By conventional metrics such as numbers of patents, the centres of innovation worldwide are the United States, Europe and Japan. Yet, two researchers from the influential British think tank Demos argue that the world’s future innovation hotspots are going to be India, China and Korea. The Demos researchers, James Wilsdon and Kirsten Bound, came to this provocative conclusion after spending 18 months on a study “The Atlas of Ideas: Mapping the New Geography of Innovation”. They recently participated in a series of discussions at the Indian Institute of Management-Bangalore, as part of the UK-India Education Research Initiative.

One key reason for the emergence of these Asian centres of innovation is the increase in international flows of talent and investment. India initially saw income and investment from software and business process outsourcing. In the process, it established a brand image for its knowledge workers. That has allowed it to move up the value chain to research and development outsourcing, and encouraged numerous multinationals to set up research labs in India. Knowledge workers are increasingly moving back and forth between the established centres of innovation and India, turning the brain drain into a brain flow.

In recent decades, Indian researchers have experienced the best of innovation-focused environments. The role model effect of Silicon Valley entrepreneurship will inspire many of them to move on and set up their own shops which will also employ best practices, thus enabling Indian research to progress rapidly. Now even the Indian government laboratories are establishing new programmes aimed at nurturing talent and promoting scientists’ engagement with the international innovation chain. Likewise, China has embarked on a massive effort to attract its foreign-trained scientists back to the mainland and pumped in significant funds towards establishing world-class laboratories and universities.

Bound, who led the India study, points out that India has significant strengths that will promote innovation. These are: democracy, diversity, demography, interdependence and role models. Democracy fosters the vibrant open atmosphere that allows for fresh ideas and free thinking. Further, the range of civil society organisations present in India ensures public scrutiny of the direction of innovation. Diversity ensures that India can draw upon a range of experiences and even alternative traditional bodies of knowledge such as Ayurveda.

Demography ensures that even if innovators emerge naturally only one among a million, India would still have a thousand potential agents of transformation. As the Honeybee Network demonstrates there are innovators even among poorer and rural sections. Interdependence characterises scientific interaction today and India, through its vast pool of expatriate scientists and entrepreneurs, is well poised to plug in at an advanced stage of the innovation chain. Further, there are now enough role models, particularly the knowledge workers from humble backgrounds, who have built successful companies in India and the USA, to inspire Indians worldwide to go beyond innovation to incorporation.

So what then are India’s weaknesses? Interestingly, Bound opines, they are: democracy, diversity, demography, interdependence and role models! The same factors could turn into liabilities if they are not harnessed in the right manner. Democracy could easily become an excuse for the mind-numbing delays of bureaucracy. There are already enough examples from the biotechnology sector where non-governmental organisations have sought to cripple research, while farmers have gone ahead and adopted scientific breakthroughs like genetically modified seeds without a proper regulatory and monitoring framework. In terms of demography, India has succeeded in providing higher education to less than a sixth of its billion citizens. Unless this system is revamped, India’s potential demographic dividend will not be encashable.

Having focused on Asia, the Demos team is now casting its net wider. For example, Bound suggests that the Brazilian experience with creating an aerospace hub around Sao Paolo and the impressive market success of its Embraer aircraft holds significant lessons for Bangalore. Wilsdon notes the huge investments in creating centres of knowledge are now being witnessed in the Islamic world — from Qatar to Malaysia. Israel’s success in building a vibrant innovation hub and Finland’s success in the mobile telecom sector all point to the changes afoot in the world of discovery and development.

But fundamentally, Demos aims to inform British policy and enhance the competitiveness of its scientific establishment. Therefore, the researchers recommend that Britain create a £100 million global research and development fund targeted at international collaboration, including a Darwin Scholarships programme to bring 200 Asian scientists a year to the UK. Interestingly, they advocate the creation of public knowledge banks, on the lines of the open source movement. It is that spirit and framework of openness that will enable the creation of new hubs and spokes in the scientific world.

(The writer is a professor of economics at the Indian Institute of Management, Bangalore)