India's Research Output: Quantity increases are sustainable, but enhancing quality is a bigger challenge

India’s share of world research output (3.5% in 2010) has been on an increasing trend since the late 1990s, but this growth is completely overshadowed by that of China. The citation impact of India’s research, though rising, continues to be below the world average. These are the main findings of a recent study undertaken by Thomson Reuters on behalf of the Indian government’s Department of Science & Technology (DST).

Access to Relevant Innovation Indicators

When I first started formal study of India’s innovation system a decade ago, finding relevant data on key innovation indicators was a major challenge. The global comparative studies of innovation such as the Global Innovation Index had not started at that time, databases were not that powerful, and even when databases existed, our access to them was limited. India’s own statistics painstakingly compiled by the Department of Science & Technology were restricted to research and development narrowly defined, and available with a lag of a few years. Given these data limitations, tracking trends in any kind of time frame that would be useful to policy-makers was a difficult, if not impossible, task.

Fortunately, that situation has changed. Globally, databases have become more sophisticated, database vendors see India as an important market, and are therefore making a serious effort to compile and present data that is relevant to us (and other developing/emerging market countries). Perhaps most important is the fact that policy-makers today realize the importance of such data in informing policy formulation.

Measuring Research Output

As I discussed in From Jugaad to Systematic Innovation, one of the important innovation indicators for any country is its research output. The simplest measure of a country’s research output is the number of research papers published by people working within its borders. While not all research is necessarily “useful,” a vibrant research community that furthers the stock of knowledge is considered an important pre-requisite of a modern nation. In R&D-intensive fields such as Biotechnology and Nanotechnology, this research activity often feeds into industrial innovation – e.g. today new drug discovery draws directly from the latest advances in different sub-fields of Biology. The ability to publish in journals with a strong review process indicates that scientists have inculcated the scientific method.

During a recent web search, I was pleasantly surprised to find a fascinating report on India’s research publication output during the period 2000-2010. This report reflects the results of a study undertaken by Thomson Reuters for the DST, and the DST’s conclusions from the study. Thomson Reuters is particularly well placed to make such a study as its Web of Science is one of the best regarded publication databases in the world. Only journals that are published regularly and have a credible review and selection process are a part of the Web of Science. (A competitive offering, Scopus, covers a larger and more geographically dispersed set of journals, but has been in existence for a shorter period of time and hence is not as useful to track long-term trends).

India’s scientific output, particularly vis-à-vis China, has been a subject of concern to the Indian science academies, the Scientific Advisory Council to the PM and the Indian government for some time. The first time I was exposed to these concerns was 7 or 8 years ago when I was invited by Dr. Mashelkar to speak on trends in China at a brainstorming session organized by the Indian National Science Academy in Delhi. It’s good to see the government diving into the details, and I hope we’ll see policy actions directed towards these issues.

Highlights of the Recent Thomson Reuters Report

• In 2010, India’s share of world research output was 3.5%.
• India’s share of world’s research output was on a decline from 3.1% in 1981 till the mid-1990s, and regained the 3.1% mark only in 2007. The current trend is therefore an ascending one. [As a benchmark, China’s share of world publications increased from 2.5% in 1996 to 11.7% in 2010, placing it at #2 globally!].
• In terms of disciplines, India’s share of world publications was highest in Agricultural Sciences, Plant and Animal Sciences and Chemistry in 1981. In 2010, the three disciplines in which India had the highest shares were Chemistry, Materials Science and Agricultural Sciences.
• Indian research still has relatively low impact, though this has improved over time. In 1981-85, India’s citation impact was 0.35 (compared to a world average of 1). By 2006-10, this had improved to 0.68.
• The disciplines in which Indian research has the highest citation impact are Psychiatry/Psychology (0.99), Engineering (0.95) and Physics (0.82). This means that the citation impact of research in India is below the world average in every discipline, but in at least two disciplines we are approaching the world average,
• In the period 2006-10, 20% of Indian papers received more than the world average of citations, and 35% received less than the world average. 45% of Indian papers received no citations at all.
• 2.7% of India’s papers received more than 4 times the world average of citations, and are labeled as highly cited papers. In 2006-10, Engineering had the highest proportion of highly cited papers (6.5%) and shows an upward trend on this dimension, while both Chemistry and Physics showed a downward trend in highly cited papers.
• India has 2.3% of the world’s researchers and accounts for 1.6% of world spending on R&D. India’s spending on R&D per researcher is about 80% more than that of China, but about half that of the US (in 2007, in PPP dollar terms).

