On September 12, 2024, Prime Minister Narendra Modi launched the Anusandhan National Research Foundation (ANRF), backed by a substantial budget of ₹1 lakh crore over five years. This initiative aims to align academic research with industry needs, addressing inefficiencies observed in the U.S. research system, where despite spending over $130 billion annually on academic research, only 1% of university patents are commercialized [3dae1d51].
Sanjay Kumar Kar from BBN Times emphasizes that investment in research and development (R&D) is crucial for nations to enhance their economic standing. According to World Bank data, South Korea leads with 4.8% of GDP spent on R&D, followed by the U.S. at 3.46%, Japan at 3.27%, China at 2.41%, and India trailing significantly at only 0.65% [b843b1a0].
Sanjeev Sanyal, a member of India's Economic Advisory Council, has previously criticized the private sector for its low investment in R&D, which currently stands at 0.7% of GDP. This is significantly lower than the over 2% in the U.S. and 3% in China. Sanyal emphasized the need for increased private sector spending to foster innovation and maintain competitiveness [b5b3d2dd].
The ANRF initiative seeks to promote practical applications of existing technologies rather than focusing solely on basic research. IIT Madras serves as a prime example of successful collaboration between industry and academia, having developed affordable healthcare technologies that meet real-world needs [3dae1d51].
Despite India's gross expenditure on R&D rising from Rs 60,196.8 crore in FY11 to Rs 127,381 crore in FY21, the contribution from the private sector remains low at only 36.4% of GERD. This is in stark contrast to China and the U.S., where private sector contributions are significantly higher [b5b3d2dd].
In a related analysis, Arnaud Dyèvre from the London School of Economics highlighted the declining trend of U.S. government funding for R&D since the 1960s, which has decreased by two-thirds since its peak in 1964. He noted that while private R&D investment has tripled, a balanced mix of public and private R&D is essential for productivity growth. Dyèvre's research indicates that publicly funded patents are more impactful, citing scientific papers four times more than private patents, and that a 1% increase in public R&D leads to a 0.025% increase in firm productivity [27f086fb].
Sanyal's call for action and Modi's ANRF initiative come at a critical time when global competition for technological leadership is intensifying. As countries ramp up their R&D efforts, India's private sector must respond with urgency to ensure it does not lag behind in innovation and economic growth. India's manufacturing value addition to GDP was 13% in 2023, compared to China's 26%, highlighting the need for a robust R&D culture to reduce technology import dependency and enhance economic growth [b843b1a0].