Policy Innovation Focus: Driving India's Future Growth

Policy

November 2013, Volume 2, Issue 6

Focus: Innovation

T

h e a c c e p t a n c e o f
innovation as a national
and business strategy with
positive outcomes has increased manifold
in the last decade or so. Recognizing
its intrinsic value for India's future, the
Government of India established the
National Innovation Council (NInC) in
2010, taking its outreach and relevance
a step forward. However, even as we
are increasingly becoming aware of the
potential of innovation and its impact,
putting it into practice remains a big
challenge.
Worldwide, innovation has been the crucial
trigger for technological and economic
advancement in the developed world.
Countries in the West have benefitted
tremendously from innovation in the last
century and continue to make breakthrough
advances in technology to maintain the
lead in this space. India, with its socio
economic challenges, has been slow
in adopting innovation and building
awareness on its importance. With the
impact of economic slowdown and rapidly
changing market conditions, the urgent
need for innovation is felt by all – society,
industry and the Government.
Within the Government, the Ministry of
Science and Technology has taken the lead
in encouraging innovation through various
entrepreneurial schemes (STED, PRISM,
BIRAC etc.) and funding mechanisms. The
NInC is spearheading programmes like

Inside this Issue

Message From the
Director General........... 1
Chandrajit Banerjee,
Director General, CII

State and Sectoral Innovation Councils,
Industry Innovation Clusters, Inclusive
Innovation Fund and many more.
Large industry houses and MNCs have
more or less been innovative to the
extent of having in-house R&D centers.
Their global exposure and large capital
investments have given them an edge
over smaller enterprises. In some sectors
such as automotives, they have displayed
a high degree of indigenous innovation
capacity, and also leveraged innovation to
devise products and business models to
address ‘low-income’ markets. But what
is lacking, barring a few exceptions, is the
establishment of a structured innovation
process within the industry. Working
closely with industry, CII has developed
an Innovation Framework which helps
companies identify innovation loopholes
and establish structured innovation
processes within their operations.
The SMEs in India, employing close to
40 per cent of India's workforce and
contributing 17 per cent to its GDP, face
serious issues in incorporating R&D and
innovation within their operations. CII
is constantly working with the SMEs to
improve the situation. Jointly with NInC,
CII is helping in establishing Cluster
Innovation Centers (CICs) and CII’s Centers
of Excellence on Competitiveness in SMEs
and Sustainable Development are working
to address innovation related issues.

Entrepreneurship is another area which needs
serious consideration by the Government.
India is not creating enough start-ups and
the voice of the entrepreneurial community
is poorly represented in the Government
and has limited capacity to influence policy.
Understanding this challenge, CII, under the
aegis of its entrepreneurship committee, is
currently working on establishing a startup platform which will not only provide
opportunity to start-ups for scaling up their
operations but also enable them to put forth
their demands to the policy makers. CII’s
other joint initiatives with Government and
industry - like India Innovation Initiative-i3,
which aims to commercialize innovations
of individuals above 18 years of age - is
benefitting grass-root innovators and
beyond.
Against the backdrop of these initiatives,
India is striving to transform into an
innovation-driven economy. The model of
innovation in the West is an inspiration,
but keeping the ground realities in mind,
we need to create a sustainable innovation
model with the potential to cater to the rich
and the poor with tangible outcomes.
This issue of the Policy Watch focuses
on innovation as one of the pillars of
sustainable economic growth and also
stresses on inclusivity for building India’s
innovation model for the future. n
Chandrajit Banerjee
Director General
Confederation of Indian Industry

CEO Speak............................................................................................ 2

Policy Barometer.......... 9

S Gopalakrishnan, President, CII and Executive Vice Chairman, Infosys Limited

Factfile....................... 11

Vikram Kirloskar, Chairman, CII Innovation Council & Global Innovation and Technology
Alliance (GITA) Board and Vice Chairman, Toyota Kirloskar Motor Private Limited

Industry Voices.......... 12
.

Venkatesh Valluri, Chairman, CII National Committee on Technology and
Chairman, Ingersoll Rand (India) Ltd.
Ashok Soota, Past President, CII and Executive Chairman, Happiest Minds Technologies
Private Limited

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CEOSpeak

Indian Ingenuity Can Help Address
Low Growth and Economic Instability
What needs to be done to improve the
innovation ecosystem in India?
The Indian Government has declared the
years 2010-20 as India’s Innovation Decade.
It has also set up a high profile National
Innovation Council (NInC) to evangelize the
cause of innovation and spread a culture
of innovation across the country. This is a
great step forward for India towards being
an innovation-driven economy.
Building on this move by the Government,
India needs to capitalize on the momentum
in order to transform into an innovation
driven economy. With the global economic
uncertainty compounded by the Indian
economic crisis, there is no other way than
making innovation a mantra for sustainable
growth by Government, industry and society
at large. There are many examples of Indian
ingenuity which have delivered world class
innovations within and outside India. What
we need to do is to multiply these examples
multifold to address some of our pressing
problems of low growth and economic
instability.
India, with a billion plus population, cannot
afford to ignore its citizens at the lower
economic curve. This is a sizeable population
with tremendous potential to deliver
innovative solutions, and also to act as the

for innovations to reach every household
in this country. On the other hand, many
innovations from the grass-roots level are
also making their way into the mainstream
and providing encouraging results to solve
existing challenges. We need to encourage
this trend in the future.

