Monday, October 10, 2016

Utilization of Investment through National Innovation System

 We have been talking about building New and Prosperous Nepal, but there is a simple question “HOW?” and till now nobody knows the answer of that simple question. Political leaders, government agenda and all related to it never become tired with saying “Building New Nepal”, at the same time the building blocks of prosperous economy are ripped off by those who chant the slogan loudly. Before the election, we had seen interviews, debates, newspaper articles and blogs about bringing thousands of jobs, they have the key to raise slugged economy and make trade surplus even in two or three years. However, they got elected and even became minister, but there was not any single change made even in policy that makes the foundation of such things which they have mentioned earlier. In my perspective, this is the time to rise all people who can contribute on those things and lead the country by kicking their butt.
The first thing, it might not be the right time to start politics but it is the right time to shape our economy so that it clears the way and guide the people whoever wish to walk on it. However, still there is a question “HOW?”. Now, the answer is building a system that makes everything flow smoothly, in technical term it is called as “National Innovation System (NIS)”. The National Innovation System is that which allows information flow among all stakeholders. When NIS is strong and dynamic, all enterprises, academic institutions, research institutions of any size are the hub of innovation and compete with each other for the quality as well as quantity. When enterprises compete for the quantity and quality simultaneously it creates the job as well as boost the economy regardless of the domain. When enterprises compete for quality and quantity, then they need investment, labor, knowledge, and technology. These four input terms will address the current situation of brain drain, low foreign investment, or domestic investment, low inflow and high rate of outflow of graduates, technology transfer, and creation of new technology. I think it is the one and only answer of "How?" question. 
We have seen tremendous effort from individuals creating job opportunities, from high tech industry to labor intensive industry. Nevertheless, those efforts could not sustain for a long time raising the question that why they suffered? is there any adverse situation that those high tech firms like Semiconductor or automobile firms fled away or shut down? The answer is somehow not straight forward rather it gives clear idea about how national policy caveats them. Whatever be the industry type government need to make make clear understanding that it will create the prosperity and support the economy. Moreover, it is the governments' duty to provide nurturing environment so that they can grow and help other firm to grow simultaneously by sharing their knowledge and product they have developed. Supprting policy not only for the current need but also for the prospective product as well as market is necessary, but lacking in all respect however. In this blog, I will not focus which policy but will discuss some of the government action which is against creating new jobs. 1) Government support to small and medium enterprises through seed money: Government led by Baburam Bhattarai declared supporting at least 200,000 thousands without interest under self-employment program. However, the budget was spent without at concrete plan. This distribution could have done through proper assessment by segmenting the clusters so that entrepreneur can support the mainstream industry. Nevertheless, the budget utilized on grocery stores, or similar alike which doesn't create innovation. 2) Government has given intense effort on cooperatives (banking sector): though the government has started new innovative idea to ensure participation of pro-poor in banking industry. The idea of licensing banking system to pro-poor has tremendous effect on low-income family, however, the major portion of money was invested or being invested on low productive sector like real state business. 3) Huge amount of money went to Maoist Cantonment: settling Maoist insurgency was necessary but the money invested on the cantonment is not justified. Over the time, it has been proved that Maoist led civil war was not the political issue rather a economic disparity. In order to solve the economic disparity, the amount spent on settlement of Cantonment could have utilized on other sector such as entrepreneurship or job oriented sector.    4) One village one product program: I remember, government has also promoted one village one product program but we have no idea that where the program is running and what the outcome is.
There are a lot more programs have been announced but still the outcome of the program is negligible. It proves that under current NIS system whatever the effort we make the outcome will be negligible compared to the effort. Which necessitates that the simultaneous cooperation between industry and government plan so that every government action complements the industry need. By which, self-employment policy can boost the industry sector focusing on production of raw materials for the major industry or fulfills the market demands; funds collected from the cooperatives can be utilized to the main stream industry or large firms; money spent on Cantonment could have been utilized to establish new business so that people in the cantonment can get jobs which is long-lasting solution for them rather distributing hand-on cash to them; one-village-one-product slogan can be realized effectively.  

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