“If
we had excellent technology managers then we should focus in a narrow
technology. We could be an inch wide and a mile deep.
But in the absence of that, it is safer to be a mile wide and an inch
deep.”
Mr.
Somenath Ghosh, Managing Director of National Research Development Corporation,
New Delhi, under the Dept. of Scientific and Industrial Research, coordinates
the technology transfer, technology innovation, IPR and related functions under
Ministry of Science and Technology. Mr. Somenath Ghosh
is an alumnus of IIT Delhi.
R&D
India project team met Mr. Ghosh to know the current activities of NRDC, trends
in technology transfer and technology innovation activities in general in the
country’s corporate sector.
Following
are the excerpts from the interview
NRDC
is a premier agency for transfer of technology. How does NRDC source the
technologies?
Technology
transfer takes through informal as well as formal methods.
NRDC is in touch with various research networks like CSIR, ICAR, ICMR and
other institutes of excellence. Over
the years, we have built linkages, and our people are in direct contact with a
lot of people. Plus, we have some expert committees with people from industry
and academic institutions. Our own in house expertise deliberates specific areas
and based on their linkages identify and inform us about the groups which we may
not be aware of. Technologies,
whether through NRDC networks or through external committee network, go through
an evaluative process by the expert committee.
We get the independent assessment of the work that is being done and
shortlist technologies, which are promising, and of commercial relevance.
Depending on the level of development we provide assistance directly by
NRDC or through other institutional mechanisms such as DSIR, DST, DBT etc. In
addition, we give marketing insights to research groups.
We help them patent the technology.
Quite often, we fund it directly or by joint
funding between the organization and NRDC.
To develop these technologies, to bring into a form, which is more
readily acceptable to the industry, some other inputs needs to be brought.
How
does NRDC assist the entrepreneur in transfer of technology?
There
is a gap between technology sourced from labs and the market needs. We need to
invest in building what is called the basic engineering package that may
comprise of the process diagrams, the PNIDs, the equipment list, electrical
instrumentation list, the line list, spot plan that are given as a package. This
is basically a starting point for an entrepreneur. We also usually invest in
doing our market survey. Once the entrepreneur invests his money, he wants his project
to be on in as short a time as possible. So,
in addition to the technology sourced from the labs, documentation makes it is
easier to convert into a bankable projects.
Quite
some work goes behind, as the technology that comes from labs would be in a raw
state. How does NRDC add value to the technology?
Significant
amount of work needs to be done just as you pick up a technology from the lab.
First of all boosting his level of confidence in being able to
commercialize his technology, taking a lot of risks.
Therefore the fees that we can earn in terms of licensing and royalty are
low. So we may value add so that NRDC’s licence fee and royalty
also increases, b) we also get
involved in the project. But we
can’t do this exercise for everything. That
is why we shortlist the technology. The expert group advises us which is the
subset of the technologies that need to be focused and taken further. We give
that input to the
researchers. Because the researcher
is typically far from the market and he cannot normally visualize that many
steps are involved in building the market.
There
are several organizations like CSIR, ICAR, ICMR.
They do basic research on their own.
They focus more on their specific interest rather than the market need
for a given technology. How are you doing the match?
A
lot of CSIR labs are already actively working on innovation Model.
Other networks like ICAR or Universities are still not that oriented. A lot of them are not even licensing model oriented.
They would just publish and get away with it.
We are trying to get the message across about the right way.
In fact, this was the trend even in the U.S. Over 15 –20 year period
there have been many legislations to support what is called an ecosystem of
innovation. For the researcher it
is mandatory to commercialize. They
need to look at the commercialization of whatever work they are doing very
seriously. In India, we are in the early stages of this innovation ecosystem. It has not evolved enough.
It is not yet legislation driven. Whatever is happening today is at a
voluntary level. Persuasive
methods are used to get people do things.
Does
NRDC earn a license fee even when it is not patented? Are these invariably new
technologies? And also, how is the license fee determined for technology
transfer?
These
are always new technologies because these are sourced from the research labs.
Today most of these are patented technologies.
But I would say if you go back ten years or more then the number of
technologies in a portfolio that were patented were quite limited because IP
activity was that much less in the country.
First
of all, what we take in is based on some perception of a market value.
There are certain technologies that we promote have social relevance.
So, those we give away just for a token fee, there is no royalty.
The fee could be as low as Rs.10,000.
There would be technologies that have a lot of commercial relevance and
demand in the market. These technologies would be from the life-sciences
segment. We have technologies, for
instance, some animal vaccine technologies that are in this bracket of a crore
or more.
