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Business Accent
Commercialise research
If India wants to achieve global economic leadership, we
have to transform ourselves from a services economy to an innovation economy.
The first step in this direction will be commercialising research
Among the many deities worshipped in India, Saraswati and Lakshmi (representing
knowledge and wealth) respectively are prominent. Indian mythology is full of
stories about the lack of co-existence between these two goddesses. The division
between them has got so well ingrained in India that they became the preserves
of distinct society strata with pursuit of knowledge being accorded a higher
status than the pursuit of wealth.
Today, India is globally recognised as the services hub, and is commonly referred
to as the ‘back-office of the world.’ But to achieve global economic
leadership, India has to transform from a services economy to an innovation
economy and become the ‘front-office of the world.’
Understanding innovation
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We must reflect on the fact that though the output gets
converted into commercial products and solutions elsewhere in the world,
it is ultimately sold in India
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The word innovation sparks images of white coated people in
cluttered laboratories periodically shouting ‘Eureka!’ Though scientific
discovery is the starting point, innovation requires the conversion of a new
idea or discovery into something tangible with a measurable impact and value
to the stakeholders.
However, an innovation economy cannot be possible only on the basis of scientific
excellence. Economic leadership in the 21st century will be achieved by nations
which possess the ability to convert internal or external scientific discoveries
into commercial solutions in an economically efficient manner.
This is not a new concept. The 19th century industrial revolution was led by
nations which had mastered the manufacturing processes required to convert globally-sourced
raw material into finished goods. These were then sold in the countries where
the raw materials were originally sourced from, such as India.
The raw material of yesteryears is the knowledge capital of today. As India
becomes the preferred destination of R&D outsourcing, we must reflect on
the fact that though the output gets converted into commercial products and
solutions elsewhere in the world, it is ultimately sold in India. Most of the
patents generated by the MNC R&D facilities in India are registered outside
the country, creating a brain-drain without the physical displacement of humans.
The importance of commercialising research
- Technology-enabled solutions are important to solve
many of India’s social development issues such as education, health care
and poverty reduction. Using domestic R&D will create technology solutions
aligned to Indian requirements at a fraction of the cost of imported technology.
- Dependence on external technology is dangerous for
national security and may leave India hostage to other countries’ demands.
This has been demonstrated through recent experiences with developed economies
on atomic energy, LCA engine and hi-technology transfers.
- A services economy dependent on cost arbitrage is
always under threat from emerging low-cost providers. The ability to create
and commercialise technology will therefore create a sustainable competitive
advantage for India.
There is no doubt that the country possesses world-class scientific community
and research facilities. Apart from private sector R&D, there are over 200
dedicated government laboratories in India representing almost all areas of
science including bio-technology, nanotechnology and space. However, except
for select verticals like pharmaceuticals and institutions like ISRO, there
are not many success stories about the commercialisation of domestic R&D.
The change cannot happen overnight. It will require sustained efforts by all
stakeholders to create an innovation value chain where the outputs of each stage
get transformed by the succeeding stages.
Centuries ago, the great Indian strategist Chanakya said: “Arth karicheya
vidya” (create wealth from knowledge). If India has to reach its goal as
a 21st century economy leader and become a technologically self-reliant nation,
the Saraswati to Lakshmi continuum needs to happen sooner than later.
- Increase collaboration between industry
and the scientific community. This will provide a commercial direction
to research and encourage industry to use technology created according
to needs instead of force-fitting imported technology.
- Encourage commercial licencing of government
IP assets by entrepreneurs. This will not only increase the commercial
success of research assets as compared to scientists launching businesses,
but also generate new revenue sources for research institutes.
- Mandate government research institutes
to generate part of their funding requirements through external sources.
With most government institutes operating on a cost-centre model and
getting funded 100 percent by the government, there is no incentive
for them to develop alternative sources of funding.
- Allow industry to participate in restricted
government sectors including space, defence and atomic energy. This
will encourage the commercial usage of IP assets created by the government
institutes working in these fields in diverse application areas e.g.
an angioplasty stent using anti-corrosion submarine technology has been
created by a defence research laboratory at a fraction of the cost of
imported stents. Public-private sector partnership in Israel has resulted
in a large amount of commercially successful innovations using technologies
originally created for defence.
- Encourage the deployment of solutions
created using domestic technology. Most large-scale technology consumers
in India, including those in defence, tend to procure technology from
outside the country through technology transfers. Apart from discouraging
domestic R&D, these transfers are expensive and have restrictive
contractual conditions. A balanced evaluation of domestic versus imported
technology is required.
- Strengthen patent laws, reduce cost of
patenting and increase conviction rates for infringement. Patents are
critical to measure scientific research and innovation. They safeguard
the creator’s efforts.
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The author is Vice-president, Nasscom. These are his personal
views. He can be reached at rajdeep@nasscom.in
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