Value Creation through Innovation: Investing to enhance India’s Ability to Grow
The paper assesses India’s current position in the global value creation and innovation eco-system and outlines the approach that the country can adopt to increase its share of global manufacturing and services value creation. We argue that India must set up a national mission for investment in research and innovation. Else, it runs the risk of being caught in the middle-income trap.
Section I discusses Prof Schumpeter and Prof Knight’s ideas about innovation and entrepreneurship to highlight the fact that economic and social progress depends on a society’s ability to create value through innovation. Section II outlines the general-purpose digital technologies and sectors that are expected to lead the fourth industrial revolution and redefine our consumption and production choices.
Section III discusses the role of research and innovation investment in creating high value-adding work and avoiding the middle-income or the development trap. Section IV assesses the size of opportunity available to India for accelerating its growth through participation in global value-chain. Section V outlines the objectives for India’s Research and Innovation Mission under the National Research Foundation. Section VI discusses India’s innovation capability in the global context and the identifies the areas that need immediate investment. Finally, in Section VII, we discuss the state of entrepreneurship in India using the Global Start-up Ecosystem Rankings.