Global Innovation Index 2021: India on the rise

The recently released Global Innovation Index ranking 2021 covering 132 countries highlights that innovation and research continue to grow in spite of COVID-19. Global Innovation Index 2021

In the context of COVID-19, expenditures on research, patents and venture capital deals are on the rise as nations individually and collectively aim for solutions to the pandemic and in dealing with its fall out.  This is in stark contrast to previous times of global turbulence when innovation has faltered. However, it should be noted that there are sectoral discrepancies. Some sectors, notably software and ICT, pharmaceuticals and biotechnology have shown an increase in innovation while others including transport and travel have experienced a decline.

Europe and North America continue to dominate the rankings. The top ten countries in the world are Switzerland, Sweden, USA, UK, South Korea, Netherlands, Finland, Singapore, Denmark and Germany. In fact, there has been consistency in the rankings over a number of years now with Switzerland, Sweden, US and UK being in the top 5 over the last 5 years. What is also apparent is the rise of Asian nations. Apart from South Korea entering the top 5 for the first time and Singapore being in 8^th place, China continues its inexorable surge and is placed 12th, Japan is 13^th, Hong Kong 14^th, Malaysia 36^th, Thailand 43^rd, Vietnam 44^th and India 46^th. Slowly and tentatively, the locus of innovative activity is shifting towards Asia although there is a considerable way to go before the dominance of Europe and North America is threatened. Other groupings, notably Central and Southern Asia, Latin America and Africa lag considerably behind the leaders.

The Global Innovation Index measures inputs (pillars of Institutions, Human Capital and Research, Infrastructure, Market Sophistication and Business Sophistication) and outputs (pillars of Knowledge and Technology Outputs and Creative Outputs). Underpinning the pillars are upwards of 80 variables canvassing such metrics as regulatory quality, business environment, investment in education, Science and Engineering graduates, intellectual property receipts, ranked universities, articles published, labour productivity, skilled workers, trade indicators and high and medium technology industry outputs.

India’s performance

India is ranked 46^th in 2021 and has improved significantly over time from 60^th in 2017, 57^th in 2018, 52^nd in 2019 and 48^th in 2020. India, along with Kenya, Moldova and Vietnam, has been over-achieving on innovation relative to its levels of development, for 11 years in a row. 

Focusing on the 2021 rankings, the results reveal some interesting findings for India. India’s output ranking is 45^th better than its overall ranking of 46^th, its but its input ranking is 57^th. Thus, there remains even further scope for improvement in inputs and in translation of inputs to outputs. India does well even though its input performance is lagging behind both overall ranking and output ranking.

Digging deeper, among the key strong metrics for India ie those inside the top 25 ranked are: Graduates in Science and Engineering (12^th); global corporate R&D investors (15^th); ease of protecting minority investors 13^th); venture capital recipients (22^nd); market capitalization (19^th); domestic industry diversification (12^th); domestic market size (3^rd); labour productivity growth (17^th); cultural and creative services exports (18^th); creative goods exports (24^th); and ICT services exports (1^st).

Among the key weaknesses ie those metrics for which India is ranked weaker than 100th are: ease of starting a business (105^th); tertiary inbound mobility (108^th); ICT access (111^th); ICT use (110^th); environmental performance (125^th); females employed with advanced degrees (103^rd); and new businesses (115^th). 

There are a number of important implications of these findings, suggesting that there are still disconnects in India’s innovation system. First is that while India is best in the world for ICT services exports, it has a weak position domestically as reflected in ICT access and use which are at the lower end of the rankings. Thus, capabilities are narrow in this important field and not geared to domestic diffusion. Second, while the business environment is improving as reflected in such things as protecting minority investors, venture capital and infrastructure, this is not translating into overall ease of starting a business and the establishment of new businesses. Thus, the overall dynamism of India’s entrepreneurial base still needs attention. Third, is that despite India’s improved position overall, its environmental performance is sadly lacking, at 125^th place in the world. Improving the natural environment, including continuing to address climate change, energy and effective natural resource management, continues to be a challenge and science, technology and innovation can be usefully deployed to this end. Fourth is that gender equity, including in employment for females with advanced degrees, continues to be well short of global leading practice. Measures to enhance female participation in the labour force, in skills development and associated employment, is critical. Finally, on education, while India performs very strongly on graduates in science and engineering, this is not a quality measure and India still struggles in other elements of the overall education sector, including in school life expectancy and pupil teacher ratios in secondary education.

Overall, India continues its rise up the rankings, and is reasonably well placed to become a leader in the global innovation effort, noting that there are still areas for improvement.

Dr. Anand Kulkarni is a Higher Education Professional with Victoria University, Australia

The views expressed here are the author’s alone.

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