I feel privileged and honoured to have been invited to deliver
the C D Deshmukh Memorial Lecture today. C D Deshmukh was
a person of such rare charm and brilliance, erudition and
versatility. He had given sufficient indication of an extraordinary
career that awaited him when at the young age of 22, he topped
the Indian Civil Service Examination in 1918. It was at that
time the pinnacle of glory for an Indian.
An administrator par excellence in the highest tradition
of his service, a lawyer by training, an outstanding expert
in finance, an educationist with a vision; Deshmukh was also
a great institution builder, a scholar, an author and a poet.
Deshmukh wore several caps with equal ease and grace. Few
would know that tugged among his several works largely dealing
with economics, development, finance and education, there
is one, Sanskrit Kavya Malika.
Deshmukh was instrumental in the creation of several institutions
which have played a foundational role in planning and which
influenced the course of evolution of post independent India.
Deshmukh pioneered the nationalisation of Imperial Bank and
reformation of the Company law; he was very concerned with
reforming the tax system and environment for achieving the
apparently conflicting objectives of growth with equity.
It is a sign of very different times that despite the fact
that he was not a political person and belonged to no party,
he was inducted into the cabinet on the sheer strength of
his expertise and experience to mould the destiny of a nascent
nation through the always choppy seas of finance and economics.
I consider it a special privilege that I have an opportunity
to pay my humble tribute through this lecture to this great
son of India.
When I look at the list of those, who have given this prestigious
lecture in the past, I feel truly overwhelmed. I find that
they were some of the greatest leaders, visionaries and thinkers
covering many walks of our life. My choice as a speaker is
perhaps influenced by the fact that I am a scientist and that
the breathtaking pace at which science is moving is not only
shaping our present, but also is going to dominate our future.
This is the last year of the century, and indeed the millennium.
We stand at the threshold of the next one with anticipation
and excitement. Many feel that the next century will be the
century of the mind. Some say that the next century will be
the century of knowledge. A nation's ability to convert knowledge
into wealth and social good through the process of innovation
is going to determine its future. I, therefore, want to focus
on the exciting subject of economics of knowledge, which will
dominate the coming century.
Let me set the stage by dreaming about our tomorrow. Tomorrow's
societies will be knowledge societies. Tomorrow's markets
will be knowledge markets. Tomorrow's wars will be fought
not by the conventional weapons, guns, missiles and so on,
but they will be fought in the knowledge markets with the
new thermonuclear weapons called information and knowledge.
The war on a patent right, which took place between Eastman
Kodak and Polaroid, was settled for about one billion dollars
recently. This is half of India's R&D budget! So these
wars in the knowledge market will be quite expensive.
The power of knowledge in the knowledge society is there
for all of us to see. The paradigm shifts are truly dramatic.
For more than a century, the world's wealthiest human being
has been associated with oil, starting with John Rockefeller
in the last nineteenth century and ending with the Sultan
of Brunei in the late twentieth century. But today, for the
first time in history, the world's wealthiest person is a
knowledge worker, his name happens to be Bill Gates!
I want to emphasise that to meet the twin objective of growth
with equity, knowledge cannot be the prerogative of a few;
everyone in the society must have access to knowledge and
become a knowledge worker. Nations which do not create knowledge
societies will vanish into the oblivion. But those that do
create these knowledge societies will have the potential to
lead the world. India has a chance to become a leader provided
it sets this process of creating the knowledge society in
place with speed and determination.
If the Indian society has to become a knowledge society, then
it is important that every Indian becomes a knowledge worker.
We need to recognise the concept of a knowledge worker in
the broadest possible sense. It is not scientists and technologists
alone, which will be knowledge workers. Even a farmer can
be a knowledge worker, provided he understands the soil that
he is sowing his seeds in, he understands why and how of the
micro nutrient and pesticide addition that he makes, he lives
in an information village, where he has the benefit of short
and medium range weather forecasting to plan his farming activity
and so on. If he does so, then he will be a continuous user
of knowledge and he will be a knowledge worker.
