Page 261 - ES 2020-21_Volume-1-2 [28-01-21]

244 Economic Survey 2020-21 Volume 1

Figure 5: Innovation and Level of Development

Global Innovation Index 2020 Innovation Output Sub-Index 2020
0 UK US 0 UK GR
CH FR GR CH US
JP CA JP FR
CA
IT IT
50 India 48 50 India 45
BR BR
Rank Rank
100 100

150 150
3 3.5 4 4.5 5 3 3.5 4 4.5 5
Log 10 (GDP per capita 2019, PPP Current International $) Log 10 (GDP per capita 2019, PPP Current International $)

Innovation Input Sub-Index 2020
0 CA US
UK
CH JP FR GR
IT
50 BR
India 57
Rank

100

150
3 3.5 4 4.5 5
Log 10 (GDP per capita 2019, PPP Current International $)
Source: The World Bank and GII database
Note: Highest possible rank is 1. Figure shows India’s innovation rank. US = USA, CH = China, JP = Japan, GR =
Germany, UK = United Kingdom, FR = France, IT = Italy, BR = Brazil and CA = Canada.
Is India a positive outlier only because of its population?

8.9 India is an innovation outlier in terms of its level of development (per capita GDP in PPP
terms). India is the third largest economy globally in PPP terms and the second largest in terms
of population. Since per capita income is a function of the population, we examine whether
India is a positive outlier because of high population.

8.10 Figure 6 sheds light on this issue. It plots GII rank, Innovation Outputs rank and Innovation
Inputs rank against log GDP PPP and log population. The top 10 economies (GDP current US$)
are highlighted on the graphs. It may be seen that population does not seem to be correlated to
GII, Innovation Outputs and Innovation Inputs. However, GDP seems to be positively correlated
with innovation performance. Figure 6 suggests that India’s status as an innovation outlier w.r.t.
its level of development cannot be attributed to its population as we observe no clear pattern of
correlation between innovation performance and population.

8.11 Figure 6 also suggests that India is a negative outlier in terms of its GDP, i.e. India seems
to be underperforming in innovation w.r.t. the size of its GDP. This divergent performance for
India in terms of the size of its economy and its level of development is a significant finding and
warns against being complacent.