Sub-national innovation networks in India- an emerging scenario A.S.Rao, Adviser, Government Of India, Department of Scientific and Industrial Research, [email_address] Regional Consultative Meeting on SIS 18-20 January 2006 Seoul

GOVERNMENT POLICY TOOLS Public enterprises Scientific and Technical institutes Education Information networks Financial Legal and regulatory Procurement

Public enterprises

Scientific and Technical institutes

Education

Information networks

Financial

Legal and regulatory

Procurement

Indian SME sector limit (one million Indian Rupees ) on investment made on plant and machinery. number over 3 million contributes almost 40% of the gross industrial value largest employment opportunities for the Indian populace, next only to Agriculture. contributing 45%-50% of the Indian Exports.

limit (one million Indian Rupees ) on investment made on plant and machinery.

number over 3 million

contributes almost 40% of the gross industrial value

largest employment opportunities for the Indian populace, next only to Agriculture.

contributing 45%-50% of the Indian Exports.

SME technology capital Market Fig 1: SME triangle

Emphasis on Market reservation of products for exclusive manufacture in the small scale sector A total of 812 items were reserved Units (1987-88) accounted for:- 11.3% of the items produced in the SSI sector. 28.3% of the production in SSI sector. 36% of the working SSI units for which data was compiled in the Census

reservation of products for exclusive manufacture in the small scale sector

A total of 812 items were reserved

Units (1987-88) accounted for:-

11.3% of the items produced in the SSI sector.

28.3% of the production in SSI sector.

36% of the working SSI units for which data was compiled in the Census

Impact of globalisation India has agreed to make adjustments in tariff rates to the level of “bound rates” for more than 3300 commodities. 66 per cent items of Indian small-scale industry are bound, which is higher than all India level.

India has agreed to make adjustments in tariff rates to the level of “bound rates” for more than 3300 commodities.

66 per cent items of Indian small-scale industry are bound, which is higher than all India level.

Competitiveness remained mostly tiny, technologically backward and lacking in competitive strength. survived due to product and geographical market segmentation and policy protection. hampered the growth of important sectors like light engineering and food processing. It has also stunted the exports of toys, textiles and leather: small enterprises are simply unable to supply large volumes of high-quality goods in time.

remained mostly tiny, technologically backward and lacking in competitive strength.

survived due to product and geographical market segmentation and policy protection.

hampered the growth of important sectors like light engineering and food processing. It has also stunted the exports of toys, textiles and leather: small enterprises are simply unable to supply large volumes of high-quality goods in time.

Resurgence Thriving entrepreneurship. Supportive govt policies

Thriving entrepreneurship.

Supportive govt policies

SME technology capital Market Fig 1: SME triangle

Emphasis on “Technology” and “Venture Capital” Credit linked capital subsidy scheme for the technology upgradation of the small scale industries [CLCSS] Quality Upgradation/Environment management for small scale sector through incentive for ISO 9000 /ISO 14001 Certifications Small Industry Cluster Development Programme Technopreneur program (TePP )

Credit linked capital subsidy scheme for the technology upgradation of the small scale industries [CLCSS]

Quality Upgradation/Environment management for small scale sector through incentive for ISO 9000 /ISO 14001 Certifications

Small Industry Cluster Development Programme

Technopreneur program (TePP )

Video on TePP innovators ( 30 mts)

Fig 2:TePP Innovation Funnel 1 st Level Screening 917 792 TePP Screening Committee 123 57 Successfully Completed Appropriation & Scale-up limitation Commercialization of Innovation Diffusion by Imitation Creativity Phase Innovation Phase Diffusion Phase 5 0 0 0 I D E A S

Capabilities in transition Capabilities based on regulations capabilities based on geographic positioning Capabilities based on assets Capabilities based on personal Capabilities based on relationships

Capabilities based on regulations

capabilities based on geographic positioning

Capabilities based on assets

Capabilities based on personal

Capabilities based on relationships

Sub-national innovation networks - two emerging scenarios Collective innovation system for clusters Individual innovators support system

Collective innovation system for clusters

Individual innovators support system

Collective Innovative system for clusters Collective invention, also called informal know-how trading, technology trading, information exchange, is a significant element of technological collaboration Since the exchanged and generated knowledge consists of small advances with potentially large cumulative effects, both the costs and risks to member firms are less than through independent pursuit or formal collaboration.

Collective invention, also called informal know-how trading, technology trading, information exchange, is a significant element of technological collaboration

Since the exchanged and generated knowledge consists of small advances with potentially large cumulative effects, both the costs and risks to member firms are less than through independent pursuit or formal collaboration.

illustartions Kolaphuri chappal About 1200 families engaged in the production of ethnic footwear under the generic name Kolhapuri. Due to lack of standardization and poor quality, the product was loosing market. CLRI developed 120 new designs and technology packages for quality assurance and product standardization. The improved product has gained export markets in Italy, Japan, Spain, USA.

Kolaphuri chappal

About 1200 families engaged in the production of ethnic footwear under the generic name Kolhapuri. Due to lack of standardization and poor quality, the product was loosing market. CLRI developed 120 new designs and technology packages for quality assurance and product standardization. The improved product has gained export markets in Italy, Japan, Spain, USA.

Bankura handicrafts NISTADS ( National Institute of Science, Technology and Development Studies, has set up a S&T field station at Bankura, west Bengal to upgrade technologies for artisans and craftsmen by blending the traditional with new technologies. A software package called MADHU (Modernisation of Artistic Design for Handloom Unit) was developed in collaboration with IIT, Kharagpur. This CAD software package facilitates computerized digitization of the pictures/ design produced by the artist/ designer. This package has been successfully demonstrated to designers and weavers of Banura. As a result a large number of craftsmen have adopted blending of this new technology to increase efficiency, quality, flexibility and cost effectiveness.

NISTADS ( National Institute of Science, Technology and Development Studies, has set up a S&T field station at Bankura, west Bengal to upgrade technologies for artisans and craftsmen by blending the traditional with new technologies. A software package called MADHU (Modernisation of Artistic Design for Handloom Unit) was developed in collaboration with IIT, Kharagpur. This CAD software package facilitates computerized digitization of the pictures/ design produced by the artist/ designer. This package has been successfully demonstrated to designers and weavers of Banura. As a result a large number of craftsmen have adopted blending of this new technology to increase efficiency, quality, flexibility and cost effectiveness.

Individual innovators support system Innovation flows out of creativity Stifling creativity – cannot be invented here syndrome Need to create right climate for creativity to flower in abundance.

Innovation flows out of creativity

Stifling creativity – cannot be invented here syndrome

Need to create right climate for creativity to flower in abundance.

Network climate innovation Social standing of Creative people creativity Value system Fig 3: creativity loop

conclusion Networking is Knowledge Networks are often more than relationships that govern diffusion of innovation and norms. Networks contribute capabilities that augment the value of firm.

Networking is Knowledge

Networks are often more than relationships that govern diffusion of innovation and norms.

Networks contribute capabilities that augment the value of firm.