Economics
Context: A petty patents regime could encourage domestic enterprises to undertake minor adaptive innovations
- India’s rank of 46 in WIPO’s Global Innovation Index (GII) 2021, up from 81 in 2015, is encouraging.
- India, which aspires to emerge as one of the largest economies of the world, needs to move up further in the innovation rankings, for building self-reliance in technology, especially in the context of the incipient digital revolution.
Stats
R&D
- Gross R&D expenditure (GERD) as a percentage of GDP at 0.7% is low.
- Only about 30% of the GERD is spent by business enterprises, despite the generous tax incentives offered by the government.
- This suggests that Indian enterprises have not got into an R&D culture.
Innovation
- The number of patents registered by residents is another indicator of innovative activity.
- In India the bulk of innovative activity is conducted by a handful of companies in the pharma and auto sectors
- The patent filings by Indian enterprises and other institutions have increased from 8,841 in 2011 to 23,141 in 2020 (WIPO). However, patents granted have been only 776 and 4,988 respectively.
What’s need to be done to boost the R&D activities of Indian enterprises?
Partial funding
- In India, R&D activities have been encouraged mainly through weighted tax deductions.
- Partial funding by government for specific R&D projects undertaken by business enterprises may be desirable to develop products or processes, thus strengthening competitiveness.
Petty patents
- Another policy to promote local innovation could be to protect minor innovations through the so-called utility models or petty patents, as has been done by several East Asian countries.
- The patent system fails to encourage minor innovations since the criteria for inventiveness tend to look at the novelty of the invention.
- Petty patents and industrial design patents could be effective means of encouraging domestic enterprises to undertake minor adaptive innovations
- India should consider adopting a petty patents regime that provides limited protection to minor incremental innovations made, especially those by MSMEs, often called jugaad.
- The utility models or petty patents typically provide a limited period of protection (5-10 years in contrast to 20 years in case of patents) and have less stringent requirements and procedures.
India’s rising rank in the global innovation league suggests its potential, opportunity, and stakes in boosting the R&D culture among business enterprises to strengthen their competitiveness. R&D funding and petty patents could help India climb the ladder.
Source: The Hindu
