Make in India: The Innovation imperatives. Does the Make in India slogan resonate with S&T perspectives? Key Issues comes at most important and appropriate

Pradosh NathDirector

Centre for Knowledge, Ideas and Development Studies (KnIDS)

Delhi and Kolkata

Make in India: The Innovation imperatives

Does the Make in India slogan resonate with S&T perspectives?

Key Issues

comes at most important and appropriate time

At 1-2 % growth, un-encouraging performance of the manufacturing sector

Generation of income and employment for billion population is a non-negotiable task for politics and economics of the country

Developed economies have evolved over the years as knowledge economies, where manufacturing sector has been gradually replaced by knowledge creating sectorIndia would be able to emulate developed economies once it achieves the status where population is human resources, and not an undesirable appendage of the economyTill that time manufacturing has to be nurtured as the backbone of the economy

So what is required to realize the true potential of the slogan?

Imperatives are competitive technological and innovation capabilities

Strategic road map to push the Indian economy to a higher growth orbit

In a globalised world ‘Make in India’ has to have the strategy of ‘make locally’ and ‘sell globally’ - Local makes have to be saleable globallyOnly local market cannot be the focus because other countries would have go global strategy and make easy inroad in the domestic market

Products serving our local market is already gasping, facing Chinese competition

Making local ensures income and employment generation, while global market ensures sustenance and growth, and also competitive capability building

However, international comparisons of innovation are not very encouraging…

Percentage of innovative firms in different countries

Percentage of innovative firms in product and process innovations

India figures at the bottom in introduction of new or improved products in the market

In innovation related activities India is far behind the developed countries in intra-mural R&D, but compares well with countries like Poland

Indian firms, compared to innovative firms in other countries, widely use external sources for information and knowledge

Source: These Graphs were constructed through data sourced from Eurostat, South Africa Innovation Survey Main Results 2008 and UNESCO Institute for Statistics (UIS) results of the 2011 Pilot Data Collection of InnovationStatistics.

India’s position at the bottom in technological innovations is reasoned by firms’ perceived barriers to innovations (National Innovation Survey – DST, 2013)

This takes us to look at the innovation promotion system in India

Why is it so?: Barrier to innovation

Availability of skilled manpower is the most important problem for 88% of the innovators.

Problem with access to market information and availability of information technology follow closely.

Infrastructure as barrier has been expressed by much less percentage of innovative firms

Access to knowledge/ Information has been found most important barrier by about 40% of the innovative firms.

This is followed by cost factor associated with innovation

Internal resources remain strong barrier for all types of innovations

Innovation cost for ‘product’, ‘process’ and ‘alternative material’ is a barrier as expressed by more than 70% of the innovators.

Firms engaged in innovation on alternative material and efficient use of inputs are more prone to availability of lab facilities.

Innovation infrastructureInstitutional arrangements for addressing needs for innovation support are done at:

Activated through national government and become one of the components of the National Innovation System

Activated by the state authority according to the states own planning for economic development and industrialization

Sectoral specificities of innovation creating Sectoral Innovation System

National Level (NIS)

Regional/State Level (RIS)

Sectoral Level(SIS)

Innovation support system as part of NIS across countryJurisdiction

Activity National State District Local Firm level

Technology GenerationRDI (611), CMTI TDC (8) TDC hand tools (1)

RDI (918), SIRO (490), Univ (282)

In-house R&D, MNCs’ R&D centres

Technology diffusion/ Marketing

NRDC, MSMEDO, IDEMI

MSMEDI, State Khadi Board DIC

Technology Consultancy CMTI, IDEMI TCOs DIC

Tools, equipment, prototype development CMTI, IDEMI, CMTI Central tool room (10),

Dir of Inds. Collaboration with Danish, German, Swiss

Common facilities/ testing centres

Testing centres (4); Field testing stations (7), CMTI

TDI (30) Workshops (42)

Raw material, Machine and equipment supply NSIC, Khadi Board State Khadi Board,

MSMEDI DIC

Finance, refinance SIDBI, NABARD State Fin Cor. Lead bank MFI

Infrastructure development MSMEDO, RISC State Dir of Inds.

MSMEDI

Training and skill development

TI (2), CMTICAPART, IDEMI, NIMSME, Khadi Board

MSMEDI, ITI, Khadi Board DIC SHG, CSR, DRDA,

BDO, Coop, NGO Donor Agencies

Entrepreneurship development

EDI, IIT, TDI, NIT, NIESBUD, IIE MSMEDI SHG, CSR

Support system covers almost all areas that touch innovation




RDI (918), SIRO (490), Univ (282)



NRDC, MSMEDO, IDEMI









MSMEDI DIC



MSMEDI







There are large number of organisations for technology generation, but comparatively few for dissemination




RDI (918), SIRO (490), Univ (282)



NRDC, MSMEDO, IDEMI









MSMEDI DIC



MSMEDI







As we move forward from the national to the local levels, organisations for support system become rarer

National Innovation Survey, DST 2013 shows……

• Accessing institutional facilities (NIS) for technological support to innovation is generally very low

• Accessing institutional sources of finance is very rare among the innovative firms. Similarly institutional training programme for human resource development is also rarely accessed

This is indicative of disconnect between innovation infrastructure & production system

Again from National Innovation Survey, DST 2013 • RIS has high positive correlation with innovation potentiality of the states. States

ranked lower in RIS also have poor innovation potentiality. Weak RIS leads to ineffective innovation eco-system.

• For SIS it has been shown that states promoting sectors with high innovation potentiality can improve the overall the innovation eco-system of the states.

Correlation SIS RIS

Innovation potentiality of

states0.57 0.48

Correlation SIS RIS

Innovation potentiality of

states0.57 0.48

Road Map• ‘Make in India’ has to provide the big push to the manufacturing sector

• The strategy has to be make locally for global market

• The imperative is strong innovation eco-system which appears to be the weak link for realising the ‘make in India’ dream

• The weak innovation infrastructure is examined from NIS, RIS and SIS perspectives

• NIS shows an overall a dichotomous innovation system reflected in the disconnect between the production system and innovation support system, as it is understandable from the observations of the National Innovation Survey

• RIS shows that physical infrastructure (that includes education and health system along with road, electricity etc) is the key to promote innovative manufacturing activities

• SIS, on the other hand indicates that promoting production activities of the sectors that have high innovation intensity help improve innovation eco-system

Steps towards strengthening innovation support system is, therefore, necessary conditions for successful ‘make in India’ movement

Thanks

Documents

Make in India: The Innovation imperatives. Does the Make in India slogan resonate with S&T perspectives? Key Issues comes at most important and appropriate