5. Indigenous Technology Devel-opment

59. Pakistan has traditionally supported a heavily protected industry and a large public sector with little competition as there was no pressure on the industry to become more ef-ficient. Thus technology, which could have helped industry become more efficient, pro-ductive and competitive, could not play its proper role. Both India and China – China due to its isolation and India through deliber-ately high tariffs – kept their domestic markets closed to imports until their industrial sector had gained sufficient strength to compete in the world market. The originally low quality of their products has over the years been replaced by world-class quality through development of local technology combined with acquisition of foreign technology (reverse engineering). Their industrial products are now in a position to compete with those of other more advanced countries.

60. With the current globalization of trade and the WTO regime of low tariffs the indus-trial sector of Pakistan is increasingly coming under pressure to improve the quality of its products as well as the efficiency of its produc-tion processes to be competitive in the world market. Thus science and technology will be-come indispensable for the local industry for intelligent absorption of imported technology coupled with development of indigenous tech-nology.

61. The R&D system of the country is cur-rently oriented towards the supply side, with very little interaction with the industry, which is the ultimate user of the products or proc-esses developed in the R&D organizations. There is negligible R&D activity in the indus-trial sector, in contrast to the industrialized countries where the industrial sector is a ma-jor contributor to the overall R&D effort of the country. There is, therefore, an urgent need to re-orient the public sector R&D organizations to demand-driven research in collaboration with the industry.

Indigenous Technology Development

62. The ST&I Policy for indigenous technol-ogy development is, therefore, based on the following objectives:

i. The R&D organizations should be oriented towards solving the problems of the indus-try regarding improvement of their prod-ucts or processes. In this regard, Govern-ment-Industry partnership programmes should be launched where the researchers will provide technical assistance to the pri-vate firms/companies. Initially it will be necessary for the scientists to demonstrate that they are in a position to solve the problems of the industrialists within a rea-sonable time-frame and at a relatively low cost. Once this is established, the industri-alists would be more willing to approach the R&D organizations and universities of the country rather than looking towards foreign countries. The Government can enhance the linkages between public R&D organizations and industries by directly supporting the industrial activities that are related to innovation, facilitating the commercialization of technologies, and sharing the human resources and techni-cal facilities.

ii. In order to encourage scientists to work on the problems of industry, a part of the income generated through research con-tracts with the industry may be given to the scientist/research group involved in the R&D effort. Similarly, the royalty ac-cruing from the commercialization of a patent may be shared according to an ap-proved ratio among the Government, the R&D organization and the scientist(s) who developed the patent.

iii. Efforts should be made to attract the global R&D manpower in order to meet the imme-diate needs of the industry, while ensuring that Pakistani researchers are adequately trained, in their presence, to understand and meet the future needs of the country. Pakistani scientists / engineers serving in foreign countries should also be encour-aged to return to their home country as

National ST&I Policy 2012 25

Indigenous Technology Development

their knowledge and international linkages may benefit the R&D sector of Pakistan.

iv. The focus of research should be diverted towards a small number of strategic areas that yield the highest economic returns so as to develop and sustain research capa-bilities in the focused areas as well as to improve the competitiveness of the coun-try’s products in international trade. The reverse-engineering methods, where per-missible, may be used wherever feasible.

v. The funding mechanisms for research should be improved by simplifying ad-ministrative and financial procedures in order to facilitate the research scientists/ engineers in performing their duties.

vi. The R&D organizations of the country should have an enhanced financial auton-omy that will result in a more focused ap-proach, better utilization of human and fi-nancial resources, and improved decision making processes.

vii. There is a need of providing women with opportunities of higher learning so that they too could opt for research and devel-opment as a career. Similarly, scientific/ research activities of young scientists/en-gineers need encouragement and support.

viii. The industry, especially the larger units may be motivated to set up their own R&D establishments. In India, 35% of the firms have their own R&D units while in Pakistan there are only a few. Appropri-ate incentives in the form of tax rebates on the amount spent on R&D activities by the industrial unit may be considered.

ix. The Government should invest in upgrad-ing the S&T development infrastructure of the country by establishing new R&D organizations and improving the techni-cal facilities of the existing ones. Current-ly, there is a non-uniform distribution of laboratory resources / equipment in the R&D organizations / universities of the country. Mechanisms should be devel-

oped to facilitate the sharing of laboratory resources among R&D organizations and universities.

