Senker, J. (2001) 'European Biotechnology Innovation System ...

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Dec 3, 2012 (4 years and 8 months ago)

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1



Biotechnology Innovation System in India: Role of Government


Parveen Arora*
+



Abstract



The present paper traces the role of Government in the promotion of the national
Biotechnology innovation system in India.
Using the N
SI
perspective, the paper a
ttempts to
analyze the policies,
institutions and instruments introduced by the government from time to
time for
addressing the issues of knowledge support, commercializa
tion of research,
collaborative
research, financial support, regulation and IPR in the

growth of the
biotechnology in India.



The
systemic analysis
showed that the
proactive role
played by the
Government has
resulted in prioritising, building capacities and capabilities in the development of
biotechnology in the country with
considerable p
rogress
being made
in the healthcare
domain. The national biotechnology innovation system is presently o
verlaid by many
horizontal and
vertical policies
.

H
owever,
there are couple of issues such as low

level of
R&D investment
,

commercialisation

of biotech
nology and integrated policies
, networking
among actors etc requir
ing

immediate attention

of the government
for the growth

of
biotechnology
innovation.



Key words:
Biotechnology, Innovation System, Government, Innovation, Policies and
Instruments



*
Scientist

National Science & Technology Management information System

(NSTMIS)

Department of Science & Technology (DST)

Government of India, New Delhi
-
110 016

e
-
mail:
parora@nic.in
,
parv04@yahoo.com



+

The views expressed in the Paper are of the author only and not necessarily of the



Organization he works for
.


2


Biotechnology

Innovation

System in India:

Role of Government


Parveen Arora*



1.

Introduction





T
he government
plays an

important role in building the National Innovation
System
(NIS
)
by
setting up institutions (public research institutions such as universities, labs etc),
developing policies that support innovation and providing regulatory frameworks

that can
have a considerable influence on sectoral development

(
Lundvall 1992, 1993, Nelson 1993,
Edquist 1997, Metcalfe 1997 and
Malerba 1997, 2002
).



In the context of the developing countries, the role of the government
1

becomes more
prominent as th
e majority of the resources for the scientific research and development are
being channelised or governed by the government. In case of India, nearly 80% of the gross
expenditure for research and development is being incurred by the Government while in cas
e
of the industrialized nations such as Japan, USA and UK the Industry spends nearly 75%,
64% and 44% respectively (DST 2006, OECD 2006).
Though there has been a significant
increase in the country’s Gross National R&D expenditure in absolute terms from Rs
.3974
Crore in 1990
-
91 to Rs.16199 Crore in 2000
-
01 to Rs.18000 Crore in 2002
-
03, the
share of
the government
in national R&D expenditure has remained unchanged. However, it is
interesting to note that internationally all the governments perform the in
-
hou
se R&D
function, including even the highly private
-
sector
-
oriented governments such as the US and
other OECD countries (BEST, CSTA 1999, OECD 2006).

A study of the Biotechnology
innovation system of the four global leading countries namely

USA, UK and Japa
n and
Germany further supports the active involvement of Government R&D in furthering the
growth of the Biotechnology
s
ectoral innovation (Bartholomew 1997).


Biotechnology is being characterised by multidisciplinary fields,
high dependence on
science and
are emerging from industries having large R&D base, high degree of qualified
manpower and having close links or interaction with public research institutes as well as
universities and thus
faces a broad set of different
policy interventions by the governme
nt
underlying the National Innovation System (NIS) (see
Bartholomew 1997, Enzing et al
1999
,
EPOHITE 2003, Senker et al 2001
).





1

Apart from the universally accepted role of the government in the production of scientific and technological
knowledge as “public good”( see Nelson 1959,Arrow 1962)


3

The National System of Innovation (NSI) perspective is a convenient framework to
understand the process of innovation occurring
in an economy and especially within the
manufacturing sector. It
focuses on the country
-
specific factors influencing the process of
innovation and economic growth.

The NSI approach ha
s evolved over the years both
analytically and empirically with the contr
ibutions from Freeman (1987, 1988, and 1995),
Lundvall (1988, 1992) and Nelson (1988, 1993), Edquist (1997, 2002).
NSI has

became
popular as an analytical framework to study innovation at the national, regional and even

Sectoral

level (
OECD 1997, Balzat et

al. 2004,
Edquist 2004).
Though there are several
definitions of NSI but that

best fit

in
to the present context is that of
Metcalfe

(1995). NSI is
defined by
Metcalfe (1995) as a “set of distinct institutions which jointly and individually
contribute to
the development and diffusion of new technologies and which provides the
framework within which governments form and implement policies to influence the
innovation process. As such it is a system of interconnected institutions to create, store and
transfer

the knowledge, skills and artefacts which define new technologies”.


NSI framework

is comprised of
various components such as the government,
independent research institutes, firms and higher education system etc
and their
interrelationship
s.

Innovation

o
r government

policy instruments and institutions play a very
important role in cementing the relationship
among the

various

components for the success of
NSI.

An application of this framework shall help in analysing the systemic failure that
hamper the g
eneration of innovations. Public policy can be applied to correct such failure.

The
re are several NSI studies on
Biotechnology
in the
context of the developed world (see
Bartholomew 1997,

EBIS
S
enker et al 2001, Epohite 2003
and
Reiss et al 2004
)
but the
s
tudies in the developing countries are rather limited.

Biotechnology NSI

in India has evolved over time and has been instrumental in
creating infrastructure and capabilities in promoting biotechnology innovation in the country
.
There are
241

institutions

and 321 firms
engaged in various
dimension
of biotechnology
in
the country

(BCIL,

DBT 2003)
.

Indian Biotechnology industry is now among the top 12
countries in the world and

like its global counterpart, is dominated by the healthcare sector
2

(Arora 2005,
Bowonder et al 2001, Ernst and Young 2004
).


The recently released “Draft
National Biotechnology Strategy 2005” by the Indian Government is a step forward in the
direction of promotion and development of biotechnology to withstand global challenges and
yet
, solve the local healthcare needs of the country.

Studies on biotechnology in India by



2

During 2006
-
07, out of the total revenues amounting to 2.08 billion $ t
he healthcare sector accounted for a
lion share with 70% of revenues, bio services 13%, agricultural application 11%, industrial application 4%
and

bioinformatics 2%( Biospectrum,
2007). Further, the healthcare sector dominates the Indian
biotechnology i
ndustry with 44% of firms followed by other sectors ( Arora 2005)


4

(Chaturvedi 2005,
Chaturvedi
&
Rao

2004
) and a recent empirical analysis of the health
innovation system of seven developing countries (Cuba, Brazil, South Africa, Egyp
t, India,
China and South Korea) further supports the role of the Governments in providing the
sustainable environment for the successful development of health biotechnologies (
Kumar et
al 2004, Thorsteinsdo’ttir et al

2004)
.


Accordin
g to Acharya et al (2
004 a, b) g
overnment in developing countries is one of
the key actors in prioritizing, implementing new technologies and promoting innovation to
address their specific health and development needs.
The governments of the countries where
biotechno
logy innov
ation system has been
successful

in

perform or support the following
fun
ctions/activities
such as knowledge support, commercialization of research, collaborative
research, financial support, regulation, IPR and resolving ethical issues etc. (NSF 2001,
Bart
holomew 1997, EPOHITE 2003).

Thus it would be interesting to analyse the role of the
government in the promotion of the biotechnology in the country with special focus on the
healthcare sector.

Hence
,

the present study traces the role of government or nati
onal approaches in terms
of policies, institutions and instruments in the promotion of biotechnology innovation system
in India with a special focus on the healthcare biotechnology sector. A systemic
framework
3
similar to the EPHOITE

(
2003) project is being

adapted to examine the direction
of public policies, institutions and instruments in addressing the issues of knowledge support,
commercialization of research, collaborative research, financial support, regulation, IPR and
ethical issues in the area of he
althcare biotechnology in Indian context.


The paper is organised as follows: The second section of the paper presents the
significant features of national biotechnology innovation system

with focus on healthcare
biotechnology

with the help of various S&T
indicators. The
third
section
discusses the
various government initiatives in terms of various policies, institutions and instruments in the
framework
of

NSI while the
concluding section discusses the
lessons learnt along with the
policy implications
and c
hallenges
for the growth of
healthcare

biotechnology

in
n
ovation
.


2.

Salient features of
National

Biotechnology Innovation System



The potential for the biotechnology development is strongly influenced by the size
and strength of the national economy, th
e structure of existing industry and the

intensity of
R&D
.

(EP
OH
ITE, European Commission 2003)
. The national approaches and initiatives to



3

Examining biotechnology innovation in light of the systems theory of innovation and from

the perceptive of
the actors engaged in the system
.



5

promote the growth of the Biotechnology and
its innovative

performance could be depicted
with the help of various S&T

indicators.

A comparison of India with other developed and
developing countries in the development of
Biotechnology

is also reflected
4
.


Table
1.
Indicators of Expenditure and Sources of Funds on R&D for Select Countries


Sl.
No



Country



Per Capita
R&
D


(
in Us $
)

R&D Exp.
as % GDP

Source of R&D Funds

(%)



Industry

Government

other

1

Germany

613.94

2.64

67

30

3

2

China

12.15

1.23

66

27

7

3

India

3.53

0.80

2
0

80

0

4

Italy

220.76

1.11

43

51

6

5

Japan

976.58

3.11

75

18

7

6

Korea, R
ep.

288.50

2.91

75

23

2

7

Russian Fed.

29.91

1.24

31

61

8

8

United Kingdom

436.40

1.88

44

31

25

9

United States

962.15

2.67

64

31

5

Source: UIS, UNESCO
2005, OECD 2006, DST, 2006
&

World Development Indicators 2004/05, The World Bank

Note:

China

excludes Hong Kong
,
Other
-

includes International sources etc.



R&D and GDP figures for the various countries are for the period 2000
-
02.



