R&D and Innovation in India

R&D and Innovation in India Status, Emerging trend and challenges

R&D and Innovation in India Status, Emerging trend and challenges

Indian Economy Prof. Sthanu R. Nair

Submitted ByPGP 18 Section B Group 3Kaushik ChandrashekarPGP/18/082Praveen GPPGP/18/099Samip KhandelwalPGP/18/104Shahinsha SPGP/18/107Vineet Prashant ToppoPGP/18/116

Research & Development (R&D) and Innovation:R&D: Investigative activities that a business chooses to conduct with the intention of making a discovery that can either lead to the development of new products or procedures, or to improvement of existing products or procedures. Research and development is one of the means by which business can experience future growth by developing new products or processes to improve and expand their operations.Innovation: The process of translating an idea orinnovationinto a good orservicethatcreates valueor for whichcustomerswillpay.

Difference between R&D and Innovation R&D is a form of Innovation R&D is focused on getting a desired output R&D involves investment in discovering new technology and increasing capacity of a firm Innovation can happen across the value chain of a company Innovation has a more wide range Innovation does not necessarily have to be systematic Innovation involves improving the method of working/producing goods

Indian Scenario: R&D and Innovation Innovation is a key driver for the growth of Indian economy Since 1991, Emergence of a number of Knowledge-intensive manufacturing and service industries Higher education sector in India is not a source of technology for the industry Pharmaceutical Industry: Scientists from public institutions becoming entrepreneurs (e.g. IDPL , Dr. Reddys) Indias R&D spending as a % of GDP is just 0.9% Out of these, bulk of Indian R&D is done by public sector 70-80% i.e. 0.72% of GDP R&D spending by private sector is only 16-20% i.e. 0.18% of GDP Number of research articles published by India in 2012 is only 30, which is very low compared to countries like Japan, China, Australia, etc.

Global Comparison

Indias R&D spending as a % of GDP is just 0.9% Out of these, bulk of Indian R&D is done by public sector 70-80% i.e. 0.72% of GDP R&D spending by private sector is only 16-20% i.e. 0.18% of GDP Number of research articles published by India in 2012 is only 30, which is very low compared to countries like Japan, China, Australia, etc.

Comparative Picture

Major Challenges1) Budget allocation for Research saw series of deferment:Science and Technology Policy of 2003, unveiled by then PM Atal Bihari Vajpayee, declared that the country's investment in s&t would be raised to at least two per cent of GDP by the end of the Tenth Plan (2002-07). But in January 2007, Dr. Singh, inaugurating the Science Congress held at Chidambaram in Tamil Nadu, pushed the timeline for achieving that goal to the next five years. Again in 2012 it was postponed by another 5 years. Expenditure -India - 0.9% of GDP in 2006 - China - 1.4% of GDP in 2006The bulk of India's research funding continues to flow from the government. However, such funding as a proportion of the country's total R&D expenditure has fallen from over 80 per cent in 1990-91 to 66 per cent in 2007-082) Flimsy Infrastructural Support and Absence of EquipmentSystem lacking populist political themes that promises to deliver education at all levels to the masses.3) Out-dated Educational System4) Brain drain ScenarioLack of quality higher education prompts, good infrastructure and favourable policies prompts Indian students and researchers to seek opportunities in other countries.5) Research and TeachingIndian Universities were organized as examination-oriented bodies with affiliated colleges. Significant research did not take place in them. Separate Institutes were created to undertake research which The National Knowledge Commission strenuously opposed it.6) Science and EngineeringWe Indians became enamoured with engineering and other professional courses. Possibly due to the fact that it provides immediate employment.7) Courage and Curiosity C V Raman said that there is nothing intrinsically inferior with the quality of the Indianmind when compared to that of a Teuton or an Anglo-Saxon. Rather, he added that what inhibits us is the lack of a certain courage that would allow us to explore unusual avenues.

