R&D AND INNOVATION IN

INDIA STATUS,
EMERGING TREND AND
CHALLENGES

Indian Economy Prof. Sthanu R. Nair

Kaushik Chandrashekar
Praveen GP
Samip Khandelwal

Submitted By
PGP 18 Section B Group 3
PGP/18/082
PGP/18/099
PGP/18/104

Shahinsha S
Vineet Prashant Toppo

PGP/18/107
PGP/18/116

Research & Development (R&D) and Innovation:

R&D: Investigative activities that a business chooses to conduct with the intention of making a discovery
that can either lead to the development of new products or procedures, or to improvement of existing
products or procedures. Research and development is one of the means by which business can experience
future growth by developing new products or processes to improve and expand their operations.
Innovation: The process of translating an idea or innovation into a good or service that creates value or
for which customers will pay.

Difference between R&D and Innovation

R&D is a form of Innovation

R&D is focused on getting a desired output
R&D involves investment in discovering new technology and increasing capacity of a firm
Innovation can happen across the value chain of a company
Innovation has a more wide range
Innovation does not necessarily have to be systematic
Innovation involves improving the method of working/producing goods

Indian Scenario: R&D and Innovation

Innovation is a key driver for

the growth of Indian economy
Since 1991, Emergence of a
number of Knowledgeintensive manufacturing and
service industries
Higher education sector in
India is not a source of
technology for the industry
Pharmaceutical Industry:
Scientists from public
institutions becoming
entrepreneurs (e.g. IDPL , Dr. Reddys)
Indias R&D spending as a % of GDP is just 0.9%
Out of these, bulk of Indian R&D is done by public sector 70-80% i.e. 0.72% of GDP
R&D spending by private sector is only 16-20% i.e. 0.18% of GDP
Number of research articles published by India in 2012 is only 30, which is very low
compared to countries like Japan, China, Australia, etc.

Global Comparison

Comparative Picture

Indias R&D spending as a % of

GDP is just 0.9%
Out of these, bulk of Indian R&D
is done by public sector 70-80%
i.e. 0.72% of GDP
R&D spending by private sector
is only 16-20% i.e. 0.18% of GDP
Number of research articles
published by India in 2012 is only
30, which is very low compared
to countries like Japan, China,
Australia, etc.

Major Challenges
1) Budget allocation for Research saw series of deferment:
Science and Technology Policy of 2003, unveiled by then PM Atal Bihari Vajpayee,
declared that the country's investment in s&t would be raised to at least two per cent of
GDP by the end of the Tenth Plan (2002-07). But in January 2007, Dr. Singh,
inaugurating the Science Congress held at Chidambaram in Tamil Nadu, pushed the
timeline for achieving that goal to the next five years. Again in 2012 it was postponed
by another 5 years.
Expenditure - India - 0.9% of GDP in 2006
- China - 1.4% of GDP in 2006
The bulk of India's research funding continues to flow from the government. However,
such funding as a proportion of the country's total R&D expenditure has fallen from over
80 per cent in 1990-91 to 66 per cent in 2007-08
2) Flimsy Infrastructural Support and Absence of Equipment
System lacking populist political themes that promises to deliver education at all levels to
the masses.
3) Out-dated Educational System
4) Brain drain Scenario
Lack of quality higher education prompts, good infrastructure and favourable policies
prompts Indian students and researchers to seek opportunities in other countries.
5) Research and Teaching
Indian Universities were organized as examination-oriented bodies with affiliated
colleges. Significant research did not take place in them. Separate Institutes were created
to undertake research which The National Knowledge Commission strenuously opposed
it.
6) Science and Engineering
We Indians became enamoured with engineering and other professional courses. Possibly
due to the fact that it provides immediate employment.
7) Courage and Curiosity
C V Raman said that there is nothing intrinsically inferior with the quality of the Indian
mind when compared to that of a Teuton or an Anglo-Saxon. Rather, he added that what
inhibits us is the lack of a certain courage that would allow us to explore unusual
avenues.

