June 2012

Imperatives for an Innovation Agenda in India

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Innovation is critical to ensure that gaps between the oft-mentioned ‘two Indias’ can be narrowed and the economic and social growth can be made more inclusive. Innovation places  the information and communication technology (ICT) industry at the centre-stage, making it an engine of the knowledge economy

Dr Jaijit Bhattacharya,
Dr Jaijit Bhattacharya
, President, Centre for Digital Economy Policy Research; Director, South Asia, Hewlett Packard

 Hewlett PackardIn the fiscal year 2011, the number of applications for patents filed in India rose to 37,000  from 34,000 in the previous year. Of these applications, 80 percent came from outside India.  Even as India continues to make its mark as a ‘knowledge’ economy, the creation,  application, commercialisation and protection of knowledge—all need more work before India  can be at the forefront of innovation in the world. Above all, there needs to be a national agenda for innovation, which penetrates down from policy to the individual user.

Learning from other countries

When it comes to policy, the US, UK, Europe and China are the leading examples of nations  with clear innovation agendas outlined. In UK, the existing framework under the  Department for Innovation, Universities & Skills (DIUS) has been performing well, especially  on the lifelong learning and early-stage venture capital front. The Innovation Nation White  Paper outlines the future of innovation in the country, providing intellectual leadership by  suggesting new policies based on new imperatives. Highlights include provisioning for  ‘hidden’ innovation and demand-driven ideas and fostering collaboration between public, private and non-governmental organizations (NGOs) to transform public services.
The US, recognises a vision and strong culture of innovation, and more importantly, successful commercialization of innovation in the country. The National Innovation  Initiative (NII) outlines the next phase in this journey, focusing strongly on the three pillars  of talent, investment and infrastructure. In both, the US and the UK, there is recognition of  the fact that the focus of research is skewed towards certain sectors—health science and  defence in the former and pharmaceuticals and aerospace in the latter. There is, therefore, a  conscious move to even the playfield for innovation in all sectors.
The European Union (EU)  stresses on innovation at both the Union level as well as the regional level. For Europe 2020,  the three priorities identified include smart growth, sustainable growth and inclusive  growth. The EU’s Innovation Policy places strong emphasis on social innovation, recognizing  it as “an important new field which should be nurtured.” The Policy suggests creating a  virtual hub of social entrepreneurs and supporting them with a European Social Fund (ESF).
China has been a strong science and technology innovation player. The Organisation for Economic Co-operation and Development (OECD), along with the Ministry for Science and  Technology have been reviewing the policies for  innovation in the country and have come  up with gaps that we, in India, would be quite  familiar with. As its medium and long-term  objective, China wants its dependence on foreign  technology to reduce by 30 percent and be  among the top five countries in the world in terms  of domestic invention  patents granted, and the number of international citations of its scientific papers.

Imperatives for India

The innovation strategy for India needs to have four very clear objectives to enable  innovation at the bottom of the pyramid (for and by the next billion), create an innovation  ecosystem, focus on local capabilities for both near- and long-term benefits and harvest  existing innovations so that the benefits reach a larger potential user base. This quadri-focal  strategy is outlined in the figure below:
Even as the near-term benefits spark immediate interest, the long-term vision needs to be on  creating a culture of innovation. And even as we invent solutions at the institutional level, we need to create a nurturing environment for innovations developed at the individual and grassroots level. The four types of innovation need an organisation created to identify and seed ideas to harvest them. Budgets need to be created to support innovations and interfaces evolved with other government agencies, the private sector and academia to foster them.
To build the environment for innovation, the strategy needs to address the following factors:

Ensure research converts to innovation:

Research is integral to innovation, but it doesn’t end there. For research to convert into  meaningful innovation there needs to be a three-way understanding between the public  sector, the private sector and the academia. Collaboration between industry and labs,  creating a framework for jointly-funded research, creating a functioning lab-less research  capability that leverages the existing facilities in the private sector, universities and the  government itself, and ensuring feedback for research are the other important factors.

Create a strong legal structure:

The intellectual  property rights (IPR) ecosystem is a minefield that needs careful navigation  coupled with a sturdy framework. For innovation to truly prosper, it is important that the  IPR of all solutions and innovations are legally protected. One of the biggest concerns for small  entrepreneurs and individual inventors is that they don’t know enough about existing  IPR and end up inadvertently infringing on them or losing their IPR to larger corporations.  These entrepreneurs need specialised legal and IPR support even as they are being incubated.  Small enterprises and individuals need to have access to online IPR systems so that they can  protect their IPR. Such systems should include online patent filing.

Enable business partnerships and incubation:

The gap between idea and adoption is filled only by the successful commercialisation of  research. For this, there need to be strong linkages between research and industry. The industry, with its in-depth understanding of the market and resources that can help bring  innovation to market, can help take the innovation to its logical conclusion. This can be  through direct or indirect involvement. An organisation could support incubation through  new and existing qualified entrepreneurs, support technology acquisition through buy-outs,  or even have summer-break programs for potential student entrepreneurs to work on their  ideas. In today’s complex world of technology, new innovations cannot thrive without access  to existing IPR.


“The gap between idea and adoption is filled only by the successful commercialisation of research”


Encourage community participation:
Inventions like jugaad are examples of demanddriven responses. Jugaad maximizes asset utilization by reusing the same pumpset that helps in irrigation, to also power the cart that helps take the farm produce to the mandi and provide locomotion to the villagers, thus  optimizing the economy as a whole and making the local economy more efficient. In fact,  jugaad is a symbol of community-driven innovation. However, it is also a perfect example of  how our policies stifle innovation. As per the Central Motor Vehicles rules, jugaad is illegal.  Not only is jugaad illegal, there have also been no steps taken to introduce this innovative   solution to other parts of the country such as the south or the east, thus depriving them of the
benefits from this innovation.

Develop policies to incentivise innovation:

There are three requirements on the policy front for innovation—formulation of appropriate  strategies for promoting technological development, identification of trade and fiscal  measures to encourage technology development, and developing of a framework for standardization, certification and accreditation. Innovation needs a fertile environment  where it can take roots. Incentives in the form of capital investment, finance and favourable  taxation are critical. There also need to be policies for the government to enable procurement  of innovation. Current procurement policies disincentivize innovation. Technology and IPR  framework, availability of a talent pool and better access to market are all necessary to foster  innovation as well.
India offers a unique chance and a ready testing ground for new initiatives and services.  Innovation aimed at inventing for the next billion will be most critical to develop, because  that will help narrow the divide between the haves and the have-nots in the Indian state. The  proposed US $5 billion India Inclusive Innovation Fund , to be launched by the Indian  government later this year, is a step in the right direction. Innovation, however, will always  be driven by people’s creativity and enterprise. And that’s what policy makers need to  nurture.

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