Budget 2023: Why driving national goals with focus on R&D and digital clusters is the need of the hour

India has seen a significant increase in its research and development (R&D) expenditure in recent years, but it still lags behind other countries in terms of the percentage of gross domestic product (GDP) invested in R&D. India’s R&D expenditure as a percentage of GDP is only 0.7 percent, compared to 2.8 percent in the United States, 2.1 percent in China, 4.3 percent in Israel, and 4.6 percent in South Korea. This is reflected in the low number of researchers per 100,000 people in India, which stands at 25 compared to 441 in the United States, 130 in China, 834 in Israel, and 749 in South Korea. While India is fifth in the world in terms of the number of scientific publications, it ranks 11th in terms of citation impact, with only 15.8 percent of its publications appearing in the top ten journals, compared to 36.2 percent for the United States and 27.6 percent for China. Slow progress in innovation Despite these challenges, India is making progress in various areas of innovation, including university-industry collaboration, access to the latest technology, and capacity for innovation. However, the impact of these efforts is often limited and does not adequately address local needs and societal challenges. To improve the effectiveness of the innovation system in India, it is important to take a systemic approach and consider the relationships between enterprises, universities, research institutes, intermediaries, and governments. Focus on digital transformation vital As we make economic progress by directing our attention toward possibilities in the manufacturing and engineering segments, the focus on digital transformation will be integral to uncovering these opportunities and welcoming unserved and underserved sections into the financial fold. Doing so can spark employment opportunities in emerging tech clusters. The Karnataka government’s Beyond Bengaluru initiative via the Karnataka Digital Economy Mission (KDEM) is a successful illustration of this effect, injecting growth into pockets outside the capital with the primary aim of contributing to hopes of a $1 trillion digital economy by 2026–27. With KDEM’s efforts inextricably linked to the country’s economic prospects, we have a couple of expectations of the upcoming budget. Notably, we are hopeful it supports plans for the Emerging Digital Cluster Scheme (EDCS) and the Global Technology Excellence Center (GTEC) program. Emerging Digital Cluster Scheme (EDCS) Priming tier 2 and 3 regions by allocating an annual outlay of Rs 30,000 crore for this financial year toward the Emerging Digital Cluster Scheme (EDCS) is essential to building digital tech clusters everywhere. The financial impetus will help states develop their own digital economic missions and replicate what we’ve done here in Karnataka. Under their individual Digital Economy Mission Annual Plans, states can outline how they intend to establish these emerging clusters through policy, class-A infrastructure, investments, industry-academia collaborations, future digital jobs, and internships. We hope the central government will fund three quarters, with the states tasked with the rest: They can then aim to increase their digital economy share of the GDP by 30 percent while combining to contribute 35 percent to the national GDP. Through the scheme, we’d be looking at local employment of 50 lakhs through 100 new centres nationwide. The result would cause the digital economy to give rise to more IT/ITES industries by enticing global capability centres (GCCs) and programs hosting electronics system design and manufacturing (ESDM). And the benefits extend beyond the mentioned dimension above—the focus on emerging areas like healthcare, e-governance, and education, among others, will stimulate start-up activity. Global Technology Excellence Center (GTEC) Number two on our budget wishlist is desiring support in setting up 40 global technology excellence centres throughout India to generate R&D activity alongside start-ups and innovation networks. We estimate GTECs will have a defining role in accelerating research in evolving areas and will be the face of new Bharat’s R&D architecture. State governments should enable a separate program (Global Technology Excellence Centre Scheme) devoted to emerging technologies like AI/ML, medtech, ed-tech, clean tech, agritech, public digital assets, mobility, telecom, fabless manufacturing, and more. The scheme’s overall vast scope entails significant capital—we expect a contribution of Rs 250 crore for each center, totaling Rs 10,000 core to be set aside in this year’s budget. We expect the Indian government to satisfy over half the fund requirements—60 percent, precisely, with the state government and the industry chipping in with 25 percent, and 15 percent, respectively. We anticipate a period of 12 months to establish the program; on completion, it will put India among leading global peers in R&D, bringing about new IPs and earning worldwide recognition. Most importantly, these centres will elevate the industry further through globally competitive products and the creation of 25 lakh new employment opportunities by 2026. The writer is CEO of Karnataka Digital Economy Mission (KDEM), Views expressed are personal Read all the Latest News , Trending News , Cricket News , Bollywood News , India News and Entertainment News here. Follow us on Facebook, Twitter and Instagram.