Karnataka’s engineering research & development policy to help industries scale greater heights
For decades Karnataka has been the beacon of Science and Technology in the country. Nearly 40 per cent of the Engineering Research and Development (ER&D) revenues of India come from the state alone. In 2018, the Engineering R&D sector became the fastest growing in the country, with a compound annual growth rate of 12.8 per cent. The global spend of the sector is likely to reach USD 2 trillion by 2025. Three sub-sectors, software products, semiconductors and automotive that drove the spending growth in 2019 will continue to contribute to this significantly.
India has over 900 R&D and Global Capability Centres (GCCs). These Service Providers offer innovative solutions worldwide and serve over 90% of the top Global 1000 companies. With India’s growth story, Karnataka’s positioned has strengthened too. We are today considered as the ‘innovation powerhouse of India’. We have over 400 leading R&D and GCCs. (Global Capability Centre). Our state capital, Bengaluru, is the fastest-growing tech hub in the world and has emerged as the 4th largest technology cluster globally. To continue to lead the wave of innovation, Karnataka’s ‘Department of Electronics, IT, BT and S&T’ has recently announced the Engineering Research and Development (Engineering R&D) Policy 2021.
The policy framework’s core intention is to position the state as the ‘Destination of Choice’ for ER&D in India by attracting Multi-National Companies, GCCs, Engineering Service Providers and provide them with a robust and well-connected ecosystem by bridging the gap between engineering talent and opportunity. We aim to create 50,000 new direct and indirect jobs for the skilled workforce in the ER&D sector and grow regional economies by promoting innovation. The policy envisages to develop a research-oriented skilled talent pool and foster a knowledge economy. It enables our state to contribute more than 45 per cent of India’s ER&D during the policy period.
The purview of the new policy extends to 5 key priority sectors- Aerospace and Defence, Auto Components and Electronic Vehicle, Biotechnology, Pharma and Medical Devices, Semiconductors and Telecom and Software Products.
Our Karnataka Innovation Technology Society helps us implement policies, programs, schemes, administering incentives, organizing trade shows, conferences, and undertaking all allied promotional activities that will help develop industries in the state. We have also set up the Karnataka Digital Economy Mission to promote digital industry growth and attract investments by providing handholding services and suggest policy initiatives to be taken up by the state.
Growth Beyond Bengaluru is one of the missions of our government. We are providing an impetus to companies to set up or expand ER&D beyond Bengaluru urban district, and the policy offers an incentive of up to 50 per cent of rent (up to Rs 2 crore) to GCCs. The state will provide recruitment assistance of Rs 20 lakhs, investment subsidy equal to 20 per cent of investment (up to Rs 2 crore) to an MNC’s Indian entity setting up or expanding operations beyond Bengaluru. Apart from these, on a case-to-case basis, we have offerings for companies with more than Rs 250cr investment and with 3,000 employees.
To focus on developing innovative offerings that leverage cutting edge technologies like IoT, Blockchain, Robotics, Digital Twin, Advanced Manufacturing, and Virtual Reality. The ER&D Fund will provide a partial and conditional grant for ‘Approved R&D Projects’. The state will provide a conditional grant of 40 per cent of the approved R&D expenditure (up to Rs 8 crore). For three units located in 3 different locations beyond Bengaluru, Karnataka will grant up to 40 per cent of the approved budget of Rs 50 crore, whichever is lower.
To establish innovative labs beyond Bengaluru and showcase emerging areas like Digital Health, Digital manufacturing, Smart agriculture, Smart city, Smart grid, and renewable energy, we will provide funding up to Rs 8 crores per entity. Technologies with a social impact will be allowed to conduct trials and pilot programs with state government departments. A grant of 80% for a project cost, up to Rs 3 crores per entity, is reserved for this purpose.
We will also support setting up ‘Go and See Centres’ to demonstrate the state’s R&D capability to prospective customers in PPP mode. It will help generate business opportunity from ER&D in the future. Further, to support the industrial application of academic research and bridge the gap between academic skills and the need for the engineering R&D industry, we will spend Rs 10,000 per student towards industry-oriented courses and Rs 1.25 crore per college/university to set up laboratories. Providing relevant solutions and incentives to address the industry’s crucial issues is also a critical aspect of this policy.
The policy’s critical underlying thought is to create an environment that encourages youth to get into research mode. The various sets of policy offerings are sure to take Karnataka’s ER&D industry to greater heights.