We
are in the picture, but not very active. We
have set up linkage now with some tech transfer organizations in Europe for that
purpose. In particular, we would like to source technologies
especially in manufacturing sector, particularly electro-mechanical segment.
That is where we are weak and need the technology feed to traditional
manufacturing.
Does
NRDC interface MNCs in any way in technology transfer from them to companies
within India?
We
do represent some international research organizations or tech-transfer
organizations. We are in the
picture if it is something through that source.
But western MNC coming in India and setting up contract research facility
do research for their own requirement
and they do not necessarily file patents in India.
For the work they do in India, they need to first file the Indian patent
and then an international patent or PCT.
The MNC organizations do 70% of the work here, then take it back to their
labs in the U S, do the balance 30%, so they qualify
for filing in U S patent directly and then you see, India is a market
through PCT. NRDC is not in the
picture in this. In fact, it is in
their interest to keep NRDC out.
How
can we characterize the technology transfer model NRDC practices?
Actually,
there has been an evolutionary process in this concept of technology transfer.
Phase I is what we call the science-based model what was practiced in the
past, where researchers did research in labs, published papers. If somebody
wanted to use that information it was an open literature. He developed product
out of that. There was no licensing
revenue that went back to the researcher. That
is called open science model.
Next
model is called the Licensing model - researcher does the work in the lab, he
brings it to a point where he thinks it is complete.
Then he makes it available to Knowledge Transfer Organizations like NRDC,
and we go to the market trying to find a buyer for that.
Now we have moved to a third level which is called the Innovation Model,
where we try to bring in the entrepreneur and the researcher at a relatively
early stage, so that what researcher does gets the insight of the entrepreneur
who is bringing in the market feedback and they participate in finishing stage
of the development process. NRDC
manages that process.
What
are the different approaches to technology management taken by other countries?
In
Europe, you have two models which are worth studying, one is the Small Country
Model which is practised in Finland, Ireland, Israel
and the Large Country Model
which is to be seen in Germany, U.K., France.
Germany, U.K., France are adopting the U.S. Model. Finland, Ireland,
Israel have a different model. They
look at the niche areas and the government puts in a lot of effort, focus and
funding. The government attracts companies and directs the commercialization
process.
Nokia
is an example. Two decades back Finland was specializing largely in
textiles, shipbuilding and timber exports.
They had heavy machinery network for cutting and managing timber.
When for environmental reasons that was fading out all they had was the
skills of making heavy equipment. So,
they started merging heavy machinery skills with wireless telephonic skills.
They have developed the boring machines that can bore large tunnels below
the seas that are remotely controlled through wireless systems.
But that is entirely driven by the government directions.
The
Far East, Korea, Japan, China are following a model which is very different.
China’s internal markets are small. They have to look to global
players. So global markets are
addressed by these MNCs, which are equivalent to large trading houses in Japan.
These companies do market development, brand positioning and servicing
the market. Developing the product
is done by small research boutiques and manufacturing is done by another set of
automated lines. So, research and product development is outsourced.
Manufacturing is outsourced. The big companies would only build brands and do
the marketing, and overall technology strategy.
China
has a lot of new technologies to supply, at least for Indian markets.
How do they manage to get them?
Chinese
are doing the cost arbitrage in manufacturing.
Like we in India are doing cost arbitrage in service industry.
They are inviting people from all over the world, particularly Korea,
Japan, U.S. and Europe, to set up manufacturing facilities where they are given
basic inputs – land, electricity, water, raw materials plus labour at a fixed
price. But you may ask what do Korea gain by transfer of technology?
Are they not facilitating competition by
China? Well, the reality is if Korea is looking towards international markets,
and if they want to produce something at a half the price, they can’t do it in
Korea any more. They have to come
to China. Chinese have started
moving out. For instance, refinery
and petro-chemical segment, which is very advanced in terms of technology, they
have the required know-how. But
this segment is dominated by America. Chinese
are licensing the technology
to a U S Large Corporation, who markets that technology.
Sometime down the line they start using Chinese technology, as this is an
area where investment required are huge people tend to be cautious.
But at the low end, like mobile phones, consumer products etc. there is a
lot of Chinese technologies in use already.
MNCs
are setting up labs there to harness Chinese resources. In strict context of
technology management do they not lose skills in the long run?
Actually,
this goes in the name of contract
research, when they put up research facility either in China or in India,
the IPR is owned by the parent organization
in the U S or Europe. The inventor may be Chinese that doesn’t really matter.
