Open Forum

New Delhi, 3 July 2019

Innovation & R&D Focus

WILL IT REVIVE ECONOMY?

By Dhurjati Mukherjee

There is widespread discussion and debate on how to revive the country’s economy, what with preparations afoot to present the Budget. It goes without saying that in gearing up the economy and boosting manufacturing activity, innovation must be seen as the key. In fact, innovation is the basis for success, whether in industry or agriculture as this leads not just to an increased productivity at a low cost but also ensures economies of scale. Moreover, the quality of products based on sheer innovation assures their quality as well as an increased acceptability in the international market.

Though India ranks third among the most attractive investment destinations for technology transactions in the world, the government has reiterated that technology is a strong priority area with special focus to make it people science-centric and key element of economic growth is intrinsically related to development of appropriate technology. But it must remember that not just big units, but small and medium ones need to flourish in large numbers across the country with the right innovation and technology to meet global standards.

It is an admitted fact that the country is among the topmost countries in the world in the field of scientific research, positioned as one of the top five nations in the field of space exploration. The nation has regularly undertaken space missions, including missions to the moon and the famed Polar Satellite Launch Vehicle (PSLV). India is among the world’s top five scientific powers and the Indian Space Research Organisation (ISRO) will launch its first Indian human mission by 2022 or even earlier.

While the need for innovation is widely felt across the globe, including in India, the required impetus unfortunately has not been given in most areas despite the Government’s ‘Atal Innovation Mission’, launched in 2016, which sought to focus on scaling start-up incubation centres and promoting innovation culture among schoolchildren. And, though the focus on innovation seems to have helped India improve its ranking in the Global Innovation Index, from 81st in 2015 to 57th in 2018, investment towards innovation in research and development is very low compared to an economy of India’s size.

In comparison, whereas India invests 0.67 per cent of GDP in R&D, mature economies say such as the US or Japan, invest around 3 per cent of their GDP. Thus, it could be said there is lack of world class research infrastructure in the country. However, there are projections that engineering R&D and product development market in India is forecasted to grow at a CAGR of 20.55 per cent to reach US $45 billion by 2020 from US $28 billion in FY18.

In recent years, the government promoted research parks (RPs) and technology business incubators (TBIs), which would promote innovative ideas till these become viable commercial ventures. India is now the world’s third largest technology start-up hub with incorporation of 1,000 new companies in 2017.

The first issue that the Centre needs to work upon is the strengthening of its industry-academia linkages. At least the major universities in the country have to become the hub of research and innovation. Academic institutions could play a significant role in knowledge creation and its transfer. However, even if the criterion of knowledge creation is fulfilled to some extent, knowledge transfer is rather poor in the country.

One may mention here, that for the past two-three decades we have been hearing about lab-to-land transfer of technology, especially in the field of agriculture. Though some headway has been made in the past decade, primarily due to efforts of IITs and agricultural universities, the results in some regions of the country such as east and north-eastern parts are not quite encouraging. This has resulted in productivity not improving to global standards while agricultural diversification is not taking place to the extent necessary.

The lack of proper linkages between industry and academia is the lack of a collaborative strategy where the State governments have a vital role to play. Hardly a few universities have an Intellectual Property Rights (IPR) policy. There is, therefore, a lack of clarity on who owns the IP and how will information be shared between parties.

There are some aspects of the IP regime where the conflict between government and industry is manifest. Most of these pertain to the pharma sector. Section 3 (d) is also criticised for setting higher standard for patentability than mandated by Trade Related Aspects of Intellectual Property Rights (TRIPS). This aspect needs to be reviewed and a pragmatic approach framed.

India is aggressively working towards establishing itself as a leader in industrialisation and technological development. Significant innovations in the nuclear energy sector are likely as India looks to expand its nuclear capacity. Moreover, nanotechnology is expected to transform the Indian pharmaceutical industry. Apart from these highly sophisticated areas, there is need for innovation and technology to boost up the electronics sector as also ensure value addition in micro, small and agro-industrial sectors. 

While there is no dearth of scientists in the country and technology that helps manufacturing, especially in labour-oriented and export sectors would have to be given special support and attention. The lack of R&D in the private sector unlike other countries is a cause of concern and the government may evolve means to ensure that this sector keeps a part of the profits for technology upgradation.

Meanwhile, a recent report by Nasscom and consulting firm Zinnov found that engineering and R&D (ER&D) services and products are the fastest growing segments of the tech industry in India today. Such services and products constituted $36 billion of the total revenue of $177 billion of the Indian tech industry.  It was encouraging to learn that about 5 per cent of R&D is globally sourced and India has been the biggest beneficiary of that, accounting for 30 per cent of the total in 2018, up from 28 per cent in 2017.

The point that needs to be made here is that R&D has to be made available to not just big firms in the engineering, automotive and electronics sectors but to small ancillaries so that these can grow in a big way, increase productivity and improve quality standards. The ‘Make in India’ programme can become a reality only with the growth of innumerable micro and small sector firms spread across the country.

With experts harping on the need to move out, at least a part of the work force from agriculture, and job creation emerging as a big challenge, innovation and modernisation, specially of the small sector is imperative. However, innovation and adoption of technologies in the farm sector is equally important to increase productivity and ensure diversified products of quality. Pulse imports have to be totally stopped as also that of rapeseed oil through increased production in the country.

The attention of both the government and the private sector needs to be focused on research while ‘lab-to-land’ slogan has to become a reality and then only can innovation become a reality. Can the government not fix any guideline in the regard? The earlier it is done, the better as innovation could be the tool that will help gear up the economy.---INFA

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