India’s steady climb up the Global Innovation Index inks a changing world order

India’s performance in the Global Innovation Index (GII) has steadily improved. In the 2022 edition of the GII, India leapfrogged to the 40th position, an improvement from its 2021 ranking of 46th and a long way from its 81st spot in 2015. India’s improvement reflects its efforts to foster innovation and develop its innovation ecosystem. It’s time for India to let go of its old-school pedagogy and widely adopt emerging new-school vocations to meet fast-moving and evolving client needs.

In a discussion at 2023’s NASSCOM Technology and Leadership Forum (NTLF) on fueling a big vision for India to leap into the top 10 innovative countries, Srikanth Velamakanni (Co-Founder, Group CEO, and Executive Vice Chairman at Fractal Analytics), Ashish Dhawan (Founder-CEO at The Convergence Foundation), and Sabeer Bhatia (Co-Founder and CEO at ShowReel) discussed why India should bet heavily on its talent pool and the deep-tech startup ecosystem to become a global R&D powerhouse.

The panel concluded that India could build its R&D capabilities by upskilling and preparing its talent pool to work, keeping a sharp focus on two waves of innovation: the digital age innovation that includes supercomputing, AI, and automation, and the deep science innovation that includes biotech, nanotech, and new materials.

India has become the world’s de facto location for highly skilled digital talent, but are we doing enough?

During the NTLF conversation, Mr. Dhawan stressed increasing R&D investment to move up the value chain. He also emphasized that the government should prioritize futuristic, science-friendly initiatives and prioritize investments to build more extensive R&D labs. Mr. Bhatia, too, emphasized the need for innovation as the world heads into a creative economy. He said, “India must fund young crazy ideas and let the young minds think out of the box and imagine the future.”

In our recent research study with Cognizant on how India can rise to the challenge of developing a winning talent ecosystem, we observed that nearly one-third of the surveyed enterprise leaders believe in the quality of talent India offers. Still, only one-sixth of leaders feel that fresh ideas and innovation are driving factors (see Exhibit 1). In addition, nearly half of enterprise leaders expressed concern over not getting new innovative solutions from their partners to support business outcomes (see Exhibit 2). This suggests room for improvement in education and training and fostering an environment that supports R&D and innovation. It also reflected India’s 101st rank in global talent competitiveness in 2022.

Exhibit 1: Quality of talent is India’s strength; however, fresh ideas and innovation could be the deal breaker

Sample: 300 Global 2000 enterprises
Source: HFS Research in partnership with Cognizant, 2023

Exhibit 2: Nearly half of enterprise clients miss out on innovation from third-party service providers

Sample: 300 Global 2000 enterprises and 600 India-based IT services employees
Source: HFS Research in partnership with Cognizant, 2023

India is striving daily to reach its full potential as an innovation-driven economy

India has made significant strides in recent years toward becoming an innovation-driven economy. The country’s innovation ecosystem has been steadily evolving, clearly reflected in the growing number of startups, incubators, and accelerators emerging nationwide. Initiatives such as Startup India, Digital India, and Make in India are proof of the government’s strong resolve to promote innovation and entrepreneurship to drive India’s innovation growth. In the last two decades, such initiatives have attracted multinational companies to set up R&D centers and other innovation-driven initiatives in India.

The Bottom Line: A forward-looking strategy on intensifying the innovation and collaboration culture can help India sustain its growth and growing international prominence.

In addition to its diverse economy and strategic location, India’s large pool of highly skilled engineers, scientists, and other professionals will contribute perennially to its growing prominence in the international community. But it also needs to create a culture and impart an education that encourages innovation and fosters collaboration with peers and clients.