Page 284 - ES 2020-21_Volume-1-2 [28-01-21]

Innovation: Trending Up but needs thrust, especially from the Private Sector 267

Figure 35: Sector-wise Contributions to Total GERD, 2018

GERD (as per cent of GDP) 100 GERD by Government(per cent of Total GERD)

4 JP GR 80
GERD (% of GDP) 3 2 CH FR UK US Government GERD(% of Total GERD) 60 40 India 56.11

IT
CA

IT
0 1 India 0.65 20 CH JP FR GR US
CA
3 3.5 4 4.5 5 0 3 3.5 4 4.5 UK 5
Log 10 (GDP per capita, 2018 PPP Current International $) Log 10 (GDP per capita, 2018 PPP Current International $)

GERD by Business(per cent of Total GERD) 100 GERD by Higher Education(per cent of Total GERD)
Business GERD(% of Total GERD) 60 40 20 India 36.79 IT FR GR Higher Education GERD(% of Total GERD) 80 60 40 IT CA
JP
80
CH
US
UK
CA

FR
US
JP
0
4
3 3.5 4 4.5 5 20 0 3 3.5 India 7.10 CH 4.5 UK GR 5
Log 10 (GDP per capita, 2018 PPP Current International $) Log 10 (GDP per capita, 2018 PPP Current International $)
Note: Figure shows India’s GERD values. US = USA, CH = China, JP = Japan, GR = Germany, UK = United
Kingdom, FR = France, IT = Italy and CA = Canada.
Source: The World Bank and UNESCO

8.40 Research & Development (R&D) investment is a key input in innovation. Figure 34 shows
gross domestic expenditure on R&D (GERD) as per cent of GDP in relation to the level of
development measured by GDP per capita on PPP basis. Although India’s GERD is in line with
expectation for its level of development, there is much scope for improvement. Other top ten
economies such as USA, China, Japan, Germany and France have higher than expected GERD
for their level of development. India’s business sector and higher education sector contribution
to GERD as per cent of GDP is in line with its level of development. However, the business
sector’s GERD in USA, China, Japan and Germany is much higher as expected for their level of
development. Higher education sector in Canada and Germany also has larger GERD than their
level of development.

8.41 Figure 35 shows positive correlation between the level of development and GERD as
per cent of GDP and business sectors’ participation in total GERD while government sector’s
participation in GERD is negatively correlated with development. In India, the Government
contributes 56 per cent of GERD while this proportion is less than 20 per cent in each of the top
ten economies. Yet, India’s GERD is much lower than that of the top ten economies because
India’s business sector contributes a much smaller per cent to total GERD (about 37 per cent)