Shyamal Banerjee/Mint

Shyamal Banerjee/Mint

Ourview | Innovation, a malleable word

Ourview | Innovation, a malleable word

The buzzword these days in government departments is innovation. A decade ago, innovation—in governmentspeak—was inextricably wedded to invention and scientific output. Therefore, prime ministers and presidents then exhorted India’s scientists to generate more patents and catalyse a greater number of specialist PhDs and techno entrepreneurs. With little progress on all of those fronts in the last decade, the idea of innovation is now more malleable. As several members of the National Innovation Council (NIC) emphasized earlier this week, an enterprise is innovative only if it makes money, with the onus shifting on businessmen and entrepreneurs to become “innovative," a marked shift from India’s traditional policy of confining scientists to research and publishing papers and entrepreneurs to derive commercial benefit from them.

Shyamal Banerjee/Mint

Noble as the fund’s objectives may be, it could turn into a failed enterprise if it can’t accelerate the pace of growth in the country’s manufacturing sector. The current trend of venture capital as well as private equity investment in India is skewed towards service sector companies that, by and large, serve India’s affluent population and don’t really offer India a global competitive advantage in terms of improving the country’s exports. With the deteriorating economic conditions in Europe and the US and China’s rising economic and political muscle—much on the back of its manufacturing prowess—it poses serious challenges for India to progress over the next few decades without a sufficiently skilled and gainfully employed population. The manufacturing sector cannot grow without access to better technology that in turn results from inventions, as well as research and development that rapidly transforms into commercial products or processes.

The fund, in its objectives, does state its intent and plans to link existing technologies developed in Indian labs to industrial clusters that sorely need them. Hopefully, it will be able to do so. Otherwise, it risks meeting the fate of several government-backed funds to encourage inventors already that aren’t well known outside the confines of government offices because of their rather lacklustre record in helping promising firms scale up. The NIC must learn from their failures.

Can government-backed funds spur innovation? Tell us at views@livemint.com

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