The Fiscal Year 2022-2023 federal budget of USD 14 billion dollars is the largest event and aims to achieve economic growth of eight percent and inflation control by seven percent. The budget has allocated $ 1.6 B (NRs 196.4 B) to the Ministry of Education and Science and Technology (MoES&T with an increase of nine percent funding than the previous year but it is not enough.
In the budget, Education and Science and Technology funding remained short of the expected increase to 15 percent and 0.75 percent and remained at 11 and 0.45 percent of GDP. The education investment emphasizes digitization of the education sector, broadband internet facilities in community schools, educational TV programs for distance education, two years loan of up to Rs 80,000 to students for laptops in secondary/ high schools with one percent interest, and free SIM card under digital policy 2019 framework to make Nepal digitized (all information in digital format) by 2025. The essence of the budget for Science and Technology’s focus is on innovation and better coordination of research agencies but no concrete vision and roadmap are spelled out.
The importance of S&T is reflected in the percentage of GDP spent. India has increased spending to 0.7 percent of $2.6 Trillion (T), China’s two percent of $ 17.3 T, Japan’s 3.4 percent of $ 5.2 T, and the US’ 2.7 percent ($ 23.7 T) while Nepal spends lowest 0.45 percent of $30B. The performance of S&T is reflected by R&D expenditure spent to develop, design, and enhance innovative products, services, technologies, or processes and Nepal’s R&D expenditure remains lowest at 0.3 percent compared to the world average of one percent. Due to the COVID crisis, the importance of science, technology, and innovation (STI) has increased and is become a necessity even for the least developed countries.
As part of the Sustainable Development Goals (SDGs) Agenda 2030, countries have pledged to foster and encourage innovation (SDG Target 9.5) with increased public and private spending on R&D. UNESCO Institute for Statistics (UIS) reveals that the global spending on R&D has reached a record high of almost US$1.7 trillion. Out of it, 80 percent of spending is being held by nearly 10 countries. R&D spending also drives private sector growth and job creation. In Nepal the private sector R&D spending is dismal and the government budget is not sufficient to create the expected impact. Many developing nations are luring foreign direct investment to their R&D but Nepal’s effort is poor.
Global Innovation Index (GII) innovation expenditures is one of the indicators linked to R&D spending. In Asia, China’s, India’s and Korea’s R&D expenditure grew 8.6 percent, and 5.5 percent and 8.3 percent higher than Europe and USA. Private-sector funding drove much of this growth in innovation expenditure and the top 2,500 R&D companies invested 823 billion euros (EUR) in R&D in 2018, an increase of 8.9 percent. In the GII index, China, India, and Korea stand in fourth, 10th and 48th positions respectively while Nepal is ranked at 95th position. Experts hold the view that the COVID impact has slowed down global innovation spending but is expected to remain in positive mode with strong innovation potential beyond 2022. Universities play a key role and an important conduit for the industry in technology partnership and transfer which is a missing link in Nepal’s case. Universities are also ranked based on innovation and in Nepal, Tribhuvan University is the only recognized university in Nepal ranked at 1000.
What should be done?
At least 0.75 percent of GDP should be allocated for the S&T. A separate Ministry of Science and Technology should be established to streamline S&T activities.
There is a need for separate budget allocation for the S&T to at least 0.75 percent of GDP and a separate Ministry of Science and Technology established to streamline S&T activities. This year MoES&T budget tries to woo technology development, innovation, digitization, and entrepreneurial activities with the following priorities: 100 percent youth literacy, connectivity of education to skill-labor-employment- production-market-business knowledge, and a new curriculum for skill-based training to self-employment and self-reliance after secondary level education. Likewise, there is a Presidential Educational Reform Program (Rs. 8 billion 300 million), for the technical infrastructure of 1,200 community schools to enhance quality education through teacher capacity development, functional research, teaching, and learning-based project work.
The budget also says that the Information Technology Academy (ITA) of the international standard should be established with a public-private partnership to retain overseas students and a Centre of Excellence should be established at Tribhuvan University to integrate teaching and learning in higher education research, apart from easy visa facility for foreign professors. An R&D coordination committee with executive heads of Tribhuvan University, Kathmandu University, Nepal Agricultural Research Council, and Nepal Academy of Science and Technology to coordinate research agencies, promote research cooperation and partnership with the National Innovation Centre and other research agencies.
The budget aims to create a multi-purpose planetarium park for knowledge in astronomy. Science, Technology and Innovation Council (STIC) is to foster scientific research and innovation.
The budget aims to create a multi-purpose planetarium park for knowledge in astronomy. Science, Technology and Innovation Council (STIC) is to foster scientific research and innovation. Madan Bhandari Science and Technology University has been allocated Rs 180.4 billion for the collective development of education, science, and technology. Other priorities include Rs 13 billion for Industries and Startups focusing on “Made in Nepal” and “Make in Nepal”, Virtual Trade Shows, a five percent interest subsidy to support SMEs and MSMEs, and lease-free land to the innovators, e-commerce policy. Women-run businesses, commercial farming, undergraduate student access to Rs 25 lakhs seed fund with a maximum of five percent interest, Rs 25 lakhs to start-up (with one percent interest), simplification of registration, renewal, and other services with free-of-cost on-door policy and Rs one billion challenge fund to attract FDI into the start-up ecosystem are among other priorities.
For STI, Nepal needs both top-down and bottom-up strategy and funding, a coordinating agency at federal and state levels, a Prime-Ministerial advisory committee comprising of world-renowned scholars for policy direction, innovation fellowship through the 1000 talents program, fellowships for high achievers in schools and Universities, 1000 PhD and post-doctoral fellowships at state and federal levels and a National Innovation Hub for start-ups. Similarly, there should be a cooperative R&D program in energy, environment, manufacturing health, agriculture and waste recycling to link Academia and Industry. There should be a Matching Fund for overseas investment and collaboration, a scientific attaché at Nepal diplomatic missions to lure foreign investment if we wish to see S&T impact on socio-economic prosperity and Nepal’s contribution to global innovation in the future. Nepal needs to spend at least 0.75 to one percent of its GDP on STI to achieve the above goals.
The Non-Resident Nepali Association (NRNA) could be a knowledge investment partner and act as a conduit between Nepal and Global R&Ds to help mobilize diaspora knowledge, expertise, and experience in technology transfer, exchange of scholars, and promote collaboration. Nepal needs a strong push and outreach to global STI policy to benefit from future innovation to the socio-economic prosperity of the country. It is never too late to do so.
Dr Raju Adhikari, a principal scientist based in Australia, is a founding chair of the Nepal Science Foundation and SKI Committee, Non-Resident Nepali Association, and International Coordination Council (ICC).