Tags:
Journalism of Courage
Widely and justifiably acknowledged as the drivers of India8217;s economic growth, considered now a serious player in global mergers and acquisitions, and having produced CEOs whose brand values seem to have transcended the confines of balance sheets, is there any activity in which India8217;s corporates are way behind global best practices? Innovation. The data makes for painful reading as anyone glancing through a recent World Bank study, 8216;Unleashing Innovation8217;, will realise. True, reforms have had their effect.
Enterprise R038;D in 2004 was seven times more than in 1991. Competition, as the study notes, spurs innovation. But aggregate figures are still dreadful. India has never spent more than 1 per cent of its GDP on R038;D and nearly eight out of every ten rupees spent comes from the public sector. Just how much more corporates can spend is clear when one considers MNCs spent nearly one and half billion on R038;D in India between 1998 and 2003. Clearly, the potential for absorbing research funds exists.
Yes, of course, there are structural problems, several of them have been cited by the study. Gross enrolment in higher education is low, which is the main reason for the skills bottleneck. Venture capital funding tends to be conservative, shying away from early-stage financing. There are far too many regulations. But there8217;s also India Inc8217;s unwillingness to bet on primary research as a profit-maker. This, the sarkar can8217;t change. Only our CEOs can.
