India’s innovation currency took a giant leap forward, with the leap in the Global Innovation Index rankings to number 66 this year from 81, last year. India also continues to maintain pole position in Central and South Asia.
In a 1.3 billion-strong democracy, more than half the population still struggles for basic needs such as potable water, decent sanitation facilities and higher education. India is also the largest market of working and spending Millennials (18-27). As such, there is no denying the brainpower available here.
And it is this power that has finally been recognised in the world too with the GII findings that have been released by Cornell University, INSEAD and World Intellectual Property Organisation (WIPO). GII is now in its ninth year of surveying more than a 100 economies across a variety of sectors.
Switzerland, Sweden, the UK, the US, Finland and Singapore bagged the top five spots. And China is the only nation from mid-income range to have broken in the top 25, for the first time ever. In the last year, India has overtaken Brazil in the mid-income countries to stand second in the overall innovation space.
According to the report, India has high scores on tertiary education and R&D, high-quality universities and scientific publications. The report stated, “Relative weaknesses exist in the indicators for business environment, education expenditures, new business creations and the creative goods and services production,” but overall, India has the potential to become a global driver of innovation. Mainly due to the country’s inherent mindset of frugal innovation, a burgeoning talent pool and strong market potential, as already mentioned.
But, the fact that was most stressed in the report was that of digital advancement and penetration. Information and communications technology (ICT), where India still ranks number one. And the tech sector, engaging entrepreneurship and our burgeoning startup ecosystem is in no small way, responsible for this development.
Jumping 16 Places In One Year
“Digital has become a primary driver of strategy development and innovation for business in almost all sectors,” said John Aurik, Managing Partner and Chairman of GII’s knowledge partner A.T. Kearney. And digital penetration in India is at an all-time high.
With an estimated 350 Mn smartphone users and about 19,000 tech startups operational in some form of another, innovation is taking place on multiple technological fronts in India. It also helped that the BJP-led Government under Prime Minister Modi is also pro-entrepreneur with initiatives like Startup India, Standup India and 10,000 Startups, NIDHI among others, launched to promote the spirit of entrepreneurship and innovation.
Modi’s government and indeed, the startup ecosystem in general understand one key rule: In order to break the chains of an emerging economy, the economy needs to be a global force to reckon with in whichever primary platform the world is adopting.
The recently approved GST Bill too is supposed to make it easy for entrepreneurs to work across the country and use tech to solve logistics and manufacturing pain points.
How Tech Is Making A Difference
But like the report states, digital is the way to go when it comes to adopting new tech and making advancements. With different sectors like FinTech, FoodTech, ecommerce, and hyperlocal breaking out over the last two years, the country has seen a number of drastic trends – both upwards and downwards.
Shutdowns have taken place as have layoffs and M&As, and the startup ecosystem is watchful as it takes a moment to pace itself before moving forward, all guns blazing. While investors were enthusiastically pouring in funds in 2015 across sectors, they are now tightening their belts and investing only in strong, unique products, which show sustainability.
“India has the ability to create a unique spot in innovation history to meet its own market requirements by using its cultural advantages of frugality and sustainability,” said the report. “India’s priorities for innovation need to be in the areas of energy, water, transport, health care, food security and digital consumption, the index said that India should strengthen its own talent pool and leverage global talent ‘in these market-pull areas.’”
States like Kerala already operating its first fully green airport in Cochin and Rajasthan and Punjab too are developing alternate sources of energy and transport in CleanTech innovations, clearly taking heed of the climate change problem. Social media and ecommerce portals have changed the way Indians think of shopping and transactions, while payment solutions related to the banking industry, as well as the unbanked population, are on a mission to onboard all of India on the tech track.
UPI: Next Step Towards Making India Truly Digital
“Innovation in India is accelerating because of three things,” said Rajeev Suri, spokesperson for InnoFest – a platform that is aimed at showcasing entrepreneurship and innovation from a grassroots level. “For one, we are the largest services industry with a centralised system of administration and process – be it insurance, healthcare or tech. It’s this ease of doing business that has contributed to the services sector being a huge driver for overall growth in India. And thanks to GST, and the free movement of labour that already exists in India, we will soon be poised to become the largest goods market.” Services plus goods equals better quality of life which will lead to individual as well as economic development.
So far, the startup ecosystem in the country has been mostly a case of ‘me-too’ models and aggregator models with not much coming in the way of problem-solving grassroots issues. What is needed is solutions and businesses that are aimed at making users’ lives easier in a fractured economy.
In FinTech, one of the ways this is changing is with the introduction of UPI.
“UPI (Unified Payment Interface) is basically the API-isation of payments and other transactions,” said Rajeev. UPI, like the much-vaunted Aadhar Card, is a process by which a transaction can be conducted by any two parties at any given point of time from any device. It is device-agnostic, works across platforms and allows anyone, whether on a smartphone, feature phone or tablet or computer to conduct commerce without having to go through plastic money or digital money in the form of wallets.
“In essence, your phone can become your bank branch,” ended Rajeev.
In an emerging economy where about 34% of the population is already online and willing to try out alternative methods of transacting in their day-to-day lives, there is no doubt sustained growth through innovation is the endgame for India.