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News: Recently, India was ranked 46 in WIPO’s Global Innovation Index (GII) 2021, up from 81 in 2015. These findings corroborate are similar to findings in the UNCTAD’s Digital Economy Report 2021.
Importance of Innovation
Innovative activity is the key driver of competitiveness and economic growth. It is important for the Indian Economy.
The innovation can lead to self-reliance in technology, especially in the context of the incipient digital revolution.
India’s rising rank in the global innovation league suggests India has a lot of potential, and opportunity, to strengthen the competitiveness among business enterprises.
Indicators of innovative activity
(1) Gross R&D (GERD) and (2) The number of patents registered, are the key indicator of innovative activity.
Status of the patent filings in India
The patent filings by Indian enterprises and other institutions have increased from 8,841 in 2011 to 23,141 in 2020 (WIPO).
What are the issues in the field of innovation in India?
Issues in GERD
(1) India’s gross R&D expenditure (GERD) as a percentage of GDP at 0.7% is low.
(2) The Indian enterprises have not got into an R&D culture. Only 30% of the GERD is spent by business enterprises, despite the generous tax incentives offered by the government.
(3) The bulk of innovative activity is conducted by a handful of companies in the pharma and auto sectors.
Issues in case of patents in India
The patents granted have been only 776 and 4,988 for Indian enterprises and other institutions respectively.
Many patent applications fail to satisfy the three-pronged test of novelty, inventive step and utility.
The patent system fails to encourage minor innovations since the criteria for inventiveness tend to look at the novelty of the invention
What can be done to boost the R&D activities of Indian enterprises?
The development countries spend billions of dollars on R&D subsidies given to national enterprises to shore up their competitiveness. However, as per the World Trade Organization rules, subsidies up to 50% of project costs have been made non-actionable.
The India government can go for partial funding for specific R&D projects undertaken by business enterprises. It may be done in a desirable direction or field.
– For instance, to promote capability building for new products, process innovations for local or global markets, focus on enhancing ecological sustainability, promote industry’s linkage with public-funded research laboratories and universities, and so on.
Furthermore, products based on indigenous developed technology could be given production tax concessions, as well as income tax concessions to encourage innovation.
Way Forward
India should protect minor innovations through the so-called utility models or petty patents in order to promote local innovation. This has been done by several East Asian countries.
The utility model or petty patents regime provides limited protection to minor incremental innovations made, especially those by MSMEs. For example, providing a limited period of protection (5-10 years in contrast to 20 years in case of patents) and having less stringent requirements and procedures.
The petty patents and industrial design patents can encourage domestic enterprises to undertake minor adaptive innovations and foster an innovation-based rivalry among them.
Source: The post is based on an article “Petty patents can boost R&D” published in the “The Hindu” on 20th June 2022.
