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Monday, September 26, 2016

Global Innovation Index is a wake-up call for India


With all the economies of the world realising the potential of entrepreneurship, creating an enabling environment should be on top of their priority list. But is it? To help policymakers to assess progress and track innovation trends, the Global Innovation Index (GII) was set up in 2007, as a “tool-for-action” for decision-makers. Their annual report/rankings are worth looking at, to know where we (India) stand in relation to other countries, and the numbers are not looking great.
Taking into account 81 indicators such as political environment, regulatory environment, business environment, human capital and research, infrastructure, ecological sustainability, market sophistication, business sophistication, knowledge and technological output etc; the report has been co-published by INSEAD, WIPO, and Cornell University in association with the Confederation of Indian Industry (CII), du and Huawei.
The World Intellectual Property Organisation (WIPO) site states, “It provides a rich series of metrics that benchmark the innovation capabilities and performance of 143 countries. As firms and governments show growing interest in identifying and energizing creative individuals and teams to harness future growth, this year’s GII explores the critical role of the human factor in innovation.”
“Countries that have made visible efforts to maintain or enhance the quality of their human resources through education and life-long learning include the Republic of Korea, Finland and the UK (among high income countries) and China, Argentina and Hungary (among middle-income countries).”
At the GII launch, Australia’s Minister for Industry, Ian Macfarlane stated: “Reports like the GII provide direction on how we can boost our innovative outcomes giving us a deeper understanding of the many factors that drive innovation.”
WIPO Director General, Francis Gurry added, It is a “comprehensive map of the capacity of countries to innovate and thus compete on the world stage.”
WIPO has a succinct synopsis of the GII rankings. “For the fourth consecutive year, Switzerland topped the GII’s rankings, followed by the United Kingdom and Sweden. For the first time, Luxembourg entered the top 10, ranking ninth. Among the top 20 rankings there is a very high degree of stability” noted Bruno Lanvin, Executive Director of INSEAD and co-author of the report.
“The top 25 countries consistently score high across most of the Index’s 81 indicators, have well-linked innovation ecosystems and demonstrate strong capabilities in areas such as innovation infrastructure (including information and communications technologies), business sophistication (including innovation linkages, knowledge workers, and knowledge absorption); and innovation outputs (such as creative goods and services and online creativity).”
While a persistent divide exists between and within income groups over the speed of innovation, some middle-income countries like China and Malaysia are likely to break through to the Top 25 list in the near future.  In the same vein - of the 33 sub-Saharan countries in the rankings, 17 have shown major improvement.
Cornell University’s Soumitra Dutta, who has co-authored this report stated that the results “indicate important trends for the future. They show which economies are learning faster and where probably a lot of future growth in the economy and other interesting innovative ideas will emerge in the future.”
BRICS countries are not all performing on par. Or rather, India is doing dismally. It skipped 10 places to be in the 76th position. The other four did better. Brazil moved up by 3 places to reach 61st rank, the Russian Federation by 13 places to reach 49th, China by 6 places to reach 29th and South Africa by 5 places to reach 53rd position. More reason for Indian policymakers, innovators, and businesses to take the GII ranking seriously. Other countries are leading the march when it comes to making their country a magnet for innovative talent. In fact, Morocco is one of few countries that has succeeded in bringing back their talented brain-power.
WIPO’s site states, “Recent studies show that around 75 percent of migrant inventors from low- and middle-income countries reside in the US, with China and India standing out as the two largest middle-income countries of origin, followed by Russia, Turkey, Iran, Romania and Mexico.”
So what is India doing to bring back its innovative people, and make it attractive for the ones who have stuck it out here and are making a go of things? Answers would be truly welcome because the numbers are not exactly rosy.
Here are a few takeaways for some of the criteria I’ve mentioned earlier:
  • On political stability and absence of violence/terrorism: India ranks at 126. Below countries like Niger, Botswana, Tajikistan, Myanmar, Uzbekistan, Kazakhstan, Burkina Faso, Bosnia and a lot of others, who surprisingly are way ahead of us. The five toppers were: Finland, Norway, Switzerland, New Zealand and Sweden.
  • On regulatory environment: We rank 83. Again behind Niger, Kazakhstan, Burkina Faso, Botswana, Uganda, Rwanda! These are not even ‘usual suspect’ kind of countries like Singapore, New Zealand, Denmark, Netherlands and Hong Kong, who have topped this benchmark.
  • On business environment: India ranks 128. We lag behind Ukraine, Tajikistan, Ecuador, Algeria, Malawi, Mali, Burundi, Serbia, Uganda, China and Pakistan among many others. The top five are: Singapore, Canada, Ireland, Hong Kong and Norway.
  • Human capital and research: India is at 96. Ghana, Albania, Vietnam, Brunei, Mongolia, Lesotho, Algeria, Uruguay, Serbia, Montenegro and a bunch of other interesting countries are higher up on the list than us. The five toppers are: Finland, Singapore, Korea, UAE and Israel.
  • Infrastructure: India is at 87, behind Albania, Algeria, Azerbaijan, Georgia, Dominican Republic, Botswana, Tunisia, Slovenia, Peru etc. The top five were: Hong Kong, Singapore, Norway, Sweden and Korea.
  • Ecological sustainability: India is at 106. Behind Malawi, Swaziland, Moldova, Kyrgyzstan, Pakistan, Bangladesh, Gambia, Namibia etc. The top five were: Hong Kong, Spain, Switzerland, Italy and Czech Republic!
  • Market sophistication: India ranks 50. With Lithuania, Bosnia, Moldova, Saudi Arabia, Rwanda, Estonia, Albania etc above us on this list. The top five countries were: USA, UK, Hong Kong, Singapore and Canada.

    - Business sophistication: India is at 93. We are way behind Niger, Bhutan, Ghana, Nepal, Vietnam, Bulgaria among others. The top five were: Singapore, Luxembourg, Israel, Ireland and Barbados!

    - Knowledge and technological output: India is ranked at 50. Behind Serbia, Slovakia, Croatia, Cyprus, Bulgaria, Romania, Belarus, Estonia. In this regard, Hong Kong is also placed at a low 45 (below all of the above-mentioned countries). The top five were: Switzerland, China, Sweden, USA and the UK.
China/Hong Kong and Singapore have kept the flag flying high for the Asian continent. Some of India’s smaller neighbours have done better than us. We only top in the Central and Southern Asia regions, where we have beaten Kazakhstan and Bhutan. Otherwise, the only other country we seemed to have done better than is - Sri Lanka! With this country having endured civil war for so long, and only just finding their economic and political feet, even they might do better in future GII rankings. Do Indian decision-makers need anything more to prod them to wake up, than these insulting facts?

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