 "Attn Netas, India Inc.- Pay heed to CNR Rao's angry outburst")
The last thing the government would have plausibly expected to hear, after it conferred the Bharat Ratna on distinguished scientist CNR Rao was scathing indictment on the inadequate scientific funding given out for research and development in this country. "... Why the hell these idiots, these politicians have given so little for us. In spite of that, we scientists have done something," Rao, also chairman of the PM’s scientific advisory council said in an angry outburst after receiving the award, though he clarified later that he had made the remark casually and was misquoted.
The media meanwhile has played up the 'politicians are idiots' part, but missed stressing on the substance of this remark adequately, preoccupied as we were with celebrating the victory of the better known awardee Sachin Tendulkar. Exhilarating as Tendulkar’s win is, it’s important we don’t let it steal Rao’s thunder, and highlight the critical point he was trying to make on India’s sorry position with regards to scientific spending – something that can be extrapolated to funding for R&D as a whole.
To put things in context, India spends barely 0.9% of its GDP on R&D, much lesser than China’s 1.2%, UK’s 1.7% and Israel’s 4.3%. Other BRIC economies including Brazil and Russia too, exceed India’s research and development expenditure. In fact a quarter of R&D spending in India that happens from the private sector too is slowing down. Worryingly, 6 of the top 10 companies that spend most on R&D have reduced their expenditure as a percentage of revenue over the past few years according to a study done by Business Today magazine.
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Tata Steel for instance spent 2.7% of its revenue on R&D in 2007/08, but that came down to a bare 0.4% in 2011/12. Similarly Ranbaxy Laboratories spent 9.7% in research in 2007/08, that’s down to 4.2% in 2011/12. No surprise then that India has severely lagged behind in filing patents. Only about 6,000 patent applications were filed by Indians in 2010, which is a mere 0.3% of the total applications filed in the world. Moreover India has steadily seen a decline in its position on the world innovation map - dropping to the 66th position this year from 23rd in 2007-08 on the Global Innovation Index.
And yet,despite lack of support from the government and big home grown businesses sleeping on the need for more research, scientists have managed a feat of sorts, as Rao rightly pointed out. MNCs have extended support, with 870 of them establishing R&D centres in India. And grassroot initiatives have seen an explosion notwithstanding the funding crunch. The National Innovation Council recently claimed it had listed 1,75,000 innovation practices in India over the last couple of years, busting repeated claims that Indians do not ascribe too much value to innovation, focusing only on jugaad.
The big lacuna is not that India doesn’t have innovators, but that we don’t have incubators, or a strategy to foster innovation which it seems is directly proportional to increased spends on research, among other things. “The innovation front in India continues to be penalized by deficits in human capital and research; infrastructure and business sophistication, where it comes last among BRICs, and in knowledge and technology outputs, where it comes in ahead of Brazil only” noted the Global Innovation Index.
The Planning Commission too has recognized this problem, and in a note stresses that the “current fiscal incentives for attraction of investments into R&D by way of tax benefits have led only to marginal results and the linkages between academia-research and industry remain under developed and weak…existing funding options, especially made available by the Government need to be increased. India’s dependency on foreign VC/PE funds and almost no domestic venture capital needs to be addressed.”
The government has taken a step in the right direction with the proposed $1 billion India inclusive Innovation Fund in the anvil to support SME innovation efforts, but that has been mired in delays. Meanwhile it is contemplating increasing the investment in R&D to 2% of through higher allocations to scientific research, setting up of new institutions for science and educational research, strengthening infrastructure for R&D in universities etc, all of which needs to be accelerated. The Technology and Innovation (STI) Policy 2013 is also being seen as a enabler.
But the buck doesn’t just stop solely with the government. India Inc. too must play an active role as an incubator which it seems to have abandoned. The Prime Minister had taken a jibe at local industry during the 99th Indian Science Congress last year saying “It is in some ways ironic that GE and Motorola have created world-class technology hubs in India while our own industry has not done so, except perhaps in the pharma sector.” He isn’t incorrect in this assessment given that a large part of corporate R&D has happened through off-shoring by MNCs.
A survey by Battelle India showed that beyond government support, there were 33 major deterrents to companies wanting to embrace R&D. These included lack of internal support from business divisions, difficulty in raising funds, unfavorable company policies, lack of a research & innovation mindset, talent crunch, an aversion to capital risk and investment requirements among other things.
The government and industry will have to work alongside to address these concerns if India must indeed turn into an innovation powerhouse. Else, we’ll continue lamenting that the Googles and Apples of the world aren’t born on Indian soil.