by | Liz Alexander, PhD | Futurist. Author. Consultant. Speaker.
Dr. Liz Alexander has been named one of the world’s top female futurists. She combines futures thinking with over 30 years’ communications expertise to produce publications that showcase the advice of fellow futurists on issues including the future of education, and how businesses can practically benefit from working with the futures community.
Dr. Liz is the author/co-author of 22 nonfiction books published worldwide, that have reached a million
global readers, and has contributed to leading US technology magazine Fast Company, Psychology Today, and journals such as Knowledge Futures, and World Futures Review. She earned her PhD in Educational Psychology at The University of Texas at Austin.
Each year, financial publications and newspapers publish their “Top 10” lists of the world’s most technologically advanced nations: countries that successfully apply high-tech to benefit their citizens’ lives and boost their national economies. Annual reports such as the Global Innovation Index highlight those countries considered to be highly innovative. The two lists are inevitably similar, with the usual suspects appearing on both, most notably The United States, China, the United Kingdom, and India. That is perhaps not surprising; while innovation does not require technology to thrive, technology is one of the most tangibles ways in which innovative approaches practically transform lives.
These Top 10 lists are not only dominated by the “big guns,” however, and it is from the smaller countries featured that some key lessons can be learned—not least the vital role government plays in their success. The ease of doing business being a primary factor.
The World Bank’s annual Doing Business report ranks 190 global economies. It is perhaps no surprise that technologically backward countries like Bangladesh (rank 168); Cambodia (144); Tanzania (141); Mozambique (138) and Uganda (116), show up poorly compared with these smaller countries that have carved themselves successful technological niches globally:
Clearly government has an enormous role to play in creating the conditions in which countries can become technological and innovative exemplars. But how did some of the smaller Top 10 winners discover what they would be technologically competent in? How did some forge strong economic pathways despite being disadvantaged by having few, if any, natural resources as is the case with Singapore and South Korea, plus Japan if you consider what they have remains largely untapped ? These questions led me to discover a connection that appears to receive little or no attention.
Local to Global
Some years ago, I interviewed a number of highly successful Indian entrepreneurs for a book co-authored with the Director of the Founder Institute in Bangalore. What we discovered in each case was that these stories of success were underpinned by the founders’ desire to find innovative solutions to problems that personally impacted their own lives, and also positively benefit other people’s. Their innovations ranged from a do-it-yourself device that allows small and medium sized businesses to keep track of their energy consumption, to the world’s first intelligent and adaptive web-based tutor for K-12 students.
A similar pattern emerged among some of the Top 10 exemplars, where governments solving serious national problems led to those countries developing expertise that garnered international renown.
Depending on your criteria, only 10 to 30 per cent of Japan’s land mass is habitable and major cities like Tokyo and Osaka are situated over 500 km apart. The country also has an aging population and declining workforce. Japan therefore had two intractable problems: how to facilitate movement between distant workplace metropolises, and how to boost productivity with fewer humans working. Japan, not the U.S., leads the world in serious technology, according to an article in Forbes. I would argue that overcoming the abovementioned problems has largely been responsible for that achievement.
For example, high-speed bullet trains not only connect workers to their places of employment, but a focus on efficiency means they keep to schedules other rail systems can only dream about. Out of this national need for an efficient commute emerged a niche export opportunity: punctuality (the average delay of these Shinkansen is said to be 36 seconds). As a result of their technological excellence, Japan’s rail consortia have landed contracts with countries including the Philippines, Taiwan, and the United Kingdom.
Japan’s reputation in the arena of robotics, which originally grew out of its post-WW2 need to increase efficiency and reduce costs in the car industry, is now helping to solve its declining population problem. After automating most of their heavy manufacturing and warehousing processes far earlier than most other countries, Japan ended up supplying over 50 percent of the world’s industrial robots in 2017. Today, automated chefs, therapy and companion robots, together with short-range autonomous vehicles, are helping Japan to meet its stated mission to become “the very first country to prove that it is possible to grow through innovation even when its population declines.” In a blog post entitled Who Will Win the Global Race on AI and Robotics , the International Federation of Robotics stated that “Japan and Europe are leading in robot development and supply.”
