Science Led Innovation
1.0 Linking Science, Technology & Innovation
1.1 It is interesting to see the evolution of science related policies in India. The pathbreaking Science Policy Resolution (1958) was followed by a robust Technology Policy Statement (1983), which was then followed by the Science & Technology Policy (2003), which took a more integrative view. Presently Indian Science, Technology and Innovation Policy (2013) is on the national drawing board.
1.2 The power of the idea that science, technology and innovation need to be seamlessly integrated has been driving the strategies around the world for over a decade now. Even the names of the ministries of science and technology in Argentina, Australia, Denmark, Malaysia, South Africa, Spain, UK, etc. have been changed over the last decade with the word ‘innovation’ explicitly included. In fact, Argentina now has a ‘Ministry of Science, Technology & Productive Innovation’!
1.3 But why this emphasis on innovation? The power of innovation to create social and economic transformation has been well recognized. In fact, Innovation has become a tool for competitiveness as well as accelerated inclusive growth. European Union (EU) had declared 2009 as the year of creativity and innovation for EU. Indeed, European Union is building itself as Innovation Union now. India has declared the decade 2010-20 as the Indian Decade of Innovation. There is a growing realization in India that research and innovation must go together. After all, research converts money into knowledge. But it is innovation, which converts knowledge into money. The introduction of the University for Research and Innovation Bill 2012 by the Government of India is one indication of this.
2.1 An often used definition of innovation is ‘Innovation is a process that translates knowledge into economic growth and social wellbeing. It emphasizes a series of scientific, technological, organizational, financial and commercial activities’. There are different types of innovations. These include technology innovation, business process innovation, workflow innovation, delivery system or supply chain innovation, public policy innovation and so on.
2.2 The Indian way of doing innovation has led to the introduction of new nomenclatures in the ‘dictionary of innovation’ with phrases that did not exist just five years ago! These include phrases like frugal innovation, Gandhian innovation, MLM ( more from less for more), reverse innovation, nanovation, and even Indovation! Some of the Indian innovations were driven by the power of the combination of scarcity and aspiration. Some of these have been truly game changing and are taught as case studies in world’s leading business schools.. The innovation leading to the cheapest mobile phone call rates in the world by the Indian Telecom companies is a typical case of game changing `business process innovation’. The fact that Aravind Eye Care can do a high quality cataract eye surgery at one by thousandth of the cost in USA or the fact that Narayan Hrudalaya can do a high quality heart surgery at one by twentieth of the cost prevailing in USA is due to the `work flow innovation’. However, when it comes to technological innovation, India has not done so well.
2.3 Science provides the base for technology, which in turn triggers technology led innovation. It was the science of precise control of atoms in semiconductor materials that eventually led to the creation of microchips with billion transistors. It was the science of creation of single crystals of silicon carbide and gallium nitride that led to cell phone displays. It was the science of laser crystallization of amorphous silicon that led to flat panel displays. It was the science of hot electron injection in thin films of insulators that led to digital cameras.
3.0 Paradigm Shifts in Science Led Innovation
3.1 The advent of modern biotechnology industry is a classic case of science based innovation. The scientific breakthrough that led to the elucidation of the structure of DNA led to genetic engineering and subsequently the creation of modern biotechnology as we know it now. The advent of strongly science based industry such as biotechnology changed the rules of the game.
3.2 Previously, it was not uncommon to have firms participate in basic science as a part of their grand innovation strategy. But the purpose was limited to reinforcing their `absorption capacity’. However, modern biotechnology start-ups led to a paradigm shift in terms of new scientific knowledge itself becoming a saleable product. Strong science oriented drug discovery necessarily required the firms to become participants in science rather than just the users of known scientific knowledge.
3.3 Industrial firms dealing with strongly science based sectors of economy realized that much of the generation of new scientific knowledge is done outside their firms – that means within the universities and public research institutions. Therefore, they started shifting the strategy from just the R&D (Research & Development) mode to C&D (Connect and Develop) mode, the new connections being with access to new science generated within the academic institutions.
3.4 Small and medium size firms are getting more and more specialized in the sale of scientific knowledge rather than the finished product in the marketplace, Creation of such firms was made possible by the design and implementation of new laws, where the intellectual property rights ( IPR ) could be used as the starting capital. Some key institutional measures and extension of the scope of patent system were concerning what could be patented (not only inventions) and who can patent (not only individuals and firms but also academic institutions). Thus, the prevailing division of labour of research between public and private institutions changed dramatically in the new landscape of science led innovation.
