A grand strategy for technology 

Source: The post is based on an article “A grand strategy for technology” published in the Business Standard on 29^th July 2022.

Syllabus: GS 3 Achievements of Indians in Science & Technology; Indigenization of Technology and Developing New Technology.

Relevance: Research and Development Spending in India; innovation and Entrepreneurship

News: In India, Research and Development (R&D) spending has stagnated. However, it has risen steadily in the other major economies.

As a percentage of gross domestic product (GDP) India’s R&D spending was 0.67% in 2018-19. It is way below the spending made by the major economies. For instance, China has 2%, the European Union has 2%, the US and Japan have 3% and South Korea has 4.5%.

Further, the Union government accounts for about 45% of the total R&D spending. And, about 60% of the total goes to defence, space, atomic energy and agriculture sector.

What kind of the R&D Model should be adopted by India?

The R&D model should be on the lines of the US R&D Model which made it the leading force in technology development in the latter half of the 20th century. For example, path-breaking developments in information technology, communication, medicine, space exploration, energy, and a lot more were seen in the US.

Following are some of the steps US took to develop the R&D:

It is generally accepted that the R&D growth in US lead by the private sector. Instead, it was provided by the Federal government. This can be understood by the Federal and business R&D spending as a percentage of GDP.

Its R&D spending reached 1.86% of GDP in the mid-1960s. However, the business R&D spending grew slowly only to 0.86% of GDP.

The Federal government set up the Defence Advanced Research Projects Agency (DARPA). It supported several projects like the development of the Internet at a time when even the word “internet” was not known!

The Federal government spent on technology projects that had a time horizon of 15-20 years because the private players would seldom invest in long-gestation projects. However, the federal government made efforts to associate the private sector.

In later period, business R&D grew rapidly from the 1990s onwards often on commercialisation of technologies that were pioneered through the Federal R&D spending rather than on basic or applied research.

In fact, even now, the US government continues to play a major role in promoting very forward-looking research. For instance, the Federal government has set up an Advanced Research Project Agency-Energy (ARPA-E) and a fund for promoting Energy Frontier Research Centres in Universities.

US government also supported the commercialization of the technologies obtained after the basic and applied research. For example, the US government provides 20-25% of funding for early-stage technology firms. Further, the venture funds come later when there is sufficient commercialisation to deliver returns in five to seven years through initial public offerings or merger/acquisition.

What India should do? 

(1) At present, India is at the stage where the US was in the 1950s and ’60s. Therefore, the government should do what was done by the US in the ’50s and ’60s.

(2) The Union government should adopt a grand strategy for technology development. The elements should be:

(a) A five-fold increase in Union government spending on R&D from 0.3% of GDP to 1.5 in 3-5 years’ time

(b) The Department of science & technology should be reorganized into mission-oriented set-ups.

(c) The private sector should be better connected with focused mission-oriented research institutions like the Defence Research and Development Organisation, and Space Commission.

(d) There should be new mission-oriented programmes focussed on emerging challenges like climate change, bio economy and long-term opportunity potentials like nanotechnology, artificial intelligence.

(e) Capacities of the University/IIT research institution should be enhanced with a substantial increase in research grants

(f) Setting a soft target for large corporations on their R&D spending as a proportion of their profits.

(g) There should be symbiotic linkages between government, business and research institution. Further, the private sector, particularly with a provision for angel investment in high-technology start-ups.