OPINION | India’s rank is rising in Global Innovation Index. But where’s the innovation?

Loophole in the index

How does this square this against the patent filing explosion in India? Universities now account for 42 percent of patent filings, with institutions like Lovely Professional University filing more patents than the entire University of California system. This appears not as innovation but as statistical gaming optimised for composite indices like GII.

The index rewards patent counts without checking their quality or commercial potential. Without university-industry collaboration, these patents are essentially disconnected from market needs or commercial application.

India’s low relative R&D spend

India's gross expenditure on R&D remains stuck at just 0.65% of GDP, barely changed over the past decade despite rising innovation rankings. The US spends 3.5% while China invests 2.5%.

India's ability to rank 38th globally while spending a fraction of what innovation leaders invest exposes the index's vulnerability to being gamed by economies that optimise for measurable outputs rather than building foundational research capacity.

Scoring on output; falling short in making difficult investments

The structure of India's high-performance areas further reveals what GII rankings obscure. India's top global ranking in ICT services exports predominantly reflects skilled labour arbitrage - Indian IT companies implementing technologies developed elsewhere rather than creating frontier innovations.

Similarly, strong performance in venture capital and unicorn valuations reflects substantial capital inflows, but despite billions raised by Indian startups, very little has translated into IP-worthy research. Most highly-valued Indian unicorns operate in e-commerce, food delivery, and fintech - business model innovations adapting proven concepts rather than deep technology innovations generating intellectual property.

The GII identifies India as demonstrating "enhanced innovation efficiency" by converting limited inputs into high outputs. But efficiency in innovation should mean translating research investment into commercial impact, not producing more outputs with less investment. What GII celebrates as efficiency is optimisation for metrics: India generates countable outputs - patents filed, startups funded, services exported - without making difficult investments in fundamental research infrastructure, doctoral training, industry R&D laboratories, and university-industry partnerships that characterise genuine innovation.

The regional comparison is interesting. Central and Southern Asia has overtaken Latin America and the Caribbean in GII rankings, driven largely by India's innovation outputs, even though Latin America still leads on innovation inputs. This scenario - where a region with weaker inputs produces stronger measured outputs - should raise methodological red flags.

Latin American economies like Brazil and Mexico have more established industrial R&D capabilities and deeper integration into global manufacturing value chains; their lower output scores likely reflect inability to optimise for specific metrics GII privileges rather than genuine innovation deficit.

GII doesn’t track key links

Perhaps most revealing is what the GII does not measure. The index does not systematically track licensing revenues generated by universities from patents, the rate at which academic research gets incorporated into commercial products, companies spun out from university research, or talent flow between academia and industry R&D divisions. For India, tracking university patent licensing revenue would expose that despite thousands of patents filed annually, universities generate minimal income from technology transfer because most patents have little commercial value.

The observation that few Indian entities file patents internationally represents a powerful reality check that GII rankings obscure. International patent filings cost tens of thousands of dollars; entities only bear these costs when they believe an innovation has genuine global commercial potential.

The paucity of Indian international patent filings reveals that even patent holders themselves do not consider them worth protecting globally. This market verdict on patent quality does not appear in GII scoring.

Risking wrong policy signals

The disconnect between India's strong GII performance and weak underlying R&D fundamentals has significant policy implications. Seventy-seven percent of member states now use GII to design national innovation strategies. If policymakers interpret rising GII rankings as validation that innovation strategies are succeeding, they may continue prioritising wrong interventions - encouraging more patent filings, attracting venture capital, expanding ICT exports - rather than making difficult structural reforms needed to build genuine innovation capacity. True innovation overperformance would mean translating limited resources into disproportionate commercial impact, global competitiveness, and technology leadership - outcomes India's innovation ecosystem has not achieved despite improving index rankings.

Innovation should not be treated as a production function where outputs can be generated efficiently from minimal inputs through clever optimisation. Innovation is actually an ecosystem phenomenon requiring dense networks between universities, industry, finance, and government, sustained over longer time periods.

The GII report acknowledges that "many economies struggle to scale their innovation ecosystem, commercialise research, and integrate into global value chains," but these struggles - which precisely characterise India - do not prevent high innovation rankings if economies perform well on measurable components.

(Arindam Goswami is a software professional and a Research Scholar at The Takshashila Institution.)

Views are personal, and do not represent the stand of this publication.