Research and Development (R&D) is gaining momentum in India. India is increasingly becoming a top global innovator for high-tech products and services. In a recent study by World Bank, it found that more than 300 multinational corporations have set up R&D and technical centres in India. Hundreds more have their plans to move in future.
I was reading Unleashing India’s Innovation, a 224 page Report, released by World Bank recently. Clearly, India is taking giant steps in becoming hub for innovation, however, there are still lot of challenges that need to be taken care of, before India can call itself the leader.
Here is a graphical representation of improvement areas that India needs to address:
Here are some of the other interesting facts that I learned from the report..
- Roughly 90 percent of the workforce is employed in the informal sector, which is often characterized by low-productivity and low-skill activities.
- About 2 percent of India’s population—20 million people—live abroad, where they earn the equivalent of two-thirds of India’s GDP.
- Of the top 50 applicants for patents in India between 1995 and 2005, 44 were foreign firms. Only six were Indian; three of these were public institutions and one, a public corporation. Just two were private Indian firms, both in the pharmaceutical industry.
- Aggregate domestic R&D spending has never exceeded 1 percent of GDP, and 75–80 percent comes from the public sector.
- Since the Indian economy was opened up in 1991, the private sector has invested the most in research and development (R&D) in the sectors most open to competition. In 2004, enterprise R&D was more than seven times higher than in 1991.
- Only 16 percent of Indian manufacturing firms offer in-service training, compared with 92 percent in China and 42 percent in the Republic of Korea.
- Average enterprise productivity in finance, insurance, and real estate companies is nearly 23 times that in agriculture. But these industries account for only 1.3 percent of employment, while agriculture accounts for 60 percent
I never imagined that only 2% of Indians living abroad earn as much as two thirds of India’s GDP (roughly $660 billion)..Wow !
Companies have to realise the importance of R&D,while carryingout routine production . It could be possible that know how/know why may not be available always especially when India compets in world market .It will be too late to think of development at that time . Successful economies always thrive on Research and Development .Share holders of companies must insist that companies compulsorily declare R&D expenditure and consequent product development and commercialisation results . Then only economy can prosper without getting surprises .