Innovation is demand driven. India is not home to any significant global innovation for the obvious reason -there is no demand for innovations in India. There is demand for innovative products/ services and they are met by imports. Preaching to private sector to invest in R&D has become an annual ritual. Declaration like Innovation Decade exposed hollowness of public policy. Will the government walk the talk?

1. Intelligent Public Policy
to boost private demand for
innovations
A.S.Rao
motguru.com
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3. Private demand for Innovations
Emerging demand side innovation policy approaches
appear to be very limited in their outreach, focusing
largely on public procurement of innovation or pre-
commercial procurement. Though the idea to support
private demand and improve the demand conditions has
entered the policy debate, Innovation policy has not yet
systematically discovered the role of other instruments
and the various ways in which private demand influences
innovation. There are almost no explicit policies to
improve the ways in which public and especially private
demand can trigger innovation, ask for new solutions.
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4. Direct support for private demand
Demand subsidies: The purchase of innovative
technologies by private or industrial demanders
is subsidised lowering the entry cost of an
innovation.
Tax incentives: Amortisation possibilities for
certain innovative technologies in different
forms ( tax credit, rebate, waiver etc)
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5. Indirect support for private and
public demand:
• Awareness building measures,
• Voluntary labels or information campaigns,
• Training and further education,
• Articulation and foresight,
• User – producer interaction
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6. Technology Upgradation/
modernisation
This type of demand-side policies promotes the
diffusion and up-take of existing innovations. One
of the most common types of direct support of
private demand for innovations is to offer subsidy
or grant for purchasing of innovations, e.g.
machinery. Especially in many Central and East
European Countries this kind of direct subsidy of
demand for innovations from companies is often
included in their basic and generic (non-sector
specific) instruments to promote research and
innovation in firms.
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7. Green technologies and eco-
innovations
Support to eco-innovative investments in SMEs
(Marche,ITE3); Baross Gábor Programme (Del-
Dunantul, HU23); financial support for Eco
innovation in Picardy (FR22) and Support for the
development and demonstration of innovative
environmental technologies (North West, UKD).
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8. Born Global
An increasing amount of regional innovation
policy instruments provide support to export of
innovations and to internationalisation of
innovative firms. Support is provided in the form
of grants for: patent applications and
certification; the adaptation of products; specific
market research and visits to specific events on
the relevant new markets; training of employees
with regard to the new markets; visits to trade
fairs; consultancy; and marketing.
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9. Designing Demand
Another type of (non-technological innovation)
policy support that tries to stimulate private
demand for innovations is the support for firms
regarding design. Several examples can be found in
the UK, for instance the Designing Demand
programme in London. ‘Designing Demand’ is a
design support programme for businesses. It aims
to help them become more competitive, increase
their profits and boost their performance through
the strategic, effective use of design.
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10. Lowering the entry cost of an
innovation
The goals of the programs are varied: Some
target new energy technologies, others are
directed at small businesses, and others are
geared to specific industries or technologies.
Similarly, the programs use a variety of vehicles
to accomplish those goals. Overall, federal
programs to commercialize technology through
product development have had a mixed record.
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11. Patents and Technology Transfer
Measures of technology transfer in the U.S. from
1996 to 2015 demonstrate over $1 trillion in
economic growth and millions of new jobs. Critical
technologies such as life-saving drugs, vaccines, and
medical devices, the internet, global positioning
system or GPS, and countless other innovations
underpinning every aspect of the American way of
life are traceable to ground breaking work at
Federal Laboratories, universities receiving Federal
funding, and private sector R&D organizations.
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12. The Return on Investment (ROI)
Initiative for Unleashing American
Innovation
The President’s Management Agenda (PMA),
released March 20, 2018, lays out a long-term
vision for modernizing the Federal Government for
the 21st Century.2 The Return on Investment (ROI)
Initiative directly supports the PMA and is designed
to unleash American innovation. ROI refers here to
the economic and national security return to the
Nation based on the investment in Federal research
and development (R&D) by the American people.
