India innovates

November 28, 2016

With its high demographic dividend, a vast talent pool, strong domestic market, and roots in frugal innovation or jugaad, India has all the ingredients to become a global leader in innovation. It is this potential that is highlighted in the ninth edition of the Global Innovation Index 2016 (GII).

 

The 2016 Global Innovation Index Report (GII 2016) was officially launched on 15 August in Geneva. Its rankings and in-depth analyses are already stimulating interesting debates in various parts of the world. India is one of the countries that many observers consider as a potential key player in innovation. What does the report tell us in this respect?

 

GII 2016—a brief overview

The GII 2016 covers 128 economies around the world and uses 82 indicators across a range of pillars (5 for ‘inputs’ and 2 for ‘outputs’). This annual report is now in its ninth edition, and has become a highly recognized point of reference in benchmarking countries’ innovation performance. More than an annual benchmarking exercise,

or an academic report, GII aims at being a tool for action, allowing governments, business, and civil society to better perceive innovation trends and improve their own respective approaches to innovation.

The theme for this year’s GII is ‘Winning with Global Innovation’. Science and innovation are more internationalized and collaborative than ever before. A rising share of innovation is being carried out through collaborative networks, leveraging talent worldwide. The GII explores global innovation as a win-win-proposition.

In addition to its annual rankings, the report offers some thirteen chapters that discuss different aspects of the index and the theme, followed by appendices that provide the data from individual data tables for each indicator, a profile for each of the countries/economies covered this year, detailed information about the sources and definitions of each indicator, and technical notes about the composition of the index.

 

key findings
Following are the key findings of the report:

 

01 leveraging global innovation to avoid a continued low-growth scenario: The global economy is not back on track. Concerns about weak future output growth and low productivity are now serious. In this light, uncovering new sources of productivity and future growth are the priority. If R&D expenses or incentives to innovators are not sustained, the progress accumulated in the previous years can vanish quickly.

 

02 need for a global innovation mindset and fresh governance frameworks: Science and innovation policies should also become more inclusive of developing countries. Are new governance systems needed to improve global innovation cooperation? This question should be at the centre of future innovation policy debates. A new global innovation mindset can provide a timely counter to rising sentiments of nationalism and fragmentation.

 

03 innovation is becoming more global but divides remain: The GII rankings have shown a remarkable level of global diversity among innovation leaders over the years.

In 2016, the GII remains relatively stable at the top. Yet, a symbolic first step in closing the divide between developed and developing countries has also been made—China is the first middle-income economy to join the top 25 of the GII. It is likely that other emerging economies, such as India, will continue moving up the ladder of innovation performance.

 

04 there is no mechanical recipe to create sound innovation systems; entrepreneurial incentives and ‘space for innovation’ matter: How best to create innovation systems that enhance innovation quality is becoming a core challenge in all types of economies. Governments should focus on providing enough space for entrepreneurship and innovation; the right incentives and encouragement to bottom-up forces such as individuals, students, small firms, and others; and a certain ‘freedom
to operate’ that often challenges the status quo is part of
the equation.

 

how is india doing? what are india’s prospects?

India is one of the countries that have made the most spectacular progress in this year’s GII, jumping 15 ranks ahead of its previous position (from 81st to 66th). This is no accident, and reflects the efforts made for a number of years to foster an ‘innovation mentality’ across Indian society. Successes in key areas, from space to automobile to manufacturing and ICT services have shown how India could be a global leader. National policies and the strategy put in place by the government have played key roles in this respect.

To leverage such success and keep the momentum of improvement, Indian policymakers and decision-makers will need to focus on some of the remaining weak points of the country’s innovation profile. These have to be,
for example,

  • Improving the business climate, especially for smaller firms and startups (making it easier to create a new business, paying taxes and resolving insolvency)
  • Continuing to address education as a national priority.
  • Pursuing efforts to increase transparency and good governance.

 

chart-1_1

 

On the other hand, India can also leverage its remarkable successes in the field of innovation. One (often under-reported) aspect of innovation lies in its quality. GII defines the ‘quality of innovation’ as a combination of elements such as higher education performance or international visibility of publications. This is an area in which progress is leading to further progress in the future. As the table below indicates, it also happens to be an area in which India has reached a remarkable 25th rank in
the world.

In a country of the size of India, progress cannot happen overnight. Yet, the signs identified above leads many observers to think that, as far as innovation is concerned, ‘we have not seen the best of India yet’. The increasing global dimension of innovation will offer new opportunities to India to show to herself and to the rest of the world how innovation can translate into better ways of life, and that a ‘true globalization of innovation’ implies that new ideas, new products, and possibly new business models should come from emerging economies

 

Bruno-Lanvin