In today’s world, technology is playing a transformational role in enabling innovation and driving change. New ideas, new business models and new technologies are leading to the birth of the “ideas economy,” where the “innovation quotient” has emerged as the key determinant of market value.

India will lose out on the opportunity to benefit from innovation-led, value-added growth if it fails to recognize the enormous value that can be created by leveraging Intellectual Property (IP). Despite the scientific and engineering talent in the country, India had filed just 1,400 international patent applications in 2014. The same year, China filed 18 times as many patents as India. Japan filed 30 times as many and Korea’s count was 9 times more. The US filed over 61,000 patent applications, 44 times more than India! No wonder then that India was recently ranked 81 out of 141 countries on the Global Innovation Index 2015, well behind middle income countries such as Brazil, China and South Africa.

We are lagging behind not because there is dearth of innovative ideas in the country, but because we have failed to create a price discovery model for intangible  assets based on Intellectual Property. There have been very few Indian companies like Biocon that have dared to pursue a risk-ridden, innovation-led business and create valuable IP in an industry where the business ethos favours low-risk ventures based on services and generic drugs.

Given India’s desire to reimagine its future as a world leader, the time has come for us to really look beyond predictable, imitative business models and me-too products. Only innovation can lead to exponential growth and non-linear job creation that India needs.

Surely, India has the potential to be the next global innovation destination. For that to happen, India needs to create a virtuous financial cycle to realize the nation’s huge entrepreneurial potential. This financial ecosystem will work only if all three components – academia, entrepreneurs and industry – work symbiotically and in tandem.

To set the wheels spinning and make the model self-perpetuating, monetization needs to happen at every stage of this cycle. Academia therefore needs to create IP through its discoveries and inventions that can be licensed to either entrepreneurs or directly to industry with royalty payments upon commercialization. Entrepreneurs need to create value-added IP that can be licensed to big industry with royalties upon commercialization. Industry needs to monetize new technologies through successful commercialization that enables payment of royalties.

What works in our favour is that India is fast emerging as a destination of choice for global technology-led R&D. According to a recent study* India accounted for nearly 70% of all new offshore R&D centers established in 2015. However, India stands to lose its attractiveness as an innovation hub in the wake of a proposed government move to withdraw the tax incentives that are currently available on R&D-related expenditure. A country that already ranks low on research and innovation can ill-afford to put itself at a competitive disadvantage vis-à-vis others by doing away with tax sops that are aimed at encouraging a culture of innovation.

Furthermore, India needs to remain steadfast in its pursuit of affordable innovation to enhance access to affordable healthcare for millions of patients in India. In that context, it’s imperative that India remains TRIPS compliant and yet ensures that it is not forced into a TRIPS Plus regime that aims at ever-greening of patents which is detrimental to our economic model.

India’s diverse culture and the plethora of prevailing challenges present unlimited opportunities to innovate. The India of the future will need to be agile, innovative and committed to take advantage of these unfolding opportunities. An IP-led strategy coupled with an enabling eco-system can create compelling success stories of taking innovative ideas to the market.

*study by consulting firm Zinnov

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