Table1 clearly highlights the role of the government in driving the Indian
innovation system in general

while the countries Korea and Japan completely stand in
contrast.

It also shows that there is an urgent need to boost the investments in R&D with
strong participation from the private sector to catch up with other countries in S&T
development
including bi
otechnology
and to realise the target set in the Science and
Technology Policy

(STP) 2003
5
. However, the performance

of the
Indian
innovation system
in

the biotechnology sector could be
well
recognised
through the
patents

granted
6

nationally
and internatio
nally namely at the US Patents
Office (
USPTO)
7
.
(see

Tables 2
-
3)


Table 2.

Trends in Biotechnology Patents in India, 1995
-
2002


Year

Number of Patents

1995

172

1996

193

1997

279

1998

287

1999

162

2000

265

2001

451

2002

395




4

The set of counties in the various Tables

may vary.

5

India has a set a target to achieve investments in S&T to 2% of GDP( See STP 2003).

6

Patents granted are an important indicator of innovativeness of an economy.

7

In the context of biotechnological invention ,USPTO has a long tradition of fi
rms filing patents therein(
for

details see Bhattacharya ,S.(2007)



6

Source:

Asian Biotechn
ology and Development Review, Vol.7(2), March 2005


Table 3.
Biotechnology Patents Granted by USPTO from 1990 to 2003


Country



Patents
Granted


Sectoral break
-
up (%)

Industry

Research

Others

Ind. / Res.

South Korea

337

64

17

14

5

India

178

7

81

11

1

China

98

16

49

35

0

Brazil

44

29

54

0

17

Cuba

29

0

100

0

0

South
Africa

29

47

33

20

0

Egypt

10

17

50

0

33

Source: Quach, U et al. 2006 International Journal of Biotechnology, Vol
-
8 Nos.1/2, pp 43
-
59



Table 2&
3 show
a rising trend
of the India
n pa
tents in biotechnology
over the
years.
Study by Kumar et al (2004) has

also shown an increasing trend /growth both in the
patents

(
at USPTO)

and
the paper

published in the area
of biotechnology

in the country.

Also
,

India ranked 2
nd

in the growth of Biote
chnology patent applications next to China as
per Global Biotechnology Report (Ernst & Young 2007).
The
sectoral break
-
up of the patents
at USPTO (see Table
-
3) shows the dominance of the patents by the government Public Sector
Research
Organisations
(PSROs
) in complete contrast to Korea.

Study by Quach,U et al
(2006) on the Biotechnology Patents (at USPTO)

further revealed a high proportion of
the
total
patents

being
account
ed by the

healthcare sector
.
In case of India
,

nearly 75% of the
patents were in

the healthcare sector while Cuba and Korea had more than 80% of the patents
in the healthcare domain.




The above innovation trends

show

the role of the government in building considerable
technological capability in certain areas of

healthcare

biotechn
ology

in India.



3.

Policies, Institutions and Instruments



This section explores

the role of Government
by

analyzing
the
policies, institutions

and instruments introduced by the government from time to time
to
address the issues of
knowledge support,
commercialization of research, collaborative research, financial support,
regulation and IPR
for

the
promotion

and growth
of the

Biotechnology

in the country. These
issues are essentially the significant factors or determinants in the
national
biotechnolog
y
innovation system.

Studies
by Senker et

al (2001), European Commission
,

E
P
OH
ITE

(2003),
Reiss et al (2004)
, Bart
holomew (1997)
,
C
ooke (
2001
)

revealed these factors

mainly in the

context of

European and
US

biotechnology innovation system.




7


We
shall

ada
pt the
systemic framework

developed by
Sinker

et al
(
2001
) and
used in
the EPOHITE
(
2003
)

to

categorize

the

determinants
or

factors

in to networks
8


namely the
knowledge

support,
Industrial

R&D and
innovation

support
,

n
etwork
of innovators

or actors
and re
gulatory framework
to
analyze

the

role

of the government
in the development

of
biotechnology
innovation system
in the country.
The
systemic

analysis is preceded by a
section on
p
rioritizing

biotechnology and po
licy reforms to set the contours in right fram
e.



In order to understand the national policy systems, organisations, priorities and the
instruments to promote biotechnology and their evolution, the desk research was carried out
extensively to collect the information pertaining to national promotio
n programmes, funding
activities, policy instruments and institutions in the country.

Efforts were also made to
collect information from the literature search and other relevant secondary sources in this
regard.

3.1

Prioritizing ‘Biotechnology’ and Po
licy reform
s


In India
,

the government recognized as early as 1980s the importance of
biotechnology for national development in the areas such as health, agriculture etc. India’s
Sixth Five Year Plan (1980
-
85) was the first policy document to accentuate bi
otechnology
development in the country (Bhargava 1995, Chaturvedi and Rao 2004). The plan document
emphasized upon strengthening and developing capabilities in the areas of immunology,
genetics, communicable diseases etc (Planning Commission 1981).



As a

consequence the existing national laboratories under the S&T agencies, such as
the Indian Council of Medical Research (ICMR) and the Council for Scientific and Industrial
Research (CSIR), had initiated several research programmes to
fulfil

the above plan
objectives. In 1982, the Department of Science and Technology (DST) Government of India,
in order to promote biotechnology, relevant to the needs and priorities, constituted an agency,
viz. the National Biotechnology Board (NBTB), as an apex coordinating b
ody to identify
priorities, coordinate, oversee and plan for required manpower, integrated industrial
development and large scale use of biotechnology products and processes. The thrust for the
promotion and strengthening of the technology base in newly em
erging and frontier areas
of
Biotechnology

got further
boost

with
the government
Technology Policy Statement (TPS)
1983.




8

The networks with in which the relevant institutions and organizations are embedded and their inter
-
relationship.


8

In 1986, the NBTB was replaced by a separate government department called the
Department of Biotechnology (DBT, 1993) under the aegis o
f the Ministry of Science and
Technology
9
. Since 1986, DBT is the nodal agency responsible for policy, R&D promotion,
manufacturing/industrial activities and international cooperation in the field of biotechnology
in India. The recent
Science and Technolo
gy Policy 2003

also lays special importance to key
leveraging technology such as Biotechnology and it integration with varied national activities
and society in sectors such agriculture, water, health, industry, education etc.
Recently
, to
realise the fu
ll potential of biotechnology the Department of Biotechnology (DBT) came out
with the Biotechnology

Vision Document 2001
.
The Vision Statement on Biotechnology aims
at



Attaining new heights in biotechnology research, shaping biotechnology into a premier

precision tool of the future for creation of wealth and ensuring social justice

especially for
the welfare of the poor
".


To respond to the rapid accruing changes in the biotech sector the DBT formulated a
Draft

National Biotechnology Development Strateg
y 2005
, after detailed consultation with
the various stakeholders


scientists, NGOs, civil society, policy makers and industry
10
. The
Draft Strategy aims at making India globally competitive in the emerging bio
-
economy with
the strategic action plan to di
rect the future priorities and activities in different sectors of
biotechnology
with enhanced participation from the private industry
visualizing a ten year
perspective plan period to accomplish the above Vision
11
.

The prime goal of the
Biotechnology Strate
gy is to facilitate
an
emergence of an ecosystem or environment that
promotes and sustains innovation.

3.2

Supporting the Biotechnology Knowledge base

3.2.1

Allocation of Public funds for Biotechnology and co
-
ordination


Biotechnology being a knowledge i
ntensive field with high uncertainties and success
expected to take longer duration
,

a requirement for
a consistent financial support

assumes
great

importance

to develop and renew the biotechnology science base
for its national
development.




9

The main reason for this evolution was the realization that biotechno
logy being the generic technology, whose
progress requires the development of a variety of competencies in a variety of scientific disciplines. And to
achieve this coordinated development an agency working in tandem with Ministry of Science and Technology
was necessary (Ramani 2002).

10

The Draft Strategy is pending for the approval of the Government.

11

A ten year perspective period is stipulated due to long gestation period and uncertainty associated with
biotechnology research and innovation.


9

One of the chal
lenges facing the developing /non
-
OECD countries is low level of
investments in private R&D and innovation to which the Biotechnology is no exception.
This is evident from a
meagre

private R&D expenditure
in biotechnology
of 609
.
5
million
rupees
in 2002
-
0
3 with a percentage share of around 2%
of
the total private R&D
expenditure
12

The prime mechanism or instrument of funding the biotechnology research
both basic and applied being the government or public grants available through the Five year
Plan allocatio
ns/ Annual allocations of the concerned department/scientific agencies
13
.

The
DBT is a
nodal agency

with committed budget allocation,
responsible for
promotion and
development of biotechnology
in the country
. In addition,

there are five other
government
ag
encies

responsible for financing and supporting

scientific
research in
cluding
biotechnology
14
.

The
DBT
started with a meagre funding of
400 million

rupees
in 1986
-
87
which witnessed a
nearly four fold increase
to around
15
10

million
rupees
in 2000
-
01
and
a
ten fold increase
to 4590 million

rupees

in 2005
-
06.

In fact the plan
allocation for DBT has
witnessed a consistent
annual
increase

of more than 20% since 2001
-
02.


One of the prime reason
s

for the higher allocation
of funds for the biotechnology
being t
he government goal to raise
the
S&T investment as share of GDP to 2% by the end of
Xth plan period ( 2002
-
07)as targeted in the STP 2003. As a result the plan allocations for the
three major

S&T agencies

namely DST, DSIR and DBT have

been doubl
ed during th
e Tenth
Plan (
2002
-
07) as compared to the Ninth plan by
the Planning Commission(X Plan
S&T
Document, Planning Commission ).



The
growth in Indian Biotechnology R&D and innovation has been primarily driven
by the government funding
as compared to a margina
l increase
in the R&D by private sector
in the recent years. This is in harmony with the national trend in Indian R&D as majority of
the resources (nearly 80%) are being financed by the Government. Interestingly a similar
national trend of government driv
en R&D growth has been observed recently in the USA and
Europe whereas in case of Japan and Korea, industry led R
&D as been the dominant feature
(OECD 2006).




