Knowledge driven economy has become the main stay of many nations. Knowledge driven economy requires enabling environment and constant removal of road blocks. To catalyze such economy, the Cabinet has taken the first step to permit researchers to become part of the knowledge enterprises while continuing with their research pursuits. This was revealed by Union Minister for Science and Technology, Shri Kapil Sibal at a press conference in New Delhi today.

Cabinet cleared a proposal from Department of Scientific and Industrial Research (DSIR) on ¡§Encouraging development and commercialization of inventions and innovations: a new impetus¡¨ comprising a package of measures viz.

• Permitting the researchers to have an equity stake in scientific enterprises / spin offs while in professional employment with their research and academic organizations (universities, academic and research institutions).

Inventions and Innovations are essential for competitiveness of the nation, which in turn are central to economic development. However, the inventions and innovations alone can not bring the economic benefits, unless these are translated into commercializable knowledge of technologies / processes / products. Such translation is often risky, and long drawn requiring substantial creative efforts besides the association of the inventors.

Scientific enterprises are a special class of new Entities that have specialized needs and resource requirements. Strong domain expertise, contemporary skills and access to specialized manpower, facilities and know-how are often essential for nucleating new scientific enterprises. Given these requirements, it is no surprise that such enterprises are often founded on the campuses or around the research and academic institutions including universities with the active involvement of the researchers and faculties of these institutions. Universities and Research Institutes in many countries and regions have thus become drivers of local economy. Till now, the commercialization of technologies / processes / products is done through licensing to private companies. As Indian industry is generally averse to taking risk, this process has limited success. With a view to playing a catalytic role, the government is opening up more avenues for commercialization.

The scheme permits the researchers (scientists, engineers, professors) working in Scientific Establishments to have an equity stake in scientific enterprises / spin offs while in professional employment with their organizations. Such an equity stake can be taken at any stage of the entity through investment of their personal money. This measure will encourage not only creation of new businesses / spin off companies but also employment opportunities for highly skilled technical and scientific personnel. This would further enable the researchers to create practical solutions meeting social challenges, and to create and sustain a globally competitive industry for decades to come.

• Permitting the Scientific Establishment to invest knowledgebase as equity in the enterprises.

Launching a new product or setting a knowledge based new Entity requires investment on many fronts particularly for capital-intensive infrastructure, manpower, technology costs, working capital etc. Thus, the requirement of heavy investment discourages many aspiring techno-entrepreneurs and companies to launch new projects/products. Governments try to support entrepreneurs in different ways to ease the burden of initial investment including offer of knowledgebase in exchange for equity.

Although the offer of technology/knowledge for equity by the Scientific Establishment is small when compared to overall investment in the Entity, it enhances the confidence among the entrepreneurs, as the Scientific Establishment is behind them for further development of the technology/knowledge. Often such confidence boosting measures attract investors to invest in such ventures. Thus, the spin off benefits of such a small measure could at times be immense. Further, the offer of equity in lieu of knowledgebase besides playing a catalytic role for industrial growth in the country would provide more financial returns to Scientific Establishment compared to that obtained from premia and royalty.

• Encouraging the Scientific Establishment to set up incubation centers.

Nurturing early stage innovations and developing them to technologies and products is the key to success. Early stage scientific enterprises are special class of ventures that have peculiar needs and resource requirements. Thus, proximity and ready access to strong domain expertise, business skills, centralized modern infrastructure, problem solving capabilities and knowledge base shall go a long way in nucleating the scientific enterprises. The concept of ¡¥incubation centres¡¦ has served well in moving innovations to marketplace in advanced countries. Further, making a success of business from early stage innovations is associated with considerable risks, requires large investment of risk capital and significant effort by the entrepreneur. This measure would contain the initial capital investments in converting the innovations into commercializable knowledge.

Institutions like CSIR, IISc and IITs have devised mechanism to open incubation centers on their campuses to nurture start up companies. However these technology incubation centres need to be established in large numbers, in and around other Scientific Establishments and Scientific and Industrial Research Organizations (SIROs) as also private institutions in order to nurture start up companies. Such technology incubation centres shall compliment and help the researchers who wish to utilize the scientific entrepreneurship scheme as mentioned earlier.

• Facilitating mobility of researchers between industry and scientific establishment.

The mobility will build newer skills, capabilities and competencies in the scientists of Scientific Establishment by providing them exposure to industry and to other organizations. This will help in seamless transfer of knowledge from one organization to other and from industry to Scientific Establishment. Mobility from industry will give them first hand account of research and development being pursued in Scientific Establishments. Thus the proposed scheme will bring amalgamation of ideas and skills across the entire spectrum of R&D in the country. Further, there is shortage of competent manpower to manage new institutions being established by the Government. The mobility scheme will ease this problem temporarily and provide time to new Scientific Establishments to recruit competent people.

Advantage of Policy Measure:

The policy measure will:

• enhance the competitiveness of the nation;
• create wealth for the nation;
• enable commercialization of the IP generated in the country ;
• unleash the entrepreneur skills of scientists, technologists and academicians and build newer skills, capabilities and competencies in the country;
• attract young scientists and engineers to Scientific Establishment;
• boost the efforts of researchers to create practical solutions for development of the nation;
• generate employment opportunities for highly skilled technical and scientific personnel; and
• provide more financial returns compared to that obtained from premia and royalty.

Source: Press Information Bureau
Date: 27 February 2009