the state of innovation in india
DESCRIPTION
Presentation on Intellectual Property Rights, Innovation and Competitiveness. The talk was delivered at an event organised by NBR and Waseda University.TRANSCRIPT
IPR In IndiaInnovation and Competitiveness in India’s context
Dr Amit KapoorPresident and CEO, India Council on Competitiveness
Honorary Chairman, Institute for Competitiveness
Is there any link between Innovation and competitiveness?
20 25 30 35 40 45 50 55 60 65 702.50
3.00
3.50
4.00
4.50
5.00
5.50
6.00
3.84
4.08
3.04
3.79
4.01
5.085.16
4.53 4.48
3.72
4.36
5.18
3.803.77
4.15
4.344.37
3.213.09
3.89
3.66
5.24
4.60
4.89
4.234.42
3.67
4.134.31
4.53
5.29
3.824.01
3.60
4.71
3.60
5.50
5.08
3.53
4.22
5.49
3.71
4.044.10
2.79
3.653.82
5.46
4.28
4.71
4.21
4.57
4.03
4.984.95
4.42
3.98
5.47
4.254.42
3.93
4.96
4.51
3.73
4.50
3.683.73
4.51
5.17
3.413.25
5.16
3.43
4.454.52
4.27
4.03
3.83
4.234.21
3.24
3.963.81
5.45
5.20
3.82
3.44
5.35
4.46
3.42
4.43
3.59
4.244.40
4.48 4.54
5.24
4.304.374.27
5.06
3.703.90 3.91
5.65
4.15 4.224.35
4.55
4.19
3.55
5.41
5.70
3.93
3.57
4.66
3.953.96
4.46
3.56
4.14
5.33 5.415.54
4.04
3.32
4.23
3.86
3.54
f(x) = 0.0520559406635344 x + 2.29194675173707R² = 0.798777795369209
Competitiveness And Innovation Scores for Countries
Global Innovation Scores according to the Global Competitiveness Report 2014 on a scale of 1-100
Glo
bal C
ompe
titive
ness
Inde
x Sc
ores
on
a sc
ale
of 1
-7 a
ccor
ding
to
Glo
bal C
ompe
titive
ness
Rep
ort
201
4-15
Links between Competitiveness and Innovation
0 5 10 15 20 25 30 35 40100
1000
10000
100000
1000000
1047065
434096
121819 9295180561
458214342942937
21811
1838917326
162961580815508
1469210370
9876
75526942
60155719 4265
40533438
2570 2491
16981586
1568
1216955
Patents Granted by USPTO (Foreign Country of Origin)
CAGR Growth rate of Patents granted from 2003-2013
Tota
l Num
ber o
f Pat
ents
file
d in
201
3 on
a lo
g sc
ale
Patents Granted by the USPTO
1000 10000 100000 1000000 100000001
10
100
1000
10000
844
1
6746
25
890
23
645
287
4035
115
1167
257
111
2540
11
6
2
18
44
10778
4
1212
12
478
50
441
f(x) = 0.00149778512504157 x − 137.523769039565R² = 0.760365849529645
Patent and GDP Data for States
GDP of the state in Rs Crore in 2012-13 on a logrithmic scale
Num
ber o
f pat
ent fi
led
in 2
012-
13 o
n a
logr
ithm
ic sc
ale
Categorization of States as per the SCR 2014
Source: Institute for Competitiveness
City-State Economies
North Eastern Economies
Innovation Driven Economies (Per capita GDP Above 1500 USD)
Transition Economies (Per capita GDP 1300 to 1500 USD)
Investment Driven Economies (Per capita GDP 900 to 1300 USD)
Evolving / Changeover Economies (Per capita GDP 700 to 900 USD)
Factor Driven Economies (Per capita GDP less than 700 USD)
Are there any trends observed in IPR activity in India?
