COMMENTARY

march 9, 2013 vol xlviII no 10 EPW Economic & Political Weekly

16
Sunil Mani (sunil.mani@gmail.com) is
at the Centre for Development Studies,
Thiruvananthapuram.
The Science, Technology
and Innovation Policy 2013
An Evaluation
Sunil Mani
The new Science, Technology and
Innovation Policy of 2013 makes
all the right noises, but how do we
know that it will not go the way of
the 2003 policy when it comes to
implementation? There are
indeed some interesting ideas in
STIP 2013 but none show that they
have been thought through.
O
ver the past few years the Govern-
ment of India has been on a policy
announcement spree. A number
of policy documents ranging from those
relating to specic industries such as auto-
mobiles, biotechnology, chemicals, infor-
mation technology and telecommunica-
tions to a more general policy on manufac-
turing have been announced in a rather
feverish pitch. It is almost as if the underly-
ing belief is that having some policy state-
ments is better than no policy at all. More-
over these policy exercises have had the
positive effect of bringing in some strate-
gic thinking with respect to very specic
sectors. The most recent exercise has been
preceded by a number of statements and
near policy documents on innovation such
as the aborted attempt at passing a National
Innovation Act and the rather long conver-
sation in effecting a legislation which aimed
at incentivising publicly funded research
(Protection and Utilisation of Public
Funded Intellectual Property Bill, 2008).
Further, the present policy seeks to
replace the Science and Technology Policy
of 2003, which was not considered to be
up to date especially during the recen tly
announced decade of innovation. How-
ever a careful reading of the Science,
Technology and Innovation Policy (STIP)
of 2013 shows it has very few new
things to say or pronounce compared to
its 2003 predecessor. It is nothing but a
restatement of very many ideas contained
in the earlier policy and it too has
once again indulged in elusive target
chasing exercises.
With a plethora of policy documents on
every conceivable industry/sector or issue,
what is perhaps felt is that what we lack
is not a supply of policies but their lacka-
daisical implementation. On that count,
the STIP 2013 may also suffer the same fate
since the set of instruments and institu-
tions that are listed in the policy document
are stated in such general and vague terms
that its actual implementation will be next
to impossible or at best difcult to track
over time. More importantly, the document
is virtually silent on whether policy imple-
mentation will be subject to any form of
concurrent evaluation. In fact, the lack of
this important practice made the laudable
objectives of the 2003 policy remain just
on paper. Our review of STIP 2013 is struc-
tured as follows. First, we present the
main planks of the policy. Thereafter, we
critically examine the strategies envis-
aged in the policy to achieve its stated
goals. We conclude with a discussion of
the expositional aspects of the document.
Nine Objectives
STIP 2013 has nine broad objectives or goals.
The policy itself uses the term capturing
aspirations while referring to these goals
and these can be divided into two cate-
gories: subjective and objec tive. The former
includes such aspirations as promoting a
proliferation of scientic temper among
all sections of society, triggering changes in
the mindset and value systems to recog-
nise, respect and reward performances
which create wealth from science and
technology-derived knowledge and link-
ing contributions of science, research and
innovation systems with an inclusive eco-
nomic growth agenda and combining pri-
orities of excellence with relevance. How-
ever, a majority of the goals are objective
ones, even if they have been rehearsed in
earlier policies. They are: making India
one of the ve global scientic powers by
2020, establishing world-class research
and development (R&D) infrastructure
for gaining this global leadership, facili-
tating high risk innovations through new
mechanisms, making careers in science,
research and innovation attractive to the
brightest, and enhancing skill for appli-
cations of science among the young, etc.
In order to achieve these goals, some
of which are tangible and others not so
tangible, one of the most important strat-
egies envisaged in STIP 2013 is to increase
investments in gross expenditure on R&D
(GERD) to 2% of GDP in the next ve years
from its current level of about 0.8%.
Further, the policy envisages that this
increase in R&D must come through signi-
cant increases in investments in R&D
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by Indias private sector enterprises as
these enterprises have experienced very
signicant increases in their sales turnover
especially during the recent ve-year-
period ending 2010.
Statistically speaking, this requires the
share of private sector R&D in GERD to
rise from the current 30% to almost 50%
in the next ve years. In order to achieve
this STIP 2013 envisages the creation of a
conducive external environment without
elaborating anywhere as to what it means
by this environment or the means through
which it is to be enhanced to precipitate
signicant increases in R&D investments
by business enterprises at a time when
much of the business enterprise sector is
gripped by recessionary conditions. So the
2% target in the GERD to GDP ratio may
not actually fructify in the next ve years.
At this point, it is worth reminding our-
selves that the 2% target is nothing new,
the earlier policy of 2003 had targeted its
realisation by the end of the Tenth Five-
Year Plan (namely by 2006-07) and the
actual spending, even ve years after this
date is as low as 0.8%. Further, as has been
shown earlier, private sector investments in
R&D are highly concentrated in two or
three industries, namely, the pharmaceuti-
cals, chemicals and automotive industries.