Let me illustrate this concept further. I had the privilege
of witnessing some truly novel models being tested by M.S.
Swaminathan Research Foundation on creating new knowledge
systems in the villages around Pondicherry last week. The
knowledge system for sustainable food security in the Pondicherry
villages has its goal the empowerment of rural women, men
and children with information relating to ecological agriculture,
economic access and utilisation.
Such a knowledge system is being managed by local youth at
the Village Knowledge Centre, from where the computer-aided
information system is operated. Farmers, who are becoming
the knowledge workers, are also being trained to maintain
a "Soil Health Card" to monitor the impact of farming
systems on the physical, chemical and microbiological components
of soil fertility.
If a customer becomes a knowledge worker, he will change
the market dynamics. We take great pride in the white
revolution that took place in India, with India emerging
as the largest milk producer in the world last year. But let
us remember those early days when some producers began diluting
the milk and customers could not determine its quality before
buying it. It was empowering the customers with knowledge
with simple kits to determine the buttermilk content that
put emphasis on quality, and led to the qualitative and quantitative
growth of milk production.
Enlightened citizens empowered with knowledge will be able
to see the crucial link between the 5 Es, namely environment,
ecology, economics, equity and ethics. They will not be then
guided by misinformation fed by vested interest groups. But
they will use their knowledge to decide on their own as to
what is wrong and what is right. They will not stop projects
that lead to economic development, but they will stop those
that lead to destruction.
India's economic development will crucially depend on society's
understanding of the new knowledge. After green revolution,
we need an evergreen revolution and a nutritional revolution.
We will have the gigantic task of producing 350 million tons
of food grains by the year 2040 to feed 1.5 billion Indians.
We will have to produce more food from the same land; only
new knowledge can do that. Modern biotechnology involving
genetically engineered crops will be a crucial alternative.
But lack of understanding in the society can stop the process
of this new knowledge reaching the farm, the signs of which
are already seen in India. Empowerment with knowledge at all
levels is, therefore, crucial.
In a knowledge society, the knowledge workers will perform
different tasks. Some of them will generate knowledge, some
will acquire knowledge, some will absorb knowledge and some
will communicate knowledge. Generating knowledge will require
an ab initio approach and will build on creativity. India
traditionally has been good at this. Acquiring knowledge will
involve both development of knowledge indigenously as well
as acquiring it from elsewhere in the world, through licensing
agreements, foreign investment and so on.
Absorbing knowledge will involve ensuring universal basic
education, creating opportunities for lifelong learning, supporting
tertiary education in science and technology, etc. For building
true knowledge societies, extending education to girls and
other disadvantaged groups will be crucial. Education will
be crucial for development, but education without openness
to innovation and knowledge will not lead to economic development.
Soviet Union had near hundred percent literacy but severe
restriction on innovation in the market place led to an economic
Communicating knowledge will involve, among other things,
creative use of modern information and communications technology
through competitive environment, but at the same time ensuring
that the poor have an access. Revolution in information technology
will galvanise the process of knowledge communication. The
cost of transmitting a million bits of information over a
kilometer has plummeted in the last twenty years from over
twenty dollars to a few cents; and the curve is logarithmic.
In 2020, half of the world's population will be connected
by Internet; we will be then talking about 'netizens' and
not 'citizens'! Access to information and knowledge will therefore
assume a different dimension altogether.
Increasingly the traditional factors of production - land,
labour and capital - have become less important when compared
with technology; the economists have termed this as the 'expansion
of the production frontier'. The source of technology is in
science that is rooted in knowledge. It is easy to visualise
that tomorrow's industries will be knowledge industries. The
emphasis will not be on physical or tangible assets, but on
intangible knowledge assets.
