Imperatives for an Innovation Agenda

Imperatives for an Innovation Agenda in India  

 

In the fiscal year 2011, the number of applications for patents filed in India rose to 37,000 from 34,000 in the previous year. Now consider this—of these applications, 80 per cent came from outside India.

 

Even as India continues to make its mark as a ‘knowledge’ economy, the creation, application, commercialization and protection of knowledge—all need more work before India can be at the forefront of innovation in the world. Above all, there needs to be a national agenda for innovation, which penetrates down from policy to the individual user.

 

Before we delve into the strategy for innovation, let us see why innovation is pivotal to the country’s growth. Just 15 years ago, there was no World Wide Web or profusion of dotcoms and social networking platforms, no ubiquitous cellphones, no sequenced genome and no carbon nanotubes. Science and technology have been advancing in the past couple of decades, making people smarter and more capable every day. The internet has become a democratizing force today and globalization is a dominating reality. Both as a cause and consequence, it is inevitable for individuals, organizations and nations to innovate. For India specifically, innovation is critical to ensure that gaps between the oft-mentioned ‘two Indias’ can be narrowed and economic and social growth is more inclusive.

 

By finding more efficient ways to work, innovation can reduce cost and increase revenue. By finding simpler, more convenient and even aesthetic solutions, innovation can help enhance a citizen’s quality of life. Innovation places the information and communication technology (ICT) industry centre-stage, making it an engine of the knowledge economy.         

 

Learning from other countries

When it comes to policy, the US, UK, Europe and China are some of the leading examples of nations with clear innovation agendas outlined.

 

In the UK, the existing framework under the Department for Innovation, Universities & Skills (DIUS) has been performing well, especially on the lifelong learning and early-stage venture capital front. The Innovation Nation White Paper outlines the future of innovation in the country, providing intellectual leadership by suggesting new policies based on new imperatives. Highlights include provisioning for ‘hidden’ innovation and demand-driven ideas and fostering collaboration between public, private and non-governmental organizations (NGOs) to transform public services. Aside from this, it stresses on reforming the Small Business Research Initiative (SBRI) and incentivizing enterprises with investment and expertise to convert research into innovation. To prepare the next generation of innovators, it recommends getting educational institutions to emphasize on STEM (science, technology, engineering and mathematics).

 

The US, recognizes a vision and strong culture of innovation, and more importantly, successful commercialization of innovation in the country. The National Innovation Initiative (NII) outlines the next phase in this journey, focusing strongly on the three pillars of talent, investment and infrastructure. In both, the US and the UK, there is recognition of the fact that the focus of research is skewed towards certain sectors—health science and defence in the former and pharmaceuticals and aerospace in the latter. There is, therefore, a conscious move to even the playfield for innovation in all sectors.

 

The European Union (EU) stresses on innovation at both the Union level as well as the regional level. For Europe 2020, the three priorities identified include smart growth, sustainable growth and inclusive growth. The EU’s Innovation Policy places strong emphasis on social innovation, recognizing it as “an important new field which should be nurtured.” The Policy suggests creating a virtual hub of social entrepreneurs and supporting them with a European Social Fund (ESF).

China has been a strong science and technology innovation player. The Organization for Economic Co-operation and Development (OECD), along with the Ministry for Science and Technology have been reviewing the policies for innovation in the country and have come up with gaps that we, in India, would be quite familiar with. As its medium and long-term objective, China wants its dependence on foreign technology to reduce by 30 per cent and be among the top five countries in the world in terms of domestic invention patents granted, and the number of international citations of its scientific papers.

 

Imperatives for India

The innovation strategy for India needs to have four very clear objectives—enable innovation at the bottom of the pyramid (for and by the next billion), create an innovation ecosystem, focus on local capabilities for both near- and long-term benefits and harvest existing innovations so that the benefits reach a larger potential user base. This quadri-focal strategy is outlined in the figure below:

 

Even as the near-term benefits spark immediate interest, the long-term vision needs to be on creating a culture of innovation. And even as we invent solutions at the institutional level, we need to create a nurturing environment for innovations developed at the individual and grassroots level.

