Technology Innovation Financing in India

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1 Technology Innovation Financing in India By Dr. Sujata Chaklanobis, Scientist E Department of Scientific & Industrial Research (DSIR), Ministry of Science & Technology, Govt. of India, New Delhi, India WORKSHOP on National Technology Innovation Financing Hanoi, Vietnam October 30-31, 2012

2 Innovation Innovation is the successful exploitation of new ideas. It involves thinking differently and creatively to create solutions that have impact in terms of social and economic value. It is one of the critical factors for creating competitive advantage for problem solving and addresses the challenges of our times. Often seen as the currency of the 21st century.

3 Innovations in India Decimal system of enumeration to represent all integers Determination of the diameter of the earth and moon Determining the approximate value of pi and alphabetical representation of numbers The 24-feet high Iron pillar in Delhi, which has remained rust free for 1500 years Shown impressive development in telecom and IT. Open Source Drug Discovery: OSDD) developed by CSIR is working on developing a new affordable tuberculosis drug in a global collaborative effort using an open source approach.

4 Innovations in India contd These initiatives have remained exceptions, rather than the rule. India s innovation trajectory has been skewed. It is therefore, pertinent to re-think the Indian innovation paradigm to enable it to address the fundamental disparities and inequalities in the country.

5 Science & Technology Policy 2003 Innovation will be supported in all its aspects. A comprehensive national system of innovation will be created covering science and technology as also legal, financial and other related aspects. There is need to change the ways in which society and economy performs, if innovation has to fructify

6 Decade of Innovation Recognising the importance of innovation, the President of India has declared this decade as the Decade of innovation, with a focus on inclusive growth.

7 Innovation Ecosystem Innovation is the result of a complex set of relationships among key actors in the system such as Government, Education and Research Institutions, Finance, Individual Innovators, Customers/users and NGOs/ Civil Society & grassroots.

8 Some Key Indicators and Global Competitiveness Population crossed 1200 million mark( million in 2010) 550 million people below the age of 25 GDP of India has touched US $ 1.3 Trillion and is reported to be amongst the top 10 countries of the world Expenditure on R&D is 0.9% of its GDP India ranks 56th in the Global Competitive Index ( )

9 The 12 Pillars of Competitiveness Basic Requirements Institutions Infrastructure Macroeconomic environment Health and primary education Efficiency Enhancers Higher education and training Goods market efficiency Labor market efficiency Financial market development Technological readiness Market size Innovation & Sophistication Factors Business sophistication Innovation Source: The Global Competitiveness Report ; World Economic Forum Key for Factor-Driven Economies Key for Efficiency-Driven Economies Key for Innovation-Driven Economies

10 Support System for Innovation National Innovation Foundation (NIF) National Innovation Council Technology Business Incubators (TBIs) India Inclusive Innovation Fund Innovation Repository : India Innovation Portal

11 Need for Frugal and Inclusive Innovation India needs inclusive innovation to accelerate its growth. India needs more frugal, distributed, affordable, diverse, and malleable innovation that produces more frugal cost products and services that are affordable by people at low levels of incomes without compromising the safety, efficiency, and utility of the products. Nano (by Tata Motors)- a modern car that costs about 100 thousand. Providing access to mobile phone services to hundreds of millions of people in the country at a fraction of the cost at which they are provided in rich countries is another.

12 Innovation Requires Finance which is Supportive and Inclusive

13 Funding Schemes :Technopreneur Promotion Programme (TePP) Scheme of Department of Scientific and Industrial Research (DSIR), Ministry of Science and Technology Funds individual innovators without any collateral security Aims at generating prototype or process from the germination of an idea All Indian citizens are eligible to apply

14 Technopreneur Promotion Programme (TePP) contd For development of a prototype/process stage, an entrepreneur could get financial support of 75,000 to 150,000 For upscaling the the prototype to pre - commercialization stage, the financial support could be between 750,000 to 4.5 million Also has provision for financial support to start-up companies, the annual turnover of which does not exceed 4.5 million

15 New Millennium Indian Technology Leadership Initiative (NMITLI) Scheme of Council of Scientific and Industrial Research(CSIR) Largest Public-Private-Partnership effort within the R&D domain in the country Seeks to catalyze innovation centered scientific and technological developments as a vehicle to attain for Indian industry a global leadership position, in selected niche areas A proactive programme Provides financial support to all players in the project