12

One of
the reasons for such a low R&D expenditure is the generic nature of biotechnology and globally there
is lack of clarity globally on the definition for proper mapping of its R&D expenditure ( see Chaturvedi 2005,
OECD( 2004, 2006)).

13

It may be ment
ioned here that the
Planning Commission set up in 1950 has been responsible for the
formulation of S&T plans as well as for the budget allocation of funds for S&T as a part of an overall socio
-
economic development plan of the country.

14

The other five age
ncies are :

Department of Science and Technology (DST), the Department of Scientific
and Industrial Research (DSIR) including the Council of Scientific and Industrial Research (CSIR), the Indian
Council of Medical Research (ICMR), the Indian Council of Ag
ricultural Research (ICAR) and the University
Grants Commission (UGC).



10

The government
allocate

funds to the relevant public research institutions and
universities as l
ong
-
term institutional / committed block grants and
only a limited amount
mainly 3% of the total national R&D expenditure is
sponsored

through competitive funding
(through peer
-

review) mechanism towards the targeted or programme oriented goals

as
Extramu
ral
R&D
. The provision of block grants to the PSROs entails

ex post co
-
ordination
(fragmented policy sy
s
tem
) instead

of ex
-
ante co
-
ordination (concentrated

policy system)
15

of
the strategic decision
s

for
research and
funding.


The

results of the European Co
mmission
study EPHOITE(2003) shows that


ex
-
ante co
-
ordination and competitive funding ( through
peer
-
review mechanism)
leads

to more effective national performance for
instance,

the
Nordic countries namely
Denmark
, Finland

and

Netherlands
.

Also Ireland w
ith a
concentrated or

ex
-
ante policy system exhibited a relatively good performance despite its low
investment in R&D

this in contrast to the France which despite
its high

expenditure
was

not
able to achieve high scientific performance.


It is appreciatin
g to note that the Indian government has taken a lead role in for the
support
and renewal
of knowledge base
,

very much essential for the promotion of
biotechnology in the country.

3.2.2.

Infrastructure support for research and innovation

The S&T infrastru
cture priority has been directly linked to national research priorities
in the Government National Five Year Plans
as well as

in

various
S&T
Policies so as to
enable the scientists to carry out research
at

par with
international standards. The Government
a
llocat
ion of funds or
Block Grants
results in the creation of new
research institutions and
facilities
apart from the

strengthening or upgrading
the existing facilities of an organisation.


In addition
,

the specific
programmes of the DST such as Sophistica
ted Analytical
Instruments Facilities (SAIF) introduced in early 70s provide

an access to the expansive

facilities of sophisticated
analytical instruments to researchers in general and especially from
the institutions which don’t have instruments to undert
ake

internationally competitive
advanced research
16
.

Recently
,

the Fund for improvement of S&T infrastructure (FIST)
programme initiated in

2000 provide

funds for the improvement of quality of
P
ost
-
G
raduate
teaching

and research
in all

the science departmen
ts of universities, colleges and other aided
institutions in the
country so

that more students are attracted to pursue their career in higher
studies in new and emerging areas such as Biotechnology etc.
In recent years
,

the
Industry



15

This ensures cooperative working to cachieve a coherent strategy for research and for diminishing the nuber
of policy actors over time( See EPHOITE 2003).

16

At present thirteen SAIF
s are being supported by DST at CDRI, Lucknow, AIIMS New Delhi, Guwahati
University etc ( see DST Annual Report, 2005
-
06)


11

has

also been
involved

in partnership with the institution and the government
in the

infrastructure capabilities
building
through the programmes like R
elevance and Excellence in
Achieving
New Heights
in
E
ducational
I
nstitutions

(R
EACH
)
.

It aims at creating Centre of
Relevance a
nd Excellence

(COREs)

in
higher

educational
i
nstitutions
to impart training and
courses to students in specific areas of interest to industry

such as
a
CORE on New Drug
Delivery
Systems

at MS University

etc
.
17




To undertake the
modern biotechnology resear
ch
in areas
such as
molecular
modelling
, protein engineering, drug designing, immunological studies, pre
-
clinical studies,
clinical trials, etc.
,

t
he Government
D
epartments mainly DST, DBT, ICMR

& DSIR

have
played a proactive role in establishing dedicate
d
State
-
of
-
the Art National Facilities
for
doing R&D
in all systems of Medicine
such as

National Facility for
p
harmac
okinetics and
metabolic studies

at CDRI,

Lucknow
,

Clinical Research Facility to Develop Stem Cell
Technologies & Regenerative Medicine a
t Centre for Cellular and Molecular
Biology(CCMB
),
Hyderabad
,

Animal House facilities with GLP at National Institu
te of
Nutrition(NIN), Hyderabad,

Transgenic Facility, Toxicology Centers, Clinical
pharmacological centres etc.
These facilities are availabl
e to scientists, industries an
d
students at nominal costs. Th
e national

facilities also conduct small duration regular training
programmes for capacity building in areas of instrumentation, handling of animal houses,
bioprocess, and molecular biology

and e
ncourage inter
-
departmental networking.




3.2.3

Support to public research organizations

The country has developed a large number of public sector research organisations
which include universities and public research laboratories to enhance the institutio
nal
capacity to undertake R&D or new knowledge in the life sciences and many of them have
made smooth transition in to evolving the Science of Biotechnology. According to the
Directory of Biotechnology 2003, brought out by the BCIL
18

there are a total of 2
41 S&T
institutions in the area of Biotechnology out of which 123 (50%) fall in the medical
biotechnology.




The
Government

has established a large number of institutions in the area of
Healthcare Biotechnology over a period of time and in the rece
nt past a multitude of
specialized institutes such as National Institute

of Immunology (NII),
New Delhi
;

National
Centre for Cell
Sciences, Pune
;

International Centre for Genetic Engineering and
Biotechnology, New Delhi, (in collaboration with UNIDO)
;

Ce
ntre for DNA Fingerprinting



17

so far 26 COREs are functional across the country in various S&T areas .( DST Annual Report, 2005
-
06)

18

Biotech Consortium India

Limited (BCIL), Government of India


12

and Diagnostics, Hyderabad have been established. More recently
,

the
National Centre for
Plant Genome Research (NCPGR), New Delhi in 1998, and National Brain Research Centre
(NBRC), Gurgaon in 1999

were established
.

It may b
e interesting to note that among the large number of established institutions,
some have
undergone metamorphosis in their mandate

and focus for example the

Centre for
Biochemicals (CFB) established in 1977 under went changes and became Centre for
Biochemi
cal Technology (CBT) in 1997, which further under went transformation to be
finally renamed as Institute of Genomics and Integrative Biology (IGIB), Delhi, established
in 2002 with a new focus in the area of Functional Genomics to take advantage / lead
in this
emerging area on the completion of the Human Genome Project.


A number of
PSROs over

the past few years are now working on advance research
programmes in frontier areas of biology, genetics,
cellular biology

and
Neuro

biology that
would have si
gnificant implications for the evolution
of new

generation medicines in
therapeutic segments, ranging from psychiatry to cancer and heart disease.

3.2.4

Human resources
D
evelopment

The issue of highly qualified and well trained S&T personnel has always
remained
high on the agenda of the various policy initiatives of the Government such as SPR 1958,
TPS 1983, and STP 2003 in general and for biotechnology in particular in the DBTs Vision
Document 2001 and the Draft National Biotechnology Strategy 2005.

DBT

has played a pioneering role in the human resource development for higher
research in biotechnology.
In the early phase of development (1986
-
90) grants were provided
by the government for the creation of scientific competence or core of researcher’s utmos
t
essential for the development of
b
iotechnology innovation to a network of teaching and
research institutions in the country such as the Indian Institute of Sciences, Indian Institutes
of Technology, All India Institute of Medical Sciences, National Chemi
cal Laboratory, Tata
Institute of Energy Research, Tata Institute of Fundamental Research etc.



To cope with a growing demand for highly trained manpower in biotechnology.
The
DBT initiated
in
the first phase (1984
-
85),
supported higher education research

in 5
universities

and
later
evolved the curriculum for biotechnology courses and established a
model system of post
-
graduate/post
-
doctoral teaching in biotechnology in
7

universities/

institutions in 1986
-
87
.
As a result in 2003
-
04, there are 30 m
asters a
nd doctoral programmes
in general biotechnology with s
everal
specialized courses such as marine and agricultural
biotechnology

and medical including
diploma courses in molecular and biochemical

13

technology

being supported

and carried out
in the leading Indi
an universities and research
institutions. The total intake of students
recently
in the various post
-
graduate courses
supported by the DBT in the country is around 729 per year
19
.


In order to ensure a steady stream of scientist and technologists in the kno
wledge
intensive discipline of biotechnology, the focus in the recent past has shifted to attracting the
bright students
20

to take up science as a career by awarding merit fellowships, popularizing
biotechnology through popular books in English and other In
dian languages etc.
21

For the
Young Scientists, special incentives such as increased number of PhDs and Post
-
doctoral
fellowships, overseas fellowships in niche areas, a special rapid travel grant scheme and
priority R&D support to facilitate young scientis
ts to receive grant
-
in
-
aid for research
projects have been envisaged. In addition an Innovative Young Biotechnologist Award has
been instituted to nurture outstanding young scientists with innovative ideas and help them to
pursue their research efforts.


Despite the efforts of the government, the
talent crunch in Biotechnology Industry
looms large according to the concern expressed by the industry about the quality of
manpower being produced in the existing university system. Almost all the industry
respon
dents are of the view that the university needs restructuring and strengthening as it is
still not at the cutting edge. At the same time nearly 60% of the top students prefer to go
abroad

(Top Industry Survey, BioSpectrum February 2007)
.

A
ccording to ano
ther study one
of the largest gaps in the academia was the lack of innovations and entrepreneurial culture
with weak linkages between Industry and University (Bhattacharya and Arora 2007).


