Understanding the Value Chain of Innovation

Innovation has become a buzzword, used extensively to convey different perspectives with social, economic and political underpinnings. This creates confusion in the mind of the people as to the nature and purpose of innovation and its relation with intellectual property rights. However, the expectations from innovation carry one commonality i.e. bringing something new to the respective field or providing effective/new solution to the existing problems comprising new technologies, new products, new services and whole new industries. Innovation is a necessity for economic growth as industries as well as products get matured in due course of time while the market demands new products and services. Innovation ensures creation and transformation of new knowledge into new products, processes or services according to market demands stimulating higher standards of living. In addition to this, innovation also carries surprises creating new demands and providing competitive advantage to companies.

The value chain of innovation runs through creating business, new jobs, and personal income with an ultimate aim of human progression. However, the term innovation is used in a very limited sense in present time as many people restrict the meaning of innovation as to the creation of new products through advanced technologies such as software, biotechnology, robotics so on and so forth having tremendous impact on economy. Moreover, there is a regional asymmetry as to the places too; places having industrial hub get prominence as compared to those, which are not that developed. This neglects the diversity of innovation that is rooted in society in different forms catering the local demands. Jonathan Aberman has in the Washington Post blog entitled “It’s time to broaden our definition of innovation” aptly maintained we need to stop unicorn hunting, and reset why innovation matters. We must give “innovation” back its broader meaning.” Many activities taking place in small places may provide viable solution to a given problem.

“Innovation improving life” was one of the ultimate goals of innovation reflected in the theme of the World IP Day 2017. The theme aimed at using innovation as a tool to bring positive changes in human lives and exploring how it is making human lives, healthier, safer and more comfortable, changing problems into progress. In effectuating such sort of innovation the drivers supporting innovative processes needs to be strengthened. Intellectual property is seen as such a strong driver in promoting innovative process in the present knowledge economy. However it needs a viable ecosystem in which it functions supported by basic infrastructure, robust R&D system and progressive business environment. Intellectual property supported by proper research and business ecosystem attracts investors and promotes innovation. The supporting mechanism for intellectual property may consist of basic infrastructure, an effective implementation machinery, and viable court system backed by a coherent policy framework.

In the value chain of innovation, one of the pertinent question is who can become an innovator and for whose benefit it is persuaded? Going for an inclusive innovation, one of the policy objectives should be making people realize that they can act as innovator to participate and contribute in economic progress and bring a change because of them and not without them. The other policy objective should be an equitable distribution of benefits of innovation among various stakeholders and public at large. Different fields need a different model of innovation e.g. information and technology, biotechnology and medical technology in healthcare needs a collaborative model of innovation. In the present age, individual efforts cannot result in meaningful innovation unless combined through a collaborative model in certain sectors. This opens the gateway for open and collaborative research. The proper understanding of all the integers of innovation value chain and a holistic approach to innovation may yield results improving life. Emphasizing on the relevance of innovation as a game changer Francis Gurry stated:

“With this year’s World IP Day campaign (2017) we are celebrating innovation and how it improves our lives. We are also celebrating all the risk takers, all those who have dared to bring about positive change through innovation”.

In India the definition of innovation varies from one sector to another and the context in hand. Many analysts now agree that macro-indicators such as ‘R&D, patents filed in a year, number of research papers and number of PhDs in science and engineering’ are inadequate to capture the realities of India’s innovation system. In India, financial structures that support innovation are fragile and disconnected and majority of publications from reputed institutions of science and technology are not routed to provide solutions. There is little follow up by the groups of institutions involved even if they try to provide solutions. Most patents are not commercially valuable but still maintained by various organizations due to lack of proper IP audit. Problems persist at the idea stage itself as the user’s needs, market demands and potential obstacles in bringing the idea to the market is usually not properly understood. Moreover, the bureaucratic hurdles, poor urban and rural infrastructure, weak industry-academia linkage and less innovative Micro Small and Medium Enterprises (MSMEs) are few other challenges before India’s innovation ecosystem. However, to make India a truly innovative country the fundamental challenges are: how to bring innovation to the grass root level?; how to recognize the potential of small inventors and innovators? and how to achieve the social purpose of innovation?

Despite these challenges, there are few sectors in which India has made great strides such as pharmaceuticals and automobiles. Indian pharmaceutical industries are providing low cost affordable medicines and innovative pharmaceutical products in major markets. Globally India ranked third in manufacturing pharmaceutical products by volumes. India has been the world’s second fastest growing car market since 2010. However, the average technology value added in manufactured products by Indian Industry is very low as India focuses ‘more on assembling and sales than on design and development, making the process very shallow.’ Whereas, MSMEs which are the backbone of Indian economy are facing great challenges and many of them have been shut down due to ‘financial non-availability, obsolete technology, infrastructural constraints, inadequate and delayed credit and managerial deficiencies.’

However, the Government of India has made tremendous efforts to encourage innovation in India through various policy initiatives. Many reforms are taking place in Indian legal and administrative system relating to intellectual property and innovation. The Government schemes are focusing on inventors, MSMEs and startups with all the support including financial support, rebates in patent filing, expedited examination process, incubation and intellectual property facilitation centers. However, the Government has to make a practical assessment of these initiatives so that its popular slogans such as “Make in India”, “Startup India” and “Digital India” should touch base with people’s life. This is only possible, if we connect all the dots of value chain of innovation with an inclusive and integrated approach. As an important constituent of innovation, intellectual property should be respected and valued by developing an intellectual property culture in India.

Dr. Kshitij Kumar Singh is Chief Editor of iprpolicy.com and is Assistant Professor at Amity Institute of Advanced Legal Studies where he teaches intellectual property.