India is emerging as a major destination for multinational R&D projects. It currently hosts nearly 750 captive R&D centers of foreign multinationals, about 350 of which are for engineering R&D. The value of India's engineering R&D sector is estimated to be around $10 billion currently and projected to rise to $45 billion by 2020. However, India ranks only 62nd on the Global Innovation Index, showing there is still potential for growth in research and innovation. The government is taking steps to promote R&D, such as increasing national expenditure on R&D, establishing research centers in each state, and facilitating industry-academia collaboration. Barriers include lack of scientific skills, infrastructure issues, and

1. TRENDING STATE:AN OVERVIEW
 India is fast emerging as a
major destination for high-end
research & development (R&D)
projects for multinationals across
the globe.
 The country is home to a lot of
top corporate R&D investors across
sectors such as automotive,
industrial machinery, information
technology (IT), pharmaceuticals
and biotech.
 India currently has
nearly 750 captive centres of
foreign MNC, out of which
some 350 are for
engineering R&D.
 The value of India's
engineering R&D sector is
estimated to be around US$
10 billion currently and is
forecast to rise to US$ 45
billion by 2020, as per an
estimate by the National
Association of Software and
Services Companies
(Nasscom).

2. Current State
 As per the Global Innovation Index, India
ranks 62nd.
 There is a growing trend of MNCs setting
up their R&D centres in India.
 14 Indian companies have made it to the
top R&D global entities.
 The National Expenditure on R&D has
increased from Rs. 18088.16 Crores in
2002-03 to Rs. 28776.65 Crores in 2005-06.
The Projected R&D Expenditure has been
raising heavily since then.
 A dominant proportion of GERD, around
70 to 75%, is met by the government
sources.
0
1
2
3
4
5
6
Amount spent on R&D from
Their GDP in %

3. NEED FOR PROMOTING RESEARCH AND INNOVATION
 India is in danger of falling behind other nations in the race to build an advanced 21th
century economy.
 Scientific gains and a booming economy go hand in hand.
 Technologies from other countries reach India very late, hence we need to create our own.
 Importing technologies at this time of economic crisis will lead to further weakening of
rupee value.

4. STEPS TO PROMOTE RESEARCH & DEVELOPMENT
Working Toward Practical Application of
University Research Output
A program to support industry-academia
collaborative R&D across a wide range of phases
to develop commercial applications of research
output generated by basic research in
universities. Several types of funding must be
provided under this program, depending on the
characteristics of each R&D phase.
Collaborative Research Programs based on
Industrial Demand
We need to work on basic research to help solve
technical issues shared in the industrial sector.
This program facilitates industrys use of basic
research results, as well as giving feedback on
industrial viewpoints and perspectives to basic
academic research.
Setting up of research centres in each state
Every state should have a team of researchers to
predict crisis and mitigate the problems in that
state and promote regional R&D projects in
which resources of universities, industries, and
local government are integrated.
Development of Measurement and Analysis
systems
Creative and original R&D is a key to generating
innovation. To support these activities we need
to promote the development of systems and
technologies for advanced measurement and
analysis

5. IMPLEMENTATION
 A country’s research and innovation highly depends on the economic state of the country.
The % of GDP that India spends on Research and Development must be raised to a higher
level in order for it emerge as one of the big players in the scene.
 The central government must set up Universities for Research and Innovation. These
universities should be deemed to be institutions of national importance. The central
government may declare any existing public funded university to be a university for
research and innovation after an expert committee (formed by the central government)
has assessed it.
 Research centres must be established in all states. These research centres should
predict the crisis and mitigate the problems of that state. The work done by these
research centres must be closely monitored. Apart from the financial aid provided by
the government ,it should also be ensured that credible number of scientists are
employed in each centre.
 It must also be ensured that the professors who teach in these universities are highly
qualified and have a history with research, since only he who has already done research
can inspire it.
 These universities shall be a not-for-profit legal entity, in that case, these universities will
be completely merit basis and not exclusive for the wealthy.

6. BARRIERS
 India has poor infrastructure, low literacy levels and labour
inflexibilities. So high-volume manufacturing has not taken off yet in a
big way
 Less availability of scientific and Engineering skills in competitive wages.
 In the end, innovation capability majorly depends of the economic
flexibilities.
 Skill shortages due to lack of effective in-house training programmes.
 Lack of effective collaboration with R&D labs. Pressure of short term
result and not thinking of the long term result.
We observe that 43% of large firms think that excessive government
regulation in their industry is an important barrier to Innovation. In
addition, only 42% of large firms perceive insufficient external pressure to
innovate as an important barrier to Innovation.

7. How to overcome barriers?
• Conducting effective research programmes in different parts of the country can
help with the skill shortage and will create awareness about the endless
opportunities in Research & Development.
• Students must be encouraged to indulge in research at school level itself.
• Our education system should be more knowledge oriented than marks
oriented.
• Ever since independence, only one Indian citizen has won Nobel prize, the main
reason is the lack of infrastructure. Steps must be taken to increase the overall
infrastructure of the country.
• Indian research labs should collaborate with the universities.

8. INNOVATION IMPACTS AND THEIR
SCOPE
 Innovation Intensity has grown faster from 2001-02 to 2005-06for
services than manufacturing. Further, services firms are more likely to be
Highly Innovative, i.e. they have a greater propensity to introduce ‘new to
world’ Innovations.
 For all the firms in our sample (large firms and SMEs), Innovation has
had roughly the same level impact for manufacturing and services firms, in
respect of increase in market share and increase in competitiveness.
 However, Innovation has led to a greater
increase in profitability for manufacturing firms and a greater
reduction in costs for service firms.
 Further 37.3 % have made breakthrough innovations while 76.4 have
made incremental innovation.

9. Processes and Services:
Innovation is occurring in process (i.e. not just in product development) as well as in
the services sector. (i.e. not just manufacturing) Although services sector firms have
lower Innovation Intensity, they are more likely to be Highly Innovative.
 Innovation is most highly concentrated in operations, with sales and marketing being
the next most important.
 This emphasis on process is a departure from traditional R&D and manufacture
centric notions of Innovation.

10. Intellectual Property:
Firms in industries where Innovations are patented
have higher Innovation Intensity and are also more
likely to be Highly Innovative.
Firms that have filed more than 20patents in the last
five years have higher Innovation Intensity than those
with less than10 filings and are also more likely to be
Highly Innovative.