Long-term growth depends on continuous improvements in productivity and innovation. China has transformed itself over time from being a manufacturing powerhouse driven by sweatshop labour to one propelled by high-tech products. India needs to make that switch to lift its economic prospects and make the most of its demographic dividend. As an indication of how the tables have turned over the last two decades or more, the Economic Survey 2017-18 points out that India’s published scientific output of over 12,000 papers was double that of China’s in 1991, but in 2011 China’s output at over 1.2 lakh papers was thrice India’s. As a striking parallel, China’s and India’s per capita incomes have diverged sharply over this period. China’s R&D spend at 2.1 per cent of GDP is considerably ahead of India’s in absolute and relative terms, with India’s R&D investment a mere 0.7 per cent of GDP (the US, Israel and Korea spend 2.8 per cent, 4.2 per cent and 4.2 per cent, respectively). This paucity of investment is reflected in the number of researchers per million people — at 156, India is way below China’s 1,113 and the US’ 4,231. Clearly, Indian science needs a leg up; as the Survey notes, it “underspends even relative to its level of development” and the increase needs to come from the private sector (which accounts for 43 per cent of research spending) and the universities (4 per cent). The latter’s insignificance points to a broken education system, which is, in fact, the fundamental problem.
However, it is notable that over half of private R&D spending has been restricted to pharma, auto and computer software (IT). The Unesco Science Report 2015 points out that while six industries account for 85 per cent of R&D, within these, they are concentrated in a handful of large firms (five firms account for over 80 per cent of the R&D reported by the pharma industry). Small enterprises need access to venture capital for Start-up India to really work and reverse this concentration. The report also observes that “six Indian States out of 29 account for half of R&D, four-fifths of patents and three-quarters of FDI. Moreover, even within each State, only one or two cities are research hubs...” The effects of the tax deduction of 150 per cent for R&D spending need to be closely examined, or fine-tuned. The Indian patents office is buzzing with activity, but foreign enterprises are doing most of the patent-filing. While becoming an FDI hub for R&D, particularly in software, technology diffusion issues need to be addressed. The Centre could drive frugal innovation — which as the Unesco report says, has emerged as India's strength — in medical devices, solar power and financial services.
There is also a crisis of teaching and research in science. The university model of inter-disciplinary exchange of ideas will serve as a catalyst. Research will benefit from teaching and vice-versa, particularly in the natural sciences. Applied research should be linked to socio-economic outcomes.