18 May 2024 : PIB Summary for UPSC
1. IICA organises roundtable consultation on R&D expenditure by top 1,000 listed companies in India
| Topic: GS2 – Governance
GS3 – Indian Economy |
| Context |
| ● A roundtable consultation held in New Delhi, organised by the School of Business Environment, IICA, with support from the Office of the Principal Scientific Adviser, focused on R&D expenditure by India’s top 1,000 listed companies.
● Discussions highlighted the need for standardised R&D data capture, increased private sector participation, and policy alignment. |
Analysis of the news:
- A roundtable consultation was held in New Delhi by the School of Business Environment, IICA, with support from the Office of the Principal Scientific Adviser to the Government of India.
- The objective was to consolidate corporate views on R&D expenditure and sensitise companies on the importance of investing in R&D for sustainability and growth.
- Ajay Kumar Sood highlighted the need for standardised criteria in capturing R&D data and emphasised India’s transition to a product-driven economy through innovation.
- The roundtable discussed international best practices in R&D and stressed the importance of ESG reporting frameworks.
- Parvinder Maini emphasised increasing private sector participation in R&D investments for innovation.
- Shri Sunil Kumar proposed rational policy-making and better alignment with Indian policies in capturing R&D data.
- Garima Dadhich stressed the importance of R&D commitment for shaping business, environment, and society.
- Key recommendations of the conference included a dedicated web portal for real-time R&D data tracking and standardised R&D definitions and disclosures.
| R&D by private sector in India: |
| Importance of R&D by Private Firms for Indian Economy:
● Innovation and Competitiveness: R&D expenditure fosters innovation, leading to the development of new products, processes, and technologies that enhance the competitiveness of Indian firms in domestic and global markets. ● Economic Growth: Investment in R&D drives productivity gains, fosters economic growth, and contributes to job creation, driving overall prosperity in the economy. ● Technology Upgradation: R&D spending enables firms to upgrade their technology infrastructure, improve production efficiency, and adapt to changing market demands, ensuring long-term sustainability. ● Global Recognition: Increased R&D expenditure enhances India’s reputation as a hub for innovation and technological advancement, attracting foreign investment and fostering international collaborations. ● Addressing Societal Challenges: R&D investment can address pressing societal challenges such as healthcare, renewable energy, agriculture, and environmental sustainability, contributing to social welfare and inclusive growth. Challenges in R&D by Private Firms: ● Financial Constraints: Many Indian firms, especially small and medium-sized enterprises (SMEs), face financial constraints and limited access to funding for R&D activities. ● Lack of Infrastructure: Inadequate R&D infrastructure, including laboratories, testing facilities, and research institutions, hampers innovation and technology development. ● Skilled Manpower: Shortage of skilled researchers, scientists, and engineers with expertise in cutting-edge technologies poses a challenge to R&D initiatives. ● Regulatory Hurdles: Complex regulatory procedures, bureaucratic red tape, and intellectual property rights issues deter firms from investing in R&D. ● Risk Aversion: Risk aversion among firms, particularly in traditional sectors, inhibits investment in long-term R&D projects with uncertain returns. Way Forward: ● Government Support: Provide incentives such as tax breaks, grants, and subsidies to encourage firms to increase R&D spending. ● Public-Private Partnerships: Foster collaboration between government, academia, and industry to pool resources, share expertise, and promote technology transfer. ● Enhanced Infrastructure: Invest in R&D infrastructure and create innovation clusters to facilitate collaboration and knowledge exchange among firms. ● Skill Development: Promote skill development programs and initiatives to build a talented workforce capable of driving innovation and R&D activities. ● Streamlined Regulations: Simplify regulatory processes, expedite approvals, and strengthen intellectual property rights protection to encourage R&D investment. ● Encourage Risk-Taking: Foster a culture of innovation and risk-taking within firms by rewarding entrepreneurial initiatives and embracing failure as a learning opportunity. |
| PYQ: Scientific research in Indian universities is declining, because a career in science is not as attractive as our business operations, engineering or administration, and the universities are becoming consumer oriented. Critically comment. (200 words/12.5m) (UPSC CSE (M) GS-3 2014) |
| Practice Question: “Discuss the significance of Research and Development (R&D) expenditure by private firms in India. How can standardised data capture mechanisms and increased private sector participation enhance innovation and sustainable growth? (250 Words /15 marks) |
