Global Innovation Index: Startup ecosystem propels India into top-50

New enterprises have helped India overcome inadequate govt R&D as well as innovation infrastructure. India now has the third highest number of startups in the world, after the US and UK

Global Innovation Index: While traditional scientific power houses Switzerland, Sweden, USA and UK again occupied the top four spots in the global innovation rankings, the most enthusiastic backers of the exercise are now mostly the middle-income Asian countries, particularly those that have broken into the top 50. And among them is India, which feels it should have been ranked better than the 46th position it has reached. 

Amitabh Kant, CEO, Niti Aayog, speaking at the India launch of the Global Innovation Index (GII), said the report “does not capture the full range of Indian innovations like the JAM trinity and that of online-only public procurement”. 

Other than China in 12th position in the Global Innovation Index (GII), the key investment destinations in Asia are now bunched in the lower half of this group. Malaysia is the next highest at 36, with Thailand (43) and Vietnam (44) just ahead of India. It is no surprise that Monday’s release of the Global Innovation Index rank of countries has attracted attention among them. All these Asian countries have put in a lot of effort to climb the ranks, because while few in authority say so explicitly, a higher innovation rank seems to draw in larger investment. The report claims its measurement of an economy’s innovative capacity and output “provides clarity for decision-makers in government, business and elsewhere as they look forward to creating policies that enable their people to invent and create more efficiently”. 

For India this is particularly satisfying. The GII report, written by the World Intellectual Property Organisation (WIPO), has often got blindsided by the glare of the now discredited Ease of Doing Business report of the World Bank-IFC. That India had moved up from 81st rank in 2015 to the 48th position among 132 countries in the GII ranks, had often escaped notice even within the government. 

Soumitra Dutta, professor at Cornell University and one of the founding authors of the report, on Tuesday described India’s rise as steady in these words: “Everyone (setting policies) in the Indian innovation ecosystem deserves congratulations for that.” 

India’s improved rank has been helped by the huge surge in startup numbers. “Performance of the Startup Ecosystem of the top 100 countries was found to have a significant positive correlation with GII innovation rankings,” noted Deepanwita Chattopadhyay of IKP Knowledge Park, writing about the Indian experience in last year’s report. It has helped India beat the shortcomings of inadequate investment in publicly-funded research and development (R&D) as well as innovation infrastructure. India now has the third highest number of startups in the world, coming up behind the USA and the UK. 

Government data shows India’s investment in R&D has remained below one per cent of the GDP for a long time. It has rather decreased over the last decade from 0.85 per cent of GDP in FY09 to 0.7 in FY19. Korea spends 4.3 per cent, Japan spends 3.3 per cent and Switzerland does 3.2 per cent. So there is plenty of ground to cover here. Covid could change some of that. 

Aware of the shortcomings, K VijayRaghavan, principal scientific adviser to the government, said at the launch the challenge was to create a larger ecosystem that demands such R&D. He said the government will soon launch a mission on artificial intelligence and also push for development of deep ocean technology. Kant said, “innovation has to play a central role in societies. We shall drive a mission mode approach to drive innovation in India this year.” 

GII 2021 has also acknowledged that India has excelled in crisis-driven innovation. “Beyond China, these four particularly large economies (India, Vietnam, Philippines and Turkey) together have the potential to change the global innovation landscape for good,” it says. The GII’s overall formula for measuring an economy’s innovative capacity and output provides clarity for decision-makers in government, business and elsewhere as they look forward to creating policies that enable their people to invent and create more efficiently. 

The risks for India, given its fiscal limits, are the pace that the challengers could set in pushing innovation. Chandrajit Banerjee, director general of CII, was optimistic that the fact that India has been climbing ranks is a “testament to the high priority of the country to spur innovation”. CII is one of WIPO’s partners in the work on the global report card. 

One of the most searched words in Google from 2020 was innovation. It is difficult to count, but the response to everything, from infectious disease outbreaks to keeping ageing populations healthy, seems to find some reasons to use the word, innovation. The Covid pandemic has only pushed it up. “We expected a harsh slump in 2020 of around 3 per cent, however, the GII shows there are reasons to be optimistic… with governments showing foresight and not cutting spending,” Sacha Wunsch-Vincent, WIPO Composite Indicator Research Section and GII co-editor, said at the launch of the report in Geneva. 

The sectors are also getting sorted out. According to the Global Innovation Tracker, technology, pharmaceuticals and biotech industries boosted their investments during the pandemic and increased their research and development (R&D) efforts. Top tech companies like Apple, Microsoft and Huawei have increased their investment on an average about 10 per cent last year. 

This is significant as an earlier report from OECD (OECD Science, Technology and Innovation Outlook 2021), released in January 2021 has warned that the Covid-19 pandemic could “cause long-term damage to innovation systems at a time when science and innovation are most needed to deal with the climate emergency, meet the Sustainable Development Goals, and accelerate the digital transformation". 

The emphasis on innovation is however pushing an expected renewed rise in global productivity. 

In the third decade of the twenty-first century, ease of doing business is about pushing innovation as it also seems to help reduce inequality. The GII report seems to promise so and this is what the middle income Asian nations are keen to apply.