 

The four types of innovation need an organization created to identify and seed ideas to harvest them. Budgets need to be created to support innovations and interfaces evolved with other government agencies, the private sector and academia to foster them. To build the environment for innovation, the strategy needs to address the following factors:

 

Ensure research converts to innovation: Research is integral to innovation, but it doesn’t end there. For research to convert into meaningful innovation there needs to be a three-way understanding between the public sector, the private sector and the academia. Collaboration between industry and labs, creating a framework for jointly-funded research, creating a functioning lab-less research capability that leverages the existing facilities in the private sector, universities and the government itself, and ensuring feedback for research are the other important factors to keep in mind. What is most critical, however, is to ensure that research is done with a focus on the market and to ensure that the research is commercialized. Such research-to-commercialization cycles will get enabled if there is industry partnership in setting the research agenda. For a country like India, if it doesn’t lead to viable, accessible, affordable solutions to real problems, then the innovation agenda is inappropriate.

 

Create a strong legal structure: The intellectual property rights (IPR) ecosystem is a minefield that needs careful navigation coupled with a sturdy framework. For innovation to truly prosper, it is important that the IPR of all solutions and innovations are legally protected. One of the biggest concerns for small entrepreneurs and individual inventors is that they don’t know enough about existing IPR and end up inadvertently infringing on them or losing their IPR to larger corporations. These entrepreneurs need specialized legal and IPR support even as they are being incubated. Small enterprises and individuals need to have access to online IPR systems so that they can protect their IPR. Such systems should include online patent filing. Above all else, though, this is an area where awareness levels are extremely low. As we move towards an era where no new IPR can be created without requiring support from existing IPRs, there needs to be a concerted effort to educate people on IPR and make IPR a part of regular curriculum. For instance, perhaps IPR education should be part of engineering courses and be taught even at school level.

 

Enable business partnerships and incubation: The gap between idea and adoption is filled only by the successful commercialization of research. For this, there need to be strong linkages between research and industry. The industry, with its in-depth understanding of the market and resources that can help bring innovation to market, can help take the innovation to its logical conclusion. This can be through direct or indirect involvement. An organization could support incubation through new and existing qualified entrepreneurs, support technology acquisition through buy-outs, or even have summer-break programs for potential student entrepreneurs to work on their ideas. Institutions like HP Labs offer opportunities for talent to be nurtured and ideas to be incubated. However, in today’s complex world of technology, new innovations cannot thrive without access to existing IPR.  Therefore, to spur innovation, it is critical to provide access to IPR related to existing innovation. This can be through outright purchase of technology, patent swapping, buy-outs of relevant companies through government-sponsored industry consortiums, commercial arrangements where patents can be freely used or a combination of these techniques.

 

Encourage community participation: Inventions like jugaad are examples of demand-driven responses. Jugaad maximizes asset utilization by reusing the same pumpset that helps in irrigation, to also power the cart that helps take the farm produce to the mandi and provide locomotion to the villagers, thus optimizing the economy as a whole and making the local economy more efficient. In fact, jugaad is a symbol of community-driven innovation.

However, it is also a perfect example of how our policies stifle innovation. As per the Central Motor Vehicles rules, jugaad is illegal. Not only is jugaad illegal, there have also been no steps taken to introduce this innovative solution to other parts of the country such as the south or the east, thus depriving them of the benefits from this innovation. Innovation would get a huge leg up if government facilitates innovation and if one were to engage, besides research scientists and engineers, rural citizens, individual innovators, academicians, CXOs, government bureaucrats, district level officials and others. This engagement has to happen both, bottom up, for ideas to be harnessed on a larger platform, as well as top-down, to ensure a broader outreach for innovation, through a consciously created conducive environment and not just through serendipity. Conferences, workshops, awards, and other events are some of the ways to engage with the community to create a mass base for innovation.