The research is being done in these places under the contract research
agreement, and majority of the Agreements are arranged in such a way, that the
ownership of the intellectual
property rest with the parent organization.
There could be some contract research where joint ownership of the IP is
happening. But majority is with the
parent organization. Yes, in the
long run, they will be losing. But
industry does not look that longer. Governments
need to look at that longer.
Actually,
there is no such thing as fully conceptualized model.
It just evolves over a period of time, takes a shape.
We don’t have the approach of the Koreans.
We do not have as supportive as
ecosystem as it exists in the U S. There
is no body, which is collating the data.
In
India, though our research institutions have been around for a very long time,
the acceptance of research output from our labs into the industry is a recent
phenomenon. None of the cases have
been there for a very long time.
Of course, there is some element of research, which has been funding
project for a very long time. Our nuclear, defence, or for that matter space
programmes are entirely in house, because
there was a blockade against tech-transfer by developed world.
But that programme is not developed through commercial process. It is not
through a licensing process. What
we are looking at in that tech-transfer is the commercial domain.
The tech-transfer in the commercial domain is in the drug, pharma,
biotech sectors and now the automotive sector.
How
do you see Indian R & D environment and innovation capability? Has
sufficient R & D being taken up?
I
am sure, there is a lot of potential. We
have been able to conceptualize complex designs. I am talking
about Ratan Tata’s one lakh car. It
is totally a new concept. Designing,
engineering has been thought out from the scratch.
Even existing cars Indica, Indigo from Tata or Mahindra’s Scorpio
etc. have come up through Indian industrial engineering and are all
indigenously designed, manufactured. Intellectual
inputs are being in terms of overall design and putting the system together.
Indian automotive industry is growing rapidly.
It is developing and getting into doing new designs.
The
very fact that we had very successful programmes like the space-launch programme,
the Nuclear Energy Proramme, the
defence-related programmes despite complete isolation.
There may be delays in some of these programmes.
But, the fact is that these things have come up and success is visible.
I am sure there is a lot of creativity.
But, if you ask do we not have the genius to create block-buster
products, which could get the international or global mind-share, like
Sony creating walkman in the eighties or ipod from Apple Computers or the mobile
telephony which is a 10 year old phenomena, discovering internet, Google search
engine, etc. Whether we can come up with product of that nature.
I don’t know. But considering a very large proportion of the technical
professional working in these corporations are Indians.
To that extent we have the potential.
But
I don’t know whether we have the leadership we do not perhaps have the system
where the leadership is going to be backed with funding, early stage funding to
support an idea. Not even the mightiest army can stop an idea whose
time has come. We don’t have those mighty armies who can tap the
ideas. Ideas in India get killed.
We need to build supportive mechanisms that propel such ideas.
NRDC
takes care of some of these ideas. We
are one off. We can only nurture by giving some technical direction. In
terms of our ability to bring in funding, we have very limited resources.
We do participate and within the government system it is not very easy to
angel fund. We need to really fight
out at many levels.
Well,
if you see the investment in R & D Programme in India, the budget may be
equivalent to one large Fortune-500 companies.
In terms of scale, perhaps we are not investing now.
But in terms of breadth yes,
we are into many diverse areas; we are supporting many different ventures.
If I am asked whether it is a conscious strategy and could
it have been better? Well,
I would say there is no such thing as better or worse.
If we had excellent technology managers, yes, then we should focus in a
narrow technology. We could be an inch wide and a mile deep.
But in the absence of that, it is safer to be a mile wide and an inch
deep.
As
to the output from our labs there are different grades of work being done in
different places. In some
institutions work quality is pretty good. You
have to see from the point like many of the networks that we have in India
agricultural network or the medical network, these social contexts have been
extremely strong and are holding to them over the last 50 years.
So whatever work being done and developed till recently was given away as
free for social benefit. Now,
we are trying to change that mind-set. Also,
considering there is a need to fund a lot for research some of our research has
to become self-generating.
Funding
at our disposal for S&T is limited. Yet, our agencies find it difficult to
use the funds fully. How do we explain this?
We
often do not use the S&T budget allocation in government departments. That
in fact is a part problem with the science management process. This could happen
also because project administrators are not willing to take the risk with people
who are coming for the funds. It
could also be true that there may be not enough good projects that are coming
for funding. May be the processes are so cumbersome and so time consuming
that they don’t want to come here. Funds
are there. But it is not being
fully utilized. There are many
reasons for that. We
have to be a little more risk-oriented; government has to become a little more
risk-oriented. Government works as
a control mechanism. Instead we
have to become a supportive mechanism.
