Why is India Not Leading the Innovation Sector?
In 2023, India filed over 90,000 patents, which is an average of 247 patents per day, marking a notable 17% increase – the highest in two decades. However, it still does not rank in the top 10 countries for patent filings, raising the question of its position in the global innovation sector. “Many patents attributed to Western companies are the result of work conducted in India, However, these patents are registered under the names of Western companies due to the global operations,” said TV Mohandas Pai, chairman at Aarin Capital, at the recently concluded IGIC 2024 in Bengaluru. Pai highlighted that the Indian research culture does not consider patent filing as an objective, which has been a hindrance. While in the US, a significant number of patents are filed defensively driven by broader strategic reasons rather than for immediate utility. Source: SBI Research and Indian Patent Office report Ingredients of Innovation System “For any innovation system, there are three main ingredients – human capital, physical capital, and financial capital,” Pai noted. India’s overall Digital Competitiveness Score of 60 (out of 100), places it ahead of all BRICS nations except China, reflecting the growing tech talent in the country. According to NASSCOM, India has approximately 4.5 million IT professionals, including those working in the software export industry. “India is second only to the US in the number of highly skilled technology professionals. Notably, 60% of the professionals in the export industry work for American companies,” Pai mentioned. Additionally, India has a significant digital infrastructure, with 1.31 billion mobile phone users and substantial data consumption. The country has achieved impressive milestones in digital public infractures, especially with UPI’s daily transactions expected to hit a billion by 2026. However, Pai pointed out that India lacks cutting-edge research labs and a robust hardware industry, crucial for leading global innovation. Hurdles to Cross Coming down to financial capital, Pai noted that over the past decade, $145 billion has been invested in India, a contrast to China’s $835 billion and the US $2.3 trillion. The scarcity of financial capital is a significant constraint for India. “Public funding for research is insufficient, with Indian universities receiving around $800 million annually, less than what a single prominent American university might receive,” he said. In 2020, India filed nearly 57,000 patents, which is a mere 4% of the 1.49 million applications filed in China and 9.5% of the 5,97,000 applications in the US. Similarly, India grants 23,361 patents, compared to 5,30,000 in China and 3,50,000 in the US. On an average, it takes about 58 months to process a patent application in India, while in China it takes about 20 months, and 23 in the US. Source: World Intellectual Property Indicators 2021 report The delay is primarily due to a shortage of manpower in the Indian patent office. As of the end of March 2022, the Indian patent employed only 860 people, including examiners and controllers. In contrast, China employed 13,704 people, and the US employed 8,132. As of March 31, 2022, approximately 1,64,000 applications were pending at the controller level in India. Slowly Catching Up Despite the challenges, there have been some positive developments. In 2023, central universities like JNU, DU, Jamia, AMU, Maulana Azad National Urdu University, and UoH received an additional Rs 826.28 crore, increasing their total allocation from Rs 3,191.55 crore in 2021-22 to Rs 4,017.83 crore in 2022-23. Similarly, if you look at the generative AI startups emerging in India, the numbers only indicate how far the country is progressing. Currently, approximately 70 Indian startups are creating products and solutions focused on generative AI. It may not be too long before India is also considered an innovation capital of the world.
“Public funding for research is insufficient, with Indian universities receiving around $800 million annually, less than what a single prominent American university might receive,” TV Mohandas Pai said.
“For any innovation system, there are three main ingredients – human capital, physical capital, and financial capital,” Pai noted. 
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["AI", "generative AI", "RAG", "R", "Git", "API", "innovation", "startup", "funding", "programming_languages:R"]
Vidyashree is enthusiastic about investigative journalism. Now trying to explore how AI solves for all.