S Gopalakrishnan
President, CII and
Executive Vice Chairman, Infosys Limited

end user of low cost innovative products
and services. Hence the future of Indian
innovation is dependent on its capacity
to include the marginalized in the process
of development, making a true model of
inclusive growth. Today multinationals and
Indian corporates are looking beyond the
metros to tier 2 and tier 3 Indian cities
and villages in search of new markets for
their products and services which are of
low cost and good quality. Frugality has
been imparted in the conceptualization of
such innovations and has defined a whole
new array of products and services. This
is a very positive and important step in
terms of solving an increasing number of
people-centric issues with less resources
and at an affordable price; a great trend

Government mechanisms in India need to
be transparent and corruption free to boost
the innovation ecosystem in the country.
IT intervention in Government functioning
(like RTI, Income Tax filing etc) has already
shown results and more e-governance
measures would yield greater innovation
potential for delivering timely and quality
services to the people. The Government
should also focus on improving the poor
regulatory environment for creating new
start-ups and commercial ventures. This will
not only encourage entrepreneurs in this
country to be competitive globally but also
help in addressing unemployment prevalent
among Indian youth.
The work started by the NInC on Innovation
Cluster Development is a much needed and
essential step forward to encourage the
local innovation ecosystem and develop
local Small and Medium Enterprises (SMEs).
The State Innovation Councils set up by the
NInC can be a revolution if the States take
up this opportunity and focus on developing
and implementing good innovation strategies
within the States. CII’s involvement in these
State Innovation Councils will surely provide
the impetus to develop industrial activity in
each State.
How can we leverage entrepreneurship
to boost the economy? How does
a start-up culture help in this
direction?
Entrepreneurship is an integral part of building
an economy and its future growth engines.
In India people are very entrepreneurial, but
the country has failed to capitalize on this
strength to create the optimum number of
new enterprises that it should have created

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CEOSpeak
after Independence. This is an issue and
has a direct connection with the lack of
development of an entrepreneurial support
system in the country. There are no proper
guidelines on how an entrepreneur can
benefit by the system in terms of funding,
mentoring and institutional support to make
the venture successful. Although there are
multiple schemes and programmes of the
Government for entrepreneurial activities,
they are all scattered and difficult to locate
and access.
With the economic crisis fresh in our minds,
we are gradually coming to terms with
the fact that the old enterprises are not
enough to sustain economic stability in
the rapidly changing global market. New
ideas and solutions need to be encouraged
and supported to solve new challenges.
Entrepreneurship is the only way out to
achieve this goal.
Start-ups are the smallest segment of
the industry, which thrive on innovation
and entrepreneurship. Every big enterprise
needs to initially go through the process
of incubation as a start-up venture. Hence,
building a start-up culture is essential for
shaping the economic future of this country.
Although the short term dividends are less
with a majority of these start-ups, but it has
tremendous long term potential.
In the present scenario, the start-up culture
in India is poor and we need to address this
issue collectively. Government, industry and
academia should work jointly to encourage
building new start-ups across sectors. A focus
on building high technology start-ups will
usher a positive change in the existing product
and process building capacity of India.
Can India emulate a model from any
other nation to become a leader in
creating more start-ups? How can
start-ups in sectors other than IT and
Biotech-Pharma be encouraged?
Although there is always scope to learn
from the best practices of other nations,
the learning needs to be customized based
on the ground realities and challenges in
India. Countries like USA, Europe, Japan
and others have been leading the path
of technological development for many
decades. The start-up culture in these
nations has given big dividends in the
form of a Google, an Apple, a Microsoft,
a Virgin or a Toyota and many more. The

Government guidelines and entrepreneurial
ecosystem have always been encouraging
and supportive towards the growth of
technological start-ups. For example, in Israel
it is a common habit to build start-ups as a
strategy towards economic development. All
these start-ups are resourceful and serving
global markets.
In India, things are different given its
demographic diversity and economic
disparity. India should learn from the
achievements of other successful nations
and then formulate a plan to bring inclusivity
in the process. India needs to develop
innovative techniques to minimize resources
and cost, and improve quality and utility of
products and processes.
IT and Biotech have already taken a big
lead in terms of innovation in India. In these
sectors, India is now competing with the
world leaders; infact India is now recognized
as the IT destination of the world due to
our collective effort to build this industry.
Biotech-Pharma is also creating a niche area
in terms of generic drugs and other low
cost medicines. What is still lacking is the
shift from a service providing industry to a
product regime. IT in India now needs to
gear up for building new and world class
products which can compete with the best.
Similarly Biotech-Pharma needs to come up
with new drugs and vaccines rather than
remain confined to being the manufacturer
of generic versions of foreign drugs. With the
human resource available in the country I am
confident of India achieving this feat.

