Despite India having several policies and programmes for encouraging innovation culture and absorbing major encouraging technologies, persistent shortage of well-trained scientists and engineers stand as an impediment, according to a UNESCO report.
The latest Science Report — The Race Against Time For Smarter Development — published on June 11, 2021, said that India’s research effort remained unsatisfactory. The UNESCO publishes science reports once in five years.
The report notes that India has an average overall Gross Domestic Expenditure on Research and Development (GERD) over the past two decades of 0.75 per cent of GDP. It has one of the lowest GERD/GDP ratios among the BRICS (Brazil, Russian Federation, India, China and South Africa) though research expenditure rose consistently over the past 14 years.
The Science Report notes that India’s research intensity declined since 2014. It said that Science and Technology Policy of 2003 fixed the threshold of devoting 2 per cent of GDP to research and development by 2007. This target date was set back to 2018 in the new Science, Technology and Innovation Policy (2013) and again to 2022 by the Economic Advisory Council of the Prime Minister. In 2020, the task force drafting the country’s new Science and Technology Policy recommended pushing back the target date to 2030. As of October 2020, no date had yet been set for the policy’s official release, the report points out.
RESEARCH AND DEVELOPMENT
The UNESCO report points out that the country saw a steady decline in share of Research and Development by the government sector since 2015. However, the private business enterprise sector raised its own contribution to 42 per cent of the total, the report added.
The report mentions that India’s challenge is to ensure that the current increase in business expenditure on R&D becomes systematic, as has been the case for countries such as China and the Republic of Korea.
The Science Report pointed out that GERD remained concentrated in a handful of industries, firms and states, led by the pharmaceutical, information technology, automotive and defence sectors. The Economic Advisory Council of the Prime Minister noted that the three private companies that spent the most on R&D in 2017 specialised in software development. It said Maharashtra, Tamil Nadu, Karnataka, Gujarat and the Undivided Andhra Pradesh were the top spenders in 2017. One of the main reasons is the presence of top firms of research expenditure and leading public laboratories in these states. Of the seven research councils in the country, the top research spenders continue to be those responsible for defence, space and atomic energy.
The UNESCO report shows that investment in R&D by foreign multinationals is on the rise. They accounted for as much as 16 per cent of private sector investment in R&D in 2019, or 13 per cent when public-sector enterprises were included in the calculation.
India had 253 full-time equivalent (FTE) researchers per million inhabitants in 2018. This formed 11 per cent of the researcher density of Italy. The report shows that this was a marked improvement on the situation in 2011 (157 per million) and 2015 (216 per million).
CONCERN OVER EMPLOYABILITY OF GRADUATES
Employability increased from 34 per cent in 2014 to almost 47 per cent in 2019, the report said. This means that one out of two graduates is still not employable. In technical fields, courses in electronics and communications engineering shared the highest employability rates (60.3%) with information technology (60.2%) in 2019, whereas civil engineering had the lowest.
For a long time, India has been losing highly skilled personnel, primarily to the United States. It said that half of the foreign-born individuals in the US in 2017, with a higher degree in science and engineering came from Asia, with India (23 per cent) and China (10 per cent) being the leading countries of origin. As part of addressing brain drain, India introduced two schemes in 2017
MAKE IN INDIA
India launched the programme ‘Make in India’ in 2014 aimed at ‘ease of doing business’. The report finds that ‘Make in India’ is yet to make a tangible difference to manufacturing. The Make in India programme has sought to increase domestic manufacturing of a host of high-tech products, such as cell phones and electric locomotives. To boost economic growth and the Make in India programme, the Minister of Finance announced a scheme, in a statement on the Union Budget for 2019–2020, whereby global companies would be invited, through a transparent, competitive bidding process, to set up mega manufacturing plants in ‘sunrise and advanced technology’ areas, such as semiconductor fabrication, solar photovoltaic cells, lithium storage batteries, solar electric charging infrastructure, computer servers and laptops.
