If the Government fails to incubate innovative ideas at home or builds a reputation of failing to protect ideas of others, its ambitious manufacturing policy will be still-born. It also needs to focus on the commercialisation of knowledge
India’s slide as a global innovation hub continues. Not only is India expected to perform pooraly on this year’s global innovation index, slated to be released later this month, but the country drew a complete blank on the Bloomberg innovation index, an annual ranking of the world’s 50 most innovative countries.
Even official records of the Indian Patent Office casts a gloomy picture — while patent grants for foreign inventions increased by almost 300 per cent, grants to Indian inventions grew by a mere 45 per cent. The Government spends less than five times what China spends on research and development and the country attracts only 2.7 per cent of the global R&D spend.
India scores poorly in commercialising R&D from its universities and its regulators often create antitrust and taxation hurdles in the effective exploitation of foreign-owned patents on Indian soil.
If India fails to incubate innovative ideas at home or creates a reputation of failing to protect ideas of others, its ambitious manufacturing policy will be still-born. The country needs to adopt policies for ‘nudging’ public and private creation and commercialisation of knowledge. A 29-page draft Intellectual Property Rights policy is a good start but not enough. An innovation-conscious economy needs more than a robust IPR regime.
In 2014, China, in-spite of being on the ‘serious watch list’ of the United States Trade Representative, for IPR deficiencies, was the highest climber in the ranking for patents granted by the European Patent’s Office, reaching the fourth spot after an 18 per cent year-on-year increase in patent filings.
What has helped China is that its Government has itself invested close to 2.8 per cent of its gross domestic product in developing R&D efforts in science and technology, besides incentivising Chinese companies to boost their own R&D efforts. Such companies having increased their R&D spending by an average of 64 per cent every year for the past five years. China has also made huge investments in its university system, hoping to re-create a Silicon Valley-style symbiosis between industry and the research sector.
However, innovation is country-specific and industry-specific, and emulating another country’s model may not work for India. Patent policies that help pharmaceutical companies with products having longer life cycles may hinder the disruptive innovation practices of maverick information technology businesses. India’s media and entertainment industry’s innovation woes arise as much from weak copyright laws as from fixed tariff rules preventing effective monetisation of its rich content. Such differences among industries need to be reflected in India’s innovation strategy.
The National Innovation Council — set up to adopt a holistic innovation strategy for all sectors of the economy — aims at identifying such sector-specific bottlenecks through innovation surveys. However, sparse efforts are being undertaken to align sector-specific innovation quirks to regulation aimed at curbing such handicaps.
One aspect of India’s engineering strength that remains absent from our national innovation agenda is that of frugal innovation (different from jugaad and quick-fix solutions). From Mangalyaan to Nano to the six sigma certified dabawallas, Indians have developed innovative products and processes with limited resources — providing competitive advantage through product differentiation or cost leadership, or both. They have created no-frills, good quality, functional products, affordable to consumers with modest means.
Given the revolution in product-design and process-design philosophy that such innovation embody, it can become the lynchpin of India’s homegrown innovation culture. The Government should join India Inc in patronising research and training in codified frugal-engineering practices and brand it as a globally relevant business methodology.
Traditional small and medium-sized enterprises like textile, footware and metalware, which have their unique local innovation systems need to be strenghtened to make them more competitive. Principles of modern systems of innovation are only partially relevant to such sectors. These principles needs contextualisation to ensure that the delicate balance of traditional knowledge-based production techniques are not disrupted.
India needs to adopt an innovation principle in its risk management and regulatory language — ensuring that whenever, any state agency propose legislation/regulation, its impact on innovation should also be taken into account.
The Indian innovation agenda is a work in progress, but the Government’s heart and money is in the right place as the Prime Minister Narendra Modi’s Digital India programme, which aims at making India a hub of innovation, stands proof. But as always, the devil lies in the details of implementation.
(The writer is an assistant professor of competition law at the Jindal Global law School and a former expert consultant to the Competition Commission of India)