2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Filed 12613 17466 24505 28940 35218 36812 34287 39400 43197 43674
Examined 10709 14813 11569 14119 11751 10296 6069 11208 11031 12268
Granted 2469 1911 4320 7539 15261 16061 6168 7500 4381 4126
2500
7500
12500
17500
22500
27500
32500
37500
42500
47500
1261
3 1746
6
2450
5 2894
0
3521
8
3681
2
3428
7 3940
0 4319
7
4367
4
1070
9 1481
3
1156
9
1411
9
1175
1
1029
6
6069
1120
8
1103
1
1226
8
2469
1911 43
20
7539
1526
1
1606
1
6168 75
00
4381
4126
f(x) = 3344.09696969697 x + 13218.6666666667R² = 0.916841925347474
Total Number of Patents
Trends in Patents as per CGPDTM
Andhra Pradesh; 414; 7%
Assam; 16; 0%
Bihar; 21; 0%
Chhattis-garh; 15; 0%
Delhi; 812; 13%
Gujarat; 286; 5%Haryana; 123; 2%Himachal
Pradesh; 15; 0%
Jharkhand; 85; 1%
Karnataka; 814; 13%
Kerala; 123; 2%Madhya Pradesh; 50; 1%
Maharashtra; 1936; 32%Punjab; 44;
1%
Rajasthan; 36; 1%
Uttar Pradesh; 161; 3%
Uttarak-hand; 25;
0%
West Ben-gal; 303; 5%
Chandigarh ; 33; 1%
Others; 728; 12%
Ordinary Patent Applications by Indians, State Wise in 2007-08 (Total -6040, 17.15% )
Trends in Patents as per CGPDTM
Andhra Pradesh; 844; 9%
Assam; 67; 1%
Bihar; 46; 0%Delhi; 890; 9%
Gujarat; 645; 7%
Haryana; 287; 3%
Himachal Pradesh; 40; 0%
Jharkhand; 115; 1%
Karnataka; 1167; 12%
Kerala; 257; 3%Madhya Pradesh; 111; 1%Maharashtra; 2540; 26%
Odisha; 44; 0%
Punjab; 107; 1%
Rajasthan; 78; 1%
Tamil Nadu; 1212; 12%
Uttar Pradesh; 478; 5%
Uttarakhand; 50; 1%
West Bengal; 441; 4%
Others; 492; 5%
Ordinary Patent Applications by Indians, State Wise in 2012-13 (Total-9911, 22.69%)
Trends in Patents as per CGPDTM
USA ; 8606; 36%
Germany ; 2441; 10%
Japan ; 1806; 8%Switzerland ;
1327; 6%
Netherlands ; 1293; 5%
France ; 1224; 5%
Sweden ; 1001; 4%
United Kingdom ; 990; 4%
Republic of Korea ; 698;
3%
Italy ; 519; 2%
Finland ; 499; 2%
Canada ; 416; 2%
Australia ; 404; 2%
Belgium ; 352; 1%
Israel ; 339; 1%
Denmark ; 302; 1%
Republic of China ; 263;
1%
Spain ; 155; 1%Austria ; 157; 1%
Norway ; 108; 0% Others; 991; 4%
PCT National Phase Applications 2007-08
Trends in International Patents as per CGPDTM
USA ; 8745; 31%
Germany ; 3364; 12%
Japan ; 4939; 17%
Switzerland ; 1380; 5%
Netherlands ; 1148; 4%
France ; 1390; 5%
Sweden ; 885; 3%
United King-dom ; 991; 3%
Republic of Korea ; 584;
2%
Italy ; 534; 2%
Finland ; 321; 1%
Canada ; 438; 2%
Australia ; 325; 1%
Belgium ; 321; 1%
Israel ; 285; 1%
Denmark ; 335; 1%
Republic of China ; 957;
3%
Spain ; 203; 1%
Austria ; 252; 1% Norway ; 136; 0% Others; 902; 3%
PCT National Phase Applications 2012-13
Trends in International Patents as per CGPDTM
2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Filed 92251 78996 85699 103419 123514 130172 141943 179317 183588 194216
Examined 89958 72091 77500 85185 63605 105219 25875 205065 116263 202385
Registered 39762 45015 184325 10936 100857 102257 67490 115472 51735 44361
25000
75000
125000
175000
225000
9225
1
7899
6
8569
9 1034
19 1235
14
1301
72
1419
43
1793
17
1835
88
1942
16
8995
8
7209
1
7750
0
8518
5
6360
5
1052
19
2587
5
2050
65
1162
63
2023
85
3976
2
4501
5
1843
25
1093
6
1008
57
1022
57
6749
0
1154
72
5173
5
4436
1
f(x) = 13576.6606060606 x + 56639.8666666667R² = 0.933475743789885
Total Number of Trade Marks
Trends in Trademarks as per CGPDTM
2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Filed 3357 4017 4949 5521 6402 6557 6092 7589 8373 8337
Examined 3228 4017 4719 4976 6183 6446 6266 6277 6511 6776
Granted 2547 3728 4175 4250 4928 4772 6025 9206 6590 7252
500
1500
2500
3500
4500
5500
6500
7500
8500
950033
57 4017
4949 55
21
6402
6557
6092
7589
8373
8337
3228
4017
4719 49
76
6183 64
46
6266
6277 65
11 6776
2547
3728 41
75
4250 49
28
4772
6025
9206
6590 72
52
