On Funding Projects from the Industry
STEP: Till now, mostly you were funding projects in the academia. Would you be looking at funding projects that are directly initiated by the industry?
QS: We are supposed to fund projects submitted by the industry. Our proposal can be initiated by even an individual. But, being an entity that funds public money, the longevity of the institution to which we are giving money is very important to us. An individual can take the money (from us), work for a little while, and then disappear. What do we do then? Universities don’t disappear. They can provide longevity and credibility to the project. And, it is not (just) longevity for the length of that project but even after that.
We don’t fund projects just for the sake of those projects. We fund projects to create an eco-system as well. You don’t plant a seed on a land that may be abandoned or may be sold for building a commercial building and the tree will be cut down even before it has a chance to get 5 feet high. So, when industry comes to us, we say, it may be better for you if you come through a university channel.
That’s not a (strict) condition, however. We have also funded industry proposals directly. Actually, we very clearly say that we are a pre-angel fund. We fund creation of technology. But, we are finding out that the challenge of monitoring them can at times become difficult. A lot of these companies start to take this funding as work-for-contract. They say, ‘oh, you asked us to do these things and we’ve done these things, end of story and we’re done’. When you are trying to create an eco-system, and you’re not even asking for any money back, you want the sort of vision where the entity that gets the money runs with the ball. It doesn’t matter whether it was a 100m dash or a marathon; if you have gas, just keep going.
STEP: You talked about longevity and stability but, in a sense, innovation is counter to that. Fostering innovation may mean saying, ‘okay, here’s a smart guy, he has a really smart idea, let me give him some money to go build something’.
QS: We do exactly that. We just say, please park in a university so that there is some stability. You know, smart guys can be very fickle too. [Laughter] If the smart guy walks out, we get totally stuck. If we were VCs, and it was private money, we could say, okay, we were going to lose ninety percent of the projects anyway. This is one of the ninety percent. Ten percent will take us forward. But, with the public funding and government level accountability, we can be taken to task for funding such projects.
Whereas, if the money goes to a university, and a professor is involved, then if nothing else the professor becomes the archive. If the smart guy moves on to the next smart idea, some student or another entrepreneur could come and take the idea and developed IP forward.
STEP: So, what’s the motivation for industry then to get professors up to speed?
QS: One of the ways I motivate industry to partner with the academia is that I give them the argument that suppose you get Rs. 15-20 million from us and suppose the solution that you create is a hit, and suddenly your product is bought by General Electric or Microsoft or some consulting company. Now, the buyer says, we want to take your company to a 300-people development centre. Where are you going to get 300 people from? The idea is that, if an entrepreneur hosts his project in a university and gets a professor and a few students involved, he may not get 300 students by the time the project is completed but at least you would have sown the seed in the university and you will be two years ahead in creating this pipeline. So, a very big positive effect for the industry here is that the human resource developed by universities is in line with industry’s requirements.
STEP: Shouldn’t we make a technology park or an incubator with every university?
QS: That’s exactly what we’re doing. The only difference is that we believe that building a building is not necessary. In several cases, the incubation center of the university is about 3 miles away in a rented house. If the university has space, we compensate the university with rent. If the university does not have space, then the industry-academia joint project rents an office and we pay for electricity, air-conditioning, etc.
STEP: Do you think that the industry that is generating this revenue, which is the telecom industry, has a right to demand back some return for this money? Or, do you think those are two decoupled things?
QS: I think they gain a lot by wealth generation and improvement of standards in the country. If the improvement is more suitable to their goals, it’s even better. So, as any entity we have to pay attention to our financier. Some of the thematic areas for research and development, for example, the center of excellence for telecom operations, are of interest to the telecom industry. There is also a significant probability that education through ICT will light up their network as a lot of that activity may have to happen through mobile phones.
STEP: The Fund’s vision states that you want to create a knowledge-based economy. Historically, economies have evolved from agriculture-based to post industrial-revolution industrial economies, and then recently to knowledge-based economies. In a sense, we are still largely an agricultural economy. Does it make sense to jump directly from an agricultural economy to a knowledge-based economy?
