Policy question - Varun Gulati

Policy question: What actions if any should be taken by the Director of Central Board of Secondary Education (CBSE) in India to help scientists/PhD student's ideas/research reach marketplace.

Background and motivation:


The best way to solve the problem of unemployment and lack of innovation in India is to promote researchers’ idea and bring it to the marketplace. There is an urgent need to put in place a system for efficient transfer of technology from laboratory to the market and commercialize the technology. This step would bring the technology we have harnessed in our laboratories and put to use for the benefit of the society at large. Businesses will gain as they get long-term competitive edge and technical research will get a boost by having a strong marketplace for innovative ideas.

Challenges:

1. In India, a PhD scientist is evaluated based on number of journals they publish and number of PhD students they supervise and amount of external funding they bring etc. Their technology based commercialization projects are rarely encouraged. In such a situation, it is required that there is an incentive in place for scientists and PhDs to go out of box to commercialize their research.
2. Mindset of PhD candidates is focused on research and not on commercialization. Most of the times a PhD candidate would think of business as beneath his dignity. They are more focused on knowledge than monetary factor.
3. Almost all PhD candidates file request for patents after publishing their paper.
4. PhD candidates do not look at their research from a business point of view. They need expert guidance in this regard. Many scientists are not even aware of consequences of not filing patent for their research.

Typical lab to market program:




Figure 1: Lab to market[3]

Policy alternatives:


1. Status quo
Until now there is no policy at National Level that incentivize scientists to commercialize their idea or to hold equity in those startups. In May 2009, Government of India has approved the proposal of DSIR on Encouraging Development and Commercialization of Inventions and Innovations. The key elements of this proposal were[4]:

1. Permitting the researchers to have equity stake in the enterprise.
2. Permitting the scientific establishment to invest knowledgebase as equity in the enterprise.
3. Encouraging the scientific establishments to open incubation centers.
4. Facilitating mobility of researchers between industry and scientific establishments.

Although there is a policy in place but a lot needs to be done. These guidelines do not give a clear picture of what is termed as innovative-commercialization. These are policy document driven and is shaped by opinions of top management of these companies.

Advantages of status quo:

• let the policy do its work
• will lead to innovation in those government bodies that are covered in the policy

Disadvantages of status quo

• Does not cover the disconnect of scientists and business logic
• Does not target root cause of scientists not contributing to technological entrepreneurship
• Does not change incentives for technological entrepreneurship

2. Sanction Special Economic Zones(SEZ) for Business Incubators
SEZ is a generic term to refer to any modern economic zone. In these zones business and economic laws differ from the rest of the country. Aim of SEZs include increased trade, increased investment, job creation and effective administration[5].
“A business incubator is a shared office-space facility that seeks to provide its incubatees with a strategic, value-adding intervention system (i.e. business incubation) of monitoring and business assistance. This system controls and links resources with the objective of facilitating the successful new venture development of the incubatees while simultaneously containing the cost of their potential failure…when discussing the incubator, it is important to keep in mind the totality of the incubator…[it is] also a network of individuals and organizations” [5]


Figure 2: Business Incubators [6]

Advantages of SEZs:

• Attract FDI (Foreign Direct Investment)
• Encourage investing by providing tax benefits and quotas etc
• Produce goods at global competitive price
• Creation of employment opportunities
• Development of infrastructure facilities

Disadvantages/hurdles of SEZs

• Huge investment requirements
• Difficult to get sponsorship

3. Encourage collaboration between scientists and management institutes
There should be a mechanism that would enable interaction and collaboration between management institutes like Indian Institute of Management and technology institute like Indian Institute of Technology. This collaboration will help create synergy that will lead to techno-entrepreneurship innovation.

Advantages

• Business professionals get innovative ideas
• Scientists get guidance on patenting issues
• Scientists can look from a more business perspective with the help of Management Students
• Fill the gap between technology and entrepreneurship
• Technical development guided towards solving needs of the customers

Disadvantages

• Lack of free time for scientists and management students to collaborate
• Need to build a mechanism to enable distant communication

Summary

Policy Option	Efficiency	Effectiveness	Equity	Ease of political acceptablity
Status Quo	+	++	-	+++
SEZ	+++	--	+	+
Collaboration	++++	+++	+	++

References

1. http://www.venturecenter.co.in/pdfs/ISB-Conf-Paper-ver04.pdf
2. http://www.pucsp.br/icim/ingles/downloads/pdf_proceedings_2008/05.pdf
3. http://www.venturecenter.co.in/water/pdf/water-technologies_15-jan-11.pdf
4. http://www.dsir.gov.in/circulars/knowledge_equity_om_25may2009.pdf
5. http://en.wikipedia.org/wiki/Special_economic_zone
6. http://technopreneurship.wordpress.com/2007/04/14/what-is-a-business-incubator/