In view of the
multidisciplinary character of the Bio
-
technology

and to facilitate
the availability of the quality human resource for the emerging biotechnology sector, the
Draft Biotechnology Strategy

(2005) lays emphasis on setting up of a
National Task Force
on Education and Training
to augment human resources in the

academic sector. The
emphasis
is o
n the multidisciplinary /
inter
-
disciplinary learning in the areas such as
bioinformatics, medicine, technology transfer & commercialization, bio
-
enterprise & bio
-
financing and IPR etc. by creating an effective interface b
etween academic, industrial needs
as well as across disciplines.

This is considered important for improving the quality of



19

Off late, some institutes in the private sector have also come up for various degrees and diplomas in
biotechnology

20

In view of the declining popularity of science and the unwillingness among the youth to take up sci
ence as a
career (Xth S&T Plan Document , Page 1081, Planning Commission, Govt. of India).

21

Also by organizing popular lectures apart from holding exhibitions and supplemented by National Science
Day celebrations.


14

education and providing exposure to new technologies for students at various levels. In
addition Women scientists would be encouraged

to take up careers in biotechnology.




The Industrial Interface to be strengthen
ed

further by establishing regional training
centers at diploma, graduate and post graduate level by imparting skills required by the
industry,
industry internship in PhD pr
ograms and network of universities and industries
facilitating pooling of resources.

Visiting professorship and creation of industry sponsored
chairs in partnership with the government Department of Biotechnology are also envisaged.


The

draft Biotechnol
ogy strategy (
2005)

further lays stress upon

arresting and
reversing brain drain
by making public

the

information on availability of p
ositions in
education/research establishments and industries
,

to facilitate employment of scientists with
specific skills
at appropriate positions. A database of scientists working in different areas of
biotechnology within and outside the country shall also be created to utilize the expertise
appropriately. In addition the draft strategy also emphasis
e

upon
enabling working

conditions for scientists

to undertake industry oriented research including the lateral

mobility of scientific personnel in universities/research institutions to work in industry

for commercialization of their research efforts such as dual/adjunct facul
ty positions being
held by the scientists in university/research institutions, joint salary

support etc.

3.3

Support to Industrial R&D and Innovation

The
Industrial Policy Resolution
1948

of the Government

marked the beginning and
provided the
broad

suppo
rt for the Industrial development in the country while the
Industrial
Policy Resolution 1956

gave the Public Sector the role in the economy
22
.


The promotion of

R&D and innovation
by the public research institutes to strengthen
the endogenous industrial ba
se received strong thrust in the 1983
Technology Policy
Statement (TPS)
.

The TPS also lays special emphasis

on setting up of
In
-
house R&D units
in Industry
, to provide a desirable and essential interface between efforts within the national
laboratories an
d the educational sector as well as production in the industry.

The special
mention was being made for the promotion and strengthening of the technology base in
newly emerging and frontier areas
including

Biotechnology
.

The

recent
S&T
policies namely



22
I
n the early phase of the Drugs and P
harmaceuticals

development
, the Public Sector incorporations such as Hindustan
Antibiotics

Ltd (HAL) in 1954 and Indian Drugs & Pharmaceuticals Limited (IDPL) in 1961 were setup to meet the
healthcare

needs of the country.


HAL primarily engaged in the
manufacture of bulk drugs, mainly Penicillin,
Streptomycin and a number of formulations while IDPL contributed significantly in the area of such essential and life
-
saving drugs as Narrow Spectrum Antibiotics, Tetracycline’s and Antifungal
.



15

STP 2
003
,

Biotechnology Vision Document
2001

and also the
D
raft

National
B
iotechnology
S
trategy 200
5

have further reinforced the thrust on the promotion of R&D
and innovation for the Biotechnology Industry.


The target of the government
(See STP 2003)
to achie
ve National S&T expenditure to
2% of GDP with the active participation of the Industry

has acted as a catalyst to focus
attention and support for innovation at the higher level of government for Private R&D.
The
Government has

launched several

fiscal and
non
-
fiscal

measures

from time to time

both
supporting R&
D and

innovation
to keep pace with the changing industrial

and
technological
needs

for

strengthening the R&D capabilities of the Private Sector In
-
house R&D Units and
the private NGOs named
as the

Sci
entific Industrial Research
Organizations

(SIRO) in the
country.

The

various measure
s

or instruments
of support to Industrial R&D and Innovation in
general and with reference to
the emerging Biotechnology
sector include:

3.3.1

In
-
house R&D Centers
/SIRO

R
ec
ognition

To promote industrial R&D, a Scheme for granting recognition to the In
-
house R&D
centers in Industry was started by the government in 1973 with the initial objective to provide
liberal import facilities under the Open General License (OGL) to mee
t the technical and
technological needs of industrial production.
23

Recognizing the need to establish their own
R&D units and to take advantage of the incentives and various support measures available, a
number of industrial units have set up their own in
-
h
ouse R&D units in general and more
particularly in knowledge intensive sector such as Biotechnology
24
.

The R&D recognition
scheme was later extended to the non
-
commercial voluntary Scientific and Industrial
Research Organizations
(SIROs
) and even some of th
e industrial
o
utfits have also
registered
their R&D units under
SIROs. And several

measures have
also been

evolved to encourage the
R&D carried out by the SIROs
25
.

3.3.2

Promoting
R&D and Innovation



The government has evolved several schemes and measures
to promote as well as
support R&D and Innovation in Industry at various stages of the innovation
chain namely
Idea to Proof of Concept, to Pilot Plant and to Commercial Stage.

Up to late
1990s the

government schemes focused on new knowledge or idea gener
ation
i
n the

formal institutions
mainly
PSROs and
I
n
-
house

private

R&D
I
ndustrial units
as

these

have
well
established



23

This has now
been absorbed in the liberalized trade policies announced by the Government in 1991.

24

The number of In
-
house R&D units recognized has increased steadily from about 100 in 1973 to around 1214
in 2006( see R&D in Industry, 2006 DSIR, Government of India)

25

The SIROs recognized by the Government are eligible for Customs and Excise duty exemption on capital
equipment, spares and consumables required for scientific research.


16

resources
and capabilities

to
conceptualize
a new idea and take it forward through formal
means to the next

proof of concept


stage
.



Off late, t
he government have tried to

promote

innovation
by capturing

the
knowledge or idea of the individual innovator apart from the
institutionalized knowledge

pool
of PSROs or In
-
house industrial units
to
extend the domain of
innovation to all
sphere
s

of
national
activity in the country.
A

series of programmes instituted such as

the
Technopreneur
Promotion Programme (TePP) in 1998
and the
National Innovation Foundation (NIF) in 2000
with a corpus fund of Rs.200 million

to support individual inn
ovators both from informal and
formal knowledge system
so as to enable them to become
tec
hnology
-

based entrepreneurs
(
Technopreneurs)
.

The recent policies STP 2003 and NBDS 2005 further re
-
emphasise their
promotion

to strengthen
innovation in the country
.



The Technopreneur Promotion
Programme (
Te
PP
)

provides financial support to
individual innovators
26

to convert and origin
al idea / invention / know
-
how
in to a working
prototype / process. In addition the support is also provided to the owner of the ‘St
art
-
ups’
having

an annual turnover less than 0.30 million rupees
.

The recently launched scheme of
the
government

Small Business Innovation Research Initiative

(
SIBRI
)

in 2006 by the
Department of
Biotechnology (DBT
)
, further

supplements the efforts in th
e
area of

Biotechnology.


More r
ecently
,

the focus
has been on to
promote and nurture inventions and
innovation among youth/students, the programme


young inventors initiative steer the Big
Idea



jointly launched by the government in collaboration with
C
onfederation
of

Indian
I
ndustry

in 2004 is

a

step in this direction.

The
programme
Technology Development and Innovation Programme (TDIP)
,

erstwhile PATSER
27

initiated in 1992

and the Home Grown Technology Programme started
in 1993 provide the support

for the up
-
scaling of
innovative technologies
both indigenous and
foreign technologies
from the

proof of
concept

stage


to the

pilot
plant /pre
-
commercial
stage’ by the industry

mainly start ups and SMEs
.

Realising the need of financial capital to acce
lerate the development and
commercialization of indigenous technology or adaptation of imported technology
from
for
wider domestic application
28

and to compete globally, the Government set up in 1996 a



26

Individual innovators includes any Indian citizen
-

artesian, technician, engi
neer,

scientist, architect, student,
farmer etc.

27

Programme Aimed At Technological Self
-
Reliance ( PATSER)

28

The TDB administers the fund called the Fund for Technology Development and Application which receives
the grant out of the Cess collection on th
e import of technology from the industrial concerns under the
provisions of the Research and Development Cess Act, 1986


17

Technology Development Board (TDB). The board provides
financial assistance in the form
of equity, soft loans or grants. The projects funded by the Board include various sectors
including Medicine and Health. Incidentally the maximum numbers of projects were
sanctioned in the area of Medicine and Health sector
29
.


Enc
ouraged by the response of TDB
and the continuing
demand from
the
industry for
financial capital
for accelerating the development of industrial R&D
,

the government
through it various PPP schemes such as New Millennium India Technology Leadership

Initiative (NMITLI) in 2001, Drugs and Pharmaceutical Research Programme (DPRP)
30

in
2004
have also
extend
ed
soft loans to industry for R&D projects carried out in collaboration
with PSROs. Recently the new scheme
Small Business Innovation Research Initiat
ive
(SIBRI) in 2005 extends loan and as well as grant to support
small and medium size biotech
enterprises.

3.3.3.

Technology Transfer

To facilitate
the
technology

transfer

from national laboratories and nationally funded
R&D programmes to industry
,

publ
ic sector organizations

like NRDC

in the early 50s
and

the
BCIL in 1990 specifically for

the
biotechnology
having

been
set up
by the Government.


