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Title: Science Technology and Innovation Policies in India: Changing Perspectives and Missing links


1
Science Technology and Innovation Policies in
India Changing Perspectives and Missing links
  • K J Joseph Dinesh Abrol

2
An Overview
  • Introduction
  • Evolution of ST policies
  • Focus on Selfreliance (1947 to c1980)
  • Scientific Policy Resolution (1958)
  • Internal liberalization (c1980 to-1990)
  • Technology Policy Statement, 1983
  • Globalization Phase
  • Science and Technology Policy 2003
  • ST Performance Empirical overview
  • A critical Appraisal

3
Focus on selfreliance (1947 to c1980)
  • The background
  • Colonial experience and transforming an economy
    that has been stagnant for a century
  • Export pessimism and import substitution
  • Soviet performance and memories of great
    depression
  • Development strategy by Nehru (first prime
    minister), Gandhi and the Orthodox school
  • Other policies (eg, industrial, trade, fiscal)
    also had significant bearing on science and
    technology

4
Focus on Selfreliance (1947 to c1980)
  • Scientific Policy Resolution (1958)
  • The wealth and prosperity of a nation depend on
    the effective utilization of its human and
    material resources through industrialization. The
    use of human material for industrialization
    demands its education in science and training in
    technical skills. Industry opens up possibilities
    of greater fulfillment for the individual.
    India's enormous resources of man-power can only
    become an asset in the modern world when trained
    and educated.
  • Friedrich List National System of Political
    Economy 1841
  • the present state of nations is the result of
    the accumulation of all discoveries, improvements
    perfections .. of all generations which have
    lived before us they form the intellectual
    capital of the present human race,and every
    separate nation is productive only in proportion
    to which it has known how to appropriate these
    attainments of former generations and to increase
    them by its own acquirements

5
Focus on Selfreliance (1947 to c1980
  • SPR (1948) In industrializing a country, heavy
    price has to be paid in importing science and
    technology in the form of plant and machinery,
    highly paid personnel and technical consultants.
    An early and large scale development of science
    and technology in the country could therefore
    greatly reduce the drain on capital during the
    early and critical stages of industrialization
    Emphasis of self reliance
  • Friedrich List- Infant industry protection

6
Focus on selfreliance (1947 to c1980)
  • The SPR (1948) interalia aimed
  • to foster, promote, and sustain, by all
    appropriate means, the cultivation of science,
    and scientific research in all its aspects -
    pure, applied, and educational
  • to ensure an adequate supply of research
    scientists of the highest quality
  • to encourage, and initiate programs for the
    training of scientific and technical personnel,
    on a scale adequate to fulfill the country's
    needs
  • to encourage individual initiative for the
    acquisition and dissemination of knowledge, and
    for the discovery of new knowledge, in an
    atmosphere of academic freedom
  • to pursue and accomplish these aims by offering
    good conditions of service to scientists and
    according them an honoured position, by
    associating scientists with the formulation of
    policies, and by taking such other measures as
    may be deemed necessary from time to time.

7
Focus on selfreliance (1947 to c1980)
  • In the context of SPR (1948)
  • Policy initiatives institutional arrangements
    to promote research in atomic energy, defense,
    space electronics and areas
  • National wide net work RD labs with regional and
    national focus under the CSIR
  • Setting up of IITs, large number of engineering
    colleges and universities for generating human
    capital
  • Promotion of agricultural research to usher green
    revolution and achieve self sufficiency in food
  • The Indian patent act on 1970 facilitated
    reengineering through process patent instead of
    product patent
  • Liberal approach to FDI and foreign technology in
    the initial years and later moving towards a much
    restrictive regime

8
Focus on Selfreliance (1947 to c1980)
  • An array of support measures (institutional
    fiscal)
  • Setting up of National Research Development
    Corporation (NRDC), engaged in licensing of
    indigenous technologies to industry and also
    makes available, comprehensive know-how documents
    on the licensed technology to the potential user
  • Accelerated depreciation allowance on plant and
    machinery used for indigenous technology
    development,
  • Customs duty exemption on imported equipment
  • Price control exemption on domestic RD based
    Bulk Drugs
  • National Awards for Outstanding RD Achievements
  • Income Tax Relief on RD Expenditure Donations
    to Scientific Research Organisations
  • Tax holiday to Commercial RD Companies Customs
    and excise duty Exemption to Non-Commercial
    Research Institutions (SIROs) Excise Duty
    Waiver on Patented Products.