 

Develop policies to incentivize innovation: There are three requirements on the policy front for innovation—formulation of appropriate strategies for promoting technological development, identification of trade and fiscal measures to encourage technology development, and developing of a framework for standardization, certification and accreditation.

Innovation needs a fertile environment where it can take roots. Incentives in the form of capital investment, finance and favorable taxation are critical. There also need to be policies for the government to enable procurement of innovation. Current procurement policies disincentivize innovation. Technology and IPR framework, availability of a talent pool and better access to market are all necessary to foster innovation as well.

Innovation, ultimately, thrives in an environment where there is high accessibility to technology. Democratization of ICT can go a long way in ensuring a platform for greater collaboration and also catapulting India to its rightful place at the helm of global innovation.

 

India offers a unique chance and a ready testing ground for new initiatives and services. Innovation aimed at inventing for the next billion will be most critical to develop, because that will help narrow the divide between the haves and the have-nots in the Indian state. The proposed US $5 billion India Inclusive Innovation Fund[1], to be launched by the Indian government later this year, is a step in the right direction. Innovation, however, will always be driven by people’s creativity and enterprise. And that’s what policy makers need to nurture.

 

 

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[1] http://www.innovationcouncil.gov.in/index.php?option=com_content&view=article&id=107:government-plans-rs5000-crore-india-inclusive-innovation-fund&catid=14:news&Itemid=13

eGov 2.0: Policies, Processes and Technologies (Book Launch)

Launch of the book by the Honourable Minister for Communication and Information Technology, Shri Kapil Sibal: http://www.youtube.com/watch?v=arfBOzvMlMk&NR=1&feature=endscreen

Book Review: http://egov.eletsonline.com/2012/04/e-governance-matters/

Governance in large countries such as India, Brazil, China, Indonesia etc face many challenges. These challenges are compounded by the fast changes brought in by globalization and by increasing expectations of the citizens.

To begin with, citizens are expected a greater say and a greater direct participation in governance. Citizens have seen how their voices have forced businesses to be more customers friendly but frustratingly, citizens find that their voices are completely lost to the government. In order to effectively meet these challenges there is needed a strong centralized administration support system supported by IT.

The adoption of IT by governments has typically been viewed as a four stage phenomenon, starting with the publish stage, the transact stage, the interaction stage and the integration stage. However, there has been a plethora of changes in technology, legislations and business models that has led to a new paradigm emerging in e-governance, which has been termed as eGov 2.0 and described in the book E-Gov 2.0: Policies, Processes and Technologies. It is the only known book on e-governance which describes high level policies and case studies as well as systematically walks through the policies, technologies, implementations and domain knowledge. eGov 2.0 is defined as an evolutionary step towards a more efficient, inclusive and participative government through adoption of a set of new trends in business models, operational models, financial models and technological models.

Governments should be more dependent on services for revenue generation rather than on taxes which is implied by the Concept of Service Oriented Administration or SOA. The monopolistic situation of the government gives it enormous revenue generation capability through providing services. For example, if the government provides an online land exchange, it can get the 1% service charge that is typically charged by brokers. In addition, it would help in increasing the number of transactions. Similarly, the online second hand vehicle sales system would not only reduce the number of stolen cars sold, but would also generate considerable income for the government. It is estimated that at commission of USD 100 per car sold and USD 10 per two wheelers sold, India can generate over USD 2 billion every year. There can be many such SOA initiatives that can be enabled through eGov 2.0.