Government Initiatives
1) Innovation Councils
The National Innovation Council, India To prepare a Roadmap for inclusive Innovation
for the decade 2010-2020 under the chairmanship of Sam Pitroda. It creates a framework for

Evolving an Indian model of innovation with focus on Inclusive growth

Delineating policy initiatives within government to spur innovation
Exploring new strategies and alternatives for innovations and collaborations
Encouraging universities and R&D institutions to innovate

2) Inclusive Innovation Fund

This fund will be structured as a Fund of Funds with seed capital leveraged from the
government and built up by investment from the private and public sector enterprises and banks
as well as by challenging VCs to raise money.
3) National Innovation Portal
www.techpedia.in A resource for student projects
www.indiausp.org By the ministry of Urban Development
4) Innovation Ecosystem
Innovation is not linear progression but is based on the interplay of various actors and
policies. This interaction determines the context in which a nations innovation eco-system gets
constructed. An innovative ecosystem must facilitate the birth of new ideas and also provide
platforms for the successful exploitation of these ideas.
5) DST and DSIR takes the Lead
Ministry of Science and Technology. The Department of Science and Technology (DST)
and Department of Scientific and Industrial Research (DSIR) taking the lead in fostering
innovation & R&D in the country through various programs
6) New Science, Technology and Innovation Policy
The new policy focusses on creating a framework that imparts quality knowhow, a better and
more.
7) National Jawaharlal Nehru Fellowship Scheme/Professional Scheme
A Scheme envisaged to attract Indian born skilled and talented researchers and academicians
back to India for short stints to pursue Research and Development in Indian Institutues and
Organizations. (Received Strong Criticism for ECG Sudarshan, but adopted successfully by
nations like China, Australia Etc...)

DST and DSIR Initiatives DST:

National Science & Technology Entrepreneurship Development Board (NSTEDB),

Setting up incubators in the technology domain, Technology Business Incubators
supporting individuals or start-ups to set up their professional ventures.

Technology development Board The board provides financial assistance in the form of
equity soft loans or grants

Technology Commercialization Facilitation agency by TIFAC

PRISM (Promoting Innovations in Individual, Start-ups and MSMEs) Grant for

Innovation, Prototype to final Product (Rs.2L- 50L)

Industrial R&D Promotion Program

Tax breaks for R&D Initiatives A significant R&D tax incentives in India is a 200%
accelerated deduction on scientific research expenditure incurred by an in-house R&D
facility (Biotechnology, Manufacturing, etc.)

Tax exemption for R&D related import equipment

DSIR:

Policy Measures

Indias scientific talent pool is very less compared to other countries

It stands last in a list of 14 countries in spending on R&D in science

So, there is a major supply-demand gap

According to 10th 5-year plan 2002-07

Country

Scientists/ million population

Per capita spending on R&D

India

110

$3.53

China

633

$12.15

Sweden

5171

$1104.2

Japan

5085

$976.2

USA

4526

$962.5

France

3134

$552.08

Singapore

4352

$475.52

What India needs to do to attract and retain best talents for R&D?

Reforms in the education system and more practical learning

More industry interaction with the educational institutions
Tax benefits to be provided to the start-ups
Intellectual property rights to be revised
Incentives for young talents for their achievements
Improve infrastructure in the country by setting up more labs and R&D
centres
Seed fund for the researchers who want to return to India from overseas
Sound incentive system for the corporate sector involved in scientific R&D
with viable incentives
Encourage active interaction and exchange with international research
institutions
Knowledge sharing and cross-continental research should be imbibed
Invite international scientists for seminars on their research
Special economic zones and technology parks for R&D establishments
Root seeking camps
Stressing on the importance of Alumni

Role of Government, Industries and Indian origin scientists in improving R&D

Raise R&D budget from 0.9% of GDP to 2% of GDP

Government must play a key role in enhancing the quality of Science schools
Transparency in selection procedures in scientific institutions, with proper
gender audits
Increased interaction between industry and research institutions is important
Main focus should be to solve food, energy and water security issues
Sustainable development and green growth
Need for enhanced Private-public partnership in science and technology

Indian Innovation
Case 1: Break Through Innovations #1: Case of J.K. Tripathy
Tackled

Corrupt Image of Police

Inadequate intelligence sources

Approach: Community policing model

Changes

Constables directly contacted Tripathy instead of Station House Officers (SHOs) who used
passive-aggression methods. Tripathy contacted SHOs.
260 constables screened and interviewed personally and divided into those who could related to
diverse population and those who could be in a rough (slum) environment.
Created a beat system 4 beat officers responsible for a locality and gave them walkie-talkies
and did not have to report to police station for roll call. One of them have to be present and it was
up to them to decide who would be present when. Middle-level cops supervised them randomly.

