Role of Intellectual Property (IP or IPR) in Innovation Driven Economy of 21st century as relevant to India

Almost 80% of global wealth is intangible in the form of Patents, Registered Trade Mark for the Brands, copyrights and in several other forms of intellectual property. — Dr. Dhanpat Ram Agarwal

We are in the era of knowledge and technology where Human Resource plays a vital role for economic development in any country. However, the Human resource has to be properly harnessed through proper education, skill development under a conducive environment for research and scientific invention and innovation for translating the ideas into assets. Thus there is potentiality for unlocking the hidden wealth which is intangible in the form of human capital. 

Research studies show that almost 80% of global wealth is intangible in the form of Patents, Registered Trade Mark for the Brands, Copyrights and in several other forms of intellectual property. Economic Resources are of three types-Human, Capital and Natural and of the three, the Human resource is said to be the richest resource as per World Bank study and contributes to 64 per cent of the total pie as against 16 per cent for capital resource and 20percent for the natural resource. In other words, Human resource is four times greater in value than that of capital resource and accordingly there is change in parameters about which country or company is rich or poor. India has the advantage to have very rich human resource with highest number of youth population in the world in the age group of 15-64.

In the new digital economy, Google, Facebook, Microsoft, Apple, Amazon or any such knowledge based organisations, innovation plays the most vital role. Intellectual property contributes to 34.68 per cent of the US GDP which is more than one third or about plus 7 trillion US Dollar which is more than double of India’s total GDP of 3.5 trillion US Dollar. The US Economy or the European Economy largely consists of IP intensive industry and the income from royalty, technical fees and copyright revenue from IP Assets in the form of Patent, technology and Brands is very high. We import not only goods and services but also technology and have to pay almost US$ 30-35 towards royalty and technical fees. Therefore there is a dire need for our country to develop its IP and innovation to promote our domestic manufacturing with the ownership of Indian corporates.

There is a direct linkage between R&D Expenditure and the numbers of inventions or the innovative products. In order to commercialise the inventions, you also need to have conducive investment climate for entrepreneurship. An inventor is not necessarily an innovator. Steve Jos or Bill gate were not a scientists but were innovator who could use the inventions of other scientists with the help of capital provided by the investors. Thus the trinity of invention, innovation and the investment together bring in economic growth in today’s era of innovation and technology. 

Therefore if a country desires to grow it has to have all three but the primary need is the research and inventions. It is unfortunate that despite having a very rich human resource and representing almost 18 per cent of the global population, we share hardly 4 per cent of the global GDP and US with a population of nearly 5 per cent of the global population shares more than 20 per cent of the global GDP. Our present spending on Research & Development is less than one per cent or 0.6% of our GDP as against China 2.15%, Germany 3.02%, Israel 4.54%, South Korea 4.55%, Japan 3.21%, UK 1.66% and USA 2.79% and the World Average is 2.2%.The number of Patents filed in India is also very low. In 2017-18 the total filing was 47854 of which almost 80% by MNCs although filing of patents have increased from 42763 in 2014-15 to 66440 in 2021-22, in the last 7 years. The average annual filing of Patents in China is more than 13 lakhs and in USA, Japan and South Korea, the average varies between 3-5 lakhs. Our private sector is responsible for not spending enough for the research and development. The present era is of competition and unless we spend on human resource and R&D, We will continue to depend on imports and this is the reason why automobiles or electronics or several other capital equipment are in demand but are either imported or are being produced by multinationals except very few by the domesticindustries.

IP Eco System needs improvement for creation, protection, enforcement, commercialisation and awareness as per National IPR policy which was declared on 13th May 2016 but lot of efforts are required to be undertaken in this direction and specially for the awareness at the school level where the budding ideas come from the young mind. Incubation centres need to be set up for nurturing the new ideas. The poor result of the expected demographic dividend is thus evident when we compare our GDP with other global indicators in the form of Global innovation index or the Human Development index or even the Hunger index. Grass root innovation and Jugad technology should be allowed to be patented as Utility Model as done in China and Germany and we can thereby encourage our MSMEs where lots of new ideas take place but our tedious patent laws do not allow them to get a Patent.

Traditional Knowledge can be protected and used more aggressively and our local culture, music and folklore can be protected and promoted at global level.Folk music, Folk dance and other local level intellectual property needs to be identified and protected. Similarly our geographical indications need to be protected and promoted through proper incentive for finance and marketing facilities to the local communities.Brain gain initiative by stopping brain drain and technological piracy and leakages should be stopped.

Artificial intelligence in the form of internet of things, machine learning, robotics, block chain technology has to be developed in the new industrial revolution which is I-4. Domestically manufactured local goods have to be made more qualitative and competitive under Make in India, Skilled India and Start up India initiative. It will reduce our dependence on imports and reduce our current account deficit and make us more self- reliant. Our exchange rate can improve only by improving our innovation index with more start-ups and manufacturing of qualitative goods at competitive prices and thereby reduce our dependence on imports and thereby not only conserve the precious foreign exchange but also increase our exports. We can make our country more prosperous by creating more jobs for our youth and take advantage of demographic dividend and ultimately reduce or eliminate poverty.          

Dr.Dhanpat Ram Agarwal: Director, Swadeshi Research Institute, Kolkata & National Co-Convener, SJM

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