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Fixing India’s R&D inadequacies

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February 27, 2023

Why in news?

The story of Kodak is a cautionary tale that illustrates the dangers of neglecting innovation, for it can lead to the downfall of even the mightiest of companies.

What is the issue?

  • Innovation and technical progress are prerequisites for economic growth.
  • For an economy to grow, there is a constant need to innovate.
  • In India, the government undertakes 60% of expenditure on Research and development (R&D), unlike other nations where private enterprise takes the lead.
  • Despite efforts to boost R&D, the country’s spending on R&D has remained stagnant at around 0.7% of GDP.
  • The India Innovation Index 2021 has found that the overall spending on R&D by India has been relatively low across the country.

The world average of expenditure on R&D is around 1.8%.

India's R&D inadequacies

What is the role of private players in R&D?

  • Investment - The private sector in India hesitates to invest in research and development that is crucial in fostering progress and innovation.
  • Issue with patent system - Historically, India’s patent system had a reputation for being weak and unreliable when it comes to safeguarding commercial innovations.
  • Imitation by local competitors - The obstacle for firms is the risk of imitation by local competitors, which further disincentives investment in R&D.
  • Challenges for researchers - Researchers face challenges in the implementation of certain rules like having a zero-balance account for every single research project.
  • Researchers have also reported difficulties accessing the grants already awarded to them.
  • US & China Private firms invest more heavily in R&D than the government in the US and China.
  • India needs to develop its higher education institutions to attract top talent and drive innovation.

The Prime Minister’s Science, Technology, and Innovation Advisory Council’s startling finding is that less than 1% of higher education institutions actively participate in high-quality research.

How about the government machinery in this regard?

  • Procurement of instruments - Researchers face issue with procuring laboratory equipment as the present system is bound with red tapism.
  • Capacity issue - According to a recent EAC-PM paper, the patents filed in India in 2020 is just 4% of the number filed in China and 9.5% of the number filed in the US.
  • The reason is that the Indian Patent Office had only 860 patent examiners and controllers as of March 2022.
  • Recognising the problem of understaffing, the government has taken measures to mitigate the situation by creating over 500 additional positions within the patent office.

What is the way forward?

  • Innovation in India is similiar to a resource allocation problem.
  • The government must consider the specific needs and nuances of the R&D ecosystem before implementing regulations and guidelines.
  • Unlocking the mystery of why the private sector in India hesitates to invest in research and development is crucial in fostering progress and innovation.
  • The public expenditure on R&D activities, especially in Higher Education Institutions (HEIs), should be increased to at least 1%.

 

References

  1. The Hindu Business Line │ Fixing India’s R&D inadequacies
  2. The Hindu │ India’s R&D estimates are an incomplete picture
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