How Boosting R&D Intensity Could Speed Up India's Economic Growth

30/12/2015 8:14 AM IST | Updated 15/07/2016 8:25 AM IST
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Group of Asian Students studying in college.

While addressing the Times Higher Education BRICS and Emerging Economies' Universities Summit in the first week of December, President Pranab Mukherjee expressed serious concerns over the quality of higher learning in India: "The expansion of higher education network in India has enabled us to create access to higher education across the country. However, the quality of education in our institutes of higher learning remains a big challenge."

Subsequent to this, Phil Baty, Times Higher Education World University Rankings editor, noted that Indian universities do not invest enough in research. These two statements underline the fundamental flaw of India's higher education system, which is one of the largest in the world with 712 universities and over 36,000 colleges.

It is shameful for a nation like India that the support for research and development (R&D) still remains below 1% of GDP.

The poor show of Indian universities in the world rankings marks the failure of institutions in branding them as quality centres at the global level. As the President noted, the higher education sector in India must align itself with the global education sector. Quoting the report of the first University Commission of independent India, popularly known as the Radhakrishnan Commission of 1948, he pointed out that universities need to have "world-mindedness and national sentiments". So, how the universities can align with the global education sector? The answer lies in the word "research".

The ranking agencies seriously count the research output of educational institutions, and Indian universities simply do not contribute enough. It is shameful for a nation like India that the support for research and development (R&D) still remains below 1% of GDP. When it comes to global research output, India's contribution is just under 5%, according to some research experts. A report in the Times of India noted that it was 3.5 % in 2010.

The R&D intensity, a commonly used indicator reflecting R&D expenditure as a percentage of gross domestic product, supports the above figures. In 2014, this author learnt from the UNESCO Institute for Statistics (UIS), the statistical arm of UNESCO and the UN depository for global statistics in the fields of education, science and technology, culture and communication, that India's R&D intensity was just 0.8%. The Republic of Korea secured the top position of Asia's R&D intensity list with 4%, followed by Japan (3.4%), Singapore (2.2%), China (1.8%), Malaysia (1.1%), India (0.8%) and Thailand (0.25%).

Hendrik van der Pol, director of the UNESCO Institute for Statistics told me a year ago:

"Research is a fundamental part of the mandate of universities in general. They are responsible for preparing students to participate in a knowledge-based economy. Research activities will raise the profile of a university and make it a more attractive place to study. These activities also ensure that professors stay abreast of current developments in their fields, which makes them better teachers."

A report titled "Higher Education in Asia: Expanding Out, Expanding Up", published by the UIS in May 2014, projected the case study of the Republic of Korea to outline the importance of promoting R&D in universities. Korea's GDP per-capita has shown an increase of 12 times over a period of 45 years. The R&D expenditure increased from 0.26% of GDP in 1965 to 4.04% in 2011. Interestingly, the private sector registered 76.5% of total R&D expenditure and 66.8% of the total number of researchers in 2011. Since the Korean War in the 1960s, the country has marked exceptional growth with the development of its R&D in the last four decades.

A considerable number of India-born researchers are working outside the country even as the premier institutions here are struggling to find quality faculty.

Several studies note that a considerable number of India-born researchers are working outside the country even as the premier institutions here are struggling to find quality faculty. Innovation expert Pavan Soni, told me a likely reason for this:

"Unlike the higher learning institutes in developed countries, Indian universities are under-funded and unable to purchase and apply the latest research equipment. The faculty and staff seem to be less qualified and the salaries of professors are so low."

So, what should be done?

In my opinion, HRD Minister Smriti Irani should take bold initiatives to create a better university-based research ecosystem that can produce and retain exceptional researchers. For that, she needs to harness the power of promoting R&D in universities through multiple channels, which should include the active participation of the corporate world. The example of Korea underscores that focusing more on R&D intensity could accelerate the economic growth of the country.

The UIS report highlights three phases in the development of the Republic of Korea's R&D system. Quoting some points from the report seems sensible here:

First phase: The 1960s saw the promotion of both export-substitution and import-substitution industries such as textiles, garments, furniture, and assembly of electronic goods. When those labour-intensive industries expanded, they established select heavy industries and chemical industries to provide materials and components for these enterprises. The formation of Korea Institute of Science and Technology (KIST) in 1966 was crucial for technology assimilation and development of industrialisation. In the 1970s, the country expanded into strategic industries, such as shipbuilding, machinery, industrial chemicals, electronics and automobiles. Specialised government research institutes (GRIs) were created as technology windows for diversified technological needs. Technological learning, as opposed to indigenous technology development, was at the core of the development strategy in the early stage.

Second phase: During the 1980s and 1990s, the socio-economic R&D demands focused on critical and essential technologies to overcome protectionism and secure competitive advantages in the international market. In the 1980s, efforts were made to ensure a market-conducive environment by deregulating various sectors and liberalising trade. R&D in the private sector started picking up in response to these demands. More company research institutes began to emerge to create technology-intensive industries, and in-house R&D emphasised technology indigenisation for the creation of new information-technology industries. It was during this phase that higher education was expanded, and the government launched national R&D projects and the Industrial Technology Development Programme. Large companies internalised imported technologies, and the joint efforts of GRIs and universities were able to provide complex technologies needed for industry.

Third phase: After the financial crisis of the late 1990s, emphasis was placed on fundamental technologies to lead the global technology market for continuous growth in the knowledge economy and public technologies (such as technologies for environmental protection) in order to meet various social demands. The role of universities in basic research became more important and industry academic linkages were encouraged. The private sector realised the necessity to develop technologies needed for future knowledge-intensive industries and directed the work of their research institutes towards this. It also began working with GRIs and universities in strategic partnerships to develop a domestic technology base. Investment in education has played a significant role. To achieve sustained productivity growth by consistently increasing the value-addition of output, a highly educated workforce was necessary. Education gives rise to a person's initial tacit knowledge, which is an essential building block in technological learning. A continued expansion of R&D capabilities in industry drew on the skilled workforce that had resulted from the government's expansion of the higher education system.

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