At
present only few institutions like Indian Institute of Technology (IITs), Indian Institute of
Science

(IIS
c), Bangalore, Pune University

and

some
CSIR
research lab
s etc have
the
ir own
Technology Transfer Cell
(TTC)

to commercialize the outcomes of the research.
However

due to traditionally poor linkages with industry and weak commercialisation policies
,

the
g
overnment is contemplating
to
strengthen the

technology transfer capacity
and
effectively
make use of the research outcome of the PSROs
by creating several national/regional
technology transfer cells (TTC’s) over the nex
t 5 years to provide high calibre
,
specialized
and comprehensive technology transfer services
31
. Each TTC would service a cluster of
institutions in a region or a large city
. To further encourage the transfer of know how to
industry, the scientists and technologists associated with it would
be rewarded through
financial returns

(see STP 2003, Draft
National Biotechnology Strategy

2005).


3.3.4

National Recognition for

outstanding
R&D Achievements


The government apart from rewarding the PSROs scientists for their distinguished
research work

has

also constituted

several Awards for the
Industry in

recognition of their



29

The study firms Shantha Biotechnics Pvt. Ltd., Hyderabad and Biocon Ltd., Bangalore have also been the beneficiary of
the TDB loan

30

The DPRP started in 1994
-
95 but the granting of the loan initiated in 2004 only.

31

The services would include: evaluating technology and identifying potential commercial uses, developing


and executing and IPR strategies identifying potential licensee
s and negotiating licenses.


18

outstanding R&D
achievements
.

The D
SIR instituted ‘National Awards for Outstanding in
-
house R&D achievements in Industry” in 1987

aimed at

recognizing the

efforts of industry in

de
veloping their own technologies and
also
for
the efforts in absorbing/up
-
scaling the
technology developed by other public research institutions or the efforts involving
indigenization of imported technologies
32
.

An a
nother award
was
instituted by the

Te
chnology Development board (TDB) Award
in

late 90’s with

a

special focus on the SMEs
/SSI

and also including
other

industrial concerns
involved in the
successful
commercialization of indigenous te
chnology. This is supplemented
by a similar award
institute
d by the D
BT
and
given to
scientists/

innovators/


entrepreneurs/

institutions/

companies both in public as well as private sector for a new process, product development
and for the commercialization of a technology or a product in the areas of biotechnolo
gy and
biological sciences including agriculture, biomedical and environmental sciences.


The awards are a

reflection of the utility of the public
science being

carried out in the
national laboratories/universities and
provide the

stimulating environment
for the other

industry to take up

innovative research and competitive technology development as a part of
their

growth strategy.


3.3.
5


Fiscal Incentives for R&D



Biotechnology

firms

are by far the most research intensive among major industries
and in
vest on an average 20
-
30% of their operating costs in R&D or technology outsourcing
(Draft National Biotechnology Strategy 2005). The fiscal incentives and tax benefits are an
indirect way of encouraging R&D expenditure and help the firm to capitalize on t
he inherent
cost effectiveness of the biotech enterprise
33
. Apart from the general 100% tax rebate on the
R&D expenditure, weighted tax deduction of 125% for sponsored research in the PSROs etc.,
recent years have seen the introduction of new tax incentives

and changes in the existing
incentives to make them more attractive for the Knowledge intensive sectors including
Biotechnology and also for the SMEs. Major incentives include: i) increase in the weighted
tax deduction from 125% to 150% on R&D expendit
ure since 2000, to companies engaged in
the business of Biotechnology or production of drugs, pharmaceuticals etc in Government in
-
house R&D centre. ii) Customs/Excise duty exemptions both for capital equipment and
consumables for privately funded NGOs

(SI
ROs) since 1996 and 1999 respectively
34
. iii)
Pharmaceutical reference standards allowed to be imported duty free since 2003 In addition



32

So far DSIR has presented 155 Awards during 1988
-
2005 in a wide range of sectors including biotechnology. The biotech
firm Shantha Biotecnics Ltd., has received this Award twice
.

33

These incentives are given based upon the und
erstanding that the R&D expenditure has benefits that can’t be
fully appropriated by the investing firm so that firms are reluctant to invest in socially optimal levels of R&D.

34

PSROs are also eligible for the same.


19

there are other incentives
such as a) exemption from the Price Control of Drugs Order for
drugs which have been develope
d indigenously or produced through a process, developed
through indigenous R&D b) exe
mption from the requirement of
the compulsory licensing,
and c) Foreign Direct Investment( FDI) permitted up to 100%.



The Draft NBTS 2005 suggests
further intervention
s

to encourage innovation and
make the biotechnology industry more competitive namely, Exemption of import duties on
key R&D, contract manufacturing / clinical trial equipment etc to facilitate SMEs to reduce
the high capital cost of conducting research, e
xtending the 150 % weighted average tax
deduction on R&D expenditure under until 2010, inclusion of the international patenting
costs under R&D expenditure, remove customs duty on raw materials imported into India,
where the finished product is imported
duty free(including the imported diagnostic kit),
Rationalization of import and export of biological material is considered critical for clinical
research and business process outsourcing etc


3.3.6

Venture Capital


The venture capital

(VC) industry emer
ged in India as a result of the major initiative
of the government with the introduction of the venture capital guidelines in 1998.
35

On the
biotechnology front, globally over 25% of the finances are raised by Venture Capitalists

(ICRA 2005). In India the v
enture funding initially played a limited role
36
.However,
recognition in the country is growing of the importance of VC, especially for the early stages
in biotech ventures. In 2003, the first national VC fund for biotechnology in India (The
Biotechnology V
enture Fund) was initiated with a joint venture, APIDC
-
VCL, between
Dynam Ventureast Group and Andhra Pradesh Industrial Development Corporation
(APIDC, Hyderabad, India). In 2004, it provided about Rupees 80 crore ($17.7 million) in
funding mainly targeti
ng early stage biotech firms. The biotechnology has attracted large
number of commitments from the leading public sector banks and private financial
institutions and insurance companies apart from the government Technology Development
Board(TDB) discussed
earlier. The Indian Credit and Investment Corporation of India(
ICICI) and the Andhra Pradesh Industrial Development Corporation (APIDC
-
VCL)are the
leading dedicated biotechnology funds with a share of 16% and 14 % respectively(see
Chaturvedi 2005). Enthus
ed by the success number of state governments namely Kerala,



35

According to Bowonder and Mani ( 200
4) called it a remarkable document as it clearly laid out the scope of


Venture financing in the country in terms of stage, instrument and industry.

36

due to
concerns
by the firms/entrepreneur
that venture capital is “mostly available to companies wh
ose
product and market are clearly identified and research leads are already available for commercialization”

and
concern of the venture capitalist regarding legal and regulatory matters, valuations strength and stability of the
management, revenue model,

exit options etc( see ICRA 2005 and Kumar et al 2004).


20

Karnataka, Gujarat etc have also established biotechnology related VC funds. The Draft
NBTS 2005 has recommended for a
n appropriate policy guideline to extend the
priority
sector lending to biot
ech companies as well on the lines of agri
-
business
37
.

3.4

Networking among Innovators or
Actors

The

recent
N
ational

P
olicies namely STP 2003 and the
Draft National

Bio
technology
Development Strategy 2005 have articulated the
need for
developing a network

of relevant
stakeholders to promote innovation
in the

country.

This calls for the Public investment to be
catalyzed to promote clustering and networking among stakeholders as this can lead to
enhanced creativity by sharing of expertise, resources and infr
astructure.

The
networking of
actors or stake
holders may involve Public
-
Private Partnership or either have a regional focus.

3.4.1

Pubic Private partnerships (PPP) programmes

Over the years several P
ubic Private partnerships (P
PP
)

programmes have been
laun
ched by the government, PATSER by DSIR in 1987, DPRP by DST in 1994
-
95,
NMITLI by CSIR in 2000 and of late joining the list is SIBRI by DBT in 2006. The
programme DPRP is dedicated to healthcare domain in general while SIBRI focuses on the
application of

biotechnology in
various sectors/domains including

healthcare.
Recently in
2004
,
based upon the feedback from Industry
,

the DPRP programme was strengthened with
the enhanced allocation of funds

and to also provide
i) soft loans to the Industry to carry ou
t
basic research in the drug and pharmaceuticals independent of the National Lab/University
partnership and, ii) has the objective to establish advance national facilities to be utilized by
the various stakeholders
for

drug development.


The financial sup
port is generally being provided as a grant to public institutions and
as a loan or grant to private sector company’s exception being the DPRP programme where
no grants or loan are provided by the Government and instead the desired matching money of
the pr
oject is being spent by the Private Industry itself. These programmes have encouraged
the industry to take up innovation with reduced risks and have enabled infrastructure
development, mechanisms and linkages to facilitate new drug
development
in the count
ry.

The
draft
NBTS 2005

lays thrust on the promotion of basic and translational (applied)
research in key biological processes and new materials as “innovation for tomorrow” on a



37
Currently lending to agri
-
businesses as well as investment in Venture Funds by banks is categorized as Priority Sector


Lending with the rationale that

Biotech as a business has similar chara
cteristics in terms of risk as well as gestation time
lines similar to agri
-
business


21

cooperative rather than a competitive basis by involving various stakeholders

including
Industry with relevant skills.

3.4.2

Regional innovation clusters



Innovation thrives in geographic
ally based

C
lusters
38

of firms, universities and public
sector research laboratories, service providers, suppliers and trade associations etc. and thei
r
networking .
Since the early 1990 many OECD countries including Europe and US have
promoted a cluster based approach to innovation which at the same time has a regional
dimension (OECD
2006)
.
The companies in the cluster compete but also co
-
operate

an
d have
varied benefits
39
.

Cluster
have become
particularly more important in knowledge
-

based
sectors like biotechnology, Drugs and Pharmaceuticals etc as it encourages knowledge
exchanges or best practices requir
ing
regular proximity and trust
to be effec
tively
communicated

( B
io
S
pectrum
, November 2005).


The
draft national biotechnology strategy

2005
envisages
foster
ing

research, trade and
industrial partnership at regional and sub
-
regional levels by encouraging a “bio
-
cluster"
approach involving collab
orative
k
nowledge networks among stakeholders.