However, India does not seem to have acquired the requisite technology to manufacture these products itself, the report said. It also said that past attempts to precipitate domestic investment, especially in semiconductor fabrication, proved inconclusive. “Moreover, incentive-induced stimulation of investment has a social cost because it involves taxing citizens and passing on the benefits to a private entrepreneur who ultimately may or may not set up a manufacturing facility in the chosen area of technology. At the same time, the very lumpiness of investments requires some sort of subsidy,” the report said.
Though inflows of Foreign Direct Investment have risen since 2014, multinational corporations have been repatriating about 27 per cent of this amount. “Only 26 per cent of investment by foreign multinationals has actually gone towards the manufacturing sector, the remainder benefiting the services sector. Over the past 20 years, one-quarter of FDI inflows has gone to finance, banking and insurance, as well as computer software and hardware. Just 2% has been invested in the green economy,” the UNESCO report said.
Since Covid-19 outbreak, the country has been mobilising its considerable capabilities to produce low-cost solutions for public health systems in three areas: vaccine research and manufacturing; manufacture of generic versions of ‘game-changer’ drugs; and frugal engineering of medical devices. In the Vaccine sector, six firms are already in the race. The Serum Institute of India has earned a reputation for being the cheapest vaccine manufacturer in the world. In frugal technologies, one domestic manufacturer, AgVa Healthcare was able to produce invasive ventilators. The start-up Nocca Robotics, by the Indian Institute of Technology Kanpur, began commercializing a low-cost ventilator in 2020, which, according to the developers, would cost about 6% of the international price.
HARNESSING EMERGING TECHNOLOGIES TO MODERNIZE INDIA
The report states that India has been attempting to modernize the country through the establishment of the National Institution for Transforming India (NITI Aayog) in 2015, which serves as a think tank. One of the main thrust is to promote innovation and diffuse modern digital technologies. Another focus has been the diffusion of renewable energy technologies and electric vehicles. The government launched Digital India in 2015 to use information technology to transform the entire ecosystem of public services. “The total number of Internet subscribers stood at 644.08 million in 2019, 87% of whom were broadband subscribers, according to the Indian Telecom Regulatory Authority’s Yearly Performance Indicators (2019). In 2018, out of the 1.176 billion mobile phone subscribers in India, half (578 million) were wireless data subscribers,” the report said. “This, in turn, has fuelled the digital economy, boosting e-commerce and the use of app-based food-ordering and taxi-hailing services, as well as hospitality-booking services.” It added.
With respect to bank accounts, only half of Indians had a bank account in 2014. As a result of the government’s Pradhan Mantri Jan-Dhan Yojana programme, eight out of ten Indians had a bank account by 2018, t6he report added.
AUTOMATION DISPLACING JOBS
The people, especially the youth, are anxious about the prospect of automation displacing jobs. These fears have been heightened by the phenomenon of ‘jobless growth’ that has plagued India since 1991. “In 2004, about 58% of the population entering the workforce – based on age – was absorbed but this proportion had fallen to 15% by 2011 and even to -5% by 2017, implying that some of the working age population had actually left the workforce, according to the National Statistical Office,” the report stated.
The UNESCO sad that rural women were the worst affected and those employed in sectors like agriculture, mining and quarrying or manufacturing.
AT A GLANCE
- In 2015, India launched Digital India to transform public services. Government departments now use Blockchain technology extensively
- The government is fostering a digital marketplace and smaller informal economy by encouraging Indians to open bank accounts and embrace cashless payment systems.
- The number of start-ups has grown steadily since 2016 but most are in the services sector, especially software development, rather than in manufacturing, the focus of the Make in India programme.
- Coal power plants pushed up carbon emissions in 2018. India is hastening the diffusion of clean technologies such as solar panels and electric vehicles.
- Foreign multinationals and Indian enterprises are spending more but overall research intensity is stagnant and domestic patenting remains low.
- The government is encouraging more students to enrol in science and engineering degree programmes. The relatively low employability of graduates remains a concern.