What Needs to be Done

The good news from this report is clearly that the downward trend of research output that began in 1981 was arrested by the mid-1990s, and India’s research output has subsequently been on an upward trajectory. It is important that this trajectory be maintained.

The efforts in recent years to improve funding for Science & Technology, enhance the working conditions in academia and research institutions, and evangelise science education appear to have paid off. The government has programmes like INSPIRE that provide encouragement to budding young scientists. Tighter accreditation of the universities under the revised NAC guidelines and the new appraisal processes for faculty introduced by the UGC should also create pressure to enhance research output across disciplines. So, overall, I suspect that volume increases will not be difficult to sustain.

However, increasing quality is a much trickier issue. Here a more focused effort may be required. The Thomson Reuters report has classified different fields according to a combination of output and impact. There are three fields – Engineering, Physics and Materials Science – that are the “stars,” i.e. above the Indian average on both share of world research output and citation impact. These may be the best bets for the future. Three other fields – Psychology, Computing and the Social Sciences are above average on citation impact but not on output – these offer the opportunity to scale up without losing quality. Of course, a more careful examination of resources, distinctive research opportunities from India, and the existence of a critical mass of researchers will be required before research priorities can be decided upon.

Having higher impact is also related to which journals you publish in. Journals with high impact factors tend to have larger citation impact. Building the right research agendas, being a part of the right networks, skills and aspirations to publish in the top journals are important to be successful in such an endeavor. Some incentivisation to target higher impact journals may also help. At IIMB, our research incentives that are sharply skewed in favour of publishing in higher ranked journals have had some positive impact.

In expanding research output, we need to take some precautions as well. One is to make sure that we guard against fraud. Increased pressure for research performance and incentives linked to output will put our academics whose research skills are poor or rusty at a disadvantage. Some of them may be tempted to resort to fraud to meet institutional requirements for promotion. India is already known as a major source of research fraud, and we will need to put in place better verification and validation processes if we need to prevent this from spreading. A second and related measure is to put in place support systems like mentoring and faculty development programmes to help faculty sharpen their research skills.

Head Held High: Creating Dignity through Integrated Rural Economic Development

As Meghraj walked on to stage confidently to tell his story, the audience watched, and then listened mesmerized. If his story of moving from doing casual physical labour across India to working in a BPO for a major IT company was captivating in itself, the fact that he told the story in fluent English gave it the romantic touch of Eliza Doolittle. How did this transformation of a primary school dropout to an IT services professional happen? That’s the story of Head Held High (HHH).

Henry Higgins was able to transform one flower girl into a high society English woman. In keeping with the times, and the challenges we face today, HHH has much more audacious goals. In the next decade, the organization hopes to take 2 million Indians out of poverty.

Inspired by an Interesting Medley of Thinkers

HHH is inspired by an unorthodox yet attractive mix of thinkers. Their first source of inspiration is, of course, Mahatma Gandhi. The Mahatma’s great grandson, Tushar Gandhi, is on the board of HHH, and he gave an inspiring talk at the HHH event I attended a week ago. Drawing on stories from Gandhiji’s life, Tusharji emphasized the importance of humility (learn from others rather than thinking you have something to teach them), action (based on the fascinating story of the Dandi Salt March, and how it was first opposed by Motilal Nehru and others), and a spirit of service (“we are privileged to have the opportunity to serve”).

HHH’s second inspiration (maybe I should call it the first?) is Rabindranath Tagore. His moving poem, “Where the mind is without fear” remains one of the few that I remember from my school days. HHH’s name comes from the first line of this poem, and signifies the mission of the organization to help every Indian live with dignity. I can’t think of a better way of putting it.

HHH’s third inspiration is our former president, APJ Abdul Kalam. One of Mr. Kalam’s favourite projects has been PURA, providing urban amenities in rural areas. The PURA philosophy seeks to prevent large scale migration to urban centres, and to allow people to live closer to their roots. That’s undoubtedly difficult to achieve, and goes counter to the way today’s developed nations evolved, but offers an alternate, and attractive model of development. HHH hopes to create a network of globally-connected rural ecosystems in line with the PURA philosophy.