Recently the
Indian cities like

Bangalore, Hyderabad and New Delhi have been included in the life
sciences and biotechnology clusters of the world along with New York/New Jersey,
Philadelphia, Baltimore/ Wash
ington, DC, Research Triangle NC of the US prepared by the
Minnesota Biomedical and Bioscience Network
(
Bio Spectrum
, November 2005)



Bio
-
clusters are
also
being established in several Indian states through the initiatives
of many State governments in the

recent past to attract a biotechnology industry to their
respective States
40
.


Prominent among the states
promoting bio
-
clusters
are Andhra Pradesh,
Karnataka, Maharashtra, Punjab, Uttar Pradesh, Rajasthan, Gujarat, Tamil Nadu and Kerala
to take advantage
of the network of research institutes and universities that already exist. It
may be observed that some of the states have established Bio
-
cluster or biotech Park( Andhra
was the first State ), with dedicated policy and streamlined pro
cedure, Tax holiday
rebates
etc

to attract national and international stakeholders from the research, academic, government



38

Clusters comprised of interconnected companies and associated institutions in a particular field including product
producers, service providers, suppliers, universitie
s, research laboratories and trade associations (Department of Trade and
Industry, Govt. of the UK)
. Thus cluster is an amalgamation of producers, users and learners in a geographically spread area.

39

Benefits of Clusters : Raise innovation and productivit
y ; Help in sharing knowledge about best practices ; Reduce costs
by jointly sourcing services and suppliers; Interactions facilitate formal and informal knowledge transfer; Encourage
formation and efficiency of collaboration between institutions with co
mplementary assets and skills ( BIOSPECTRUM
November 2005, p 20
-
22)


40

It is similar in case of Australia where the state government (Queensland government ) have played a critical
role in fostering the cluster based innovation, to position Queensland as

a regional hub for biotechnology
(
www.smartstate.qld.gov.au
, OECD 2006).


22

and industry sectors.

A recent example is a cluster of biotechnology and pharmaceutical
ventures at Baddi in Himachal Pradesh.


The government wishes t
o
encourage the

bio
-
cluster innovation approach by
providing the missing links

such as availability of capital, regional networking

with

involvement of all the stakeholders

essential for the formation and growth of clusters as a
part of an
overall

devel
opment of Biotechnology in the country.
There are plans
to establish
niche
cluster in the area of stem cells in Hyderabad and Bangalore

and also in genomics and
proteomics.

3.4.3

S
timulating entrepreneurship and supporting innovation




The government
has placed considerable emphasis on the promotion of
Science

P
ar
ks

to utilize the large talent pool of human resources and the existing infrastructure
facilities available in the PSROs

(
see Draft National Biotechnology Strategy 2005)
.
Science
Parks help i
n creating an atmosphere of innovation and entrepreneurship, and promote active
interaction between academic institutions and industries for sharing ideas, knowledge,
experience and facilities for the development of new technologies and their rapid transfe
r to
the end user.


The Science and Technology Entrepreneurs Park (STEP)
41

programme was initiated
in 1984 by the Department of Science and Technology

(
DST)
, Government of India, jointly
with All India financial institutions (IDBI, IFCI & ICICI), State Gove
rnments

and the
academic institutions.
So far
DST
, New Delhi
has catalysed setting up of 15 such STEPs in
different parts of the country. This effort has helped in promotion of nearly 788 new units
generating annual turnover of around Rs.1300 million, and

empl
oyment of around 5000
persons.
More than 100 new products and technologies have been developed by
entrepreneurs promoted by STEPs.


The government will
promote and
support the establishment of
10
Biotechnology
Parks
42


by 2010
essentially through Publi
c
-
private partnerships
.

The biotechnology parks
will facilitate

the lab to land transfer of the technologies
and will
stimulate entrepreneurship

through partnership among innovators from universities, R&D institutions and industry.
43





41

STEPs are autonomous bodies registered as societies under the Societies Registration Act.

42
The biotech parks should be located so
as to be easily accessible for all the stakeholders, tenants, academia
with connecting roads, water and power supply and should also attract less administrative clearances from the
government.


43

Basic minimum components for parks should include research

laboratories for product development, multi
-
purpose pilot facility for manufacturing and process development, quality control and validation of

23


The government

Draft
NBTS 2005 lays further stress to
sustain these parks through

creation of incubators,
seed funds, fiscal incentives and tax benefits including 100% FDI to
ensure cost effectiveness of Indian biotechnology enterprise; for research and creation of
incubators
in the biotechnology parks;
with a recommendation to set up a
central body
Biotechnology Parks Society of India (BPSI) similar to the
S
oftware Technology
P
arks

of
India
(STP
I
)
to

co
-
ordinate this activity.


Another attempt
in this direction came with the
initiation of the Technology Business
Incubators(TBIs) scheme by
Department of Science & Technology (DST), during 2000
-
2001.
TBIs
have been recognized the world over for promotion of technology led and
knowledge driven enterprises.

The essential feature
of a TBI is that the tenant companies
leave the incubator space in 2
-
3 years
44
.

Presently
TBIs are being implemented at 12
locations in various academic institutes
with b
iotechnology being one of the thrust areas apart
from others such as ICT, new material
s etc.

Studies
have shown

that such mechanisms not
only help in the growth of technology based new enterprises, but also in improving their
survival rate substantially (from 30 per cent to over 70 per cent).

3.5


Regulatory Frame

work


The

regulatory
framewo
rk
conditions responsible

for creating the favourable
environment
for the growth of biotechnology essentially

include the
general
regulations,
IPR, ethical issues and consumers issues
45

(EPOHITE 2003)
. The

policies

or instruments
related to

regulatory
frame
work

are relevant for the
demand as these improve the market
conditions and social acceptability
,
46

and for the supply side
,

they
influence the attitude of
the investors, industrial players and scientists

and
their engagement in
the development

of
biotech
nology.
These measures

affect the institutional framework of innovation process and
are

usually

both nation

and
sector specific such as
healthcare
, agro or food sector
.

However,
the impact of the regulatory framework on the innovation process is controvers
ial
47
.






technologies, common effluent treatment plant, a GLP Animal House, a recognized human resource training
centre,

administrative support centre etc.

44

The TBIs, besides providing a host of services e.g. market survey /marketing assistance, business planning and training,
organizing management/technical assistance, information dissemination on product ideas/technologi
es, syndicating finances,
arranging legal and IPR services, using facilities of the Host Institute (HI) at nominal charges for a limited period, and
common facilities such as communication, conference, computer etc., also facilitate an atmosphere congenial

for their
survival and growth

45

Access to finance or capital for industry covered under the Industrial development

46

reliable conditions for industry, enhance trust and confidence in new technology among users

47

It can slow down the development process fo
r example in cases related with stem cell or cloning of humans or
even favour the innovation process such as GM crops.


24


In
India the phases of the innovation that are strongly regulated in case of
the
healthcare
sector are development and marketing and, with the advancement of the
biotechnology even drug discovery is also getting affected.

Currently the approval pro
cess
of
dru
g or biopharmaceutical product
for conducting clinical trials, manufacturing and
marketing of drug depends upon
whether a drug is a new chemical entity (NCE) or a
recombinant DNA

(rDNA)

product.

While for NCEs the Drug Controller General of I
ndia
(DCGI) is the approving authority, application for approval of an rDNA product needs to be
submitted to the DBT

and involves requires approval of multiple agencies such as Genetic
Manipulation, DCGI, Ministry of Health, and Family Welfare and Gene
tic Engineering
Advisory Committee, Ministry of Environment. Also the DCGI reviews the clinical data after
every Phase

and
based
upon w
hich
t
he

application is granted

the approval for next phase
.

On the
pricing front, The Drugs Prices Control Order, 1995

promulgated under the Essential
Commodities Act, 1955 that regulates the pricing of pharmaceuticals also covers select
biopharmaceuticals such as insulin.

This is being looked at by the National Pharmaceutical
Pricing Authority

( NPPA) under the Ministry
of Chemicals and Petrochemicals.

In fact the

process of discovery and development
of biopharmaceutical

product or drug
is

regulated by a
series of guidelines
introduced recently
such
as rDNA

guidelines
, Clinical trails
guidelines
48

etc
.


The plurality of n
ational regulation systems are major hurdles for potential innovators

and need streamlining.





The
s
implification

and streamlining of procedures

is also required for
import,
clearance and storage of biologicals, land acquisition, obtaining environmental
and pollution
control approvals would be simplified and streamlined within shorter time frame lines
through consultations with various central and state government departments.



Concerning policies with a socio
-
economic or ethical dimension, there are no
risk and
impact assessment studies undertaken to assist regulatory agencies and government for policy
action or scientific decision making. This will ensure safeguard on issues related to
health,
environment and quality related to issues on biotechnology i
nnovations.

Also
there are no
instrument related to examination of social acceptance and public understanding of science.
The experience of the Nordic countries namely Denmark, Finland and Sweden and other
European countries such as Belgium in this area w
ould be highly rewarding.



The Draft National Biotechnology Strategy 2005 has recommended several steps

to
improve the regulator
y framework conditions such as


single window clearance mechanism



48

This will lead to
acceptance of Indian

regulatory data internationally
.


25

for regulation and approval of drug or biopharmaceutical pro
duct, single window clearance
for establishing Biotechnology Plants,
and rules and

regulations for trans
-
boundary movements of biologicals

apart from
a

scientific, transparent, efficient predictable and
consistent regulatory mechanism for bio
-
safety evaluation and release system protocol
.

3.5
.1

Intellectual Property Rights (
IPR)


Among the Intellectual Property Rights (IPR), Patents are the most important for
technological advancement and development of t
he biotechnology. Patents apart form
providing a protection to the research efforts/results can also be exploited commercially
49

and
hence are crucial for both PSROs and firms. The Indian Patent Act (IPA) 1970 basically
governs the patenting provision in I
ndia and is widely noted for the long
-
lasting and far
reaching influences on health biotechnology innovation in the country.