The book e-Gov 2.0: Policies, Processes and Technologies is aimed at for people involved in conceptualization, planning and execution of e-governance projects. The book discusses the aspects to be borne in mind for embarking on the path for transformation to e-governance. How to leverage power of IT for providing solutions for effective e-governance in the present day context? Why cannot the e-Governance solutions help in direct participation of Citizens in the business of governance? Why cannot the 100,000 Common Service Centers take polls of people's views on each bill that is passed? Why should the government be largely dependent on taxes as its source of revenue when it has tremendous amount of data that can give it access to new monopolistic businesses? Why cannot we have revenue from e-Public Services? For example, setting up of a property exchange in lines of the stock exchange will not only bring in very high liquidity in the land market and help increase the GDP of the country but also bring in substantial revenues to the government that is currently going to middlemen in an imperfect market, with many a transactions landing up as civil cases in the already clogged court system.

Similarly, why cannot we have an online vehicle exchange system for second hand vehicles that will not only bring down the number of stolen vehicles sold but will also bring in substantial revenues for the government? Same is the case with setting up a mobile phone tracking system, number portability systems etc. Some of these systems will have fundamental enabling impact of new institutions such as the micro-finance institution.

eGov 2.0 will usher in greater citizen participation and will have tremendous uplifitng impact on the economy. Not only will it make the government more efficient by cutting out the non-value added processes but will also increase the efficiency of government's interface with the citizens, businesses and other institutions. It would also enhance the interactions between various stakeholders in the society by intelligent usage of ICT.

However, eGov 2.0 will fundamentally be a realization that the form and substance of governance needs to be changed radically. ICT will act merely as a tool and an excuse to bring in this change. The forces bringing in this change is basically people's expectations of governments delivering more from less and that service delivery needs to be personalized to such an extent that it not only serves micro-communities but perhaps is tailored to the requirements of individuals.

At the end of the day, eGov 2.0 will make people happier and bring the government's closer to Chanakya's statement in “The Wealth of Nations” that in the citizen’s happiness lies the happiness of the King.

IT enabled Land and Property Exchange

The principle of Keynesian economics and free market that information can be freely available is not valid in case of land and property in India

The issues of urban governance can be highlighted with the case study of Karnataka where multiple urban systems have already been implemented. Technology is opening up new models of governance including new business models for government, operational model, technological model and financial models which are leading to participatory governance.

One such area where these models are used is in land records. Increase in efficiency of land and property records will have considerable impact on GDP of the country. Primary source of income in rural areas continues to be agriculture. Some issues of land and property transactions are that it is broker driven, there are significant brokerages and manipulations because there is no transparency of information. There is non transparent market, distress sale and purchase which also lead to manipulation of prices. There is very limited liquidity and it is difficult to encash particular wealth. Finally we have deed based system rather than title based system which means that property can be sold multiple times based on deeds. In Karnataka, land records are mentioned in a dead language which have to be kept because new deeds have no value. Globally, people are moving towards title based system which is if the land is in a person’s name he owns it irrespective of what the previous deeds are. Between the time of registration and actual mutation, the land could be sold to many people as the registration system does not go and check whether property is sold or not. Registration and mutation are independent.

There is Sarfaresi Act which keeps track of all assets for which loan has been taken. It ensures that new urban property follows the system because much of the old properties are embroiled in the issue of whether the deed is clean or not, whether there are competing claims on land, and so on.

In Karnataka, land property records and management system works by three sections. One is land records which is responsible for managing ownership and rights, ownership records of non- agricultural land and property. Second is registration section which is registering all transactions taking place in land and property in public record. Third is service section which is managing spatial and non spatial data about land.

There are two kinds of properties- agricultural and non agricultural urban property. In urban section there is a request for pre mutation sketch done by urban property ownership record system. Then it goes to registration system Cauvery which is where you pay taxes and then it goes to Bhoomi system where mutation happens. Essentially, the four major steps are: agreement to sell is reached without the sale deed; the seller and buyer get together through a broker; pre mutation sketch is made; it is then brought to registration or mutation system. Same is the process of sale deed and detailed process of how mutation is done. All this is converted to online system.

There is a lot of pressure on the legal infrastructure because of large number of civil suites that  are based on land records. As per one estimate, 70 percent of cases in Indian courts are related to land and property issues. The Bhoomi project and reforms improved the quality of land records. But it is still built on a foundation which is very archaic, laid down by the British focussing more on revenue collection and in providing governance. Therefore, land and property transactions continue to be a significant source of litigation in courts.