What steps has CII taken to create a
policy on entrepreneurship ?
CII has been proactive and contributed to the
development of the new Science, Technology
and Innovation Policy 2013 announced by
the Department of Science and Technology.
This document emphasizes the need for
entrepreneurship and provides a direction
which we need to follow in order to improve
our entrepreneurial ecosystem.
Moreover, considering entrepreneurship as
a main pillar of economic development, CII
has constituted a National Committee on
Entrepreneurship this year. This Committee
has a mandate to encourage, promote
and nurture entrepreneurial activity in this
country. Also key industry members are
involved in formulating an entrepreneurial
policy roadmap under the aegis of this
Committee.
Although no step is big enough to solve
all the problems of this vast country, CII
thinks that small steps forward, in terms
of its entrepreneurial programmes like India
Innovation Initiative – i3, a joint initiative
by CII-DST to encourage commercialization
of innovation or an initiative like the startup platform, would help in providing the
necessary voice to entrepreneurs in order
to influence their policy needs.
We all are optimistic and confident
that in the near future, the entrepreneurial
ecosystem in India will scale up and
contribute to faster sustained growth of all
sectors of the industry. n
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CEOSpeak

Industry Should Adopt Structured
Innovation Processes
How important is the PPP model to
boost innovation in India? How can
GITA play a big role in improving the
R&D climate in India?
India has been recognized as a rising
economic power and increasingly important
focus of advanced Research and Development
(R&D). Many Indian R&D institutions in
the public sector and companies in the
private sector have made a mark in the
global arena in their respective technology
domains. However, we still have to consider
that there are several nations ahead of us
which have made their mark in the world
by their innovations. These countries have
well developed innovation models and R&D
ecosystems, suitable for their business and
economic environment.
Against this backdrop, during the 12th Five
Year Plan, the Government has set a goal
to double India's GDP in R&D to 2 per cent,
from its current level of 1 per cent. Therefore,
by the end of financial year 2016-17, the
Government will raise its investment to 1 per
cent of GDP and encourage private sector's
investment to 1 per cent of GDP from 0.33
per cent currently.
The Science, Technology and Innovation
Policy 2013 of India seeks to move the
country towards a new paradigm with a
focus on inclusive growth and innovation as
well as increased private sector investment
in R&D. It aims at strengthening India's
innovation ecosystem through supporting
and enabling technology and innovation
driven enterprises. The policy also aims at

Vikram Kirloskar
Chairman, CII Innovation Council &
Global Innovation and Technology Alliance (GITA)
Board and Vice Chairman, Toyota Kirloskar
Motor Private Limited

promoting the establishment of large R&D
facilities in PPP mode with provision for
sharing benefits.
Increasingly, the capability to innovate and
commercialize new high-tech products is
being acquired through collaborative efforts in
a distributed global network. In this context,
it is important to strengthen Public Private
Partnerships (PPPs) to strengthen the national
innovation system which can leverage the
emerging opportunities in a global setting.
Global Innovation & Technology Alliance
(GITA) was incorporated as a PPP, not-forprofit (Section 25) Company jointly by the
Technology Development Board (TDB) of
the Department of Science & Technology
(DST), Government of India and the
Confederation of Indian Industry (CII) on
November 29, 2011. GITA is well positioned
to attract Indian industry’s investment in

technology and improve the R&D climate
in India by mapping technology gaps;
evaluating technology offers across the
globe; connecting technology developers,
providers, commercializers; funding the
last phase of technology development
that connects the market and deployment
of technology solutions. GITA can also
be instrumental in forging industry-R&Dacademia partnerships, establishing centres
of excellence, large scale R&D facilities and
technology-business incubators under the
PPP mode.
Currently, GITA is implementing the joint
industrial R&D funding programmes,
assigned by the Department of Science
and Technology, Government of India,
with Canada, Israel and the ASEAN bloc.
Similar programmes with UK, Finland, Spain
and South Korea are also in the pipeline.
Funding support can be availed under these
programmes through GITA.
GITA has also been assigned the Technology
Acquisition and Development Fund (TADF)
of the Department of Industrial Policy
& Promotion (DIPP), under the National
Manufacturing Policy, for promotion of
green manufacturing among MSMEs. The
funding support under this scheme would
be available for:
1. Direct funding support for technology
acquisitions
2. Indirect funding support through patent
pools
3. Subsidy for manufacturing energy
efficiency / water conservation / pollution
control equipment
4. Incentives for energy, environment and
water audits
5. Incentives for construction of Green
Buildings
6. Subsidy for implementing waste water
treatment facilities
All these initiatives implemented by GITA
have the potential to change the innovation