x. The R&D organizations should focus on small and medium enterprises (SMEs) that generally do not have the resources to es-tablish their own R&D facilities and pro-vide them with technology information, R&D for product/process development, technical training, testing and analytical facilities etc. SMEs will be encouraged to employ S&T in general and ICTs in particu-lar in order to improve their international business relationships. SMEs will also be encouraged to form clusters in order to im-prove the quality of their products/services and international competitiveness.

xi. Efforts need to be made to make optimum use of the opportunities offered by the WTO regime by utilizing the relatively lower labour costs, high traditional skills and a large pool of natural resources to develop products that can compete in the world market. R&D organizations like PC-SIR can help SMEs in developing products using the available natural resources.

xii. R&D organizations should establish Tech-nology Incubation Centers (TICs) that provide affordable factory space as well as necessary support for business devel-opment, marketing, financing and legal services to facilitate new start-ups. The knowledge capital of the universities and research organizations should provide the requisite input in the development of new technologies and industrial products. HEC has already initiated a programme to encourage universities in setting up TICs.

xiii. Following the Chinese model, R&D or-ganizations should be encouraged to set up semi-industrial scale pilot plants for manufacturing and marketing products developed by them. This will also moti-vate them to carry out economic feasibil-ity studies before starting the research and development work.

26 National ST&I Policy 2012

xiv. Develop a viable Metrology, Standards, Testing and Quality (MSTQ) system, to ensure the quality of the Pakistani goods in the world market.

xv. Exposure of international S&T develop-ments should be provided to the research-ers/scientists of the country. Pakistani R&D organizations should be encouraged to establish branches in foreign countries, and foreign R&D organizations should be allowed and encouraged to establish their branches in Pakistan. Efforts should be made to establish scientifi c information networks among local and international R&D organizations, focusing on joint R&D activities and co-development of technolo-gies.

xvi. The researchers of the country should be encouraged to change fi elds and be facili-tated to move freely between R&D organi-zations, universities and industries in or-der to introduce new ideas in the existing disciplines and to develop inter-discipli-nary areas.

63. Based on each of the above-mentioned objectives, a number of actions would be re-quired at the level of fi rms, R&D Institutions, Federal Government and Provincial Govern-ments. The following measures will be taken in this regard:

Policy Actions:

A32. Constitution of a task force with a number of sub-committees to propose specifi c actions with the identifi cation of agencies responsible for executing these actions in order to achieve the following results.

1. Establishment of close linkages between industries and R&D institutions/uni-versities.

2. Incentives for scientists working on in-dustry-related projects

3. Induction of high-quality manpower

Indigenous Technology Development

from abroad for addressing local indus-try issues.

iv. Technical support to SMEs for enhanc-ing the quality of their products based on indigenous resources.

v. Establishment of technology incubation centers in R&D organizations.

vi. Prioritization for rapid development of selected industries with highest eco-nomic benefi ts.

vii. Analysis of reverse engineering poten-tial and relevant issues, with recom-mendation of execution plans.

viii. Collaboration with foreign produc-tion sector to learn best practices.

ix. Improvement of MSTQ system.

x. Granting enhanced fi nancial autonomy to R&D organizations.

xi. Motivating big industrial enterprises to set-up research wings.

xii. Establishment of new R&D organiza-tions in multi-disciplinary areas.

xiii. Improving laboratory and fi eld fa-cilities of existing R&D organizations/ universities and creation of a database of equipment for sharing the laboratory resources.

5.1 High Technology

64. In order to acquire high technology with-in a reasonable time-frame, it is necessary to promote technology transfer through Foreign Direct Investment (FDI) in the shape of joint ventures, production under license, technolo-gy-sharing agreements etc. There is also a need of establishing new and high technology indus-trial development zones in selected areas with adequate facilities and conditions. Improved mechanisms of information gathering, evalua-tion, and monitoring need to be established in order to assess the country’s progress related to the development of new technologies. The

National ST&I Policy 2012 27

Indigenous Technology Development

efforts of the Board of Investment for provid-ing a liberalized environment for technology transfer needs to be intensifi ed. Incentives such as tax holidays for setting up high-tech indus-trial units would go a long way to promote FDI in such industrial ventures.

