Need for innovation

India takes great pride in its large pool of scientists – said to be the largest in the world. But did you know that domestic R&D spending has never exceeded 1% of GDP. And 75-80% of the country’s R&D spend comes from the public sector.

A thought provoking report from the World Bank highlights the state of innovation in the country.

The report states that only 10-25% of general college graduates are suitable for employment and only 17% of people in their mid-20s and older have a secondary education.

Local companies lag behind in R&D spend. Of the top 50 applicants for patents in India between 1995 and 2005, 44 were from foreign companies. Only six were from Indian companies while the rest were by public institutions.

The authors of the report suggest that competition spurs innovation. Private sector R&D spend increased rapidly since the opening of the Indian economy in the early 1990s. In 2004, private sector R&D spend was more than seven times higher than in 1991.

R&D spend in the chemical sector has also been gradually rising but Indian companies still have a long way to go before they can catch up with the western counterparts.

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