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and R&D landscape of India in a holistic
manner.
Considering India’s current economic
downturn, how can innovation play a
key role in reviving the economy?
Innovation is very important in the current
Indian context. With the economy slowing
down, Indian GDP plummeting below the 5 per
cent mark and industrial production comparable
to the 1990-91 growth rate, it is high time
India incorporates innovative measures in
governance and industry related matters to
boost economic growth. The ambitious plan of
achieving a 25 per cent contribution to GDP
by 2022 from its current level of 16 per cent
for the manufacturing sector can only happen
by providing incentives to industry to set up
new plants, new production techniques and
an overall environment which spawns an
innovative mindset.
Currently with the policy paralysis that
plagues the Government's decision making,
it would be an uphill task to achieve the
projected growth for India in the coming
decade. Innovation in governance is essential
to make a turnaround from the current
state of affairs, and to create a transparent
legislative structure free of corruption. All
measures of e-governance are very important
to make that innovation happen in the
Government.
It is high time that industry embraces
structured innovation processes in its
operations, production and decision making
structure. In the absence of an innovation
policy at the firm level and a dedicated
team to monitor such process, it would be
difficult for firms (especially SMEs) to make
a transition from low to high production
units. Unless industry boosts their production
capacity in the coming years, the situation
will hardly improve.
Lastly the entrepreneurial ecosystem in India
needs a push with adequate funding and
enhanced incubation support, in order to
create future enterprises and new jobs. The
current system prevailing in India does not
support entrepreneurs, and entrepreneurs
have to face many regulatory obstacles, over
and above the difficult task of building a
venture. This is evident from the statistics
of the conversion rate of Indian innovation
into profit making enterprises -a very low
percentage. Commercialization of new

products and innovations is the key to new
markets and jobs and thus it acts as a force
to break cycles of economic stagnation.
Overall, to come out of the current economic
downturn we need to embrace innovation
at all levels starting from Government to
industry and boost the entrepreneurial
mindset. We need to think of new ways
of doing things.
What are CII’s initiatives in supporting
innovation in industry and society?
CII, for the last one decade, has been very
active in the innovation space.
To boost structured innovation in industry,
CII has spearheaded an industrial innovation
framework, which is a tool to measure
innovation in an industrial firm and identify
the gaps. This is unique in the sense that
a lot of emphasis was laid on making it a
simple and cross sectional tool, so that it can
be applied to a vast majority of sectors.
CII is also working with the National
Innovation Council (NInC) and supporting
their activities in Industrial Innovation
Clusters, State Innovation Councils and
Sectoral Innovation Councils. These are areas
which will not only boost the States in
terms of improving their GDP but also make
the industrial climate of States, specially
the industrial cluster comprising SMEs,
sustainable and robust. CII is associating its
industry members and facilitating industrial
dialogue in all the State Innovation Councils
which have been formed till date. Through

these councils CII plans to mobilize State
level innovation mapping which will
add a new dimension to the innovation
measurement mechanism at the State level.
Work on establishing Indian Intellectual
Property Facilitation Centers (IIFCs) at each
of these States to boost the IP ecosystem
is also an ongoing activity.
CII has, for the past 5 years, been steering
the nationwide innovation competition
called India Innovation Initiative –i3, which
aims to support innovators of 18 years and
above to recognize and commercialize their
innovations. This is a unique initiative to
provide a platform and voice to individual
innovators from all walks of life.
From 2013 CII is planning to create a platform
for Indian start-ups. This platform would
encourage start-ups to connect to industry and
benefit by mutual exchanges. This is essential,
considering no such existing platforms in India
connect start-ups directly with industry.
The innovation council of CII is also
working on creating a policy framework for
innovation. Such a framework would help the
Government to identify the key innovation
challenges faced by industry today, and
help in addressing these challenges through
policy intervention and implementation of
some of these recommendations.
CII is also associated with the Global
Innovation Index (GII) published by INSEAD,
WIPO and Cornell University, which is
essentially a tool to measure innovation at
the country level. n
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CEOSpeak

‘Innovation Convergence’ Required
In your view, how much will the new
Science, Technology and Innovation
Policy 2013 by the Department of
Science & Technology, Government of
India, affect the innovation ecosystem
in India?

and a sustainable environment for the
future generations. These practices can be
made financially viable without the loss of
intellectual property of the participating
bodies and yet have a positive impact on
the large, unserved society.

