Not quite advantage India

From 22nd rank to number one in a matter of minutes! Some smart calisthenics by recently retired CSIR director general RA Mashelkar saw India move from the 22nd position in terms of national research performance globally to the top slot.

When, in 2004, UK chief scientist Sir David King used India's share in the top one per cent of highly cited publications (as measured by the Science Citation Index) to conclude it was operating below its weight class when it came to R&D output, Mashelkar simply divided the number of each country's SCI publications by its per capita GDP, and, not only was India's score of 32 much better than China's 23, it was even better than the US' seven!

It will, of course, take a lot more than such mental exercises for India to become the laboratory of the world, as it were, especially if the Chinese show the same determination they've shown so far.

While it is true that India gets more bang for each R&D buck, given how developing a new drug costs a tenth of what it costs in developed markets, China enjoys similar cost advantages. It is equally, if not more focused in certain areas like nanosciences (between 1999 and 2004, China had around 7,000 scientific publications in the field versus around 2,000 for India, and 19,000 for the US), and spends a lot more than India does on R&D, both in terms of percentage of GDP and in absolute terms since its GDP is a lot higher.

Indeed, UK think tank Demos' special analysis on Chinese R&D reports that last month the OECD announced China had moved ahead of Japan to become the world's second highest R&D investor after the US.

Both countries experienced a surge in R&D consciousness and spending in the last few years. As UK Prime Minister Tony Blair put it a few months ago, "Chinese R&D has been rising by 20 per cent a year over the past five years. Indian R&D is even more astonishing - it has trebled in a decade. Indian engineers are flooding into the world's markets - 350,000 a year, forecast to reach 1.4 million a year by 2015."

Though Blair's statement makes it appear the Indian shift is the most rapid, simple math will tell you that a 20 per cent annual hike translates to a 2.5-time hike in just five years.

As a result, China scores over India on major parameters like the number of researchers in R&D (India has 119 per million population versus 708 for China, according to the World Bank's Knowledge Assessment Methodology, or KAM), the number of scientific articles, patents or even the proportion of high-tech exports as a proportion of total manufacturing exports (30 per cent versus India's 5 per cent).

What's encouraging about the Indian increase, however, is that despite the high share of defence R&D which has little commercial spinoffs, the share of private R&D has gone up substantially, from 10 per cent in 1970 to around 30 today.

Under Mashelkar, even the 38 CSIR labs were encouraged to work like private sector firms and produced 555 patents between 2001 and 2005, making them the leading patenting organisation in the developing world.

In the pharma sector, private companies are spending up to 15 per cent of sales in R&D (between 2000 and 2004, according to Demos' India paper, pharma R&D spending rose three times), and similar trends are being seen in sectors like automobiles. Auto major Maruti's new plant is the only one of Suzuki's plants abroad, similarly, that has extensive R&D facilities, and Suzuki Chairman O Suzuki is on record saying that from this year, Maruti will be the hub of Suzuki's global R&D outside Japan.

According to the World Bank's KAM, private firms in India are more geared towards R&D. On a score of 1 to 7, Indian firms score 4.2 versus China's 3.6 when it comes to spending and 5.8 versus 5.1 in terms of technology absorbtion.

One of the reasons behind the greater adaptation to R&D, needless to say, is the greater protection India gives to intellectual property. China, despite its vastly higher R&D spend, similarly, scores just marginally over India when it comes to the link between universities and company research programmes.

India's weak link though is its universities, which is why most large tech firms have their own quasi-universities for retraining. With a smaller number going into the education system, the country produces around 6,000 science PhDs each year according to Demos as compared to China's 15,000 or so.

Even the IITs, the most prestigious educational institutes, have a quality problem. According to a vision document prepared by the IIT Delhi a couple of years ago, while the institute had 15 teachers below the age of 35, it had 115 who were over 55 years old.

And, while over 200,000 people apply in the IITs joint entrance examination for 2,500 seats, the IIT Delhi got just four applications when it applied for a faculty position some years ago!

As a result, in 1996-97, while MIT got 102 patents, the average IIT got between three and six. MIT produces 200 PhDs in engineering every year as compared to a fourth for IIT Delhi and Mumbai. For the education system as a whole, China has more universities among the top 500 in the world, measured by the citations of academics there, the awards won by the alumni and faculty, and so on.

Apart from universities, the other big source of cutting edge research are MNC research centres. India has seen a huge surge here, with more than 100 of the 150 such centres here opened in just the last four years. China too has seen a surge of such centres, and the current tally is estimated at around 750, of which around 60 are supposed to be doing fairly innovative R&D.

Which way the R&D race will end will depend upon the complex interplay between universities and industry, the development of other pillars of innovation such as ICT availability and protection of intellectual property. Demos puts its money on China.

While it says India excels at servicing and copying technology developed elsewhere, it forecasts that if China's "cosmopolitan elite - MNCs, top universities and returnees - connects with the vast domestic economy, then low-cost Chinese innovations could disrupt global industries. China intends to challenge the international innovation order."