India’s economic growth over the past two decades has been driven by entrepreneurship, rapid technology adoption, and a large young workforce entering the economy. These engines have taken the country far, but sustaining momentum in a rapidly shifting global landscape will require India to strengthen the foundations that underpin long-term competitiveness: research capacity, scientific institutions and a thriving knowledge ecosystem.
Innovation-led economies treat research as strategic capital. India today invests about 0.64% of its GDP in research and development, compared to 2.56% in China and 3.59% in the United States. This gap is often framed as a funding shortfall. In reality, it reflects something more structural: the absence of long-horizon capital and institutional architecture that allows research to compound into innovation. The issue is not ambition or talent. It is that too much of India’s intellectual potential remains disconnected from the systems that could apply it at scale.
One of the most promising enablers of this transition is the pool of private development capital created through India’s CSR mandate. With nearly ₹35,000 crore deployed annually, there is no doubt that CSR has already played a meaningful role in expanding access to education, healthcare, livelihoods, and skills, leading to much-needed progress in underserved areas, communities and geography. But as CSR spending grows, its role must evolve. Only a small share of CSR capital currently flows into research and knowledge creation, despite Schedule VII of the Companies Act explicitly recognising R&D aligned with national priorities and the Sustainable Development Goals.
This creates a powerful opportunity. While programmatic CSR remains essential for delivering services and outcomes at scale, CSR can also evolve into catalytic capital—patient, risk-tolerant, ecosystem-building investment that strengthens India’s research capacity and accelerates long-term social and economic progress.
Why is knowledge creation and ecosystem important?
Countries that sustain long-term growth invest deliberately in knowledge. Not because research guarantees immediate returns, but because it expands the range of problems an economy can solve over time. Research builds the capacity to adapt to new technologies, new risks, and new forms of complexity. Over time, this capability becomes the quiet engine behind productivity growth, institutional resilience, and economic leadership.
Their investments in R&D are not judged by short-term outcomes, but by the options they create for the future. Knowledge generated today shapes the industries that emerge tomorrow, the efficiency of public systems, and the ability to respond to shocks- whether climatic, technological, or economic.
As an example, The mRNA platform behind COVID-19 vaccines was built through decades of publicly funded, high-risk basic research— primarily financed by government grants long before commercial viability was clear. When the pandemic struck, this patient investment enabled rapid private-sector scale-up, turning accumulated knowledge into breakthrough impact.
How can CSR be catalytic?
Catalytic capital is designed for work that sits between the state and the market. It is patient, risk-tolerant, and institution-building. Unlike conventional funding, it accepts uncertainty and long gestation periods. This enables the conditions in which new capabilities can emerge- shared laboratories, interdisciplinary research platforms, translational mechanisms, and talent pipelines.
CSR is particularly well-suited to play this role. Unlike commercial capital, it does not require near-term financial returns. Unlike public funding, it can move flexibly across institutional boundaries. When deployed strategically, CSR can act as first-loss capital for innovation- funding work that is too early for industry, too applied for academia, and too systemic for short-cycle philanthropy.
India already offers evidence of what this approach can unlock. Platforms like Prayog at IIT Bombay, supported through CSR, work on developmental challenges across thematic areas such as education, health, skill development, women empowerment, and rural development, and contribute towards achieving the SDGs. The initiative currently manages 50+ ongoing projects across over 11 states, benefiting more than 10,000 individuals and involving 45+ academic experts from 22+ departments at IIT Bombay. Similarly, at IIT Madras, CSR-backed initiatives have addressed issues ranging from rural healthcare access and lake restoration to assistive technologies for persons with disabilities, alongside the creation of technology incubators that have seeded hundreds of deep-tech innovations. The value here lies not only in outcomes, but in the institutional capability created—the ability to repeatedly convert research into solutions.
The case becomes even clearer in emerging technology domains. Quantum research, for instance, requires long-term investment, expensive infrastructure, and deep scientific talent. These are rarely compatible with short funding cycles. Mphasis works with IIT Madras and runs the quantum technology lab there, aligned with the national mission. These labs are now exploring cryptography, optimisation problems, and early-stage quantum applications—fields that hold enormous strategic value for India’s cybersecurity, scientific leadership and national competitiveness. Without catalytic CSR absorbing early risk, such research would simply not progress at the pace or scale required.
Building a knowledge ecosystem
For CSR leaders, embracing this role requires rethinking impact. Research cannot be evaluated through annual metrics alone; it calls for five- to ten-year commitments, clear theories of change, tolerance for experimentation and course correction, and outcomes measured in institutional strength, knowledge creation, adoption by MSMEs or public systems, and durable pathways for talent.
Catalytic CSR must also embrace the role of ecosystem architect. It should recognise that research ecosystems thrive through collaboration. Industry, academia, government and civil society each hold different pieces of the puzzle. When these actors come together, ideas move more freely across sectors. CSR, because of its relative flexibility, can build and sustain these bridges.
All this does not require moving away from traditional CSR priorities. It requires expanding the definition of social impact to include knowledge creation. India has the talent, institutions, and appetite for problem-solving needed to build a strong knowledge economy. What it needs is patient, catalytic capital to bind these elements together. If CSR is deployed with this long-term lens, it can help build the institutional scaffolding that turns ideas into innovation—and innovation into sustained, inclusive growth.
By: Deepa Nagraj, Senior Vice President & Global Head – ESG, Sparkle Innovation Ecosystem, and Communications, Mphasis and Subhashree Dutta, Managing Partner, Livelihoods Ecosystem, The/Nudge Institute
At charcha 2025, India’s largest collaborative convening, a multitude of industry experts and partners converged to explore various topics. With 40+ sessions spanning across 6 immersive, livelihood-intersecting themes, supported by 30+ sector-leading co-hosts, charcha convened to collaborate towards the shared goal of Viksit and Inclusive Bharat by 2047.
charcha 2025, an initiative by the*spark forum, was held at India Habitat Centre, New Delhi, from November 12–14, 2025. To know more, visit: charcha25.thespark.org.in
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