The value of intellectual capital of an industry will determine
its rank and competitiveness. In such industries, there will
be a major shift from people, who handled information and
did routine and unthinking work, to those who will use knowledge
at every stage. For knowledge workers, information and knowledge
will be both the raw material of their labour as well as its
The world's major growth industries - such as microelectronics,
biotechnology, designer-made materials, and telecommunications
- are already brainpower industries. These knowledge industries
stimulate other industries, in turn, to become knowledge based.
Consider the oil industry. The issue of "bottom of the
barrel" is driving the economics of these industries.
New knowledge embedded in three-dimensional acoustical sounding,
horizontal drilling, and deep offshore drilling is turning
oil business into a knowledge industry.
One might wonder as to why the physical assets such as machinery
in a factory, are becoming less important. Plant and machinery
are tradable commodities today. Even capital was a scarce
commodity until recently and was used as a competitive advantage.
But with globalised markets the companies around the world
have access to finances at inexpensive rates. So even capital
is no longer a scarce commodity. It is the intangible assets
which are knowledge based, and that are non- replicable, unique
and proprietary, that are providing companies with a competitive
The nature of intangible assets will vary from industry to
industry, but they will include several commonalties such
as research and development, patents, proprietary technologies,
databases, brands and even relationships, people and so on.
The dominance of intangible knowledge assets will mean that
we will have to make major changes in the management structures.
Around the world, the managements are built in the framework
of strategy, structure and systems. The top management is
always the grand strategist and decides on the allocation
of resources, and the lower management merely implements and
administrates the strategy. With domination of intangible
assets, one will have to create new models. The top management
will create only an overarching purpose and an environment
in which the people have the freedom to deliver. This means
the emphasis will shift to defining the purpose of the organisation,
setting the right process and getting the right people and
empowering them to deliver.
Industry will have also to think about things, which it never
cared for. For instance, among the intangible assets, customer
loyalty, which arises out of customer satisfaction and the
commitment of employees, will be the two very important intangible
assets. The investors will not merely focus on tangible assets
but start assessing the customer satisfaction index or an
employee satisfaction index of a firm. Such intangible assets
may become the heart of the annual reports of the companies.
My own CSIR is a knowledge-based organisation. When dealing
with our industrial clients, we wish to undertake research
as a business and do it in a businesslike manner. Last year
we set up the process of evaluating the customer satisfaction
index and making it as one of the performance indicators that
will determine every laboratory's budget. I expect this process
to spread as rapidly as the quality movement in India spread
during this decade.
Will the accounting norms for intangible-asset-dominated
companies change? Can the intangible assets be valued and
formally be a part of the balance sheet of firms? Will the
stock markets be willing to recognise intangible assets as
something real, particularly when accounting norms do not
do so? Will the lenders who lend today against current fixed
assets be prepared to consider knowledge assets? One does
believe that this paradigm shift will come in the near future
and the balance sheets of knowledge-based companies will undergo
a formal change.
After all Japan is already accepting intangible assets such
as intellectual property as a security against loan and not
insisting on fixed assets. A couple of years ago, CSIR laboratories
were allowed to use knowledge as an equity in start up companies,
and not insist on payment of fees. Such and other formal recognition
will push companies into developing their intangible assets
further leading to a better performance.
Finally, for a cash-starved but intellectual capital rich
country like India, emergence of knowledge industry is good
news. But harnessing the full potential of knowledge industry
requires an aggressive and visionary policy framework, creative
planning, daring and risk taking. It needs to be recognised
that the knowledge industries such as software development,
pharmaceutical industry, biotechnology, engineering services
etc. operate in a highly competitive environment with great
demand on the speed of response in dynamic market conditions.
A high operational efficiency and functional flexibility
is crucial for such industries. The Government policies, therefore,
have to be conducive to provide these. For example, the knowledge
based companies that employ knowledge workers are in great
demand and some of them may require global level compensation
with schemes to create and share wealth.
