Science & Technology

Innovation may not be the answer to India’s development challenges

India ranks second among middle income countries on ‘quality of innovation’

By Kapil Subramanian
Published: Monday 02 March 2020
A Tata Consultancy Services office in Whitefield, Bangalore. The company established itself as the most important player in India’s software industry and is an example of how it provided services through exports Photo: Wikimedia Commons
A Tata Consultancy Services office in Whitefield, Bangalore. The company established itself as the most important player in India’s software industry and is an example of how it provided services through exports Photo: Wikimedia Commons A Tata Consultancy Services office in Whitefield, Bangalore. The company established itself as the most important player in India’s software industry and is an example of how it provided services through exports Photo: Wikimedia Commons

A recent accurate description of the state of Indian science in Down To Earth correctly argued that like elsewhere in the world, what ails science and scientists in India are savage funding pressures and the use of crude measures of output to ration limited resources; the so-called ‘impact factor and h-index syndrome’.

As the article notes, India is not even among the top 50 countries in the World Intellectual Property Organisation’s Global Innovation Index (GII). But to link a measure of patent filings to the travails of Indian academic and institutional science is incorrect.

Across the world, a patent filing is a few-in-a-lifetime, if not a once-in-a-lifetime event for most research engineers, let alone for pure scientists.

Innovation leader: To what end

There is an even more important issue: India’s headline rank in the index does not reflect its true performance. Of the 26 countries classified as lower-middle income, India was one of only eight whose performance was “above expectations for level of development”. Overall, it topped all economies in central and southern Asia.

On the list of top ten universities in middle income countries, India and China were tied with three institutions each. India hosted three research clusters, level with Japan, South Korea, Switzerland and Australia.

Indeed, India was the only country whose performance merited a paragraph of praise in the report’s ‘Key Findings’, though this may have to do with the Confederation of Indian Industry (CII) involvement in the GII.

The relationship between research and growth is complex.

Most countries use technologies developed elsewhere for economic growth; examples include not just Chinese iPhone factories and Indian software factories, but also industries in every single developed economy, including the United Kingdom (UK), the United States (US), Germany, Japan and South Korea. National research-and-development investment correlates poorly with national growth.

Indeed, research-and-development expenditure is not a cause of wealth but a consequence: Rich countries merely invest more than poor countries.

As rich countries (which generally grow slowly) rank higher on the index than poor countries (which generally grow), the GII seemingly indicates that economic growth correlates negatively with innovation.

Research is an expensive means of economic growth, best suited for rich countries which feel they have utilised existing technologies to the fullest.

Like the h-index, the ‘Innovation Index’ is a crude measure whose pursuit needs justification. The thematic emphasis on healthcare innovation in 2019 is ironical. The US spends much on healthcare research and medical innovations become available (to those who can afford it) sooner than anywhere else in the world.

Governments like those in the UK send a small number of patients to the US for the latest but rarely needed treatments.

But despite its high (public and private) spend on healthcare, the US ranks last in the developed world on most measures of health outcomes.

Low-cost and low-tech healthcare models in poor places like Cuba and Kerala puts the leader of the free world to shame.

Technology, ‘quality of innovation’ and the economy

India ranks second among middle-income countries on ‘quality of innovation’. Its raw score on the measure is higher than the average of the 50 economies -classified as ‘High Income’. Thus, the argument that Indian scientists may be filing patents merely for professional advancement may not hold.

The GII admits the limits to its methodology to estimate innovation quality, which it bases on three indicators: University rankings, h-indices, and ‘internationalisation of local inventions’, as measured by patent filings in more than one country.

The problems with the first two indicators are well-known. For the third indicator, it may be mentioned that the GEs and the IBMs of the world employ entire departments of lawyers with PhDs in science to identify the ‘least patentable unit’.

What India lacks is not innovation but an ecosystem to commercialise innovation. Risk-averse Indian capitalists prefer to buy technology whose efficacy as well as market potential has been proven elsewhere.

But Indian technological capabilities have played a key role in cases where such acquisition was prevented.

For example, foreign pharmaceutical companies were subject to controls until 1970. They dominated the market and charged some of the world’s highest prices.

After 1970, price controls and disincentives to foreign equity were introduced.

The Patents Act (1970) also confined patent protection to processes rather than products. Firms could thus legally manufacture the same molecule by a different process.

This law made India a pariah in the global intellectual property regime till 2005 when the country became subject to the World Trade Organization’s Trade Related Aspects of Intellectual Property.

