 "Chandrayaan-3")
India has set its sights on becoming an innovation powerhouse. Chandrayaan-3's successful lunar landing underscores the country's potential for low-cost scientific advances. As India looks to rev up growth in a post-pandemic world, innovation in science and technology offers a promising pathway to prosperity and global competitiveness.
As the Atlas of Economic Complexity highlights, India already possesses enviable innovative strengths upon which to build. It supplies 60 per cent of the world's vaccines and 20 per cent of generic medicines. This prowess in the biomedical field was demonstrated during the pandemic with the large-scale manufacturing of vaccines and developing of indigenous ones. Translating these capabilities into biomedical breakthroughs would enable India to develop marketable products that make healthcare more inclusive and accessible.
India's $7 billion space industry has launched over 300 satellites for global clients and could grow to over $50 billion in 2024 if provided proper policy support. Its inexpensive space programme could attract more microgravity experiments with pharmaceutical applications. India also has an opportunity to become a leader in drones-as-a-service, with applications in agriculture, public health, logistics, and more. Green technologies like electric vehicles, batteries, and solar offer additional prospects, benefiting society and the environment. India's $42 billion of exports in textiles and apparel provides a foundation for advances in smart fabrics and materials. Furthermore, given the impacts of climate change, the World Bank estimates that the market potential market for sustainable cooling alone is a massive $1.6 trillion.
Centres of excellence are already emerging across the country – around Hyderabad for biotechnology and Bengaluru, Chennai, and Pune for IT services. Anchoring research at venerated institutions like the IITs, ISRO, and CSIR could further spur clusters of excellence, like the vibrant innovation corridors around North Carolina's Research Triangle. Importantly, India's anchor institutions need not be restricted to elite ones like the IITs. Many ISRO engineers graduated not from the IITs but from regional engineering colleges. Providing quality education and opportunities across India's engineering colleges and polytechnics will help maximise the country's innovation potential.
Funding is important; India could earmark resources for strategic science investments, akin to how America finances its research triangles through offshore corporate profit taxes.
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However, beyond funding, the global experience shows that fostering partnerships between academia, the private and public sectors has been key. Once-declining industrial towns like America's Akron and the Netherlands' Eindhoven grew into thriving innovation hubs by collaborating across universities, corporations, and governments. Akron rebounded from its "rubber capital" rustbelt days to boast over 400 polymer companies and 35,000 high-skilled jobs. Eindhoven, once a decaying electronics hub, has been ranked the most inventive city in Europe by Forbes. It now produces 40 per cent of Dutch patent applications (with only 0.4 per cent of the Dutch population) and nearly $9 billion in exports.
Further, firms that participate in global value chains (GVCs) tend to be more innovative than those that do not, and several policy options can help firms integrate into GVCs and benefit from them. The evidence shows that firm innovation is a driver of GVC participation, and GVC participation can bring about advanced production technologies and enhance the absorptive capacity of technology spillovers. Public policy should be geared towards helping firms join and upgrade in GVCs, including trade policy, logistics and trade facilitation, regulation of business services, investment, business taxation, innovation, industrial development, conformity to international standards, and the wider business environment fostering entrepreneurship. GVC participation can boost firm innovation by exposing them to new technologies, knowledge, and markets, and governments can support this process by adopting policies that facilitate trade, investment, and competitiveness.
Generative AI could prove to be a game-changer in terms of boosting innovation. With strong IT skills and digital drive, India can harness AI to boost efficiency and discoverability across sectors. However, technology alone does not determine outcomes. Supportive policies and institutions are vital to ensure innovations boost prosperity and inclusiveness rather than concentrate gains. As the Industrial Revolution shows, without thoughtful regulation and social safety nets, technology can displace workers and widen inequalities. South Korea's rise as an electronics powerhouse was enabled by policies that prioritised job creation alongside R&D investments. Nurturing an adaptive workforce and robust institutions will allow India to maximise the gains from AI-charged innovation.
The vision articulated in India's new National Research Foundation marks a step forward. But truly igniting India's engine of innovation requires a meticulous strategy grounded in evidence. By embracing openness, fostering nimble and agile partnerships to quickly spot and exploit opportunities in global value chains, and strategically cultivating a creative ecosystem, India's aspiration to become one of the "smartest places on earth" can be closer than it appears. If India continues reaching for the stars, as highlighted by the lunar leap of Chandrayaan-3, it can take its place among the leading centres of innovation in the world.
The author works at the World Bank as the Manager for South Asia for Climate Change and Disaster Risk Management
(Views expressed are personal)