Employers' stock option plans need to be made available in
such industries. India has yet to set up proper technology
financing mechanisms, which are risk taking and which can
cater to the knowledge industries. In particular, the venture
capital financing is very poor in India and yet at the same
time we recognise that Intel, Microsoft, Apple, etc. would
not have seen the light of the day but for the venture capital
Appropriate regulatory frameworks need to be set up. The
labour laws in India are obsolete when one considers the environment
in which knowledge workers in knowledge industry thrive. For
instance, Shops and Commercial Establishment Act, 1961, and
rules restricts working hours to 9 hours on any day and 48
hours in a week whereas in knowledge industries, flexible
timings to meet the needs of the global customers are absolutely
essential. It is important to recognise that knowledge work
in knowledge intensive industry cannot be governed by using
the laws meant for physical labour. Several other changes
in foreign exchange regulations etc. will be needed to cater
to the needs of export intensive knowledge based industries.
Options on knowledge generation and acquisition
I was attending a meeting of the Third World Academy of Sciences
in Trieste recently. Fredrico Mayor, the Director General
of UNESCO made an interesting statement. He said "Knowledge
flows from north to south and wisdom flows from south to north".
I remember making a small correction; 'knowledge' may flow
from north to south but 'usable knowledge' does not flow that
easily from north to south, since usable knowledge has the
potential to create wealth. No country, no corporation gives
a competitive advantage to another, excepting at a price.
India itself has realised this in the post liberalisation
In India we always considered the 'make' or 'buy' options,
which unfortunately got converted to 'importing' and 'import
substituting' in the closed economy that we had. But if India
has to create the best practice in economics of knowledge
then it will have to carefully consider not just the two options
of 'making' or 'buying', but also 'buying to make better',
'making to buy better' and 'making it together'. Let me explain
what I mean. 'Making' has been a preferred course of action,
but one cannot make everything. Also if one has to reach a
high rate of economic growth, then other alternatives have
to be sought. 'Buying' the knowledge embedded in a technology
or machinery is possible, when the owner is willing to part
Even in the post liberalised era, India has realised that
when Mark III technologies are available with the owner, one
has managed to discuss only Mark II and one has been lucky
to get Mark I, since no one wants to give away a competitive
advantage. Let us realise that India is not being looked at
as a bottomless pit of demand but as a global competitor.
Smart countries like Japan opted for the third option of
'buying to make better' route. They acquired knowledge through
licensing, absorbed it and developed superior products, which
competed with the best in the world. India did not do that;
we kept on buying and buying. We have also not followed the
fourth option of 'making to buy better'. Familiarity with
knowledge or a technology domain gives one an advantage in
negotiations, strategic positioning and so on. It is only
then one can negotiate for Mark III and get Mark III from
a position of strength.
For a resource poor country like India, 'making it together'
is the preferred option in the long run. This means creating
knowledge networks between all knowledge centers in the academic
world, national laboratories, etc. and our productive sector.
Let me pursue this option in some depth.
Building knowledge networks
How do we build knowledge networks between the productive
sector and R&D institutions and what are the hurdles?
Publicly funded R&D institutions should be used as idea
generators and providers of new concepts by the industry.
Industry should not look at institutions as super markets
where off-the-shelf technologies are sold. Indian industry
should be prepared to assume the role of partners, who have
the technical, financial and marketing strengths to take ideas
to the market place. As regards the products emerging from
R&D laboratories, these invariably come out as some sort
of packages containing knowledge and information, whereas
the business units will have to convert these into goods and
services, which are saleable.
Indian industry should willingly integrate national R&D
resources into their business strategy. Improved communication
and understanding, faith in mutual growth and development
of healthy working relationships is necessary. The fact that
new knowledge has to make an economic sense has not been realised
by our institutions. On the other hand the fact that competitive
advantage in business will be reached by using cutting edge
knowledge has not been realised by our industry.