Innovation is critical for emerging economies
as products developed in these economies
are expected to better address the needs
of a large population, which is defining
the growth of the global economy. The
new science policy in this regard is truly
aspirational and aims at producing and
nurturing talent in the field of science in order
to stimulate research in universities, develop
young leaders and reward performance. It
also seeks to create a policy environment
for greater private sector participation
in research and innovation to facilitate
international alliances and collaborations
to meet the national agenda.

Further, in emerging economies such
as ours, there is an imperative need
for organizations to drive innovation
to create value based products for the
current needs of the market. Companies
need to find ways to turn constraints
into competitive advantage by designing
new processes, creating new markets and
services, collaborating and partnering. In my
opinion, the future opportunity is all about
converging technologies and collaborative
approaches to create solutions that will
be applicable not only to the BoP markets
but can be applied across the spectrum.
The industry today needs to work with an
objective to create markets ‘In India; For
India; By India’. At Ingersoll Rand, almost
40 per cent of our engineers that work at
our two Global Engineering and Technology
Centres now work specifically to create
products and solutions for India using the
Technology and Innovation convergence
approach. Thus companies today need to
deploy strategic innovation to achieve market
expansion through a new definition of
collective affordability and acceptability.

I firmly believe that ‘Innovation Convergence’
across organizations and technologies is the
way forward in the current market scenario.
We must pool resources in this difficult
market. With the unique skill sets India
has in the area of Information Technology,
it is time that as a nation we bring forth
technologies on a common platform

Venkatesh Valluri
Chairman, CII National Committee on Technology
and Chairman, Ingersoll Rand (India) Ltd.

and converge them to drive profitable
sustainability practices. These could be in
the area of Energy Management, Material
Science, Solar Energy, Water, Healthcare,
Homeland Security, Food Security and many
others where a lot of societal good can
happen and at the same time economic
value can be created for the participating
enterprises. Targets that are laid out by the
Government currently do not stipulate the
methods in which they have to be met.
It becomes the joint responsibility of the
Government, industry and academia as
partners to leverage capabilities together
and drive comprehensive execution plans,
which in turn, will drive creating a cleaner

What is necessary to improve
innovation in the manufacturing
sector which is underperforming in
terms of its contribution towards the
nation’s GDP?
A couple of years ago it was being touted
that India will be the next destination for
manufacturing after China because of labour
cost arbitrage. This has not happened. The
labour cost arbitrage no longer works. Many
nations have become extremely productive
and we have not improved our efficiencies.
There are capacities available everywhere
in the world and shifting manufacturing to
countries where there is labour arbitrage is
no longer a viable option.
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Innovation is the key for the Indian
manufacturing sector to survive and lead. We
continue to depend on other countries for
many technologies and have been unable to
keep pace with the changes. I believe that
restoring growth and achieving sustainability
require a strategic shift in the core mindset
as well as operational strategies envisioned
by manufacturing companies. Manufacturing
needs to address the challenge of technology
and productivity, while consuming fewer
resources, using less energy and creating
less waste. These are, in fact, the basic
pillars of innovation to enable improvement
in efficiencies altogether.
In my opinion, innovation has clearly become
a key determinant of success. The other
area of focus is Research and Development
(R&D) with innovation in order to create a
robust pipeline of newer, better and more
efficient products hitting the markets. Thus
organizations ought to shift their focus
and make efforts towards developing
enhanced products by augmenting their R&D
investments and allow innovation to make a
smooth transition. Moreover, companies also
need to look at not just product innovations
but operational innovations in order to
achieve competence and edge in their daily
production processes and thereby create
value for their customers. Optimization of
resources demonstrates the core objective
for enhancing efficiency.
The present and future for India is about
collaborative approaches to create solutions
as markets are beginning to demand
’converged solutions’ to address a larger
interconnected problem.
The Indian manufacturing industry has the
latency to bounce back and this can only
be driven by reformation, innovation and
convergence and minimizing the use of

expensive capital by collaboration between
industries, Government and academia.
We must aim to become a self-sufficient
nation.
How can technology (indigenous and
acquired) play a big role in bringing
about the next revolution in innovation
in India and how can it benefit the
Indian economy?
The future will be dependent on many
technologies that are emerging at a very
rapid pace. The change in internet speeds,
the intelligence that will be derived out
of analytics and the ability of the new
aspirational generation to adopt such
technologies will become the key. In such a
scenario, we will need to build innovations
that are unique and applicable not just
to emerging markets, but also to global
markets.
Moreover, our ability to improve the
speed of innovation will determine the
dependency on other countries. If we
can drive technology convergence across
multiple technologies and deliver solutions
that provide more convenience and value
we will be able to lead the market not
only for the geography in which we operate