65. All other things being equal, industrial FDI is attracted by the availability of a large stock of technically competent manpower. India, with its large stock of scientifi c and technical manpower, has succeeded in attracting a large quantum of FDI in the form of production units of multinationals, software houses and research laboratories of pharmaceutical companies etc. Pakistan needs to lay special emphasis on the training of its technical manpower at all levels. A largely literate and technically competent population is an asset, as skilled manpower is in great demand all over the world.

66. The strengthening of high technology sec-tor will be achieved through following actions:

Policy Actions:

A33. Attracting FDI in advanced technology production through fi nancial incentives and provision of physical infrastructure.

A34. Ensuring the availability of local man-power suitable for absorption in high tech companies.

5.2 Incentives for Development of Technology

67. To promote the indigenous development of technology, the government would also need to improve its incentive structures. In ad-dition to taxation regimes and market-based instruments, preferential government procure-ment of locally produced goods can also be used to promote technological innovation and generate markets for new locally produced products. These measures would foster the cre-ation of small and medium enterprises, which would play a leading role in the development of new opportunities and the use of technol-ogy. Special additional incentives might be

necessary to encourage new high-tech start-ups in fi elds such as biotechnology, informa-tion technology, nanotechnology etc. It needs, however, to be ensured that the incentives are not misused in acquiring obsolete or obsoles-cent technology. There is a need of initiating an awarding system in the country in which the individuals/organizations/companies will be rewarded for their outstanding contributions towards the advancement of S&T.

68. The following steps are essential for en-couraging the development of appropriate lo-cal technologies:

Policy Action:

A35. Devising a public procurement policy that gives preference to indigenous products and processes.

5.3 Technology for Socio-economic De-velopment

69. There is an urgent need for developing technologies that may facilitate the economic and social development of the country by ad-dressing the basic needs of the people, and enhancing the competitiveness of country’s industries in the international arena. The Japa-nese, Taiwanese and South Korean economic miracles are noteworthy examples. Due to its defense compulsions and despite relatively small industrial base, Pakistan has succeeded in developing technology for the production of defense equipment at great cost to the nation. It is now time for utilizing the store of expertise and technical know-how available in the stra-tegic research organizations for the economic development of the country. For this purpose, a committee comprising the representatives of MoST, SPD and the industry should work out ways and means to transfer the know-how to the industrial sector. Implementation of this concept would give a large boost to the indus-trial sector and would contribute to increasing the share of manufactured goods in the export mix of the country.

70. Appropriate applications of the available

28 National ST&I Policy 2012

technology to address social development is-sues, such as provision of safe drinking water, or use of renewable energy resources for pro-viding electricity to marginalized populations in far fl ung areas can greatly improve the qual-ity of life of the people and contribute to the achievement of the Millennium Development Goals. Emphasis should be laid on conducting research in order to develop technologies for improving climate and environmental change forecasting capabilities, and predicting and handling emergencies such as earthquakes, fl oods etc. The R&D organizations should focus on developing simple technologies, which can be produced by the local industry, to address such problems. This would generate economic activity and employment in the local industrial sector and contribute to the economic devel-opment of the country. Moreover, in order to transfer the latest technologies/knowledge to the industry, technology parks should be creat-ed under universities and R&D organizations of the country so as to transform knowledge into products and services that result in socio-economic development.

71. To address the problem of rural unem-ployment (MDG: reduction of poverty) ap-propriate technologies and products based on locally available raw material need to be de-veloped, and the village industries (small and medium) should be assisted and encouraged in developing collective brands. Through its SPARK programme, which used this concept, China succeeded not only in reducing rural unemployment, but also in establishing a ru-ral industrial base, which currently produces goods whose export value is equal to the goods produced by its large industrial units. A simi-lar programme may be initiated in Pakistan, in which the organizations of the Ministry of Sci-ence and Technology would play the leading role in developing technologies and products based on the locally available raw materials.

72. Appropriate technologies for directly benefi tting common man will be developed and employed through the following steps:

Indigenous Technology Development

Policy Actions:

A36. Utilizing the know-how developed by a large pool of highly qualifi ed manpow-er in strategic organizations for indus-trial applications.