With limited resources for R&D, the IPA was created to encourage process patenting
rather than novel product development
50
. This a
ct allowed the pharmaceutical industry to
reverse engineer products that were still under patent protection. This enabled local industry
to build up capacity in cost
-
effective process innovations and to target generic drug
manufacturing (Kumar et al 2004,
Lanjouw et al 2001 and Bhattacharya et al 2006). To
comply with the TRIPS requirements
51
, the IPA has been amended thrice with first
amendment in 1999, second in 2002 and third in 2005. As a result, uniformly product and
process patents are now granted in

all the technology fields for life term of 20 years.
However in case of biotechnology products there are certain exceptions and inconsistency
with the developed economies such as discovery of any living thing or non
-
living substance
occurring in nature is

excluded form the patentability as invention, also plants or animal in
whole or any part thereof other than micro
-
organism are not patented etc
52

.


Pressure to comply with TRIPS is raising awareness of intellectual property (IP)
issues in the private
and public sectors. As a result the Indian private sector is increasingly
investing more resources into R&D for novel product development than ever before for e.g.
firms such as Shantha Biotech Ltd. Hyderabad, Biocon Ltd. Bangalore, Panacea Biotech Ltd.
D
elhi
,
new modes of gaining access to new knowledge are gaining popularity such as



49

On the expiry of the patents, manufactures can apply to the
regulators( such as FDA in US or DCGI in India)
to sell generic versions.

50

IPA allowed product patents for non
-
chemical substances, and only process patents for Chemical substances
including pharmaceuticals, agro
-
chemicals and food products.

51

India bein
g a member of the World Trade Organisation(WTO).

52

For more details see ICRA 2005 and Bhattachrya, S.(2007).


26

alliances, technology and patent licensing and merger & acquisitions (M&A) of global firms
with strong IP assets increased both in pharmaceutical and biotechnology sectors.




The Scientific Departments and the public research labs of the government have also
taken several initiatives in this regard such as

to create a digital traditional knowledge
database to curtail further instances of foreign patenting of India’s biodiver
sity. Second,
CSIR, a chain of laboratories, has set
-
up a Research, Planning and Management Cell

at the
headquarters and Business Development Groups (BDG) in each of its constituent labs to
facilitate patenting of new knowledge/ technology and its commerci
alization. It has also
evolved a revenue sharing formula for IPR earnings between scientists and the organization.
Similarly in 2002, the ICMR adopted a new IP rights policy that promoted public
-
private
partnerships to encourage the development of health
technologies, primarily the patents .Both
DST and DBT have also created a Patent Facilitating Cell to raise awareness, promotion and
support of IPR for public sector research organizations mainly universities and research
institutions in the country.



Th
e public research institutes, research laboratories and universities are a store house
of the scientific manpower and are vital to India’s health biotechnology sector. The USPTO
patent data on Biotechnology shows that these are largest contributors in ter
ms of technology
achievements as well. The issue of IPR assumes great significance for these public research
organizations especially with the lines blurring or getting diffused with the universities doing
research activities and national laboratories pro
vide training for students. A fine example of
this trend is the nation’s premier Indian Institute of Science, Bangalore. And similar to the
European Union (EPOHITE 2003), the larger issue remains regarding the appropriate
framework conditions to provide th
e incentives that support patenting and licensing in
biotechnology. This mainly includes i)

the IPR regimes for university inventions and, ii)
institutional support to ease the complex patenting and licensing process. This will entail
passing a law or an A
ct similar to the US Bayh
-
Dole 1980 act empowering universities to
commercialize their research with appropriate reward or incentives to the scientist. And, the
setting up of institutions or TTO in each university to support the patenting of research
resul
ts. The Draft NBTS 2005 proposes similar recommendations to strengthen the IPR
infrastructure including commercialization of the research results of the academic institutions
and other research institutions.

The national strategy also
proposes
, setting up
of an
arbitration council to redress IPR disputes and constant dialogue with WTO
-
TRIPS authority
to address patentability issues in Biotechnology in Indian context and its future inclusion in
the Patents bill through amendments.


27

4.

Conclusion
s

and
Discuss
ion

The
present
paper aims at understanding the
role played by the
Government

or
national approaches
i
n
establishing an

institutional set
-
up
for
stimulating science and
innovation in the area of biotechnology

with special

focus
on
the healthcare

domain.

Th
e
S&T
institutional se
t
-
up
in
the
Biotechnology
is
being
driven
by
policies,
institutions,
financial mechanisms and other support measures or instruments

initiated by the Government
from time to time. This has resulted in prioritising
, building capacities

and capabilities in
terms of research infrastructure

and
human resources
in
the

development of biotechnology in
the country.


The study has systemically explored the

heterogeneity and general trends

in the

design and implementation
of the
varied governmen
t
policies and instruments
to promote
biotechnology in the country
. The analysis shows that the policy changes took place in three
phases
:
Pre
-
198
0
, characterized by
science
-
oriented approach
, dominated by the growth of
PSROs and IPR favoring process pat
ents for the

bio
-

p
harmaceuticals, a
second Phase

between 198
0
-
200
0
, characterized by the
technology
-
centric approach
,
PSROs especially
the r
esearch institutes moving

beyond the invention end of the innovation chain to the
technol
ogy generation phase.

H
owever
,

in the initial period
,
the focus on promotion of R&D
,

technology generation

and the transfer
of indigenously developed technologies to the
industry
remained in favour of PSROs

with

the

in
-
house R&D
industrial units remain
ing

dormant
.
53

1990s

wi
tnessed a major shift in the focus of R&D and technology generation
from national R&D institutions to private R&D institutions
,

being carried by
industrial
In
-
house R&D units or SIROs.

Incidentally this
period
coincide
with the liberalization,
privatizati
on and globalization of Indian economy
,

adoption
of new industrial policy
and
structural reforms
imparting a

technological dynamism in the industry with the ea
sy access to
foreign technology, global managerial skills and practices
.


An array of new program
mes or
support mechanism
for private R&D
emerged on

the scene since 1990s such as
Home Grown
Technology

(HGT) in 1993, Technology Development Board (TDB) in 1996, Technology
Missions
54
, Drugs and Pharmac
eutical and Research Programme (
DPRP)
55

in 1995,
Techno
preneur Promotion Programme

(TePP) in 1998
56

etc. involving enhanced participation
of the industry
57
in R&D and in the c
ommercialisation of technology (
including providing
soft loans
).

And
,

this
was complemented
by several

new programmes for enhancing the



53

The in
-
house R&D industrial units scheme for recognition was started in 1973 by DSIR (Govt of India).

54

Sugar, Fly Ash , Composites etc

55

Rechr
istened as Pharmaceutical Research and Development Support Fund(PRDSF) in 2005 with provision of
loan to industry apart from the R&D grant support with enhanced allocation of funds.

56

promoting Individual particularly Grassroot Innovators.

57

apart fr
om PSROs


28

in
frastructure capabilities and manpower development such as Relevance and Excellence in
Achieving new heights in Educational Institutions (REACH), Funds for Infrastructure
Development in S&T (FIST) in 2000 apart from several new fellowships for young

and
pe
rforming scientists
working in the
public research organisations
.




The third phase Post
-
2000
, characterised by globalisation of
S&T

and
sectoral
policies
, witnessed
a
systemic approach to S&T innovation

with the emergence of
new
horizontal and
vertical
/
sectoral

policies
resulting in
greater coupling of public
-
private
partnerships for

the growth and development of
biotechnology
.
In this phase several
new
programmes
or instruments
were introduced
such as
New Millennium Indian Tec
hnology
Leadership Initiati
ves (
NMITLI) in
2001, Technology Business Incubators

(TBI) in 2001
apart from
a array of
Patent Act 2002

and 2005

to make it TRIPS compliant
, a range of fiscal
and tax incentives,

FDI
etc. invo
lving enhanced participation of

the industry
58
in R&D

and

commerc
ialisation of technology

(including providing soft loans
)
.


A
National Good
Laboratory Practice

(GLP) compliance
Monitoring authority

was also
set

up

by the
governmen
t

in April 2002 to
help Indian Industry to obtain
GLP certification for their test
certifi
cation as per OECD guidelines and accepted internationally.


An indicative list of t
he
major policies and
instruments of

the government
to encourage biotechnology innovation
system in the country
may be seen at

Annexure

I
.


The
Indian context i
s
being
presently overlaid by many horizontal
59

and vertical
(sectoral)
60

policies prioritising biotechnology innovation, quite similar to the context of
European biotechnology innovation (Reiss et al 2003 EPOHITE). The horizontal policies
being primarily do
minant in the pre
-
liberalized era continued till as late 2000 while the
vertical or sectoral policies
emerged

in post
-
WTO era (
i.e.
after 1995) namely the
biotechnology Vision 2001 and the Draft National Biotechnology Strategy 2005
with the

exception

o
f

the new horizontal S&T Policy 2003.


The trend from the horizontal to vertical policy in India is quite contrary to the
European context where most countries such as Finland, Sweden etc on having attained the
critical mass are switching over to horizont
al policies for

the promotion of Biotechnology
(Enzing et al 2004).

Interestingly all the horizontal
S&T
policies
including STP 2003
have
categorically emphasised upon the support for
the
new
ly

emerging Biotechnology, however
the formulation of vertical p
olicies in Biotechnology off late reinforced the commitment of



58

apart from PSROs

59

Horizontal Policies are generic or broad in character, having an impact on the biotechnology sector with out
being biotechnology specific.

60

The Vertical Policies refer to those policy measures which specifically focus on the
promotion of
biotechnology.


29

the government, primarily to
achieve

critical mass for enriching the innovation and
development of Biotechnology so as to realise its true potential in the changing global S&T
scenario driven b
y TRIPS (WTO) compliant product patent regime.


