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India : innovation

Innovation mantras


Economic growth is not enough to invite and nurture ideas
AKRAM HOQUE | Issue Dated: October 31, 2010, New Delhi
Tags : secondary education | China | ISEAD |

 The National Innovation Council of India has proposed a $1 billion innovation fund to boost innovation for India's inclusive growth. Although India witnesses exponential growth, it has been grossly underperforming when it comes to innovation in technology, method or structure. India ranked abysmally low in innovation rankings 56 out of 132 nations in the 2010 Global Innovation Index published by business school INSEAD in collaboration with Confederation of Indian Industry. India's ranking has actually slipped from 41 in 2009. In another index by the Economist Intelligence Unit, it ranked 58 out of 82 nations.
While such rankings are not entirely flawless, there are scopes for India to improve when it comes to incorporating adequate policy initiatives to encourage innovation. Firstly, almost 90 per cent of the workforce is in the unorganised sector. They are involved mostly in unskilled or low productive jobs. Though half of the Indian population is still young, around 17 per cent of them have just completed their secondary education. Secondly, in-service training remains very poor in India. Merely 16 per cent of the manufacturing firms provide on-the-job training to their employees while 92 per cent of employees in China and 42 per cent employees in Korea get on-job-training. Third is the unsystematic and inadequate information flow. According to a report by IBRD/World Bank “average enterprise productivity of finance, insurance and real estate companies is 23 times higher than that of agriculture.” But these sectors employ rarely 1.3 per cent of the total workforce while 60 per cent of the workforce depends on farming. The fourth is investment in R&D. Investment in R&D has never exceeded 1 per cent of the GDP.
Thus, there is a need to revolutionise the information flow across the nation. Mobile and broadband connections have reached 700 million and around 10 million respectively which are still very low compared to US, Japan or China. In addition, there is need to encourage competition. Competition encourages innovation. It is essential to motivate private players to invest on R&D. Moreover, we need organised efforts for in-service as well as Government initiated skill development programs. ITIs never proved to be adequate. So, the $1 billion is a nice proposal. If the Centre approves, it can be a nice beginning — provided there is least leakage. But just a right beginning is not enough!

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Issue Dated: Feb 5, 2017