The same national-to-international pattern arguably helped The Republic of Korea emerge from being a relatively poor, agricultural nation to earning a global reputation for hightech innovations within a generation. This is the country that brought us the MP3 portable player, the first touch-screen mobile phone, nano 3-D printing, the Smart Transport Card, and smart prosthetic skin. All of which, according to one commentator, was “a product of necessity.” Speaking to German media company, Deutsche Welle (DW), Kyle Ferrier, Director of Academic Affairs and Research at the Korea Economic Institute of America (KEI) is quoted as saying , “Korea has had to make its own path in a region where it competes with China’s low labor costs, and Japan’s hightech, capital-intensive industries.” Once again, inherent, uncontrollable factors appear to have had a bearing on what the Korean government and businesses chose to focus on, which indirectly led to the Republic’s technological standing in the world.
The same appears true for Finland, regularly found in lists of the most innovative, technologically focused countries. Finland’s far northern location and extreme weather conditions meant it had some of the highest energy consumption in the world. As the Business Finland website puts it, “Our Arctic location and resources have shaped the way we think, work, and innovate.” When Finland passed a law imposing a range of taxes on cars linked to their fuel consumption, the Finnish car industry had to innovate around emissions and cost. The country is now considered one of the greenest countries in the world, produces “the largest number of high impact cleantech start-ups relative to GDP,” and “tops the
ranking in generating the most clean energy options for the world,” according to a study by the Information Technology & Innovation Foundation . Thanks to this global reputation, carved out of a national imperative, Finnish companies are now in demand to help with cleantech and sustainability projects worldwide.
Like the Indian entrepreneurs who drew from personal imperatives to move from idea to sustainable business, one answer to the question of how to become a renowned hightech nation appears to be: what problems beset us locally that could lead to a reputation for global knowledge and expertise?
Show Me the Money!
Key to moving towards technological superiority is R&D— which requires serious funding. Here again, we see how the Top 10 countries beat out their lesser competitors in R&D spending as a percentage of their GDP. While most countries around the world spend a fraction of one per cent, the top investors—according to the World Bank’s list –are also global innovation and high-tech exemplars (2018 figures, unless otherwise stated):
let’s take a closer look at one important source of technological innovation and how some of the smallest renowned countries facilitate the ease with which start-ups can thrive.
Singapore has a well-earned reputation for business friendly policies. In the Doing Business ranking (#2 overall), Singapore sits at #4 for the ease of starting a business in the city-state. As a basis of comparison, China is ranked #27 on this criterion, with the United States #55.
Singapore facilitates the establishment of high-tech start-ups because it has “one of the most technologically advanced IT infrastructures in the world.” Its Intellectual Property (IP) regulatory framework is not only stringent but strongly enforced, providing the confidence companies need to ensure their R&D efforts are well protected. The island nation also has the kind of diverse, well-educated, highly skilled talent that companies look for when deciding where to establish a foothold in South East Asia. All of these factors, together with a significant financial commitment by government, are helping Singapore to move beyond its established reputation for fintech towards a start-up ecosystem that now embraces artificial intelligence (AI), robotics, and health & life sciences.
As reported by EDB Singapore, the Singapore Economic Development Board in collaboration with Hewlett Packard Enterprise (HPE) launched InnovateNext to “support local start-ups by giving them access to HPE technology as well as engineering and consulting expertise.” This also happens in Switzerland, a country consistently listed number one in WIPO’s Global innovation Index, where ICT firm Swisscom provides start-ups with the financial and infrastructure backing they need to help develop a thriving ecosystem for innovation and entrepreneurship, through PirateHub.
Now for the Bad News…
Of course, lessons come not only from other countries’ successes as technological innovators but from examining the “unintended consequences” of their otherwise good intentions, whether experienced currently or potentially in the future. These range from the dominance of “chaebols” in the Republic of Korea, and Singapore’s over-focus on research to the detriment of marketable products, to concerns about becoming “two-nations-in-one” that has raised a number of political, economic, and social challenges for some technologically superior countries. Then there is the question of education…all of which I will address in my next article.
