China ranks higher than India because of its investment in education, infrastructure

Soumitra Dutta, co-editor and author of the global innovation index 2016, explains why India lags behind in innovation

shreerupa

Shreerupa Mitra-Jha | August 24, 2016


#infrastructure   #education   #China   #India   #Global innnovation index 2016  


The recently released ninth edition of the Global Innovation Index (GII) co-published by the UN’s World Intellectual Property Organisation (WIPO), Cornell University and INSEAD, shows that India ranks 66th out of 128 countries in terms of its innovative capabilities while Switzerland remains the world’s most innovative country for the sixth consecutive year.

Soumitra Dutta is the co-editor and author of the GII report.

An alumnus of the Indian Institute of Technology, Delhi, Dutta is the dean of a new integrated college of business launched by Cornell University comprising Cornell's three accredited business programmes: the School of Hotel Administration, the Charles H. Dyson School of Applied Economics And Management, and the Samuel Curtis Johnson Graduate School of Management.

The Ivy League professor is an expert on the impact of new technology, particularly social media and social networking, on business and on strategies for driving growth and innovation through the digital economy.

Dutta has co-founded two firms and is on the boards of several startups. He received the European Case of the Year award from the European Case Clearing House in 1997, 1998, 2000, and 2002.

He spoke to Shreerupa Mitra-Jha on the GII 2016 report. Edited excerpts from the interview:


India has ranked 66th in the GII ranking out of 128 countries. Why such a low ranking even though it tops as an ICT service exporter of the world?
What is important to keep in mind is what [the] innovation index measures. Innovation index takes a very broad view of innovation across society. If you take an example, we also have things like online innovation of citizens – of how they innovate, of how they put content online because, we believe, that is also [a] kind of innovation that is important.

What India is good at is producing points of excellence in a country that has lot of room or ground for improvement. Bangalore and Chennai in ICT are points of excellence, which affects the high ranking but there are lots of other things in the country that people think are important for innovation.

What has China done right to push forward its way among the top-25 global leaders in innovation –the first-time ever that a middle-income country has been able to break into this closed group?
What China has been doing for the last 30 years or more is really developing the capacity to innovate in a much more broad-based manner. It’s not a question of comparing China in ICT and India in ICT – the best ICT in India is, probably, better than best in Chinese ICT – but the overall capacity in the country [China] is much higher because of simple things like, they have invested so much more in education at all levels, so much more infrastructure. They have invested so much more in other kinds of support for helping countries set up operations or expand their business. So, I think, China has been leading in many areas.

The report speaks of viewing innovation as a global positive rather than a zero-sum game. But innovative capabilities have often been used as a negotiating tool in multilateral forums. For instance, superior green technology has been a bone of contention in climate change negotiations where the rich nations have been reluctant for technology transfer to poorer countries…
No, not really. If you take one data point of, let’s say, the royalty getting paid on patents. So say, take a product that uses a patent from Korea, so you need to pay a Korean company for using that knowledge. But what is interesting is more innovative countries score high on both sides. So they score high on the income they get from their own patent and they also score high on the money they spend on other people’s patents. What is interesting is that all these countries, China, Japan, Korea, the US, they do make a lot of money from the innovation from their own countries but they use the innovation from other countries a lot.

So essentially, what you are seeing is that innovation is a game in which you have to use what is there in the market and improve even further. And this is a game where people have to actually work together.

But till date it has remained a game of the rich nations…
I think it is largely because the rich nations typically have a lot of legacy investments, in education, in infrastructure, in institutions and so on. So they have a lot of lead in succeeding innovations but, of course, now what is happening is that the middle-income and the lower-income countries are also catching up. India is rising, China is rising, so that’s happening.

How far does a strong intellectual property (IP) regime help innovation? Isn’t a strong IP policy in essential goods like medicine, generally speaking, detrimental for a healthy global economy?
There is no question about it [the need for a strong IP policy]. You need good institutions; you need an environment, to follow the rules. And that is important and IP laws are a part of that – you have to respect laws that govern business and innovation. At the same time, what you have, and this is interesting is patenting in the ICT sector has gone down. And we think, this is partly because the pace of innovation is itself becoming faster. And the IP processes that are there in place – the time it takes to get a patent – is, often, incompatible with the speed of innovation. Speed becomes more important than protection.

Without robust enabling structures do you think initiatives like Make in India and Startup India will suffer?
I think it’s a huge problem because ICT is a strength of India but ICT employs a couple of hundred people. It doesn’t solve the employment problem of the country as a whole. And all countries, what we have seen is that, you cannot take farmers and put them as software engineers. Farmers need to first become manufacturing, shop-floor workers. And then the next generation might move to knowledge economy and then IT and software and all that.
 

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