BENGALURU: The Economic Survey-2021, released on Friday, sounded critical of Indian firms’ expenditures on Research and Development (R&D) saying that “mere reliance on Jugaad innovation can risk the country missing crucial opportunities”.
On the brighter side, India improved its ranking on the Global Innovation Index (GII), entering the list of world’s top 50 innovating countries, ranked at 48.
When it came to competing with the top 10 global economies, especially China, India lagged much behind on the basis of seven pillars of GII including knowledge and technology outputs (KTO-27th rank) market sophistication (31), business sophistication(55), human capital and research (HCR-60) institutions (61) creative output (64) and infrastructure (75).
“India must significantly ramp up investment in R&D if it is to achieve its aspiration of emerging as the third largest economy in terms of GDP (current US dollars). Mere reliance on “Jugaad innovation” risks missing the crucial opportunity to innovate our way into the future. This requires a major thrust on R&D by the business sector,” the Survey stated.
The Economic Survey blamed the country’s business sector’s lesser contribution for India’s dismal gross expenditure on R&D
(0.65% of GDP), much lower than that of the top 10 economies (1.5-3 % of GDP).
Neighbouring China, as per the Survey, had targeted its gross expenditure on R&D as part of GDP to touch 2.5% in 2020.
THE FINDINGS
Companies contribute much lesser to the country’s gross expenditure on R&D (37%) when compared to businesses in each of the Top 10 economies (68% on average).
In terms of R&D workforce, the Economic Survey said the government sector contributes the highest share of total R&D personnel (36%) and researchers (23%) amongst Top 10 economies (50% on average).