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UNESCO SCIENCE REPORT Table 22.2: Distribution of innovative and manufacturing activity within India, 2010 State Major cities Maharashtra Mumbai, Pune 11 31 20 39 Gujarat Tamil Nadu Andhra Pradesh* Ahmedabad, Vadodara, Surat Chennai, Coimbatore, Madurai Hyderabad, Vijayawada, Visakhapatnam R&D expenditure (% of total) Patents granted (% of total) Value-added manufacturing (% of total) Pharma companies are home-grown, IT companies are foreign An interesting picture emerges when we analyse the output of firms in terms of the number and type of patents granted to Indians by the United States Patent and Trademark Office (USPTO). The data reveal a steep increase both in overall patenting by Indian inventors and in the share of high-tech patents; there has also been a discernible shift in technological specialization, with pharma receding in importance and IT-related patents filling the gap (Figure 22.4). The important point here is whether these patents are owned by domestic or foreign enterprises. Almost all of the USPTO patents secured by Indian inventors do indeed belong to domestic pharmaceutical companies. As noted in the UNESCO Science Report 2010, domestic pharmaceutical companies increased their patent portfolio even after the international agreement on Trade-related Aspects of Intellectual Property Rights (TRIPS) was translated into Indian law in 2005. In fact, for every single indicator 10 of innovative activity, Indian pharmaceutical firms have done exceedingly well (Mani and Nelson, 2013). However, the same cannot be said for computer software or IT-related patents; as can be seen from Figure 22.4, almost all these patents are secured by multinational companies which have established dedicated R&D centres in India to take advantage of the skilled, yet cheap labour on 10. Be it the indicator for exports, net trade balance, R&D expenditure, patents granted within and without India or the number of Abbreviated New Drug Applications approved by the US Food and Drug Administration (implying technological capability in generic drug capability) FDI (% of total) 12 5 13 2 7 13 10 13 7 9 8 5 Karnataka Bangalore, Mysore 9 11 6 5 Delhi Delhi – 11 1 14 Total for the above 46 80 58 78 Note: Andhra Pradesh was divided into two states, Telangana and Andhra Pradesh, on 2 June 2014. Located entirely within the borders of Telangana, Hyderabad is to serve as the joint capital for both states for up to 10 years. Source: Central Statistical Organization; DST (2013); Department of Industrial Policy and Performance the market in software engineering and applications. The growing importance of software-related patents among total patents indicates that foreign ownership of Indian patents has increased significantly. This is part of the trend towards a globalization of innovation, in which India and, indeed, China have become important players. We shall be discussing this important trend in more detail below. The surge in the creation of knowledge assets at home has not reduced India’s dependence on foreign knowledge assets. This is best indicated by observing India’s trade in technology, as exemplified by the charges that India receives and pays for technology transactions. The difference between the technology receipts and payments gives us the technology trade balance (Figure 22.5). India is surfing the globalization wave to develop innovation Thanks to a surge in FDI in both manufacturing and R&D over the past five years, foreign multinational companies have been playing a growing role in innovation and patenting in India. In 2013, foreign companies represented 81.7% of domestic patents obtained from the USPTO; in 1995, they had accounted for just 22.7% of the total (Mani, 2014). The main policy challenge will be to effect positive spillovers from these foreign companies to the local economy, something that neither the Science, Technology and Innovation Policy (2013), nor current FDI policies have explicitly factored into the equation. At the same time, Indian companies have acquired knowledge assets from abroad through a wave of cross-border mergers and acquisitions. In the first wave, there was Tata’s acquisition of the Corus Group plc (today Tata Steel Europe Ltd) in 2007, giving Tata access to car-grade steel technology; this was followed by the acquisition of German wind turbine manufacturer Senvion (formerly REpower Systems) by Suzlon Energy Ltd in December 2009. More recent examples are: n Glenmark Pharmaceuticals’ opening of a new monoclonal antibody manufacturing facility in La Chaux-de-Fonds, Switzerland, in June 2014, which supplements Glenmark’s existing in-house discovery and development capabilities and supplies material for clinical development; n Cipla’s announcement in 2014 of its fifth global acquisition deal within a year, by picking up a 51% stake for US$ 21 million in a pharmaceuticals manufacturing and distribution business in Yemen; n The acquisition by Motherson Sumi Systems Ltd of Ohio-based Stoneridge Inc.’s wiring harness business for US$ 65.7 million in 2014; 604
Figure 22.4: Trends in Indian patents, 1997–2013 Most patents granted to Indian inventors are in high-tech Utility patents granted by USPTO 2 500 2 424 Total patents 2 000 High technology patents 1 691 1 500 1 000 1 098 866 1 234 1 033 1 365 500 0 47 26 1997 125 53 178 98 342 205 363 187 384 235 481 316 546 380 634 476 679 516 1999 2001 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Source: USPTO; NSB (2014) IT firms in India tend to be foreign-owned Domestic IT-related patents (number) Share (%) Multinational companies Total Domestic Multinational companies 2008 17 97 114 14.91 85.09 2009 21 129 150 14.00 86.00 2010 51 245 296 17.23 82.77 2011 38 352 390 9.74 90.26 2012 54 461 515 10.49 89.51 2013 100 1 268 1368 7.30 92.71 Source: Computed from USPTO, 2014 The number of biotech patents has doubled in a decade Utility patents granted by USPTO, 1997–2012 7 8 21 44 35 35 50 44 44 1997 1999 2001 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Source: based on data provided in Appendix Table 6-48, NSB (2014) 28 60 57 67 Chapter 22 Six out of 10 patents are now in IT, one in ten in pharma Utility patents granted by USPTO (%) Pharmaceuticals 61.10 IT Share % 31.91 11.54 8.99 1997 1999 2001 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Source: Computed from USPTO, 2014 605
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UNESCO SCIENCE REPORT Towards 2030
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Table S3: R&D expenditure as a shar
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Table S3: R&D expenditure as a shar
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Table S4: Public expenditure on ter
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Table S5: Tertiary graduates in 200
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Table S6: Total researchers and res
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Table S7: Researchers by field of s
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Table S7: Researchers by field of s
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Table S8: Scientific publications b
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Table S9: Publications by major fie
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Table S10: Scientific publications
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UNESCO SCIENCE REPORT Data obtained
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UNESCO SCIENCE REPORT

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