.
One may wonder why Malambe, which is among other things the location of SLIIT (the Mahapola funded, for-fee IT training institute) and the pride of Sri Lankan IT startups, Millennium IT (recently acquired by the London Stock Exchange), cannot be the center of the cluster. It is on the wrong side of the Kelani River and is therefore not in the Gampaha District. And in any case, nothing wrong with having two of everything.
The real problem with telecom connectivity is getting the prices down and quality up (of leased lines that are the key inputs of knowledge firms). That, unfortunately, requires the active intervention of the Telecom Revenue Commission (http://www.lbo.lk/fullstory.php?nid=795963279). But one can always hope. And Sri Lankan leased line prices were, as of October 2009, still considerably cheaper than those in the Maldives.
Note: The increase in LK prices in 2009 is partly an artifact of exchange rate movements and partly caused by change in SLTâ€™s policies on how prices are posted. DPLC = domestic private leased circuit
Then there is the question of attractiveness of the location for knowledge workers. If one seeks the best talent, one cannot rely solely on home-grown talent. In the same way that countries wanting to play world-class cricket hire the best coaching talent irrespective of citizenship, countries that want to become world-class players in the knowledge economy have to be open to international talent.
That means that knowledge firms must be provided low-hassle ways to bring in the talent (not too difficult to do because of the Board of Investment). But these workers are highly mobile and very much in demand worldwide. They care about entertainment and are to a degree hedonistic. Coffee shops are where they get work done; bars are where they unwind; art is what they draw inspiration from. The Budget Speech goes into detail about making Singapore “an interesting, lively and fun ‘City-in-a-Garden.’”
Can Gampaha match Clarke Quay (http://www.clarkequay.com.sg/)? What can an expat do on a weekend in Colombo, let alone in Gampaha? And where can one legally get a drink on a Poya day?
Cannot rely only on foreign talent, Singapore says. The Budget Speech states a commitment to foster creativity among Singaporeans: “Our schools are striving to develop critical thinking skills and creativity in our students. We are reshaping the education landscape to allow greater diversity and bring out the best in every young Singaporean. We are opening up more curriculum options for them, including new ‘O’ and ‘A’ levels subjects, and Elective Modules for those in the Normal courses. A new school for the Arts is being set up, adding to our specialised schools in sports, and science and mathematics. Our students have more choices than ever before.”
Any chance of any of this happening in Sri Lanka or, at least, in Gampaha?
Singapore is also pumping money into universities. Sri Lanka does not have the money. Even if it did, it would be wasteful to indiscriminately pump money into dysfunctional institutions. The more intelligent thing would be to create some kind of challenge fund that specific programs can bid for, on the lines of the endowed chairs concept pioneered by the University of Moratuwa.
The difficulty of course is how to keep the challenge fund on the straight and narrow. After all the ICT Agency and its challenge funds were created to work like this. But it ended up spending World Bank money on election propaganda.
Same problem with an R&D fund. Good concept, but will it continue to reward quality, or will it be hijacked by political cronies? But still a fund would be better than setting up a government agency. The tragedy of the Arthur Clarke Center/Institute (http://www.montagelanka.com/?p=1476) must hold some lessons.
So here are the preconditions for making Sri Lanka (Gampaha District) a knowledge hub. There is a long way to go to catch up with Singapore in encouraging knowledge firms to set up here. But if the government wants to do it, the path is not unmapped.
Good governance would help, but you can get half way even without. Little more costly to duplicate the existing IT zone than to expand it; but elections need to be won and construction has its own rewards.
Annex 1: Relevant extracts from the Singapore Government’s Budget Speech 2006
2.2 First, we must become a knowledge hub in Asia. Innovation, enterprise, and R&D will increasingly be the new sources of our growth. We are strengthening R&D efforts in the universities, research institutes, and industry. Our aim is to be a knowledge exchange, a key node in a global network of people and ideas, and a choice location for international events for both for-profit and non-profit organisations.
. . . . . . . . . . . . . 2.8 R&D is the foundation upon which we will build Singapore’s competitiveness. Just as investment in education builds up our human capital, so will investment in R&D build up our intellectual and knowledge capital base. . . .
2.9 R&D requires long-term commitment. To develop new capabilities, we must support projects on a sustained basis, buffering them from the vagaries of year to year budgetary pressures, and judging results over several years. . . .
2.10 The R&D Trust Fund, together with MTI’s Science & Technology Plan 2010 and MOE’s academic research plans, will help raise Singapore’s gross expenditure on R&D from 2.3% of GDP in 2004 to 3% by 2010. This will put us on par with the European Union economies and close the gap with world leaders in R&D like the Nordic countries and the US.
