Innovation has become the cornerstone of economic development worldwide, with countries investing significantly in research, technology, and entrepreneurship. The Global Innovation Index (GII) 2024, released by the World Intellectual Property Organization (WIPO), provides a comprehensive analysis of the innovation landscape across 130 global economies. This year’s theme, “unlocking the promise of social entrepreneurship,” underscores the growing importance of innovation in driving both economic and social progress.
For India, ranked 39th globally, innovation isn’t just a buzzword—it’s a strategic necessity. The nation’s knowledge-based economy has rapidly expanded, positioning India among the leading lower-middle-income countries and showcasing remarkable growth in innovation outputs over the last decade. Compared to peers like China, Brazil, and South Africa, India has steadily improved its standing.
Decoding the Global Innovation Index 2024
The Global Innovation Index 2024 is built on 81 indicators organised into seven pillars:
- Institutions
- Human capital and research
- Infrastructure
- Market sophistication
- Business sophistication
- Knowledge and technology outputs
- Creative outputs
The leaders in mature innovation ecosystems include Switzerland, Sweden, and the United States. Notably, China, now ranked 11th, stands out as the only middle-income economy in the top 30. Countries like Malaysia (33rd) and Turkey (37th) also represent the upper-middle-income category.
India’s Performance in GII 2024: A Comparative Overview
India has improved its position, now sitting at 39th place in the GII 2024 rankings. As the innovation leader among lower-middle-income economies, India has outpaced regional competitors like Vietnam (44th) and the Philippines (53rd). The country now ranks alongside Brazil and South Africa as the largest players in this category.
Key Takeaways from India’s GII Ranking
-
Market Sophistication: India excels in market sophistication, largely due to its access to venture capital and a thriving start-up ecosystem. In contrast, Brazil (50th) and Mexico (56th) are struggling to attract global capital.
-
Human Capital and Research: India’s investment in human capital, particularly in STEM (science, technology, engineering, and mathematics), has propelled its ranking. With renowned institutions like the IITs and IIMs, India is competing closely with China. However, it still lags behind in R&D spending, crucial for fully harnessing its intellectual capabilities.
-
Knowledge and Technology Outputs: India leads globally in Information and Communication Technology (ICT) services exports, playing a significant role as a technology outsourcing hub. Nevertheless, it trails behind Vietnam and Indonesia (54th) in the development of its IT sector, largely due to China’s aggressive investments in high-tech manufacturing.
-
Creative Industries: India is making strides in creative industries, especially in media and entertainment, where it competes well against both emerging and developed economies. With a growing presence in cinema, music, and arts, India is well-poised to make a mark on the global creative economy.
In-Depth Comparative Insights: India vs Global Peers
While India’s trends are commendable, a look at its middle-income country peers reveals room for improvement.
-
China (11th) vs India (39th)
- R&D Investment: China invests over 2.4% of its GDP in R&D, while India is at just 0.65%. This significant gap affects innovation outputs, including patents and scientific publications.
- High-Tech Manufacturing: China excels in electronics and AI, while India remains primarily focused on software export services.
-
Vietnam (44th) vs India (39th)
- Human Capital: Vietnam has rapidly advanced in STEM education and attracting FDI in high-tech manufacturing, yet India retains a competitive edge in global software development.
- Technology Export: India outpaces Vietnam in software and technology solutions, while continuing to excel in ICT services.
-
Brazil (50th) vs India (39th)
- Innovation Investment: Brazil is making strides in green technologies, but India surpasses it in market and business sophistication, benefiting from a robust start-up ecosystem.
- Knowledge Outputs: India’s leadership in knowledge outputs stems from its focus on scientific research and software development, while Brazil is still developing its high-tech industry ecosystems.
Major Innovation Boosters in India
India’s improvement in the GII rankings is the result of various structural reforms and innovation initiatives:
-
Start-up India Initiative: This government initiative connects start-ups with investors through the Start-up India Investor Connect platform, facilitating AI-enabled matchmaking. While Brazil and Mexico are growing their start-up ecosystems, they haven’t achieved India’s level of international recognition and capital inflow.
-
Digital India Programme: Massive infrastructure initiatives aimed at digitalisation have enhanced internet access, digital literacy, and e-governance, distinguishing India from peers like Indonesia and Vietnam.
-
Make in India: Launched in 2014, this initiative aims to boost high-tech manufacturing, especially in electronics and automobiles. India is now better positioned than Malaysia (33rd) and Turkey (37th) in terms of industrial growth.
Challenges Facing India’s Innovation Ecosystem
Despite its successes, India faces significant hurdles on its innovation journey:
-
R&D Investment: Low R&D spending, particularly in high-tech sectors, limits cutting-edge innovation. Increased investment, especially from the private sector, is vital to maintaining India’s competitive edge.
-
Infrastructure Disparities: While cities like Bangalore and Delhi serve as innovation hubs, rural areas lack the necessary infrastructure and resources. Bridging this gap is essential for inclusive growth.
-
Intellectual Property Protection: India’s IP laws lag behind global standards, hindering indigenous innovation and foreign investment. Strengthening IP protections can encourage more patent filings and scientific research.
Policy Recommendations for Advancing Innovation
To further enhance its innovation capacity and improve its GII ranking, India should focus on:
-
Boosting R&D Spending: The country must invest heavily in research, particularly in high-tech sectors, to stay competitive globally.
-
Strengthening the IPR System: Improved IP legislation can stimulate more innovation, especially in sectors like pharmaceuticals and biotechnology, where peers like Brazil and China have excelled.
-
Promoting Regional Innovation: Bridging the innovation gap between urban and rural areas is crucial. India can look to Vietnam for successful regional innovation hubs.
Conclusion
India is on an upward trajectory in the Global Innovation Index rankings and is poised to take a leadership role in global segments such as ICT services, creative industries, and high-tech manufacturing. However, to maintain this momentum, addressing gaps in R&D spending, infrastructure, and IP protection is crucial.
While countries like China and South Korea continue to outpace India overall, its dynamic market, skilled workforce, and vibrant start-up ecosystem provide a strong foundation for competing on the global stage. By leveraging public-private partnerships (PPP) to boost R&D investments and develop social entrepreneurship, India can unlock its innovation potential and ascend further on the global innovation ladder.
Don’t Miss:
- Global Innovation Index (https://www.wipo.int/global_innovation_index)
- R&D (https://www.investopedia.com/terms/r/research-and-development-rd.asp)
- STEM (https://www.ed.gov/stem)
- Start-up India Initiative (https://www.startupindia.gov.in/)
- Digital India Programme (https://www.digitalindia.gov.in/)
