National Innovation System of India: An Empirical Analysis

Abstract

The present article aims to analyse empirically the national innovation system (NIS) of India. Specifically, the objectives were to (a) examine the different innovation-related input and output variables that reflect the structure of NIS over the years, and (b) examine the factors determining NIS. However, it was very difficult to identify the variables that could reflect the NIS of the country. Individual indicators of innovation, both from input and output side, are largely inconclusive. However, relatively more reflective indicators were chosen for the period 1980–2012. It was found that although India’s GDP has increased over the years, but its share in total world’s GDP was very meagre. Further, it was also found that as compared to major developed and comparable emerging economies, India lagged behind in both innovation inputs variables like expenditure on R&D and S&T manpower; and innovation output indicators like patents, proportion of high-tech manufacturing exports, etc. Further, for the second objective of the article concerning the determinants of NIS, a modified version of the Crepon, Duguet and Mairesse (CDM) model (1998) was used. The estimation using three-stage least square (3SLS) estimator for simultaneous equations shows that expenditure on R&D by government, stock of science and technology personnel, world’s stock of patents and openness index have positive impact on innovation performance indicators. Therefore, policies should be framed in a manner that they emphasize more on innovation inputs like expenditure on R&D and building human capital in the form of S&T personnel.