Seek deeper, jugaad alone won't cut it
DeepSeek upending American AI power and cost assumptions is a wake-up call. Among India's strengths is its capacity for jugaad, which has resulted in several high-quality outputs that meet global standards at low cost. The pharma sector and India's frugal space programme are two examples.
Keeping that in mind, falling behind on innovation and R&D will hinder such prowess.
GoI recognises the importance of investing heavily in R&D. This is evident from several interventions, such as Atal Tinkering Labs in schools, Anusandhan National Research Foundation for basic research and prototype development, and the Powering Innovation, Research & Development Fund. India's gross expenditure on R&D doubled between 2011 and 2021.
Yet, it remains a poor spender, investing a piddly 0.64% of GDP, compared to the global average of 1.79%. Increasing investment will require the private sector — which contributes 36.4% of GDP, compared to at least 75% in the US and China — to step up.
Higher public spending, while welcome, is difficult. Instead, GoI should focus on fiscal and policy interventions to increase financial mobilisation from all sources.
It should leverage public funds and institutions like IITs, IISERs and the CSIR network, for effective PPPs. Creating hubs and platforms, similar to SEZs, will incentivise innovators by pooling resources and creating risk guarantees. Improving transition from lab to practical applications and commercialisation will attract more investments.
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