India Innovation Index 2020 – All India Radio (AIR) IAS UPSC

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TOPIC: General Studies 3

• Indian Economy and issues relating to planning, mobilization, of resources, growth, development

By: NITI Aayog

The India Innovation Index 2020 

It seeks to rank the states and union territories based on their relative performance of supporting innovation, and to empower them to improve their innovation polices by highlighting their strengths and weaknesses. 

The ranking methodology is designed in a way that states can draw lessons from the national leaders in innovation. 

• The states and union territories have been divided into 17 ‘Major States’, 10 ‘North-East and Hill States’, and 9 ‘City States and Union Territories’, for effectively comparing their performance. 
• The states and union territories have been ranked on two broad categories: outcome and governance. 
• Overall, the framework of India Innovation Index 2020 consists of 36 indicators, which include hard data (32 indicators) and four composite indicators.

India Innovation Index 2020 builds on the previous year’s methodology by introducing more metrics and providing a holistic outlook of the Indian innovation ecosystem. 

• The framework has been updated to include globally considered parameters for measuring innovation (such as the percentage of gross domestic product spent on research and development), while also retaining the parameters specific to the Indian economy.
• The index captures the trends and provides detailed analyses of the various factors that drive innovation at the country, state, and district levels.

It is believed that these analyses would enable policymakers in identifying catalysts and inhibitors of innovation at the national and sub-national levels.

The Results

Most innovative among major states: Karnataka; The state’s success has been attributed to a high number of venture capital deals, registered GIs and ICT exports, and high FDI inflow.

Most innovative Union Territory: Delhi

Delhi has scored the highest on the index in the country with a score of 46.6, while Lakshwadeep has the lowest score at 11.7. Delhi recorded the highest number of trademark and patent applications, along with the establishment of new start-ups and companies in the last financial year.

Four southern states – Karnataka, Tamil Nadu, Telangana and Kerala —occupy the top positions on the index, apart from Maharashtra.

Amongst North East and hill states, Himachal Pradesh has the highest score of 25.

Some observations:

• India spends only 0.7 per cent of its GDP on R&D, much lower than the top spenders such as Israel (4.95 per cent).
• There’s a North-South divide in the findings of the report, with the southern states having fared much better. 
• As states become more innovative, they have higher per capita GDP.

The Way Forward

• There is a need for increased expenditure in R&D by the private sector. The Indian government is a major spender in R&D, while the investment of the private sector is very low. Compare this to Israel where private companies account for 70 per cent of private investment in R&D. In 2017-18, the Indian government had the lion’s share of investment in R&D at 41 per cent.
• India needs to increase its spending on R&D. Currently, India spends only 0.7 per cent of its GDP on R&D, much lower than the top spenders such as Israel (4.95 per cent).