India has the third largest group of scientists and technicians in the world and is predicted to be the world’s largest supplier of university graduates by 2020. India’s ranking in the Global Innovation Index (GII) of the World Intellectual Property Organisation (WIPO) improved from 81 in 2015 to 60 in 2017 among 130 countries.

The country’s rank in the World Bank’s ‘Ease of Doing Business Index’ also improved from 130 in 2016 to 100 in the year 2017. In 2016, India was ranked 8th among World Trade Organization (WTO) members in export of commercial services, including Information Technology and Information Technology-enabled Services.

Given this, the Indian economy is getting ready to become an Innovation Economy, which is supported by skilled workforce, adaptation of technology such as Artificial Intelligence (AI), and the Internet of Things (IoT), and government policies and initiatives such as Digital India, Atal Innovation Mission, Make in India, Skill India, and Startup India. The Indian government has entered into collaborations and Memoranda of Understanding (MoUs) with a number of countries including many European countries and European Union (EU) Member States to strengthen research and development (R&D), innovation and startup ecosystems.

Foreign investment up to 100 per cent is allowed in the information and communications technology (ICT) sector and in R&D to attract foreign companies. The progressive liberalisation of the telecommunications sector and allied reforms have led to the reduction in cost of services and increased its access and reach, which has led to diffusion of ICT. Indian and foreign companies have responded positively to government reform initiatives and a number of them are investing in ICT and high technology sectors in India.

Global studies show that ICT and intellectual property (IP) are two key pillars of an Innovation Economy.

The role of IP and ICT

The IP system plays a significant role in helping a business to gain and retain its innovation-based advantage. IP helps facilitate the process of taking innovative technology to the marketplace and reduces risk for the players involved. Patents are the most preferred IP rights in relation to technological innovations. They often play a crucial role in facilitating access to business angels, providers of early stage capital, including seed capital, venture capitalists, financial institutions, and anyone else who may provide assistance for an invention to reach the marketplace.

India’s position as an innovation economy

In 2017, the GII (Global Innovation Index) provided a detailed ranking and analysis about the innovation performance of 127 countries out of which India ranks 60th. Its sub-indicators broadly explore countries’ participation in various aspects of innovation, including political environment, education, infrastructure, and business sophistication. India’s rank between 2013 and 2017 shows a fluctuating trend, with improvements in 2016 and 2017.

The top three countries on the GII for 2017 were Switzerland, followed by Sweden and the Netherlands in third place. In terms of cross-country comparison, in 2017, all 28 EU member states were ranked above India. Patents are the most preferred IP rights in relation to those ranked above India. However, India has been ranked above developing countries such as Brazil (69th) and Indonesia (87th). India ranked above  South Africa in three sub-indicators, namely, infrastructure, business sophistication, and knowledge and technology outputs.

India also performed better than Brazil and Russia in terms of market sophistication, and knowledge and technology outputs. Thus, the sub-indicator – knowledge and technology outputs, is a strength that India possesses which can be further strengthened to move India towards an Innovation Economy.

Source: ICRIER