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Global Competitiveness and Technology

19th Oct 2010

Deepak Bhatnagar

Indian Institute of Foreign Trade (IIFT)

[email protected]

[email protected]

National Conference on IP for MSME

Organised by CII-MoMSME-WIPO


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India: Competing with the WorldA peep into the past

Indian Steel in arrows and swords:- Iron tipped arrows used by Indians in the Persian army (480 BC)- Alexander the Great prized a gift of 100 talens of steel from Porus in

326 BC- Indian Wootz steel used for making Damuscus blades and becamefamous in Europe(Wootz derived from the Kannada word UKKU meaning steel)

- British Royal Society made a detailed examination of Wootz Steel in1790: their report says.the steel of India is decidedly the best I

have yet met with!- Should Tatas make steel rails to British specifications, I wouldundertake to eat every pound of itSir Fredrick Upcott, Chief Commissioner of Indian Railways.

If Upcott had carried out this undertaking he would have had someslight indigestion(comment by Dorabjee Tata when the rails were sent to UK)


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Competing for the FutureForget that the World is flat

The world of business is turning upside down(The Economist April 17th 2010)

- Worlds Centre for economic gravity is shifting towards emergingmarkets- Emerging countries are no longer content to be sources of

cheap hands and low-cost brains.- Instead, they too are becoming hot beds of innovation, producing

breakthroughs in everything

from telecom to car making to health care.- They are redesigning products to reduce costs not just by 10% but by

upto 90%. They are redesigning entire business processes to dothings better and faster than their rivals in the West.

They are the new masters of management


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Innovation and TechnologyBreakthrough ideas are tilting the balance

Rich-world companies are doing more R&D in emerging markets e.g. Fortune 500companies now have 98 R&D facilities in China and 63 in India

Huawei, a Chinese telecoms giant, applied for more international patents than any other

firm did in 2008. It set up R&D operations in India in 1999. Globally, the companyowns 17 R&D centres with a strength of 40,000 Engineers. Order book in India $ 2Billion (Rs. 9, 000 crore) with BSNL, MTNL, Reliance, Tata Indicom and Bharti Airtel.

Even more striking is the emerging worlds growing ability to make established productsat dramatically lower costs. e.g. the $2,200 Nano Car or the $ 350 laptop: this sort ofadvance dubbed as frugal innovationis not just exploiting cheap labour. It is re-designing products and processes to cut out un-necessary costs. (Similar to theconcept oflean manufacturingwhen Japanese car industry beat the American giants30 years ago!)

Emerging economies are not merely challenging that lead in innovation. They areunleashing a wave of low-cost, disruptive innovations that will, as they spread to the richworld, shake many industries to their foundations

All sorts of CEOs will scream for protection!


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Technology and Competitiveness-these two are the most popular buzzwords of our time.

Technology is high up the agenda in both policy and academicdebates.

The capacity of firms to use new technologies and improvedorganizational methods is central in explaining industrial leadershipand the competitiveness of regions and countries.

Nevertheless, the relation between industrial innovation, scientificresearch, organizational change, and competitiveness is not clear.

The extent and manner in which innovation occurs in an economydepends on the development of new production and businesscapabilities, institutions, and infrastructure-factors which are, in turn,contingent (among other things) on business strategy and governmentdecisions on public research funding.


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Country Competitiveness: Extent to which a nationalenvironment is conducive or detrimental to business.

Industry/Sector Competitiveness: Extent to which an industryor a business sector offers potential for growth and attractive

return on investment. The concept can also be defined as thecollective ability of firms in the sector to compete internationally.

A more performance-oriented definition of industrycompetitiveness can be given as: Collective ability of an

industry on performance factors such as productivity, cost,market share and technology.

Company Competitiveness: Ability to design, produce and/ormarket products or services superior to those offered by

competitors , considering the price and non-price qualities.

Defining Competitiveness


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The Global Competitiveness Report 2010-11

Long term prosperity in the wake of Global Economic Crisis: Since2005, the World Economic Forum has based its competitivenessanalysis on the Global Competitiveness Index (GCI).

- A highly comprehensive index which captures the micro economic and

macro economic foundation of national competitiveness. The reportdefines competitiveness as the set of institutions, policies and factorsthat determine the level of productivity of a country

- Thus, more-competitive economies tend to be able to produce higherlevels of income for their citizens.