16 New Millennium Indian Technology Leadership Initiative (NMITLI) contd Financial support is in the form of grant-in-aid to the institutional partners in public domain Soft loan with 3% interest to the private sector industrial partners having more than 50% of shareholding by Indians/Non-resident Indians Soft loan with 5% interest to the private sector industrial partners having less than 50% shareholding by Indians/Non-resident Indians but with manufacturing base in India

17 Drugs and Pharmaceuticals Research Programme (DPRP) Scheme of Department of Science and Technology Supports collaborative research projects of industry and institution Cost of the project at the institution is shared by government and industry Provision for soft loan(3% on reducing amount) to the Pharma Industrial R&D projects Loan amount upto 70% of the project cost is provided by DST Grant-in-aid is also provided to the Industry for Clinical trials for developing drugs for neglected diseases like tuberculosis, malaria, kala-azar, filariasis, etc

18 Technology Development and Demonstration Programme(TDDP) Scheme of the Department of Scientific and Industrial Research (DSIR) Aims to strengthen the interface between industry, R&D establishments and academic institutions Provides catalytic support for development and demonstration of innovative product and process Supports journey from proof of concept or laboratory stage to pilot stage, rendering them fit for commercialization Projects should aim at development of a new product or a process with attractive market potential

19 Technology Development and Demonstration Programme(TDDP) contd Supports upto 50% of the project cost Around 200 projects involving industrial units and scientific establishments, both in public and private sector, have been supported DSIRs share of about 1000 million in the total project costs of around 2500 million

20 Small Business Innovation Research Initiative SBIRI Scheme of the Department of Biotechnology(DBT) Supports high-risk pre-proof-of-concept research and late stage development in small and medium companies lead by innovators with science backgrounds Covers all areas in biotechnology related to healthcare, agriculture, industrial processes and environmental biotechnology, and bio-medical devices and instruments Supports start-up units, small and medium enterprises, as well any other private industry with not more than 500 employees in R&D

21 Small Business Innovation Research Initiative SBIRI contd Offers Phase I funding for showing proof-of-concept of innovations based on valid hypothesis, R&D aimed at product development (and not for academic purpose), development of lab-scale technology, refinement & validation of a technology at small scale etc Also offers Phase II funding for process/ product development, scale-up of technology, validation & trials, demonstration, commercialization of innovative R&D, etc

22 DST-Lockheed Martin India Innovation Growth Programme(IIGP) A nation-wide project, created to enhance the growth and development of India's entrepreneurial economy Equally funded by Department of Science and Technology (Govt. of India) and Lockheed Martin Corporation Was developed with the assistance of the Indo-US Science and Technology Forum, the University of Texas IC2 Institute and FICCI Goal is to accelerate the launch of Indian earlystage technologies into the global marketplace To bridge the existing gap between the mind and the market by connecting Indian innovators to the global marketplace

23 DST-Lockheed Martin India Innovation Growth Programme(IIGP) contd Features a competitive selection process Selected participants may receive specialized training and funding opportunities Top selectees are eligible to receive professional business development support to assist them in entering global markets Open to all Indian researchers, inventors, entrepreneurs and companies with early stage technologies that possess promising commercial potential

24 NASSCOM-ICICI Knowledge Park Innovation Fund(NIIIF) Launched by NASSCOM in collaboration with ICICI Knowledge Park Anchor investors are Tata Consultancy Services (TCS), Bharti Airtel and ICICI Knowledge Park created with the intent of providing seed stage investments Promotes Intellectual Property driven innovations in emerging technologies Targeted at early stage companies with a core focus on creating Intellectual Property, and academicians, researchers and incubates looking to commercialize inventions

25 Conclusion Efforts have to be made to nourish innovation, entrepreneurship and to address the skill requirements of a growing economy Barriers like skill shortage, insufficient pricing power to derive value from innovations etc. are affecting the pace of innovation in the country Barriers on corporate: lack of organizational focus on innovation as a strategy for growth and competitiveness, inefficient knowledge management systems within the companies and poor understanding of customer needs and market dynamics Govt. has recognized the importance of innovation and is working in the direction of creating an enabling environment for germinating innovations.

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