There has to be a meeting ground between the long-term horizon
of R&D institutions and the short-term horizon of business
units. CSIR, as a large publicly funded R&D system, is
trying to make a cultural shift in its operations, by looking
at research as a business, defining a new product, defining
a new process and doing it in a business like manner. The
transformation process has just begun, but CSIR hopes that
it will become an effective hub in the Indian knowledge network
and play a crucial role in driving forward the issue of getting
economic gains from a vibrant Indian knowledge bank.
I have spoken about Indian knowledge networks, but I see
equally exciting possibilities for global knowledge networks
for economic gains, where India could assume a dominant position.
The chain of concept to commercialisation necessarily crosses
transnational boundaries today. Thus many major multinational
corporations in USA and Europe, whose R&D budgets are
larger than even India's R&D budget, are becoming partners
of India's R&D laboratories. CSIR's partners today include
giants such as Mobil, General Electric, Du Pont, Boeing and
so on. For India, rather than remaining a perennial seeker
of knowledge from the west, opportunities are opening up for
doing even reverse transfer of knowledge.
What is driving this process? Many companies across the world
today consider it to be rather unwise to attempt for self-sufficiency
in technology development, particularly in an era, where the
R&D costs are increasing rapidly. The concept that technology
could be acquired rather than reinvented is gaining momentum.
As a part of the global innovation strategy, several companies
world over are scouting for new ideas and patents. These companies
believe that the surest way of becoming technically strong
is through knowledge networking with premier organisations
across the world.
In an era of global connectivity through modern information
technology, the concept of virtual laboratory is gaining ground.
These global networks are allowing the real-time management
and operation of laboratories in any part of the world. Thus,
companies are seeking to gain a competitive advantage by using
the global knowledge resource and working with a global time
Basic skills are gaining importance and the new paradigm
is skill-based competition. The high technology companies
are asking as to what skills, capabilities and technologies
should they build up, rather than asking a stereotype question,
as to which markets should they enter, and with which products.
I see an enormous opportunity for India to become a global
knowledge platform in the coming century, by partnering these
companies in areas where we can cooperate, leveraging strategically
those Indian niches, where we have a competitive advantage.
Role of IPR in economics of knowledge
I made a reference earlier to the expensive wars in the knowledge
market that the Indian industry will have to face, as it integrates
its economy with the global economy. Intellectual Property
Rights (IPR) will be crucial in fighting these wars! Indeed
in the world of knowledge based competition, IPR will emerge
as a key strategic tool. India is way behind the rest of the
world and the continuing illiteracy in IPR will hurt us badly.
Incorporating strong systems on generation of IPR, its capture,
documentation, valuation, protection and exploitation will
need a massive thrust.
The issue of patents in particular, has created a national
interest and debate of great dimension. I thought it might
be useful to focus on this specific area. A weak physical
infrastructure, inadequate intellectual infrastructure, poor
public awareness and delays in implementing government policies
is hurting India today. We are behind the rest of the world
in patents, both quantitatively and qualitatively. Why is
this so? The basic criterion for the grant of a patent is
that the innovation must have elements of novelty, non-obviousness
and utility. How much of the research that we do today meets
even some of these basic criteria? Many of the Indian R&D
institutions and industrial firms have so far focussed on
imitative research or reverse engineering. How do we change
our mindsets so that we move on to doing truly innovative
research or doing forward engineering? This is the first big
Skills in filing, reading and exploiting patents will be
most crucial in the years to come; but our ability to read
or write patents is very poor. Neither can we properly protect
our inventions nor can we understand the implications of the
patents granted to our competitors. Many of the patents written
by our professionals could be easily circumvented. Manpower
planning for IPR protection needs priority. IPR must be made
a compulsory subject matter in the law courses in the universities
Our graduates coming out of engineering and technology streams
have no idea about IPR, and yet it is these young people,
who will have to fight these emerging wars in the knowledge
markets. A number of patent training institutes will have
to be set up. China has already set up 5000 patent training
institutes! Judicious management of patent information will
require well-structured functioning of information creating
centers, information documenters and retrievers, information
users, IPR specialists and information technology experts.