9
Focus on Selfreliance (1947 to c1980)
  • Major achievements
  • In Atomic Energy, space defense and others
  • Self sufficiency in food production
  • Establishment of a broad-based industrial
    structure
  • RD mostly by pubic sector units and limited role
    for the private sector
  • While major achievements in Big science
  • Regrettably, all these achievements have not
    found proportionate reflection in the well-being
    of poor- Prime minister in 1977
  • Also, import-substitution self-reliance and
    associated bureaucratic controls has had its
    adverse impact on the growth performance of the
    economy

10
Internal liberalization (c1980 to-1990)
  • Technology Policy Statement (TPS), 1983
  • Political freedom must lead to economic
    independence and the alleviation of the burden of
    poverty. Our own immediate needs in India are the
    attainment of technological self-reliance..
    Technology must be viewed in the broadest
    senseOur directives must clearly define systems
    for the choice of technology, taking into account
    economic, social and cultural factors along with
    technical considerations indigenous development
    and support to technology acquisition of
    technology through import and its subsequent
    absorption, adaptation and upgradation ensuring
    competitiveness
  • Establishing links between the various elements
    concerned (NSI?) with generation of technology,
    its transformation into economically utilizable
    form - the sector responsible for production,
    financial institutions concerned with the
    resources needed for these activities, and the
    promotional and regulating arms of the
    Government.

11
Internal liberalization (c1980 to-1990)Liberaliza
tion Phase I TPS 1983
  • The basic objectives Will be the development of
    indigenous technology and efficient absorption
    and adaptation of imported technology appropriate
    to national priorities and resources. It aimed
    inter alia to
  • Attain technological competence and
    self-reliance Building up of human capital
  • provide the maximum gainful and satisfying
    employment to all strata of society, with
    emphasis on the employment of women and weaker
    sections of society
  • use traditional skills and capabilities, making
    them commercially competitive
  • develop technologies which are internationally
    competitive, particularly those with export
    potential
  • reduce demands on energy, particularly energy
    from non-renewable sources
  • ensure harmony with the environment, preserve the
    ecological balance and improve the quality of the
    habitat and

12
Internal liberalization (c1980 to-1990)
  • Different initiatives under TPS (1983) included
  • The Program Aimed at Technological Self Reliance
    (PASTER)- now known as Technology development and
    demonstration program (TDDP) aims at technology
    adaptation by research design and development
    executed by the industry and overseen by the
    exports from Lab/university 150 projects were
    supported- 65 completed, 15 patents filed
  • Technology Absorption and Adaptation Scheme
  • National Register on Foreign Collaboration..
  • ST for Weaker sections.., ST for Rural
    Development
  • Science Technology Entrepreneurship Park
    (STEP) 1984 jointly with financial institutions,
    state Govts and academic institutions 15 such
    STEPs
  • Incentives for in-house RD and technology
    development to industry
  • Establishment of TIFAC

13
Globalization Phase (Since 1990s)
  • India Embarked on Globalization with a vibrant
    National Innovation system evolved over the years
    and its performance since 1991 has to be seen
    against this background
  • New Industrial Policy of 2002 and
  • Science and Technology Policy 2003
  • During the 50 years since Independence, India has
    been committed to the task of promoting the
    spread of science. The key role of technology as
    an important element of national development is
    also well recognized. There is today a sound
    infrastructural base for science and technology
    -research laboratories, higher educational
    institutions and highly skilled human resource.
  • Major national achievements include very
    significant increase in food production,
    eradication or control of several diseases and
    increased life expectancy

14
Globalization Phase (Since 1990s)
  • objectives included
  • The alleviation of poverty, enhancing livelihood
    security, removal of hunger and malnutrition,
    reduction of regional imbalances,generation of
    employment, by using scientific and technological
    capabilities along with traditional knowledge
    pool (inclusive growth).
  • To vigorously foster scientific research in
    universities and other academic, scientific and
    engineering institutions and human capital
    formation
  • To promote the empowerment of women in all
    science and technology activities and ensure
    their full and equal participation.
  • To use the potential of modern ST to protect,
    preserve, evaluate, update, add value to, and
    utilize the traditional knowledge base

15
Globalization Phase (Since 1990s)
  • Objectives..
  • To ensure, in an era in which information is key
    to the development of science and technology,
    access to information at affordable costs
  • To establish an IPR regime which maximises the
    incentives for the generation and protection of
    intellectual property by all types of inventors.
  • To promote international ST cooperation towards
    achieving the goals of national development and
    security, and make it a key element of our
    international relations.
  • This Policy, reiterates India's commitment to
    participate as an equal and vigorous global
    player in generating and harnessing advances in
    science and technology for the benefit of all
    humankind.

