Karnataka tops NITI Aayog’s India Innovation Index, followed by Telangana


The NITI Aayog India Innovation Index 2021 measures the degree of innovation carried out in the country over the past year. The report saw Karnataka topping the major states category, followed by Telangana and surprisingly, Haryana.

The parameters that ranked Karnataka among the top innovation-supporting states included human capital, investment, knowledge workers, business environment and security, legal environment, and knowledge output and diffusion.

Karnataka capital Bengaluru or the silicon valley of India has been the poster city for the startup ecosystem. The state thus experienced a large influx of money. Between April 2021 and September 2021 alone, Karnataka accounted for nearly 45% of total FDI (2.29 Lakh Cr) in India.

Karnataka was the top performer in the 2021 National State Startup Ranking Framework. Now, after securing $21.3 billion+ in venture capital funding in 2021, the state has also secured the top spot as the nation’s most innovative business ecosystem.

Bengaluru-based startups have also created a global brand that values ​​the ecosystem at around $105 billion and tops the list of venture capital investment hubs in 2022. As a result, the Karnataka government has set a target of contributing $300 billion to the country’s digital economy worth $1 billion. the highest of all states.

Dr. VK Saraswat, NITI Aayog Member, said, “Innovation is the key to sustainable and inclusive growth and helps address the biggest challenges of our time – lifting millions of people out of poverty, creating livelihood opportunities and paving the way for Aatmanirbhar Bharat.”

Suggestions for improving innovation in the country
With the Innovation Index, the government monitors selected global indices through global indices to drive the Mechanism for Reform and Growth (GIRG) for which NITI Aayog is the nodal organization.

Hence, apart from investment, Karnataka did not excel in any other parameters but was among the best, earning it the top spot in the overall ranking. Further along these parameters, in the northeastern and hill states, Manipur took the lead, followed by Uttarakhand and Meghalaya. Chandigarh managed to surpass Delhi in the category of UTs and city-states.

Constructed using 50 indicators for enablers and 16 indicators for executives, the index takes these parameters and forms seven pillars that measure the innovation ecosystem across states. The index follows its methodology from the Global Innovation Index (GII) – where India is ranked 46th in 2021. The current NITI Aayog report also states that states with higher Gross State Domestic Product (GSDP) tended to score higher in the list.

The score means that startups that are higher up the scale can spend more to facilitate their ecosystem and bring investment to the country – earning Karnataka the top spot in this metric.

Now, a report suggests that India’s R&D ecosystem needs a complete overhaul and should contribute 2% of GDP spending. This will help the nation reach its $5,000 digital economy target for policymakers and further influence its innovation footprint around the world.

NITI Aayog’s other proposals included growing human (knowledge) capital, improving our education systems and making it easier to create patent-worthy goods and services, and promoting competitive federalism.

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