Current Affairs

India Innovation Index, 2021

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  • Published
    26th Jul, 2022
  • Context

    NITI Aayog has released the 3rd edition of the India Innovation Index for the year 2021, Karnataka securing the top position.

    About the index:

    • Prepared by NITI Aayog and the Institute for Competitiveness, the India Innovation Index is a comprehensive tool for assessing and developing the country's innovation ecosystem.
    • It ranks states and union territories according to their innovation performance to build healthy competition among them.
    • The third edition highlights the scope of country innovation analysis based on the Global Innovation Index framework.
    • The number of indicators increased from 36 (in India Innovation Index 2020) to 66 (in India Innovation Index 2021).

  • Analysis

    Indicators involved in the index:

    The indicators are now divided into 16 sub-pillars, which in turn form seven key pillars.

      • Human Capital
      • Investment
      • Knowledge Workers            
      • Business environment
      • Safety and legal environment
      • Knowledge Output
      • Knowledge diffusion

    Categorisation of the states:

    • The innovation index is divided into three categories:
      • Major states
      • Union Territories
      • Hill and the North East States

    What are the Key Highlights of the report?

      • Major States: Top states: Karnataka with a score of 18.05, followed by Telangana and Haryana.
      • Lowest states: Bihar, Odisha and Chhattisgarh scored the lowest in the index, placing them at the bottom of the 'major states' category.
      • Chhattisgarh ranked last with 10.97 points.
    • Hill and North Eastern States:
      • Manipur leads the category followed by Uttarakhand and Meghalaya.
      • Nagaland ranked last (10th).
    • Union Territory/Small States:
      • The top performer is Chandigarh with a score of 27.88 followed by Delhi and Andaman and Nicobar.
      • Ladakh is in last place (9th).

  • Why this report plays a significant role?

    • Innovation is critical to fostering a country's resilience and self-sufficiency. The index points to the decentralization of innovation across all Indian states.
    • The index also brings some international parallels that will add to Indian insights and how we can be at par with our counterparts.
    • The India Innovation Index 2021 is a testament to the Government of India's ongoing commitment to transforming the country into an innovation-driven economy.
    • The India Innovation Index also contributes to the government's efforts to monitor selected global indices through global indices to drive the Mechanism for Reform and Growth (GIRG).
  • What does the Index suggest?

    • GDERD (Gross Domestic Expenditure on R&D) needs significant improvement and should reach at least 2% which would play a key role in helping India achieve the target of a 5 trillion economy and further impact its innovation footprint globally.
    • Increasing GDERD encourages private sector participation in research and development and closes the gap between industry demand and what the country produces through its education systems.
    • Countries that spend less on GDERD will not retain their human capital in the long run, and the ability to innovate depends on the quality of human capital; India's GDERD as a percentage of GDP (Gross Domestic Product) was around 0.7%.
    • The private sector needs to pick up the pace in research and development, public spending is productive to some extent; once growth follows a trajectory, it is desirable to move to research and development, which is mostly driven by the private sector.
  • What are the challenges associated with India’s overall performance?

    • On average, the country did not perform well in the knowledge worker pillar, as well as in the human capital pillar.
    • Spending on human capital has failed to create this knowledge base in the country.
    • Innovations are skewed towards the manufacturing sector due to the problems associated with it and missing middle.
  • Conclusion

    The India Innovation Index 2021 is a testament to the Government of India’s continued commitment to transforming the country into an innovation-driven economy. The India Innovation Index also contributes to the Government’s effort to monitor select global indices through the Global Indices to drive Reform and Growth (GIRG) mechanism, for which the NITI Aayog is the nodal organization.

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