2.11 Increased R&D investment will generate more intellectual capital which can be exploited and commercialised. We have already begun to do this. . . .
2.12 A safe and reliable environment for the protection of Intellectual Property Rights (IPR) is a critical factor in persuading international companies to base their R&D activities here. Because of our reputation as a trusted partner for businesses, companies and other institutions are creating and hosting their intellectual property in Singapore, assured that their IP will be protected. . . .
2.13 We must also take a broader approach to recognising ownership of IP. . . .
2.14 To become a knowledge hub, we must not only be a place for creating knowledge, but also be a centre for exchanging knowledge and ideas, and for people and businesses to network with one another.
2.15 Singapore is well suited for this role. As a society, our ethos is open, cosmopolitan and pragmatic, welcoming towards new ideas, and quick at adapting to a fast changing world. We are well wired up, with 52% of homes having broadband internet access, and nationwide wireless networks to keep us constantly in touch with one another and the world. But we must continue to plan ahead beyond present needs, and keep pace with rapid technological change.
2.16 Other countries and cities are already implementing ultra-high speed broadband and wireless networks. Some are laying fibre to homes, in anticipation of future demand. In today’s world, a national broadband network is basic infrastructure and a source of competitive advantage. We will develop a new national broadband network that is much faster than what is available today. It will offer fast, efficient connectivity to all – in schools, in offices and homes, and even on the move. It will help us plug into the global knowledge grid, and stay competitive with other cities. The cost is significant, but we can develop it together with the private sector progressively over several years, adjusting to demand at each stage.. . .
2.17 Singapore must be a place where people, businesses and non-profit organisations from all over the world converge and exchange ideas. Several International Organisations (IOs) and Non-Governmental Organisations (NGOs) are already here. . . .. We will attract more IOs and NGOs to locate their headquarters and research work here.
2.18 Hosting international events also creates opportunities for knowledge networking. In 2005, we successfully hosted the International Olympic Committee session, as well as the Global Entrepolis@Singapore event which brought entrepreneurs, venture capitalists and industry captains together.
. . . . . . . . . . . . 2.47 To become a knowledge hub and a centre for enterprise, we must continue to attract global talent. Management guru Peter Drucker has called knowledge workers “the single biggest factor for competitive advantage in the next 25 years.” Google, one of the most innovative firms in the world, takes Drucker’s words to heart. To generate a continuous stream of new ideas, it systematically looks for the most talented programmers and computer scientists in the world, knowing that smart businesses must – to use Drucker’s words – “strip away everything that gets in their knowledge workers’ way”.
2.48 Singapore must be a place where global talent with diverse backgrounds and cultures want to live, work and play. George Lucas set up Lucasfilms’ first and only studio outside US in Singapore partly because of our cosmopolitan appeal. When the studio opened in October last year, its first batch of 35 animators came from 19 nations, including Panama and Ecuador. We will continue to develop new attractions such as the Integrated Resorts and the Singapore Flyer, to make ours an interesting, lively and fun “City-in-a-Garden”.
2.49 Besides attracting talent, we are also investing in our own people. We are providing our students with opportunities, from the primary up to tertiary level. Our schools are striving to develop critical thinking skills and creativity in our students. We are reshaping the education landscape to allow greater diversity and bring out the best in every young Singaporean. We are opening up more curriculum options for them, including new ‘O’ and ‘A’ levels subjects, and Elective Modules for those in the Normal courses. A new school for the Arts is being set up, adding to our specialised schools in sports, and science and mathematics. Our students have more choices than ever before.. . ..
2.50 A sizeable number of our students go to the polytechnics, including many who have done well enough to qualify for places in the junior colleges. Our secondary schools will do more to cater to students who can benefit from some exposure to applied education while still in secondary schools. . . ..
2.51 We are also investing more in our universities. The Government aims to have 25% of each primary one cohort enrolled in publicly-funded universities by 2010, up from the 21% in 2002. To fund the additional places and invest in new physical infrastructure, MOE will allocate an additional $2 billion to the university sector over the next five years, or an average of $400 million each year. By then, Government investment in our three publicly-funded universities is expected to reach $1.9 billion annually, or 1% of GDP.
Rohan Samarajiva is a former Sri Lanka Telecommunications regulator. To read earlier columns please go to the ‘Choices’ category on LBO’s main menu or click on the ‘related stories’ below.