After finding a global voice and position, the youngest nation in the world has shifted its focus, rightly towards research and innovation. The interim union budget 2024-25 laid a strong foundation with the announcement of a corpus of Rs 1 lakh crore to bolster the research and innovation ecosystem of the country. But more needs to be done.
When compared to BRCS countries and several other economies that were in a similar growth phase, India’s R&D expenditure is very low. Though the spending has doubled over the decade, it is still just 0.7 per cent of the GDP and even in that, the private contribution is very less. R&D is a long-term process and it will take time to realise the benefits of the expenditure. But it is the only way to keep pace with the changing trends. AI, digitalisation and the ongoing chip war, have necessitated countries to ramp up their on-shore facilities. Those who come up with early and major breakthroughs, will have the potential to change world order.
The striking difference of R&D spending in India, when compared to other countries is the participation of private players. Even with rapid and transforming growth, India Inc seems reluctant to make the move. To realise the dream of the developed nation by 2047, India must increase its spending to 3 per cent of GDP with atleast half coming from private entities. This will ensure a higher multiplier effect with results across varied sectors.
Government must become a facilitator
To foster such an atmosphere, three main aspects will play a major role. It begins with a clear vision of the government. Only if the government sets a R&D approach and pathway, other stakeholders will be able to take it forward. The country must aim to develop indigenous technology that would benefit welfare and economic prosperity. Capital commitments, IP developmental frameworks, tax incentives, export-import policy consistency and investing in world-class research infrastructure will give the needed boost. Deep technologies are the order of the day. They require high gestation period and at the same time, the technology keeps upgrading fast. To keep pace, it is necessary to immediately start investment in these sectors.
Opportunity for reverse brain drain
Public private partnerships (PPP) will be pivotal in driving India’s technological advancement. The establishment of the National Research Foundation heralds a new era, with the potential for substantial non-term grants to be allocated to academic research institutes for the development of intellectual property. However, India should aim to create more such sector specific grant-making organisations, for focused work in each area. These entities can allocate funds to universities to conduct research beneficial to the country.
In addition to governmental support, India can leverage the participation of large philanthropies and corporations by inviting them to endow chairs and professorships at research institutions. This involvement would not only provide financial support but also ensure oversight of research and IP development. Such investments are crucial in incentivising the return of Indian technologists who have settled abroad. This will help in the creation of indigenous technology within India.
Fostering collaboration between private companies and academic and research institutions, within their respective technology domains can accelerate innovation. This collaborative approach will enable the pooling of resources, expertise and infrastructure, resulting in more impactful outcomes.
A key strategy to drive technology development is the adoption of dual-use models, particularly for technologies relevant to governance and national security that also hold commercial potential. By partnering, private companies retain the rights to commercialise the technology in various markets, while the government or military utilises it for governance or national security purposes. This approach, similar to practices in the United States, is increasingly vital for safeguarding national security and defense interests.
Private sector must step in massively
India’s private sector accounts for over 80 per cent of GDP growth, 90 per cent of employment and 75 per cent of gross capital formation. Consequently, it is imperative for the government to further open up avenues and fully leverage their potential in driving technological development, production and commercialisation. The successful examples set by both the United States and China underscore the value of such an approach. In addition to the policy incentives, government must focus on infrastructure development and facilitating quick process and protection of IP.
