Thursday, January 21, 2010


Domestic R&D scenario in India requires impetus

Patent-base and Research & Development (R&D) indicators at the national level are used to calculate countries’ innovation quotient. However, since last few years, the whole idea of India's low-cost workforce, and India’s significant cost-savings opportunities are suffering by the challenges of slow and substandard patent regulations.

Conventionally, R&D has always been akin to the developed world. But, in recent years, many multinational companies (especially IT-driven companies) have started their R&D centres in developing nations. In this list of developing nations, India particularly has emerged as an R&D hotspot, on account of cost advantages. A conservative estimate shows that over 150 companies (with over 800 R&D centres) are currently having some or other kind of R&D centre in India. Thus in the given scenario, the future of R&D seems rosy! But then there are a few stumbling blocks that could stand as road blocks in realising this dream. In 2007, where overseas companies spent more than $10 billion on R&D in India, the domestic R&D spending, according to the World Bank, was even lower. On an average, the domestic R&D investment is even less than 1 per cent of our GDP. Worst, a huge pie of this investment, amount 80 per cent, is publicly funded. Compare this to our neighbours — China, where domestic R&D expenditure is around $50 billion. China’s public sector performs only 30 per cent of its domestic R&D.

In fact that’s just one part of the problem. In addition to lower R&D investments, we also suffer from shortage of intellectual capital base. India has only 120 people employed for R&D per million compared to 633 per million in China. Even the number of PhD students (which forms the intellectual capital base for R&D) in India is far too less. A World Bank report titled ‘Unleashing India’s Innovation — Toward Sustainable and Inclusive Growth’ reveals that in comparison to 708 R&D researchers per million in China and 344 in Brazil, the number was a dismal 119 in India in 2004. Add this with number of PhD graduates India produces! Every year about 100 PhDs graduates in India in computer science compared to 2,000 PhDs the US and China graduates. This state of affairs in R&D also has made India loose on Patent front. In 2006-2007, just 7,000 patents were granted, compared to nearly 160,000 in the US. Right now there are around 928 registered patent agents, but merely 250 are active. To top this up, there are only about 160 patent examiners. Due to these limited resources and financial constraints, it takes about two years to examine the patents. As per Research & Development Statistics at a Glance Document 2008, the number of patents examined per examiner is 100,120 in India, as compared to 5080 in the US and 3040 in Germany. On the one hand where domestic R&D investment is seeing a downfall, then on the other the slow and delayed patenting process is acting as a deterrent. This cyclic problem of delayed patenting and lower investment is pushing India into a typical catch-22 situation.

All in all, the problem has to be dealt at several fronts. There is no denial that Indians have participated in major R&D activities worldwide and headed many research projects of Fortune 500 companies. But then domestically, the scenario cannot change till the time initiatives do not flow from the policy front. So it is imperative that an enabling environment is created with adequate financial incentive for domestic R&D (with refurbishing R&D infrastructure) along with enhancing the budget for patent offices. Till then research would exist for namesake!



  1. Good. Enlightening.

    The good news is,
    All Indians are growing more eager, day by day to solve above bottlenecks identified above as soon as possible.

    Suppose, Indian Citizens by 2020, want to take calculated risks, and invest their taxable hard earned money, directly into IPOs & NFOs of IIScs, IITs, NITs, ISRO, DRDO etc, apart from public funding.

    What kind of bills will be needed to be passed?

    Will this setup click?
    Some kind of specialized Micro-financing by a panel of accounting experts operating in every research institution like Stock-Mkt Trust Value auto-balanced Stakeholding fund managers etc.

    To boost Public Private Partnerships?

    Business Incubator Projects have become the norm of the generation in India across IITs.

    It is high time to build and evolve that model to newer levels of integration and complexity.

    Time to calculate & initiate determination of inertia magnitude of blocking forces in India and perform dependency checks, before eventually snipping them out, systematically.

    Is it possible to make that happen in 10 years time?

    What is the estimated measurable magnitude of efforts that might be needed to transform this jammed up mangled metal India into a magnificient innovative engine, say by 2020?

  2. From Security Perspective,
    To set the spirit right,
    these also might be needed ...

    Transforming the now impure Hybrid Indian Soul into a pure homogenous one will be a complex operation ever undertaken in interests of humanity & mankind and cost & efforts of this operation will obviously be quite high:

    That will require some major corrections like these:

    When the rusted Indian core has become hybrid and not indigenous.

    Because, safeguarding Intellectual Property means, Indian Antiviruses have to and not American Antiviruses, the traditional way round, (strategic tactical spyware) guarding Indian Research Work Data.