4.0 Why is India lagging in Science Led Innovation?
4.1 Why is it that India has not done well in science based innovation as against other in forms of non-science or non-technology based innovations that we referred to in 2.2 earlier? First, before 1991, in a protected economy, import substitution was the objective and, therefore, there was no incentive for creating new science-based products. The easy path was to copy the known products in the global market. First to the world product was a distant dream. First to India products, based on the existing body of scientific and technological knowledge was all that one aimed for. So new science based products did not get developed.
4.2 Second, the Indian intellectual property laws also led to this aversion to doing science led innovation, even in areas which are strongly built on science, such as drugs and pharma, biotech, etc. For example, in the area of drugs and pharma, India became a leader in the production of generic drugs by copying the known molecules already researched and productionized elsewhere in the world. But once the patent laws, which recognized product patents were introduced in the year 2005, it led to several Indian drugs and pharma companies going for discovery research, or in other words science led innovation to put new molecules, not just copies, into the marketplace.
4.3 Third, the journey from a scientific invention to innovation can be complex and arduous. The fact that a nation does great science does not mean that it will automatically lead to great innovation. The Raman effect was discovered in India. But Raman scanner was created outside India. The iron-mercury-ion coherer, which formed the basic platform for wireless technology was created by Sir J.C.Bose, but the wireless technology is attributed to Marconi in Italy. In order to monetize the knowledge, one must `own’ that monetisable knowledge. It is not often recognized that it is not `patenting or publishing’. It is `patenting before publishing’. One can cite several cases of Indian science, leading to potentially monetisable knowledge. But that science was monetised by others outside India, not in India and by Indians.
4.4 Fourth, it is only the `monetisable’ knowledge that is converted into money. When scientific breakthroughs take place, even to recognize that the new knowledge that is generated is monetisable, requires a special attribute of mind. Even when one has created monetisable knowledge, to convert it into money requires the presence of a robust innovation eco system. India is sadly deficient in this today. In this Indian Decade of Innovation, we must make an all out effort to dramatically change this.
5.0 Setting Indian Agenda for Leadership in Science Led Innovation
5.1 The essential elements of a powerful national ecosystem comprise physical, intellectual and cultural constructs. Beyond mere research labs, it includes idea incubators, technology parks, a conducive intellectual property rights regime, balanced regulatory systems, strategically designed standards, academics who believe in not just ‘publish or perish’, but ‘patent, publish and prosper’, some scientists, who have the passion to become technopreneurs, potent inventor-investor engagement, ‘ad’venture capital, and passionate innovation leaders.
Here is a ten point agenda for Indian leadership in science led innovation.
1. For science led innovation to flourish, there should be incentivisation for those who create `monetisable’ knowledge. The current systems are based on recognitions that rest on excellence in science alone. No doubt these are very important, because without cutting edge science, there cannot be breakthrough technology and impactful innovation. But side-by-side, there should be rewards and recognitions for those, who excel in science led innovation too. Simultaneously a new value system must be built that respects science that solves problems, technology that transforms and innovation that impacts the society.
2. Successful innovation is not a ‘solo’ effort. The journey from mind to market place involves a `team’ effort. The current systems reward individuals. India must move over to awards for teams, who orchestrate different parts of the puzzle of innovation, and finally assemble a successful marketable product or deliver a solution to a vexing problem.
3. Ideas need to be incubated. Therefore, we should build incubators across every Indian university, clusters of colleges, etc. These should be innovation clusters, which are sector specific, which bring all innovation players with domain expertise from academy, from industry, from finance, etc., together. There should be Research or Technology Parks. China has 300 Research Parks. India’s Research Parks cannot be counted beyond a single digit. Such parks should be funded by the Centre, by the State as well as through innovative public-private partnerships.
4. A conducive intellectual property rights regime needs to be designed and deployed. In the classical model, publicly funded academic research is done with a public interest character, whereas industrial in-house R&D is primarily done by industry for private good. In USA, the Bayh Dole act (1980) opened up the way for a new direction for the results of the basic research produced in academic institutions, by first creating the right of patent results of the publicly funded research and second, by granting these rights to exclusive licenses provided to private for profit firms. This significantly changed the relationship between the agents involved in the innovation eco-system. The bill `Protection and Utilization of Pubic Funded Intellectual Property Act, 2008’ is still pending with Rajya Sabha. Now the Government has introduced another bill, `The Research and Innovation Bill 2012’. Chapter 5 of this bill deals with `Protection and Utilization of Intellectual Property emerging from Public Funded Research’. The intellectual property proposals in this bill are far more balanced and nuanced in comparison to the 2008 bill, which had proposals for some unwarranted punitive measures. We do not have the luxury of unending debates if we are serious about making a difference in this Indian decade of innovation itself. This bill should be passed after a due debate as soon as possible and the necessary provisions put in place that will promote the creation of wealth from the science done in academic institutions.
