Innovative activity is the key driver of competitiveness and economic growth. In that context, India’s rank of 46 in WIPO’s Global Innovation Index (GII) 2021, up from 81 in 2015, is encouraging. This finding corroborates an earlier one by UNCTAD in its Digital Economy Report 2021 where India was seen as exceeding expectations. While these findings are encouraging, India, which aspires to emerge as one of the largest economies of the world, needs to move up further in the innovation rankings, for building self-reliance in technology, especially in the context of the incipient digital revolution. China occupies the 12th rank in GII, ahead of Japan at 13th. This shows that it is possible to move up the ladder with sustained effort.
Boosting R&D activities
India has much room for enhancing its innovative activity. Among the key indicators, gross R&D expenditure (GERD) as a percentage of GDP at 0.7% is low. It needs to rise to upwards of 2% of GDP, as in the leading innovative nations. Furthermore, only about 30% of the GERD is spent by business enterprises, despite the generous tax incentives offered by the government. This suggests that Indian enterprises have not got into an R&D culture, not to talk of innovative rivalry. The bulk of innovative activity is conducted by a handful of companies in the pharma and auto sectors.