Government Initiatives1) Innovation CouncilsThe National Innovation Council, India To prepare a Roadmap for inclusive Innovation for the decade 2010-2020 under the chairmanship of Sam Pitroda. It creates a framework for Evolving an Indian model of innovation with focus on Inclusive growth Delineating policy initiatives within government to spur innovation Exploring new strategies and alternatives for innovations and collaborations Encouraging universities and R&D institutions to innovate

2) Inclusive Innovation FundThis fund will be structured as a Fund of Funds with seed capital leveraged from the government and built up by investment from the private and public sector enterprises and banks as well as by challenging VCs to raise money. 3) National Innovation Portal www.techpedia.in A resource for student projects www.indiausp.org By the ministry of Urban Development

4) Innovation EcosystemInnovation is not linear progression but is based on the interplay of various actors and policies. This interaction determines the context in which a nations innovation eco-system gets constructed. An innovative ecosystem must facilitate the birth of new ideas and also provide platforms for the successful exploitation of these ideas.5) DST and DSIR takes the Lead Ministry of Science and Technology. The Department of Science and Technology (DST) and Department of Scientific and Industrial Research (DSIR) taking the lead in fostering innovation & R&D in the country through various programs6) New Science, Technology and Innovation Policy The new policy focusses on creating a framework that imparts quality knowhow, a better and more.

7) National Jawaharlal Nehru Fellowship Scheme/Professional Scheme A Scheme envisaged to attract Indian born skilled and talented researchers and academicians back to India for short stints to pursue Research and Development in Indian Institutues and Organizations. (Received Strong Criticism for ECG Sudarshan, but adopted successfully by nations like China, Australia Etc...)

DST and DSIR Initiatives - DST: National Science & Technology Entrepreneurship Development Board (NSTEDB), Setting up incubators in the technology domain, Technology Business Incubators supporting individuals or start-ups to set up their professional ventures. Technology development Board The board provides financial assistance in the form of equity soft loans or grants Technology Commercialization Facilitation agency by TIFACDSIR: PRISM (Promoting Innovations in Individual, Start-ups and MSMEs) Grant for Innovation, Prototype to final Product (Rs.2L- 50L) Industrial R&D Promotion Program Tax breaks for R&D Initiatives A significant R&D tax incentives in India is a 200% accelerated deduction on scientific research expenditure incurred by an in-house R&D facility (Biotechnology, Manufacturing, etc.) Tax exemption for R&D related import equipmentPolicy Measures Indias scientific talent pool is very less compared to other countries It stands last in a list of 14 countries in spending on R&D in science So, there is a major supply-demand gapAccording to 10th 5-year plan 2002-07

CountryScientists/ million populationPer capita spending on R&D

India110$3.53

China633$12.15

Sweden5171$1104.2

Japan5085$976.2

USA4526$962.5

France3134$552.08

Singapore4352$475.52

What India needs to do to attract and retain best talents for R&D? Reforms in the education system and more practical learning More industry interaction with the educational institutions Tax benefits to be provided to the start-ups Intellectual property rights to be revised Incentives for young talents for their achievements Improve infrastructure in the country by setting up more labs and R&D centres Seed fund for the researchers who want to return to India from overseas Sound incentive system for the corporate sector involved in scientific R&D with viable incentives Encourage active interaction and exchange with international research institutions Knowledge sharing and cross-continental research should be imbibed Invite international scientists for seminars on their research Special economic zones and technology parks for R&D establishments Root seeking camps Stressing on the importance of AlumniRole of Government, Industries and Indian origin scientists in improving R&D Raise R&D budget from 0.9% of GDP to 2% of GDP Government must play a key role in enhancing the quality of Science schools Transparency in selection procedures in scientific institutions, with proper gender audits Increased interaction between industry and research institutions is important Main focus should be to solve food, energy and water security issues Sustainable development and green growth Need for enhanced Private-public partnership in science and technologyIndian InnovationCase 1: Break Through Innovations #1: Case of J.K. Tripathy Tackled Corrupt Image of Police Inadequate intelligence sourcesApproach: Community policing modelChanges Constables directly contacted Tripathy instead of Station House Officers (SHOs) who used passive-aggression methods. Tripathy contacted SHOs. 260 constables screened and interviewed personally and divided into those who could related to diverse population and those who could be in a rough (slum) environment. Created a beat system 4 beat officers responsible for a locality and gave them walkie-talkies and did not have to report to police station for roll call. One of them have to be present and it was up to them to decide who would be present when. Middle-level cops supervised them randomly. Tripathy flashed his mobile number to all people. Shirking was negated with regular interactions between SHOs and constables. Regular interactions between SHO and sub-inspector. And beat officers also met assistant commissioners and deputy commissioners. Distress calls were addressed immediately with walkie-talkie before control rooms instructions Beats ensured complaints reached them first instead of reaching to Tripathy and were embarrassed if complaint box had information they were not aware of. Corruption within officers was tackled with punishment. Corruption among other stakeholders like the municipality was also tackled with intangible actions. Regular meetings with municipality, local NGOs, telephone, electricity departments, etc to tackle problems.Result Beat officers gained respect from the community and invited them for weddings, family gatherings etc. Beat officers given more responsibilities and power to make decisions than the sub-inspectors who supervised them and intervened as per need. Total crimes reported declined from 11,289 in 1999 to 8005 in 2000 and after 7 years number of crimes are below the 1999 mark. Police performance in crime detection registered a steady increase from 78% prior to 1999 to 86% in 2000 followed by 94% in 2004