Cipla Ltd, founded by Jamia Millia Islamia University professor Khwaja Hamied in 1935, spearheaded the 1970 patent law which directly enabled its pioneering production of Salbutamol inhalers for asthmatics. The company made global headlines in 2001 by offering anti-retroviral drugs for HIV/AIDS at $1/day per patient to African countries.

Massive public-sector investment underwrote this success.

Hundreds of firms were fostered by the cheap availability of basic organic chemicals from the state-owned Hindustan Organic Chemicals Ltd.

Managers with the Indian Drugs and Pharmaceuticals Ltd became entrepreneurs, with active mentorship of the parent organisation. Anji Reddy of Dr Reddy’s Laboratories Ltd is a key example.

The much-celebrated information technology sector provides another case study. Tata Institute of Fundamental Research built its first computer in 1956. Using designs from the University of Illinois, it built the TIFR Automatic Calculator (TIFAC) in 1960 for the Atomic Energy Establishment (now BARC).

IBM Corp entered India early on, but was forced by the ‘licence permit-quota raj’ to refurbish and assemble its popular 1401 computer within India rather than import.

However, the company refused to dilute foreign equity in keeping with the Foreign Exchange Regulation Act (1973), confident that hundreds of its machines operating in India — including in the railways and the Planning Commission — made it indispensable.

IBM was finally kicked out of India in 1978 and the then recently set-up state-owned Computer Management Corporation (CMC) took over maintenance of IBM computers.

Not only did CMC play a key role in computerising the Indian Railways’ ticketing system in the 1980s, it was also among the first in the sector to acquire an overseas company, buying the US-based Baton Rouge International in 2001. So powerful was the brand that CMC was merged with TCS only in 2015 after it was sold to the Tata Group in 2001.

TCS itself was established in 1968 to provide services to the Tata conglomerate. Taking advantage of a 1974 government policy that permitted computer imports to enable software exports, it imported a Burroughs B6700 computer and quickly began exporting.

Early customers included an Iranian power plant and the UK’s National Health Service. Benefiting from the exit of IBM from India in 1978, it established itself as the most important player in India’s software industry and is today, the Tata Group’s most important cash cow.

Had India not been protected from ‘innovative’ companies like IBM, it is unlikely it would have been in the globally unique position of having strong domestic players when the Y2K boom hit.

Innovation, the environment and India’s development challenges

De-centering innovation will be key to climate action. The Intergovernmental Panel on Climate Change noted that walking cities and transit cities had existed for ages before the 20th century’s automobile city model. Others actually called for a ‘dumb city’ rather than a smart city.

Closer home, Indian cities have more electric rickshaws plying than the total number of electric vehicles sold since 2011 in China, the world’s largest market. This e-rickshaw revolution is where the real global electric vehicle revolution is, as noted by The New York Times as well as a Slate intern but rarely commented on by the Indian media.

This is because there is no appeal for a seemingly low-tech device assembled by unheard-of small firms from imported Chinese parts with no charismatic inventor like Elon Musk in the equation.

Even more astonishingly, e-rickshaws were invented in India (as well): One claimant is Anil K Rajvanshi of the Nimbkar Agricultural Research Institute, who worked on a design in the 1980s.

The e-rickshaw revolution, with its cheap lead acid batteries (whose working is understood by every technician in rural India) can provide a way forward for the electric vehicle industry confronting range anxiety as well as expensive and fast-depleting lithium.

If petrol pumps provided a battery swap infrastructure (rather than a charging infrastructure) for the burgeoning e-rickshaw market, electric vehicles could compete with fossil-fuelled vehicles for longer journeys in slow-moving urban traffic. This infrastructure can also serve cheap lead acid battery-based electric cars.

However, that will require a vision of engineering which emphasises everyday problem solving, rather than the mantra of innovation. Or even the mantra of jugaad, a version of innovation that’s allegedly uniquely Indian and whose subversive potential has been appropriated by management literature including at the French business school INSEAD, which also collaborated on the GII.

“Implementation [is seen] as a Shudra’s job, it is not a Brahmin’s job. The Brahmin’s job is to talk about it, give lectures and theorise. Somebody has to dirty their hands, to actually do things. And that is considered the Shudra’s work. Not many people want to do it,” Sam Pitroda — the millionaire inventor who headed the six technology missions of the 1980s — once said.

India’s mixed record on using science and technology to solve the problems of its poor attests to this.

Pitroda’s observations on caste as a continuing driver of Indian society was attested to when Rahul Gandhi referred to his closest adviser’s (lowly) carpenter caste to highlight the benevolent patronage the Congress high command had shown to the downtrodden.

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