Indian planners and policy makers could perhaps draw a lesson from the role government played in bringing the economic miracle in Japan in the 1970s & 80s. At the end of World War-II in 1945, Japan was devastated and its industry crippled. By the ?60s, the economy revived somewhat, and a national consensus was built that Japan must become an economic super power. Something what India aspires to become in the next decade. In the ?70s/80s, the relationship between the government and industry was that of partners in progress, rather than of mutually suspicious adversaries. The catalyst for the change was the ministry of international trade & industry (MITI).
With the help of the ministry of finance, which ensured capital flow at low interest rates, MITI was responsible for the regulation, production and distribution of goods and services. It ensured that Japan caught up with the USA in telecommunications. To catch up with the USA in electronics switching systems (ESS), a consortium of four big industrial houses such as NEC, Fujitsu and Hitachi along with the monopoly service provider NTT, which had its own R&D laboratory, was created to rapidly develop a family of ESS called D-10.
While Hitachi and NEC were given the hardware subsystems, the software was mainly developed by Fujistu and NTT. Although Japan was lagging behind France and the US in digital switching, by the end of 1980 this gap was also closed through intense R&D in the private sector and universities. The efforts of the private sector was coordinated by MITI. MITI played similar role in other industrial segments as well, which saw Japan?s emergence as an economic miracle of the ?80s.
On similar lines, the departments of telecom and science & technology should promote innovation and R&D in the private sector. However, the IITs? experience under the public sector has not been very happy. In North America, Europe and Japan, universities?like California, Stanford, Tokyo and R&D laboratories such as Bell Labs, which has won seven Nobel prizes for its researchers?have been either part of or supported by the private sector industries. In India, practically all R&D has been conducted under the aegis of the government, i.e., initially in Telecom Research Centre of the DOT later in C-DOT and to some extent under the ITI.
These institutions have always tried to reinvent the wheel i.e., wasting their efforts in the ?90s & early 2000s in R&D relating to fixed network, when all big industrial houses such as Ericsson, Siemens and Alcatel were focusing on developing 3G and 4G cellular mobile systems. Even China, which lagged India in telecom R&D in the ?80s and ?90s, has recently taken a great leap forward. Huawei and ZTE have emerged as globally competitive telecom equipment suppliers of the 21st century.
If we are to achieve the ambitious targets set by the Telecom Regulatory Authority of India for locally designed and produced telecom products, then policies to promote R&D and innovation in our educational institutions and the private sector will have to be adopted.
The R&D process starts with the development of telecom standards. The R&D institutions have to play a more proactive role in standard setting as the Chinese and Japanese have done. DOT?s latest decision to reserve some frequency bands for R&D (in 900, 1400, 1800 & 1900 MHz) for companies developing indigenous technology standards is a welcome step. Once Indian products with IPR are developed, they should be given preferential market share, so that the industrial houses producing them enjoy the economy of scale.
Under the private sector, many innovative products have recently been developed by R&D companies such as Vihaan Networks Ltd (VNL), Tejas Networks and Coral Telecom. VNL?s innovative approach to deploy solar base stations, along with miniaturised network elements, such as BSC and MSC, has attracted global attention. Its product was declared as one of the most innovative by the World Economic Forum in 2010. Tejas Networks Packet Optical product has also won an innovation award recently. However, unless we have a large number of such innovations and many more success stories under the private sector, as well as in the centres of excellence such as at IITs, the goal of achieving the Trai’s target of having 50% Indian products for the telecom network by 2019-20 will remain a pipe dream.
The author is a former member, Trai/ Telecom Commission
The first part of this article was carried on October 5