India’s new task is the innovation economy, and it is well on its way



The introduction of new technologies, known as innovation, has been the primary source of economic progress. Innovations improve human and capital productivity, allow for rapid increases in output, and have an impact on people’s well-being. The invention of the steam engine is regarded as the start of modern innovation. Some of the most significant innovations that have changed the course of human progress include the steam engine, electricity, modern medicines, space technologies, semiconductors, and modern 3D printing.

Innovation policies and their role

Innovation policy, or the process of developing and implementing new technologies, has emerged as the focal point of economic policy. Governments around the world have implemented a wide range of programmes to foster an innovative business environment, ranging from research grants and loans to venture capital and tax breaks innovation policies are important because of the overflow effects that innovations generate. The research and development (R&D) activities of one company may have an impact on the operations of other companies operating in the same industry or in different sectors, either domestically or internationally. Knowledge is well established as a non-rival and only partially excludable good. Any innovation, however, is a risky endeavour. It must be accepted by all stakeholders, including the firms/producers who will use the new technology and the consumers who will use it. Furthermore, the new technology should be governed by a government regulatory framework. The majority of new technologies are the result of systematic collaboration between national governments, academia, and industry. Attempts at risky innovation raise the marginal cost.

India’s Development in innovation rankings

The World Intellectual Property Organization’s (WIPO) 2022 Global Innovation Index (GII) Report contains some intriguing findings about India. India has made significant progress in climbing the innovation ladder, rising from 81st in 2015 to 40th in 2022. It is top-ranked country among lower-middle-income countries. India’s innovation initiatives span a wide range of fields, including space technology, smart cities, universal healthcare, and telecommunications. The pharmaceutical industry and the government in India have collaborated to make recent advances in vaccine development and COWIN application for COVID-19 vaccination. China had the best performance, reaching the 11th position and becoming the highest-ranked country in BRICS. India surpasses South Africa and Vietnam and topped alongside Russia and Brazil.

The Covid-19 experience demonstrates that the government must provide subsidised capital to encourage innovation. In this context, India faces significant challenges before emerging as a significant innovating economy. In India, the interaction between academia and industry is still very low. Furthermore, the diffusion of innovations is slow, which reduces labour productivity and harms the economy’s long-run growth. The informalization of industry and labour also poses significant challenges to the environment of innovation. But it can be said that India is making its effort to be the platform for a number of innovations for development. By encouraging new innovations by providing loans. A slow and accurate change is the secret to India’s success in an innovative economy despite its challenges.

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Dr. Kirti Sisodhia

Content Writer

CATEGORIES Business Agriculture Technology Environment Health Education

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