Why India desperately needs an innovation strategy ?

(The following article was published in Deccan Herald on 14-December-2010)

http://www.deccanherald.com/content/120451/why-india-desperately-needs-
innovation.html
Recently in the popular press, there was a headline story on how on a Rs 70
Lakh job offer was made to an Indian student by Facebook.
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)