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India gradually improving its innovation and competitiveness to move closer to other top-ranked innovation economies

NITI Aayog CEO Amitabh Kant launched “India Innovation Index”, the nation’s first online innovation index portal which will rank states based on their innovations. Inaugurating the portal, he said that it will be a “first-of-its-kind online platform” where Global Innovation Index (GII) indicators and India-centric data from various states will be updated periodically.
“This will be a one-stop data warehouse and will track progress on each indicator at the National level and the State level on realtime basis,” he said. The access to the portal will be hosted on the NITI Aayog website.

“Data collated on this portal will not only be used to ameliorate current data gaps with respect to the GII, but be the prime source for the India Innovation Index,” a government statement said. The index was launched in collaboration with Department of Industrial Policy and Promotion (DIPP) and Confederation of Indian Industry (CII).

India has shown a downward trajectory during the period of 2013-2015 in its ranking for inputs and outputs reaching a low of 81 in 2015. India was poor in intellectual property development. It generated few science PhDs and fewer engineering PhDs. Its R&D investments were low. Poor education system is a weakness in spite of recent improvements. Indian innovation is also hampered by poor environment performance, low density of startups, and low publishing output. But the country was still innovating in business models and select areas of technology.

In the Global Innovation Index (GII) 2016, India climbed 15 spots, from 81 last year, to 66 and maintained the top spot in the Central and South Asia regions, according to the rankings released by Cornell University, INSEAD and the World Intellectual Property Organization (WIPO). Overall, the GII shows a country’s weaknesses and strengths, and tells policy-makers where to focus for producing innovation led growth.

Its large technical workforce and R&D system are strengths, compared with peers measured by GDP. Its market scale and ease of protecting minority investors are also strengths. As is growth rate of GDP per person. “A lot of innovation in India is about creating affordable products,” says IIM Indore director Rishikesha Krishnan. “I am not sure this is captured in indices.” Innovation of a unique variety was thriving in its villages.

China has been improving  gradually, and broke into the top 25 in 2016. China’s innovation rankings this year also reflect high scores in both the Business sophistication and Knowledge and technology outputs pillars. For example, the country has a particularly high number of R&D-intensive firms among the top global corporate R&D spenders.

Researchers, venture capitalists and policymakers in India think that the country is changing rapidly, and expect these changes to reflect in its ranking over the next few years. “There has been a significant broadening of the innovation ecosystem in recent years,” says former Infosys co-founder Nandan Nilekani. The ecosystem consists of educational institutions, research output, patents, entrepreneurship, venture capital, government policies and so on. Improvement is evident in some of these areas, and some of the improvements have been captured in this year’s GII’s sub-indices.

“Innovation is the greatest component of economic growth,” says Francis Gurry, director-general of WIPO, a partner in the GII report. “It is the principal means of improving the quality of life in a country.”

India’s position improved to 66 this year, which was where it was four years ago. Such jumps are rare. India scored high on tertiary education and R&D, the quality of its universities and scientific publications, its market sophistication and information and communication technology service exports, where it ranks first in the world, according to the index. Within the GII, India improved its ranking in R&D this year because of a new parameter: top multinational R&D centres within a country. With over 1,000 multinational R&D centres, India is a global R&D powerhouse.



 Niti Aayog recommends constituting foundation to improve India’s Science and Technology performance

However, compared to China there is still a large gap, gap that appeared between India and China between 2011 and 2015. As per the  Niti Aayog document, in 2011, the number of patent applications filed abroad by Indian and Chinese residents was 1077 and 1197 respectively. But by 2015 a huge gap had emerged with 11,265 patent applications by India compared to 42,154 by China.

“In terms of patents granted abroad, India improved its global rank from 27th to 15th over the same years and China from 25th to 8th. To be sure, India has made substantial progress but China’s advance has been far faster. Transformation in India’s S&T sector would require rapid progress over the next 15 years,” the action plan added.

Niti Aayog has recommended constituting a national Science, Technology and Innovation foundation headed by a distinguished scientist to coordinate efforts on national scale and come out with a roadmap. The suggestion has been made in the three-year (2017-2020) draft action plan which was put online for public consultation.

As per Niti Aayog’s draft plan, the foundation should be set up in 2017 itself and should be headed by a distinguished scientist. The foundation should coordinate all S&T efforts with all stakeholders. The foundation will coordinate with science and technology, departments, concerned line ministries, State governments, academics and researchers, private sector leaders in the field and other stakeholders to identify and deliberate national issues, recommend priority interventions in S&T and prepare frameworks for their implementation.