This is Estonia, a small country in north eastern Europe that was part of the Soviet Union until 1991. Post-independence, the government determined to kick-start its new market economy by going fully digital. Today, 99 percent of public services in Estonia are available online 24/7, which they say saves them 2 percent of GDP each year in salaries and expenses. Its reputation as “one of the most tech-savvy countries in the world” has led to declaration that, “Estonia might offer a blueprint for how to build a digital society,” not least because they had to learn the hard way about cyber threats.
In 2007, the country suffered over 10,000 cyberattacks and has subsequently been warned that, “online databases and programs like e-Residency have made Estonia vulnerable to dirty money and sanctions breaches.” In the wake of that experience, the government undertakes regular cyber defence drills, stores copies of all its data in Luxembourg, and reminds its citizens about the importance of “cyber hygiene.”
Becoming a fully digital society has it challenges, arguably best anticipated in advance. Sadly, the second and third order effects of good intentions are rarely addressed up front. Indeed, some unintended consequences are quite insidious.
Big Is Not Always Best
Take the current effect that the Republic of Korea’s “chaebols”—major conglomerates like LG, Samsung, and Hyundai—is said to have on entrepreneurship in that country, for example. Chaebols have been dominant ever since they were encouraged to invest heavily in R&D in the mid-1960s by a government that protected them with advantageous policies and incentives. Indeed, the collaboration between industry, government, and the academic community has been at the centre of the Republic’s stunning success. But some question whether this dominance is having a detrimental effect on the country’s small and medium sized businesses (SMBs), that are fighting to carve niches for themselves in areas such as biotechnology and artificial intelligence. These small-scale entrepreneurs benefit from the excellent high-tech infrastructure, of course, and can get government funding. However, as Marcus Noland, director of studies at the Washington-based Peterson Institute for International Economics pointed out to Bloomberg: “If you’re a scientist or engineer at Samsung Electronics and you come up with some brilliant new idea, you don’t quit and start pitching your ideas to venture capitalists and set up your own firm; you go to management within Samsung.” That’s quite different to what happens in the United States where Steve Wozniak worked for Hewlett-Packard before leaving to co-found Apple Computer, and many of the entrepreneurs I know in India who used to work at Wipro have founded companies employing tens and sometimes hundreds of people.
Whether concerns about the Republic of Korea’s chaebols are valid or not, there is always the possibility of inadvertently suppressing a wellspring of innovation within SMBs unless government does more to support those who are willing to take a risk on setting up their own entrepreneurial ventures, rather than stay with big companies.
Zombies and Gazelles
Supporting start-ups is something Singapore has earned a reputation for, as evidenced by having the world’s highest rated start-up ecosystem according to a survey by Nestpick. But again, there are unintended consequences to consider.
A National University of Singapore Entrepreneurship Center (NEC) longitudinal study conducted in 2017 found that few high-tech start-ups in the city-state are “gazelles,” i.e. generate fast, profitable growth. Almost 57 percent of them find it hard to scale and create employment and so are often referred to as “zombie start-ups.”
We might look at this as both a risk-averse and research obsessed issue. Excellent funding allows over half of Singapore-based start-ups to survive five years or more, which exceeds the percentages found in the US and UK. But according to NUS Enterprise director Dr Wong Poh Kam, “There’s a no man’s land where the work can’t be funded as research anymore but there’s no product ready for market.” In other words, for R&D to pay off there needs to be as much time spent on the development of marketable products as there is in conducting research. This is something that funding entities—whether government agencies or private companies—need to build into their conditions for financial support in order to avoid making the same mistake.
Two Nations in One
One of the biggest dangers—if that’s not too strong a word—in the desire to become a high-tech nation is what some countries are already experiencing: a “high-tech versus the rest” scenario.
Obviously, education is a key issue but it’s not a panacea in its traditional form, as I will explain shortly. As one Middle Eastern commentator pointed out, bemoaning the fact that while his country receives accolades for being a “start-up nation,” it has one of the highest poverty levels in the OECD, governments need to support more mid-level industries rather than get stuck only on high-tech behemoths and startups. Otherwise there is the risk of a growing societal chasm between those engaged at the cutting edge of innovative technologies, earning two, three, or even four times more than workers stuck in “backward” traditional industries with low pay and no chance of social mobility.