It also has significant socio- economic impacts. The sub-optimally governed land and property system leads to considerable hardships for rural and urban citizens. Moreover, it leads to family disputes and impacts the well being of the citizens. Support system is critical to facilitate land acquisition system for developmental projects at appropriate rates and compensations.

At the end of the day, the benefits are that one gets service/tax oriented administration. If government starts looking for providing services and getting revenue enhancements because of the service provided, that would increase the revenue collected by the government. As the transaction hassles goes down, the number of transaction goes up and in turn tax and revenue collection goes up significantly. At high level we need to train people, legislative and administrative changes, and training of owners, how to manage digital signatures and digital ownership of land.

The major legislative changes that are required are three rights that government should grant- apriory right to owners to sell their property without any objections; buyers to qualify on terms such as eligibility to buy agricultural property apriory right to buy land; automatic mutation of property after a certain period

eHealth Centre: rapidly deployable cloud enabled healthcare solution

eHealth Centre Instant-on Cloud Enabled Healthcare Infrastructure 

Micro Health Centre mitigates ground-level issues of delivering healthcare to villages in India and in other economies that are challenged by the inadequacy of health infrastructure

Commission on Macroeconomics and Health of the World Health Organisation (2001), have argued that better health care is the key to improving health as well as economic growth in poor countries.

However, healthcare delivery at the village level is constrained by lack of basic healthcare infrastructure including inadequate supply of electricity, lack of doctors, non-functional equipments, lack of supply-chain with no appropriate monitoring of the existing healthcare infrastructure and manpower.

The aim of the Micro Health Centre (µHC) is to mitigate these ground-level issues of delivering healthcare to villages in India and in other economies that are challenged by the inadequacy of health infrastructure.

The cloud enabled infrastructure of the “Micro Health Centre” solution by Hewlett Packard provides access to specialist medical consultation at affordable cost and provides support for disease surveillance by tracking disease patterns and risk factors. Given that µHC is a rapidly deployable infrastructure, it is also appropriate to support disaster relief operations.

The µHC proposes to provide preventive, curative and emergency services, also acting as a tool for creating public awareness.

Current Healthcare Scenario in India
India has nearly 741 million rural people (72 percent of the total population, source: census of India, 2001).The Tendulkar Committee report states that 42 per cent of rural people in India are below the poverty line.

In India, about 75 percent of health care infrastructure, medical manpower and other health resources are concentrated in urban areas where 27 percent of the population lives. Contagious, infectious waterborne diseases and reproductive tract infections dominate the morbidity pattern, especially in rural areas. Moreover, non-communicable diseases are also on the rise. The basic nature of rural health problems is attributed to poor maternal and child health services.

Every year, 1.8 million persons develop Tuberculosis in India, of which about 800,000 are infectious and until recently 370,000 die of it annually–1,000 every day.

However, the reach and quality of the Primary Health Centre (PHC) needs to be enhanced in order to cater to the healthcare requirements of the last mile.

The primary health care infrastructure in rural areas in India is based on the population norms of having one PHC for every 30,000 people and one sub-centre for every 5000 people. There are 24,375 doctors serving the PHCs, which imply a doctor population ratio of 1: 34,000 in the rural areas. This is much below the global standard set by the World Health Organisation (WHO) of 1: 250.

The timely availability of appropriate drugs and equipment is much needed in the existing PHC.  Efficient management of data is difficult in the currently existing manual system, and often involves duplication of efforts and wastage of time.

The existing physical infrastructure in PHC’s and the number of existing public health facilities needs to be enhanced to meet the health care demands in large remote areas of the country.

Concept of Micro Health Centre
The better reach and quality of the Primary Health Centre is much required to cater to the healthcare requirements of the huge population. This calls for a need of a rapidly deployable self sustainable infrastructure, backed by the robust healthcare services accessible from anywhere.

