Eureka!!
While the Kepler Space telescope gave Nasa and its associate scientists and
astronomers yet another chance to utter the most popular word in Greek with the
discovery of the first ever solar system closest to ours in terms of its star
and the distances of its planets from the same, spare a moment for Neil
Armstrong and Sally Ride, the first man to walk on the moon who eventually went to his heavenly abode a month and a half back and the first ever
female US astronaut respectively who lost her life to pancreatic cancer around 4 months ago. Ride did more to popularise science among young children and
create more and better science teachers than arguably any other NASA alumnus
till date. By the way, just a few days before her demise, a moment of pride came
for us when Sahyadri, the 3rd
and last of the indigenously developed 1st generation stealth
frigates was commissioned in the Indian Navy (that’s another matter that the
stealth frigate project started 15 years ago and Sahyadri alone took 9 years to
build). However, I won’t beat about the bush and come to the issue. While for
the developed world and our elder brother China (ever heard hindi chini bhai bhai), technology
development news stories are like daily morning breakfast, our score barely
reaches a dozen when it comes to indigenous technology development.
Defence
technology, without doubt, constitutes the greatest investment in all kinds of
technology for any nation worldwide but herein we top the list. Not in
technology development but in being the biggest technology beggar (read buyer)
in the world. India is the world’s largest
arms and weapons importer consisting of all the kinds of weapons and support
technology and systems. In the 2012 budget, the government has targeted a total
defence spend of $38 billion (up from $35 billion last year) an overwhelming majority
of which consists of making up for increased salaries and personnel benefits
coupled with arms and weapons procurement from outside. China corresponding defence
spend was over $105 billion last year out of which, $6 billion was on defence
R&D but this
figure, as per numerous defence experts from India and the US, may by higher.
To what extent has the People’s Liberation Army (the official name of Chinese
military) has reaped the benefits of
higher R&D spend is laid bare by the fact that it recently unveiled the J-20
5th-generation fighter aircraft, an antiship ballistic missile, and the
stealthy, catamaran-hulled Houbei-class
fast missile boat. At the same time we are at just over $1.5 billion in defence R&D spend. For
a more noble comparison, US’s total
defence R&D spending last
year was $76 billion, twice of India’s
total defence spending targeted for
financial year 2012-13!!
Moving
from defence barracks to civilian turf, we are still languishing in muddy
waters. India’s total R&D spend stands close to $40 billion as per a recent
report by Roland Berger Strategy Consultants. Out of this, apart from the
ignominiously low spending done on basic sciences, remaining is mostly divided
between the pharmaceutical and automotive sectors in the country. While this is
definitely a positive sign, it must not be forgotten that some of these
companies are foreign giants who have set up their R&D facilities in India.
Again, in the private sector, pharma stands out with nearly $2 billion in
R&D spend.
But
the flip side is that the above sectors mostly spend on developing consumer
based product technology and technology in non-consumer based product sectors
such as energy, infrastructure, agriculture and information and communication
technologies is almost negligible. One example being that almost all heavy
machinery and construction equipment used in the manufacturing plants in India
and employed in the massive real estate boom in the country respectively is
almost entirely German, Japanese or US made. Try and recall one Indian private
company that manufactures power plant and energy related equipment using
indigenously developed technology except Nuclear Power Corporation of India
Ltd. (for nuclear, atomic and space
R&D, read below). When it comes to soft skills, that’s all we have.
Skills. When it comes to developing out own software products be it OS based or
internet based, we happily hide behind the veil of our IT industry which is in
real terms, an IT services industry and not a product development industry.
There is no doubt that many IT, automotive and electrical/electronic firms,
mostly foreign, have their running R&D centres in India but herein lies the
catch. The output of that research, which means patents filed for that
technical innovation, occurs in the homelands of the parent companies. One statistic
can highlight this fact. A research study conducted by scholars in IIM Ahmedabad
states that the total value of imported R&D from India to the US stood at around
$430 million in 2006 while in 2010, it nearly quadrupled to $1.7 billion. In
fact, as per Zinnov (2011b), the total market for R&D outsourcing in India
stood at $11.8 billion in 2010, the IIM A paper states “although China may have more
number of foreign R&D Centres, she exports far less R&D and testing
services to the US” as compared
to India.