Case 2: Break Through Innovation #2: Dr. Govindappa Venkataswamy

At the age of 56 Post retirement as a professor, he dreamt of Eliminating unnecessary blindness in India Focussed on overcoming Limited Capability of eye surgeons to conduct surgeries Non Affordable surgeries for the under privilegedMaking a Dent in Global Business: He Founded Aravind Eye Hospital, Internationally recognized as an institution best suited to make not just a dent, but a grand canyon in the world of blindness. Instead of increasing the number of surgeons to cope with the problem of unnecessary blindness, he decided to find ways to increase a surgeons productivity. And he has perfected an assembly line technique of surgery that increases the productivity by a factor of ten. Orbit Shifting Idea: Building productivity through McDonald assembly line The model adopted was that of STD Booth and Xerox, where more the numbers, more the profit, continuing to serve the community Result: Only 30% of the patients pay for the treatment and rest go free of charge and yet the hospitals makes 35% operating profit.

Field VisitA visit to NIT Calicut R&D lab was made with the intention of finding out about state of R&D and innovation promotion in a premier institute. Key ObservationsPositives Sufficient number of equipment are available for use by the researchers and students. Being a premier institute, there is ample government funding for R&D activities and lab equipment.Negatives Most equipment are obsolete Equipment procurement is lengthy due to strict regulations. Delay in equipment procurement delays R&D projects. Industry tie-up is very less. Very few projects were mentioned which were taken up in collaboration with the industry. Industry-Academia relationship is not strong which does not promote strong market driven R&D culture in Academia. Government backed projects are not lucrative. Due to bureaucratic red tape, several government projects are sanctioned after long delays which renders the R&D useless and researchers are not incentivized. Stipend for Research scholars is not attractive, however, professors/scientists are amply paid. Projects are not monitored. Leakage of funds.Key Learning Barring IITs/NITs, fund allocation for R&D is very less compared to China, US, etc. Funds allocated for projects should be monitored to check for leakages and improper use. Procurement procedures should be relaxed with focus on quick procurement so as to minimize project delays and have the latest equipment for better research capability. Industry-Academia interaction should be increased through alumni, MoU, etc. Industry-Academia interaction with promote research to be market driven thus chances of research bearing profits improves. Tie-ups with foreign research institutions with facilitate knowledge transfer. Quality of research should be rewarded so as to attract more serious researchers. Compensation for research scholars should be improved.

Conclusion: Government investment in R&D is minimal when compared to other countries like US and China. Lack of visibility of current schemes among public. Decrease in the amount of money invested by government in comparison with private sector Brain drain scenario Government must play a key role in implementing educational reforms Intellectual property rights needs to be revised Undergraduate universities lacking good infrastructure in terms of laboratories