India is at an inflection point. As the world’s fastest growing large economy, it will soon join the coveted high middle-income country club. At the same time, India needs to continue making progress with its economic reform agenda to sustain growth.

According to ace industrialist Sanjay Dalmia, India needs to help cement its geo-strategic position as a rising democratic and economic powerhouse in the Indo-Pacific.“This can be accomplished by creating 1 million jobs a month, invest heavily in R&D-driven innovation, and integrate into the global value chains swiftly,” he said.

The Sanjay Dalmia, chairman of Dalmia Groupadded, “If its economy falters, India risks falling into the ‘middle-income trap’—the point when a rapidly-growing country experiences a loss of economic momentum, because it failed to make the transition to a high-income, high-innovation economy. Among those who successfully avoided this trap, common catalysts paved the way for innovation-led growth and commercialization.”

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Image courtesy: sanjaydalmia.in

This begs the question: What kind of innovation does India need?

While Budget FY19 covered digital innovation, India should consider including innovation as an all-encompassing, cross-sector budgetary item. India could earmark specific funding to boost support for state universities to serve as labs to research ideas, incubate them and spur innovation. As a result, universities will be able to partner with foreign firms and collaborate with India’s own emerging start-up ecosystem to test new ideas, scale up, and reap the dividends of innovation.

Dalmia Group, Chairman, Sanjay Dalmia is of the opinion that evidence-based policy-making should guide India’s IP framework. The return of fair value for innovation should be reflected by the pricing policies for innovative products. Improper valuation of innovation on part of pricing policies will have the impact of undermining and devaluing IP and access to innovation.

Dalmia also suggested that India must act upon the link between strong IP protections and a sustainable innovation ecosystem. “The US Chamber International IP Index, releasing February 8, ranks countries on factors indicative of robust IP systems.The Global Innovation Index, which is a collaborative measure between Cornell University, INSEAD and WIPO, ranks countries on various facets of innovation,” he said.

“Countries like the US, the UK, Sweden, Denmark, the Netherlands, which often rank near the top on both indices, underscore close relationship between pro-IP policies and innovation-driven economies. For instance, in the US, innovative and IP-intensive industries create over 45 million American jobs and contribute nearly 40% of its GDP,” explained Sanjay Dalmia.

As India charts its growth trajectory and occupies the global high table, innovation should be the centrepiece of its geo-economic calculus. The transitional experiences of vast democracies like the US, Israel and Japan, as well as smaller ones like the Asian Tigers, show that innovation is the bedrock of sustainable economic growth and the key to moving past the middle-income trap.

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