While India is marching towards building a greater economy with an ambition to reach USD 7 trillion by 2030, the quest for smart and advanced technology becomes imperative. The government has laid out a comprehensive plan to spur research and development in emerging and critical technologies for India through various policies. In the interim budget of 2024, the government has also announced a corpus of Rupees 1 lakh crore for long-term funding of R&D, including defence technology.
There are certain sectors where we, as a country, have laid out specific priorities. One of these areas, in the larger context of critical and emerging technologies, is quantum technologies, including quantum computing and communications. In fact, the government of India has recently launched a major National Quantum Mission (NQM), which is being piloted by the Department of Science & Technology (DST). Another priority area is artificial intelligence (AI), followed by semiconductors, clean energy, particularly the green hydrogen economy, and lastly, biomanufacturing and the bioeconomy. These sectors have been identified as critical and emerging, and we have set out priorities for their development.
There are national missions and policies in place to actively promote technology development and adaptation in these areas.
There are certain areas where we have shown initial momentum, and therefore we should focus on boosting them. One very important area is defence, which is crucial because history has demonstrated that advancements in defence and military technologies have enabled nations to achieve greater technological advancements than in any other field. In India, we have largely relied on imported technology for the past 70 years. However, in the last four or five years, we have witnessed the emergence of an innovation ecosystem, primarily in areas where the country possesses natural strengths such as software-related data analytics, artificial intelligence, quantum technology, and recently, there has been significant interest in chip design.
Therefore, it is essential to develop capabilities in these new areas where we are experiencing a remarkable level of progress, particularly in the space sector. Innovation is occurring in all aspects of space, including launch operations, satellite development, payload design, ground station infrastructure, and data analysis. Each of these areas is gaining considerable traction. Moving forward, we should prioritize resources and support for the areas where we are witnessing a critical mass of innovation and provide governmental assistance in sectors where progress is not as significant.
The global science and technology players in the world typically spend about 2 to 3% of their GDP on R&D. In India, we are spending only about 0.7% of the GDP on R&D. However, more importantly, when we compare this to the global ecosystem or other countries, they are spending 3 to 4% of their GDP on R&D. Seventy percent of this spending comes from the private sector, and in some countries such as Korea, it is even higher, up to 80%. But in India, the spending by the private sector in R&D has been limited to only 30 to 40%. Unless we increase the expenditure on R&D as a large percentage of the GDP, we cannot reach the level where we want to become a global player. This spending cannot come from the government alone; it has to come from the private sector by enhancing their R&D capabilities.
One recent effort by the government is the establishment of the Anusandhan National Research Foundation. One of its objectives is to incentivize and enhance funding from the private sector for R&D support. This funding need not come directly into the foundation. In fact, the government can co-fund R&D projects along with the industry. Therefore, we really need to create an environment where the private sector can increase its R&D spending, which will supplement the government’s efforts in funding R&D programs and incentivizing entrepreneurs and startups, giving them a boost.
In India, we have tremendous capacity in fab semiconductor design and chip design. In fact, all major chip design companies have their design R&D centres in India, and these fab designs are accomplished by Indian engineers. Therefore, we have the potential to create a successful ecosystem for designing fab semiconductor chips for various applications. This ecosystem can serve not only the Indian civil and defence markets but also become globally competitive.
Several years have passed we have not been focused on creating products, with only a few exceptions falling under this broad category. However, the announcement of 1 lakh crore by the government actually heralds a move from a service-based economy to a product-driven nation. Once we transition into a product nation, our growth rate, which currently hovers between 6% and 7%, can potentially reach 9% to 10%. If we want to become a developed nation within the next 20 years, we have to transition into a product-focused nation.
In terms of full-time equivalent R&D personnel, our country has a significantly lower number compared to the global average. This is primarily due to a lack of both quality and quantity in terms of R&D. This fact has been acknowledged in the National Education Policy, which clearly emphasizes the need to enhance the research and development ecosystem in tier 2 and tier 3 state universities and colleges. Currently, one of the issues in these institutions is the lack of capacity to effectively utilize funding for R&D. One potential solution could be to establish a hub-and-spoke model, where select institutions with the necessary capacity in tier 2 and tier 3 regions are partnered with established hubs in tier 1 institutions such as IITs and IISc. These hubs can support national missions in areas like Quantum, AI, or cyber-physical systems, thereby enhancing the research capabilities of the tier 2 and tier 3 institutions. With increased capacity over the coming years, these institutions can become competitive with IITs and IISc.
Embracing technology and fostering innovation will position India as a leader in the global technology landscape as India marches towards a greater economy.
(The author is an advocate by profession)
