A vast population of well-educated and trained individuals is our best bet at driving the innovation engine. And our inherent cost consciousness will give us the ability to create a whole range of value-for-money products and services.

According to a report by the India Electronics and Semiconductor Association (IESA) and Frost & Sullivan, India’s electronics systems design and manufacturing (ESDM) industry is expected to grow at a compound annual growth rate of 9.9 per cent between 2011 and 2015 to touch $94.2 billion. To kick-start the innovation engine, it requires efforts from all the stakeholders of the ESDM landscape — industry, the Government and academia.

The challenges A big problem is the inability of start-ups to attract funding. And those that manage to receive funding, are under great pressure to become cashflow-positive quickly. This leaves limited room to innovate. Then there is the absence of the right ecosystem and infrastructure to convert raw ideas into commercially viable prototypes. . For example, if a company creates a new integrated circuit (IC), we do not have enough end-equipment electronics companies in India who would want to use the IC, however innovative it may be.

Further, our business environment does not encourage risk-taking. Nor do we have role models to emulate or who will encourage us. That is a huge limitation.

The biggest issue is with our education system. In India the focus is geared towards making excellent grades, possibly because of our sheer population. This mindset must change to encourage practical experience. Institutions should encourage students to pursue R&D projects to solve real-life problems. Our faculty must be rewarded with additional incentives for the effort and time they put in to mentor young innovators. Academic institutes are best suited for creating spaces that foster open innovation.

Why not reduce the upfront taxes and duties levied on startups receiving funds? Why not give them schemes like those offered by the Software Technology Parks of India to grow the software industry? Why not give VCs special incentives for funding innovative ideas that lead to IP development? The Government can also support innovators by setting up innovation centres. It can play a huge role in influencing academic institutions to promote innovation through scholarships and grants.

Come on, take risks India Inc needs to have a more open mind and encourage risk-taking peers, even if they fail in their ventures. There are many companies that have the capability to invest in R&D. They must realise the potential upside of investing in idea creation and IP development. Companies can also foster innovation by conducting competitions such as ‘hackathons’. Not only does this increase the visibility of the company, it also helps discover many new ideas. Defence and aerospace are strategic electronics verticals with great potential for boosting electronics design and manufacturing. At present a major part of the material in this segment is imported.

PSUs and the defence laboratories are plagued by problems of capacity, manpower limitations, and huge cost and time overruns on ongoing projects, though they have been some success stories. Essentially, they lack the scale to meet the demands of the ever burgeoning defence requirements -- more so, the high technology electronics segment.

The cost of manufacturing in China has quadrupled in the last five years; this gives us a chance to make India an attractive manufacturing destination.

The writer is the president of IESA

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