Tripathy flashed his mobile number to all people.

Shirking was negated with regular interactions between SHOs and constables.
Regular interactions between SHO and sub-inspector. And beat officers also met assistant
commissioners and deputy commissioners.
Distress calls were addressed immediately with walkie-talkie before control rooms instructions
Beats ensured complaints reached them first instead of reaching to Tripathy and were
embarrassed if complaint box had information they were not aware of.
Corruption within officers was tackled with punishment.
Corruption among other stakeholders like the municipality was also tackled with intangible
actions.
Regular meetings with municipality, local NGOs, telephone, electricity departments, etc to tackle
problems.

Result

Beat officers gained respect from the community and invited them for weddings, family
gatherings etc.
Beat officers given more responsibilities and power to make decisions than the sub-inspectors
who supervised them and intervened as per need.
Total crimes reported declined from 11,289 in 1999 to 8005 in 2000 and after 7 years number
of crimes are below the 1999 mark.
Police performance in crime detection registered a steady increase from 78% prior to 1999 to
86% in 2000 followed by 94% in 2004

Case 2: Break Through Innovation #2: Dr. Govindappa Venkataswamy

At the age of 56 Post retirement as a professor, he dreamt of Eliminating unnecessary blindness in India
Focussed on overcoming

Limited Capability of eye surgeons to conduct surgeries

Non Affordable surgeries for the under privileged

Making a Dent in Global Business:

He Founded Aravind Eye Hospital, Internationally recognized as an institution best suited to

make not just a dent, but a grand canyon in the world of blindness. Instead of increasing the
number of surgeons to cope with the problem of unnecessary blindness, he decided to find ways
to increase a surgeons productivity. And he has perfected an assembly line technique of surgery
that increases the productivity by a factor of ten.

Orbit Shifting Idea:

Result:

Building productivity through McDonald assembly line

The model adopted was that of STD Booth and Xerox, where more the numbers, more the
profit, continuing to serve the community

Only 30% of the patients pay for the treatment and rest go free of charge and yet the hospitals
makes 35% operating profit.

Field Visit
A visit to NIT Calicut R&D lab was made with the intention of finding out about state of R&D and
innovation promotion in a premier institute.
Key Observations
Positives

Sufficient number of equipment are available for use by the researchers and students.

Being a premier institute, there is ample government funding for R&D activities and lab
equipment.

Negatives

Most equipment are obsolete

Equipment procurement is lengthy due to strict regulations. Delay in equipment procurement

delays R&D projects.

Industry tie-up is very less. Very few projects were mentioned which were taken up in
collaboration with the industry. Industry-Academia relationship is not strong which does not
promote strong market driven R&D culture in Academia.

Government backed projects are not lucrative. Due to bureaucratic red tape, several government
projects are sanctioned after long delays which renders the R&D useless and researchers are not
incentivized.

Stipend for Research scholars is not attractive, however, professors/scientists are amply paid.

Projects are not monitored.

Leakage of funds.

Key Learning

Barring IITs/NITs, fund allocation for R&D is very less compared to China, US, etc.

Funds allocated for projects should be monitored to check for leakages and improper use.

Procurement procedures should be relaxed with focus on quick procurement so as to minimize

project delays and have the latest equipment for better research capability.

Industry-Academia interaction should be increased through alumni, MoU, etc. IndustryAcademia interaction with promote research to be market driven thus chances of research bearing
profits improves.

Tie-ups with foreign research institutions with facilitate knowledge transfer.

Quality of research should be rewarded so as to attract more serious researchers.

Compensation for research scholars should be improved.

Conclusion:

Government investment in R&D is minimal when compared to other countries like US and
China.

Lack of visibility of current schemes among public.

Decrease in the amount of money invested by government in comparison with private sector

Brain drain scenario

Government must play a key role in implementing educational reforms

Intellectual property rights needs to be revised

Undergraduate universities lacking good infrastructure in terms of laboratories