Context:

• India has historically placed high importance on science and technology. Initially, state-led institutions dominated the landscape.
• Private organisations, such as Tata Institute of Fundamental Research (TIFR) or Bhabha Atomic Research Centre (BARC), were brought under the fold of the government, yielding successes like the 1974 nuclear test.
• Over time, there has been a shift towards a more comprehensive approach, incorporating private firms and universities into the innovation ecosystem.

The Need for Intellectual Capacity in Private Firms:

• Innovation requires intellectual capabilities in people and firms, not just in government organizations.
• Comprehensive national power and GDP growth depend on private sector involvement in research and development (R&D).
• Examples from the US and France illustrate successful private sector integration into public-funded research.

Lessons from Global Models:

• United States:
  • NASA contracts 80% of its budget to private firms and universities.
  • The Jet Propulsion Laboratory (JPL) was created at Caltech and later funded by NASA.
• China: Private AI research teams, like DeepSeek, emerged from algorithmic trading backgrounds, demonstrating the spillover effect of private R&D.
• France: Defence research is primarily conducted in private defence firms with government funding.

India's Shift Towards Private Sector-Led Innovation:

• Policy advocacy:
  • A December 2024 paper argued for taxpayer-funded R&D in private firms and universities.
  • Emphasized risk management through contracting research to multiple firms.
• Government initiatives:
  • Anusandhan National Research Foundation (ANRF): Allocating Rs 2,800 crore annually to private R&D initiatives.
  • Budget 2024-25: Rs 20,000 crore allocated to private sector-driven research and innovation.
  • ISRO's new approach: Contracting private firms for launch vehicles to enhance global competitiveness.
• Ministry of Electronics and Information Technology (MEITY) initiative:
  • Allocated 18,693 Graphics Processing Units (GPUs) for AI research.
  • Private IT infrastructure firms to operate GPUs, making them available to researchers at $1 per hour.
  • Shift from state-owned research equipment to a ‘buy, not make’ strategy.

Challenges in Implementation:

• Unlike procurement of tangible goods, R&D funding requires adaptive auditing mechanisms.
• Need for legal reforms, strategic public finance planning, and institutional restructuring.
• Balancing risk and accountability in contracting private firms for scientific research.

Conclusion:

• 2025 is poised to be a turning point in India’s science policy.
• The country is embracing the idea of shifting public money into private universities and firms that produce cutting-edge research. The taxpayer gets more value for their money as a result.
• When a private firm is working in an area, it will try to do the research well, because it also has a direct interest in the knowledge sought to be produced.
• However, the challenge lies in developing effective implementation frameworks to maximize innovation and societal gains.