Innovation in Bangladesh | The Daily Star
12:00 AM, July 31, 2017 / LAST MODIFIED: 12:42 AM, July 31, 2017

Innovation in Bangladesh

Nonexistent or flawed?

Innovation has been the dominant catchword in the last few decades. It usually happens with the development of a totally novel idea, or around the alteration of existing ones, and is sometimes enough to disrupt the whole system. However, pursuing innovative ideas is about balancing opportunities against risks. There is always a chance that innovation might not work out but there are also ways to address that. 

Taiwan, the tenth most innovative economy in the world, is also one of the world's biggest semiconductor suppliers. In the 1950s and 1960s, Taiwan was similar to Bangladesh in a lot of ways—dependent upon foreign aid for development. But that changed pretty quickly when Taiwan decided to pursue a strategy to build wealth through innovation.

The risk of an economic downturn was reduced with the privatisation of government organisations which made the system more efficient, and emphasis was put on education with a special focus on engineering and innovation. They also realised that being stagnant was never a choice as other countries would soon catch up and rival them with cheaper prices.

Bangladesh has yet to pursue a similar policy shift and remains stuck with a much smaller and sluggish economy. We lack understanding of what innovation means. Most of us consider it to be something in the line of a very sophisticated product that is unattainable. We do not think along the lines of a new market segment, value added services, or find a new way to an old business model. We simply do not want to cross boundaries. 

This is partially because it is easier and cheaper to imitate. People innovate when they see that innovation will give them a competitive edge, and they will put in their resources only when they see that they will get a premium price for it. 

Bangladesh with its 160 million people should have been a lucrative market for any investor. This sheer number of people represents a huge market, where people are interested in producing, buying and consuming innovative products. It calls for frugal, scalable, trustworthy and user-friendly innovation which clearly the manufacturers are unable to tap into. 

Our market works best when we come together, when interactions between multiple stakeholders happen. Having a shorter innovation cycle, especially in agriculture, clearly requires multidimensional involvement from all the patrons in this effort. However, despite the advantages of a holistic approach, the firms still continue to shy away from interaction and we are left with a low level of innovation despite Bangladesh's huge human capital resources.

Where we are at the moment is not the worst place to be nor do we need any revolution to turn things around. What we need is to look at the challenges that stop us from moving forward and find a way out. We only need a few of the firms to move away from the old, traditional practices and think about ways that will eventually put enough pressure on their competitors and the overall market will evolve to be more innovative.

One of the challenges faced by the private sector is their inability to make a marketable product. The reason behind this weakness is a lack of understanding of customer preferences due to little or no market research. Also, they do not have internal systems to track sales trends, engage customers through hotline numbers or e-brochures, test new promotional tactics, etc.—which are crucial to develop a good understanding of the ever-changing customer needs.

The private sector often misunderstands the very concept of innovation, believing that for an innovation to be successful, it needs to be dramatically different from other products in the market. Whereas, innovation simply is the added feature(s) that make a product different. At this point, private-sector firms need to shift their focus to creating an environment that nurtures innovation. So, efforts are also required to bring about changes to the strategic, managerial and resource related issues. 

The inefficient innovation cycle cannot only be explained by the inactive participation of private sector; government research bodies play a role in stifling innovation as well. Despite having an allocated fund, research bodies inadequately address the problem mainly due to a lack of communication with the private sector.  The solutions that they come up with don't do much problem-solving for the customers as they do not coordinate with private sector before conducting research on a new product. So, the final product is not appropriate for commercial sale and thus that one prototype never sees the light of the day. 

Some of our policies do not even support innovation; the heavy taxation on machinery components and spare parts import is one big challenge for agro machinery manufacturers. On the other hand, the duty on agro technology from India or China is much less; home-grown machineries thus cost way more than the imported ones. New companies do not want to enter the scene because of the difficulties of doing business in Bangladesh.

Academia also needs to come into the innovation cycle and work alongside the private sector in order to build trust among the target customers when it comes to local agro innovation. Instead of putting funds into their own research, the private sector can perhaps commit a bit of their time and money to the academia and counsel them on the market need. The academia in turn can take in as much market information as possible to come up with relevant technology. 

With the academia, public and private sectors working together, the task of attaining a shorter innovation cycle will be much easier. For this to happen, communication needs to be given the highest emphasis at this point. When it comes to making a technology work, communication is the key for business success.

Shafinaz Hosain is a business graduate from the Institute of Business Administration (IBA), University of Dhaka, and is currently working as an associate for a USAID project.

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