BUDGET BOOST NEEDED FOR MISSION-ORIENTED R&D PLAN

INNOVATION and technical progress are essential for economic growth.

- ADITYA SINHA

Central to this is the Schumpeterian paradigm of 'creative destruction' that posits new innovations render former innovations obsolete. This constant cycle of innovation is vital for an economy to thrive. For a country to compete globally, it must invest significantly in research and development (R&D). Despite this, India's R&D expenditure as a percentage of GDP has remained stagnant at 0.60.7 percent over the past two decades.

In stark contrast, other innovative economies have significantly higher R&D investments. China spent 2.24 percent of its GDP on R&D in 2020 and plans to increase it by 7 percent annually, according to its 14th Five-Year Plan. This has allowed China to outpace even the US in scientific and technological outputs. Countries like Israel (4.93 percent), South Korea (4.64 percent), Japan (3.26 percent) and Germany (3.09 percent) demonstrate much higher R&D spending. The private sector in India is not doing enough for R&D, but that would be discussed some other time.

In recent years, Chinese institutions have asserted dominance in global research, as demonstrated by Nature's 2024 research leaders' index. The Chinese Academy of Sciences (CAS) is on top, with Harvard University coming second. Notably, seven of the top 10 institutions on the index are Chinese, reflecting the nation's substantial investment in scientific research and its growing influence across natural and health sciences. This is a stark contrast to 2015, where CAS was the sole Chinese institution in the top 10, sharing the space with prominent institutions from the US, UK, Germany, France, and Japan.