Business / Industry Sectors
The Emerging R&D Landscape in India

Indian economy has changed dramatically since the economic liberalization in 1991. Over the last two decades, a quiet revolution has been unfolding in India, growing slowly but steadily. Indian industry has been building up its technological capabilities. The growth in the Information Technology (IT) sector unleashed a huge momentum in human capital in India. The growing talent pool became a significant draw for an increasing number of R&D investments by major Multinational Companies (MNCs) like GE, Texas Instruments, Astra Zeneca, DuPont, Motorola, Intel, etc. In addition a large number of domestic player like the Tatas, Birlas, Biocon, Godrej, and others have redefined R&D with a unique focus on mass markets in major sectors including automobiles, biotechnology, pharmaceuticals, and telecommunications. Tata Nano, Tata Swatch and Godrej Chotucool are just some of the names that have served to strengthen the image of Indian R&D around the world.

Multinational Companies (MNCs) seriously began to explore India’s potential as a research destination more than a decade ago. In the late 1980s and early 1990s some MNCs set up research labs in India. However, this early wave largely consisted of what is sometimes called “insourcing” – MNCs opened research labs to serve their own local manufacturing operations.

Despite this strong accolade, there are serious issues that affect the R&D landscape in India.  These threaten the long term growth prospect for the country and reach its full potential. Despite the growing talent pool, Indian R&D base remains globally non-competitive. India has an estimated full time equivalent R&D professional strength of 150 professions per million as compared to that of China (1,180 per million), Korea (2900 per million), USA (4300 per million), UK (2880 per million), and Finland (7300 per million). Indian research capacity is mostly skewed towards basic research and lacks in application oriented R&D. While we have several exemplars in highly innovative R&D, the vast majority of organizations would rather go for a quick acquisition of technology rather than invest in internal R&D. On the other hand, academic institutions and many of the public research centers focus on advancing the science, focusing on patenting and publishing, with very little systematic attention being spent in applied R&D.

Proposed course of action in the 12th Five Year Plan

The Government has emphasized the need for an increase in Science & Technology (S&T) activities in India. For this, the government has put forth certain steps that need to be accomplished in the next five years, through the 12th Five Year Plan.

  1. Aligning S&T to Developmental Needs

In India, a wide range of sectors need break through innovations and significant S&T inputs. There is a substantial need for resources for creating a strong R&D system. The plan aims at increasing the R&D spend of 0.9% spend of GDP, of which 75% is public sector and 25% is private sector spend, to 2% of GDP which will consist of 50% each of public and private sector R&D spend. The plan also aims at proposing a shift in the R&D system in the country from basic research (input driven model) to applied research (output driven development strategy).

  1. Interaction of Public S&T Institutions with Industry

The 12th Plan aims at bringing in changes in the way publicly owned S&T establishments communicate with the industry. Leveraging the government grants and other forms of financing to secure private financial flows is one of the actions the government intends to take. The government also aims at developing a workable protocol for facilitating interaction among these players. Large Indian companies may be encouraged to establish R&D centers like those of MNCs such as GE, Motorola, Texas Instruments etc.

  1. Research in Strategic Sectors

The government aims at increasing R&D activity in the three main sectors namely Department of Atomic Energy, Department of Space, and Department of Defense Research and Development. Their research needs could trigger unique mechanisms for encouraging innovation and ensuring the right impact on social, industrial and strategic sectors in the 12th Plan.

In order to facilitate this, special directorates have been setup at the headquarters of the departments to serve as clearing house of the relevant information on technologies. Linkage with the industry associations is another dimension which would need additional thrust in the 12th Plan.

  1. National Missions

National Missions stress on addressing national needs. National needs are mainly related to agricultural needs (soil management, water management, genetic erosion, etc.) and resource management (energy conservation, efficiency, renewable energy, etc.)

  1. Dialogue with other countries

To establish constructive communications with other countries (both developed and developing), the government aims at creating a framework that would mediate between the countries and their organizations. This would take into account the realities of strategic national interest and diplomatic charter.

  1. Expansion of Basic Science

The 12th Plan further aims at improving the basic science knowledge base in Indian institutions; mainly universities and IITs. Basic science teaching and basic science research is a prior condition for the expansion of the scope of S&T intervention in the development of the economy and society.




Source: The Federation of Indian Chambers of Commerce & Industry 

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