On Innovation in India – Rework the risk-reward matrix for innovation gains

Source: This post on Innovation in India has been created based on the article “Rework the risk-reward matrix for innovation gains” published in “Live Mint” on 7^th December 2023.

UPSC Syllabus Topic: GS Paper 3 Indian Economy – Growth and Development.

News: The article discusses the advantages India has with respect to growing its footprint in the field of innovation. It also highlights the current status of innovation in India, and the steps needed to improve it further.

What is the advantage India has in terms of innovation?

1. World-class tech talent (India’s skilled IT Workforce).
2. Rapidly maturing startup entrepreneurial ecosystems (Over 1,12,718 DPIIT-recognized startups making India the 3^rd largest startup ecosystem in the world).
3. Access to smart capital and big finance (Rising FDI and the healthy state of banks).
4. Strong academic institutions (IITs, IIMs, IIITs).
5. Supportive policy environment (such as the Startup India Scheme and the Funds of Funds for Startups).

Despite these positive factors, India hasn’t made its mark globally in terms of innovation.

What is the status of innovation in India?

A key indicator of India’s low but growing innovation capabilities is patent filing.

Patent Filing: Among 55 nations, India is ranked 42nd on the International IP Index 2023 developed by the Global Innovation Policy Center, US Chamber of Commerce.
In patent filings, directly related to investment in research, India scores much lower than top spenders such as Israel, South Korea, Sweden, Japan.

Lack of Quality Institutions: Out of the 10,000 institutions teaching technology, over 95% have not submitted any intellectual property for protection.

Lack of long-term innovation: Even in institutions such as IITs, there has been criticism about the lack of a longer-term innovation strategy.

Apart from this, the World Intellectual Property Organization ranks India 40th in the Global Innovation Index 2023.
By this assessment, despite producing more innovation output relative to its level of innovation investment, India ranks low on infrastructure, business sophistication and institutions.

What are the areas India needs to focus on to drive innovation?

First, build truly world-class centres of excellence such as those in the Indian Institute of Science in Bangalore and a few IITs. These have strong linkages between industry, government and academia.
Second, create an enabling environment for India’s Generation Z (people born between 1996 and 2010) to succeed.
India is witnessing the emergence of its current Gen Z as the first generation that is educated, competitive and not risk averse when it comes to innovations.

Third, going beyond ‘jugaad’ and frugal innovation to focus on world-class innovation in mission mode. This can be ensured through a commitment by both private industry and the government to longer-term investments, aided by tax incentives.

India must build on its strong grounding in technology, IT services and now also digital public infrastructure (DPI) to become a global powerhouse of innovation.

Question for practice:

What is India’s current standing globally with respect to innovation? What further steps should be taken to improve it?