Innovation is a complex game, sir

When NR Narayana Murthy said in his convocation address at the Indian Institute of Science, that India has never produced a technology that “has become a household name in the globe”, he was only repeating a cliché. He chided the Indian institutes for lack of innovation by comparing them with MIT. Bordering on hubris, he also claimed that the only two “transforming” ideas in the past 60 years had come from his own firm, Infosys!

The graduates would have been well served had he talked about the lack of innovation in Indian industry. Product and/or technology development consists of identifying a functional need and generating concepts to satisfy the need. Identifying a need or a market is the strength of a business. Generating a concept, based on science and engineering, is the key for innovating a product. It was an appropriate time to advice the students to use their scientific and engineering skills to usher in a change. Institutes, after all, contribute to innovation by providing skilled manpower.

Let us leave Narayana Murthy to his ostentations and analyse the real issues affecting innovation. A quantitative understanding of innovation comes from the Global Innovation Index (GII), an excellent framework for any nation to formulate policies for innovation. That India slipped 10 places in a year and ended up in the 76th position in 2014 was widely reported. The government responded by forming a National Innovation Foundation and talked about the positives, such as improvements in citation index, leaving out other more contentious issues.

GII is broadly based on the following : institutions, meaning the government support for innovation and business (India ranked 106/143), human capital and research, “the essential spark to innovation” (96), infrastructure (87), market sophistication (50), business sophistication (93), knowledge and technology output (50), and creative output (82). These have been further subdivided and ranked. The report also classifies strengths and weakness according to the ranks.

Ease of starting a business or the business environment has been cited as a major weakness. Education, the most important ingredient for human resource, is ranked 128, and is considered a major weakness. The worst score for India is in school education, assessed through skills in reading, mathematics and science (PISA scales). India, on a scale of 0 to 100, scored 0.0 (yes, zero), and China a perfect 100!! Our tertiary education languishes at the 122nd position.

To add to the woes, our firms are ranked 97th in offering formal training. If India wants to be the human capital for the world, surely we cannot have a score of 0/100! Contrary to Narayana Murthy’s observation, the report cites as strengths, research and development (ranked 31, thanks to the Indian institutes), our QS university ranking (27), and citations (24). India is ranked 8th in the world in R&D spending ($36 billion) and there is need for a lot more accountability for such high expenditure. The performance in R&D has been only modest.

An interesting aside is the comparison of India with China in GII. India seems to be slipping year after year, whereas China moves up; China improved by six places to reach 29 in 2014. The institutional strength for doing business is ranked 114, below India. China is ranked first in the world in education, but slips in higher or tertiary education, a fact that has been recognised and remedies are being put in place. China stands first in the world in formal training offered by firms. In knowledge and technology output, it is rated second.

Innovation is the driving force for economic growth. It is a complex subject and cannot be understood by odd comparisons. The three stakeholders, the government, industry and universities have, in that order, important roles to play. As observed by Kenn Hu, deputy chairman of Huawei in his foreword to GII, “Business should build platforms for talent to thrive. Solid education sets the foundation for talent’s future growth but it is only the beginning.” The solutions are not quickfix; they are long-term and require a will to understand weaknesses and act logically.

Many, like Narayana Murthy, believe that innovation can be pushed by technology-oriented startups by universities. MIT and Stanford encouraged such startups even during the postwar period (Henry Etzkowitz, The Triple Helix: University-Industry-Government Innovation in Action ). These cases are quoted often to encourage entrepreneurial universities. It is more prudent to study Brazil, which introduced university incubators in the mid-1980s. India and Brazil had similar economies for a long time. Till 1990, Brazil’s economy was based on self-sufficiency and, like India, it opened up in the early 1990s. Rio, which had three university incubators in the early 1990s, today has ten. Incubators in Brazil, according to Etzkowitz, have the “broadest scope”. But the fact that Brazil is still in the 61st position in GII shows that such efforts are necessary, but not sufficient. It works in the US because all other pillars of innovation are strong. India needs to improve every pillar on which innovation stands. It is rather odd to find fault with the strongest pillar.

A doyen of industry once told me that his group wanted to start the aluminum smelting industry during the pre-Independence era. They approached Banaras Hindu University for developing the technology. Though initially reluctant, the university formed a three-member team for this. The technology was developed and commercialised.

This anecdote clearly shows that each one played their role — industry identified a need and academia developed the technology.

What are the technologies you have identified and asked the IITs or the IISc to develop, Mr Narayana Murthy?

The writer is a professor at IIT-Madras and runs the Raghupati Singhania Centrer of Excellence for Tyre and Vehicle Mechanics, one of the largest private sector R&D initiatives at the IITs

COMMENT NOW