A37. Developing simple technologies for re-lieving the concerns of deprived sec-tions of society, related to water, energy, housing, hygiene etc.

A38. Taking steps to enhance the share of cot-tage industry in national economy.

5.4 Codification of Indigenous Knowl-edge

73. Pakistan’s S&T policy has not taken ac-count so far of the indigenous bases of knowl-edge and technology. The transfer of technol-ogy should be sensitive to the local knowledge base. In this regard, efforts should be made to create harmony between the technology being transferred and diffused and the stocks of in-digenous knowledge and capabilities. South Africa’s Department of Science and Technol-ogy has established the National Indigenous Knowledge Systems Offi ce (NIKO) to pro-mote indigenous knowledge in South Africa. One of the many steps taken towards this end was to design a degree in indigenous knowl-edge systems and the establishment of pilot centre at the University of Zululand for the purposes of researching, recording, codifying and spreading the indigenous knowledge. A similar initiative could prove very benefi cial for Pakistan’s economy as most of the busi-ness enterprises in Pakistan are micro, small and medium enterprises with a substantial in-digenous knowledge component in their pro-duction techniques. Research and codifi cation of indigenous knowledge may help introduce standards in this sector. The following would help achieve the required policy objectives:

Policy Action:

A39. Establishment of a body under MoST for

the codifi cation of indigenous knowl-

National ST&I Policy 2012 29

Indigenous Technology Development

edge and its effective use in production sector.

Many developing countries such as Malaysia, Argentina and India have reaped good ben-efi ts from this approach by establishing funds

5.5 Management of Intellectual Prop- to fi nance such activities. The Government of

erty Rights Regime

74. As far as Science and Technology is con-cerned, the global system of Intellectual Prop-erty Rights (IPR) is designed to protect the sci-entifi c discoveries, technological innovations, and traditional knowledge. It ensures fi nancial benefi ts for individual inventors and R&D or-ganizations leading to motivation for creativ-ity and increased interest for commercializa-tion, thereby benefi tting the society through enhanced industrial productivity.

75. The IPR regime in Pakistan has been strengthened after signing the agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs) under WTO. The Intellectual Property Organization (IPO) of Pakistan was established in 2005 and its legal position was defi ned through an Ordinance of the Govern-ment of Pakistan in 2007, as an autonomous organization under administrative control of Cabinet Division, responsible for implement-ing relevant legislations in Pakistan. The dis-semination of information about patents and copyrights and provision of legal and admin-istrative help to inventors is a well-known pre-requisite for global competitiveness. Recog-nizing the important role that IPO (Pakistan) can play in this regard, it is envisaged to keep close liaison with this organization in order to achieve the overall objective of ST&I Policy.

Policy Action:

A40. Creating the position of a Liaison Offi c-er in the Ministry of Science and Tech-nology to coordinate the IPR related ac-tivities across all R&D organizations in close association with IPO, Pakistan.

5.6 Innovation Fund

76. Encouraging the inherent innovative ca-pabilities of the people is a low cost and effec-tive way of developing indigenous technology.

Pakistan may also consider establishing an In-novation Fund, which would fi nance innova-tive capabilities of individuals, groups, organi-zations and fi rms in the private as well as the public sector. The size of the grant would be ac-cording to the categories defi ned while setting up the Fund and the Government would have a share (say 20%) in the income generated from any product or process developed under a grant from the Fund. Necessary arrangements will be made to implement the following policy actions:

Policy Action:

A41. Establishment of Innovation Fund to sponsor projects based on innovative approaches to enhance productivity.

5.7 Venture Capital and Equity Fund

77. Venture capital plays a critical role in the creation and development of small and me-dium enterprises, especially for new products and technologies. Besides providing the requi-site capital, venture capitalists can help groom small and medium-size start-ups into multina-tional concerns. Therefore, appropriate fi scal incentives should be given to attract venture capital for creating new businesses and im-prove their sustainability. Public-private part-nership can be enhanced through private eq-uity funds. Public sector organizations under the oversight of the Ministry could be given suffi cient autonomy to enter into fi nancial ar-rangement contracts.

Policy Actions:

A42. Coordination with the fi nancial institu-tions of the country to install Venture Capital schemes with public-private partnership.

A43. Devising rules concerning the availabil-ity of private equity funds to public sec-tor organizations.