Creation and growth of technical knowledge through innovations is fundamental to the process of economic growth. India’s growth experience during the last two decades has been highlighted by innovations in the new economy sectors that are mainly urban centric and have benefited only the elite in the high-skilled occupations.
The sustainability of this growth momentum is now under threat due to the dualistic development that has created urban-rural divide and bypassed the poor population and the looming environmental threats leading to water and energy shortages. The future will depend on the force with which green and inclusive innovations are unleashed in India to achieve economic, social and environmental sustainability.
This article highlights the innovative ideas, technologies and programmes in water and energy sector and identifies the key drivers of the innovation process. Innovations in the water sector are mainly end-user and community driven experiments at the grassroots level that have been drawn from the traditional knowledge base. There are inspiring examples of institutional innovations aimed at improving the service delivery mechanism and bringing about efficiency, equity and sustainability in water availability.
Energy sector innovations comprise improvements in products, processes, technologies and policy regime changes. They are mainly aimed at demand-side interventions to tackle the growing energy requirements. Regulators and policy makers have been catalysts in driving energy innovations. Innovations of this kind are necessary to bridge the gap between globally competitive India and India of the poor with acute inequalities and inefficiencies and should evolve strategies for those at the Bottom of the Pyramid.
Scientific and technological breakthroughs are vital for progress. As the key axiom of Joseph Schumpeter’s work suggests, innovation as the ‘perennial gale of creative destruction of ideas and structures’ is a natural and necessary process for economic growth (Rosenberg, 1994). This is evident in the growth experiences of most developed and emerging economies of the world, including India. However, India’s performance in science, technology and innovations, during the past 50 years of economic planning followed by liberalization and reforms, has been singularly uneven. India occupies a significant global space in high-end product and service innovations in the ‘new economy’ sectors of Information and Communication Technologies (ICTs), pharmaceuticals and skill-intensive manufacturing sector (World Bank, 2007). With 7-8% annual average growth rate during the past decade, India’s growth story is being re-written by innovations. However, this growth experience is highly dualistic in nature with acute differences between formal and informal sectors, urban and rural areas and educated elite and poor masses.
India’s innovation potential is grossly underutilized and has largely bypassed its young population.
The current innovation scenario has an urban bias with exclusive focus on segments catering to the elite population and export markets. India’s innovation potential is grossly underutilized and has largely bypassed its young population, often living in abject poverty and equipped with low skill sets (World Bank, 2007). The sustainability of the growth momentum itself is under threat due to the looming environmental challenges of water and energy shortages. To sustain the competitiveness and long-term growth momentum, India needs to bring in green and inclusive innovations that are targeted towards economic, social and environmental sustainability.
This paper takes an overview of innovations for environment in India, with specific focus on innovative ideas, technologies and programmes in the water and energy sector. The nature of innovations in the two sectors is examined here with particular focus on the key drivers in the innovation process, their larger socio-economic and environmental impacts and the need to unleash such inclusive innovations in future to reconcile the seemingly conflicting objectives of economic growth and environmental sustainability.
Water and energy security for the people is closely related to their food and livelihood security, health security, ecological and environmental security and economic growth and development (World Bank, 2007). Given the economic structure, India’s growth trajectory in the next few decades will greatly depend on the adequate provision for its growing water and energy requirements.
Inequalities in water distribution among regions and states will further accentuate these shortages.
For instance, based on Global Water Partnership (GWP) estimates, the total demand for water in the country is expected to double from 525 billion cubic meter (bm3) in 1997 to 1027 bm3 by 2025, with required investment of close to Indian Rupees (INR) 5000 billion (USD 100 billion, given 1USD=INR50). Yet, the water availability per capita per year is reducing from 1800 m3 during 1980s to 1450 m3 at present and is expected to decrease further to 1100 m3 by 2025. Inequalities in water distribution among regions and states will further accentuate these shortages.
Similar scenario exists for future energy requirements and availability. Concurrent with rapid economic growth, demand for energy and supporting infrastructure is also expected to grow further. The main energy products consumed in India are electricity, oil, coal, gas and biomass, of which, electricity is the single largest energy product used for residential, agricultural, industrial and commercial purposes.
The total primary energy supply (TPES) in India in 2007 was estimated at 594 million tonnes of oil equivalent (Mtoe) and net imports of energy at 150 Mtoe by the International Energy Agency (IEA). Similarly, the electricity consumption was estimated at 609.74 Tera watt hours (Twh). Further, 40% of energy production in India uses coal and 23% uses oil, which has imminent impacts on the local air quality and global climate change. As projected by the ‘National Energy Map for India: Technology Vision 2030’, in the business-as-usual scenario of 8% annual growth rate in future, commercial energy consumption is expected to increase to 1046 Mtoe by 2020 and 2123 by 2030.
Even with aggressive renewable energy generation, the consumption would move up to 1033 Mtoe by 2020 and 2097 by 2030. These figures highlight the fact that supply-side alternatives like hydro power, renewable energy sources and nuclear energy will only have a minor impact on future energy consumption levels. Therefore, demand-side interventions in the form of technology and policy-driven innovations are the need of the hour to meet the ever-growing energy demands in future.
Environmental/green innovations are absolutely necessary to move towards the sustainable development pathways.