The
number of Indian patents filed in India and out of India internationally is very
small. If we say, we are a part of knowledge economy, then we need to own
knowledge that translates into business proposition.
If I have a patent, only then I can convert into a product. In India,
perhaps today even a non-patented technology
can be converted into a product because the competition is a lot less.
In the international market you can’t do that. Because even if you convert it into a product, somebody else
takes a patent on that and he will sue you!
If we say, we are a knowledge player, and going to be a dominant one in
fifteen or twnety years hence, we better own that intellectual property.
We do have a fairly extensive support programme for research in many
diverse fields. But if you don’t
invest a fraction of those funds into protecting the ideas, both in India as
well as internationally, I think we are just losing all that.
After patenting, you also need to have a muscle, a legal muscle to file a
case against, if somebody copies the patent, and we need to grow into that game.
If
you see our patent office records as it is today, about 4,000 patents are filed
in India from Indian institutions out of the total of about 17,000 the last year
and 20,000 this year. So, balance of 15,000 would be the PCT applications that
others are filing in India.
MNCs
are filing patents for the work that is done here in the U S, because they have
the culture of filing patents. In
India, the culture of filing patents is weak.
Even for the work that we are doing. To file a patent in India doesn’t
cost very much but still not enough patents are filed.
Only
10% of the Indian large companies invest on R & D.
How can this situation be improved?
Traditionally
in India technology infusion has been through JV routes.
Indian companies go abroad, identify the product line and a JV is
effected. Local people get trained
to do manufacturing. There was time
when we were a closed market but if you are looking at global markets we need to
have the latest technology at the best price possible. This old route may not give you the best price and the latest
technology. If you want to be a
global player, you have to start generating your own technology and you have to
own the IP for that technology. We
see that happening in drug/pharma and automotive sectors, as more such research
linkages are getting established.
You
have the macro view of what is happening apart from IT, pharma, automotive.
What other sectors show promise of marketing in the next 5-10 years other
than technologies product groups that show an early sigh of maturing.
One
area which is promising and we need to look at is products based around nano
technology. A lot of activities are
happening, though very little of that has reached the commercial deliveries. We
have funded nano ventures. We are
fairly deeply involved in quite a few of them.
Is
the technology policy that we adopted during the license raj showing its real
face by leaving us backward in R & D? Now
MNCs come up with R & D set up and harvesting better benefits from the same
stock.
What
we have to appreciate is that in very limited budget India has been able to
generate fairly large, diverse skill set of fairly good quality.
Whether we get the best of the profits from our research institutions or
MNCs get is a different issue. Perhaps
we ourselves do not have the support system in place, MNC research perhaps could
be able to do that and therefore contract research is becoming so
prominent/active sector in India. Perhaps
in no other country MNCs have set up backend R & D establishments in as many
numbers as has happened in India.
NRDC
gives awards. How do you select the
products / innovations for this?
We
release advertisements in various publications
. We have people on the
field and when they find new technology interesting, they invite them to apply
for the award. We got around 100
applications from which to select five products were selected last year. There
are two kinds of applications that come to us.
One is the tech or IT driven. This
is a small percentage. Very large
number concerns those with social relevance. - Someone improving something in
agriculture sector - processing of millet etc.
Last year the prize went one from IOC refinery.
There was a full garlic-pealing machine. This is something, which could be used in a hotel or a large
hospital. There is a blend
originator for open-heart surgery. Some
of these could be high tech some
low one, but of social relevance. We need to encourage all.
Innovators or innovations do not necessarily sprout
in an organized way. Till
now we are not strictly differentiating between high and low tech.
But we are looking at different models and considering working at three
levels: (1) NRDC innovation awards,
(2) societal awards (3) the students awards.
We will have that from 2008.
How
do you see a future for NRDC and innovations in India?
For
sure there is tremendous future ahead of us.
We have to get the mix right. Within
whatever we have we can be proud of our achievement. NRDC’s role would be more
significant because the game is just beginning to unfold. We have to ramp up the
volume of patenting. In the
years to come NRDC would remain in the front, as there is nothing of this type
in the private sector. This is also
not a viable option for private sector. Some legislative changes are due to
bring things to a higher plane. Pick up in manufacturing activities would
inevitably increase the innovativeness and this makes NRDC more important in the
coming years. NRDC has the
experience that the country has to look up to.