Cover Story

The Importance Of R&D And Innovation
In The Post COVID19 World

Technological capability is a capacity that has to be built. Unlike knowhow, it cannot be bought, or acquired through any other way. It can be built only by companies and labs working together to experiment with various solutions and methods, constantly engaging in trial and error, and learning incrementally. Such capacity requires to be supported by a higher education system that will ensure a pipeline of trained yougn scientists and researchers coming out of the universities, to join the labs in the big national R&D institutions, and companies. This did not happen, as our higher education system instead turned to meeting the needs of the rapidly expanding IT sector, which wanted large numbers of people with coding skills. This served to hollow out the engineering and technological capabilities of our universities, which became factories to produce large numbers of workers for the IT sector.

When the pandemic hit us, our economy was already in trouble, having been slowing down over the past several years, with manufacturing shrinking every year. Our imports from China were growing every year, while we exported raw materials to pay for the exports. Our external trade balance has been adverse for a long time, with inward remittances and IT service exports making up in some measure for this. This is hardly the sign of a healthy economy. But, the pandemic has brought out some features of our economy, that may turn out to our advantage if we adopt the right policy meausres.

MSMEs are small, and agile, and nimble, and hence are better placed to weather the crisis of uncertainty created by the pandemic. Large integrated companies and organisations will find it difficult to recover, or pivot due to changes in the business ecosystem. Such smaller companies will find it easier to develop new products, new designs, and new processes, which will enable them to produce what the emerging market needs. Their lower overheads will enable them to do this at a lower capital cost. But, they will need to invest in R&D, and must be supported to do so through liberal research and development grants and assistance. While this may be difficult for banks and lenders to do, organisations like DST and NRDC should step in. This is how many companies in Japan were supported to innovate in the early stages of their development process.

Indian MSMEs should be helped to seek support from national R&D labs that have expertise in different domains, to solve their problems. This should be done by incentivising them to do so, through suitable policy measures. The CII, Industries Depts of State Govts, and the MSME Ministry of GOI should all get together for this task. There is considerable ignorance among MSMEs about the capabilities of national labs in various fields. Only when MSMEs visit such national labs and see for themselves the capabilities that exist, will they develop the confidence to approach them.

The founder of SCTIMST, Dr M S Valiathan, once said that a necessary condition for great achievement in science and technology is the knowledge that you have done it before. We need to have many local examples of R&D efforts by Indian companies that have led to business success. I am glad that I was able to build the small enterprise I set up with knowhow from SCTIMST into a global scale plant making high quality biomedical devices and exporting to many countries. I know that the main reason for our success was the investment in R&D we have been making consistently from the very beginning, till today. If I could do that, with little money or business experience, anyone can do the same.

For too long in this country, businesses have been content to import knowhow, and even plant and machinery, adding very few innovations of their own. What little R&D that is done is mostly relabelling modernisation spending to take advantage of tax benefits that used to exist. It is only post-1991 that we have more companies coming forward to invest in R&D. We have seen the rise of companies like Biocon, TVS Motors, Mahindra & Mahindra, Sun Pharma, Dr Reddy’s Labs, and a few more, who have risen to global prominence on the strength of their innovative products abnd technologies. Such successful companies should open their labs and facilities for MSMEs to visit and see for themselves what can be accomplished by local science and technology efforts.

The record of SCTIMST in this respect is probably unrivalled among National Labs in the country. I have involved with the activities of TIMed, the medical devices incubator started at BMT Wing at SCTIMST around the same time, and am happy to see that activities have gained traction, and several incubatees are already benefiting from the unrivalled facilities for multidisciplinary research and testing available here. The Technology Conclave is a pioneering initiative started by SCTIMST, to familiarise industry with the work being done here and the technologies developed and available for transfer. This is already having an impact, as evidenced by the transfer of technology effected after the program was started. Other national labs should be encouraged to conduct similar programs.

I would now like to end by making some general observations based on my experience as an entrepreneur and investor and mentor for tech startups.

1. The R&D spend of companies and government in India is too low. The private sector still behaves as rent seekers, not builders of businesses with a long term vision.

2. R&D has changed mainly due to the impact of the Internet: information is easy to access anywhere. This enables collaboration, sharing of resources, and crowd sourcing solutions.

3. Indian labs and research institutes are a huge resourceindustry is losing out by not seeing this fact. They have people with skills in all sorts of esoteric areas and fields, and proven capabilities.

4. Industry must learn to know where to look. As Pasteur said: chance favours the prepared mind. You must be worrying about a problem to see a solution in the most unexpected places.

5. Invest in your people regularly going to engg trade fairs and research labs and seminars and workshops, not so much for what is being discussed, as for what else you may find there. This can range from answers to research problems to processes you can use to reduce costs and improve quality, to equipment that may help you make something you could not otherwise do.

6. ‘Necessity is the mother of invention’. Innovation starts with you: if you are not worrying about something, if there is no necessity, there will be no innovation. I have found the best ROI to come from investment in research and development.