Editorial 1 : National Research Foundation: Preparing for the new revolution
Recent Context:
- Recently government planned to set up National Research Foundation (NRF) with the stated aim to “seed, grow and promote research and development (R&D)” and foster a “culture of research and innovation throughout India’s universities, colleges, research institutions, and R&D laboratories”.
- With a budgetary support of Rs 50,000 crore over the next five years, it aims to “provide high level strategic direction” to scientific research in the country.
NRF fulfils the vision of new advance technologies:
- Decision to set up the NRF is seen as a timely and much-needed move.
- As, the world has entered a transformative era with the evolution of industry 4.0, web 3.0 and genetics 2.0. It is the era of artificial intelligence, quantum computing, robotics, crypto technologies and human genome projects.
- India missed the earlier technological and industrial revolutions. But this time, it has a huge opportunity to exploit its innate potential.
India’s achievement and potential to exploit new technologies:
- Government focused heavily on preparing the nation for the new revolution. It has given much impetus to innovation.
- More than a million start-ups have sprung up in the last few years, making India the world’s “start-up capital”. A fraction of them, over 120 start-ups, have become “unicorns” highly-valued entities that could mobilise a billion-dollar investment.
- By the end of last year, around 240 start-ups have gone in for major acquisitions bringing in investments to the tune of $ 150 billion.
- Realising the importance of digital infrastructure for ramping up the country’s innovation potential, the government has invested heavily in building robust architecture.
- An optical fibre cable network of more than 35 lakh kilometres has been laid out, and electricity and the internet have reached almost all villages. With over 800 million smartphone users in the country, digital literacy is another major success story of the government.
Promoting the investment in R&D is need of hour:
- India has a huge tech-literate young population with high IQ levels. Still there is lag in areas of fundamental research. Lack of public and private support is one reason for this situation.
- The government now recognises that a major push is needed to nudge India’s scientific and technological community into the research and innovation mode.
- While talking of innovation, most of our innovations are secondary improvements of existing technologies. Catching up is not bad. But a country of India’s potential should develop institutions of world class research as well.
- It requires a few things. Foremost is funding. Leaders in innovation and research like China and the US spend massive sums on R&D.
- While India’s private and public funding on R&D is less than 0.7 per cent of its GDP, China spends over 2.5 per cent of its GDP on the same
- The actual figures for R&D funding are $640 billion for the US, $580 billion for China and over $15 billion for India.
- The government’s decision to focus on academic and research bodies through NRF has a reason. Over decades, research culture in these institutions had declined. The government’s strenuous efforts in the last few years have led to some improvement.
- Our academics and researchers produced 54 per cent more research papers in the last five years, taking India to the fourth position in the world.
- However, the quality and relevance of many of these papers remain questionable. SciVal, a research platform, suggests that only 15 per cent of them have been cited in top academic journals.
- The story of patents too needs a further push. India filed over 60,000 patents in 2022. Almost 50 per cent were local patents filed for the domestic market with perceived low quality. China, on the other hand, filed four million patents in the same year, of which 25 per cent were “high value patents”
- In the artificial intelligence area, India needs to cover a lot of ground to emerge as a leader. A lion’s share of about 70 per cent is going to accrue to the US and China. India’s AI earnings are picking up. We earned about $ 250 billion in the last financial year.
- In this sector too, R&D is going to play a major role. The US and China invest nearly $ 150 billion each in AI related R&D
- It is important to increase this investment because a Goldman Sachs report warns that AI could destroy as many as 300 million jobs by 2035 and India cannot escape this onslaught.
Conclusion:
- R&D in frontier areas is key to India’s ambition to grow as an economic and tech superpower.
- Therefore, the real R&D is about finding answers to questions that have not yet been asked. The NRF is the instrument to prepare our individuals and institutions for that future-ready task.
Editorial 2 : India and the US-China chips war
Recent Context:
- With the expansion of India-USA technology partnership, Recently India became the member if US led Mineral Security Partnership (MSP). It is also known as the critical mineral’s alliance.
- The goal of the MSP is to ensure that critical minerals are being “produced, processed, and recycled in a manner that supports the ability of countries to realize the full economic development benefit of their geological endowments.