but also globally. A firm need not be
good at developing all technologies but
needs to focus on new paradigms in this
competitive world, wherein we are able
to collaborate and create solutions. Today
the dependence on imported technologies
has become an inhibitor for our growth.
We have a technology deficit and the
application development approach is
lacking. Creating a new research approach
that focuses on application and solution
creation, funding the researchers at market
rates and industry support for them to
create solutions will drive India’s future
in the area of pure and applied sciences.
We have a huge challenge which we
must address.
The danger is in becoming a nation
dependent on other countries for
technology. This trend must be contained
and reversed. Our talent pool is one of
the best in the world. We have not made
our ecosystem attractive enough for this
talent to deliver. We must address the
ecosystem immediately to create the
right infrastructure, reward the talent
appropriately and allow the industry and
the Government to be major stakeholders
in this process. n
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Innovation Can Be One of the Primary
Levers to Transform India
How can inclusive innovation play an
important role in transforming India to
an innovation-driven economy?

ends of the economic spectrum: from the
world’s extremely wealthy to the world’s
extremely poor.

Innovation is the engine of creative output,
and inclusive innovation is about focussing
on creative output that addresses the
problems of all strata of society, rather than
a select few. Inclusive innovation is also
about harnessing the innovative ideas and
energies of the entire spectrum of society.
Since innovation is also a primary lever for
wealth creation, inclusive innovation has
the potential to influence equitable wealth
distribution. Since there is a huge potential
for improvement in economic conditions of
large sections of society, especially the under
privileged, innovation can be considered one
of the primary levers to transform India to
an innovation-driven economy.

The cost of knowledge generation in India
is amongst the lowest in the world and
few countries have the ability to scale
efforts and output as India. Constraints
on resources have brought out innovations
as demonstrated by ’Jugaad’ successes.
Indian inclusive innovation has the potential
to become a significant driver of world
growth.

Till date, the West has spearheaded
innovation in terms of its R&D and
cutting-edge technology. How could
the Indian model of growth through
inclusive innovation be relevant to

Ashok Soota
Past President, CII and Executive Chairman,
Happiest Minds Technologies Private Limited

the world?
India is uniquely poised with the potential
of emerging as one of the hubs for inclusive
innovation, because of the abundance of
production sources, and the diversity of
consumption sources. The production sources
are primarily the billion+ connected Indians
of the future – each with the inherent
human ability to create and innovate. The
consumption sources are diverse since
they include, on a large scale, the extreme

How are the IT and ITeS industries in
India embracing inclusive innovation?
Please share your views on their
growth path.
In today’s world, a proven way to address
problems across all strata of society is
through technology innovations. The IT and
ITeS industries in India are poised to make
significant contributions to these efforts. The
simple mobile phone (or affordable tablet
computer) can be used today by farmers
for yield analysis, by villagers for banking
and payments, by children and teachers
for education, by hospitals and patients for
healthcare applications, and so on. Big data
analytics can be used by the Government
to ensure tracking of various schemes and
ensuring that the target sections of society
are actually receiving the intended benefits.
Online learning has the potential to address
the key challenge faced by the education
sector today: the lack of a sufficient number
of qualified teachers. There are innumerable
similar examples. Three key dimensions
appear to emerge in terms of the direction
we need to go ahead as a people. These
are innovation, inclusivity, and a strong
technology focus.
India has established itself as a leader in
both IT and ITeS. I see India maintaining its
lead and our contribution increasing through
innovative applications. n

8

policy watch

Policy Barometer

CII’s Key Suggestions on Policy Issues
National Strategies for Science, Technology & Innovation
• High-Quality Science and Technology (S&T) Governance
and Reform; Advisory Councils; co-ordination and
implementation; new institutions and institutional
structures, evaluation, establishing S&T competencies
and enhancing incentives for innovation and science and
technology in National Action Plan for Climate Change
will boost innovation in the country.

• Under the aegis of the National Educational Programme
of the Ministry of Human Resources Development (HRD)
of the Government of India, each major player in an
industry sector (steel, power, petro-chemical etc.) should
be encouraged to set up an engineering academy to
improve the technical competence of their staff members
and also enhance their ability to innovate.

Infrastructure
• Innovation clusters which will house business incubators to
facilitate the transfer of patents/know-how from academia/
national labs to the market should be established. This will
encourage meaningful participation from the Research &
Development (R&D) fraternity across the country, thereby
strengthening existing clusters. To further strengthen these
clusters, make it mandatory for all SMEs, start-ups to
become a member of a particular cluster (with no cost
implication thereof). It should be mandatory for the owner
/ CEO to participate in weekly meetings of the clusters to
initiate improvement and development activities. Partnership

Development Platforms to foster Open Innovation and
Interdisciplinary Research should also be established.
• The IP infrastructure should be strengthened, and patent
offices and branches should be opened at technology
transfer offices around the country and at higher educational
institutions. Patenting fee must be made affordable for
innovators. A framework for IP as revenue generating tool for
SMEs should be built, to motivate them to file IP. A separate
IP for commercializable innovations having immediate impact
on society should be there.

