India Innovation Index 2021 Mapping India's Innovation Ecosystem

India is among the fastestgrowing economies globally and innovation has played a critical role in achieving this status. COVID-19 accelerated the adoption of new technologies in India since the pandemic led to the emergence of several path breaking ideas. From pioneering several innovations in the ancient times to making incomparable contributions to modern science and technology, India has rightfully earned its name as one of the world’s most innovative nations.

NITI Aayog, on July 21, 2022, released India Innovation Index 2021. The third edition is set against the backdrop of the COVID-19 pandemic and highlights the scope of innovation analysis in the country by drawing on the framework of the Global Innovation Index (GII). The number of indicators has increased from 36 (in the India Innovation Index 2020) to 66. The indicators are now distributed across 16 sub-pillars, which, in turn, form seven key pillars.

The India Innovation Index 2021 is a deep dive into the innovation landscape of India; it provides a holistic picture of the innovative capacities of our states/UTs by highlighting their strengths and weaknesses. The index provides a module to the states and UTs to build upon their strengths and work on their weaknesses. This is especially important in the current context, where multiple start-ups and unicorns have started carving their space in the Indian market.

What is the India Innovation Index?

 Prepared by NITI Aayog and the Institute for Competitiveness, the India Innovation Index is a comprehensive tool for the evaluation and development of the country’s innovation ecosystem. It ranks the States and the Union Territories on their innovation performance to build healthy competition amongst them. The 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. In addition, it also highlights potential challenges that deter the Government, businesses and individuals from fully realizing their potential.

The index has been broadly categorized into four sections. The first section begins with an introduction to the current innovation landscape in the country and goes on to present the significant innovation drivers during the pandemic. Further, a detailed analysis of innovation in India is provided by evaluating the country’s opportunities and challenges. The section concludes with a comparative study of India with other countries on various parameters.

The second section depicts the new framework mapped from the GII to measure innovation and calculate the index, which is followed by key findings and then the individual state profiles. The key findings provide a detailed analysis of the various factors that drive innovation in the country. These analyses will be critical for policymakers to identify the drivers and bottlenecks for each State to promote innovation in the region.

 The third section presents the learnings and recommendations derived from a detailed study of the innovation ecosystem at the state and national levels. This section includes the profiles of all the States and Union Territories and provides a comprehensive picture of every region’s current innovation environment. The fourth section consists of detailed data tables for all the framework indicators and sources and definitions for reference.

Key Features of 2021 Index

To celebrate innovation in the backdrop of the fourth industrial revolution, the framework for India Innovation Index 2021 has been mapped with GII indicators. This is against the backdrop of India’s aim to break into the top 25 countries in the Global Innovation Index (GII) from its current 46th position.

The dimension of the index remains the same as last year. Just like the previous edition, there are seven pillars in the Index—five ‘Enabler’ pillars measure the inputs and two ‘Performance’ pillars measure the output.

The Enabler pillars cover the features that are crucial for promoting innovation within a State/UT. Human Capital, Investment, Knowledge Workers, Business Environment, Safety and Legal Environment are the indicators that show the extent to which a state has created an environment to promote innovation. These pillars will help us understand each State/UT’s capacity to improve its innovation potential. Performance factors determine the state’s outcomes through innovation enablers. It measures how the factors such as investments in human capital have manifested itself in say patents. All the indicators of the Performance pillar represent a nation’s benefits in knowledge creation and competitiveness. The two pillars in the given dimension are Knowledge Output and Knowledge Diffusion.

New indicators have been added in the framework to further strengthen the Index. In last year’s edition, there were 36 indicators, this year there are 66 indicators. All the indicators of the Index capture both the aspects of the market as well as the State, thereby covering all necessary macroeconomic and microeconomic indicators.

The India Innovation Index covers all the twenty-eight States and eight Union Territories, which are further subdivided into districts, cities and towns. The heterogeneity and the vastness that prevails across the States in terms of geographical size, language, culture, and policies create complexities in the index analyses. Every State differs in terms of its innovative capacities and challenges given the demographic, economic, and sociocultural factors that influence it. To counter these complexities, the States and UTs have been thus classified into three categories: Major States; North-Eastern and Hill States; and UT and City States.

What are the takeaways from India Innovation Index 2021?

·         Karnataka has topped the Major States’ category in the current edition, followed by Telangana and Haryana. Chhattisgarh has scored the least. 

·         Among the North-Eastern and Hilly States, Manipur is the best performer, followed by Uttarakhand and Meghalaya. Nagaland with a score of 11 is at the bottom. 

·         For the Union Territories and City-States, Chandigarh is the top performer, followed by Delhi. Ladakh was at the bottom.

·         This year 16 States have performed above the national average. Amongst the nine Union Territories and CityStates, the average innovation score is 15.74, higher than the national average. 

·         In the overall ranking, Human Capital is the highest performing pillar with an average score of 25.60.

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What is Global Innovation Index?

The Global Innovation Index (GII) was first launched in 2007 to broaden the view on innovation—i.e., moving from just analysis based on research and development expenditure and scientific papers published to inspiring generations of innovators and business.

The Global Innovation Index (GII) takes the pulse of the most recent global innovation trends. It ranks the innovation ecosystem performance of economies around the globe each year while highlighting innovation strengths and weaknesses and particular gaps in innovation metrics.

Envisioned to capture as complete a picture of innovation

India’s Performance on the Global Innovation Index

Source : GII for various years

as possible, the Index comprises around 80 indicators, including measures on the political environment, education, infrastructure and knowledge creation of each economy. The different metrics that the GII offers can be used to monitor performance and benchmark developments against economies within the same region or income group classification.

(Compiled by Anuja Bharadwajan and Annesha Bannerjee)