Given the new policy initiatives by the Government of India that provide significant opportunity, Indian companies must develop IP-based innovative products and solutions that lead to business and economic growth...India is one of the fastest growing economies in the world and is projected to become the world’s third largest economy by 2025. The country has made significant progress in the...
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Given the new policy initiatives by the Government of India that provide significant opportunity, Indian companies must develop IP-based innovative products and solutions that lead to business and economic growth...
India is one of the fastest growing economies in the world and is projected to become the world’s third largest economy by 2025. The country has made significant progress in the last 30 years. One of the key drivers for economic growth after the 1991 reforms was the increased domestic consumption led by the creation of lakhs of new jobs in the services sector and increased foreign direct investment (FDI). Growth in the last three decades has been mainly due to the services industry in the area of information and communication technology. To achieve the next phase of India’s economic growth and make it sustainable, it is imperative for India and Indian companies to foster research, technology, and innovation to develop IP-led products and services for Indian and global markets.
IP-led innovation is critical for India’s future economic growth and competitiveness. India offers multi-billion- to trillion-dollar new market opportunities for companies to develop innovative products and solutions to meet the needs of the aspirational middle class and resource-poor people. The size of the aspirational middle class in India is expected to increase from 470 million in 2010 to 570 million in 2021. The market size is expected to cross USD one trillion due to the increase in the middle-class population in India1. Furthermore, products and solutions developed for the Indian market are going to be relevant to global markets.
A 2016 UNDP report suggests that out of the working-age population of 300 million, the Indian economy could employ only 140 million, indicating a limited capacity to generate jobs. The report estimated that by 2050, at least 280 million more would enter the job market in India2. It is important to create jobs for the sustainable growth and prosperity of India. IP-based proprietary products and solutions developed by companies have the potential to create much-needed new employment opportunities for the Indian youth.To illustrate the impact of IP-driven industries on the US economy and job creation, we can look at the recent report by the U.S. Department of Commerce released in September 2016. The report indicates that IP-intensive industries support at least 45 million U.S. jobs and contribute more than $6 trillion or 38.2% of U.S. gross domestic product (GDP)3. With Indian talent and determined enterprises, it is possible to create IP-driven businesses to achieve global leadership and drive the next phase of economic growth in India.
The pharmaceutical and IT sectors in particular have contributed significantly to the rapid progress made in the last three decades. These sectors, along with many others, have created wealth and jobs, resulting in rapid economic growth. In the last decade, Indian companies have started investing in research, innovation, and IP creation for achieving competitiveness and business growth. Tracing the evolution of pharmaceutical and IT sectors in the last few decades shows the way forward for IP-led innovation in India.
In a manner similar to the pharmaceutical industry, the IT industry too has played an important role in India’s economic growth. The IP-led innovation in the industry, though, can be boosted further to ensure “intellectual dividend” for new-age India.
India is one of the fastest growing start-up hubs in the world. The recent NASSCOM report puts India in the third place in terms of technology-driven product startups, after USA and UK. More and more startups in India are now focusing on developing products and solutions based on innovative technology. Most of these startups are in the area of ICT.
Indian pharmaceutical companies have been more aggressive in their efforts to develop patented drugs. Considering the significant investment and failure rates, it is a risky investment for the companies regardless of their size, but one successful discovery is highly rewarding. A single successful drug can garner billions of dollars that will help the companies, and in turn, the Indian economy. Compared to pharmaceutical companies, large Indian IT companies have not invested substantially in developing IP-based products and services, although risks associated with failure are minimal. There is going to be pressure on revenues from the services business of IT companies; it is imperative for the companies to invest in research and innovation to leverage multi-billion-dollar opportunities and sustain future growth.
A significant majority of other sectors need to catch up with the pharmaceutical sector in terms of IP-led innovation. Some of these sectors have shown potential to grow. The Indian automotive industry, for instance, has grown significantly after the establishment of Maruti Suzuki in 1983. Indian automotive companies have been innovating across the entire mobility value chain. The companies are aiming to take up bigger innovation opportunities that have a global impact. In a similar manner, other Indian sectors, including chemical and electronics manufacturing industries, too hold a potential for IP-led growth.
India and Indian companies have demonstrated their potential to innovate and create IP. However, their efforts so far have been limited in comparison to the size of businesses. India’s competitiveness depends on the ability of the companies to innovate and create IP. The Government of India’s new policy initiatives like Make-in-India, Smart Cities, Digital India, and new IPR Policy provide significant opportunities for Indian companies to develop IP-based innovative products and solutions that lead to exponential business and economic growth. Indian companies need to embrace IP and innovation-led growth agenda to achieve global scale and competitiveness. The priorities of Indian businesses towards research, innovation, and IP will determine the trajectory of India’s growth to achieve the status of a truly inclusive economic superpower.
Disclaimer – The views expressed in this article are the personal views of the author and are purely informative in nature.