Another important dimension that has
not so far been factored into the policy
document is the growing importance of
multinational corporations (MNCs) in R&D
in India (Basant and Mani 2012). Based
on the successive surveys of nances of
foreign direct investment (FDI) companies
conducted by the Reserve Bank of India,
the share of FDI companies in R&D has
been increasing on yearly basis and not-
withstanding the measurement prob lems,
currently (c2013) stands at around 20%
or so. For a number of MNCs R&D done in
India forms an important part of their
overall R&D efforts and these companies
have been quick to take out intellectual
property rights (almost entirely in the
form of patents) based on their research
done in India (Mani 2011). This means
that the ownership of their knowledge
assets created in India rests with them
alone and through this they prevent any
kind of spillovers to local companies.
If this trend continues, while industrial
R&D performed by the private sector may
actually show an increase over time, the
implications of this increase are very dif-
ferent from what they may be if they
were to happen through the efforts of
domestic private sector companies. But
STIP 2013 is virtually silent on this
important aspect.
Focus on Supply
On private sector investments in R&D,
the policy document attempts to make a
departure from the past by trying to give
equal importance to both supply- and
demand-side policies for stimulating
private sector investments in R&D. The
previous policies have relied almost ex-
clusively on the supply-side aspects, while
STIP 2013 claims to be giving an equal
emphasis to both demand for inno vations
and its supply. However almost all the
policies listed under the section, Attract-
ing private sector investments in R&D
deal with enhancing the supply of inno-
vations from the sector.
STIP 2013 fails to realise the fact that
stimulating demand for innovation arises
from industrial and trade policies that
stimulate competition between rms,
sometimes by making markets contestable
by lowering barriers to entry. Further, a
demand for innovations also arises from
having adventurous consumers who are
willing to try out anything that is new
(Bhide 2008). All these are beyond the
scope of an innovation policy. As far as
India is concerned, some of the demand-
side measures for stimulating investments
in R&D are contained in the National
Manufacturing Policy of 2011 and STIP
2013 makes no reference to it whatsoever.
In fact, this lack of awareness of the com-
plementarity between various policies is
a hallmark of recent announcements.
A very refreshing aspect is the identi-
cation of eight areas of technologies
as priority areas. These are agriculture
in general, telecommunications, energy,
water management, drug discovery,
material science including nanotechno-
logy, climate change and space techno-
logy. There is, of course, a cursory refer-
ence to interdisciplinary research as
well, although this reference gets repe-
ated all the time. Considerable care will
have to be taken in spelling out the
specics of these priority areas.
Innovation Policy?
STIP 2013 like its predecessor considers
innovation to be almost exclusively the
product of R&D. However in recent under-
standing of the generation of innovations,
it is almost universally accepted that in-
novations do arise from a whole host of
non-R&D activities such as the acquisition
of new vintages of capital goods, training
of scientists and engineers, acquiring in-
tellectual property rights from external
sources, etc. The results of successive
innovation surveys rst conducted among
European Union countries and later across
other deve loped and increasingly among
a variety of developing countries lend
empirical support to the importance of
non- intra-mural R&D as a source of in-
novation. This is especially so in coun-
tries such as India where the industrial
sector consists of a skewed distribution of
rms with a large number of small and
medium enterprises (Mani 2011) which
very often do not have in-house R&D de-
partments but nevertheless do introduce
a variety of product and indeed process
innovations. So if STIP 2013 considers
itself to be an innovation policy and not
an R&D policy, it should have contained
a host of measures for enhancing the
non-R&D route to innovation. But the
document is totally silent in this respect.
At this juncture it is also important to
point out the fact that the country lacks
timely data on both R&D and innovation
in general. The depart ment of science and
technology, which is charged with the
responsibility of publishing R&D data on
a biennial basis, has been very late and
irregular in publishing its agship publi-
cation, R&D Statistics. The latest published
data on R&D at the industrial sector level
refers to 2005-06.
1

Further these data have also not been
subject to any validation processes so that
its accuracy is beyond doubt. Regarding
non-R&D innovation generating activities
and routes, there is some information from
a recently conducted national innovation
survey. Once again this survey was also
not a comprehensive one as it covered only
10 states and the response rates to this
survey are not indicated, raising serious
questions about the generality of the re-
sults obtained. The results of the survey,
2

notwithstanding the doubts about its
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march 9, 2013 vol xlviII no 10 EPW Economic & Political Weekly
18
robustness, once again conrm the view
that non-R&D routes are more important
than intramural R&D. This once again
raises the need for and importance of
devising policy instruments and institu-
tions that can increase the capability of
rms to use these non-R&D routes to in-
novation. Although the policy document
raises the importance of evidence-based
approaches to investment in innovation,
it has nothing much to say about devel-
oping these innovation indicators.