Consider Ireland, a country that has “its sights on becoming a global innovation leader, driving a strong and sustainable economy.” As such, it has made significant gains in attracting high tech and life sciences companies to its shores. Ireland’s ICT services exports have also helped boost the country to the Top 10 within the European Commission’s 2020 European Innovation Scorecard. The average annual ICT salary in Ireland is around €61,000 – second only to those offered within the finance and real estate industries (€64K). Those working in manufacturing jobs can expect an average of €46K a year; construction €39K, retail trades €30K, and food services €17K. Looks familiar?
There’s a no man’s land where the work can’t be funded as research anymore but there’s no product ready for market
Dr Wong Poh Kam
Director NUS Enterprise
In the journey to become a high-tech nation, ongoing training that introduces workers to moderate levels of technological implementation but doesn’t overwhelm their abilities and motivation is hugely important. Otherwise too many citizens are at risk of being “left behind” creating, essentially, two very different nations in one.
Which brings me to the thorny, often backward arena of education.
It is no longer enough to teach students to learn passively, know how to find the “right answer,” and earn a specialist degree that shows they can pass exams but offers employers little in the way of applicable skills—not least, critical thinking.
Learning for the 21st Century
I have long been an advocate of project-based learning. While working at The University of Texas at Austin I developed and taught an elective course for college juniors and seniors that required them to act as a consulting firm and address real-life problems facing local non-profit organisations. Post graduation they used that experience, and the glowing references they received from their “clients,” to walk into good-paying jobs. They certainly had an advantage over their contemporaries boasting a 4.0 GPA but with no practical skills or experience to offer an employer.
So, it did not surprise me to see a correlation between those countries that consistently rank in the Top10 global technological innovation lists and those featured in the Worldwide Educating for the Future Index. Finland and Switzerland are the two top countries in the latter, and both are credited with producing some of the most highly skilled workers in the world. That’s because of the way they are educating their young people to be employable in today’s complex work environments. It is no longer enough to teach students to learn passively, know how to find the “right answer,” and earn a specialist degree that shows they can pass exams but offers employers little in the way of applicable skills—not least, critical thinking. Those countries now lauded as high-tech nations long ago realised they needed to teach their young people not only how to think differently—and for themselves—but how to do things.
According to the World Economic Forum, Switzerland takes a very vocational approach to education (VET): “From age 16, most young people stop full-time education, instead rotating between school, inter-company courses and hands-on experience in a workplace setting for three-to-four years, receiving both a wage and a crucial introduction to the world of work.” Just under a third of Swiss companies participate in the VET system and, “credit it with being a major contributor to the continuing vitality and strength of the Swiss economy.” Unfortunately, too many countries confuse schooling with education and focus on the former to the detriment of students who then flounder when faced with the complexities of the real world.
Two thousand kilometres to the north east, Finland maintains its global reputation for educational excellence—it’s considered the best country for teaching critical thinking and digital skills—thanks to innovative approaches like Phenomenon-Based Learning or PhenoBL. While not doing away with subject-specific classes altogether, Finnish educators offer at least one PhenoBL module a year that better prepares students to join multidisciplinary teams, take initiative, and know how to ask context relevant questions in an increasingly dilemma-laden world. For example, one realworld, meaningful—and very relevant—investigation might involve asking, “How do we stop the spread of pandemics?” which would require an exploration of biology, chemistry, maths, history and even geopolitics, in order to inspire answers.
In Finland this approach starts early: in kindergarten children “spend their time playing, exploring, and learning to learn.” That sets them up for a lifetime of motivated self-education and positions them to be highly employable citizens within technologically innovative environments.
When it comes to education there should be no “unintended consequences.” Because there are sufficient case studies and global exemplars to show that sticking to old, wornout, established educational practices isn’t going to cut it if a country is truly committed to becoming a high-tech global powerhouse. For which the likes of Estonia, Finland, Singapore, Switzerland, along with many other small countries, are already ahead of the game.