- The productivity level also determines the rates of return obtained byinvestments in an economy.

- The concept of competitiveness thus involves static and dynamiccomponents.


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The 12 Pillars of competitiveness

The GCI provides a weighted average ofmany different components, each of whichreflects one aspect of the complex concept

that we call competitiveness. These arebroadly grouped into 12 pillars ofcompetitiveness.

Strong inter-relations of the 12 pillars- infact, they tend to reinforce each other


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9th Pillar - Technological readiness

This measures the agility with which an economy adopts existingtechnologies to enhance the productivity of its industries. In today'sglobalised world, technology has increasingly become an importantelement for firms to compete and prosper.

In this context, whether the technology used has or has not beendeveloped within national borders is irrelevant for its effect oncompetitiveness. The central point is that the firms operating in thecountry have access to advanced products and blueprints and theability to use them. Among the main sources of foreign technology,FDI plays a key role. India is the 2nd favourite destination for FDI(after China)

Level of technology available to firms in a country needs to bedistinguished from the countrys ability to innovate and expand thefrontiers of knowledge


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12th Pillar - Innovation In the long run, standards of living can be expanded only with innovation. Particularly

important for economies as they approach the frontiers of knowledge.

Firms must design and develop cutting edge products and processes to maintain acompetitive edge.

This requires an environment that is conducive to economic activity, supported by bothpublic and private sectors.

Sufficient investment in R&D, especially by Private Sector.

Presence of hi-quality research institutions

Extensive collaboration in research between university and industry.

Protection of Intellectual Property (IP)

Organizational strategy for competitiveness: Develop and Integrate the TechnologyStrategy with Business strategy


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Key factors for the top spot in GCI

Switzerland has:- Excellent capacity for innovation- High spending on R&D- Scientific research institutions are among the worlds best

- Strong collaboration between academic and businesssectors ensures that much of this research is translatedinto marketable products and process, reinforced bystrong IP protection

- High rate of patenting : 148 per million inhabitants.

(India: 5.46 per million inhabitants)

Sweden: no 2 slot ( has replaced USA ,which slipped to 4th)India: no 51 slot (slipped from 49th spot last year)China: no 27 slot (up from 29th spot last year)


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What are the requirements for

enhancing competitiveness ? Prevent obsolescence sustained R&D Making the future work for you!

Are you confident about

Future trends: how they may affect you? Where the new opportunities will be? How S&T can help you seize these opportunities? What you should be doing NOW?

For every person and organization priorities may differ.

But one thing is certain:

We live in a world of change!.

The need to anticipate and prepare for the future is crucial.


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Need to Manage Technology

rapid technological change, uncertainity andcomplexity

technological knowledge to sustain

competitiveness in an uncertain business context

issues become manifold because of globalizationof technology

technology financing (VCs, Government schemesto encourage R&D and incentives)

create and nurture a culture of innovation


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NEED FOR A TECHNOLOGY VISION

Blessed are those,

who have a dream or a vision,

for, those who have not,

are dead while living!


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Stories and new ideas

Opportunities on how frugaltechnology helped companiesbecome globally competitive


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Global Leadership through Technology -

the charms of frugal innovation

Mac 400- a hand held ECG device developed by GEs health care lab atBangalore. This miracle sells for $800 (conventional ECG is $ 2000)

Water Filter- using rice husks to purify water developed by TCS in Chennai.

- Gives abundant supply of bacteria free water for an initial investment of about$ 24 and recurring expense of $ 4 for a new filter every few months.- Tata Chemicals is making these filter. Plan to produce 1m next year and

hopes for an external market of 100 mn.

Frugal Innovation- not just about re-designing products: it involves re-thinkingentire production processes and business models.

Companies need to squeeze costs to reach more customers and accept thinprofit margins to gain volume


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Low Cost Insulin Pump

- Under development at Amrita School of bio-technology with support from TIFAC, DST.

- Partnership with Bio-Con, a leading

manufacturer of human re-combinantinsulin.

- Price range in the 1000s. Imported pump

costs Rs. 1.75 lakhs.- Globally competitive product.

- A boon for diabetics, numbers increasing atalarming rate.


