South Asia

There have been some significant improvements in education since 2010 in South Asia, along with more modest progress in developing national innovation systems. In both areas, low levels of public funding have been an obstacle to development but, in the case of education, government efforts have been supplemented by projects funded by international donor agencies. Despite gains in net primary school enrolment, uptake to secondary-level education enrolment nevertheless remains relatively low: the most populous countries, Bangladesh and Pakistan, have reported levels of only 61% (2013) and 36% (2012) respectively. Universal primary and secondary education is only the first step towards developing the requisite professional and technical skills that countries will need to realize their ambition of becoming a knowledge economy (Pakistan and Sri Lanka) or middle-income country (Bangladesh, Bhutan and Nepal) within the next decade. Building an educated labour force will be a prerequisite for developing the high-value-added industries needed to undertake the desired industrial diversification. Education planning will need to include investment in infrastructure, programmes to improve teaching skills and the development of curricula that match skills with employment opportunities. In order to exploit a broad spectrum of opportunities, national innovation systems should be designed to enable both the development of local capacity in research and innovation and the acquisition of external knowledge and technologies which can generally be found in locally operated, technologically advanced firms. Whereas the majority of industries in South Asia are not yet technologically advanced, there are nevertheless a few local firms that have become internationally competitive, particularly in Pakistan and Sri Lanka. Given the heterogeneity among firms in terms of their technological innovativeness, the national innovation system will need to be sufficiently flexible to support their different technological requirements. Whereas local innovation systems are usually designed to support R&D-led innovation, countries that are able to capitalize systemically on the accumulated capabilities of high-performing local firms and implanted multinationals to nurture their industries are likely to generate broader innovative capabilities.