f(x) = 547.757575757576 x + 3106.73333333333R² = 0.944519437696896
Total Number of Designs
Trends in Designs as per CGPDTM
2008-09 2009-10 2010-11 2011-12 2012-13
Filed 44 40 27 148 24
Examined 21 46 32 37 30
Registered 45 14 29 23 21
10
30
50
70
90
110
130
150
44 40
27
148
2421
46
32 3730
45
14
2923 21
f(x) = 6.8 x + 36.2R² = 0.0431053769856068
Total Number of GI's
Trends in GI’s as per CGPDTM
IP Regime in India
• The Patents Act, 1970 and Patent Amendments 1999, 2002 and 2005
• The Trademarks Act, 1999 and the Trademarks Rules 2002
• The Indian Copyrights Act, 1957
• The Design Act, 2000 and Rules 2001
• The Geographical Indications of Goods (Registration & Protection) Act, 1999 and
2002
IP Regime in India
Who administers the IP laws in India?
Ministry of Commerce and IndustryDepartment of Industrial Policy and Promotion
Office of the Controller General of Patents Designs and Trademarks
The Geographical
Indication Registry at Chennai
The Patent office (including
Design) at Kolkata, Delhi, Mumbai and
Chennai
The Trademark Registry at
Kolkata, Delhi, Mumbai,
Chennai and Ahmedabad
Patent Information System at Nagpur
Rajiv Gandhi National
Institute of Intellectual
Property Management at
Nagpur
Office Structure of IPR under DIPP
Analytical Tools: IPR and innovation in India
• Porter’s Diamond Model
• Porter’s Five forces Model
• Value Chain Analysis
Context for Firm Strategy and
Rivalry
Related and Supporting Industries
Demand Conditions
Local rules and incentives that encourage investment and productivity are decreased:• Lower salaries due to low end work• Lower capital investments as mutinational companies
want adequate standards • Lesser incentive to innovate as knowledge is not
adequately protected • Competition between companies becomes more
distorted as a there level playing field is not present • Companies reduce spending on R and D as a they
expects others to invest while they reap the benifits
Sophisticated and demanding local customers and needs e.g.,
• Strict quality, safety, and environmental standards are not met as IPR laws are weaker.
• Greater Imports as companies not able to meet sophisticated demand
• Government procurement of advanced technology as no laws in place
Distortion in access to high quality business inputs especially in • Information • Scientific and technological
infrastructure• ‘Intellectual’ capital is not being
recognized• In case of no protection this may
result in companies’ having no incentive to innovate
Factor Conditions
• IPR rules if they are not adequately present or clear • Distort incentives to share knowledge • Adverse impact on innovation at the related and
supporting industry level• It also results in a reduced network effect in clusters as
different firms in clusters are adamant in sharing their business knowhow
The Diamond as applied to India
Threat of Substitute Products:• Low• People still like the convenience and social
status of owning a vehicle. • There is tussle between private vehicles and
using public modes of transportation. • It will take a lot of time before India starts
using integrated mobility platforms
Bargaining Power of Suppliers:Medium-high. • Large number of suppliers for
various API Inputs .• Suppliers are mostly chemical
units. • Clusters in the west and
south particularly around Gujarat and Maharashtra and Telangana and Andhra Pradesh.
• Medium- High• Buyers have rising
disposable incomes due to growth of the economy
• Buyers have a range of segments and players to choose from
• Doctors act as significant influencers for Buyers
Threat of New Entrants:Low• Technology and capital Intensive business• Pharmaceutical drugs are a necessity • Huge marketing, sales, branding and
regulation prevents new players from coming in.
