Dragging our feet on deep science

Lack of funding stifles startups and impedes the development of technology

India lags behind several countries, including China, in critical economic and technological development areas. This lag is not just a statistical artefact but a profound structural issue with significant implications for the country’s future. The elephant in the room is India’s weakness in ‘Deep Science’ — the disruptive innovation in artificial intelligence, advanced materials, nanotechnology, industrial biotechnology, and photonics — that is overtaking the world.

These areas are not just scientific curiosities but the foundations for future competitiveness. Suppose India wants to gain global scientific leadership and sustain it in the coming decades. In that case, it must enhance its efforts in digital technologies and foundational scientific and technological domains. The crucial question is: how can India achieve this?

Deep science is the quest for fundamental understanding, and deep science technology is characterised by pure basic research of the kind done by Niels Bohr, the Danish physicist who made foundational contributions to quantum theory; inspired basic research as deployed by Louis Pasteur, the French progenitor of modern immunology who introduced prophylactic vaccination; and pure applied research as done by the American inventors Thomas Edison and Tesla who developed many devices in electric power generation and mass communication.

Deep science’s fundamental breakthroughs must result in use-case applications that help solve real-world problems. Climate change, pandemics, and food security are but a few problems that require a fundamental shift in tools to tackle them.

While India excels, at least in a few institutions (and fewer areas of scientific research), like the Indian Institute of Science and the Tata Institute of Fundamental Research producing world-class research, it falters in the important phase of value realisation. The principal challenge the country faces is in the transformative transition — converting high-end research into market-ready products. While it is all very well to envision Viksith Bharat@2047, government, academia and industry must together reflect on the wide innovation gap and ponder the hurdles in our pursuit of deep science.

Two key bottlenecks self-select themselves: First, the bulk of the scientific establishment is in the government sector, and over 60% of funding for science research goes to government institutions.

Second, research teams engaged in high-end research in select private institutions of excellence will also tell you that successive governments have neglected basic research and that a thriving research system needs much greater autonomy. However, these two hurdles are not new, and the political economy drives the resistance to free the scientific establishment from the vice-like grip of over-centralisation and the public sector.

If we were to focus on the innovation bottleneck and identify the hurdle at which we trip, it would be well within our stride to find ways of surmounting that hurdle. The core of the problem is funding — or rather, the lack of it. If we look at the top four scientific-leader economies in the world — the US, China, Japan, and Germany — it is striking that all of them have a robust system of venture capital (VC) and private equity (PE) investment driving innovation.

At the same time, India’s funding ecosystem is underdeveloped. In particular, the concept of Science Equity (SE), which funds early-stage innovations, is far less prevalent in India. This lack of funding stifles startups and impedes the commercialisation of research. India, therefore, needs to rethink its innovation funding policy radically. Two approaches — one from the public sector and the other from the private sector — need to change.

First, enhance public investment in scientific research, especially in early-stage deep science programmes. The government must shake off its risk aversion and support deep-tech companies from inception to market entry. Last year, the government of India announced the establishment of a funding agency, the Anusandhan National Research Foundation (ANRF).

It was charged with disbursing five hundred billion rupees ($6 billion) to universities and laboratories over five years — 70% of it from non-governmental sources, such as philanthropists and industry. India now has numerous worldwide enterprises in construction, information technology, manufacturing, and medicines. They must be incentivised to sponsor research in deep science — both in terms of funding researchers and infrastructure.

Second, science equity offers a critical opportunity for private capital investments funding deep science. Deep science entails a complex process of transforming scientific innovation into market-ready products and can be best understood through three critical stages: science, value realisation, and growth. The science stage involves foundational research conducted by universities, research centres, and private entities, producing new knowledge and technological advancements.

This phase is characterised by generating academic papers and patents, laying the groundwork for further development. Next, value realisation is where this scientific knowledge is transferred into a prototype, scaled from laboratory to pilot plant, and a market-ready product is available to start working with industries.

Finally, the growth phase consists of moving to production at scale. India lags significantly in the transition from scientific discovery to practical application—the value realisation stage. Despite the publication of many research papers on deep science innovation, the value realisation stage sees notably fewer businesses and scarce private capital investments, which are critical for the transition from discovery to the market at scale.

Capital markets must be strengthened to provide better liquidity and investment options in deep tech products, particularly for institutional investors. Designing regulations and tax structures that promote robust and sustainable private funding is vital. The recent abolition of the Angel Tax is a good beginning. Similar policy changes will encourage institutional investors to diversify into venture capital funds. There is much that India can do on the capital markets front.

India’s future scientific competitiveness, driven by wider and deeper fundamental research to discover the unknowns, and the unknown unknowns — the true mark of science — hinges on the imperative of government, academia, and industry to work together as one team.

(The writer is the director, School of Social Sciences, Ramaiah University of Applied Sciences)