QS: I think there’s significant leap-frogging that’s happening today, for example, our land line connections are 4 million, and our mobile connections are 60, 70, 90 million depending upon what interpretation you go after. Like I talked about before, one of the key things that I really want to push for is to come up with scalable and sustainable solutions for delivering high quality education by using ICT technologies. That you can do without having to go through the industrial age.
Actually, I think a significant amount of technology management models have to be re-thought. I am not an expert on it, but when I hear statements from people who say that they are experts on technology management and technology transfer, and they go through traditional models, I tell them that tradition has been thrown out by telecommunications.
STEP: When you fund research, who owns the intellectual property (IP) that is produced?
QS: We own the IP. The Fund owns the IP. But, the grantee has an irrevocable and perpetual license to commercialize, further develop, sell, and productize the intellectual property. The only thing is that this license is non-exclusive; that is, the grantee cannot stop another party from using the developed technology. If somebody else wants this technology, we have to give it. But, realistically, our goal is to generate wealth in Pakistan. So, if you have taken the technology forward and created a significant company leveraging the developed technology, we are not going to — at least as long as I am the CEO — actively look for people who can use this software and bring you down. After all, we helped create your organization.
Future of the Fund
STEP: Do you think that the Fund is under some sort of risk or pressure to spend? And, if yes, where does the pressure come from?
QS: Oh yeah, we are very much under the pressure that we are not funding enough. This pressure comes from very well-meaning political managers, and I really mean well-meaning. A bureaucrat at a certain level stops looking at the process we are following and starts looking at key parameters from his macro view. And one of those parameters is the amount of funding that we are being able to disburse while satisfying the quality constraints. Similarly, from (the viewpoint of) political management a key parameter is the impact that we are creating.
STEP: So, is there a chance that the Fund might lose some of its funding and the money channeled somewhere else?
QS: Could be. But, I don’t think that’ll be a good thing to do because, if we were allowed to build buildings and buy equipment for a university, we could spend a billion rupees in six months. We could spend four billion rupees in 6 months.
STEP: What about some of the other directions that the Fund is taking? I know the Fund also has a scholarship program.
QS: Yes, we are funding 4-year scholarships for deserving students of rural area public schools. At this point, there are over a 1000 students in the program who are going through FAST, NUST, GIKI, COMSATS, IIU, and other universities. The students who entered the system in 2006 are becoming seniors now, and at least at FAST, since the first batch was only at FAST, they are at the top of the class.
STEP: What are some of the success stories of the Fund?
QS: One of the success stories that I am really proud of is the open-source software engineering course developed by Dr. Fakhur Lodhi at FAST-NU Lahore. In this course, the instructors select an open-source software, and the students become part of its support network. They have to either add a feature or fix a bug that the entire open-source community linked to that software has to accept.
The course has been a real success, so much so that this year a team from FAST got accepted at Google’s Summer of Code program (which is very competitive). Next year, their goal is that every kid who goes through this course to be accepted at Google.
Then there’s a project at FAST-NU Islamabad where they are working with lady health workers and they have developed the whole interface for neo-natal care. That has actually led to a briefcase-sized device which has equipment to measure temperature and blood-pressure, etc. This device has become so popular that a company that does work for UN and USAID throughout Africa and Asia wants to buy it.
Then, there’s HL7, Health Level 7. It is a standard for transferring medical data between applications. Its latest generation, which is probably version 3, is being developed at NUST in open source and already a lab in Pakistan has adopted it where they are using it to transfer data between their centers in Lahore, Islamabad, and Karachi.
STEP: Are you hoping to get the Pakistani diaspora involved with the Fund?
Yes, absolutely. But a problem that I have at times with the diaspora is that they say ‘I make $150,000 a year, so if I give you my time will you give me a percentage of my salary?’
I go as far as saying, look we will get you a solution developed, and you build a Google on top of it and become a billionaire. We would not ask for a single penny back. But, for now, if you spend time in Pakistan, may be, we can compensate your time in Pakistan at a Pakistani level (but not beyond that).
STEP: Well, we hope that there’s enough good will for people to contribute voluntarily, be it as program managers or reviewers or mentors. Of course, they cannot be compensated based on their US salaries. Thank you for your time. We hope that our readers will find this conversation just as interesting as we did.
QS: Thank you, for giving me an opportunity to share my thoughts.