16
Trends in Technology Import
17
Globalization (Post 1991)
  • Different initiatives included
  • Technopreneur Promotion Program (TePP) jointly by
    TIFAC (DST) and DSIR in 1998 to tap the
    innovation potential by providing support to
    individual innovators for converting an original
    idea into working prototype 50 projects
    completed 25 commercialized domestic patents to
    10 US patents for 3.
  • The Program Aimed at Technological Self Reliance
    (PASTER)- now known as Technology development and
    demonstration program (TDDP) aims at technology
    adaptation by research design and development
    executed by the industry and overseen by the
    exports from Lab/university 150 projects were
    supported- 65 completed, 15 patents filed -
  • National Innovation Foundation (2000) promoting
    grass root innovations traditional knowledge
    systems for poverty alleviation employment
    generation -

18
Globalization (Post 1991)
  • Different initiatives Contd..
  • Home grown technology Program of TIFAc (1993) to
    achieve international competitiveness by
    improving the existing products
  • Science Technology Entrepreneurship Park
    (STEP) 1984 jointly with financial institutions,
    state Govts and academic institutions 15 such
    STEPs
  • Technology Development Board (1996) providing
    financial assistance for innovation from the fund
    raised through the cess on technology import
  • The New millennium India Technology Leadership
    Initiative (NMITLI) 2000 to enable Indian
    industry to attain global leadership in selected
    areas

19
India currently has bilateral ST cooperation
agreements with following countries
  • AustraliaArgentinaArmeniaBangladesh Belarus
    Brazil Bulgaria Canada China Cuba Egypt
    European Union France Germany Hungary
    Indonesia Iran Israel Italy
    JapanKorea(DPR)KazakhstanLaoMalaysiaMauritius
    MexicoMongoliaMozambique MyanmarNepal
    OmanPeruPhilippines Poland Portugal Republic
    of KoreaRomania Russia Singapore South
    Africa Sri Lanka Sudan Switzerland Syria
    Taiwan TajikistanThailand Trinidad Tobago
    Tunisia Ukraine United Kingdom United States
    Uzbekistan VietnamVenezuelaYemen,Zambia.

20
In addition to Bilateral there are initiatives at
Multilateral level
  • Multilateral Programmes are being implemented
    under South Asian Association for Regional
    Cooperation (SAARC) BIMSTEC (Bay of Bengal
    Initiative for Multi-sectoral Technical and
    Economic Cooperation) and IOR - ARC (Indian
    Ocean Rim - Association for Regional
    Cooperation), STEPAN UNESCOTWAS (Third World
    Academy of Sciences) and IBSA(India,Brazil,SouthA
    frica) .

21
Recent Developments
  • India emerged as the second fastest growing
    economy
  • Major player in the field of IT, Auto Pharma and
    others
  • Foreign exchange reserve of 200 billion from
    400 Mill in 1991
  • Phenomenal increase in the Outward investment by
    Indian companies (212 mill in 1995 to 8181mill
    in 2006)
  • Preferred location for outsourcing of both
    commodity production and knowledge production
    (RD outsourcing)
  • Unprecedented increase in the inflow of FDI
  • Increased Patenting in the US (22 in 1991 to 363
    in 2004)
  • Much more.

22
  • These achievements are indeed are a delayed
    return to the National innovation system built up
    over the years
  • The crucial issue is are there enough
    initiatives under globalisation to strengthen the
    NIS such that these achievements could be
    sustained?
  • The answer appears to be a qualified No
  • Why????

