# **BIOTECHNOLOGY INNOVATION FOR INCLUSIVE GROWTH:**

### **A STUDY OF INDIAN POLICIES TO FOSTER ACCELERATED TECHNOLOGY ADAPTATION FOR AFFORDABLE DEVELOPMENT**

## **I. INTRODUCTION**

Indian economic growth has witnessed remarkable advancement over the last two decades. While the initial growth increase was triggered by economic reforms and a change in foreign direct investment policy that attracted global investment, a key driver of more inclusive growth is an innovation system that can apply solutions to challenges in health, agriculture, energy and environmental products, among others.<sup>2</sup> Affordable solutions in these areas have the potential to address the needs of all people and especially those in lower income groups. Such innovation-driven commercialization efforts should also help ensure longer-term competitive advantage to domestic enterprises as countries open their markets even more to global competition.

While many industrialized economies have implemented innovation policies and deployed resources focused on cutting-edge frontier research and its commercialization, some emerging economies have explicitly attempted to accelerate the technology catch-up process to benefit from technologies that are already developed and accessible. Frontier technology generation may indeed be the basis for a long-term growth path for some countries. However, countries with the required capabilities to adapt existing technologies to their local needs can stimulate more inclusive growth in the near to medium term, while also focusing on the creation of frontier technologies for the longer term.<sup>3</sup> This paper explores how existing biotechnologies, adapted to meet heterogeneous local needs, can help support more inclusive growth. The paper describes six complementary types of policy initiatives taken by India‘s Department of Biotechnology (DBT) to support accelerated biotechnology adaptation: (1) focusing on translational research; (2) facilitating technology access through global consortia; (3) supporting commercialization through public-private partnerships (PPPs); (4) strengthening diversified skills development; (5) establishing required regulation; and (6) creating institutional mechanisms for effective governance.

The paper focuses in particular on two complementary PPP funding initiatives, the Small Business Innovation Research Initiative (SBIRI) for early-stage funding of SMEs, and the

> 2 In a recent interview, Prime Minister Manmohan Singh emphasized the need to address the inclusive development needs of India through research, including communicable diseases, agriculture, technologies that conserve energy and save water, and environmentally-friendly technologies. See Singh (2012).

> 3 This paper builds on one of the main conclusions of Dutz (2007), namely that India (and all countries) stand to gain more from catching up to the global frontier of knowledge through adaptation of existing technologies to meet local needs and affordability concerns than from trying to push out the global frontier through creation of new-to-the-world technologies. Based on a 2006 survey of roughly 2,300 manufacturing enterprises in 16 Indian states, applying existing technology in new settings is significantly more likely to be associated with increases in productivity than are efforts to create new-to-the-world knowledge.

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