Need for rethinking IPR
There are several areas of conflict and debate in the existing
patenting system. One issue is that of public v/s. private
knowledge. Some types of knowledge - for example educational
technologies, life saving technologies, must be available
to all, not just to the rich. We need to develop principles
by which we determine as to when the knowledge will be publicly
available and when it will be kept private. Agencies should
be set up to buy knowledge for the public good, including
by using those principles used in land-acquisition proceedings
but this requires a clear legal and policy framework.
The present patent system is made applicable to all types
of industries, types of inventors and types of knowledge.
This cannot work. The electronics industry, where product
life cycles are small, wants speed and short-term protection.
Whereas pharma industry, where profits are earned, after a
long time of rigorous evaluation of safety, toxicity etc.,
wants long term protection. We must realise that one size
does not fit all and revisit the patenting system based on
the issues of cost, speed of issuance, dispute settlement
and so on based on the type of industry, inventor, knowledge,
The industrial property systems were set up centuries ago
for inanimate objects, and that too in formal systems of innovations.
A great challenge is now emerging to look at the systems that
will deal with animate objects (such as plants and animals)
and with informal systems innovation (such as those by grass
root innovators like farmers, artisans, tribes, fishermen
and so on). The standard intellectual property system will
certainly not suit such innovators and their innovations.
We need innovation in the intellectual property system itself.
Shorter duration patents for smaller innovations, including
specific improvements in the traditional knowledge need to
be conceived. They will involve simple registration-cum-petty
patent system where the inventive threshold would be lower
but even a small improvement in material, process, product
or use could be protected at much lesser costs and for shorter
duration. This will give a boost to the creative capabilities
of otherwise deprived innovators. We, in India, will have
to develop our own models for this.
New IPR regime and Indian knowledge industry
The knowledge based industry in India, such as the IT industry,
pharmaceutical industry, etc. will have to face new challenges
in the new IPR regime. The IT industry has maintained an impressive
growth rate and we have the dream of becoming an IT super-power,
raising our software exports from $ 2 billion to $ 50 billion
in the next 10 years. If this has to happen, then we will
have to reduce the content of body shopping and move on to
innovative IT products, which will need IP protection. The
Indian IT industry has not so far cared for this, but it will
have to play an increasing attention to this aspect.
The same is the case with our pharma industry. From an importer
of even the formulations in early 50s, our pharma industry
has become a net exporter. We need to recognise that it will
start feeling the heat of the global competition soon. The
global pharmaceutical industry is a knowledge industry and
the emerging Indian pharma industry will have to be no exception.
It has survived so far without developing new molecules. Indeed,
only fourteen new molecules have been developed so far in
the last forty years, out of which eleven have been from the
But with the advent of the new patent regime, the strategies
will have to change. I do strongly believe that the Indian
industry can once again rise to the occasion just as it did
in the 70s under the provisions of the Indian Patents Act
1970. Indian pharma industry, apart from pursuing novel synthetic
routes to known molecules must pursue basic research for patent-worthy
inventions comprising new molecules. It will have to forge
partnerships with national laboratories in a Team India spirit
to surge ahead. As a new strategy, the pharma industry could
pursue the development of new molecules up to the point of
pre-clinical stage and then forge strategic alliances for
co-development or license these to national and international
partners. Some of the enlightened pharma players in the Indian
industry are already beginning to reap the benefits of this
Before we protect IP, we must generate IP, which is worth
protecting. Our institutions, national laboratories and industrial
R&D laboratories will have to gear up for this. Nurturing
a strong innovation base through a balanced system of recognition
and rewards is the need of the hour. We will have to invest
liberally to enhance the skills and knowledge base of scientists,
through structured in-house and external professional training
programmes, some even abroad, on understanding, interpreting
and analysing the techno-legal and business information contained
in IP documents, and in drafting of IP documents. For this
we need to avail the services of high-class national and foreign
consultants and attorneys.