5. Rigid and obtrusive regulatory systems, which are also non-efficient at the same time, can cause impediments in moving science led innovation forward. For example, it is new science that can lead to a new cure for a difficult disease.. But the delays in the regulatory authority’s approvals (may be partly arising from the fact it is dealing with new science based innovations for the first time in India) has meant that companies have had to shift such clinical research abroad, thus losing altogether the advantage of using India’s cost advantage in clinical trials. Similar is the case in other areas of life sciences, for example, in plant science, the research leading to the GM crops is getting held up due to the lack of a precautionary but a promotional regime. Lack of clarity on foreign direct investment in drugs and pharmaceuticals and new biotech is starving the new biotech startups of the much needed foreign direct investment. Strengthening of these regulatory systems, such that they do not compromise on standards and safety of people (patient first), but at the same time recognize the importance of maintaining India’s comparative advantage (India first) should be always borne in mind.
6. In science led innovation, when a new idea is born, which leads to the design and development of a new product, that the present market has not seen before, the ready provision of early stage financing is crucial. Risk financing in the form of venture capital, which acts as an intermediary for long term investment, and which supports young startups, becomes critical. Such `ad’ venture capital created must support the young firms from their creation till they mature. India lacks such funds. The Governments elsewhere are known to take bold initiatives. For example in the USA, every department has to set aside 5% of the funds to support innovative programs, SBIRI initiatives by NIH and DoD are classical cases. These grants run upto $ 1 million or more. Many small start-ups are catalysed through such funding. Some excellent initiatives by DBT, DST, etc need to be revisited to introduce systems that will support really high risk cutting edge science based innovation. The `New Millennium Indian Technology Leadership Initiative’ launched by CSIR in the year 2000, which funded entirely new technology leading to new products with an aim to create new markets was India’s biggest public-private partnership in post-independent India. It has many successes to its credit, but also some failures. Learning from the lessons, a new initiative to support truly cutting edge science led innovation should be designed and delivered at a national level.
7. The Government must create the support structures for creating the Indian leadership in science based innovation. That requires financial resource input as well as investments in capacity building. Patenting is expensive. So there must be dedicated national funds as well as special allocations to institutions. Skills in patent related endeavours are very special. For example, interpreting patent data for identifying the areas , where there is a freedom to operate, writing patents professionally so that the competitors will not easily bypass them, assessing the potential current and future value of an intellectual property, etc. are all highly professional jobs. We cannot expect our top class scientific inventors to either master or spendtime on these. The same is the case with technology transfer and licensing offices, which should be staffed with smart professional individuals They need to be incentivized suitably by linking to their variable pay to their performance in successful technology transfer and licensing .
8. Science based innovation will invariably lead to products that do not presently exist in the market. The Government must have tax exemption policies, excise duty reductions, policies to provide massive public procurement support for the early stage market seeding and market expansion of such products. Such inputs on public procurement in China for products based on indigeneous innovation, for instance, run into billions of dollars ! We have to design our own smart intelligent support systems to accelerate and promote science based innovation.
9. We need to ensure that different components that comprise and influence the innovation ecosystem need to synergize together as an `integrated whole’. For instance, an audit system that insists that each patent should be commercialized, would inhibit the patenting initiative. On the other hand, an overdrive on patenting systems will lead to unwarranted secrecy amongst the scientific community in free idea exchange, which is the hallmark of true spirit behind open science. Therefore, a National Oversight Board with wise thought leaders of eminence, which is able to look at such issues `holistically’, should be put in place.
10. Finally, and most importantly, we must develop a new mindset at the individual , institutional and national level. This means a change of attitude from risk averseness to risk taking, from ` from `safe venture capitalists’ to `daring `ad-venture capitalists’, from `mistrust’ of the private sector for public funding to `trust’ with a generous government support in a public-private-partnership mode, especially for the risky science led innovation based new product development. It is only science led innovation that will lead us to move awat from the syndrome of ‘ first to India products’ to ‘first to the world products’ More than ever before, the private sector must realize the potential of new value creation for it though new science based new business, and rather than investing only in the use of the `existing scientific knowledge’. It must become an active partner in science led innovation as an act of faith.
5.2 We feel confident that during this `Indian Decade of Innovation’, the adaptation and execution of this ten point national agenda can catapult India to be amongst the top leaders in science led innovation. The time to take the first bold steps is here and now.