The draft action plan also said that Indian innovations should address the needs of burgeoning middle class and rural residents. “We must facilitate the development of affordable and durable products that are suitable for the local demand and context,” it added.


US Chambers of Commerce place India at 43rd among 45 nations in global innovation index

India ranks abysmally at 43rd out of 45 countries in a global innovation index, according to a report released by US Chambers of Commerce which cited the country’s “anaemic” intellectual property rights (IPR) policy and patent act as challenges to innovation.

In the 5th annual International IP Index ‘The Roots of Innovation’ by the US Chambers of Commerce’s Global Intellectual Property Center (GIPC), there is slight improvement in India’s performance — it was ranked last or next-to-last in the previous four years. “In India, many of the same challenges to innovation remain,” said David Hirschmann, president and CEO of GIPC. India has an 8.4 score as against America’s 32.6 which tops the list of 45 countries.

The United States is followed by the United Kingdom (32.4), Germany (31.9), Japan (31.3) and Sweden (31). China has 14.83 points. Neighbouring Pakistan ranks 44th with an 8.37 score.
In a statement, the US Chambers of Commerce said that in addition to its anaemic IPR policy, the report cited challenges with the scope of patentability for computer-implemented inventions, Section 3(D) of the Indian Patent Act and the recent Delhi high court decision regarding photocopying copyrighted content.

“Although India has made incremental progress, the government needs to build upon the positive rhetoric of its IPR policy with the substantial legislative reforms that innovators need,” he said. Hirschmann said reforms can improve its reputation as a destination for doing business, foreign businesses’ ability to invest in and ‘Make in India’, and India’s own innovative industries.
“If Indian policymakers wish to deliver the kinds of results the Modi administration once hoped for, they can act to address issues that impact Indian innovation, such as software patentability, life sciences patents, copyright protection and enforcement, and trade secrets protection,” Hirschmann said.


Global Innovation Index 2016: Switzerland, UK, Sweden, Finland, USA are Leaders

The GII remains relatively stable at the top, Switzerland, Sweden, the United Kingdom, the United States of America and the Finland are the world’s five most innovative nations, according to the Global Innovation Index 2016. “Yet among the top ranked 25 innovation nations this year are not only economies from Northern America (such as Canada and the USA) and Europe (such as Germany, Switzerland, and the UK) but also from South East Asia, East Asia, and Oceania (such as Australia, Japan, Korea, and Singapore) and Western Asia (Israel).”

The GII theme this year is “Winning with Global Innovation.” The report explores the rising share of innovation carried out via globalized innovation networks, finding that gains from global innovation can be shared more widely as cross-border flows of knowledge and talent are on the rise. The report also concludes that there is ample scope to expand global corporate and public R&D cooperation to foster future economic growth.


Among the GII 2016 leaders, four economies Japan, the U.S., the UK, and Germany stand out in innovation quality, a top-level indicator that looks at the caliber of universities, number of scientific publications and international patent filings. China moves to 17th place in innovation quality, making it the leader among middle-income economies for this indicator, followed by India which has overtaken Brazil.

India scored high on tertiary education and R&D, the quality of its universities and scientific publications, its market sophistication and information and communication technology service exports, where it ranks first in the world, according to the index.

Soumitra Dutta, Dean, Cornell College of Business, and co-editor of the report, points out that Investing in improving innovation quality is essential for closing the innovation divide. While institutions create an essential supportive framework for doing so, economies need to focus on reforming education and growing their research capabilities to compete successfully in a rapidly changing globalized world.

The index said that India has all the ingredients needed to become a global driver of innovation including strong market potential, an excellent talent pool, and an underlying culture of frugal innovation. India ranks second on innovation quality among middle-income economies, overtaking Brazil. “Relative weaknesses exist in the indicators for business environment, education expenditures, new business creations and the creative goods and services production,” it said.

The index said that India has the ability to create a unique spot in innovation history to meet its own market requirements by using its cultural advantages of frugality and sustainability. Stressing that India’s priorities for innovation need to be in the areas of energy, water, transport, health care, food security and digital consumption, the index said that India should strengthen its own talent pool and leverage global talent “in these market-pull areas”.

