Group 5_B | SDG 9 : Industry, Innovation and Infrastructure

Sustainable Development Goal 9: Industry, Innovation and Infrastructure

Introduction

Industrial development has been an integral part of the history of nations. Industrial development has significantly impacted our economy to drive significant changes, whether it was the invention of the first steam engines or the first assembly lines. However, looking at only the economic aspect of growth and not focusing on sustainability has excluded many people from development. More than 937 million of the world's population in 2016 did not have access to electricity [1]. Many lower-income countries have infrastructure constraints that affect the firm's productivity by 40%. According to UNDP, 2.3 billion people lack access to basic sanitation, while more than 4 billion people still do not have internet access [2].

The job multiplication effect of industrialization creates a favorable impact on society. This is because 1.1 jobs in manufacturing create 2.2 jobs in other sectors. Manufacture sector accounts for 14.2 % of the world's workforce of 2.9 billion [3]. Therefore, it is essential to address the current gap in industrialization and development.

Through SDG 9, nations worldwide have pledged to invest in more resilient infrastructure, cooperating across borders, and encouraging small enterprises. Existing industrial infrastructure can be improved through technological innovation. On the other hand, it is also essential that government and businesses create a hospitable policy environment that fosters innovation, encourages research, and facilitates access to information technology to all sections of the society.

Some of the global targets of SDG 9 include increasing the industry's share of employment and gross domestic product in line with national circumstances, double its stake in the least developed countries by 2030, and upgrading infrastructure and retrofit industries sustainable.

Relevance of Industry, Innovation, and Infrastructure to India

The emergence of Fourth Industrial Revolution can help India to accelerate its transition to a developed nation, leapfrogging the traditional phases of development. Artificial Intelligence can be used to improve the lives of farmers, reduce poverty, and has applications across various sectors ranging from manufacturing to medicine. Similarly, unmanned aircraft systems can be used as a substitute for dangerous jobs and can increase crop yields by providing relevant data to farmers enabling India to double farmer incomes by 2022. Additionally, blockchain has vast applications in issues ranging from natural resource management to cross-border data flows and future provision of government services. This can help India increase transparency, reduce property disputes, and fight corruption [4].

Over time, India has surpassed other middle-income countries in innovation and R&D in a range of areas like gross capital formation, Information and Communication Technology (ICT) services exports and IP receipts. Though India’s improvement in Global Innovation Index is a good sign, the fruits of innovation have not reached to all the sections and therefore, it is important to quickly develop a ‘grass-root’ approach lest India falls behind [5].

India needs timely and adequate investment in infrastructure as power shortages, poor connectivity and inadequate transport affect overall growth performance. The power shortages lead to dependence on expensive captive power and inadequate transport infrastructure leads to bottlenecks in the supply chain. To prevent 'lack of infrastructure' become a constraint on the growth of Indian economy that aspires to become a USD 5 trillion by 2024-25, India needs to spend about USD 1.4 trillion on infrastructure as per the Economic Survey 2019-2020[6].

Business Implication

Business is a collaboration between industry, infrastructure, and innovation to meet people's requirements while producing shareholder benefit. SDG 9 impacts businesses directly. The basic components of any business, i.e., innovation, production or manufacture of a product or service. A business depends on material, services and support for work and service from every corner of the planet, and it is not always easy for companies to obtain them efficiently. The demand for technology-based skills is on the increase today and not often enough technical experts in one place are available. Their expertise must be transferred and exchanged amongst developed countries and corporations. The cooperation of policymakers is needed and SDG 9 deals with this facilitation. But the infrastructure constraints reduce the productivity of companies by about 40% in some low-income African countries [7]. There are currently more than 4 Bn people without Internet access and 90% from the developed world. To promote fair access to knowledge and information and thus creativity and entrepreneurship, it is important to resolve this division in the digital industry [8].

This offers businesses the opportunity to partner with governments and other firms to make additional investments in infrastructure, technology, and development available. The effect of industrialization on job creation has a positive impact on society since 1.1 workers in the manufacturing sector generate 2.2 jobs in other sectors. A major employer is the manufacturing industry, which constitutes about 14.2% of the 2,9 billion global workforces [9]. By pursuing sustainable industrialization and fostering innovation among companies, businesses will help improve the regions in which they work by improving their local infrastructure, investing in resilient energy and communications technology, and making these technologies available to everyone.

How Business can respond to Industry, Innovation, and Infrastructure

Sustainable infrastructures perform a critical role in ensuring people get the services they need, improving quality of life and protecting the environment. Some of this is delivered through construction of new infrastructure. However, creative ways can be found of making current systems more efficient without the need for resource-intensive new construction.

Joining the fourth industrial revolution: The manufacturing process can be improved by letting insights from manufacturing data drive the manufacturing process. Industry 4.0 relates to inclusive and sustainable industrialization, innovation, and may also affect infrastructure. The German chemical giant BASF, for example, connects their periodic safety inspections to a digital platform in which mix-ups between different pieces of equipment have been made virtually impossible, increasing plant safety and worker safety.
Harnessing innovative finance: The growing interest in impact investing (investments that generate both financial and social and environmental returns) and use of ESG (environmental, social and governance) considerations to prioritize investments could also unleash new streams of funding for infrastructure. For example, in the US the NY Green Bank was set up in 2014 by the State of New York to increase capital flows into the clean energy market. Innovative financing mechanisms can accelerate the investment into these green systems.
Green & Smart infrastructure: Green infrastructure can both mitigate the effects of climate change and help society to adapt to climate change through the restoration of wetlands and floodplains or the installation of grass roofs, rain gardens, parks, and street plantings. Green infrastructure can often lower the cost of infrastructure development compared with traditional grey infrastructure. Natural infrastructure can also be combined with traditional grey infrastructure. Apart from this, big data and machine learning will be increasingly important tools, leading to improvement of the planning of new assets and the retrofitting of existing ones, increasing infrastructure’s operational efficiency, and reducing its environmental impact. Smart infrastructure—which combines physical with digital infrastructure— improves the quality, speed, and accuracy of decision-making while generating cost savings.
Stimulate research initiatives to drive sustainability: Innovation in the digital era is not a concept that is exclusively exploited from within the organization, as bright ideas come from everywhere and people are increasingly willing to share their ideas— both online and offline. Teaming up with universities or participating in think tanks may help organizations to think big and step aside from the regular path, help to closely think about organizational challenges, and provide clear solutions to those challenges.

