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 Intellectual Property Rights
Looking Beyond The Hype
The Times Of India, India Wednesday, June 30, 2010

People have a very narrow conception of innovation. We should never forget that innovation can be driven only in a profit oriented society. The great Economist Joseph Schumpeter stressed this point. For innovation , intellectual property rights and various other frameworks are necessary, writes Sumit Bhaduri in The Times Of india.

Is big-bang innovation about to arrive in India or is it struggling due to judicial intervention and inadequate protection of patent rights? Several recent newspaper reports indicate that while talking about 'innovation' may be the flavour of the month, what it takes to make it happen is either not understood or willingly glossed over. It must not be forgotten that the primary driving force behind innovation is that of making profits, what the celebrated economist Joseph Schumpeter termed entrepreneurial "raw instinct". An Austrian who also taught at Harvard, Schumpeter was probably the first economist to elaborate on the incredible power of technological innovation in the growth of a capitalist economy and coined the phrase "creative destruction", something that is brought about by new technologies replacing the old ones.

The game of innovation in the 21st century reflects the spin and hype of our time but the most discernible changes are those brought about by globalisation. Low-cost labour in the developing world and uniformity in patent rights in more than 100 nations are the two factors that have had maximum impact on the innovation process. An educated workforce with specialised knowledge and abundant spending on research are critically necessary for any innovation. However, for a commercially viable technological innovation there are many other factors such as intellectual property law, tax codes, patent procedures, export controls, credit policies etc that come into play. The apparently conflicting signals from the innovation scene in India are to be understood against this backdrop.

... ...

This is evident from a cursory examination of the number of granted patents to Indian corporate houses in the US patent database. As the patent examination procedure in the US, though far from ideal, is a lot more rigorous than in India, it is that much more difficult to get away with false claims of novelty. Buying turnkey technologies from the West by paying hefty licence fees has been the only visible technology strategy for almost all large Indian corporate houses. Is there any reason to think that the setting up of an innovation park would either propel them towards serious R&D or tempt them to change their technology buying habits?


Discovering a new drug is a different ball game. It is a very expensive and lengthy process that requires integration of several scientific disciplines and associated skills and, like most major discoveries, a considerable amount of luck. All over the world, large pharmaceutical companies are trying to cope with the increased cost of R&D and reduced numbers of new drugs. There may be an opportunity for innovation there but it is difficult to see how issues related to risk, ownership and cost are going to be resolved in an innovation park set up with scientists from 100 nations.
Innovation with an Indian face can only happen when corporate houses walk the talk by aligning their Schumpeterian "raw instinct" with the PM's oft-quoted words about 'technology-led accelerated inclusive growth'.

This article was published in the The Times Of India on Wednesday, June 30, 2010. Please read the original article here.
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