1. The curious case of Indian innovation

The curious case of Indian innovation

The govt should join India Inc in patronising research and training in codified frugal-engineering practices and brand it as a globally-relevant business methodology

By: | Published: July 15, 2015 12:17 AM
The govt should join India Inc in patronising research and training in codified frugal-engineering practices and brand it as a globally-relevant business methodology

The govt should join India Inc in patronising research and training in codified frugal-engineering practices and brand it as a globally-relevant business methodology

India’s slide as a global innovation hub continues. Not only is India expected to perform poorly on this year’s World Bank sponsored Global Innovation Index, slated to be released later this month, the country drew a blank on the 2015 Bloomberg Innovation Index, an annual ranking of the world’s 50 most innovative countries. All of the BRICS nations, except India, and even countries like Malta and Tunisia, were featured on the list.

Even official records of the Indian Patent Office cast a gloomy picture—while patent grants for foreign inventions increased by almost 300%, grants to Indian inventions grew by a mere 45%. In 2013-14, while as many as 42,951 patent applications were made, only 10,941 were made by Indian applicants. The Indian government spends less than five times of what China spends on R&D and the country attracts a mere 2.7% of the global R&D spend (China attracts 17.5%). 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, our ambitious manufacturing policy would be still-born. The country needs to adopt policies for ‘nudging’ the public and private creation and commercialisation of knowledge, and the 29-page draft IPR policy; although a good start is definitely 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% year-on-year increase in patent filings.

What could have helped China is that its government has itself invested close to 2.8% of its GDP in developing R&D efforts in science and technology (bringing China closer to R&D intensity levels of a number of developed nations). It has also incentivised Chinese companies to boost their own R&D efforts (including corporate tax deductions up to 150% on expenditures that create intangible assets, such as patents or trademarks)—resulting in such companies having increased their R&D spending by an average of 64% every year for the past five years. China has also made huge investments in the country’s university system, hoping to recreate a Silicon Valley-style symbiosis between industry and the research sector.

However, innovation is both country-specific and industry-specific, and emulating another country’s model may not work for India. Each Indian industry has its distinctive array of strengths and constraints for innovative growth and its unique set of innovation bottlenecks. Patent policies that help pharmaceutical companies with products having longer life-cycles may hinder the disruptive-innovation practices of maverick IT businesses. India’s media and entertainment industry’s innovation woes arise as much from weak copyright laws as from fixed tariff rules preventing the effective monetisation of the industry’s rich content. Such differences among industries need to be reflected in India’s innovation strategy and policy.

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 matching regulation/legislation—aimed at curbing such handicaps.

Another aspect of India’s engineering strength that remains conspicuously absent from our national innovation agenda is that of ‘frugal innovation’ (different from jugaad and quick-fix solutions). From the Mangalyaan to the Nano to the Six Sigma certified dabbawalas, Indians have developed innovative products and processes, with limited resources—providing competitive advantage through product differentiation or cost leadership, or both. In the process, 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, if used systematically 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 SME sectors of the Indian economy, like textile, foot ware and metal ware, which have their own unique ‘local innovation systems’, need strengthening 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 the traditional knowledge based production techniques of such sectors are not disrupted. The recently launched Mudra Bank (India’s Mittelstand) can take leadership in providing a platform for cooperative stakeholder based R&D efforts, matching their innovation needs to external funding and training resources and providing direct linkages to national and international markets.

Further, India needs to adopt an ‘innovation principle’ in its risk management and regulatory language—ensuring that whenever any state or a federal ministry/agency proposes a legislation or a regulation, the impact on innovation should also be taken into account in the policy and legislative process.

The script of the Indian innovation agenda is a work in progress, but the incumbent government’s heart and money is in the right place. Earlier this month, Prime Minister Narendra Modi launched his government’s much awaited Digital India initiative—a R1.13 lakh crore government programme—which, among other things, aims at making India a hub of innovation. However, as it is often said, the devil lies in the implementation.

