Below are some of the learnings from the panel discussion on “Collaborative R&D: Super Innovation Clusters – Way Forward!” from the 13th NASSCOM Design and Engineering Summit held in Oct 2021.
India is already becoming a digital talent nation for the world and is poised to become the location of choice for Engineering R&D. Indian Engineering R&D market is expected to reach USD 125 bn in 2030, quadrupling in value in a decade. This growth is not possible without the establishment of “Super Innovation Clusters” in the next few years. Technologies such as shared mobility, autonomous driving, digitalization, and electric on the engineering side, as well as health-tech and transformation in the wake of the Covid pandemic are accelerating at a rapid speed. In addition, many processes including engineering have become digital, and there is an increasing focus on agile networks, fuelled by rapid advancements in 5G and broadband. Companies and countries are taking many initiatives to build a sustainable ecosystem.
What are some of the key learnings from some of the superclusters across the globe?
- One of the strengths of innovation systems is that it should be industry driven with strong govt. support. A collaborative ecosystem which co-creates, co-develops solutions and platforms and one that is suitable for the particular country’s landscape should be chosen. Innovation systems are very successful if there is with strong collaboration with the ministries and the industry, and hence benefit from governmental and industry funding.
For example, Germany’s gross expenditure on R&D is Euro 100 bn and 2/3rd of the expenditure is funded by the industry and 1/3rd from the government.
In smaller countries like Israel, it is primarily driven by private sector primarily with the govt. playing a small but crucial part to push the correct agendas and the right challenges to address. Govt. here is a facilitator of innovation by creating the venture capital ecosystem to foster investments and innovation
- Choose an appropriate strategy to fit the particular country’s ecosystem. Should it be bottom-up approach where the industry dictates what innovation needs to be focused on and what problems need to be addressed and the govt facilitates that? Or should it also integrate the top-down approach, where govt. also shares its insights and focus on global problems such as sustainability and climate change and not just local ones? Matching funding by all parties including govt and the industry is necessary to create a super innovation cluster.
- Super innovation clusters must cover the entire value chain of innovation from basic research to applied research. For example, in Germany, there are many innovation systems which are industry driven, but there is also a purely applied research-oriented innovation centres like Fraunhofer are also present.
- A clear KPI of the super innovation clusters must be defined. How much does one rupee or euro of investment generate in private investment? For example, each Euro spent on Fraunhofer by the taxpayers generated Euro 18 to the national GDP and in turn generated Euro 124 in terms of tax revenues to the govt.
In addition, number of patents filed, publications published in leading journals, new projects, products, IT assets, licences granted, partnerships created can also be some parameters.
- Other KPIs or parameters to focus can be gender balance. How many companies in the super innovation cluster have women in CXO roles? For example, for European Innovation Council, that figure is 35%. Other matrices to be considered could be to increase the reach of technology and digitization to a wider segment of the population and improve their standards of living.
- The super innovation clusters must choose their competence or areas of focus, based on the respective country’s strengths so that funds can be distributed wisely.
- Digital innovation and engineering must be focussed and ramped up as it is impacting a variety of sectors and support through investments and funding should be provided to the traditional industry players who want to adopt to digital technologies to improve their competitiveness and change their business model.
- There should be a shared interest. If case of failures, the risks would be equally shared by all involved, however in case of success, royalties on sales must be shared.
- Upcoming technologies must constantly be evaluated and included and these include AI, ML, IoT, AR/VR, Cloud computing, Low code/no-code etc.
- Constantly engage in discussions with other countries to see how they developed their innovation ecosystem and focus on their best practices.
- The super innovation cluster must be member driven, whether industry or govt. Constant discussions with members must be done to create a robust and agile ecosystem. The key is to create a critical mass of members who share the same vision and relate to the problems being solved by the innovation clusters.
- Sharing of success stories is a big motivating factor for more participation, engagement, and funding
What is some of the advice that can be given to India?
- During any future disturbances such as the one caused by the pandemic to the economy, the govt. should make sure that critical products and programs must be continued and extra investments and incentives, which may be needed, should be given to tide over the crisis.
- The super innovation cluster must find a way to combine super innovators with the modest innovators with no compromise on excellence and quality. Modest innovators can team up with the universities of advanced countries, while the govt and the industry finds pockets of excellence in these modest innovators. The program must close the divide of economics, research performance, level of digitization etc. between all players.
- Human capital is essential to expand, grow, and tackle demand.
- Build an ecosystem of entrepreneurs, MNCs, big companies, universities and research institutions is necessary to build a successful ecosystem, with funding and govt support incorporated together.
- Not only the supply side, but importance must also be given to the demand side. The innovation must always have the problem statement clear, which it intends to solve.
While India currently does not have any super innovation clusters, but discussions with other countries go a long way in learning how they are faring along the value chain. For the recent entrants like Canada in 2018 to the more matured ones like Germany, it is imperative to constantly engage with other countries and learn from them to bolster India’s position as the destination of choice for Engineering R&D.
To read more about the Engineering R&D Industry of India, please follow the links to access the “Advantage India: Gateway to Global Engineering R&D and Innovation” report