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13. Sovereign Patent Funds (SPF)
Alarmed by the rise of powerful patent
aggregators in the United States, governments
from other countries have decided to counter
with their own initiatives of aggregating patents
through the establishment of Sovereign Patent
Funds (“SPFs”). In the last few years, Japan,
South Korea, China, Taiwan, and France have
each launched SPFs.
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14. Patent Infringement Risk-Singapore
introduces Intellectual Property
Insurance Initiative for Innovators
(IPIII)
it will give innovative enterprises insurance
coverage for legal expenses that may be
incurred in intellectual property (IP)
infringement proceedings worldwide.
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15. Compulsory Licensing
US Trading with the Enemy Act (TWEA) as a
result of World War I was an example of
compulsory licensing on invention. Passed on
November 17, 1917, the TWEA was intended to
“dislodge the hostile Hun within our gates” and
to place all enemy property “beyond the control
or influence of its former owners, where it
cannot eventually yield aid or comfort to the
enemy”.
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16. Patent boom in China
Direct subsidies on patent filling fees, sometimes
coupled with rewards for granted patents, are
regularly offered by the government. Besides, many
other innovation-promoting programs, such as the
certification of the prestigious High and New-
Technology Enterprise (HNTE) status, which gives
the enterprise a 10% deduction in corporate
income tax, are also linked to the performance in
patent output. These policies incentivize patent
filling enormously.
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17. Technology Incubators
US incubators, as we now know them, came into
being in the USA during the 1970s–although the
first began in an abandoned Massey Ferguson
manufacturing plant in Batavia, New York in
1959. Incubator is nursery for spin-offs, bridging
the gap among the resources and capabilities of
academicians and financial, organisational and
managerial resources necessary to set up in
adequate way the new business.
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18. Industry districts
The concept of the modern innovation district
has long been in the making, with the first
industrial and corporate business campuses
evolving into university research parks. There
was a surge in the development of many of
these areas in the 1970s and 1980s, which were
anchored by if not led by universities with
notable research-based institutions.
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19. Advanced Manufacturing parks
Most successful cities today are those that have
adapted to the transformation of the national and
the global economy over the last century. Their
traditional industries have declined due to
processes such as containerisation and
globalisation, and they have reinvented their
economies around knowledge rather than physical
advantages such as access to coal, iron ore, or
waterways. These cities have attracted investment
from high-skilled exporting businesses that create
new innovations, boost local wages, and drive the
local economy.
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20. Creative Cities
The next generation workforce has a different set of
values in terms of what is important to them. As
technology continues to advance and the trend of
innovation districts continues to grow and expand
in preferred cities, changing the conversation in a
more diverse and inclusive method will ensure that
these centers of innovation, economic growth, and
cultural transformation continue to prosper, and
change the way we look at industry and urban
planning for years to come.
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21. Technology demonstration projects
Demonstration projects in Demand side
innovation policy are “where public funding is
used to sponsor preparation of a facility showing
the capabilities of a technology, and its
subsequent demonstration to potential users”
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22. Skill development
In Germany many young people enter the
labour market over the apprenticeship system.
Over 500,000 new apprenticeship contracts are
concluded every year. The system developed
historically out of the medieval guild system. Its
base is the concept of “occupation”.
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23. Internationalisation of R&D
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24. User-driven Innovation
User innovation refers to innovation by
intermediate users (e.g. user firms) or consumer
users (individual end-users or user communities),
rather than by suppliers (producers or
manufacturers).This is a concept closely aligned to
co-design, and has been proven to result in more
innovative solutions than traditional consultation
methodologies. Eric von Hippel and others
observed that many products and services are
actually developed or at least refined, by users, at
the site of implementation and use.
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25. Innovation Clusters
Innovation districts take advantage of the
benefits of clustering on a much smaller scale.
Regional Innovation Clusters are geographically-
concentrated groups of interconnected
businesses, suppliers, service providers and
related institutions in an industry that drive
innovation, job creation and help grow the
economy.
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26. More information
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