By Persis Khambatta

Recently, Prime Minister Singh of India declared the present decade to be the ‘Decade of Innovation’ and announced the creation of a National Innovation Council, which will promote innovation centers nationwide. When laying out, “A Strategy for American Innovation,” President Obama said: “The United States led the world’s economies in the 20th century because we led the world in innovation. Today, the competition is keener; the challenge is tougher; and that is why innovation is more important than ever.” Clearly, our leaders get the critical importance of innovation—the application of new inventions and technologies to solve old problems, address new challenges and generate economic growth.  What’s needed now is action from legislators on both sides to press ahead and enable innovation.  New drug discoveries, clean energy, energy efficient buildings, greater access to electricity and lower-cost healthcare, cold-chain technologies, expanded access to broadband and joint experiments in space can all be many steps closer to reality if policies are put in place to enhance bilateral cooperation between the U.S. and India.

Three things come to mind as a place to start:

First, research and education in cutting-edge science, technology, engineering, and mathematics is the backbone of a knowledge economy. However, as the Pacific Council recently pointed out less than half of India’s secondary school graduates enroll in college (PDF), and the U.S. has fallen from first to ninth place among OECD countries in terms of college graduation. The 65 percent of Indians under 35 will only constitute a demographic dividend if they are well educated and eventually employed. Both nations must emphasize turning their young populations into successful students, and then into successful workers.  The upcoming U.S-India Higher Education Summit should place a high priority on increasing market-based skills training and exchanges for community colleges, universities, and graduate programs.

Second, the most valuable resource in the innovation economy is human capital, and it is critically important that high-skill workers from both countries be able to move freely. India is a major source of young, high-skill professionals with the ability to work globally, and the United States is dependent on foreign talent to bolster its science and technology workforce. In fact, much of the world will face a shortage of workers in 2020, while India will be one of a few countries enjoying a surplus.  Devising a new regime to facilitate the training and movement of high-skill workers would benefit both countries in maintaining a competitive edge in innovation-related sectors. Congress should take the lead to remove remaining barriers and create a new visa program designed specifically to attract high-skill workers in advanced technology fields, or risk losing talent.

Third, foreign firms are apprehensive about IP protection in India and are increasingly vocal about it. On a recent trip to India, then–Secretary of Commerce Gary Locke noted: “India is still working to establish a robust system of intellectual property protection… Over time, countries that do not have strong [IP] protections will face two equally unappealing options: Either their scientists, engineers and businesses will lose the incentive to innovate. Or they will decide to innovate somewhere else.” New Delhi should enforce strict IP regulations in order to foster an environment of greater certainty among scientists and businesses. Working through the U.S.-India Trade Policy Forum, a formal agreement on IP should be devised that would afford vital safeguards to both American and Indian innovators.

There is enormous potential to be realized if the United States and India can partner in innovation. With a strong foundation in place, the two nations can be uniquely positioned to pool their talent and address the challenges of the 21st Century.

Persis Khambatta is a Fellow with the CSIS Wadhwani Chair in U.S.- India Policy Studies.