“The commitment of India to innovation and improved innovation metrics is strong and growing, helping to improve the innovation environment. This trend will help gradually lift India closer to other top-ranked innovation economies,” said Chandrajit Banerjee, director general of the Confederation of Indian Industry.

“In today’s competitive world, both developed and developing countries need to come up with joint innovative solutions to counter global challenges; simultaneously they need to address the pressing needs of their respective populations. These twin goals can be achieved by empowering global citizens to think independently and to risk transforming their ideas into value propositions,” says Chandrajit Banerjee Director General Confederation of Indian Industry.


The rise of Silicon Valley’s worldwide

KPMG survey “The changing landscape of Disruptive technologies”, Global Technology Innovation Insights-2014/2015 concluded that Silicon valley no longer has a lock on technology innovation. Today multiple hubs exist and emerging technologies are in many countries including Japan, Israel, China and India. Technologies such as mobile commerce and digital currencies have taken more hold more rapidly in Asia than in the west, leapfroging over legacy systems. Micro-innovations from China for gaming, instant messaging and smartphones are now being copied in the West-the reverse of a decade ago.

KPMG report also found “Significant numbers of emerging technologies are gaining momentum on a global scale, at faster innovation cycles, with the potential to be the next market disruptors.” Growing acceptance of technologies such as Internet of Things (IoT), machine-to-machine (M2M), biotech, digital currencies, data analytics, drones, robotics, 3D printers, and AI in both consumer and enterprise markets are pushing them into the mainstream.

Cloud and mobile technologies are increasingly maturing as disruptors. These foundations will remain vitally important to further technology progress and will remain a source of enabling innovation. New tech hubs springing up from Shanghai, Tokyo, New York and Seoul foster more breakthroughs.


Global Competitiveness Report

Switzerland, Singapore, and the U.S. are once again taking the top spots in the latest edition of the World Economic Forum’s Global Competitiveness Report, which combines 113 indicators that the WEF believes matter most for countries’ productivity. Here’s a look at this year’s top 10: Switzerland, Singapore, United States, Germany, Netherlands, Japan, Hong Kong, Finland, Sweden and United Kingdom.

India has secured the 39th rank, climbing 16 places from last year, on the annual Global Competitiveness Index prepared by the World Economic Forum (WEF). Every year, WEF releases its Global Competitiveness Report based on their analysis of the world’s 138 economies. India has a score of 4.52 on the Index, while that of Switzerland, ranked 1st, is 5.81.

India has shown the greatest climb by jumping up 16 places from last year’s rankings. India is also the second most competitive economy among the BRICS nations, following China, which is ranked at the 28th position.

India’s public institutions and increasing transparency in the financial system have been noted as the “stellar areas of improvement” in the report. According to the analysts of the Forum, India is the best-performing economy in South Asia, with reforms like opening the economy to international trade and foreign investors and efforts towards increasing transparency in the financial system.

“Thanks to improved monetary and fiscal policies as well as lower oil prices, the Indian economy has stabilised and now boasts of the highest growth among G20 countries,” says the WEF’s Global Competitiveness Report 2016-17.
The lack of technological readiness and the issue of NPAs (Non-performing Assets) with the banks, which hasn’t seen any solution, have been recognised as areas that need improvement.


Global Innovation 1000

In the 2015 Global Innovation 1000 study, Strategy&, PwC’s strategy consulting business, analyzed the flows of R&D spending among companies and countries worldwide. Led by dynamic growth in China and India, Asia is now the number one region for corporate R&D spending, Europe falls to third. More corporate in-region R&D is now conducted in Asia (35 percent) than in North America (33 percent) and Europe (28 percent), which is a change from 2007, when Europe was the top region for R&D spending and Asia was third.

Massive growth in China and India propelled Asia to the top position. From 2007 to 2015, R&D imports to China grew 79 percent, helping to make it the second-largest destination for in-country R&D. India also saw imports increase 116 percent, making it the third-largest destination for imported R&D.

The U.S. holds its position as the largest corporate in-country R&D spender, importer, and exporter. The U.S. is the largest spender on in-country R&D, but its lead is narrowing because its growth isn’t as robust as that of some Asian countries, specifically China. From 2007 to 2015, in-country R&D spending increased 120 percent for China but only 34 percent for the U.S. Although the U.S. is shifting more of its R&D exports to low-cost countries in Asia such as China and India, most R&D imports are from Europe, which provided 63 percent of the U.S. total in 2015.


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