• Know how of Indian conditions is a must for entry into the business
Rivalry amongst Existing Firms:High• Tough Competition (>35 players) among
existing players to capture market. • For generics the basis of competition is cost
rather than innovation and R&D.• Value is driven by relationship with doctors as
well as the fact that the drug is branded or generic
• Disruptive innovation is observed in certain select cases.
Bargaining Power of Buyers:
Porter’s 5 forces
Compound
Generation and
Screening
Lead Optimiz
ation and
Development
Drug Candid
ate
Precedented Target
Generics
Target Existing
Drug Concep
t to Emulat
e
Target Existing
Drug Concept
to Emulate
New Concept Target
Drug Discovery and Development Clinical Trials
Pre Clinical testing
Phase I and
Phase II Clinical Trials
Phase III and Phase
IV Clinical Trials
Phase III and Phase
IV Clinical Trials
Bio Equival
ence Testing
High Yield
Chemistry
Drug Intermediates
and Active Ingredi
ents
Drug Produ
ct
Manufacturing
Target Biologic
al Pathwa
y
IP Value chain of MNC’s versus that of an Indian Player
Source: Michael. E. Porter and Authors Analysis
InboundLogistics
(e.g. Incoming Material Storage, Data Collection,
Service, Customer Access)
OutboundLogistics
(e.g. Order Processing,
Warehousing, Report Preparation)
After-Sales Service
(e.g. Installation, Customer Support,
Complaint Resolution, Repair)
M
a
r
g
i
n
Primary Activities
Firm Infrastructure(e.g. Financing, Planning, Investor Relations)
Procurement(e.g. Components, Machinery, Advertising, Services)`
Human Resource Management(e.g. Recruiting, Training, Compensation System)
Value
What buyers are willing to pay
• Relationship with universities (-)• Ethical Research Practices (-)• Product Safety (+/-)• Conservation of Raw Materials (-)• Recycling (+/-)
• Financial Reporting Practices (+/-)• Governance Practices (+/-)• Transparency(-)• Use of Lobbying (-)
• Education and Job Training (+/-)• Safe Working Conditions (-)• Diversity and Discrimination (+/-)• Healthcare and Other Benefits (+/-)• Compensation Policies (-)
• Procurement Practices (e.g., Bribery, child labour,) (+/-)
• Use of Particular Inputs (+)• Utilization of Natural
Resources (+/-)
• Transportation impacts (e.g., emissions, congestions) (+/-)
• Emissions and waste (-)• Biodiversity and ecological impacts (-)
Energy and water use (+/-)• Worker safety and labor relations (+/-) • Hazardous Materials (+/-)
• Packaging use and Disposal (+/-)
• Marketing and advertising (e.g., truthful advertising) (+/-)
• Pricing Practices (+/-)• Consumer Information (+/-)• Privacy (+)
• Disposal of Obsolete Products (+/-)
• Handling of Consumables (-)
• Consumer Privacy (+/-)
SupportActivities Technology Development
(e.g. Product Design, Testing, Process Design, Material Research, Market Research)
This is where most patent producing multinationals focus
Operations
(e.g. Assembly, Component
Fabrication, Branch Operations)
Marketing& Sales
(e.g. Sales Force, Promotion,
Advertising, Proposal Writing, Web site)
This is where most Indian Generic Manufacturers focus
Value chain of a generic player and Impact on Society
Recent changes in the IPR Regime
• US Trade Representative’s (USTR)’s special 301 Report came out in April 2014 pointing to an Out-of-Cycle
Review.
• PM Modi’s first five-day visit to US started on September 27th, 2014 after which joint statement is issued
to ‘establish an annual high-level Intellectual Property (IP) Working Group with appropriate decision-
making and technical-level meetings as part of the Trade Policy Forum.’
• The Out-of-Cycle Review initiated by US on 14th October 2014.
• Department of Indian Policy and Promotion (DIPP) on 22nd October constituted an IPR Think Tank
(comprising of one chairperson and five other members) to draft the National Intellectual Property Rights
Policy
Steps for removing impediments
• Improvement in present IP regime
• Establishment of a special IP Court
• More research on linkages between better IP regime and greater innovation
• State level policy for improving Innovation
• Protection of Trade Secrets
• Dispute resolution through bilateral talks
Thank You