1. Models of STI Driven Manufacturing
Dr. Nirmalya Bagchi
Professor
Administrative Staff College of india

2. What to Make in India Low Tech High Tech
Low CAPEX, labour intensive
Polluting, labour issues, large land requirements, resource intensive, High non tech barriers to entry
High Tech
High CAPEX, tech intensive
Non polluting, less land intensive, highly skill intensive, highly R&D intensive, low non tech barriers to entry
Military Industrial Complex Oriented?
Export Oriented?
Demand Driven?
Supply Driven ?
Achieving Economies of Scale – like China ?
Innovation Driven?
Small scale, large scale, start up?

3. Low Technology Intensity
High Labour Intensity
Eg. Garments
High Technology Intensity
Eg. ICT
Low Labour Intensity
Eg. Weaving
Eg. Robotics driven manufacturing

4. How other countries have achieved manufacturing led growth

5. SME based traditional manufacturing: Germany
Mittelstadt
Small town in Germany
SME hub of Germany
99% classical industrial era companies
Provides 60% of employment in Germany
No nanotechnology, no biotechnology, no ICT just plain vanilla old tech companies
Most companies in Mittelstadt have no Bank loans
Up to 500 employees and Annual Saes of up to 50 million Euros
Stability and not growth is the focus
does not supply large customers more than 10% of sales! Risk mitigation

6. Innovation driven manufacturing growth: Sweden, Finland
Robust linkages between Industry ad Academics
Great facility for prototyping, test sites and demonstration
Challenge driven R&D and Innovation leading to High Tech manufacturing
Leveraging public R&D spending for Innovation
Involvement of end-users early in the process
Increased demand for cross collaborations
Open processes

7. Start up led manufacturing growth: Israel
Israel is a start up nation. Produces more start ups than Japan, China, India, Korea, Canada and UK
Attracts 30 times more venture capital investment than Europe
Attracts twice as much venture capital investment per person than the US
It has more tech companies on NASDAQ, a tech oriented stock exchange than all of Europe, India and China put together
A recent survey published in Ivey Business journal reports that
while high tech proliferates in Israel traditional industries are R&D averse. 57 % of such firms operate in low tech and medium tech and do not have any R&D division, 20% do not invest in any R&D, and 25% have no R&D personnel.
This disparity has been acknowledged in the comprehensive “Israel 2028” policy report which advocates a dual economy.
Innovation is also acknowledged as a stimulus of economic growth
OCS

8. Preconditions for government entry
More than 50% of the start up companies employ people from elite military units in management.
Preconditions for government entry
Market Failure Conditions
Government as a Catalyst
Share Risk (Lowered Risk)
Predetermined Exit Conditions
No Government Control
Indirect Investments (Funds)
Partnering with experience groups

9. R&D Fund
Grants up to 50% of R&D expenditure.
If R&D fails, no repayment, If R&D succeeds, 3-4% of sales as royalty
Each year 1000 projects are taken up and about 500 companies are given grants, ~2000 requests per year
Supports competitive R&D of mature companies (SME’s as well as big companies)
Target: establish and develop substantial industrial R&D infrastructure
Grants between 30-50% of R&D plan, royalties payments - obligatory upon success
Acquisition and transfer of knowledge due to special approvals
Budgetary platform for all bilateral parallel agreements

10. Technology Business Incubators
Pre Seed and Seed
Nascent companies to start up stage
24 Incubators
2 Industrial Incubators
1 Biotechnology incubator
8-10 projects in each
Grants- up to 85%
Complimentary Programs
BIRD etc.

11. Magnet Generic R&D
Supports consortia of industrial companies and academic institutions.
Target: jointly develop generic, pre competitive technologies or dissemination existing new technologies.
The technology cannot be acquired from commercial sources at competitive prices
Grants of up to 66% - no royalty repayments
Magneton, which is a scheme for promoting technology transfer from academic institutions to industry.
Noffar, which is a programme to support applied academic research in bio-technology and nano-technology in order to promote the transfer of technology in these areas.
Tnufa, which encourages and supports technological entrepreneurship and innovation at the early stage i.e. pre-seed stage. The assistance is given to individual inventors and startup companies.

12. OCS Government Support Programs
Pre-Seed
Generic R&D
Competitive R&D
Cooperative R&D
TNUFA
MAGNET
Industrial
R&D
Technological Incubators
MAGNETON
National
NOFAR
Long-Range
R&D
KAMIN
ISERD
(Europe FP)
Bi-national Funds
Bi-national Agreements
International
EUREKA
Galileo
Global Enterprises
R&D Collaboration Framework
Applied Academic
Research
Basic R&D
Market Proximity

13. Mixed industry cluster based approach: France
Public research : more than employees, including researchers
Private research : more than employees, including researchers
83 universities and 100 engineering and business Schools
More than 30 research establishments (e.g. CEA,CNRS, INSERM, INRA, INRIA, CEA, CNES…)

14. Competitiveness Clusters
71 clusters in biotechnologies, materials, energies, chemistry, aeronautics, electronics, pharmacy ...
Targeting identified markets
3 types of partners : industry, public research and higher education
CARNOT
34 public research institutes showing significant interactions with industry
full time staff
6 500 PhD students

15. Model for India
Both Low tech, high labour and high tech high labour to create ripple effects in both directions
Creating space for SME
Defence production, niche technology capability, Design capability
Barriers to entry
Promoting Cluster Development
Tech Innovation driven, start up driven
Need a framework for government financing and advising start-ups and SMEs with provision for equity stake in return.
Need an entity with new rules and practices
Need new practices and rules of audit
Culture of Innovation and Entrepreneurship in
Colleges, Institutes and Universities
R&D institutions
Industry
Leveraging R&D base for tech development and innovation
Need an organization that liaises with S&T as well as Industry including start-ups, SMEs and large firms.
Competitive funding schemes
PPP

16. Govt. Support New Entity Commercial?
“Classic VC & PE”
“Intermediate VC”
“Early Stage”
IP value
Govt. Support HE
PPP’s
Govt. Support S&T
Govt. Support New Entity Commercial?
Basic Research
Applied Research
Tech Development
Manufacturing
Stages and Time

17. Thank You