A History of Learning in R&D: Beyond Expenditure

Syllabus: GS2/Governance; GS3/Science and Technology 

Context

• India needs technological capabilities along with increasing R&D expenditure and private-sector participation to be globally competitive.

India’s R&D Landscape

• India’s R&D ecosystem has expanded through public institutions, universities, start-ups and strategic sectors.
• However, R&D expenditure remains modest relative to major innovation economies, and private-sector participation is uneven. 
• Recent policy discussions increasingly emphasise better mapping of R&D finance, outcomes and institutional capabilities, not merely higher expenditure.

Current Landscape of R&D in India

• Emerging technologies such as artificial intelligence, semiconductors, biotechnology and clean energy make indigenous technological capability strategically important.
• As per ‘Research & Development Statistics 2025-26’ Report of Department of Science and Technology (DST), the GERD as a percentage of GDP was around 0.84% (2023-24) from 0.66% 2019-20. It is significantly lower than major economies:
  • The United States and China spend above 2% of GDP on R&D.
  • Israel and South Korea spend more than 4% of GDP on R&D.
• India’s R&D funding is heavily dependent on public funding (with about 64% contribution), unlike the case in several leading innovation economies which have more than 60% of the R&D budget contributed by the private sector.
• India’s future competitiveness will depend on translating research into products, processes and globally viable firms.
  • It requires stronger links between laboratories, industry, skilled workers and production ecosystems.

Issues and Concerns in India’s R&D Landscape

• Attention on Inputs: R&D is generally judged by money spent not capabilities generated, technologies absorbed, products developed or productivity increased.
• Weak Industry-Research Linkages: Research institutions and enterprises often operate in isolation, constraining the commercialisation of information and feedback from production.
• Limited Private Sector Participation: Businesses may under-invest in long-gestation research because of uncertainty, inadequate risk capital and weak incentives for technological development.
• Technology Transfer Without Learning: Importing technology or assembling foreign-designed items does not necessarily generate the capacity to design, improve and produce them on one’s own.
• Fragmented Innovation Ecosystem: Skills development, R&D, tooling, manufacturing, and market feedback are typically considered as discrete operations rather than pieces of a continuous learning system.

Related Efforts and Initiatives

• National Research Foundation and ANRF: Institutional reforms to promote research ecosystems and to stimulate more participation by universities, industry and philanthropy actors.
• Research, Development and Innovation (RDI) Initiatives: It is meant to bring in more private sector engagement and long-term funding for strategic and developing technologies.
• Atal Innovation Mission and Start-up Ecosystem: Innovation programs support entrepreneurship, incubation and conversion of ideas into commercial viable solutions.
• Make in India and Production-linked Manufacturing Policies: Manufacturing policies that relate demand to domestic technological capabilities, skill development, design and indigenous innovation are good.

Tata Motors Case Study: Capability Creation as Technology Transfer

• Starting with the Daimler-Benz joint venture, TELCO evolved beyond assembly to component manufacture and indigenous design.
  • By 1966, it had set up its own R&D facility.
• The successful transfer of technology is thus largely a function of the timing of the end of the foreign partnership in 1969. Telco had acquired the ability to produce trucks by itself.

Way Forward: Bolstering India’s R&D Landscape

• India needs to transition from an expenditure-based approach to a capability-based innovation strategy.
  • The results of R&D should be evaluated in terms of technology absorption, patents of commercial significance, indigenous design competence, productivity benefits and successful products.
  • Universities, public laboratories, and business need to be connected by joint research platforms and mission-oriented projects.
  • Manufacturing itself should be a site of learning. Companies need better apprenticeship schemes, design centers, toolmaking capacities and feedback loops between shop floors and researchers.
  • The use of public procurement and strategic industrial policy can help build markets for local innovation while preserving performance and quality requirements.
• India should benefit from China’s emphasis on rapid capability accumulation but not mechanically duplicate its model.
  • In a world that is very competitive, the ability to learn faster is the differentiator.

Source: BS