23
Aspiring to be the Global Player by RD in the
backseat?Trend in RD as GDP
24
RD in India- Compared
25
RD Expenditure by Major Scientific Agencies
under the Central Government ()
26
Preferred location for RD Outsourcing
  • Outsourcing, if harnessed properly, could be
    beneficial. But could also undermine the NSI and
    its strengths
  • Are there initiatives to understand its
    implications under the heightened competition for
    skilled manpower?
  • How to mitigate the plausible adverse impacts?
  • Are there policies and programs to take advantage
    of its spillover benefits?
  • Even the policy announced in 2003 keeps a
    silence

27
  • STI under liberalization A Critical Appraisal

28
External liberalization the patterns of
corporate technological accumulation
  • Decline in the breadth depth of imported
    know-how is directly related to the loss of
    control over markets.
  • decline of independent TCs
  • increase of Tcs under the JV mode
  • lump sum payments increased by many times
  • low technology content of agreements continuing
  • increase in the import of finished goods, SKD/CKD
    imports, imports of components capital goods
  • Merger acquisitions linked FDI increased during
    the phase of external liberalisation.

29
Technology assimilation in-house RD performance
  • Share of industrial development in total RD in
    pvt. sector industry fell from 71.3 in 77-78 to
    33.9 in 96-97
  • More than two third of firms in basic chemical
    industry passive vertical integration had a
    negative impact on the technology investments
    medium sized firms invest much more in in-house
    RD.
  • Composition of RDD changing in engineering
    industry CDOT will focus on subcontracting in
    RD and on patents and not on technology
    development

30
Technology accumulation exports
  • Technology licensing negatively related to
    exports
  • MNC affiliation matters to the increase in
    exports
  • No improvement in technology intensive
    export-import ratios
  • Global integration of industrial technology
    investments

31
Denationalization of network organizers
  • MNCs successfully position themselves as network
    organizers in information, electronic and
    mechanical engineering
  • Failure of improvement in the productivity,
    efficiency growth of the Indian private sector
    (Siddarthan, Nagesh and others) in the
    information, electronic and mechanical
    engineering
  • Industrial innovation through public sector
    undertakings impact on PSU RD share of PSU RD
    declined, PSU RD intensity came down
  • Public sector weakened as network organizer in
    infrastructure related industries newly
    emerging technology systems

32
Utilization of Incentives by Private Sector
33
Gains not due to liberalization but due to the
continuation of selective protection
  • Take pharmaceutical and automobile industries
  • Both were beneficiaries of calibrated protection
    external liberalization was put on hold till
    2002-03,
  • Performance requirements insisted sectoral
    reservation continued
  • Public sector firms used to create the
    capabilities that have spun off individuals who
    have come into private sector have benefited
    both the industries in terms of human resources
    backward linkages

34
Costs of emerging tensions for the IS
  • New patterns of technological integration reduce
    the private risks costs of introduction of new
    technologies for the large firms only by
    enhancing the social costs and risks for the
    Indian people that are already quite well
    manifest in the forms of technological
    fragmentation, import dependence, unsustainable
    production and shift into luxury consumption.
  • Loss of autonomy in decision-making

35
Changes in the Sectoral Contribution of National
Expenditure on RD(In Percent)
Year Central Govt. including Public Sector Higher Education State Sector Private Sector
1985-86 79.95 7.87 12.18
1994-95 74.96 8.63 16.41
2002-03 71.2 8.5 20.3
2004-05 (estimated) 72.0 9.0 19.0
36
Contribution of public and private sector industry
  • A trend of stagnation evident in the proportion
    of national RD expenditure incurred by the
    public sector around the figure of 10 between
    85-86 94-95, which in 2002-03 is down to the
    meager figure of 4.5. For public sector, only
    0.26 of STO was spent on RD in 2002-03.
  • Although the share of private sector industry
    financed RD in terms of total investment on
    RD has risen from 12.18 to 20.3, but the private
    sector RD intensity is not rising.
  • RD intensity of the private sector has been only
    declining (from 0.83 in 81 to 0.70 in 86 to
    0.61in 91 to 0.60 in 97 to 0.59 in 2002-03)
  • While the industry spent 0.38 of GNP on RD
    during 1985-86, its current expenditure on RD is
    down to 0.20 of GNP.

