Dr. R.A. Mashelkar, Director General, Council of Scientific & Industrial Research

II saw an interesting report about the university of California. This university has won 42 Nobel prizes so far. At the same time, based on scientific research done in the University, several biotechnology companies have been set up around the campus with their market capitalisation reaching a few billion dollars. Over 80 per cent of the employees in these companies are graduates of this university. Saraswati and Lakshmi seem to co-exist happily here.

I was looking at a list of the Nobel prize winners in Chemistry over the last three years. It included great names like Allan Heeger, Ryoli Noyori and Barry Sharpless. Each one of them has acquired a large number of patents. While doing Nobel class scientific research, they appear to have understood the wealth creation potential of scientific research.

This is all happening in the developed world. What about the developing world? I was looking at the major patent applicants under the Patent Cooperation Treaty (PCT) from the developing countries for 2002. The top 50 list is created every year by the World Intellectual Property Organisation (WIPO) in Geneva. I was, of course, very pleased to see that our own Indian Council of Scientific & Industrial Research (CSIR) was tied at the number one position along with Samsung. It was also pleasing to see a few Indian pharma and biotech companies appearing in the list. But I also saw that around a dozen universities from China, South Korea, Brazil and Singapore had appeared in this top 50 list. I did not see a single Indian university or an Indian Institute of Technology (IIT) on that list. The sad reality, it seems, is that we do not understand the meaning of 'economics of knowledge'. This does not augur well for the country. All the more so for a country with a dream of becoming a major economic power in the decades ahead.

We need to recognise that increasingly, the traditional factors of production-land, labour and capital-are becoming less important in comparison with technology. The source of technology is science-rooted in knowledge. Worldwide, a knowledge revolution is on. International trade was once dominated by primary products. It is now moving to knowledge-intensive goods. High-tech goods have doubled their share of world merchandise in the last 20 years, while primary products have lost their share by half. Over half the GDP of major Organisation for Economic Cooperation and Development (OECD) countries is attributed to the production, distribution and valourisation of knowledge.

The world's major growth industries -microelectronics, biotechnology, telecommunications and designer materials-are already knowledge industries. Knowledge is like a candle. It lights other candles without extinguishing itself. Thus, these knowledge industries stimulate other industries, in turn, to become knowledge-based. Consider the oil industry. The 'bottom of the barrel' model drives the economics of this industry. But new knowledge embedded in three-dimensional acoustical sounding and horizontal drilling is turning the oil business into a knowledge industry too.

The emergence of knowledge-based industries is good news for India because of its scientific manpower. But we must learn to create wealth, for which I would suggest five simple things.

First, let us change our value system. A leading Western scientist had once said that the creativity that went into the zip was greater than what went into a Nobel prize winning discovery. Rewarding scientists who make "things that work" is the first step.

Second is the emphasis on protection of usable knowledge. True, knowledge can be converted into wealth. But increasingly, this is so only of 'protected' knowledge. Such protection is provided by patents. Scientific institutions must change their mindset of 'publish or perish' to 'patent, publish and prosper'.

In the same way, our industry must become patent literate, realising that tomorrow's wars will be fought not by conventional weapons such as guns, missiles and so on, but will be fought in knowledge markets with the new weapons of information and knowledge.

Emergence of knowledge- based industries is good news for India because of its great science and technology manpower

Third, we need to create conditions so that thousands of 'technopreneurs' will flourish. Technopreneurs have entrepreneurial minds and technology in their hearts. This means our universities, IITs and national laboratories will have to change their mindsets as well as their rules to allow several Indian silicon valleys and genomic valleys to bloom.

Fourth, we must recognise that scientific innovation is like a baby. It requires a mother, a father and a pediatrician. A mother is one who supports and champions the young child. The father figure provides the finance. Investments increase sharply as one moves from idea incubation to prototyping to manufacturing. Therefore, we require different forms of technology financing. Angel funding and 'real' VC funding must grow.

Fifth, the Indian industry must take a vow that 'I' in industry will stand for 'innovation' and not for 'imitation' or 'inhibition'. To survive fierce global competition, innovative public-private partnership is one of the answers. The CSIR-led New Millennium Indian Technology Leadership Initiative (NMITLI) has created a huge public-private partnership with 50 private sector companies and 150 laboratories and institutions with the very objective of creating wealth through scientific research. Beyond this, industry must also create 'a strong demand pull' that would draw Indian academia to its R&D laboratories.

Goldman Sachs' recent BRIC report predicts that India will be among the world's three biggest economies by 2050. I am convinced that this can happen much earlier if we can master the 'economics of knowledge' in all its nuances, and put it into practice.