To become a vishwaguru

With the G20 presidency, India has an opportunity to set the global agenda and be in the limelight, at least for a year. But if it has to be a real leader, say, the vishwaguru, it has to do some heavy lifting for quite some time. The real vishwaguru today is the US, which has retained its global leadership almost for a century since World War I. It is not just the military might but technological superiority in various fields of the economy that has made the US the biggest and a competitive open economy.

The US has a culture of innovation backed by a solid base of research and development. Innovation is rightly recognised as an engine for economic growth, and prime minister Narendra Modi was right when he extended the old slogan of Shastri and Vajpayee, ‘Jai jawan, Jai kisan, Jai vigyan’ to include ‘Jai anusandhan’ (research and innovation). The Modi government also launched the Atal Innovation Mission (AIM) in 2016 to create an ecosystem to promote innovation and entrepreneurship in the country. All these are steps in the right direction, but the foundation of all this lies in how much India spends on R&D, both in absolute terms and the percentage of its GDP, in relation to other G20 countries.

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Even the Sustainable Development Goals (SDGs) Agenda 2030 aims to “build resilient infrastructure, promote inclusive and sustainable industrialisation and foster innovation”. In particular, SDG Target 9.5 calls upon nations to encourage innovation and substantially increase the numbers of researchers, as well as public and private spending on R&D. Gross Domestic Expenditure on R&D (GERD) is the proposed aggregate to quantify a country’s commitment to R&D.

According to UNESCO’s Institute for Statistics (UIS) latest report, the G20 nations accounted for 90.6% of global GERD (current, PPP$) in 2018. Global R&D expenditure has reached a record high of about 2.2 trillion current PPP$ (2018), while Research Intensity (R&D expenditure as a percentage of GDP) has gradually increased from 1.43% in 1998 to 1.72% in 2018. Though looking at spending in PPP terms is a reasonable metric for welfare measurement in the economy, when it comes to technological prowess in high-end activities of R&D, it all boils down to measuring in hard currency in US dollars.

G20, accounting for 86.2% of global GDP and over 60% of the global population in 2021, are the leaders in every way. The United States leads the G-20 by spending $581.6 billion on R&D, followed by European Union ($323 billion) and China ($297.3 billion) in 2018. India lags way behind with a paltry $17.6 billion in 2018. In terms of their relative shares in G20 R&D expenditure, the US is way ahead with 36%, followed by the EU (20%) and China (18%). India’s share is less than 1% of G20’s R&D expenditure.

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The lesson is very clear: to realise its dream of becoming a vishwaguru, India has a long way to go. And the only way to achieve this seems to be repurposing its massive expenditures on various subsidies (revdi culture) on food, fertilisers, PM Kisan, free power, and even PLI for manufacturing towards multi-fold increases in spending on research and innovation.

While the absolute expenditures in R&D provide a sense of scale, their percentage to respective GDP provides the research intensity (RI). It is interesting to note that in 2018 for which the latest information is available, South Korea has the highest RI at 4.43%, followed by Japan (3.21%), Germany (3.09%), USA (2.83%), France (2.19%), China (2.14%) and EU (2.02%). India is ranked 17th in the G20, with a RI of 0.65%.

However, there are many non-G20 countries that have higher RIs than even peers within G20, but their absolute expenditures on R&D are relatively very small. One of these countries is Israel, which, while having an R&D expenditure of just $18.6 billion, a population of only 9.3 billion people and a per capita income of around $51,430, has the highest RI of over 5%. No wonder Israel is known as a land of innovations, be it defence or agriculture. The innovation system in Israel is a fundamental driver of its economic growth and competitiveness. The government has played an important role in financing innovation, particularly in SMEs, and in providing well-functioning framework conditions for innovation, such as venture capital (VC), incubators, strong science-industry links, and high-quality university education. Israel builds a strong case to show that despite being a smaller nation, sustainable growth can be achieved by prioritising investments in R&D.

During India’s G20 presidency, the engagement group Science20, has the theme of “Disruptive Science for Innovative and Sustainable Development” focusing on Universal Holistic Health: Cure and Prevention of Disease; Clean Energy for a Greener Future; and Connecting Science to Society and Culture. It will be interesting to see how India can leverage this for the shared prosperity of the world.

India needs not only technological development and brilliance in various sectors but also innovations that can safeguard its basic environment—land, water, and air. India has shown its global leadership in IT and the digital world. If it can show similar breakthroughs in other sectors, it will turn its aspiration of vishwaguru into reality and confidently enter the golden era of Amrit Kaal.

The authors are respectively, distinguished professor and researcher, ICRIER