Financing of R&D
An area of R&D policy where STIP 2013 is
very specic is in the area of nancing
of R&D through the establishment of a
National Science, Technology and Innova-
tion Foundation on the public-private part-
nership mode. Implicit in this initiative is
the establishment of a number of research
grants for nancing R&D not only in high
technology areas (as STIP 2013 visualises
a doubling up of Indias share in world high
technology trade) but also for introduc-
ing innovations that are affordable and
will aid in the more general policy of social
inclusion. Success on both these counts
will depend very much on the size of these
funds and the modalities that will be put
in place to disburse funds from it in such
a way that the accumulative advantage
of grantees does not result in the grants
ending up in the same group of rms
and individuals. The country may do
well to learn from some of the best prac-
tices in this area, in specic terms learn-
ing from the research grant scheme of
the Ofce of the Chief Scientist (OCS) in
Israel (Mani 2002; Trajtenberg 2002). The
OCS has been very successful in stimulat-
ing and broad-basing investments in R&D.
Further, STIP 2013 is silent on tax in-
centives for R&D. This is perhaps because,
according to a recent study by Stewart,
Warda and Atkinson (2012), India has one
of the most generous tax regimes for R&D
in the world. The country has a 200% super
corporate income tax deduction for R&D
and this facility is available to all rms in
all industries. However, the important
question is whether such a generous tax
regime has facilitated incremental inves t-
ments in R&D. We require carefully done
analytical studies to inform us of the ef-
cacy of this important policy instrument.
STIP 2013 ought to have referred to
this possibility.
Apart from these schemes for promo t-
ing investments in R&D, an area where
STIP 2013 has devoted considerable
amount of emphasis and rightly so are the
proposals for the promotion of knowledge-
based entrepreneurship in the country.
A number of new schemes and strength-
ening of older ones are proposed. The
establishment of research grants schemes
like the Small Idea-Small Money and
Risky Idea Fund, and newer mechanisms
for fostering technology business incu-
bators (TBIs) are all specic steps in the
former category. Strengthening of TBIs is
a step in the right direction to promote
knowledge-intensive entrepreneurship as
the country has an increasing number of
engineering gra duates, some of whom
may be encou raged to establish innovative
ventures. Experien ces of such knowledge-
intensive entrepreneur-based rms from
places such as Silicon Valley show us
that this is yet another successful way
of promoting innovations.
Quality of Human Resources
STIP 2013, like its predecessor, recognis-
es the importance of improving both the
quality and quantity of our scientic
manpower. A series of studies done in the
past including the earlier 2003 policy
had explicitly referred to the fact that
the core Human Resource in Science and
Technology (core HRST, that is human
resources in science and technology based
both on education and occupation) is
actually very small in the country and
this is primarily due to the fact that science
and technology as a career option is not
very attractive to young graduates, even
to those graduating from our premier
higher education institutions such as the
Indian Institutes of Technology. In order
to increase the private sector investments
envisaged in the document, STIP 2013
expects the total number of R&D personnel
to increase by at least 66%. But STIP does
not spell out how these growth targets
were arrived at and the specic schemes
for incentivising science and engineering
as a career option to young graduates.
On this issue, STIP 2013 merely repeats
what was stated in the earlier 2003 policy.
So there is every reason to worry that
just like the eternally elusive GERD to GDP
ratio, the pronouncements on increasing
the size of core HRST will remain pro-
nouncements merely to be repeated at
regular intervals. A new area in this con-
text of promoting core HRST is STIP 2013
introducing for the rst time a Perform-
ance Related Incentive Scheme for pro-
moting basic research through publica-
tions. However this scheme is more tied
to the desire to raise the quality and
quantity of science production in the
country in the form of increasing publi-
cations in high impact international
journals. Indias current share in this area
is only 2.5%. Apart from incenti vising
scientic research through these reward
schemes, STIP 2013 also aims at improv-
ing and modernising phy sical infra struc-
ture for carrying out R&D projects.
In addition, STIP 2013 also makes ref-
erences to improving the ecosystem for
innovations, increasing the participation
of women in science, technology and
innovation activities, improving public
understanding of science and techno-
logy so that people participate more ef-
fectively and constructively in scientic
debates (for instance, on the pros and
cons of genetically-modied food, climate
change issues, etc). All these are laudable
objectives and needless to add success
will lie in implementation within an
acceptable time frame.
Despite its numerous shortcomings,
the policy does have some fresh ideas in
areas such as the nancing of R&D and
in promoting knowledge- intensive entre-
preneurship. It is, of course, important for
the government to put in place a credible
scheme for implementing the various
initiatives set out in the document and
to develop a systematic scheme for its
concurrent evaluation.
Notes
1 See R&D Statistics 2007-08, http://nstmis-dst.
org/ rndstst07-08.htm, accessed on 30 Janu-
ary 2013.
2 See the document, Understanding Innova-
tion, The Indian Context, http://www.na-
tionalinnovationsurvey.in/download/August-
Bulletin- 2012.pdf, accessed on 30 January
2013.
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