India’s Report Card - An Analysis:

Industrial Corridors Infrastructure: During the past few years India has made commendable progress in terms of the overall infrastructure development. With special schemes like Bharatmala, Sagarmala, and Vayumarg, the country is set to make changes in the roadways, seaways, and airways, respectively. For instance, in Bharatmala program, around 25,000km of road will be developed. The same plan helped in increasing the rate of construction of roads from 17km (in 2014-15) to 29.7km [10]. India’s industrial corridor, USD 90billion project, will create a positive impact by creating an industrial hub across six different states. The major issue that India is facing at present is that to reach the 2025 GDP target of USD 5trillion, the country needs to spend another $1.4trillion on infrastructure. Even in terms of the communication infrastructure available within India, the country went miles ahead within a span of few years. The internet user base increased to 665 million subscribers from 252 million in 2014 [10]. Another feat achieved by India is by making data affordable to a substantial portion of the population. The country’s data rate is the cheapest in the world (USD 0.26 per GB) as compared to the global average (USD 8.53 per GB) [10].

Industrialization: Post the launch of the new economic policy in 1991, the focus of the Indian industry has shifted towards evolving into an internationally competitive industry with greater interaction with the global market. India has been making efforts ever since to break free off any barriers that create a hindrance to moving forward in creating a holistic manufacturing and industrial base in the country. The efforts made by the government to allow foreign direct investment to have helped cover the investment gap and have contributed significantly to the increase in local and foreign industrial investment inflow. Make in India was launched to make India a self-sufficient economy with focus on multiple industries with high potential to garner a huge domestic market and export competitiveness leading to creation of jobs. Owing to all the favorable policy mix in India, the ease of doing business rank for the country has significantly improved in the past 3 years from 100 in 2017 to 62 in 2020 [10].

Innovation: Innovation is a process construed at all levels in an economy, sectoral, regional and at different technological levels. India has been taking initiatives on this front by launching and implementing programs like Digital India and Atal Innovation Mission. Through Digital India, the government aims to transform the entire ecosystem of operations using information technology and make India a digitally empowered economy. The Atal Innovation Mission comprises the tinkering labs and incubation centers which are pushing the spirit of innovation and invention in young minds of the country. The government is also indulging in eco-innovation and implementing steps like energy tax, carbon emission taxes, and providing R&D tax incentives to facilitate innovation across sectors in the country.

Amazon

Amazon focuses on significant changes in efficiency and alternative distribution methods to optimize their transport system. In order to limit their effect on climate, Amazon Web Services (AWS) always concentrates on productivity and continued creativity in their data centers.

BCG & Bain

BCG and Bain are working to reduce their Scope 1 and Scope 2 emissions. They achieved an 82% and 68% reduction in 2019, by transitioning to 100% renewable electricity in their offices respectively [11]. Both these firms are taking steps to improve the energy efficiency of their office spaces and find ways to reduce the possible wastage.

Asian Paints

Asian Paints has launched a new category Nilaya Naturals, which is earth-safe and formulated with over 95% natural materials or materials of natural origin [12]. The organic paint consists of a high percentage of natural ingredients like soya bean extract, castor seeds, neem oil etc.

Bajaj Auto

Bajaj Auto employs the ‘Green Purchasing Policy’ which specifies requirements related to water, energy and natural resource conservation that need to be met by the entire supply chain. In line with this policy, all key vendors are in the process of getting certified for ISO 14001 to adhere to the policy to significantly reduce their negative impact on the environment.

Sanofi

Sanofi is making efforts to ensure optimal access to information of each drug sold reflecting the value of the product and conditions in the target market. The pricing team’s Innovation Unit is running projects to innovate in pricing differentiation strategies for people with different economic backgrounds.

Way Forward:

The Indian industries are in the phase of adopting newer technologies that emphasizes on operational and material efficiency. But going forward, India should also be able to support this growth sustainably. Some of the key factors to focus on while we grow as a country are:

Proper care to migrant laborers is to be ensured by the state governments. Some state and the central governments are exorbitantly dependent on migrant laborer community for its infrastructural developments. Thus, to ensure a sustainable growth in the infrastructure, care packages for this community like insurance, medical aids, adequate basic resources, etc. should be given.
As the country attains an industrial growth, the wastes and discharges from these companies increase. Thus, the country should develop a resilient waste management and pollution control system. Moreover, regulations on water treatments and recycling should be increased.
Energy requirements are going to increase as India builds on its industrial strength. To address this requirement, the country would have to develop the right infrastructure to harness the renewable energy resources available in India.
The innovative practices implemented on an individual organizational level are often gone unnoticed. The government can produce schemes to recognize these sustainable practices and at the same time, provide a platform to share this knowledge that could help in horizontal deployment across various organizations and industries.
The government should encourage more academic projects and research through scholarships and funding that could bring in sustainable technological advancements in the fields of energy, manufacturing, and software.