As India races ahead from being a developing country to a transforming economy, there are a number of factors which are catalysing this journey. This is not to ignore the fact that we have some way to go to become an inclusive society and a developed nation.

Among others, the growth and success of many old as well as new economy industries, both in manufacturing and services, also in small and medium scale enterprises (SMEs), are being driven by a number of factors. One of the principal factors is the under-recognised role of innovation. Here, innovation is defined as the conversion of new or known ideas into goods, services and management processes, leading to improved quality, reduced costs and greater competitiveness.

Innovation is usually a loosely defined and understood term which is widely used to describe several things. What has escaped our notice is that value creation innovation, as defined above, is now spreading across India’s industrial landscape. This enables many companies today to compete nationally and internationally, a phenomenon which is less than 20 years old in India.

A recent study by the National Knowledge Commission has confirmed the above observations while noting that best practices have yet to spread across significant sections of both public and private enterprises. In other words, there remains a huge potential to drive competitiveness and growth in Indian industry if some of the well documented Indian practices are more widely adopted.

But there are certain barriers which are preventing a more rapid spread of innovation. Principal among these is the lack of awareness of opportunities among some of the industry leaders. Another important barrier is the growing shortage of skilled human resources. A third vital issue is that many Indian companies have yet to adopt best global practices of networking with knowledge generating centres in order to advance their innovation intensity.

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