Innovation Strategy- India and UK: Wish list Vs Pragmatism

The draft Science, Technology, and Innovation Policy, 2020 is a non-starter as a policy on innovation and went into a limbo. When authorities try to give a new avatar the team can benefit from UK policy paper `UK Innovation Strategy: leading the future by creating it'

A recap of India's draft:

Broad vision- To double the number of Full-Time Equivalent (FTE) researchers, Gross Dimestic Expenditture on R&D (GERD) and private sector contribution to the GERD every 5 years. Open Data Policy for Publicly Funded Research: All data used in and generated from public-funded research will be available to everyone (larger scientific community and public) under FAIR3 (findable, accessible, interoperable and reusable) terms. Wherever applicable, exceptions will be made on grounds of privacy, national security and Intellectual Property Rights (IPR). Transforming existing R&D institutions to research universities. This will foster better linkages between research and education and also enable effective utilization of research infrastructure. Foreign MultiNational Companies (MNCs): Foreign MNCs play an integral role in boosting India’s economy. To gainfully measure and assess the contributions made by foreign MNCs in the STI financing landscape, innovative methods to capture them will be developed. Boosting fiscal incentives for industries investing in STI through incremental R&D based tax incentives, tax credit for investing in facilities for commercialization, tax holidays, tax waivers, target-based tax incentive for specific domains, tax deduction, expatriate tax regimes, remodelling of patent box regime etc. There will be a reassessment of the possibility of reviving weighted deduction provisions (of expenditure incurred on in-house R&D).Flexible mechanism for supplier development programmes for public procurement in all sectors (especially earmarked for Small & Medium Enterprises - SMEs and Start-ups).Reassessment of regulatory control on STI landscape to promote innovative enterprises. It is recommended that the Central Government re-examine and widen the scope of R&D expenditure. Further, the government may determine the right mix of loan, equity and grants to assist Indian industries for technology up-gradation and commercialization. Further, to attract Foreign Direct Investment (FDI) in STI, reduction in corporate tax rates for foreign MNCs, fast track clearances, easing land acquisitions, adequate means for incorporating FDI etc. will be explored on a need basis. To undertake efficient governing mechanisms for the STI funding landscape, a national STI Financing Authority will be created.Modification/waiver of General Financial Rules, for large scale mission mode programmes and projects of national importance will be explored. A new model for funding, implementation and monitoring of such programmes will be developed, either as an overarching mechanism or through obtaining cabinet approvals in respect of individual programmes. In addition, certain GFRs will be required to be amended for funding of R&D projects to facilitate ease of doing research.

Summery: A great compilation of wish list. There is something for every stakeholder.  STI Financing Authority , modification/ waiver of GFR are radical proposals in Indian context.

UK Policy paper focus is comparitively narrow, pragmatic and more likely will be acted upon.  They talk of innovation by business which is diffrent from business innovation , favouraite of Unicorns.

Vision is for the UK to be a global hub for innovation. Strategy set out plans against 4 key pillars, which will support the achievement of that vision:

• Pillar 1: Unleashing business – we will fuel businesses who want to innovate
• Pillar 2: People - we will make the UK the most exciting place for innovation talent
• Pillar 3: Institutions and places - we will ensure our research, development and innovation institutions serve the needs of businesses and places across the UK
• Pillar 4: Missions and technologies – we will stimulate innovation to tackle major challenges faced by the UK and the world and drive capability in key technologies

Indian draft is for ease of doing research by government funded researchers of government funded institutes where as thrust of UK policy paper is on innovation by commercial enterprises.

DEMAND DRIVEN INNOVATION: LEARNING FROM CHINA

In India, we think preferential treatment to local innovation is stupid economics and sinful global behavior. How did the Chinese manage to support local innovations with a public procurement policy consistent with international treaties? Some excerpts from the PhD Thesis of Radomir Tylecote.

• The Chinese government has created demand-side innovation policies to help give indigenous innovators a favourable environment, including procurement preference for domestic innovative products, and technical standard-setting.
• In 1992, Beijing published the Government Procurement Law, mandating (with exceptions) that government procurement purchases should be limited to domestic products , with support for enterprises used to support those which purchase domestic high technologies.
• In public procurement, the World Trade Organisation’s Government Procurement Agreement (GPA) does not apply to all government procurement, and GPA coverage to each member state is based on negotiation (WTO members are not yet required to join the GPA, and China is currently negotiating GPA accession, meaning it can include preferences for domestic goods and companies in state procurement practices.
• Procurement policy was reinforced from January 2005, as the Ministry of Industry and Information Technology (MIIT) issued the Opinion on Accelerating the Large Company Strategy in the Electronics and Information Industry, stating that support should be provided “to the leading large companies”.
• In 2009 the Circular on Carrying out the Work on Accreditation of National Indigenous Innovation Products, (a.k.a. Circular 618, by MOST, the NDRC, and the MOF) created a national-level “catalogue” of preferred procurement products in the six high-tech areas of computing and application equipment, communications, modern office equipment, software, new energy, and high-efficiency and energy-saving products.
•   An upgraded catalogue following the Circular listed 240 forms of industrial equipment in 18 areas that Chinese firms are encouraged to manufacture, to upgrade China’s manufacturing base, including solar PV. Participating firms were offered subsidies and tax incentives, alongside priority in procurement. 
• This was followed in November 2009 by the Indigenous Innovation Product Accreditation Policy, whereby state-procured products had to contain Chinese IP. Beijing’s municipal procurement catalogue contained 42 products and just one from a foreign-invested manufacturer; Shanghai’s had 258, with two from foreign-invested firms; Nanjing’s list had none. 
• These initiatives have been pursued in different ways by different levels of state. Procurement has built a platform to take Chinese firms from early innovation to market entry, and demonstrates a more direct approach among local government, and province-level cities in particular (the four major municipalities of Beijing, Shanghai, Tianjin and Chongqing) in supporting their high tech firms.

·       The indigenous IP issue fizzled out in 2011, but it had become entrenched in many people’s minds.