How Innovation Will Drive The Economic Growth Of A Country Like India
The term innovation, though used currently excessively in our day-to-day lives, continues to be pivotal in improving holistic performance. Though innovation is not easy to find, it is considerably more far-reaching than mere improvement. It is also important to consider the fact that institutions and organizations are faced with situations that offer grounds for exhaustive changes every now and then. Such situations necessitate out-of-the-box thinking and only innovation can lead to the requisite transformation. In fact, innovation is also of the utmost importance for prolonged growth and economic development. Many basic conditions facilitate innovation and prompt economic growth.
In today’s economy, innovation serves as a decisive factor for not only value creation, but also growth and employment. Innovation also results in new businesses and leads to the enhanced competitiveness of existing companies. In this context, it is also important to note that the momentum of both industrial and economic progress is directly proportional to the endeavours made for research and development (R&D), which actually functions as a well founded barometer of a country’s capacity to innovate. India’s R&D spending has consistently grown over the years and its total spend on R&D is currently less than 1 per cent of its gross domestic product (GDP), 0.69 per cent, to be precise.
However, India, as a country, still needs to do more in this regard. Why? For starters, innovation has proven to be the key change driver across the globe. Innovation has enabled the provision of convenient and reasonably priced products and services to meet constantly changing consumer needs. Global archetypes plainly demonstrate how ingenious solutions not only help encourage national economic growth but also improve standards of living. Countries such as China and South Korea serve as leading examples of how innovation influences progress and growth, with the latter discernibly improving its economic standing by boosting the inflow of overseas technology, cultivating the capacity to absorb said technology, and increased investment in R&D.
India is the world’s seventh largest country by area and the second most populated country in the world. Currently, 65 per cent of the Indian population is below the age of 35; the country’s working age population i.e. the ones between 15 to 64 years, will touch one billion by 2030. Furthermore, by 2021, the emerging middle and middle class segment in India will comprise nearly 900 million people. Though this will provide new opportunities, companies will need to deploy innovative business models to achieve new value propositions.
A PwC report states that India has the potential to boost its GDP to 10.4 trillion USD by 2034 and increase the per capita GDP from 1,490 to 6,800 USD) by attaining a GDP CAGR of 9 per cent over the next two decades and increase its R&D spend to 2.4 per cent of GDP by 2032. Attaining such growth necessitates transformation driven by innovation. And globally, solutions centred on the consumer, provided via rapid adoption of technology, are progressively becoming the exemplars of innovation. Considering the scale of the challenges India is currently facing, all stakeholders in the country’s economy need similar approach based on innovation so as to establish and sustain a competitive identity in the global environment.
There is a need for innovation and entrepreneurship, for the economic growth of the country. Programs like the Economic Times Power of Ideas partnered by Department of Science And Technology, Govt. Of India, CIIE of IIMA and presented by Facebook, endeavors to foster a thriving ecosystem of innovation and entrepreneurship. The program seeks to encourage individuals with innovative business ideas and helps them access necessary resources including mentors and investors.
