Has India become more innovative since 1991? : analysis of the evidence and some disquieting features

Abstract

India is variously described as a knowledge-based economy in the making thanks essentially due to her high economic growth and the role played by knowledge-intensive sectors such as Information Technology in spurring and maintaining this high growth performance. There is also a strong feeling among especially the West that India is becoming very innovative. The study will take the reader through the empirical evidence on whether this is indeed the case since the reform process of 1991. A variety of conventional (in the absence of new indicators such as the results of innovation surveys) are analysed and their movements over the last two decades or so chartered to draw some firm conclusions on this front. The conventional indicators considered are the growth in research intensity, patenting, scientific publications, and technology balance of payments. The study is organised into five parts. In the first part I will discuss certain macro features of the growth performance over the last two decades or so and thus sketch the context in which the study is conducted. In the second I engage myself with the literature on measuring innovation using a variety of indicators. In the third section I measure the actual innovative performance of India’s economy since economic liberalization by employing a variety of these indicators. The ensuing analysis shows that the growth in innovations is not widespread but concentrated in certain specific sectoral systems of innovation such as in the case of the pharmaceutical industry. In the process of analyzing and piecing together this evidence, the fourth section identifies certain disquieting features which can act as limiting factor to the future innovative potential of the nation. Two such factors are identified and analysed: first, the financing of innovation and second, the availability and quality of science and engineering personnel. The fifth section concludes by examining the efforts made by the government to overcome these two constraints through public policy initiatives. Key words: India, innovation, R&, patents, technology balance of payment, high-tech industry, financing of innovation, technical education JEL Classification: O31; O32; O34