Human Resources Development
• Pomote innovation and entrepreneurship among young
people.
• Develope easy learning modules and experience-based
teaching programmes on innovation.
• Place emphasis on ‘projects’ and hands-on deliverables along
with pure text books and course type education.
• There should be adequate training for students on the importance
of IPR and innovation as part of the school/college course-work.
Training in entrepreneurship may also be considered.
• India has 670 districts. If every top corporate adopts one

district and works towards building a science, technology
and innovation culture, it would be a great initiative towards
strengthening the ecosystem. This can come under Corporate
Social Responsibility (CSR) activities.
• Create career opportunities in the field of innovation and
connect the process/outcome of innovations into a research
degree (M.Phil or Ph.D). These degree holders can then
become guides for future innovators.
• Industry focussed courses in engineering and science
disciplines and tie-ups between colleges and industry for
practical project-related experience should be started.

Funding, Direct & Indirect Incentives and Processes
• Direct funding, fiscal incentives and provision of infrastructure
should be used to promote the involvement of national firms
in international co-operation.
• Total R&D spending must be 3.5-4 per cent of GDP of which
2 per cent should be public support and 2 per cent Business
Expenditure on R&D (BERD); 10 per cent of public spending
on basic research; 90 per cent of public R&D allocation
should be in financial partnership with stakeholders; 70 per
cent of the R&D funds should be for scale up, pilot scale
evaluation and commercialization trials.
• The Government should look at putting in a performance
clause for availing tax sops for R&D spend so that this is
not only a tax saving measure.

• Public support may be graded: high priority sectors may offer
near 100 per cent support to Government-funded institutions;
academic and R&D institutions may be supported up to 70
per cent and industry may receive 50 per cent support for
S&T/R&D programmes.
• The Government should also provide tax incentives or any
other tangible benefits to the industries for investment in
S&T manpower development and innovation.
• There should be greater encouragement by way of various
types of tax incentives on the expenditure - both capital and
revenue - for more business R&D and innovation, and speedy
processes for approval for establishing new R&D centers.
policy watch

9

Policy Barometer
Intellectual Property Rights
• Enhancing IP Education and Training: Educating local
communities, businesses and the public on the potential
benefits of the intellectual property system; providing
assistance to innovators/producers/ creators on how to use
intellectual property protection to their commercial advantage
and supporting efforts of stakeholder organizations in this
area. Further, there needs to be a structure, preferably
along the lines of a PPP model and training programmes
for enforcement bodies.

favourable response for their innovations in India. To address
this, the Government should come forward and create a
market for IP products developed by domestic innovators.
Policy measures should look at enabling Government agencies
to procure more domestic IP innovations. Government to buy
the technology/technology transfers at a decent royalty and
use the innovations to encourage more collaborative and
indigenous innovations. The Government should also look at
promoting local standardization, allocating additional R&D
budgets to domestic technology and development and aim at
growing the quantity of IP–tax/financial incentives. Moreover,
the Government should encourage local universities and
research centers for R&D and have a policy to encourage local
companies to take up commercialization of innovations.

• IP Management and Research Centres: The Government should
seriously look at adopting management-oriented education and
IP research facilities. This facility’s curriculum should focus on
issues related to patent protection, exploitation—licensing,
negotiating and litigating—to convert patents into revenue
streams. Once this model is well established, it will enable the
industry to innovate and collaborate in IP Projects. Currently
due to lack of understanding of various IP issues, industry and
academic institutes don’t see value in IPRs. There is a need
to bridge this gap and have initiatives in the IP regime to
bring in awareness and sensitize the industry to make them
see value in IPRs.

• Encourage Patenting Innovations and Research Results: There
is a strong need to create awareness regarding patents and
IPR among innovators and researchers.

• Government Policy on Procurement of Indigenous IP: Indian
innovators don’t find a domestic market and do not get a

• Establish measures to safeguard genuine innovations from
frivolous challenges.

• There is a need for a suitable framework for assuring Return
on Investments (ROI) for innovation, flexibility in IPR issues
as well as assurance of financial return at the IPR stage
itself.

Collaborations
• A platform for R&D personnel to interact with industry and
academia not only from India but also from other countries
should be created, such as a portal, which is open to all,
where industry, institutes, innovators can post problems and
anyone can post a solution. This would benefit the cause
of innovation. An internet based network portal should be
developed for people to interact on R&D work.
• Specially incentivize universities that are benefitting industry
by providing high quality HR and knowledge services and
earning more than 50 per cent of their research budgets,
based on industry ratings.