Both the horizontal and vertical policies namely STP 2003 and Draft
NBTS
2005 take
a
systemic approach

and

have been evolved with wider consultation of all the stakeholders,
a complete departure from the
earl
ier policies in the
pre
-
WTO

era
.


The STP 2003 policy
takes a balanced

and systemic
perspective for the promotion of Science and Technology
together
61

along with legal, fina
ncial and other related systems. It lays special focus on
promoting close and produ
ctive interaction between public and private institutions including
states, in sectors such as health, industry, and education etc. with key leveraging tech
nologies
such as “Biotechnology”

being given a special importance.



The
Draft National Biotechno
logy Strategy (NBTS) 2005
visualizes a ten
-
year road
map w
ith clear direction and targets and focuses on
various cross
-
cutting issues such as
human resource development, academic and industry interface,

innovative enterprises,

infrastructure development
,
regulatory environment , effect of WTO,

etc.
for
the growth
and
global

competitive
ness of


Indian biotechnology.


The

systemic analyses reveal the co
-
evolution of new sectoral institutions and

organisations such as new specialised
departments
with

in

t
he
universities,

changes

in the
existing research mandate of the
institutions due

to
new scientific and technological
advancements etc
,

have been r
esponsible for the dynami
sm
and transformation
in the
biotechnology

innovation in

the country. In fact the ye
ar 1995,

India

joining the WTO
,
launching of
t
he DPRP programme followed by

plethora

of instruments in the subsequent
years aptly

deserve
s

to be the
watershed year or turning point
for the healthcare
biotechnology innovation in India.


The government
att
aches
a high priority to the
field Biotechnology in the country and
as a result significant achievement have made especially in the area of healthcare.
This has
resulted in the development of vaccines such as

the first indigenously developed
recombinant
He
patitis
-
B vaccine,
anti
-
leprosy

vaccine and

a series of
them such

as
Rota Virus,
Tuberculosis etc

are in the pipeline (
See DBT Annual Report 2006)
, apart from
building
capacities and capabilities in terms of research infrastructure and human resources in t
he



61

as part of the double helix strand unlike the earlier policies, namely Scientific Policy Resolution (SPR), 1958
with emphasis on Science and Technology Policy Statement (TPS 1983) on the Technology respectively.


30

development of biotechnology in the country.

The recent spurt in the growth of the healthcare
biotechnology patents further supports the innovative potential of Indian
Biotechnology (
see
Table 2
-
3)
.



The
systemic
explor
ation of various policies

and ins
truments responsible for the development
of the biotechnology sector in the country has
focussed

the attention to
couple of issues
requiring immediate attention by the Government, as discussed below:

o

Low

level of

investment in R&D

The current

level of
in
vestment in R&D in the country is not adequate

(
See Table
-
1)
.

An

urgent need
is felt
to boost the investments in R&D with strong participation from the private
sector to catch up with other countries in S&T development and to realise the target set in the
Science and Technology Policy (STP) 2003
62

which has been spilled over to the 11
th

Five
Year Plan
(2007
-
2012)
.
A growing number of
OECD
countries have qualified targets as part
of their action plan to focus attention and support for the innovation at
the hi
ghest

level of the
government

(
OECD 2006)
.

However
,

the
D
raft NBTS 2005 is silent on the investment
required for the
infrastructure and capacity building to make the country globally advanced in
the fi
e
ld of
Biotechnology
.


o

Allocation
and
Coordination
of
Government Grants

The government allocates funds to the relevant public
sector
research
organisations
including
universities mainly as long
-
term institutional / committed block grants towards the
targeted or programme oriented goals. While, only a limited
3% of the total national R&D
expenditure is funded through competitive funding or sponsored mechanism (through peer
-

review) as extramural R&D.

The results of the European Commission study
,

EPHOITE
(
2003) shows
that ex
-
ante co
-
ordination and competitive fu
nding
(through

peer
-
review
mechanism) leads to more effective national performance for Nordic countries namely
Denmark,
Finland, and Netherlands
.

In the context of India,
a balance of competitive funding
mechanism with longer term institutional funding or
block grants could be attempted by
enhancing the ratio of extramural R&D
.

This

will
also
ensure
ex
-
ante coordination for
achieving the desired goals.

The
European country,
Ireland with a concentrated or ex
-
ante
policy system exhibited a relatively good p
erformance despite its low investment in R&
D
(
EPOHITE 2003
,Calvert and Senker 2004)
while Spain is switching over to the competitive
funding instead of block grants
(

Lacasa, I.D et al 2004)
.




62

The governm
ent set up the target to achieve

investments in S&T including R&D to 2% of GDP by the end of
10
th

Five Year Plan( 2002
-
07)


31

o

Effective Networking

or linkages

among the actors


The interventi
on of the
Indian government in the creation of networks between Indian
firms and between public laboratories and private firms themselves through national
programs, as some European countries such as France have successfully done,

will help
in
overcoming

t
he problem of infrastructure

and skilled capacities
required to take up modern
biotechnology research and development
in
accelerat
ing
the
growth of

biotechnology

innovations in the country.


Though there are attempts
to link some of the research Labs

and
other institutions
to
work together in a network mode
(CSIR 2006
-
07 Annual Report)

and even private firms
through schemes such as DPRP, NIMTLI etc

but u
nfortunately there
has been no

attempt to
link the
Indian firms or inter
-
firm cooperation. Perhaps
,

t
his has missed the attention of both
the recent Government policies viz.
,

S&T Policy 2003 and Draft National Biotechnology
Strategy 2005
.
Thus it would be worthwhile for the government to consider the networking of
the private firms themselves through nati
onal programmes apart from the
Pu
blic
-
Private
Partnership model
on the lines of DFID
,

U.K.

o

Commercialisation

of biotechnology
and

Integrated Policies


Despite the policies STP 2003 and Draft NBTS 2005 addressing the need for the
commercialisation
polices for the
successful promotion

of biotechnology in the country, the
re
is no commercialisation

mechanism or polic
y

in

most of the research institute and universities

to translate the research results in
biotechnology
to practical application.

Perhaps

this could
be one of the reasons for the mobility of the experienced scientist from the PSROs to
i
ndustry
or other green pastures. Even some of the institutes mainly universities are not even
mandated to commercialise their research results. The governmen
t is now contemplating
to
introduce on the lines of the
Bayh
-
Dole Act of the USA

a new legislation to promote
innovation and flexibility in the country’s university where scientist would be given
ownership of the intellectua
l property for their creations
(
HT November 2006, Bi
o spectrum
2006)
63
.

The results of the EPOHITE 2003 have shown that policies for commercialisation
are not effective in the absence of a strong science base, an example in this case is the
country Greece, with a poor
commercialisation

pe
rformance despite giving priority to
policies for commercialisation at the
neglect of the knowledge base (
Enzing et al 2004) and
the study on Portugal and Ireland biotechnology innovati
on system by Calvert and Senker



63

Further it is interesting to note that in case of China to promote innov
ation even some of the research
institutes have been converted into companies to manufacture medicines (Thoresteinsdottir et al 2004).





32

(2004)
.

Thus
an integrated
set of both
commercialisation and science base policies
is required
for the successful promotion of

biotechnology in the country to avoid a situation generally
referred as the European Paradox (Allansdottir et al 2002 and European Commission, 2002).

o

Better Incentives
for
Research
Personnel


The
globalisation of the Indian economy has led to an
increase in the entry of MNCs
and their R&D centres in India

(
TIFAC 2006
) and
retaining
young scientist
s
and
skilled
manpower for the development of Science & Technology

have

thr
own a challenge to the
Government.
The
globalization require
s

a
national
policy
to

attract and reward the young
talent with better financial

and carrier options

as well as congenial environment for

the
development of science intensive field such as biotech
nology.

Apart from the above
,

the

regulatory issues

including IPR

are critical for the
advancement of the
biotechnology.
Although, t
he draft NBTS 2005
has rightly flagged the
regulatory framework
issues/conditions

in discussion with the various stakeholde
rs in the
country, the problem
s or issues
will be
addressed
speed
ily

with the
implementation

of the
policy

upon approval
by the government.


In Indian context, the government is a key actor influencing heavily the
PSROs

and
institutions ranging from finan
cial, legal and regulatory
system
which
overall
affect or shape
the biotechnology innovation process
.

Both
horizontal and vertical policies have to work in
tandem

in a systemic manner to address all the elements of innovation for the growth of
biotechnolog
y in the country.


*****



33

Annexure


Major Instrument
s for knowledge support, commercialization of research

and financial capital in biotechnology

Year

Instruments/Mechanisms

1958

Science Policy Resolution

1970

Indian Patent Act 1970

1973

In
-
house R&
D Centers Recognition Scheme house R&D Centers
Recognition Scheme, DSIR

1983

Technology Policy Statement ( TPS)

1985

R&D Cess Act

1986

New Education Policy

1988

Venture Capital Guidelines

1991

New Industrial Policy

1992

PATSER, DSIR

1993

HGT, TIFAC

1995

TDB Act

1995/2005

DPRD/ PRDSF, DST

1996

Security and Exchange Board of India (Venture Capital Funds)
Regulations, 1996

1996

TDB, DST

1997

Swarn Jyanti Fellowships

1999

First Amendment to IPA

2001

FIST, DST

2001

NMTLI, CSIR

2001

Biotechnology
Vision Document, DBT

2002

Second Amendment to IPA

2003

Science and Technology Policy

2005

Third Amendment to IPA

2005

Nanotechnology Programme, DST

2005

Rammana Fellowships, Ramanujam Fellowships DST

2005

SIBRI, DBT

2005

Draft National Biotechnology

Strategy

2005

Knowledge Commission

2005

National Manufacturing Competitiveness Council




34


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ACKNOWLEDGEMENTS


I th
ank
Prof.

Pranav Desai, CSSP, JNU,
New Delhi;
Pradosh Nath

and

Sujit Bhattacharya,
Scientists, NISTADS
, New Delhi

for their valuabl
e
suggestions
.