Countries like India should use their standing on the Global Innovation Index as a measure of development in the future, instead of using GDP as the sole measure of development.

Talking to BusinessLine on the sidelines of the CII organised 13th India Innovation Summit, Kris Gopalakrishnan, co-founder Infosys and CII India Innovation Summit Chairman, said: “I’m not saying that GDP is an inaccurate measure but the standing of the country in the future should be measured based on its position in the Global Innovation Index. India, according to some estimates ranks 66 in innovation, whereas China is positioned at 32.”

Gopalakrishnan also opined that while the ecosystem to support innovation is on the rise, a lot more needs to be done. “Converting it into a business opportunity is not happening enough,” he said.

RV Deshpande, Minister for Large and Medium Industries, Karnataka government, pointed out that despite Bengaluru figuring the top bracket when it comes to doing R&D, the situation is not so bright in the country overall. “India’s R&D investment is less than 1 per cent of the GDP versus a desirable 2 per cent,” he told the gathered delegates.

Karnataka currently accounts for 38 per cent share in India’s electronics and software exports. Further, the private sector R&D investment is less than 0.33 per cent of the GDP. The topic of innovation is assuming increasing significance these days as India is changing its image of country associated with cost-arbitrage as rapid technological changes is rendering a lot of business obsolete.

“There is empirical evidence that higher innovation results in higher per capita income,” said Rekha M Menon, Chairman and Senior MD, Accenture India. To put the innovation push in perspective, in 1996, China used to spend 0.5 per cent of its GDP in R&D, according to World Bank data. That number has swelled to 2 per cent in 2014.

Innovation in fintech

However, things on the ground are changing. With the recent demonetisation drive, the government has opened up doors for fintech companies. “Innovation in financial technologies such as digital payment gateways and mobile wallets by home-grown ventures are beginning to transform the financial landscape,” said Deshpande. This is aided by around 19,000 tech start-ups, as per the Economic Survey data for 2015-16.

However, these positives are offset by negatives such as industry readiness of people coming into the workforce. “There is an urgent need to change the curriculum according to the needs of the industry and invest in human capital through education, knowledge and skill development initiatives,” added Deshpande.

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