A management guru completes the quartet. During his three-decade professional career, CK Prahalad covered amazing ground from strategic intent to core competence to the idea he is best known for today – the fortune at the bottom of the pyramid. Though CK’s first formulation of this idea focused on the poor as consumers, after some robust criticism by Aneel Karnani and others he broadened its scope to include the poor as key economic actors. It is this latter notion that is strongly embedded in the HHH model.

The HHH Model

At the core of HHH, is a powerful training engine. HHH has developed intensive training methods that allows them to transform non English-speaking, school dropouts from rural backgrounds into qualified and confident English-speaking individuals who can join the global workforce. The training is completed in a residential boot camp at a district headquarters town. It’s a tough course – long days, and very little time off - but the outcome is undeniably good.

But HHH’s goal is not to send more people from rural India into our crowded cities. Instead, it seeks to find them good jobs close to home. HHH has worked closely with rural BPO service provider partners to find jobs for the people it trains. But HHH soon came up against a major challenge – rural BPO accounts for less than 1% of those employed in the BPO industry. Large corporations are uneasy about using rural BPO services fearing difficulties in control and oversight, and hence quality control. HHH has worked on some technological solutions to this problem including android platform based dashboards that allow the client to monitor key output and quality parameters in real time. This has helped ease client concerns.

The Bigger Picture

Of course, BPOs can’t be the only solution to the challenge of creating rural jobs. HHH understands that there need to be many other employment opportunities created. One opportunity has already been discovered in doing rural market surveys. Helping FMCG and other companies penetrate beyond the block level through last mile rural distribution is another possibility. But, creating all these opportunities can’t be a centralized process.

Another prong of HHH’s efforts is therefore to train rural entrepreneurs. If organizations like TiE can catalyse entrepreneurship in urban India, can’t something similar be done in rural India? HHH held an entrepreneurship workshop in Gadag last year – I saw the picture of a packed hall – and hopes to train high potential entrepreneurs from rural India (some of HHH’s top management, including CEO Madan Padaki come from an assessment background; this should help them identify these people!). But I was a little worried that I didn’t see a single woman either on the dais or among the participants in that Gadag event.

Ultimately, HHH plans to be the catalyst of rural ecosystems that generate jobs, sales and rural wealth. In a globalized world, these rural ecosystems will be connected to each other, and to bigger ecosystems elsewhere.  This will be the modern version of Gandhiji’s village economy, consistent with many of his principles, but aligned with the contemporary world.

HHH’s journey so far includes innovation in training methods and technology. It is likely that many more innovations will be required to make their dream come true. I will be watching them in anticipation…

Indian Industrial Innovation in 2013: A Mid-year Review

One of my first blog posts for 2013 expressed the hope that this would be the year for systematic innovation. Half-way through the year, this is a good time to take stock.

The Macro Situation

A quick look at the macro situation first. It’s been bad, much worse than most of us expected. High inflation, an uncontrollable current account deficit, the rapid slide of the Rupee (all three of these are, of course, related) and the recession in manufacturing (yes, the most recent GDP numbers show a contraction of the manufacturing sector!) are worrisome. In such a situation, firms’ posture towards innovation can take two paths – if innovation is seen as critical to a firm’s competitive advantage and a driver of growth, a firm could choose to invest more in innovation; but, if innovation is seen as a “nice to have,” discretionary expenditure, then a firm could choose to spend less than before.

I haven’t studied spending patterns across sectors, but I did come across an interesting report that FMCG R&D spends have been declining rather than increasing. The report suggested that FMCG companies are trying to increase the efficiency of their R&D, and tightening their belts to aid the bottom line.

In another prominent sector, Infosys, which took a courageous leap into the domain of innovation with its Infosys 3.0 strategy, now appears to be backtracking after the return of Mr. Narayana Murthy as Chairman. When I combine his comments about seeking more plain vanilla services business, and trimming flab to enhance margins, I see an obvious consequence looming – a cut-back on innovation investments.

Almost every time I speak to someone in industry who has worked in both Indian companies and MNCs, he comments on how Indian companies just don’t have the appetite for innovation investments that have medium to long term payoffs. That doesn’t seem to be changing easily.

The Pharma Sector

For innovation trackers in India, pharma is a key sector. The pharmaceutical industry accounts for more than 40% of the R&D expenditure by Indian industry. Here the news is decidedly mixed. On the one hand there is the good news from Zydus Cadila on the creation of a new diabetes drug for those who have high cholesterol – this appears to be the first “new chemical entity” from India to have crossed all the regulatory hoops of drug development. This is a welcome development considering that Indian firms have been involved in new drug development for 20 years. While my colleague Chirantan Chatterjee pointed out in his recent provocative talk on “Is 2013 an Inflection Point for Healthcare Innovation in India?” that Indian drug firms are yet to address unvalidated targets or technologically complex modules, that doesn’t, in my opinion, detract from Zydus Calida’s achievement.

