We need an incubation ecosystem to compete with innovation societies

PROBIR ROY:

 

In a recent business daily editorial, Kiran Karnik, President, Nasscom, wrote passionately about fostering a culture of innovation. It is interesting to note that innovation has indeed been intricately woven into our national fabric for centuries. Or, as Pawan Verma, author of best-seller Being Indian calls this form of innovation — jugad, or creative improvisation! In that respect, it is clear that we have had a head start to most societies. On a serious note, if indeed there are readymade metrics to measure what is loosely termed as innovation, then we are nowhere near it, nor on a path to it.

Let’s take a quick look at three simple parameters: research and development (R&D) spending as per cent of GDP, number of patents registered and yearly output of science and technology (S&T) graduates. Countries like Israel, Taiwan and Korea score significantly over India. India, with only 1% of GDP spent on R&D and over 300,000 engineers/scientists graduating each year, registered a mere 354 patents in 2003, compared with Taiwan’s 5,300 and Korea’s 3,952. These countries spend more than double of what India spends on R&D as a percentage of GDP.Contrast this with the vanguard innovation society, the US, with 88,000 patents and 2.7% of GDP going towards R&D with the same output of S&T graduates as India’s! In this respect, they are truly on a trajectory of being tomorrow’s Innovation Society.

 

How can we give a fillip to such an ecosystem — an idea whose time has clearly come? Government must play a significant incubatory and facilitating role in development of new ideas. In the flush of the post-internet boom, Silicon Valley seemed to forget that the US government funded them in the first place, with defence initiatives in the 50s. This form of collaborative nurturing and incubation up to the early 1980s led to the growth of about 1,300 biotech companies, which today employ more people than the US toy and sporting industry.The benefits are clear. Over 250 million people worldwide have been helped by 130 biotech products and vaccines approved by the Federal Drug Administration (FDA). And, there are around 350 biotech drug products and vaccines in different phases of clinical trials, targeting diseases like cancer, Alzheimer's, etc.In India, the National Innovation Foundation, run by the Council of Scientific and Industrial Research, is a government initiative with similar intent — fostering innovation and creativity in S&T with an ultimate go-to-market proposition, as is the department of science and technology’s Tifac.

 

Several low-key private sector initiatives, like the KReSIT, IIT, Mumbai & Madras and Indiaco, India’s largest private sector incubator, to name a few, are places where this is being done, albeit on a much smaller scale. The much-publicised Indian government and MIT Media Lab Asia project to facilitate the invention, refinement and deployment of innovations to benefit all sectors of Indian society, however, never replicated its American success (Computer Clubhouse Network and Lances). And has since lost its pride of place to South Korea.Nasscom, on its part, has recognised its own role in facilitating innovation under a recent Innovation Initiative Programme for its SME constituency and has achieved initial success. However, all told, there is a group of about 100-200 incubatees with these guardian organisations, when the actual need and potential for a country this size is 100 times that.

 

Closer home, Malaysia is a good example of how government involvement can successfully harness the innovative powers of entrepreneurs in areas as diverse as tele-health, smart schools, and e-governance. It makes available innovative debt financing and an infrastructure ecosystem under the aegis of a $420-million corpus operated by the Multimedia Development Corporation. Universities and other institutions of higher learning in and around the 50-km knowledge super-corridor of Kuala Lumpur facilitate this ecosystem.Some may argue that this symbiotic relationship between public and private players, coupled with a robust patent system ensuring equal intellectual-property justice, has been instrumental in producing the likes of Jerome Lemelson, far and away the most prolific inventor of the 20th century, with more than 500 patents to his credit. Israel, a nation-state with a population as small as that of Bangalore city, is in a steady state of innovation — a record 1,188 US patents registered in 2003. It has around 100 venture capital firms, that have been responsible for more than 120 companies being listed on Nasdaq.

 

Fostering innovation by partnering across the intellectual value chain is another key enabler. Good examples being the newly coined military-entertainment complex in the US, where the unusual, yet exciting, collaboration amon-gst the Pentagon, Hollywood, gaming companies and Silicon Valley have created tank and infantry warfare simulators and software for the US army. Thus, not only turning ideas into dollars but also contributing to national security. The other one being NVidia, the graphics card manufacturer, Henson Puppeteers (top puppet-making company) and Electronic Arts (a top gaming company), which have collaborated to create real-time 3D humanoid characters for the next generation of video games.Nasscom hitherto has been at the forefront of exploiting the labour cost arbitrage with respect to IT services, BPO and ITeS -- certainly no cornerstone for an innovation society. While we have consciously embarked on the low cost-high value destination for global majors, we are falling behind in our race to be counted amongst the innovation societies of the future. Mr Innovation, the US, itself is outsourcing to India, in the hope that what is not core to its business is best done where it is. Leaving it free to concentrate on what they do best — building intellectual property and an innovation edge for the future.

I had advocated in 2002 what I called an innovation ecosystem — a network of public and private firms, universities, government agencies, NGOs and Nasscom which taps into a global pool of knowledge and assimilates and adapts it to local conditions. Nasscom is ideally poised to play a pivotal role in its own reinvention, replicate its success and once again provide leadership in promoting the desired incubation ecosystem to create the next value proposition for India — as an Innovation Society.

 

The writer is member, Indian Merchants Chamber National Technology Committee and member, Focis Entertainment Alliance. These are his personal views.