Industries need a national innovation system: The manufacturing sector’s share in India’s GDP has been stable at 16 percent since 1991, despite the implementation of economic reforms. No country can become an important manufacturing power without an institutional system that promotes and drives design capacities and innovations. India needs a system that develops human and technological capability at the enterprise level as well as at the national level. An important dimension under comprehensive industrial policy will continue to be to build design capability in enterprises. In the words of Joseph Stiglitz, ‘You always learn by working’ because in most products technology is embedded in the process of product manufacturing and different parts of the product, as well as the use in the manufacturing process. It is hidden in the tools and means that occur.
It is often argued by Indian economists and importers that the best and lowest price inputs should be supplied for the development of a region. But this approach can be considered short-sighted. To promote Indian technology at all levels in domestic industries, the production of electronic hardware, mechanical equipment and capital equipment will have to be encouraged. At present, all such equipment and hardware are being imported from China in India. Although design capability is only one element of the National Innovation System- NIS, it also includes other important elements.
Construction of nis
India has considerable potential in the field of research and development, but the main components required for a national innovation system are still lacking. According to a study, many reasons can be considered helpful for India’s prominence in terms of research and development in the world scenario such as-
- Relative protection of intellectual property rights
- Availability of skilled labor and
- Low cost of R&D.
With this, India’s judicial system closely resembles that of Western countries, especially the US and England, the system is seen as a major benefit by multinationals as it makes it easier for companies to understand the judicial system so that they feel safe. We do. In fact, considering these comparative advantages, in the year 2018, more than 1,500 international companies set up their R&D centers in India. But in India, the R&D processes of these companies have seen limited gains in various sectors of the economy.
It is also worth noting that such efforts by Indian private companies have not been seen so far in research and development. Major challenges remain in India’s national innovation system. There is a need to expand Learning by Doing in India to encourage students to understand and create technology related to the useful things in daily life at educational level in India, due to which complex technology in India To create an environment for building.
For this, attention needs to be paid to the following areas:
- Lack of an industrial policy has hindered India’s emergence as a manufacturing hub and innovation has been limited to growth, as well as limited total productivity as per India’s capacity.
- Many failures in the overall education system have produced serious negative educational consequences for the current skill development. In order to promote inclusive growth on the strength of science, technology and innovation in India, it is necessary to improve the learning and educational levels of the workforce in India. In the year 2015-16, 38 percent of the manufacturing workforce had primary or even lower education, in addition 19 percent had only 8 years of schooling, with only 10 percent of the people having formal or informal vocational education / training ( VET) were received. However, the situation in the service sector was slightly better.
Although enrollment in secondary classes has reached 85 percent in the year 2015 and since then there has been a trend of growth, with enrollment in higher education reaching 26 percent. Apart from this, the literacy rate is expected to reach 90-95 percent by the year 2021. But along with this, the following things are also important:
- There has been a sharp increase in the number of people with higher education but this has not resulted in improvement in quality at the level of learning or learning.
- There is a severe shortage of STEM teachers at the secondary / higher secondary level (STEM- Science, Technology, Engineering, Mathematics).
- Engineering, manufacturing and science at tertiary level has only 39 percent enrollment status (of which only 5 percent enrollment in science).
- There is a need for more private and public investment in education, at present 4.6% of GDP in India is being spent on education which is insufficient keeping in mind the needs of the education sector. However, the government has talked about bringing it to 6 percent of GDP in the coming times.
In addition, structural changes are needed to align industrial policy with education / skills policy so that India can become an important science, technology and innovation (STI) hub in areas such as the Fourth Industrial Revolution (Industry 4.0). However, for this, it will also be necessary to turn millions of young people in the age group of 15-18 years towards vocational education and training (VET). Vocational education and training in India has been mainly government-driven and supply-driven. Thus, the country needs a demand-driven and employer-led and industry-funded (rather than government-funded) vocational education and training system. Currently, a short-term vocational training system operated through private training providers funded by the National Skill Development Corporation (NSDC) for the under-educated workforce has failed to improve employment levels.
A challenge in building the National Innovation System (NIS) is that India allocates only 0.72 percent of its GDP for research and development, compared to China which invests 1.8 percent, the US 2.9 percent and Japan 3.4 percent. Presently, India’s expenditure under this head is also very low relative to its income level. Apart from this, where there has been a huge increase of funds as a percentage of GDP for research and development, mainly in East Asian countries (where there has been rapid economic growth) such as China, Japan, Korea etc. There was only a slight increase in the area of. Despite the relatively low expenditure on research and development, there has been an impressive growth in scientific publications (sixth in the world) and patent filing (seventh in the world). Despite the above situation, the use of such knowledge, research and patents in India is very less for industrial benefit. The result is that government initiatives such as setting up technology parks, incubation centers (incubators) etc. and incentives to start-ups (as government initiatives such as Start-up India, Atal Evolution Mission) will not provide the expected benefits.
Distribution of R&D expenditure among enterprises (44 percent), public research institutes such as CSIR laboratories (52 percent) and universities (4 percent) is also an issue. The global average for corporations, public research institutes and universities is 71, 12 and 17 percent respectively. India’s private sector spending on research is below the global average, there is a need to increase this expenditure so that India’s private sector can develop various technologies domestically. According to Forbes, 70 percent of global industrial R&D is related to the five core sectors of medicine, auto, technology hardware, software and electronic and electric equipment. Since India is not the major producer of the world in the above mentioned areas, apart from medicine and auto, the R&D expenditure of Indian companies is also low.
Research and development contributed significantly to Korea and Taiwan’s industrialization in the 1980s, while China began to meet in the 2010s. There is limited expenditure on research in India, as is the situation in the private sector. Apart from this, various deficiencies exist at the level of education system to support the creation of skilled workforce in India. In order to increase the manufacturing sector and increase the contribution of this sector to GDP, it is necessary to reform the India National Innovation System. For this, the government will have to make various reforms at the policy level and create a conducive environment for the manufacturing sector. At the same time, India also needs to develop a culture of learning by doing from the primary level so that education can provide a strong base of learning and training to the workforce.
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