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Rajasthan an innovation cluster for solar? Creating more innovation clusters in India

Rajasthan was cited as a potential innovation hub for solar energy, according to Professor Glyn Davis, keynote speaker at the Australian Trade Commission Innovation Showcase held in New Delhi last week. 

Briefly commenting on India, Davis used Rajasthan, Gujarat and Bangalore as examples of potential innovation clusters, as these regions showed proximity to public investment, great universities, and a specialized focus – not unlike Silicon Valley in its early days as a region of government programs focused on electronics. 

Sustainability Outlook (SO) sees innovation as a critical part in decoupling India's growth from consumption of natural resources. SO had an offline discussion with Professor Davis about the outlook for the emergence of innovation clusters, like Silicon Valley, in India. 


India lags behind contemporaries in overall R&D spend

In India, R&D spend is 0.88% of GDP and the goal has been to increase this to 2% of GDP for quite some time. It is an R&D laggard compared to contemporaries like China, Australia, Russia and Brazil and far behind world leaders in technology development such as Israel, US, Sweden, Finland and Japan. 

For Davis, publically incubated and funded research is the key to facilitating the growth of innovation hubs like Silicon Valley.

Looking at the The Science & Technology Innovation Policy 2013, however, GOI is adamant about shifting R&D expenditure to the private sector, and seeks to only 'maintain' current levels of government R&D funding. 


Do we really need ‘innovation hubs’?

From an Indian perspective, research incubators such as national labs, DST, DORST, TERI, Urban Institute of Sustainable Development could be considered as an Indian model of facilitating innovation that does not require hubs. 

However, the growth of ICT in Bangalore demonstrates the power of aggregating innovative activities through technology hubs, and the role innovation hubs can play in accelerating the adoption of new talent, technologies and practices into industry.


Last month, Sam Pitroda called on the need to further develop the nexus between the knowledge accumulating in national labs, and practical solutions for industry, particularly the SME and unorganised sectors who do not have capacity to invest in R&D. 


Supporting the MSME sector with innovation is a key opportunity area

The role of the government in supporting MSME sector is critical and private R&D cannot substitute public R&D expenditure. 



Indeed, the top three areas where MSME R&D expenditure is occurring (industrial machinery, equipment, and textiles) appears to be very different to the top three areas where big companies will commit R&D investment (drugs & pharmaceuticals, transportation & IT).

Interestingly, one sector that should attract R&D but is conspicuously absent area from R&D expenditure figures is investment in agriculture, cold storage, food processing & distribution technology. 

This is perhaps a critical area as Sustainability Outlook sees that land use policies, cold storage infrastructure, and food processing value chain segments will experience structural and technological changes to meet India’s domestic food requirements over the next decade.


Good financing models needed

There is a lot of debate on what is the best way to finance R&D and to facilitate the emergence innovation clusters. 

Here in India, the Center avoids direct funding, preferring to incentivise private investment in R&D or tax and regulatory incentives to support the commercialisation of R&D. 

The National Innovation Fund has set aside pools of money at national and state level to foster development & uptake of new technologies, though it does not specify a focus on particular outcomes or problems, but broadly highlights industries of priority.

"Investment funds work well when there is already a body of research for people to draw on," Davis muses, "while basic research typically needs government support or starts off in government programs. It all depends on what part of the innovation chain you want to incentivise. " 


Find local applications for existing technologies

The discourse in India around solar, green energy and clean tech reveals a dilemma of whether India should facilitate technology transfer from other countries, or protect & build its own national capabilities, especially in nascent industries like cleantech.

 "There is always a debate on the extent to which national borders should open up versus protecting or favouring national capabilities. My view is that we need to focus on the right answer and the best use of resources. If you're buying a technology from outside of India, invest in research for local applications. There is always potential to extend or improve technology for local implementation," Davis said.

 “Outcomes focused government programs for research work well,” said Davis, reflecting on Silicon Valley’s inception through US Defense research in electronics, “although you might not always get the sorts of innovations at the end which you expect at the beginning.” 


Good universities and public investment will be critical to create innovation clusters in India

The key thrust of Davis's message is that innovation hubs are built off the back of public investment and are anchored by good universities, where collaboration between a consortium of players (such as researchers, private companies, entrepreneurs, NGOs, industry bodies) can take place. 

As Forbes points out, while Silicon Valley is commonly associated with private sector innovation and entrepreneurial activity, government is not credited as being a critical financier and incubator during the Valley's history and development. Consider a private company most emblematic of the region, Apple: its flagship product, the iPhone, is composed of technologies that were all government defense programs including the invention of the internet, cellular communication, GPS, microchips, SIRI, touchscreen technology. 

For Davis, it is only later in the "innovation chain" that multiple external players such as private companies get involved - early phase innovation is critically dependent on public funding and incubation of R&D.


Prof. Glyn Davis is Vice Chancellor of University of Melbourne.

Alongside his role as Vice-Chancellor, Professor Davis serves as chair of Universities Australia, the peak body representing public and private universities across the nation. He has also served as Queensland’s most senior public servant, Director-General of the Department of Premier and Cabinet, before returning to university roles. He was awarded a Companion in the Order of Australia for his public service. 


Image credits: Clint Tseng, AbiSkipp


Author: Sustainability Outlook