• Cluster level whitepaper on industry problems/issues would
help institutes approach industry to solve their problems.
• Foreign Direct Investment (FDI) /Joint Ventures in R&D
• Partnerships with reputed overseas institutions and
exchanging researchers
• Policies should be aimed at linking domestic firms to
foreign sources of knowledge, which in turn would attract
knowledge intensive businesses, and foreign highly skilled
workers, providing opportunities for inward and outward
international mobility.

Other Recommendations
• Design should be part of STI Policy - encourage activities
aimed at transforming the S&T findings for the social and
economic benefit of people by adding new value through
design.
• Public procurement through SMEs which have commercialized
public funded R&D.
• Support and training on innovation marketing predominantly
for design engineering right up to product sale.
• Open up research to foreign investments and project Indian
talent pool for cost effective global research.

10 policy watch

• Work in industry-academia combined projects to enable
students access dual type of research
• Venture capital to support early stage innovations
• IPR must be treated as an asset by financial institutions/
banks.
• SME / start-up ideas would require Government funding
for at least 5 years for them to generate IPR / succeed in
product development.

Factfile
Patent Applications globally by Applicants’
Patent Applications Globally byof Origin Countries of Origin (Top
Countries Applicants’ (Top 15)

15)

Source: World Intellectual Property Organization

Source: World Intellectual Property Organization

25

Patents Filed / (Granted) in India
Confidential

© Confederation of Indian Industry

Patents Filed / (Granted) in India

Source: Indian Patent Office
Source: Indian Patent
26

Office

Key sectors filing patents in India
Confidential


Key Sectors Filing Patents in India

28

Confidential


policy watch 11

Industry Voices
In the post-globalised era, innovation has become the core mantra for the very existence of any business in the
connected economies. Given the size and complexity of a country like India, meaningful and globally competitive
innovation is the only way to uplift the condition of millions. We have to empower the poorest of the poor
to the level that they realize their actual contribution to the value creation of the nation's success story. Only
inclusive innovation can guarantee prosperity of the nation at a macro level. Here, SMEs and companies run
by entrepreneurial dynamics play the crucial role of innovation hubs throughout the world. CII, along with
Government, is trying to create an ecosphere in order to promote it.
Deep Kapuria
Chairman, CII MSME Council and Chairman, Hi-Tech Group

In today's business environment, disposable income across various strata of the society is under stress. As a result,
per capita consumption and company growth are under threat. The need of the hour is inclusive innovation
which is the only solution that can strike a win-win between the expectations of consumers and marketers alike.
Inclusive innovation could be a result of technological breakthroughs leading to cost or process improvements
or simply meeting unmet consumer needs at attractive price points. Breakthrough innovation is possible only
through deep consumer understanding enabled by a continuous connect with the consumer. Companies need to
co-create products with the consumers by involving them in the new product development process. Further, to
foster inclusive innovation, it is important to encourage budding entrepreneurs and build a favourable ecosystem,
an ecosystem that is targeted at innovative solutions for the Bottom of the Pyramid, an ecosystem that nurtures
grass-roots enterprises by providing the necessary knowledge and venture capital.
C K Ranganathan
Chairman, CII National Committee on Entrepreneurship and CMD, CavinKare Private Limited

Let us raise the battle cry to make this the century of Indian innovation and lead the way on inclusive innovation
-inclusive of the different sections of Indian society, inclusive of the different regions of the Indian economy,
inclusive of ideas from everywhere and needs of everyone globally, inclusive of all that is beautiful about this
universe.
Dr. Gopichand Katragadda
Member, CII Innovation Council and CMD, GE India Technology Centre Pvt. Ltd

For real innovation, creativity, growth and prosperity to happen, it must be on an inclusive platform where all
stakeholders are encouraged to participate, contribute and enjoy the benefits of creativity and success.
Sriram Subramanya
Member, CII Innovation Council and Founder, MD & CEO, Integra Software Services Private Limited

For suggestions please contact Priya Shirali, Corporate Communications at priya.shirali@cii.in
Copyright © 2013 by Confederation of Indian Industry (CII), All rights reserved.
No part of this publication may be reproduced, stored in, or introduced into a retrieval system, or transmitted in any form or by any means (electronic, mechanical, photocopying,
recording or otherwise), without the prior written permission of the copyright owner. CII has made every effort to ensure the accuracy of information presented in this document.
However, neither CII nor any of its office bearers or analysts or employees can be held responsible for any financial consequences arising out of the use of information provided
herein. However, in case of any discrepancy, error, etc., same may please be brought to the notice of CII for appropriate corrections.
Published by Confederation of Indian Industry (CII), The Mantosh Sondhi Centre; 23, Institutional Area, Lodi Road, New Delhi-110003 (INDIA)
Tel: +91-11-24629994-7, Fax: +91-11-24626149; Email: info@cii.in; Web: www.cii.in

12 policy watch

Policy Innovation Focus: Driving India's Future Growth

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