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3 April 2018
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| Silicon Valley(The Total Investment & Insurance Solutions) |
India has the potential to innovate on the lines
of Silicon Valley but it needs to do more for expanding the innovation
ecosystem as it aspires to become a middle income country, World Bank India
head Junaid Kamal Ahmad said today. The
Total Investment & Insurance Solutions
He said what drives productivity is pertinent when it comes to
innovation and is a very relevant question for India as it seeks to move up the
ladder from low middle income to high income country. The Total Investment & Insurance Solutions
Releasing a World Bank report on innovation in developing countries, he
said: "I think we can do a Silicon Valley in India in the next five
years..as the world is changing, we can leapfrog. The Total Investment & Insurance Solutions
"I believe firm size, firm capability and innovation have a strong
relationship. More needs to be done in the innovation ecosystem in India where
firms continue to remain stagnant."
The Total Investment & Insurance Solutions
In developing countries, the concept of national innovation system must
be expanded, said the World Bank Chief Economist for Equitable Growth, Finance
and Institutions, William F Maloney.
According to the report, investments for innovation often consist of
marginal improvements in process or products, rather than significant
technology adoption or new product imitation. The Total Investment & Insurance Solutions
"They very rarely involve frontier research...if a firm (or
country) invests in innovation but cannot also import the necessary technology,
contract or hire trained workers and engineers, or draw on new organisational
techniques, the returns to that investment will be low."
Returns from investments in research and development (R&D) rise
initially, but lack of complementary factors over time result in their decline,
the report said.
"The policy makers conception of the national innovation system
(NIS) must go beyond the usual institutions and policies designed to offset
standard innovation-related market failures. The scope of the NIS must include
broader complementary factors and supporting institutions," it added.
Further, innovation cannot be supply driven, there must be demand from
firms that have the capabilities to innovative.
"On this demand side, the firm and its decisions to innovate,
policy makers must be concerned with the incentives for firms to accumulate the
necessary physical, human and knowledge capital," Maloney said.The Total Investment & Insurance Solutions
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