Disruptive transformation is taking place in the global manufacturing sector. This is led by new technologies that are developing rapidly and spreading through manufacturing hubs all over the world. In this scenario, India has the opportunity to become a key player in advanced manufacturing, provided we are able to reap the technology dividend along with our demographic dividend.
Advanced manufacturing is a broad term that includes new products and new processes. ‘Smart’ and ‘intelligent’ manufacturing ecosystems bring together both production and services. The concept applies to high-technology products as well as traditional manufacturing that may now be usingmore technology-intensive processes.
For example, additive manufacturing is a process where thin layers of material are deposited in a pattern made by a digital design. Similarly, robotics is veering towards smaller and more complex robots that can operate alongside workers, and automation is rapidly gaining space. Data digitisation and analytics are changing how machines of the shop-floor operate, while integrated computational materials engineering (ICME) is reducing costs and time to market.
ADVERTISEMENT
All these forces lead to greater productivity, better asset utilisation, increased flexibility and customer-focus, and better working conditions. Advanced manufacturing is here to stay, and will involve more strategies for promoting innovation, R&D and quality. In India, high-tech manufacturing and innovation is taking place in various manufacturing hubs such as Pune and Bengaluru. To align with the evolving global knowledge economy, India will need to strengthen these processes.
Low R&D
India’s R&D expenditure was estimated at $44 billion in 2014, the eighth largest in the world. Between 2006-07 and 2012-13, patent applications went up by a compound annual growth rate of close to 12 per cent from 137,900 to 269,500. Part of these would have filtered into the advanced manufacturing sectors.
ADVERTISEMENT
However, we have a low ratio of R&D expenditure to GDP at 0.9 per cent, and this is further skewed by a larger proportion being undertaken by government agencies rather than the private sector. India also lags in the export of high technology manufactured goods, which comprise 8.6 per cent of its total manufactured exports in 2014, although this is double the share in 1990.
Building on its talent pool, India has the requisite capability for advanced manufacturing. We are looking at greater engagement of the private sector in R&D for advanced manufacturing, and tie-ups with UK companies will be a force multiplier. For this, we must learn from leading players in the world, and the visit of Theresa May, Prime Minister of the United Kingdom (U.K.), with focus on the India-U.K. Tech Summit, which will give shape to India becoming a key player in Advanced Manufacturing.
India and the U.K. have embarked on a partnership for advanced manufacturing, a key focus outcome of Prime Minister Narendra Modi’s visit to the European country in November 2015. The year 2016 was announced as the year of Education and Research, and it was decided to jointly take up projects for scientific and technological cooperation.
U.K.’s strengths
The U.K. enjoys strengths relating to design, integration of science and engineering, and integrated automation solutions. The two countries have complementarities in areas such as material engineering and have been working on student exchange programs and academic interaction. India’s multiple language skills and software capabilities are also considered strengths. The areas of collaboration identified by lead agencies include automation, next-generation sensors for manufacturing, standards, materials design, and engineering-driven sustainable manufacturing.
The U.K. has recently commenced an initiative to create advanced manufacturing innovation districts which bring together research organisations, enterprises and incubators in urban centres. The first such district is coming up in Sheffield. If we, in India, consider a similar strategy, the U.K.’s advanced manufacturing research centres could be taken as a model.
To propel advanced manufacturing in alignment with global developments, India would need to also develop the right business ecosystem to promote innovation and entrepreneurship. Make in India is a comprehensive campaign to build infrastructure, develop the right skills, and attract FDI for the manufacturing sector as a whole. It includes special emphasis on innovation and creativity.
A new national policy on intellectual property rights has also been announced. This includes a stronger legal framework to protect IP, and encouragement to the private sector for generation and utilisation of IPR. It also mentions technology transfer and licensing as well as more modern and streamlined service delivery by IPR offices.
The Startup India program is a step in the right direction, incorporating many areas such as finance, tax incentives, and skill development to promote commercialisation of innovation. Similarly, Digital India has helped increase electronics production in the country, with mobile phone output increasing to more than 110 million in 2015-16.
With this strong ecosystem in place, India can progress on a rapid path to grow its advanced manufacturing sector. The partnership with the U.K., with its well-developed industries and knowledge institutions, can catalyse this process, and we welcome Prime Minister Theresa May to take this collaboration to a new phase.
The author is Director General, Confederation of Indian Industry