37
Publicly funded civilian RDduring liberalization
  • Public investment declining for the mission
    oriented civilian technology development, weak
    technological infrastructure (NSF, 95)
  • Nature of civilian socio-economic goals in the
    efforts being made for BT IT
  • Impact of self-financing paradigm global
    platform orientation on technology development
    transfer and other aspects suvh as ECF and
    linkages with industry RD capabilities

38
RD Agencies their institutions institutions
of socio-economic sector
  • Of all the ST sectors in the country, the RD
    sector is the second largest in terms of
    publications output in ST
  • Of all the socio-economic ministries in the RD
    sector, the Health Ministry contributed 46.7
    publications in 2001-02.
  • Of all the RD agencies, CSIR has been the
    largest contributor, followed by DAE, DST, ICAR,
    DRDO, DOS, ICMR DBT.
  • Nearly three-fourth of the RD sector
    publications output continues to be published in
    low impact journals.
  • Declining trend in publications share activity
    index of the RD sector in agricultural sciences
  • Collaborative research profile of the
    socio-economic ministries is better, compared to
    RD agencies.
  • Priority areas for research of various agencies
    did not change significantly during the period
    between 85-86 and 2001-02
  • Bulk of research output in the industry sector is
    published in low impact journals.

39
Patenting Activity
  • There were 1051 patents filed by India during the
    period between 1990-2002, 669 were India owned
    organisations, 273 were Foreign owned patenting
    organisations rest 109 belonged to unassigned
    category
  • Pharma sector patents a key area, process patents
    were the dominating patenting category from
    1995, IMDs related product patents have too
    appeared.
  • Only 8 organizations had more than 10 patents and
    accounted for 519 patents (80) CSIR accounted
    for 378 (57) of the IOP, Texas Instruments,
    Hoechst, GEC, IBM dominated the FOP
  • CSIR No portfolio planning piperine story,4 of
    patents alone have been able to earn a meagre
    amount, huge costs involved in filing patents
  • IMDs are yet a priority of only Ranabaxy, IPA is
    uncertain wants the change to wait in this
    regard.

40
FDI in RD sector
  • RD services has emerged as the third segment in
    Export of IT services, it occupies a share of
    18.4 of software exports accounting for 2.3
    billion US
  • RD investment worth of 1.13 billion has flowed
    into India during 1998-2003
  • 22980 RD workers consisting of scientists,
    software engineers other support staff are
    working in this segment
  • Availability price of work count with MNCs
    Indian scientist costs 10,000 dollars per year,
    1/10 of the costs abroad in US.
  • The bulk of RD investment entered during 99-01
    period, computer based RD dominates , while
    drugs, auto, chemicals, agro have followed
  • Nearly half the FDI Cos are cases of relocation
    of in-house RD in home country to offshore
    location
  • 56 of FDI Cos prefer to work alone in India,
    with 100 foreign equity without local partner in
    equity.
  • No reporting system for the RD based FDI in the
    country No govt. agency to monitor these
    organizations not many attract income
    taxsafety, security benefit sharing
    arrangements related issues
  • Non-open science, spillovers management, would
    not happen automatically

41
  • Policies and institutions matter
  • Structural changes
  • impact on user-producer interactions
  • connection with home market
  • Connection with interactive learning

42
Science, Technology Economic Growth Before and
After
  • Shifts in the STI policy practice
  • influenced by the strategic requirements of
    political-bureaucratic order to bring about an
    alignment between the world of ST and the world
    of industry-market
  • interests of the industry-market order are not a
    new influence even earlier it had much success
    in shaping the world of ST priorities.

43
Change in the World of ST
  • The world of ST itself has undergone a change in
    its ideology changes are evident at the level of
    the ethos of ST leadership, relative power and
    interests of ST workers in the prevailing
    organizations the outcome (s) of new alignment
    are more myopic than before in terms of the
    achievement of coherence and flexibility in the
    Indian NSI.

44
Changes in the culture of innovation
  • orientation of the changes in development
    priorities
  • direction of the changes in policy instruments
  • changing nature of balance in the ethos of
    individuals and institutions
  • changing character of core constituencies

45
Challenge before the ST World
  • In respect of how to deal with the challenge of
    transformation of culture of innovation, it is
    posited that neither it is desirable nor it is
    possible to conceive the existence of total
    autonomy either for the world of ST or for the
    communities of practitioner(s) of innovation.
    Particularly, if the culture of innovation is to
    be transformed in the democratic direction, it is
    certainly desirable for the state and civil
    society to exercise sufficient influence on the
    worlds of ST and industry.

46
  • THANK YOU
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