The solution is equipped with built in electricity, built in connectivity, medical equipment, telemedicine services and requires minimal training to operate.

In rural areas, a simple, correct and timely diagnosis of the fever could be a challenge, yet life saving. The difficulty of reaching a blood sample to a lab and getting the report back in a reasonable time frame for the villager, who may have already travelled long distances for medication, is a serious concern. Especially in case the patient is suffering from a disease like malaria.

The µHC acts as a solution in similar scenarios as it provisions the availability of laboratory facilities and specialist consultations through tele health services. The continuous remote monitoring of equipments, data, medical staff and the stock of medicine through techniques like biometric surveillance and “cloud enabled medical devices” ensures the availability of health services without interruption at all times.

The sms based services will act as an enabler to the vaccination camps of the government ensuring a higher volume of enrollment even in rural areas.

µHC can effectively address the challenge of health work force shortage in rural areas and the issues of quality and accountability in healthcare. Through a unique simple interface, it enables community ownership of the health care services being provided, thereby acting as a self sustainable solution.

Health Cloud – Linkage to Centralised Backend
Cloud computing provides tremendous opportunities for the health sector to improve the delivery of services and reduce the cost of operations. Using cloud technology in healthcare can aid in disease surveillance by tracking disease patterns and risk factors and disaster management.

The cloud enabled µHC infrastructure can help solve some of the most pressing issues facing the health care industry today such as dismal quality of health care provided, shortage of drugs, equipments, trained personnel and specialist medical care in remote areas.

A health data base gets generated by electronic reporting of data using rapid and reliable diagnostic tools and remote sensing for the collection, storage and analysis of health data. Services provided in µHC are OPD services, tele health services: real-time support to physicians, tele consultation, information dissemination, research, video conferencing, availability of essential drugs, mother and Child healthcare services including family planning services, referral services, in-patient services, education about prevention and control of locally endemic diseases, Health Education and Behavior Change Communication (BCC) and laboratory services such as all general tests, including blood, urine and sputum tests, record of vital events and reporting and disease screening for diabetes, hypertension and COPD (chronic obstructive pulmonary disease) and ambulance on call.

The µHC will increase the reach of healthcare and will lead to improved communications between healthcare providers separated by distance through Tele consultation and video conferencing. It will address basic health issues and deliver preventive healthcare such as immunisation to the rural masses. It can act as a tool for public awareness and disaster management and provide accurate reporting of health indicators of the community.

Components of a cloud connected µHC infrastructure: •    Equipped with Cloud based network architecture •    Web based EMR with CPOE (computerized physician order entry), •    CDSS (clinical decision support system) •    Data storage and transfer to expert centre •    Video conferencing with medical experts •    Medical Equipment Connectivity: Equipments with sensors •    Automated reminder of vaccination and TB drug administration •    Monitoring of the patient visit, doctor and medical staff attendance. •    Centralised health record management •    Training and health awareness program

Conclusion
Thus, µHC presents an affordable solution proposed by HP (Hewlett Packard). It is an intelligent Telemedicine Health Centre, designed to meet the local needs and conditions without any infrastructural constraints.

It proposes to provide essential health care services with Health Cloud connectivity services, thus providing invaluable data for research and can act as a tool for disaster management, disease surveillance and public awareness.

Thus µHC can dramatically increase the reach of healthcare with the following benefits rapid deployment of nation-wide healthcare, remote monitoring of functioning of the micro-PHC and its equipment through transducers, improved ante-natal and post-natal care, addressing basic health issues and delivering preventive healthcare such as immunisation, invaluable data for research on better drugs, reduced mortality and enhanced quality of life for patients, reduced IMR and MMR, easy access to primary  healthcare facility and better quality of care, affordable healthcare, enable citizens to avoid unnecessary travel for health care needs, access to family welfare services and laboratory services, low cost diagnostics tools and methods for diseases requiring immediate attention, patient data available in EHR and counselling and teaching for preventive healthcare.