The author is assistant professor of Competition Law at the Jindal Global Law School and a former expert consultant to the Competition Commission of India

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  1. A
    Alok Asthana
    Jul 16, 2015 at 7:28 am
    For whatever reason, there are no takers for in India for techniques of technical innovation. The irony is that a technique based system makes technical innovation easier than innovation in the marketing fields. All machines follow rules, humans don't. But as a trainer of this system. TRIZ, I can see that not many, including the government, are interested.
    1. Davuloori Bheemeswar
      Jul 17, 2015 at 10:08 am
      It is all may be due mismanagement bad publishing or reporting for unknown reasons, in fact CSIR has good Innovations which can make India great but they have never seen the light that's all.
      1. Hemen Parekh
        Jul 19, 2015 at 11:09 am
        Innovation , a distant dream ? Writing in today's ( July 19 , 2015 ) Business Standard , Arindam Majumder provides following interesting facts about patents : > No of patents filed last year * W World..................... 214,500 * USA................................ 61,492 * an.............................. 42,459 * China............................... 25,539 * India............................... 1,349 > Only one Indian eny features on the list of the top 10 recipients of Indian patents > Collectively , the IITs filed 342 patents That article also quotes Mr Narayan Murthy , expressing his anguish at the lack of innovations coming out of our IITs and Research Labs True , but while lamenting this poor state of affairs , we should also examine what causes this poor state Here are my guesses : > PATENT - FILING TIME Whereas , it takes months to get a patent approved in Developing Countries , it takes years in India ( see my old blog below ) > PATENT- FILING COST In India , it costs lakhs of rupees ( fees of Patent Attorney ) . Abroad , it takes lakhs of dollars > PATENT PROTECTION COST It costs a fortune ( whether in India or Abroad ) , to protect your patent in a court of law . Often , more than the monetary benefit derived from it ! And with never-ending appeals , it takes years to settle the matter For Indian Innovators , fighting a patent litigation in Foreign Courts , is an impossible task > PATENT REGIME India's Patent Laws are considered " weak " , especially , in case of Pharma / Chemical patents , in respect of " Product Patent " vs " Process Patent " There is also a provision whereby , Government of India can force a Foreign Patent holder to " license " it compulsorily , to an Indian applicant who wants to exploit that patent ( of course , on reasonable licensing fees ! ) > PATENT BENEFITS Abroad , when a scientist working in a Educational Insute or a Research Lab , invents something for which ,even if a patent gets applied for in the name of that Insute , he too gets a percentage of future royalties , when that patent gets licensed for commercial exploitation I don't think , Indian Inventors , benefit in this way . That takes away the incentive > PATENT PRESTIGE If the inventing scientist's name does not figure on the patent and gets replaced by the name of his boss , innovations will remain buried ! ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ { Old blog dated : 26 Feb , 2012 } Want a Patent ? Be patient ! Newspaper Pravasi ( 26 Feb 2012 ) gives following interesting – but far more distressing – info about working of India’s Patent Office in Mumbai :  No of patent applications pending ………………………………… 100,000  Which will take to clear ………………………………………………….. 3 years  No of requests being examined / year ………………………….. 12,000  Additional Patent Examiners being trained …………………….. 250  Which will help clear no of applications / year ………………… 40,000  New requests being received / year ………………………………… 25,000  Annual growth-rate of requests ……………………………………… .. 20 % I would not be surprised if Indian scientists working in foreign labs are filing more patent applications abroad than the Indian scientists working in Indian labs ! Innovation will get a huge boost if Patents can be granted – or even rejected – in 6 months ! ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- ------------------------------------------------------------------------------------------------------------------------------------------ hemen parekh 19 July , 2015 B2BmessageBlaster
        1. S
          Jul 16, 2015 at 3:52 pm
          The seeds of innovation should be sown in the minds of the people of our country when it is at its creative best, and that is in childhood. Innovation should be encouraged right at the school/college level to nurture the creativity of the young minds. In corporate or government insutions what I have experienced is that the senior management is keen to demand for innovation in services and products from the employees but there is a rigidity shown when there is a proposal for some innovation in the process or the way id working. This should be checked through innovation awareness training programs.

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