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FUNGISOMETM

Pride Product of Public-Private Partnership

FUNGISOMETM development at Delhi University & KEM

Hospital, Mumbai was supported by DBT, MoST, GoI.

Technology transferred to Lifecare Innovations Through

National Research Development Corporation.

R&D at Lifecare Innovations led to the commercialization

of FUNGISOMETMwhich was supported by DSIR, MoST,

GoI under the auspices of PATSER(Program Aimed atTechonological Self Reliance).


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Liposomal Amphotericin :

Produced in the lab

LAMP LRC 1

Liposomal Amphotericin :

Produced at Lifecare

FUNGISOME

TM

Bench to Bedside


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FUNGISOMETM-

BrandCompleteResponse

(%)

PartialResponse

(%)

SuccessfulResponse

(%)

Nephro-

toxicity

incidence7

(%)

Minimum

Daily

Treatment

Cost (Rs.)

FUNGISOMETM1 73.6 17.5 91.1 -1* 5,900

AmBisome2,3 58.0 19.0 77.0 10-20 30,00042.0 30,000

Amphocil/Amphotech5 11.0 35.0 46.0 25-40 24,100

Ampholip/Abelcet3,4

282 out of 473 patients enrolled in different

groups of fungal infections, only some

successfully treated

42-63 17,325

33.3 17,325

ConventionalAmphotericin B6 31.6 34-40 300


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PATSER Providing Strength Special issue ofJournal ofPostgraduate Medicine

on-

Systemic Fungal Infectionsand development of Indian

Liposomal Amphotericin B

The special issue of the Journal highlighted matchless safety,therapeutic success and economy of treatment


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Indian Institute of Foreign Trade

Specialised Centres in IIFT: SME CITT

WTO


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IIFT : SME Centre SME Centre of the institute, set up in May 2005, plays a crucial role in conducting research and

capacity building programmes for SMEs at national and international levels

IIFT is being increasingly recognized as Regional Resource Centre for Capacity Building of SMEs

1. Research: Some of the important research conducted by the Centre includes

A. Impact of Global Financial crises on SMEs from India

B. Product Market Identification for Agricultural exporters from Andhra Pradesh

C. Product Market Identification for SME Textile exporters : case study for Tirupur Exports

D. The SME Whitebook: Essential Handbook for Small and Medium Enterprises 2009-10

E. Inventory of Food Safety Standards for Agricultural Exporters from India

F. Market research reports in collaboration with Centre for Promotion of Imports fromdeveloping countries

G. Increasing Competitiveness of Informal sector in India, submitted to NMCC

2.Training: SME Centre has been involved in Capacity Development of SMEs both at Nationaland International level. Some of the important Capacity building programs conducted by theCentre for the year 2009-10 includes

A. Training the trainers for SMEs in Greater Mekong Sub Region at Bangkok in Dec 2009

B. Capacity Building of SMEs at Chennai (Leather cluster), Tirupur (Textiles cluster) andHyderabad (Agriculture)

C. Student training in collaboration with CII and CBI, Netherlands


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IIFT : Centre for International Trade in Technology (CITT)

Objectives:

Support industry by providing analytical information ontechnology export potential sectors and markets.

Develop a cadre of experts and trainers in internationaltechnology trade.

Underscore the importance of technology exports andstrive for its inclusion in the curricula of the concerned

academic institutions. Sensitise Government of India towards an enabling and

proactive policy regime.


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Focused studies by CITT:Technology Branding in SMEs

Technology Support Services in Special Economic Zones (SEZs)

Survival of Startups

Foreign R&D Centres in India.

Exportable R&D Services in the CSIR System.Technology Financing for SMEs: A Survey Report on Auto-Component SMEs.

Valuation of Intangible Assets - A Perspective.

GATS Provisions on R&D Services and Export Potential for India.

Global Marketing of Research and Development Services: Some Conceptual

Issues.Technology-Intensive Exports from India.

Policies and Incentives for Accelerating Technology-Intensive Exports: Exporters'Perspectives.


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How can IIFT help ?

Develop an export strategy for SMEs by linking

technology with trade.

Organize tailor-made training programmes for

capacity building on the interface between technology

and trade.

International branding/marketing of technologies

New business opportunities for Global trade Impact of changing global, technological & business

environment in the domains of your interest.

Documents

Wipo Msmes Del 10 Ref Theme 02 01