- A key element of the partnership is the resolve to diversify the global semiconductor supply chain, which is at the centre of the rivalry between the world’s number 1 and 2 economic powers, the US and China.
Chips, the ‘new oil’
- Semiconductors or chips are essential to almost every modern device from a phone to advanced defence systems and advanced artificial intelligence-powered machines.
- But only a few countries are in the business of making chips among the world’s most advanced technologies and some specialise only in some aspects of it.
- As, the Covid-19 pandemic exposed the US dependence on supply chains in Asia four of the top chip makers in the world are Taiwanese at the same time as the trade and diplomatic war between Washington and Beijing and military tensions in the Taiwan Strait spiked.
- Since 2020, the US has taken a number of steps aimed at
- denying semiconductor technology to China to prevent it from gaining high tech dominance over the world, and
- pumping up its own domestic capacity for making chips.
- As a result of it, In August 2022, Congress passed the CHIPS and Science Act, providing $280 billion in new funding for domestic research and manufacturing of semiconductors in the US
- The US also moved towards semiconductor friend shoring in the Quad, where the leaders of Australia, Japan, India, and the US committed themselves to building “resilient, diverse and secure supply chains of critical and emerging technologies” over two summits in 2021 and 2022.
India-US iCET:
- Also, at the 2022 summit in Tokyo, President Biden and Prime Minister Modi announced the US-India Initiative on Critical and Emerging Technologies (iCET).
- India’s National Security Adviser Ajit Doval and his US counterpart Jake Sullivan met in Washington to discuss the broad areas for cooperation under iCET.
- The initiatives listed in the US-India joint statement in the technology basket during the Modi visit flow from the January meeting during which the two countries agreed to enhance bilateral collaboration on resilient supply chains, support the development of a semiconductor design, manufacturing, and fabrication ecosystem in India, and promote development of a skilled workforce for the industry.
- During the recent visit of India prime minister, MoU was signed on Semiconductor Supply Chain and Innovation Partnership to promote commercial opportunities, research, talent, and skill development.
- Micron Technology, a leading US semiconductor firm, announced a proposed investment of up to $825 million to build a facility in India, with the Indian government pitching in to take the combined investment value to $2.75 billion.
India’s chip challenge
- India has allocated Rs 76,000 crore ($10 billion) for the semiconductor industry. While there is plenty of optimism, the mission has been beset with difficulties.
- Three companies that applied to set up fabrication plants with the first tranche of government support — a Foxconn-Vedanta joint venture, Singapore’s IGSS, and a joint venture between Next Orbit and chip consortium ISMC that was banking on Israel’s Tower Semiconductor as a tech partner all failed to get off the ground for separate reasons.
- As, three things are essential for chip making
- uninterrupted and uninterruptible power
- unlimited pure water supply and
- chip making infrastructure the “fabs” or fabrication plants that are highly specialised units.
- At the moment, there is no place in India that can guarantee 24×7 power or water supply. Chip manufacturing also requires a highly skilled workforce.
- Industry experts have repeatedly said that chip making is “not like assembling a phone”
- Therefore, despite the political will but absence of a “chip ecosystem”, no big international chip makers have yet shown interest in India.
State of the chip wars
- In 2020, China was the biggest market for semiconductor machines. Beijing’s “Made in China 2025” plan, launched in 2019 had prioritised achieving self-sufficiency in semiconductors.
- But the export controls set in motion by the US and more are in the pipeline have made China’s mission look difficult if not impossible.
- Japan, has also announced restrictions on semiconductor exports to China. The Japanese restrictions will take effect from July. China has lashed out at the move and warned of “consequences”.
- As US works with key partners to restrict Chinese access to chip tech, China’s chip imports from Japan, South Korea and Taiwan, part of the US-led “Chip 4 Alliance”, fell by 20 per cent in the first five months of 2023, according to the latest trade numbers.
- US is also lobbying the Netherlands to take similar steps the Dutch company ASML is the only maker in the world of deep ultraviolet lithography machines that are required to make certain kinds of chips.
Conclusion:
- All things considered, India is said to be at least two decades behind the chip curve. It could take the country 10-20 years to establish itself as a serious player in the semiconductor industry.
- For now, though, India has positioned itself in the global chip war, with a technology partnership that promises to take bilateral ties with the US to the next level.