State Innovation Report

State Innovation Report is a flagship report of the initiative which will help the states in envisioning their future. The research is done on the basis of economic and social indicators at a national and subnational level to take stock of the present state of Indian Innovation.

Linkages between Innovation potential and manufacturing and services sector has also been done and important factors for growth and innovation has been researched and looked into. The report has looked at the evolution of some industries and what and how exactly are the present stakeholders engaged in doing innovation in these industries. It will go on to discuss challenges and opportunities.  The report has also brought out individual state innovation policies that have had a positive impact. Important consideration has been given to look at industries and how they have acquired innovation acumen at a state and national level. Innovation Policy framework has also been part of the report to help the policymakers have a clear vision for leveraging the innovation potential at the state and national level in India.

A State Innovation Index has also been developed which looks at key innovation parameters within the states in India. The purpose of this index is to map the innovation in the states so as to help them learn from each other’s experiences and formulate policies, that will benefit innovation in the Indian context. It is hoped that the report will play an important role in improving the state of Innovation in the Indian Context.

Press Release

Maharashtra, Tamil Nadu, Karnataka and Gujarat are Innovation Frontrunners in India

The results of the India State Innovation Report 2016 wherein the report looks at various factors that have a bearing on India’s innovation environment


  • The report does a comprehensive assessment of the innovation environment at a state level in India
  • Aim is to look at innovation at the level of India and its states and try to compare innovation environment across states
  • Theoretical and conceptual approaches from scholars have been used to build a State Innovation Index for Indian States
  • Maharashtra emerges as the most innovative economy overall. The most innovative economies are Maharashtra, Tamil Nadu, Karnataka and Gujarat. In different categories Delhi, Uttarakhand, Goa, Sikkim and Mizoram emerge as top performers.
  • Looks at the National System of Innovation in India and its performance over time
  • Another important element is discussion on Innovation at a sectoral level with innovation playing a key role in industrial development
  • Looks at different dimensions of the innovation policy and looks at some of the industrial policy architecture at a union level and in some states
  • Useful to corporates/ industry bodies and governments who seek to understand and enhance India’s competitiveness
  • Another important point is the role of FDI and liberal industrial policy regime in fostering innovation
  • Focus is not only on assessments but steps policymakers can take to enhance India’s innovation potential

Innovation comes from the latin word innovationem which means “to change; to renew”. Innovation thus described means “a novel change, experimental variation, new thing introduced in an established arrangement”. Innovation process has been old but the discipline is relatively new.

The India State Innovation Report 2016 envisages and looks holistically at the innovation landscape of India. It broadly seeks to conceptualize, understand and look at the contours of India’s Innovation landscape. It also seeks to present a conclusion, remedial steps and changes required to enhance India’s innovation capability.

The report also has a State Innovation Index, which seeks to measure innovation environment across states in India. Categorization is done on the index according to a stage of development with eleven indicators being used for building stage of development. At the top of the Index are states like Maharashtra, Tamil Nadu, Karnataka and Gujarat. However, it must be said that these states also pale in comparison to states and regions globally which are deemed as innovation hotspots. These states have been innovative largely because some locations and cities within these states have become innovative.

Overall the index seems to tell that the innovation environment is strong regionally in south and western parts of India. Thus there seem to be a west-south and north-east divide. Delhi and Uttar Pradesh seem to be an exception to this rule and seem to be doing well on the Index. States in peninsular India seem to be doing well on innovation environment.

In various categories stacked from the most innovative to the least innovative states like Delhi, Uttarakhand, Goa, Sikkim and Mizoram emerge as the top performers.

Innovation as a paradigm is of huge concern for a country the size of India. It is because innovations are important from several viewpoints. These include solving certain problems in society either by companies or by individuals using innovations. Innovations are also important from the viewpoint of economic growth. Technological innovation forms the basis of industrial development and growth and competitiveness of nations. Several countries have invested greatly in R&D efforts and these have helped reap rich dividends. It is because such efforts have been instrumental in the development of inventions that lead to innovations and globally competitive industries over time.

Broad level learning and some policy imperatives at the national level include increasing the spending on R&D at a national level, improving capability of top rung educational institutions in India like IIT/IIM’s to produce greater innovation outputs. The need is also for greater coordination and collaboration between national CSIR labs and the educational institutions for enhancing innovation capability. The issue is also lack of technology transfer mechanisms between labs and industries. Another important issue at a national level is to constantly upgrading and design better laws and policies on crucial areas like industrial policy, intellectual property, foreign direct investment, etc. Another learning if for innovation to be important at a national level it takes long-term policy orientation even in the wake of newer governments. Decade long innovation policy can become a reality only with all stakeholders being convinced on innovations being central to competitive economies.

At the state level, broad level policy imperatives and key learning includes finding a balance between technology push and market-oriented technology development. Another important finding is lack of linkages between state level universities, MSME’s and R&D institutions. Another important find is few policies exist that seek to improve the innovation and entrepreneurship ecosystem at the state level. Cluster development programs are also an area badly in need of greater coordination and can benefit with a more open collaborative approach. Also, industrial policies at the state level need to focus more on innovation. At present few policies exist for innovation even in the most innovative states with the exception of Karnataka.

At a sectoral level some things have worked and some have not. An overarching theme is that sectors, which have seen more openness and collaboration with domestic and foreign private sector, have been able to reap rich dividends with several research labs coming up in distinct locations and the sectors becoming globally competitive over time. These include sectors like automobiles, pharmaceuticals, food processing and biotechnology. The defense production sector has had several checks both on its technology development organizations such as DRDO and its production organizations and this has had a tremendous cost. It is because India has had to import a lot of its defense equipment and this has a bearing on not just the sector being relatively uncompetitive but also in terms of the costs of procurement from outside being high. Another important point is that the teaching and research ecosystem around the sectors does have a positive impact on development of sector and sectoral innovation.


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© [2016] Future of States & Institute for Competitiveness, India

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