By Deeksha S Bisht & Surbhi Jain
Innovation, in both products and processes, has the potential to be India’s big-ticket to development. This is in line with the vision of the prime minister who has said “… I dream of a Digital India where the world looks to India for the next innovation.” India’s continuous improvement to reach the 48th position (among 131 economies) in the recently released Global Innovation Index (GII) is indeed good news. GII uses a broad definition of innovation which includes both product and processes. It has two sub-indices with equal weightage, ie, inputs (pillars of institutions, human capital and research, infrastructure, market sophistication, business sophistication) and outputs (knowledge and technological outputs and creative outputs).
India has made it to the top-50 in the GII—one of only 10 middle-income economies to have done so. Also, India, being the top ranker in Central and South Asia region, is a new entrant to top-3 rankers among lower middle-income economies. Besides, it has bagged the title of an “innovation achiever” for 10 years in a row. India ranks second among all middle-income Countries and 27th among all countries in innovation quality.
India has some intrinsic strengths which make it a naturally strong contender, such as domestic market scale (ranked 3rd), ICT service exports as proportion of total trade (ranked 1st), government’s online service (ranked 9th), ease of protecting minority investors (ranked 13th), and graduates in science and engineering (ranked 12th). The rise in India’s rank is attributed both to methodological factors and its ascent in innovation performance. The rise in political stability, government effectiveness and ease of resolving insolvency have contributed to the improved institutions’ pillar. In the business sophistication pillar, firms’ conduciveness to innovation, gross R&D expenditure by businesses and intellectual property payments as a proportion of total trade and research talent have improved significantly. In creative outputs, we have improved in cultural and creative service exports.
India’s innovation output is much more as compared to its innovation inputs. INSPIRE scholarships, infrastructure support through FIST Scheme, incubation support, soft loans and tailored grants, goal-specific challenges such as Smart India Hackathons and sectoral schemes such as Biotechnology Ignition Grants have been beneficial in shaping the innovation landscape. That said, India has many grounds to work upon. Catching student innovators when young, through Atal Innovation Mission, Smart India Hackathons, Grand Challenges and making entrepreneurship a part of school curriculum, will foster an innovative and entrepreneurial culture.
According to R&D Statistics and Indicators FY20, women participation in extramural R&D projects has increased significantly to 24% in 2016-17 from 13% in FY01.
Policy support through schemes like KIRAN of DST has to be complemented with behavioural changes to promote female labour force participation and equitable sharing of household care services. Unleashing this “gender dividend” can help nurture innovations for women-centric issues.
As per DST, gross domestic expenditure on R&D (GERD) as a percentage of GDP was 0.7% in FY19—low even if one accounts for India’s income levels. To boost it to the targeted 2% by 2022 (recommended by PMEAC), both public and especially private sector expenditure on R&D need to rise. Indian brands do well in terms of international brand value, but industry R&D is limited to 40% of GERD (compared to 50% in other BRIC economies), that too for few firms and too few sectors. An atmanirbhar Bharat needs local firms to innovate for domestic as well as global challenges. Successes in vibrant arenas such as fintech—with commendable innovations such as Indiastack are examples of private-sector research leading public sector support. Covid has opened up areas in innovation in health, pharma, ICT and processes such as remote working, staggered work shifts, court proceedings and passenger management. India is one of the six middle-income countries, where three knowledge clusters (Bengaluru, Delhi and Mumbai) feature in global top-100. Our rising entrepreneurship can both be a source and outcome of innovation, flowering through programmes such as Start-up India, Skill India, and Mudra.
India has outperformed its comparable income peers in innovation, but there remains enormous scope given the young talent, a culture of ingenuity and the sheer diversity of development challenges. Private participation in R&D, academia-industry collaboration, and enhanced public education systems are building blocks of innovations. Let us innovate to build a new dynamic and vibrant India.
The author is IES officers, department of economic affairs. Views are personal