R&D: A Public and Private Challenge

Morning Standard

1. Introduction and Context

This editorial by Prof. V. V. Krishna explores one of India’s most persistent developmental challenges — the chronic underinvestment in Research and Development (R&D) and the limited participation of the private sector in the national innovation ecosystem.

The discussion is framed around India’s ambition to achieve technological leadership in frontier domains such as Artificial Intelligence, Quantum Computing, Green Hydrogen, and Space Technology, alongside the long-promised policy goal of raising the Gross Expenditure on R&D (GERD) to 2 % of GDP.

Despite multiple announcements and initiatives, India’s actual R&D spending has remained stagnant at around 0.7 % of GDP, far below:

• the OECD average (2.7 %),
• South Korea (4.9 %), and
• China (2.4 %).

The editorial thus situates India’s innovation lag within the global context — arguing that without substantial and collaborative investment, the nation risks technological dependence and economic vulnerability.

2. Key Arguments Presented

a. Persistent Public Dominance and Weak Private Participation

• Nearly 85–90 % of India’s R&D expenditure originates from government-controlled sectors such as defence, atomic energy, and space.
• Civilian innovation and industrial research receive a negligible share.
• In contrast, private R&D drives innovation in most developed economies, where corporate laboratories fuel industrial and digital growth.
• The imbalance limits India’s capacity to commercialize technologies and build a robust innovation pipeline.

b. Policy–Performance Gap

• Despite schemes like the Atal Innovation Mission, National Research Foundation (NRF), and national missions on AI, semiconductors, and quantum tech, private investment remains minimal.
• Programs often rely on seed funding from the government, expecting the private sector to follow — a dynamic that rarely materializes due to risk aversion and weak incentive design.

c. Economic and Strategic Costs of Low R&D

• Insufficient R&D spending restricts India’s industrial competitiveness, export diversification, and technological self-reliance.
• It weakens India’s integration into global value chains, limiting productivity and innovation-driven GDP growth.
• Strategically, it increases dependence on foreign technologies in defence, electronics, and renewable energy.

d. Need for Private–Public Convergence

• R&D should be viewed as a national investment, not a fiscal burden.
• Prof. Krishna calls for co-funding, incentive-based collaboration, and industry–academia partnerships.
• Tax reforms, matching grants, and shared infrastructure can help align public research with industrial application.

e. International Benchmarking and Missed Opportunities

• Nations such as South Korea, Israel, Japan, and Germany maintain high R&D intensity through private-public synergy.
• Indian corporations — even major ones like Reliance, Wipro, TCS, or Vedanta — invest less than 1 % of turnover in R&D, far below the 3–5 % global average among tech-driven firms.

3. Author’s Stance and Tone

Prof. Krishna adopts a realist and reformist stance.

• He supports continued state leadership in research, yet insists that private participation must become co-equal.
• The tone is analytical, advisory, and evidence-based, directed toward policymakers, industrial leaders, and academic institutions alike.
• His underlying message: Technological sovereignty is the foundation of economic and strategic independence.

4. Biases and Limitations

Bias

• Displays a technocratic bias — emphasizing fiscal coordination and institutional design while underplaying grassroots or frugal innovation.
• Assumes that increased funding and coordination will automatically deliver results, without addressing cultural or structural barriers to innovation.

Limitations

• Does not sufficiently analyze constraints such as weak IP protection, talent shortages, or limited university–industry linkages.
• Overlooks regional imbalances, as most R&D is concentrated in southern and western India.
• Could have enriched the argument with comparative case studies or concrete reform examples.

5. Pros and Cons of the Argument

 Pros

• Policy Alignment: Stresses the need for an integrated national innovation ecosystem connecting academia, government, and industry.
• Empirical Grounding: Provides credible global comparisons of GERD ratios.
• Strategic Framing: Links R&D investment to national security and long-term competitiveness.

 Cons

• Execution Gap: Focuses on funding goals without specifying practical mechanisms for sustained private investment.
• Human-Capital Oversight: Neglects education quality, research talent, and retention issues.
• Limited Start-up Perspective: Misses how India’s start-up ecosystem and frugal innovators could complement formal R&D.

6. Policy Implications

1. Fiscal Incentives:
• Reinstate 200 % tax deduction for corporate R&D spending (reduced to 150 %).
• Offer innovation-linked tax credits and fast-track IP benefits.
2. Institutional Strengthening:
• The National Research Foundation should become a bridge between academia and industry, ensuring transparent, merit-based funding.
3. Sectoral Focus:
• Encourage joint R&D missions in semiconductors, green hydrogen, defence manufacturing, and biotech.
4. Private–Public Partnerships:
• Create co-financed innovation funds on the Israel model, combining public grants with private venture capital.
5. Human Resource Development:
• Expand research fellowships, post-doctoral programs, and global collaboration networks to retain scientific talent.

7. Alignment with UPSC GS Papers

8. Real-World Impact

Positive Outcomes if Implemented

• Raise R&D spending to 2 % of GDP, catalyzing technological self-reliance.
• Strengthen India’s presence in global supply chains for advanced manufacturing and clean energy.
• Generate high-skill employment and stimulate export diversification.

Risks if Ignored

• Continued dependence on imported technology and low-value manufacturing.
• Weak competitiveness in strategic industries like semiconductors and aerospace.
• Brain drain of top researchers due to inadequate infrastructure and incentives.

9. Conclusion

The editorial succinctly captures India’s R&D paradox — strong institutional intent but weak private execution.
It calls for a national innovation compact where state, industry, and academia co-create the technological foundations of India’s economic future.

Prof. Krishna reminds policymakers that R&D is not expenditure but investment — the engine that transforms human potential into strategic capability.
India’s march toward Viksit Bharat 2047 will depend not merely on adopting global technologies, but on creating and exporting them.

10. Future Perspectives

1. Innovation Clusters: Build regional R&D hubs linking universities with industrial corridors.
2. National Innovation Scorecard: Introduce annual benchmarks tracking sector-wise private investment in research.
3. Start-Up–Academia Bridges: Create incubation pipelines within IITs, IISERs, and state universities.
4. IP and Patent Reform: Simplify patent approval, expand IP insurance, and promote technology transfer.
5. Global Collaboration: Engage in trilateral R&D partnerships (e.g., India–EU–Japan or India–US–Australia) for joint technology development.