Business360° Magazine

Importance of Research and Development

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The contributions of research and development (R&D) on economic growth are debatable.As the social and private returns from R&D differ across the countries with varying GDP per capita levels and the market sizes, economists remain divided when it comes to measure an exact correlation between R&D and economic prosperity and use distinctive growth models to justify their own hypothesises.

Despite this major difference, most economists and policy researchers agree on one thing that increased R&D investments have positive spillover effects on human capital, innovations for consumers and for the poor people and while formulating evidence-based policies.Realising this latter factor, governments and companies around the world invest billions of dollars in their R&D facilities. For example, as per recent data available from Business Insider Inc.,G20 nations alone account for 92 percent of net global R&D spending. In 2015, United State was the largest R&D spender ($463 billion) among all the G20 nations followed by China ($377 billion), European Union nations combined ($346 billion), Japan ($155 billion) and South Korea ($74 billion). However, in terms of R&D spending as the percentage of GDP, South Korea (4.23%) topped the list of all the G20 nations’ ranking followed by Japan (3.29%), Germany (2.93%), United States (2.79%) and France (2.22%). Similarly, as per the data obtained from the same firm, one of the richest, most innovative and profitable tech companies in the 21st century – Apple – has recently been adding substantial amount of resources in company’s R&D activities – $4.77 billion in 2013, $6.61 billion in 2014, $8.58 billion in 2015 and $10.39 billion in 2016. Other profiting and novel companies that also spend billions of dollars each year on their R&D include Amazon, Alphabet, Samsung, Intel Co and Volkswagen. In 2017 alone, as per the December 2017 end data provided by Statista, these companies had spent $16.1 billion, $13.9 billion, $12.7 billion, $12.7 billion and $12.1 billion respectively.

Trends in Nepal

As per UNESCO Institute for Statistics’publicly available data, Nepal’s current R&D investment as the percentage of GDP stands at 0.3% only, one of the lowest in South and in West Asia. Current ambiguity concerning availability of reliable data on public and private sectors’ net R&D investments within their own institutions or in other R&D facilities and also on number of properly trained researchers per million Nepalis further challenge economistsand policy analysts to exactly measure the overall social and private returns of R&D in the local context.

Moreover, poor measures against academic plagiarism at select universities and private institutions, miserable means for maintaining and updating students’ and faculties’ academic records and finally, most importantly, no significant use of graduate students’ final year research works (theses) create a huge gap between country’s existing problems and academic research works’ potential roles to address those complications. Contrary to what we have been observing in academicresearch trends in East and in Central Asia, over decades, Nepal’s net gain in this sector has been insignificant, if not totally disappointing. For example, institutions like Centre for Economic Development and Administration(CEDA) and Centre for Nepal and Asian Studies (CNAS) – established as the Institute of Nepal Studies – were established with much hope in late 1960s but after almost after five decades into operation, their net contribution towards country’s R&D and in academia are trivial. During their early stages, institutions like Research Center for Science and Technology (RECAST), Nepal Academy of Science and Technology (NAST) and Nepal Agricultural Research Council (NARC) had caught wide local and global attention for their groundbreaking R&D works but their failure to give continuity to such works in the following years led them to become them less productive in recent years.

Despite this discouraging performance by most of the country’s oldest R&D institutions; few new think tanks, research institutions,academic institutions and regional networks that were established much later in the aftermath of 1990 People’s Movement – like Martin Chautari, South Asia Watch on Trade, Economics and Environment, Samriddhi Foundation and Social Science Baha – have been flourishing in terms of the number of research publications that they produce in one fiscal year and the net impact (real and perceived) of their works on country’s policies and also in enhancing overall quality of research discussions at the universities and outside.As a consequence of combined effect of all these inadequacies, Nepal continues to perform poorly in all major regional and global R&D rankings.

Need for Serial R&D Investment in Nepal

In late 2015, when one of the Associate Professors from the University of New South Wales in Australia and I were discussing the existing poor research facilities in Global South countries – including Nepal – and individual and collaborative ways to improve those conditions at a dinner table in Singapore, he shared with me over a dozen incidents where research works of students and scholars from Nepali universities were heavily plagiarised. After encountering such incidents in a row, he had then begun admitting fewer students from Nepal at his department and to make sure his investments go towards the growth of deserving candidates he then begun employing alternative assessment tools to check research abilities of any prospective student and/or a scholar.

This simple experience shared by an academician at a foreign university is more than enough to make us realise how poor and often shameful our global research footprints have been. The first step to avoid similar incidents from happening again would be to ensure enough R&D investments at existing universities, academic institutions, related think tanks and at other applicable places that works to generate and communicate knowledge. This would help us not only to increase positive impacts of Nepalis’ quality research works outside of the country but also would boost overall quality of our academic and research institutions which in turn would offer direct and indirect short/long-term benefits to the involved individuals, their families and institutions.
In addition, I also see a serious need to install a dedicated R&D unit or expand an already existing such unit at country’s every for-profit and not-for-profit firm to help those firms to take time and come up with most appropriate goods, services and programs for the consumers and service recipients.

Article originally appeared in January 2018 issue of Business360° Magazine, one of Nepal’s premier business magazines, under the monthly column – Innovation Insight. Read original article here.

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