Note: Co-authored with Ritu Ghosh and Anjali Nanda

Technological Sovereignty

http://egov.eletsonline.com/2012/12/technological-sovereignty/

Dr Jaijit Bhattacharya
President, Centre for Digital Economy Policy Research;
Director, South Asia, Hewlett Packard

Sovereignty is one of the cornerstones for ensuring the security of the country and ensures that India as a nation can stand up to pressures from other nations. Sovereignty is critical to ensure our economic independence. As India moves into occupying the space of an IT superpower, the ability of the ICT industry to provide the requisite technologies reliably to the military, needs to be significantly enhanced. The issue is compounded with the fact that India has a feeble presence at the high stake tables of IT standards. IT standards have become one of the preferred tools of developed economies to extract undue economic benefit from emerging economies. Given that India, as of now, appears to have limited presence presence at the global forums on international IT standards, we appear to be abdicating our responsibility to secure our IT industry as well as IT usage. This situation has very deep implications on our defence preparedness.

The Strategic Implications With the lack of control over the technological layers, defense institutions will be challenged to protect the nation from Cyberwarfare. More importantly, military hardware itself could be subject to intrusions and control by adversaries, thanks to the increased “intelligence” of the equipment.

Given that tactical thrusts on the ground need to be backed up with complex supply chain which are increasingly dependent on critical information infrastructure such as Railways Signaling, telecommunications network etc, the entire Military strategy could be threatened by compromising the critical information infrastructure which has non-authenticated ICT components.

With the same “ICT intrusions”, the Financial Infrastructure of the country can be brought down, impacting the ability of the military to sustain a conventional warfare.

The impact on Network Centric Warfare is also obvious.

Thus it is imperative that we move towards an ICT & Electronics and Cyber (ICT&CE) ecosystem profile which provides greater control over the ICT layers to the military strategists.

The Tactical Implications
The tactical implication of lack of Technological Sovereignty on ICT is even more severe. The saying that “but for a nail, the war was lost” holds absolutely true for role of ICT in tactical engagements.

Compromising the supply-chain, command and control systems, financial systems, Operational Control systems will have devastating tactical implications, arising out of not having control over the ICT layers.

Industrial Ecosystem
A military can be as strong as the industrial ecosystem that backs it up.

In the modern warfare, ICT industrial ecosystem plays a critical role to ensure continuous supply of the latest ICT tools to support defense preparedness.

It is quite questionable whether India’s ICT Industrial Ecosystem has the wherewithal to provide uncompromised ICT tools to the military. This issues needs to be addressed through systematic policymaking and through carefully crafted institutional mechanisms.

Way Forward
India is growing as an economy and as an IT superpower. However, from a defense pre-paredness perspective, one is suspect of the layers of ICT&EC going into the ecosystem and the purposes for which these layers are actually operating.

India has limited sovereignty over these layers of ICT&EC that are going into defense preparedness. It is imperative to address this lacuna. India has the potential to develop the critical technologies and provide the technological sovereignty required to have credible defense preparedness.

One of the policies that may be leveraged to develop Technological Sovereignty is the defence offset clause. Under the current procurement
norms, India has a policy for 30% offset on defence procurement. This creates an immense opportunity for domestic manufacturers and service providers. More importantly, this also creates an opportunity for developing domestic IPR to take benefit of the 30% defence offset policy. However, in order to do so, it is critical to identify the roadblocks that prevent domestic manufacturers from tapping this enormous market, which also includes a fickle tax regime that prevents having a long-term view of the market. It would also involve identification of institutional mechanisms to facilitate partnerships of global military ICT providers with domestics manufacturers to enable the procurement process The first step in this process would be the identification of institutional mechanisms to facilitate domestic entrepreneurship.

However, such a step would require conceptualization of facilitating policies and institutional mechanisms to accelerate the process of Technological Sovereignty in ICT&EC for Strategic purposes.

