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.

For example, companies such as GE and IBM have taken advantage of India’s knowledge repositories by forging alliances with leading national laboratories and technology institutions, while many Indian companies have yet to grab these valuable opportunities.

It is a matter of time before innovations will begin to visibly improve the agricultural and rural sectors. We have seen some beginnings with the emergence of modern supply chains by the new organised sector retailers. In contrast, the innovations in cash crops, such as flowers, spices and fruits, have advanced much more rapidly. But all this still is the tip of the iceberg of opportunities, compared to what is happening in the Indian manufacturing sector.

Indians and India today have begun to be globally recognised for their innate abilities to innovate. It is a matter of time when the country will be recognised among the global leaders in innovation.

The author is member, National Knowledge Commission and co-author of its recent report, Innovation in India