Why India desperately needs an innovation strategy

I don’t know when there would be a ‘breaking story’ of an Indian starting a  700 million worth Facebook-like startup. Facebook valuation is a couple of billions not even millions but the point is something larger. Job offers worth Lakhs still make news even when in the words of Obama ‘India has emerged.’

The Global Innovation Index Report 2009-10 released by the Confederation of Indian Industry (CII) in association with INSEAD Business School, France has something to worry for all of us. India has dropped 15 places, from 41 to 56th position, on the Global Innovation Index (GII). India in fact has been on a decline for the last 2 years, losing 18 places from 23rd position in 2007-08 to 41st last year.

Although the ranking is relative, it shows how other countries are moving faster than India in terms of five enabler pillars of innovation like institutions, human capacity, general and ICT infrastructure, market sophistication and business sophistication and two output pillars of scientific outputs and creative outputs and well-being.

Apart from Scandinavian countries, our main concern has to do with China which along with Hong Kong has moved up the ranking from 12th position to 3rd position this year. It’s important to note that we still perceive China as a low cost imitator rather than innovator which is far from reality now. 

China's investment in research & development (R&D) as a share of its national wealth has doubled since 1999, reaching 1.5 per cent in 2007, behind the 3.5 per cent investment in Japan and Korea; while India's stagnated at 0.7 per cent according to a recent report by the Goldman Sachs. China’s current investment in R&D is US$ 100 billion, compared to US$ 325 billion in the US and US$ 123 billion in Japan. China’s target of spending 2.5 per cent of its national wealth (gross domestic product) on R&D by 2020 translates into a tripling of its investments in this sector to US$ 300 billion.

China’s share in science and engineering articles has risen six fold since the mid-1990s, from 9,000 to nearly 57,000 each year, and accounted for 7 per cent of the global research output in 2007. India's share stagnated at 2 per cent between 1999 and 2007; while that of the US declined from 31 per cent to 28 per cent; and the European Union from 36 per cent to 32 per cent.

India needs to graduate from a service provider to an innovator. Yes we are a IT super power, yet we don’t have companies which can produce block buster products like i-Pod’s or Facebook. We just cant be satisfied on foreign companies setting up shops no matter how advanced work they carry out here, but we need homegrown Microsofts, Ciscos and the Bell Labs for us to be in the league of super powers.

Focus on innovation

Indian companies and labs should become competitive enough to export green technologies, hybrid cars and nano technologies. For this we need to have both long term as well as a short term policy focus on innovation.  Firstly we should incentivise research and entrepreneurship in India in proportion to our large population.

On the entrepreneurship front while our country is being mushroomed with technical and management colleges, how many of our kids have support for ‘creating’ jobs rather than finding them. The concept of seed money and funding which is so critical in raising entrepreneurship has to be further institutionalised.

 India as a country has no dearth of high net worth incomes, yet our risk taking appetite is low. Government should give adequate tax breaks and promote institutions of innovations through a public private partnership (PPP) mode. India needs many more business and technology incubators so that innovations can be realised commercially. There is  also a significant role to be played by our society towards innovation.

Our social thinking towards entrepreneurship has to change. Much has to do with our colonial mindset tuned towards a ‘safety net’ through a  job rather than a risk taking entrepreneur. It’s omnipotent that our parents and teachers create foundations and support for accepting ‘entrepreneurs as professionals’ rather than deviants. Yes there would be many failures in the process, but that’s what makes an economy an advanced one which is judged by the inherent capacity to absorb and tolerate failures.

America is what it is by its innovation and entrepreneurship and also by its inherent attitude to accept failures. If one fails in America he is experienced not finished. Till we gradually change our mindset, we cannot be innovators in the true sense.

Last but not the least, creativity has to become a fundamental axiom in our educational system. Our ability to innovate can only come when right from kindergarten, our kids are nurtured with creative skills. 

Chinese schools are also adopting a problem-based learning approach rather than a traditional rote learning system. What we need is a long term multi-faceted innovation strategy if we can compare ourselves with America.

In a recent article in Newsweek, its former editor Fareed Zakaria wrote, “America remains the world leader in technological achievement. Consider the 2009 Nobel Prizes of the 13 people honoured, nine were American. Once you take out the economics, literature, and peace prizes, the United States, with five per cent of the world's population, still won close to 70 per cent of the awards. Even amid a terrible recession, the country still dominates the fields of IT, life sciences, and nanotechnology.”

(The writer is a professor of strategy & innovation)