We need to encourage the publication of R&D results in
scientific papers only after careful consideration of the
consequences on IP rights. It is hard to estimate the loss
of Indian intellectual property due to the inadvertent publication
of usable knowledge in the last few decades. Monitoring national
and international patents and other IP through access to on-line
databases, to ensure effective protection and to ward off
infringements and threats to India's IP portfolio will be
crucial. Analysing and assessing techno-legal and business
information and market intelligence to identify strategic
alliances and to exploit potential uncovered niche areas of
opportunities itself will give rise to new knowledge based
I believe that we will have to mobilise public opinion and
influence government decisions and policies on diverse IP
issues. This should be done, not through emotional cries,
but on the basis of analytical and scientific studies taken
up in-house or commissioned nationally and internationally.
We must spearhead a movement towards formulating a national
Economics of traditional knowledge
In my pursuit of economics of knowledge so far, I have dealt
with factors which will drive knowledge markets dominated
by conventional industries as in industrialised societies.
The issue of economics based on traditional knowledge and
biodiversity are far more complex. India, with approximately
8 per cent of world's biodiversity and as one of the greatest
storehouses of traditional knowledge, has the potential of
becoming a major player in the global trade in herbs-based
formulations, medicines and products. An estimate by the EXIM
Bank puts the international market of medicinal plants-related
trade at $60 billion per year growing at about 7 per cent
annually. India has only 2.5 per cent share of this market.
Knowledge-rich companies and researchers from the developed
world have been attracted to the wealth the poorer countries
have in their biodiversity and the traditional knowledge systems.
Some argue that the access to such biodiversity and community
knowledge by the industrially developed nations is necessary
for the larger welfare of mankind as this advances knowledge
and leads to new products which contribute to the well being
of global consumers. However, this is not the point. The point
is that this access to the resources of the poor does not
benefit them in any way, while their natural resource and
intellectual property continues to be appropriated and exploited.
Many researchers who have obtained knowledge about biodiversity
and its uses from local innovators, communities and institutions
do not even acknowledge their contributions, let alone sharing
of the benefits resulting from such knowledge. One recalls
here the case of a new antibiotic. This was launched in the
US, based on the discovery of peptides in frog skin by a researcher
who had found three tribes in Africa and America, which knew
about the wound healing capabilities of the frog skin and
were using it for that purpose. However, no benefit was given
to the tribes.
The local communities or individuals do not have the knowledge
or the means to safeguard their property in a system, which
has its origin in very different cultural values and attitudes.
The communities have a storehouse of knowledge about their
flora and fauna their habits, their habitats, their
seasonal behaviour and the like and it is only logical
and in consonance with natural justice that they are given
a greater say as a matter of right in all matters regarding
the study, extraction and commercialisation of the biodiversity.
A policy that does not obstruct the advancement of knowledge,
and provides for valid and sustainable uses and intellectual
property protection with just benefit sharing is what we need.
When we come up for reviewing TRIPS, we need to push for TRIPS
plus, meaning TRIPS plus equity and ethics.
It needs to be emphasised that the issues of the economics
of community knowledge are truly complex. While it is true
that many indigenous cultures appear to develop and transmit
knowledge from generation to generation within a system, individuals
in local or indigenous communities can distinguish themselves
as informal creators or inventors, separate from the community.
Furthermore, some indigenous or traditional societies are
reported to recognise various types of intellectual property
rights over knowledge, which may be held by individuals, families,
lineages or communities.
