Monday, September 5, 2016

How Innovative are we?

“India, Innovative? India’s 15 – place jump in a new Global Innovation index has to be taken with a pinch of salt.” Economic Times, dated 25th August 2016

Should this headline make Indians feel excited or make them wary of the fact that despite this positive jump, our innovations are still not world class? Let’s look into this story.

What is the Global Innovation Index?

The Global Innovation Index (or the GII) was launched in 2007 by Cornell University, INSEAD. It is published annually by INSEAD & World Intellectual Property Organisation, and does an annual ranking of countries by their capacity for success in innovation. The theme for 2016 is “Winning with Global Innovation” and is in its 9th edition. GII parameters & methodologies are tweaked continuously and hence could be one of the reasons why countries’ rankings keep changing. 

However, countries that are constantly investing in innovative research & development tend to retain their rankings. Switzerland has been ranked as number 1 for the past 6 successive years. Followed by Sweden, United Kingdom, USA & Finland, these countries wrap up the top 5 ranks. India is one of the countries with fluctuating positions, which is a reflection of constant changes the country is going through.

India’s story around Innovation

“There has been a significant broadening of the innovation ecosystem in recent years in India’”, says Nandan Nilekani, former Infosys co-founder. What is this ecosystem Mr. Nilekani is referring to?

The ecosystem comprises educational institutions, research output, patents, entrepreneurship, venture capital, government policies, etc. All of these contribute immensely to creation of new & innovative goods & services that enable better customer experiences, cost reductions, growth & development on the economy. Innovations needn’t always be radical like say an ATM; sometimes incremental ones too add value like say a solar powered ATM. Improvements in all the above mentioned areas are captured in GII sub-indices.

India is currently ranked at 66, a significant jump from last year’s 81. Prior to this in 2008-09 India was at its best at 41 and since then has been tumbling down. The upward movement is a big feather in our cap and we need to make efforts to keep up with the good, or should I say innovative, work. There have been over the past year significant positive achievements in human capital, research, market & business sophistication. Campus startups and incubators being funded by companies across diverse institutions have propelled the startup culture especially in the IT sector. This implies that India’s educational system has improved in the eyes of the global peers, even though our overall ranking in education field is 118.

Things are way better for India in R&D compared with previous years, as the country has been investing consistently in R&D. A major contributing factor to this has been the presence of top multinational R&D centres that have set up shop all across the country. Numbering close to 1000, these R&D centers have made India an innovation powerhouse.

What should we be wary of?

The GII report highlights some glaring inadequacies too in India.  Our biggest drawback is the absence of elite & world class universities that can add to India’s innovation capability. Investments need to increase significantly in education across the board be it primary, secondary or vocational. India has its IITs and of course the Indian Institute of Science (which incidentally comes in top 150 universities in the QS university ranking system) which are facilitating innovation, but scientific innovations are few & far in number, with maximum R&Ds focusing towards making existing products more affordable to the common man.

New initiatives by Government of India could lead to some improvements in the education sector and soon we may see ‘Innovation’ become embedded in the basic fabric of our society. Let’s wait for the day when India breaks into top 10 most innovative countries in the world and hope that it isn’t too far!

- Ms. Monica Mor, Sr. Faculty, INLEAD

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