Spend on tech, focus on strategic areas

Kiran Karnik

TECHNOLOGY is the currency of power, and the driver of economies around the world. So, what needs to be done for India to make the leap in technological capability, enabling an acceleration in sustainable and inclusive growth? It could spend more, be purposeful, promote diversity and upgrade higher education.

 

Target reaching a spend of two percent of GDP on R&D by 2030

For decades now, political leaders (including prime ministers) have set a target of two percent of GDP for R&D. Even this modest target is a pipedream, with the present gross expenditure on R&D (GERD) estimated at just 0.65 percent. The PM must announce a year-by-year ascent path, to reach two percent by 2030. In addition, provide appropriate tax or other incentives to increase private sector R&D spending to 0.75 percent in five years, from the present 0.26 percent.

China — our main rival — spends 2.43 percent and, with a GDP that is more than four times ours, this translates to over 10 times India’s expenditure (Israel invests 5.6 percent).

 

Mission mode for efficiency, accountability and delivery

While funds are necessary, they are not sufficient. Executing in true “mission mode” requires structures and systems that facilitate efficiency, accountability and delivery. Delegation and empowerment are key. Over the years centralization and excessive bureaucracy (including tech-bureaucracy) has become the unfortunate norm. There is much to be learned from the experience of our nuclear and space programmes, especially from their early decades.

The growing prowess of India’s tech industry, its agility, flexibility, and speed of execution, offer unique opportunities, as do its market knowledge, market linkages and global connections. Allowing industry far greater access to government research facilities and promoting interaction between the two could stimulate R&D. Public-private partnership would, therefore, be a very effective mechanism for rapid progress. Collaborative international links (with companies or universities and research institutions) should be established for R&D, wherever appropriate.

 

Focus on strategic areas like agriculture, health-tech, pharma, AI and more

Even with big increases, funds will always be scarce. Focussing on a limited number of fields is therefore necessary. We need to pick areas which are important and strategic with a view of the future and of our capabilities and strengths. Amongst these would be: agriculture; health-tech, healthcare and pharmaceuticals; electronics; cyber, computers, and AI; genetics and biology; climate change; energy; transportation; nuclear and space tech. Even within these, a tighter focus is essential. For example, thorium reactors and small modular reactors; or space-tech applications, scientific research, and autonomous/robotic space systems, instead of huge time, effort and funds going into vanity-driven human space flights.

While a mission-orientation with clear deliverables, costs, and time-frames is essential, funding should also be provided for blue-sky, open-ended research and for basic science. These are the foundations and seeds of future (often, yet unclear) technologies and missions.

 

Improve education at all levels and encourage diversity for innovation

Much has been written about India’s innovative capabilities, about frugal engineering, and real-life space missions that cost less than movies about them. Despite this, we rank 40th in the World Intellectual Property Organization’s Global Innovation Index (GII) 2023. This is certainly great progress from our position (81) in 2015, but far behind China (12) and South Korea (10).

If India is to be an innovative society we need to encourage diversity. This requires reversal of the present philosophy of uniformity and centralization — in education (curriculum, admission tests, systems, procedures, and much else), organization of research, funding, etc. — which dampens innovation. 

 

Going from STEM to STEAM, India can be a talent factory 

We are proud of our top sci-tech educational institutions: the Indian Institute of Science and the Indian Institutes of Technology (IITs) are globally renowned. Unfortunately, the average sci-tech institute is miles below. The long tail of hundreds of universities and colleges provides even poorer education. India does produce the second-largest number of graduates in science, technology, engineering and mathematics (STEM), behind only China.

As a result, India has a couple of million graduates with sci-tech degrees, the top 10 percent of whom are high-quality professionals. This number makes India a hub of talent and an attractive destination for so-called Global Capability Centres (R&D hubs of MNCs). Now, in keeping with new needs, STEM must quickly integrate Arts — and humanities — to become STEAM.

Rapidly upgrading the quality of higher education is essential, but we need to start at the school level. In addition, there is a need to equip those who have minimal education with skills that do not necessarily need a strong academic base (masons, electricians, plumbers, and carpenters, for example). Upgrading skills (eg., in AI) of those already employed is a must if they are to continue being productively employed.

India needs these skills, and it is the only way to reap the benefits of the demographic dividend. At the same time, demography is creating a shortage of workers and talent in most developed countries. Here, then, is a unique opportunity for India to meet its own needs and be a big exporter of talent. Success in this is dependent on the rapid scaling and quality improvement of our education and skilling systems. 

 

Kiran Karnik is a public policy analyst and author. His most recent book is ‘Decisive Decade: India 2030, Gazelle or Hippo’.