Discussion of IPRs and traditional knowledge should draw
more on the diversity and creativity of indigenous approaches
to IPR issues. In addition, there are power divisions as well
as knowledge divisions among people in many communities, and
sharing of benefits with a community as a whole is no guarantee
that the people who are really conserving traditional knowledge
and associated biodiversity will gain the rewards they deserve
for their efforts.
To encourage communities, it is necessary to scout, support,
spawn and scale up the green grass root innovation to generate
employment and use natural resources sustainably through linking
of innovation, enterprise and investment. This requires building
up adequate linkages with modern science and technology and
market research institutions. In short, one needs new models
of development, employment generation and conservation of
In this connection, one looks with hope to organisations
like Gujarat Grassroots Innovation Augmentation Network (GIAN).
GIAN has attempted to set up venture capital fund for small
innovation providing for its linkage with R&D and scaling
it up into viable enterprise. The recent effort by DSIR and
DST to set up a Technopreneurs Promotion Programme is also
noteworthy, since it provides the much-needed financial support
for the first time for such endeavours.
There is also a deep philosophical divide on the issue of
IPR that we have to deal with. The existing IPR systems are
oriented around the concept of private ownership and individual
invention. They are at odds with indigenous cultures, which
emphasise collective creation and ownership of knowledge.
There is a concern that IPR systems encourage the appropriation
of traditional knowledge for commercial use without the fair
sharing of benefits, or that they violate indigenous cultural
percepts by encouraging the commodification of such knowledge.
While recognising the market-based nature of IPRs, other
non-market-based rights could be useful in developing models
for a right to protect traditional knowledge, innovations
and practices. Geographical indications and trademarks, or
sui generis analogies, could be alternative tools for indigenous
and local communities seeking to gain economic benefits from
their traditional knowledge.
To date, debate on IPRs and biodiversity has focused on patents
and plant breeders' rights. The potential value of geographical
indications and trademarks needs to be examined too. They
protect and reward traditions while allowing evolution. They
emphasise the relationships between human cultures and their
local land and environment. They are not freely transferable
from one owner to another. They can be maintained as long
as the collective tradition is maintained.
Whether one likes it or not, it is a hard fact that a mere
focus on morally defined rights will not be successful, because
it is too difficult to build arguments to bridge the wide
gap between general human rights and indigenous peoples' rights
in the changing value systems in the modern world. It is generally
difficult to attribute an objective economic value to the
knowledge of local and indigenous communities, and associated
resources, for a number of reasons.
One could be the absence of a market for genetic resources,
and the complexity of inputs into creation of new crop varieties.
It will be more pragmatic to focus on the costs of conservation
to indigenous and local communities as a guide to designing
economic incentives that will help them gain adequate rewards.
Different interest groups, such as industry, intellectual
property experts, and indigenous and local peoples' organisations
need to cooperate in order to define mechanisms for more effective
sharing of benefits with the providers of traditional knowledge
and genetic resources.
I believe the next century will belong to Asia. I believe
India will have a chance to lead. I also believe India will
be an economic power, mainly because of her great intellectual
capital and its mastery over the theory and practice of economics
of knowledge. I do really believe that the creative potential
of millions of individual Indians will be unleashed from the
bondages of self-inflicted mental sanctions. For too long
we have talked about the potential of India. The latent potential
energy of the creative Indians will be converted into creative
and productive kinetic energy. The unique knowledge society
in India will be based on Indian ethos and the ethics.
I believe many schools will flourish, where brilliant new
theoretical frameworks for economics of knowledge of the 21st
century will be developed and India will assume a conceptual
leadership in this development. This brings us to an interesting
thought. 1998 was a great year for India. Amartya Sen won
the Nobel Prize in economics. His development of welfare economics
combined economic theories with philosophy and ethics. If
knowledge economics has to deal with the issues of growth
and equity, then it will have to combine economics, science
and technology, philosophy and ethics in the most creative
and innovative way. Will an Indian win the Nobel Prize in
knowledge economics? Why not? We certainly have the right