There are other bright spots as well. I was speaking to the innovation head of a fast-growing domestic Over-the-Counter (OTC) drug maker the other day, and he told me that the company is investing in a structured innovation development process with a goal of 3 to 4X growth over the next few years. I hope this company is not just an outlier!

Unfortunately, there is a lot of bad news on the pharma innovation front as well, and this may outweigh the good news. The record fine of $500 million levied by the US FDA on Ranbaxy has brought the spotlight on manufacturing practices in India. Another major company, Wockhardt, has seen a ban on export of products from one of its plants to Europe. DRL’s new Chairman, GV Prasad, has put a brave face on this by saying that the increased regulatory scrutiny is good for the industry, but in the short run there is no doubt that this will result in higher costs of compliance. The NIH recently announced suspension of 40 different clinical trials projects in India. In parallel, the government is into a new round of price control. All this doesn’t bode well for the industry.

Multinational pharma has always been reluctant to invest in core drug discovery in India. The Glivec judgement and the compulsory licensing of the Bayer cancer drug to Natco have only reinforced this reluctance. MNCs were enhancing their investments in trials in India, but recent guideline changes that have made trials in India more onerous are bound to slow down this trend.

MNC R&D in India

I wrote about the cautious mood in MNC R&D centres in an earlier post. While MNCs across sectors are encouraging their Indian employees to be more innovative through innovation contests with attractive prizes, and focusing on a training and motivation (I have myself spoken at 5 MNC innovation events in the last quarter), there is no evidence of major new R&D investments in India. On the contrary, I recently had an interesting chat with the financial controller of a large MNC R&D center about how his parent company is trying to estimate the return on investment from their R&D investments in India!

The Future

Overall, this doesn’t seem to be a good time for R&D-driven innovation in India.  I hope this gloom is short-lived. India’s new STI Policy announced at the beginning of this year at last moves away from the R&D institution centric policy of the past. And India continues to have some innovation-related advantages. One of these is the ability to innovate at low cost. I recently ran into Dr. Sumantran, who chairs all the automotive initiatives of the Hinduja group, and he told me that the development of the successful Dost range of Light Commercial Vehicles by Ashok Leyland was done at an estimated one tenth of the cost that would have been incurred if their alliance partner Nissan had done it. Can Indian companies convert this cost advantage into a durable source of innovation leadership? 

Health and Finance for All: Sugha Vazhvu Healthcare & Pudhu Aaru Financial Services

On a nice sunny day early last week, I set off from Trichy to Thanjavur to visit the field site of two exciting social ventures. The build-up was good – the 50-odd kilometres from Trichy to Thanjavur took less than an hour to cover on the well-maintained four-lane National Highway 67. En route to the office of Sugha Vazhvu Healthcare (SVH) in Thanjavur town, I passed streams of older girls walking to high school and college, a vivid testimony of Tamil Nadu’s impressive social indicators.

My visit started with a useful introductory meeting with the SVH team.  If the ability to attract a good team is evidence of a successful organization, this meeting was a clear indicator that SVH is on to a good thing. The SVH team includes a public health specialist trained at Johns Hopkins, an intern from Yale, doctors, and alumni of the Young India Fellowship programme. I then got to learn about the financial inclusion initiative run by Pudhu Aaru Financial Services (PAFS) in the same district.

The Visit to Alakkudi

After the meeting, we drove down to Alakkudi village where SVH and PAFS are co-located right on the main street. Visible from a distance is the wireless communication mast that provides access to the IT hub that provides the backbone of both these social enterprises.

Healthcare

The SVH micro health centre has a simple design. An open reception area offers benches for patients to sit, and a Health Extension Worker (HEW) registers patients or updates records. Behind her is a small examination room. To the right is the doctor’s chamber. Conspicuous in this room are the laptop on a table in one corner, a big medicine cupboard, and a smaller examination bed that doubles up as a chair for dental scaling. Overall, quite neat and unfussy.

I found a few distinctive and impressive features of the SVH approach.

