Big ideas come from a risk-taking culture

R. A. Mashelkar

INDIA should create science that will lead and not just follow. Innovations from India should be disruptive and not merely incremental. Innovation with inclusion will make India a global leader in providing access and dealing with problems of poverty.

A culture of risk-taking needs to be encouraged as opposed to being risk-averse the way we are now. ‘Make in India’ should not just mean ‘assembled’ in India, but ‘invented’ and ‘made’ in India — not just for India, but for the world.

 

Industry should invest much more in R&D, govt should give the incentives

The first priority should be to urgently deal with the current low investment in R & D, which is just 0.64 percent of GDP, well below the world average. Indian industry's investment in R &D is only around 0.2 percent of GDP. The government should play a bigger role to play in getting industry to spend on R&D. Innovative public private-partnerships (like for instance the successful New Millennium Indian Technology Leadership Initiative) is one way. But performance-based (both on input and output) incentives is another way. Incentives like weighted tax deduction, accelerated depreciation allowance, investment allowance have been either reduced or withdrawn. It is very easy to bring them back with a policy switch.

 

Link the lab to the market, help ideas find the money they need

The second priority is to accelerate the currently sluggish journey from mind to marketplace. In terms of technology readiness level (TRL), the labs begin at proof-of-concept level (TRL1) but Industry seeks fully standardized and market-ready products (TRL 9). Research labs have their limitation to go beyond TRL 4 or so, which involves only a successful demonstration on a small scale. For India, the journey from TRL 4 to TRL 9 has been a real valley of death.

The government should set up 100 sector-specific ‘Innovation Translation Facilities’ in partnership with industry and within or in the vicinity of industry. These should be publicly owned but privately managed facilities. Catapult is an interesting model that exists in the UK.

 

Cut back on bureaucracy because it is suffocating science and tech

The science, technology and innovation system should be freed up from bureaucracy. It has been a long-standing problem. The current audit systems do not recognise that science is an exploration and cannot be treated in the same way as in road-building. The previous efforts on decentralization are giving way to centralisation. Disbursement of research funding has become slow.

 

Govt as first-buyer, early-user can grow markets for new products

The fourth priority is for the government to set up aggressive public procurement policies. Innovations are products of creative interaction of supply and demand. India has incentivized supply by funding many research institutions.

We also need aggressive demand side initiatives. With large procurement budgets, government can not only be the biggest, but also the most influential and demanding customer.

More specifically, the government could act as the ‘first-buyer’ and an ‘early-user’ for small, innovative firms and manage the consequent risk thus providing the initial revenue and customer feedback they need to survive and refine their products and services so that they can later compete effectively in the global marketplace.

The government can set up regulations that can successfully drive innovation either indirectly through altering market structure and affecting the funds available for investment, or directly through boosting or limiting demand for particular products and services.

 

Buy from the private sector, free up tender, bidding rules

The fifth priority is to look at the instruments to give a greater role to the private sector. Many success stories of innovation policy in advanced economies are grounded on connection between public expenditure for innovation and spillovers into the society that are obtained through the ‘buy’ approach by contracting out to the private sector (like NASA in USA does) rather than the ‘make’ approach in a government-funded institution (like ISRO does). This calls for a radical departure from the currently adopted ‘make’ path to the ‘buy’ path, wherever possible. It will yield higher returns to society per unit public expenditure.

We need some truly bold steps to fundamentally change the General Financial Rules (GFR), which is the fundamental document that shapes government contracting in India. Bidding and tender requirements are unsuitable for research contracts. Efficiency of research gets impaired and costs of contracting increase through tendering. Rule 144 (for goods) and Rule 201 (for services) should be modified to exclude research contracts.

Grants are a flexible instrument to fund research. Under Rule 230, only educational institutions, cooperative societies and government organizations are allowed to receive grants from the Union government. This should be amended to include all forms of organizations including private for-profit firms. 

 

Dr Raghunath Anant Mashelkar is an influential thought leader who is globally recognized and honoured for his contributions to science and technology.