India needs both informal and formal innovation to move higher in Innovation Index


India has moved up in the Global Innovation Index (GII) rankings announced on July 24 to No. 52 from No. 57. However, experts say the real story is not the advance made by India but the divergence in performance with China.

When the GII rankings – co-published by Cornell University, INSEAD and the World Intellectual Property Organization – were introduced in 2009, China was ranked 37 and India 41. This year, China is at No. 14 compared with India’s 52.

The deviation in the progress of the two countries is the result of the different methods they use to generate economic growth, according to those involved in the creation of GII, which measures an economy’s innovation performance.


For the past three decades, China had been investing heavily in science and technology. In 2006, the Chinese government announced a 15-year Medium and Long-Term Plan, which set a goal of increasing R&D investment from 1.34% of GDP to 2.5% of GDP by 2020. Last year, China’s R&D intensity was 2.18% of GDP. During this period, the Chinese economy grew six-fold.

“The brand of innovation that China has chosen for itself is good for global leadership,” says Soumitra Dutta, professor management at Cornell University and the creator of GII. In India, prime ministers have been promising since 1989 to increase R&D intensity to 2% of GDP.

It is now roughly 0.7% of GDP and has remained stagnant for two decades. India’s improvement on the innovation index is due to good performances in technology clusters, market sophistication and software exports.

Unlike China, India has not focused on economic growth stimulated by investments in R&D. Experts say that India’s innovation is at an informal level and not easily measurable. “India’s brand of innovation is good for getting products and services to the masses and not for global leadership,” says Dutta.

India has done well in its lower middle-income group as it has been ranked second after Georgia. However, it performed poorly on fronts such as student-teacher ratio, inbound mobility for tertiary education, access and use of technology, and environmental performance. In all of these, India was ranked above 100 in the world.

India’s investment on public R&D is itself deceptive, as it spends a disproportionate amount on space, defence and atomic energy, leaving little for universities.

“A large country like India needs both informal innovation and formal innovation through investments in science and technology,” says RA Mashelkar, former director-general of the Council of Scientific and Industrial Research and an advisory board member to GII.

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