Like many other developing countries, Sri Lanka has also the inspiration to enter and succeed in the innovation economy. On stepping into innovation economy, Sri Lanka has been paving the pathway with graphite. In the age of information technology (IT), artificial intelligence (AI), robotics, and automation creating the Fourth Industrial Revolution (4IR), why Sri Lanka has gone into the Stone Age in pursuing innovation is an intriguing question, indeed.
The graphite mining industry in Sri Lanka dates back to 200 years with its boom periods during the First and Second World Wars. The labour-intensive graphite production and its export in raw form kept falling since then, reaching 3,444 tons in 2012 from 35,000 metric tons per annum in the 1940s. The contribution of graphite export to Sri Lanka's economy became also negligible, meager US$ 3 million in 2011.
Graphene extracted from graphite is a high-value commodity, used in making electronics and lithium-ion batteries, among others. To enter into innovation economy, Sri Lanka targeted in creating knowledge to support the process innovation for extracting graphene from graphite for generating far higher economic return than exporting raw graphite, thereby creating a mechanism of generating knowledge and transferring it into economic output.
Currently, the most common route of producing graphene nanosheets cheaply is the chemical exfoliation of naturally occurring graphite using oxidising agents and acid. But the approach relies on highly toxic and environmentally unfriendly chemicals, making the process unsuitable for large-scale production. Instead of just importing machinery and start producing graphene, Sri Lanka embarked on applied nanotechnology research in creating knowledge for innovating better graphene extraction process from graphite. This change of approach opens the opportunity for Sri Lanka in creating wealth from the mental capacity of high-calibre research professionals as opposed to conventional means such as labour, raw material, or operation of imported capital machinery.
To begin the journey of adding knowledge to materials, in 2005, the then Minister of Science and Technology put forward a cabinet paper detailing how Sri Lanka can reap the benefits of the knowledge era by setting up a National Nanotechnology Initiative (NNI). To make sure profitable revenue from the investment in generating knowledge, government intelligently decided not to set up another fully state-owned research institute, and thus requested private sector participation prior to pledging funding support. For ensuring market driven journey of knowledge generation and commercialisation, the government agreed to fund 100 per cent of the infrastructure and also pledged 50 per cent of the funds required for operating capital through the National Science Foundation, while the private sector partners chipped in for the remaining 50 per cent, thus giving birth to Sri Lanka Institute of Nanotechnology (SLINTEC).
SLINTEC is not just another research institute, nor it is just an institute to develop human resources for processing graphite in producing graphene. It is rather part of the model in developing Sri Lanka's capacity to greatly enhance the value added to that country's exports-through the mental capacity of generating knowledge, as opposed to conventional means of raw material, labour, and imported capital machinery. SLINTEC research has already succeeded in developing and testing out a nano-tech enabled, cost-effective method to convert graphite to graphene. A new spin-out company has already been formed to commercialise the technology. The continuation of this journey may lead to new knowledge revenue source for Sri Lanka from the global market of graphene, which is expected to show a Cumulative Average Growth Rate (CAGR) 40 per cent, especially since it can be used to manufacture lithium-ion batteries, from now and 2026--as reported by industry analysts.
SLINTEC's business model has two primary revenue streams. The first one is about undertaking research in selected areas with the objective of producing intellectual outputs having high commercial value. Significant knowledge assets that arise out of these endeavours are then patented and commercialised via licensing or an outright sale. So far, SLINTEC has managed to file for 15 patents, of which 13 are in the United States and two are in Sri Lanka. As it has been reported, by selling three patents to an Indian company, SLINTEC has already generated USD 1 million in revenue. The other one is about undertaking contract research, either producing Exclusive Intellectual Property (IP) Rights, or Limited IP Rights, or Non-Exclusive IP Rights for the client.
To strengthen the market-oriented knowledge generation capacity, SLINTEC has been progressing in building research and human capacity in the country by offering postgraduate degree programmes in nanotechnology and other advanced technologies. To leverage entrepreneurial engines to commercialise already developed intellectual assets as well as to attract new ideas that can be researched and incubated within SLINTEC, the organisation has set an ambition to launch SLINTEC Startup Engine, which is actually an incubator-accelerator hybrid.
Over the last decade or so, SLINTEC has demonstrated a model that developing countries like Sri Lanka should focus on market-driven research to generate knowledge and commercialise it. As opposed to fully state-owned research establishments like the ones which South Asian countries such as India, Bangladesh and Pakistan set up in the 1950s as Councils of Scientific and Industrial Research Centres, SLINTEC is initiated by public fund, but operated with financial participation of the private sector. In many advanced countries like the USA, Canada and Germany such institutional models have been making significant contribution to their innovation economy.
Although SLINTEC needs to go a long way to fine-tune to make it a significant contributor to strengthen Sri Lanka's competitiveness with environed role of innovation, it is a good beginning to proceed in promoting innovation economy. Once the model of investment in R&D in generating knowledge to fuel innovation for generating profitable revenue is demonstrated, the private sector will likely accelerate the model on their own. For example, in the 1970s, Korea's public sector exposure to R&D was almost 80 per cent of the total national investment. But upon the profitable demonstration, private sector accelerated the expansion of the R&D led growth model by contributing more than 80 per cent of Korea's 4.3 per cent GDP contribution for research, development, and innovation.
Developing countries with the aspiration to keep growing are in the process of developing their R&D capacities. It is expected that many of them will boost up the R&D investment from less than 0.5 per cent of GDP to more than 2 per cent over the next 20 years. But what would be the model of utilising that added resources? In a globally connected market economy, there has been no natural correlation between R&D investment, intellectual asset development, and economic growth. Each of those aspiring countries should draw lessons and fine-tune market oriented institutional model of driving economic growth through research and innovation.
It is understood that government should initiate and provide initial stimulus, but past model of fully owned R&D establishments may be required to be abandoned or significantly transformed. Private sector driven new type of institutional capacity can be developed-so that private sector succeeds in capitalising R&D outputs to augment labour and raw material as well as other natural advantages to open endless frontier of growth.
Dr M Rokonuzzaman is an academic, and researcher on technology, innovation and policy. [email protected]
