Where Does India Stand on the World Tech Map?

Modern technological marvels are rapidly paving the path to a vibrant new future, and those who cannot fully embrace them are bound to be left behind. Subsequently, countries the world over are placing greater emphasis on innovation, pouring their resources into research and development. Our country, India, is no different. 

It’s become evident that in recent years, India has massively bolstered its technological competency. Across businesses, government facilities, and educational institutes, the adoption of modern technologies has gained incredible momentum. Similarly, in terms of innovation and new research, India is experiencing exciting transformations. With impressive efforts in space technology, telecommunications, advanced healthcare, and smart cities, India is taking monumental strides forward.

But, despite all the innovative wonders that we’ve seen recently in India, where do we truly rank on a global scale? Can we now successfully compete with European and North American powerhouses such as Switzerland and the USA, or do we still have much to catch up on? Here, we dive into a riveting new world of innovation, painting a realistic picture of our technological competencies and gaining an understanding of where India stands on the world tech map.

Leading the World in Tech Adoption and Service Exports

In recent years, India’s Information Technology (IT) and Business Process Outsourcing (BPO) sectors have been shining stars for the entire tech industry. In fact, IT and BPO account for a staggering 60% of all of India’s service exports, bringing in approximately US$157 billion in 2021–22. The sheer size of the service export industry has helped India cement its place on the world tech map. With an ever-growing population of skilled human resources, major global corporations outsource their IT and BPO projects to India, making the country an essential partner in the global tech ecosystem. Furthermore, as multinational organizations find value in investing in the Indian tech space, technology adoption and exposure have massively increased across the country.

The sheer size of the service export industry has helped India cement its place on the world tech map.

With India now serving as the tech backbone for some of the world’s largest corporations, the country is gradually transitioning from a tech back office to a notable hybrid workforce. As India continues to flourish as a technology and services hub for the world, we can expect to see companies leverage Indian workforces for more sophisticated tasks such as full-stack digital engineering, complete software development, consulting, and much more.

Is India Facing a Lack of Innovation?

Despite achieving unparalleled levels of technology adoption and standing as one of the world’s largest exporters of IT and BPO services, India still falls behind in one fundamental area: innovation. According to the Global Innovation Index 2022, India ranked 40th in the world as an innovative economy. Though this is a step up from a 2021 rank of 46, it still prominently highlights the gap between India and the top-ranking global innovation powerhouses. 

But how exactly can we define an innovative economy? Though measuring the level of innovation can be quite a challenge, the Global Innovation Index aims to do just that. Taking 81 distinct indicators across seven categories into consideration, the Global Innovation Index provides a comprehensive view of a country’s innovative capabilities. The seven categories used for this analysis are Business Sophistication, Market Sophistication, Infrastructure, Human Capital and Research, Institutions, Creative Outputs, and Knowledge and Technology Outputs. 

So why exactly does India rank so low on this index? There are a few major answers. For a start, India’s patent system is critically ineffective. Patents are regarded as the hallmark of an innovative economy, and India unfortunately ranks 42nd in a list of 55 countries on the International IP Index. This simply means that the intellectual property (IP) frameworks currently established in India are not suitable for a country that truly wishes to drive innovation.

Secondly, India severely lacks proper investment in research and development (R&D). Currently, India spends only 0.7% of its GDP on R&D. For comparison, countries ranking higher on the Global Innovation Index, such as the USA and China, spend 2.8% and 2.1%, respectively. The fundamental reason for this is a lack of investment from the private sector. While the corporate sector contributes roughly two-thirds of gross domestic expenditure on research and development (GERD) in nations with advanced economies, India only accounts for 37% of GERD. 

With that being said, India still ranks as one of the most prominent innovation over-performers. In fact, India holds the record for being Innovation Achievers for 12 consecutive years. For the lower middle-income group that India finds itself in, India has regularly exceeded expectations. Moreover, it would be unfair to claim that India doesn’t have a budding culture of innovation. Due to its tech-savvy younger generation, India currently boasts the third largest startup economy in the world. The emergence of the entrepreneurial spirit, the availability of venture financing, and government programs like “Startup India” have all contributed to the growth of an atmosphere that is favorable to innovation.

To Infinity and Beyond: The Road Ahead

From recent trends and statistics, we can see that India is moving towards a digital-first economy. As technology becomes a critical part of our daily lives, sectors like e-commerce, digital payments, and telemedicine are expected to grow significantly. Similarly, thanks to India’s vibrant start-up ecosystem and a young, enthusiastic population, innovation is bound to blossom. Frontier technologies such as artificial intelligence, machine learning, blockchain, and renewable energy technology in particular are likely to flourish in India.

India’s journey on the world tech map has been one of remarkable progress and immense potential. Particularly in the IT and BPO services sectors, the nation has reinforced its place as a global tech powerhouse. However, the Global Innovation Index shows that India continues to struggle to foster a culture of innovation. The need for stronger intellectual property frameworks and increased investment in R&D can be clearly seen.

To ensure a bright and prosperous future, India needs to invest in its invaluable human resources, promote a culture of growth and innovation, and create an atmosphere that is conducive to technological advancements. By building on these fronts, India can not only bolster its technological competency but also take significant strides forward, further solidifying its position on the world tech map and driving the nation towards an unprecedented era of technological excellence.

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Written By: Emerald Tuladhar