The preceding section brings forth the fact that environmental/green innovations are absolutely necessary to move towards the sustainable development pathways. There are positive externalities associated with green innovations in the form of direct and indirect economic, environmental and social benefits. They are also necessary to bridge the divide between an enthusiastic and globally competitive India and India of the poor with acute inequalities and inefficiencies.
Naturally, such innovations find a place in evolving strategies for those at the Bottom of the Economic Pyramid, as aptly pointed out by the modern management guru, C.K. Prahlad. Green innovations are wide-ranging in scope from new techniques, products and services to new policies and regulations. A plethora of actors and stakeholders are seen to be driving innovations for sustainability in India as depicted in Figure 1 below.
Figure 1: Key drivers and stakeholders in sustainable innovations
For the sectors under consideration in this article, i.e., water and energy, a few or all the stakeholders shown in the above figure have played an important role in initiating and harnessing innovations. The role of policy makers, entrepreneurs and technology changes in driving innovations is well documented. For green innovations, initiatives taken up by the end-users, communities, entrepreneurs (mainly, the public sector utilities) and service delivery mechanisms (like energy services companies and financial service providers) have been particularly important in recent years.
In the water sector, innovations are mainly end-use and community driven experiments at the grassroots level. These are technologies and practices drawn from the traditional knowledge base and are essentially process innovations. There are a few inspiring examples of institutional innovations introduced by policy makers which aim at improving the service delivery mechanism and bringing about efficiency, equity and sustainability in the availability of water. A few noteworthy innovations introduced in the water sector during the last decade are:
Energy sector innovations scenario in India has been quite rich in terms of innovative products, processes, technologies and policy regime changes. It must also be pointed out that these innovations are mainly aimed at demand-side interventions to tackle the growing energy requirements. Regulators have played a key role in driving these innovations. The major policy instruments pertaining to tariff determination, development of renewable energy, sharing of CDM benefits among the developers and electricity distribution companies, etc., are examples of the catalyst role played by the regulators in the energy sector. In general, energy sector in India has seen many regulator-driven and service delivery innovations as mentioned below:
Green innovations have tremendous potential if harnessed well in the sectors, such as, small-scale agriculture, agro-based industries and small and medium enterprises (SMEs) in India.
When we analyze the impacts of innovations in the water and energy sector, they are not restricted to the direct beneficiaries alone. There are wider economic, social and environmental impacts, which necessitate the spread of such innovations in these as well as other sectors of economic and social importance. Green innovations have tremendous potential if harnessed well in the sectors, such as, small-scale agriculture, agro-based industries and small and medium enterprises (SMEs) in India.
Innovations in these sectors assume great importance given the fact that 50% of the population depends on primary sector for livelihood opportunities and 90% of industrial units are SMEs supporting more than 20 million jobs. Such innovations would not only achieve resource conservation and sustainable practices and but also offer means of livelihood to those at the bottom of the pyramid.
To conclude, it is imperative for India to unleash the innovation potential to create sustainable development pathways for future. Given the dualistic nature of the development experience with acute intra and inter-regional differences and environmental imbalances, the focus has to shift to innovations which try to bring in economic, social and environmental sustainability. Water and energy security are the two critical inputs that are expected to carve out the future development trajectory of the country. Both sectors have seen community and regulator driven innovations during the last decade.
Most of these innovations have had economic and social impacts, particularly at the grassroots level in case of water sector and end-use level in energy sector. Learning from the experiences in both sectors, India has tremendous potential to unleash green innovations in other areas of vital importance from the perspective of livelihoods, resource conservation and sustainability.
By Archana Patankar, PhD, Assistant Professor, K J Somaiya Institute of Management Studies & Research, Mumbai
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8. TERI, National energy map for India: Technology vision 2030, The Energy Research Institute and Office of the Principal Scientific Advisor, Govt. of India
9. World Bank, Unleashing India’s innovation: Towards sustainable and inclusive growth, Dutz M. A. (Ed.), Washington DC, 2007
About Archana Patankar
Archana Patankar is currently working as Assistant Professor at K J Somaiya Institute of Management Studies & Research, Mumbai, India. She holds PhD from Indian Institute of Technology Bombay (IITB), where her principal area of research was health impacts of urban air pollution and their economic valuation. She has taught economics at undergraduate and graduate level for more than seven years. She has also carried out a number of independent assignments for renowned organizations that include analysis of end-use consumption patterns in electricity sector for energy efficiency and readiness of developing countries for cleaner technology transfers.
Archana has published a number of research papers and has presented in many conferences on environment and health. Her current research interests include environmental policy analysis, climate change vulnerability and adaptation, health impacts of climate change and green innovations. Archana can be reached at firstname.lastname@example.org
* Clean Development Mechanism (CDM) is a market-based mechanism envisaged by the negotiators under the Kyoto Protocol (1997) to help developed countries meet their targets of greenhouse gas (GHG) emission reductions. The mechanism encourages private sector and developing countries to contribute to GHG emission reductions by undertaking emission reduction projects in developing countries and earn certified emission reduction (CER) credits. The CER credits are traded and bought by the developed countries to partially meet their GHG emission reduction targets under the Protocol (UNFCCC, http://cdm.unfccc.int).