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Rediff.com  » Business » R& D: India lags behind China, Mexico

R& D: India lags behind China, Mexico

October 08, 2007 09:57 IST
Although termed as the knowledge hub providing valuable human resource to the world, when it comes to Research and Development (R&D) at the domestic level, India lags behind developing countries like China, Brazil and for that matter even with Republic of Korea and Mexico.

A recent World Bank report titled 'Unleashing India's Innovation - Toward Sustainable and Inclusive Growth' says that in comparison to 708 R&D researchers per million population in China, the number was a dismal 119 in India in 2004.

While the same is 3,319 in Russian Federation, in Brazil the number of researchers per million population is a much better 344, the report stated.

"Though there is no doubt that India has an impressive stock of skilled talent based in past investments in higher education, the more pressing question is the availability of qualified talent, measured by both quantity and quality," Mark A Dutz, editor of the report said.

The report also rapped India for its abysmally low R&D spending, which in India never exceeded one per cent of the GDP.

"Over the past 20 years, India's domestic R&D expenditure as a share of the GDP has fluctuated between 0.71 and 0.91 per cent, with the highest share recorded in 1987-88. This was when the average expenditure on R&D for developed countries was 2.5 per cent of the GDP.

Juxtaposing the same with countries like Brazil, Russia, China, Korea and Mexico, the report said, "In 2004, the last year with comparable data for India, India's share stood at 0.85 per cent. These numbers match unfavourably with the countries India is being compared with, except Mexico (partly as Mexico's R&D is relatively linked with the United States R&D)," Dutz said.

Even as India's 10th Five Year Plan, launched in 2002, indicated that R&D spending was to reach 2.0 per cent of the GDP by 2007, with the current levels, that goal is unrealistic, the report commented. In 2004, China's share was 1.4 per cent and it is expected to reach 2.0 per cent by 2010, despite rapid growth in the GDP, it said.

According to World Bank, India's domestic R&D spending was just $ 5.4 billion in 2004. But in Purchasing Power Parity (PPP) it was $ 26.9 billion, making the country the ninth largest spender in the world that year.

"The rank reflects the lower costs of India's R&D spending relative to that of Organisation of Economic Co-operation and Development (OECD) countries," it said.

But even in PPP terms, China with $ 94 billion (next to Japan) was the third largest global spender in 2004. Given China's ambitious expansion of investments in R&D and its higher GDP growth, by the end of 2006, China was already the world's second largest R&D spender in PPP terms (over $ 136 billion) after the United States at almost $ 340 billion," the report said.

One more aspect which the report highlighted is the sector-wise R&D spending in the country.

India is still at a typical early innovation stage with regard to the distribution of domestic R&D efforts - about 75 to 80 per cent of it is conducted by the public sector, 20 to 25 per cent by private companies and just 3 per cent by the universities.

On the other hand, in China, more than 65 per cent of expenditures are undertaken by enterprises, it said.

In contrast, average R&D expenditures in OECD countries are 69 per cent by enterprises, 18 per cent by universities, 10 per cent by government R&D labs and three per cent by private non profit organisations (OECD 2005).

One positive point India scored over countries like Russia and Brazil is the number of patents it got approved by the Patent Office in the United States.

The report observed that in 2004, 376 patents were granted to India in comparison to 161 for Brazil and 173 for Russia.

But India had to spend a much less $ 15.6 million on R&D per patent granted in comparison with $ 39.3 million by Russia and $ 376.7 million by Brazil. Even China, which had 597 patent approvals in 2004 from the US, had spent $ 46.6 million on R&D for one patent on average.

The positive factor appears true as the report stated, "Indicators of India's capacity for innovation highlights its promising innovation potential."

Prasad Nichenametla in New Delhi
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