In
today’s world, technology is playing a transformational role in enabling
innovation and driving change. New ideas, new business models and new
technologies are leading to the birth of the “ideas economy,” where the
“innovation quotient” has emerged as the key determinant of market value.
India
will lose
out on the opportunity to benefit from innovation-led, value-added growth if it fails to recognize the enormous
value that can be created by leveraging Intellectual Property (IP). Despite the scientific and engineering talent in the
country, India had filed just 1,400 international patent applications in 2014.
The same year, China filed 18 times as many patents as India. Japan filed 30
times as many and Korea’s count was 9 times more. The US filed over 61,000
patent applications, 44 times more than India! No wonder then that India was
recently ranked 81 out of 141 countries on the Global Innovation Index 2015, well
behind middle income countries such as Brazil, China and South Africa.
We
are lagging behind not because there is dearth of innovative ideas in the
country, but because we have failed to create a price discovery model for
intangible assets based on Intellectual Property. There have been very
few Indian companies like Biocon that have dared to pursue a risk-ridden,
innovation-led business and create valuable IP in an industry where the
business ethos favours low-risk ventures based on services and generic drugs.
Given
India’s desire to reimagine its future as a world leader, the time has come for
us to really look beyond predictable, imitative business models and me-too
products. Only innovation can lead to exponential growth and non-linear job
creation that India needs.
Surely,
India has the potential to be the next global innovation destination. For that
to happen, India needs to create a virtuous financial cycle to realize the
nation’s huge entrepreneurial potential. This financial ecosystem will work
only if all three components – academia, entrepreneurs and industry – work
symbiotically and in tandem.
To
set the wheels spinning and make the model self-perpetuating, monetization
needs to happen at every stage of this cycle. Academia therefore needs to
create IP through its discoveries and inventions that can be licensed to either
entrepreneurs or directly to industry with royalty payments upon
commercialization. Entrepreneurs need to create value-added IP that can be
licensed to big industry with royalties upon commercialization. Industry needs
to monetize new technologies through successful commercialization that enables
payment of royalties.
What works in our favour is
that India is fast emerging as a destination of choice for global technology-led
R&D. According to a recent study* India accounted for nearly 70% of all new
offshore R&D centers established in 2015. However, India stands to lose its
attractiveness as an innovation hub in the wake of a proposed government move
to withdraw the tax incentives that are currently available on R&D-related
expenditure. A country that already ranks low on research and innovation can
ill-afford to put itself at a competitive disadvantage vis-à-vis others by
doing away with tax sops that are aimed
at encouraging a culture of innovation.
Furthermore,
India needs to remain steadfast in its pursuit of affordable innovation to
enhance access to affordable healthcare for millions of patients in India. In
that context, it’s imperative that India remains TRIPS compliant and yet
ensures that it is not forced into a TRIPS Plus regime that aims at ever-greening
of patents which is detrimental to our economic model.
India’s
diverse culture and the plethora of prevailing challenges present unlimited
opportunities to innovate. The India of the future will need to be agile,
innovative and committed to take advantage of these unfolding opportunities. An
IP-led strategy coupled with an enabling eco-system can create compelling
success stories of taking innovative ideas to the market.
*study by consulting firm Zinnov
Twitter: @kiranshaw
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