By Tushar Madan —
In November India will host the 2017 Global Entrepreneurship Summit in Hyderabad. This piece is the second in an occasional series exploring the climate for entrepreneurship in India, what the Modi government has done to promote entrepreneurship, and best practices for promoting entrepreneurship in other countries.
Spurring innovation in India is a top priority for the Modi administration, and many of the government’s schemes — such as the Atal Innovation Mission, Start-Up India, and Make in India — focus on reigniting the inventive Indian spirit. Experience shows, however, that successful innovation ecosystems rely on effective cooperation by the public sector, private industries, and academic institutions. Unfortunately, Indian institutions of higher education are not equipped to assume the key role universities play in anchoring innovation ecosystems in the United States and other countries.
Many of India’s institutions of higher education are not set up to encourage innovative research. For example, over 65 percent of Indian universities are run by the center, states, or other federal institutions. These universities do not usually receive, or pursue, the large sources of private funding that they need to boost research and development (R&D). Similarly, Indian institutions incentivize risk aversion. Spin-offs from universities ought to be encouraged, thus facilitating the creation of new companies. One way to do this would be to allow faculty members and scientists to start their own ventures while holding onto their current positions. Otherwise, Indian institutions will continue to lose potentially lucrative opportunities due to faculty worries regarding the high rate of failure for Indian startups.
Though India continues to slowly propel academia into its rightful place as a driver of innovation, this process could be quickened by examining and adopting global best practices. The United States offers some illustrative examples of how universities can become integrated into the innovation ecosystem.
Research Grants from the Federal Government
- In recent years, the largest source of federal grant money for U.S. higher education R&D has come from the Department of Health and Human Services, though the Department of Defense, Department of Energy, National Aeronautics and Space Administration, National Science Foundation and Department of Agriculture have all contributed.
- The National Institute of Health, one of the world’s largest sources of health-specific research, for example, greatly benefits from this model of partnership. Not having the resources to conduct all its studies in-house, the NIH spends more than 80 percent of its budget on grants to higher education and research institutions.
- Grants from the U.S. government have been the origin of major innovation breakthroughs at Universities, such as the Yale Medical School’s success in identifying and curing a severe group of skin disorders.
Research Partnerships with Private Industries
- Non-federal funding of university R&D has been slowly increasing in the past few years, as federal funding continues to decline.
- This type of funding has created industry specific initiatives, such as the partnership between IBM Research and the University of Illinois Urbana-Champaign for a multi-year research partnership specific to Cognitive Computing Systems based on IBM’s Watson technology.
- Through these partnerships Stanford University, one of the most innovative universities in the world, has over 6,000 externally sponsored projects. Stanford entrepreneurs have created an estimated 39,900 companies and 5.4 million jobs since the 1930s.
Encouraging Student Research and Entrepreneurship
- Funding for student-led research, including fellowships and research grants. It was the Stanford Mayfield Fellowship that connected the co-founders of Instagram and support from the Stanford Business School was key in helping create the now eBay owned StubHub.com.
- There are over 240 incubator/accelerator programs within U.S. universities that specifically encourage entrepreneurship and student research.
Commercialization of University Research
- Helping protect intellectual property through patent application. Household names like Dell and Dropbox wouldn’t exist without university support in the patent process. In return, universities often receive significant donations from the companies they aid; this is the case with the University of Texas and the Dell Company.
- Using university networks to bring new research to market. A group of students at the Massachusetts Institute of Technology (MIT), for example, recently internally created a smart exercise suit, called BioLogic which automatically opens to provide fresh air to the areas of the body most impacted by sweat and heat. Initial development was supported solely by MIT and the team behind the invention is now using MIT’s networks to help bring their invention to market.
Identifying Major Gifts for Research
- Universities spend time courting donors for major research-specific gifts that help provide scholarship funds, research grants, and increase the likelihood that research oriented students attend that institution.
- Many U.S. universities, such as Cornell, Georgetown, and Rutgers, have an entire office, called the office of “Corporate & Foundation Relations”, to fill this role. Nearly every major U.S. higher education institution has dedicated a team specifically to identifying and securing major research donations.
- Programs at many schools offer faculty, staff, and students as resources to help local industries and small businesses grow. The University of Washington, for example, recruits university affiliates to help aid non-profits and small businesses in underserved communities; the university, in partnership with many large private corporations, even created a website for Seattle-area business owners to search for resources that can help them succeed.
- Other universities, such as Georgetown and the George Washington University, offer similar services for international organizations and foreign companies. These types of programs increase innovative collaboration and further engage universities in the innovative ecosystem, while simultaneously building good relations and a positive public image for the universities.
Indian universities can do more in encouraging innovation and private sector involvement. Until India fully embraces higher education’s key role in accelerating innovation, Prime Minister Narendra Modi will be unable to fully meet his goals for an innovative India. Indian universities could play a stronger role in the innovation ecosystem, potentially by borrowing and adjusting from the six primary methods employed in the United States to connect the academic and commercial environments.