Patents are the measure of output of R&D labs. That is how an IBM or an Intel publicises its research output. Even countries measure their research output based on the number of patents. India started appearing significantly on the radar only since 1998, the year when statistical reports from the US patents office show a separate breakout. The number of patents granted every year to companies in India has been growing since-from 85 in 1998 to 131 in 2000 to 179 in 2001 to 342 in 2002 (according to data with the Director-General of the Centre for Scientific and Industrial Research). That translates into a whopping 91 per cent in the last year.

This is still very small compared to many other countries, even companies. The US state of California filed 20,863 patents in 2001, Germany, 11,895 and IBM, 3,411. But take South Korea-home to giants like Samsung and LG-which filed 3,763 patents in 2001 or the red dragon that filed a very modest 266 patents in 2001 and the picture begins to look very different.

CSIR, which holds 42 per cent of Indian patents granted in 2002, filed 728 foreign patents thus far this year. A potential client list for 2003 of one of the patent lawyers in the country lists 112 non-it companies, including Indian companies, laboratories and MNCs. If MNCs, which have set up R&D centres (about a 100 of them have), file patents, these will be accounted under India.

India is still new to the patents game. Till recently, academics and researchers in India were of the opinion that publishing papers was the endgame of research and that knowledge had to be free. The equation now is patents = productisable ideas = wealth creation. And our scientists are now beginning to get it.

R.A. Mashelkar, who took over as Director of National Chemical Laboratory in Pune in 1989, changed the slogan from 'publish or perish' to 'patent, publish and prosper'. Four scientists-current National Chemicals Laboratory Director Swaminathan Sivaram was one of them-from the laboratory patented a polycarbonate innovation. Now, polycarbonates are the playground of GE and the MNC started working with NCL. When then GE CEO Jack Welch found out about this, GE decided to set up shop in Bangalore. Now, the Jack Welch Research Center is slated to grow from 1,600 scientists to 2,400, at which point it will be the company's largest R&D set-up anywhere in the world, including the US. By 2001, GE India had been granted 17 US patents.

Mashelkar, the Director-General of CSIR, compares the output from his 40 labs to that of Samsung; CSIR filed 184 pct (patents cooperation treaty) applications and tied with the Korean giant for the number one position for the number of pct applications filed by companies in developing countries. And he is not the only scientist who is looking to benchmark his output with that of global private sector labs. The pioneering Professor Ashok Jhunjhunwala in IIT Madras asks: "If Huawei, the Chinese telecom giant, could come out of nowhere as late as 1988 and get to be so big, why can't we create a global company?" The good news is, his research and the goal of the cluster of companies that he has created is all towards reducing the cost of state-of-the-art telecom in India.

Indian Institute of Science in Bangalore has changed rules so that its professors can be on the board of companies. Strand Genomics in Bangalore is a result of that. Rudra Pratap, a Cornell-returned professor of mechanical engineering has filed for patents in MEMS (micro electro mechanical systems) and has lured Cranes Software to fund his lab. "Why can't we build a wearable ultrasound machine that will cost just Rs 3,000 and can be taken to villages?" he asks. Academics in the Universities of Pune and Delhi too are talking about creating wealth through innovation.

The other part of the picture is that investors are now confident in their belief that India is not just about labour arbitrage. They believe breakthrough innovations can come out of India. There is now a small trickle of funds willing to fund seed-stage companies in areas other than it. In a complete reversal, Mahesh Murthy, head of tie (The Indus Entrepreneurs, a technology mentoring forum) Mumbai, talks of organising a parade of VCs from across the world to look at innovations in Indian labs here. There are individuals who are willing to get into bed with labs early in the game (See This Prince Thinks Small, Very Small). Funds like VenturEast, Opportunia and 2icapital are now willing to listen to seed stage companies. Even a traditional Indian business house like Tatas has invested in Avestha Gengraine, a biotech start-up. So the picture might look very very different 20 years from now.