By Smita Purushottam
China has grown immeasurably powerful over the last two decades, having placed science & technology (S&T) at the core of its developmental and military strategy. China invests 2.2% of its GDP on R&D ($496 billion), dwarfing India’s $50 billion (PPP figures, 2017). It is closing in on the American R&D spend of $549 billion, clocking over 17% in annual growth rates between 2000 and 2017, against the US average of 4.3%.
China’s S&T drive, growth, military strategy and geopolitical goals are intertwined, and made clear by Xi Jinping’s declaration that “technology is China’s core combat capability.” Unsurprisingly, China has simultaneously grown more threatening. It has unhesitatingly flexed its new-found muscle, to which the sacrifice of our soldiers on the border bears tragic witness.
Like China, countries the world over recognise that national technology ownership equals power, with the richest and the most powerful nations all being high R&D spenders. But India’s R&D expenditure has trended downwards from 0.85% in 2011 to 0.62% in 2015, the latest year for which figures are even available, making it dependent on high-tech imports in defence, aircraft, ICT (information and communications technology) products and other sectors.
Imports cannot make up for national security, which can only be guaranteed by national technological and economic strength. But in a technology-obsessed era, we are yet to take the necessary measures to rejuvenate our R&D ecosystem.
The government has, indeed, launched several incentives and reforms to turbocharge India’s economic recovery. But its putative industrial policy lacks an R&D focus, an ingredient vital for success. India has been granted a time window to become internationally competitive by the government’s wise delay in signing FTAs/the RCEP. It must use this interregnum to promote national technological resilience through a whole-of-government, R&D-intensive industrial policy.
Even in the US, the industrial policy is staging a comeback due to a bipartisan consensus on China. How much more urgent it is for India to forge a similar consensus to meet the challenge on our doorstep! Unfortunately, the government’s laudatory reforms are continuously being undermined by venal civilian and defence bureaucracies, a legacy of India’s import-with-benefits past. We have several heart-breaking stories on how bureaucrats emasculate their own country’s capabilities in favour of imports; tenders and contracts continue to be skewed in favour of the Big-4/foreign OEMs; foreign companies receive largesse under the Universal Service Obligation Fund (USOF), while domestic high-tech companies are routinely shown the door; public sector companies frequently act as fronts for imports; and so on.
Without orders, Indian industry/high-tech SMEs are being squeezed out of existence or are fleeing abroad. India’s high-tech manufacturing sector has shrunk by 14% between 2011 and 2015. All this is in stunning and complete defiance of the Prime Minister’s call for atmanirbharta (self-reliance). It is imperative that the government’s procurement reforms be implemented on the ground. Thus, domestic procurement is estimated to provide an economic stimulus of up to 25%. In addition, to encourage business sector R&D, the government must institute a transparent tender process covering focus areas—under which top R&D-intensive domestic companies become eligible for priority procurement, tax incentives, grants or low-interest loans. A no-cost-full-commitment (NCFC) procurement model in selected projects will also provide a lifeline to domestic high-tech companies which own their intellectual property.
The government must also provide direct R&D grants to companies—along the US, Israeli and Chinese models. At present, R&D funding is mostly going to academic institutions, with precious little to show in terms of commercialisation.
It must create a disruption in government laboratories, the Defence Research and Development Organisation (DRDO) and academic institutions, granting the same incentives and funding for R&D in the private sector as enjoyed by government labs and the academia. India desperately needs an Indian DARPA that can promote a genuine, networked and effective innovation ecosystem which yields results for the economy. (The DARPA, short for the Defense Advanced Research Projects Agency, is an R&D agency of the United States Department of Defense responsible for the development of emerging technologies for use by the military.)
The government must finally live up to its commitment to encourage a private sector defence industry and implement the strategic partnership policy. It must replace the mystifying and deliberately obfuscating Defence Procurement Procedure with a transparent Defence Production Policy, which all advanced countries have. The US defence sector was the primary mover on technological disruption. In India, it is still overrun by import lobbies, which constitute a deep state on their own.
The US science state & genuine technological disruption
Of some comfort should be the fact that China has yet to deliver a truly ‘disruptive indigenous technology’. That distinction has always belonged to the US whose game-changing technologies—from airplanes, computers, semiconductors, to the Internet and related inventions—have completely transformed life on our planet.
Unfortunately, while the US science state (Fred Block) was being hobbled by market fundamentalists, China was implementing its own ersatz, top-down ‘science’ state, “parasitically siphoning off disruptive technologies born out of basic and fundamental research” conducted in the US (Bruyere and Picarsic). China’s consistent focus on applied/experimental research (US Science & Engineering Indicators) helped it to repurpose disruptive technologies developed elsewhere, which it had acquired through espionage, forced technology transfers and overseas acquisitions. This enabled China to disrupt 5G, ICT, robotics, electric vehicles/driverless cars, defence technologies, high-speed rail and biotech markets, without undertaking the hard slog of basic research.
We need to move towards the American model of the networked science state. That would entail a reformed bureaucracy with a developmental and pro-technology mindset. The Prime Minister must give the call for an urgent focus on R&D and carry forward procurement reforms to save the country from external and internal predators. Sections in the bureaucracy must be made to answer for undermining the nation’s economic and technological capabilities on which national security ultimately depends.
The author, a former ambassador, is the chairperson of SITARA (Science, Indigenous Technology & Advanced Research Accelerator)