Launch of the First of its Kind eHealth Centre

Launch of eHealth Centre - a Two year effort of Technological and Social Engineering

Issues in Public Procurement – The Public Procurement Bill 2012

The prime objective of any government procurement is getting the right product or service, at the right price and quality and at the right time. Government Procurement accounts for approximately 20% of India’s GDP. However, public procurement processes, which are governed at the Centre by the General Financial Rules, 2005, are widely perceived to be vulnerable to corruption, collusion, fraud and manipulation. Therefore, there is a need for a single set of robust guidelines for public procurement in India which would mitigate the current situation.

In order to strengthen the public procurement process, the Government of India has already taken a stand to streamline all public procurement. As a first step, the government, through the Ministry of Finance, has formulated a draft Public Procurement Bill 2012 which will govern the procurement process for all central government and PSUs in the country.

The Draft Procurement bill 2012 however faces the challenge of aligning all other regulations and legislations that impact Public Procurement in India. This includes alignment in the areas of ‘green’ procurement, support to innovation, appropriate penalties for both vendor and procuring entity alike, vendor development programmes for SMEs and a mechanism for procurement based on lifecycle costs.

Green Procurement

As advised by the Prime Minister’s Climate Change Council, all government procurement in India is scheduled to go ‘green’ by mid 2013. Under the PMO’s directions, the Planning Commission has set up a core group comprising senior representatives from government departments, including BEE, DGS&D, MoEF, CPCB, Defence, Railways, and select industry associations like CII. 

As a part of the move towards green procurement, BEE has sent a proposal to DGS&D today for procurement of energy efficient goods. Should this be accepted by DGS&D, then for future procurement DGS&D would either give a ‘preferred vendor’ status to suppliers who comply with the BEE labeled products (laptops and Office Automation equipment for now) or the next Rate Contract could be only for products which are energy efficient as per the India specific requirement, which is BEE labeled.

While this effort is laudable in itself, it throws up two distinct challenges for procurement which are (a) there is need for a crisper definition of ‘green’ and (b) there is a need to have clear processes for managing the labelling on imported products such as office automation products, such that when their packaging are opened locally for inserting the required labels, such products should not treated as second hand products.

Support to Innovation

DGS&D procurement rules follow a process whereby unless there are a minimum of three bidders who can supply to the specifications in the Rate Contract, the RC stands cancelled. By definition, an innovative product will be the only product in the market in the initial stages. The current process prevents the innovative company the chance to bid, thus inadvertently discouraging procurement of innovative products. While the PPB 2012 allows single vendor procurement under specific conditions, there needs to be a clear connect between the Bill and the DGS&D rules in this respect.

The matter is further compounded by the fact that the procurement processes prevent product upgradations midcourse through a rate contract. This raises challenges for the IT industry, as rate contracts are typically for one year, while there are component upgradations every quarter. Under the current norms, each upgradation would necessitate a revision in the specifications outlined in the rate contract. The OEMs are thus in a position where they may have to stock up a year’s supply to provide obsolete products to the government. It is a lose-lose situation. The PPB should allow for product upgradations as and when industry moves forward, as long as there is no upwards price revision.

Disproportionate penalties for vendors and procurement agencies

As per PPB 2012, it is mandatory for all potential vendors to inform the procuring entity on any blacklisting of the vendor by any government agency across the world in the previous three years. Based on that information, the Indian government reserves the right to debar the vendor for a period of two years from bidding for any rate contracts. Given the complexities of doing business with various kinds of government agencies globally, the above clause would essentially debar almost all multinational vendors. This clause requires rationalization in order to strengthen the procurement process.

Public Procurement is a challenging issue. Besides the above challenges, Public Procurement also need to address issues of vendor development programmes for SMEs and a mechanism for procurement based on lifecycle costs. The PPB 2012 is a step in the right direction that needs to be further strengthened with the above guidelines/clauses.