India has been one of the best performers in the world economy in recent years. Indian economy has been one of the stars of global economics growing 9.6% in 2006 and 9.2% in 2007. Growth had been supported by market reforms, capital inflows of FDI, rising foreign exchange reserves, both an IT and real estate boom, and a flourishing capital market. Like rest of the world, however, India is also facing testing economic times (economic recessesion) with inflation running at 11%, the highest level seen in a decade .The Indian stock market has fallen more than 40% in six months from its January 2008 high. $6 billion of foreign funds have flowed out of the country in that period, reacting both to slowdown in economic growth and perceptions that the market was over-valued. It’s high time we recognize the growing significance and visible impact of Entrepreneurship and innovation on wealth-creation and employment-generation in India.
Innovation is a process to achieve measurable value enhancement in any commercial activity, through introduction of new or improved goods, services, operational and organizational processes. It is a significant factor in fostering competitiveness, improvement in market share and quality. It reduces costs . Innovation is a key driver of economic growth. It is both creation, commercialization of new knowledge and diffusion and absorption of existing knowledge in new locations. Growth, accompanied by innovations, has been associated with rising living standards and a reduced number of poor people.
India is increasingly becoming a top global innovator for high-tech products and services. Still, the country is under performing compared to its innovation potential which has direct implications for long-term industrial competitiveness and economic growth. About 90 % of Indian workforce is employed in the informal sector. This sector is often characterized by underemployment, low-productivity and low-skill activities. Although India has the benefit of a dynamic young population , with more than half of the country’s population under 25 years old, only 17 percent of people in their mid-20s and older have a secondary education. To uphold rapid growth and help alleviate poverty, India needs to aggressively exploit its innovation potential, relying on innovation-led, rapid and inclusive growth to achieve economic & social transformation . According to one of the findings the output of economy could increase more than five folds if each enterprise could absorb knowledge existing in India and achieve the level of productivity of top enterprises in their sector. By applying knowledge in new ways to production processes, better and new products can be produced with the same or fewer inputs to meet the needs of all sections of Indian society.
The very popular “Dabbawala” system is an innovative business process which allows 4,500–5,000 semiliterate Dabbawalas to deliver almost 200,000 lunches to workers every day in Mumbai. The Dabbawalas reportedly make one mistake per 6 million deliveries. So remarkable is this delivery network that international business schools have studied the work flows of the Dabbawala system to understand the key to its stellar performance rating.
To unleash its innovation potential, India needs to develop following strategies: > > Increasing level of competition to improve the investment climate, supported by stronger skills, better information infrastructure and more public and private finance. Recommended actions to raise competition include removing regulations which are not essential and applying essential ones more transparently in product, land, labor, capital, and infrastructure services markets—for example, easing limits on small industries, restrictions on foreign direct investment (FDI) etc. Limited skills and training are a major bottleneck. Only 16 percent of Indian manufacturing...