The biggest bottleneck to innovation is that our universities are producing non-thinking graduates who can only repeat the teachings like a parrot. They have no analytical or employable skills. Many previous Committees have pointed to this malfunctioning of our system. This system was set up by the British rulers of Bharat to produce a non-thinking educated class that could oppresses the native population and serve the foreign masters.
Prime Minister Narendra Modi must be congratulated for putting innovation in the forefront. Subsequently, the Niti Aayog established an Expert Committee to prepare the road map for giving impetus to innovation in the country. The Committee has made some valuable suggestions. It has suggested that a “Grand Prize” be established to provide encouragement to innovators. It has suggested that public funding of startups maybe increased. A college graduate may have an idea to do business but he may not have the funds for the same. There are specialised investors that provide financial support to such ventures. These are variously called incubator funds or venture capital. They provide financial support without requiring collateral security. The funder gives money if the project appears viable. These fundings are of high risk . One out of ten start-ups may succeed but the value added by that one start-up is so huge that it makes up for the loss incurred in the nine failed start-ups. The Department of Science and Technology has provided such funds to the tune of Rs 100 crore since 1980. The Committee has suggested that the Government should increase this to Rs 200 crore per year. This is entirely welcome though it would be better to seek a larger amount for this critical initiative. Other suggestions of the Committee, however, need major improvements.
The biggest bottleneck to innovation is that our universities are producing non-thinking graduates who can only repeat the teachings like a parrot. They have no analytical or employable skills. Many previous Committees have pointed to this malfunctioning of our system. This system was set up by the British rulers could of Bharat to produce a non-thinking educated class that could oppress the native population and serve the foreign masters. Our politicians have appropriated the system as it is. The Committee has not gone to the root of this malaise. It has remained satisfied by repeated standard slogans. Report of the committee says that it supports “steady re-engineering of the education system in the country to prepare our youth for the new innovation economy and provide our young enterprises with a large pool of highly-employable workforce… including overhauling of existing school and college curricula, change in existing teaching techniques, better monitoring of school and faculty standards, better access to e-education facilities, and better targeted skilling and training to ensure employability of youth.” All this is meaningless bureaucratic jargon. The basic problem of our University system is that teachers have no incentive to teach, let alone to innovate. The Committee has not given any suggestions to deal with this fundamental problem. Requirement is to convert all University teachers from permanent employment to contract appointments and to institute an external evaluation system to determine renewal of their contract. The teacher must himself know innovation in order to teach the students.
The Committee has suggested that patents should be enforced strictly. That will create incentive for private individuals and business houses to invest in Research and Development, it has said. However, there are two aspects to the matter. The Harvard University had undertaken a study on role of the Government in innovation in the energy sector. The Report said that patents protection both helps and harms innovation: “In some cases, broad patent protection contributed to rapid innovation; in others a relatively weak… framework during the early stages contributed to technology transfer and competition, and thus innovation.” Weak patents protection can allow Bharateeya businessmen to copy advance technologies and upgrade themselves rapidly. Once upgraded they maybe in a situation where they can make new innovations and have them patented. It is necessary to make it easier for the weak businesses to access patented technologies. The Committee has ignored this aspect of patent protection and merely restated the need for patent protection that is consistently raised by the developed countries.
The Committee has underscored the need to promote small businesses to generate employment. The Committee has remained silent on some other actions that are necessary to spur innovation in the country. A study by the United Nations University on the role of Government in promoting innovation said that “public subsidies for private sector research and development is quite low” in Bharat. It is necessary, therefore, for the Government to increase direct investment in innovation such as by sponsoring innovative projects. The United States has a system whereby private individuals, building upon research undertaken by Government Universities, can have the innovations patented in their personal names. This has enabled individuals to take innovations from the university system and build on it. It was necessary for the Committee to suggest a roadmap in this direction.
A study on innovation in the United States found that procurement of hi-tech products by the Government has helped much in innovation. The Committee has failed to make any suggestions in this direction.
Bharat has a large network of scientific laboratories established by the Council of Scientific and Industrial Research of the Government of India. These labs have large budgets but they has contributed little to innovation. The United Nations University pointed out that the efforts to restructure CSIR have been made since 1996 but with only marginal results. The Committee has chosen to remain silent on this issue. Consequently, the report of the Committee fails to face the major roadblocks to innovation in the country and will derail the Prime Minister’s efforts to jumpstart innovation in the country.
Dr Bharat Jhunjhunwala (The writer is former Professor of Economics at IIM Bengaluru)