The first is the emphasis on preventive healthcare. While patients tend to come to the health centre only when they are sick, SVH tracks community members to see whether they have any incipient signs of “silent killers” like cardiovascular disease or cervical cancer. While they take pains to avoid unnecessary tests, at the same time their focus is on early detection so as to save patients from expensive and complex curative options later. (SVH has its own diagnostic facility shared between a set of micro health centres).

The second is the collection and maintenance of data. The establishment of each micro health centre starts with a community engagement initiative. Each rural micro health centre has a Health Extension Worker (employed from the local community) with an android-based phone who visits homes to enroll community members. Each patient enrolled has a neat bar-coded registration card that serves as a unique identifier. Since the health record of each patient is maintained on the health information system of SVH, and updated directly online each time the patient visits the health centre, SVH has a comprehensive medical history for each patient who uses its services. At an aggregate level, such data will be useful for identifying disease patterns and epidemiological studies over time. (In contrast, Government PHCs still use paper and files; even today, some of the “best” hospitals in India do not maintain comprehensive, digitized medical records of their patients).

The third is the push towards evidence-based medical care. As the doctor speaks to a patient and captures the patient’s symptoms, the diagnostic process is aided by different menu options on the doctor’s laptop. These options prompt the doctor on what questions to ask and also ensure that important possibilities are not left out.

A fourth (related to the third) is the effort to train and use Ayush (Indian traditional medicine) practitioners as doctors. They tend to be more grounded and willing to serve in local communities, thus addressing the problem of retaining doctors in rural settings. Many of them practice as allopathic doctors anyway, and here they are both trained as well as provided support (through the online expert system) to do a better job.

Financial Inclusion

While excesses by some black sheep have brought the microfinance industry under a cloud, there is no doubt that better access to financial services is essential for people to improve their lives. India’s fragmented rural demographic makes financial inclusion through the conventional banking system unviable, and there need to be alternate ways of providing financial access.

With developments in technology, and new sophisticated identification systems like Aadhaar being put in place, there is optimism about the future of financial inclusion. In the meantime, several efforts are afoot to solve this problem.

PAFS represents one such initiative. PAFS brings a “wealth management” approach to rural financial inclusion. If you have ever dealt with one of the urban wealth management advisory companies, you know what this means – it usually starts with a listing of your assets (and liabilities) and your income. It then moves on to understanding your aspirations, financial goals, and appetite for risk. It then puts in place an investment plan as to how you can achieve your goals and aspirations consistent with your risk appetite.

The PAFS template follows a similar approach. It has four stages – Plan, Grow, Protect and Diversify. It is IT-enabled with easy-to-follow templates that allow the PAFS staff to capture and visualize the needs of each of their clients. PAFS is not a bank or an NBFC, but works on behalf of banks under the banking correspondent framework. I saw several women waiting patiently for their turn at the PAFS office in Alakkudi.

Some interesting features that I saw – a suggestion/complaint box in which the customer has only to drop a slip with her mobile number – PAFS management will then call her back to understand her problem. This probably suits semi-literate customers well – they can write their names and phone numbers, but may struggle to write a detailed feedback note. 

The whole PAFS approach is neatly depicted on some graphics that are fixed neatly on the wall, thereby ensuring transparency of the process.

In Conclusion…

Having seen both SVH and PAFS in action, I would rate both of them high on effectiveness. But what I am not sure about is the financial viability of these models. I am not privy to the numbers, but the cost of some of the basic infrastructure like a dedicated communication link can’t be low. The cost of the highly educated team behind SVH must also be very high though I guess this could be spread across a large network once the model is scaled up. Since PAFS is not a bank or NBFC, it has to manage not on spread but on the commission paid by the bank for which it is a correspondent.  

But, I imagine that with some financial experts behind these ventures (Nachiket Mor, former Deputy MD of ICICI Bank, is one of the driving forces), they know what they are doing! SVH is part of a network of organizations under the umbrella of the IKP Trust, and works in close conjunction with the IKP Centre for Technologies in Public Health (ICTPH).

I particularly liked the simplicity, and integration of people and technology in the SVH model. I hope they are able to strengthen the links with public health and preventive healthcare further. In recent years, there has been too much emphasis on curative health, particularly in expensive tertiary care hospitals in cities. Some state governments like Andhra Pradesh are now paying out huge sums of money for treatment of their citizens in these hospitals, and I can’t see how this will be sustainable over time particularly with the predicted increase in “lifestyle” diseases.