To
put it in perspective, the core purpose of R&D is the socio economic development
of a nation. Now, R&D centres of foreign firms, which by the way far
outnumber similar setups by Indian companies, provide employment opportunities
to Indian researchers and PhDs, the fruits are enjoyed by the developed nations
abroad. From software to hardware, from automobiles to electronics, the patents
filed outside after using cheap Indian talent are then converted into products
and sold across the globe as brands at prices far outweighing the pockets of
80% of the Indian masses (barring pirated software which, being the biggest
heartache to the developed world proprietary software industry, is available
cheaply in India). Without being jingoistic, parallels can be drawn how the
British colonialism destroyed the flourishing cloth dying and cotton weaving industry
in many cities of India and at the same time, exported cheap minerals to UK
which were then exported back to India and sold at exhorbitant prices to the
select elite at that time while the farmers, mine workers and cotton weavers gradually
perished in the hundreds of millions.
But,
coming back to the present, this hidden irony behind Indian technological and
applied sciences R&D can largely be attributed to a rotten patenting
process in the country which simply does not have enough workforce to process
patent applications which is a extremely skilful exercise. As per a report presented
in the Rajya Sabha in October 2008 by the Parliamentary Standing Committee on Commerce,
a patent examiner in India handles 214 applications every year. The same number
is only 90 in the European Patent Office, 97 in the United States Patent Trade
Office and 88 in China. In 2010,
China received 391,177 invention patent applications. Since China has a little
above 5000 employees in its Patent office, a simple calculation would reveal 78.23
patent applications being processed per examiner. The Chinese office
granted 135,110 invention patents in 2010, a little above 27 per
examiner. While in India in
2009, our patent office received 36,812 applications and during the period
2008/09, made 16,061 grants. This comes out to 245 applications processed per
examiner and just about 107 grants. Any lay man can
ascertain the quality and accuracy of the patent processing office and its
officials!! The enormity of the discrepancies that might lie in indentifying and
rewarding the most important sources of socio-economic development of the
country can be eye-popping. The icing on the cake is so colossal that it covers
the entire salty cake. Just a small
figure of an over 80,000 backlog of patent applications.
Turning
the page to institutional R&D promoted by non – profit organisations and
government funded institutions, India lags far behind the dragon and South East
Asian economies like South Korea. The biggest organisation in India for
conducting original R&D, Centre for Scientific and Industrial research (CSIR),
under which 39 national laboratories come, the Achilles heel is the peanuts
awarded to these national laboratories when it comes to funding for what is
their very objective of existence - R&D. The total allocated budget for
CSIR in the financial year 2011-12 was Rs.3300 crore or around $650 million
($1.6 billion in PPP terms). For comparison, Alstom, the US company which
manufactures power plant and electrical equipment and supplies to most Indian
power utilities spends a little over $1 billion on R&D per year. Also, the
R&D budget of National Science Foundation, US’s equivalent of CSIR, was
$7.5 billion for the financial year 2011-12, 0.5% of US GDP. For India, CSIR’s
budget is just 0.06% of India’s GDP.
However,
there are bright spots slowly rising above the horizon. To augment R&D
across all sectors of the economy, the weighted deduction on expenditure
incurred on in-house R&D has been enhanced from 150 per cent to 200 per
cent. Similarly, weighted deduction on payments made to national laboratories,
research associations, colleges, universities and other institutions, for
scientific research has been enhanced from 125 per cent to 175 per cent. As per
the Union Budget 2010-2011, the income from such approved research association
is exempt from tax. In 2010, the government declared to set up a state backed VC fund for
R&D in life critical sectors such as pharma with an initial corpus of $2.14
billion to expedite the drug discovery process and enhance the number of new
drugs being discovered manifold.
But,
such initiatives are pittance when it comes to massive investments in technology
needed in core sectors such as energy, agriculture, heavy machinery and
material science. This has percolated backwards to the first link of the entire
R7D value chain, i.e the education sector at the school level to cuh an extent
that the mountain of challenges is only growing higher. As per the results of a
recent survey conducted across hundreds of schools in the Metros of India, the
number of students wanting to take up commerce at a higher level of education has
risen almost three-fold as one moves from classes six to eight to 11 and 12 in
the last few years. While astronauts like Sally Ride go on to become educators
to spur the next generation of scientists in the developed world, teachers in
India are forced due to poor pays and in adequate recognition (owing to the
vestiges of the colonial era) to teach in coaching institutes and private
tution centres. More than 70% of science and engineering graduates from non IT
stream end up being the part of the largest educated private labour force in
the world – the Indian IT/ITES space. Hundreds of millions, though continue to
live in an India where the fruits of R&D conducted 200 years back like
electricity and water supply have never been tasted.
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