Professor at France’s Insead business school, Soumitra Dutta, is working with industry group CII (Confederation of Indian Industry) to create an innovation index for different states of India, as first reported by Mint on 3 May. Dutta and Insead publish a Global Innovation Index that ranks countries on their innovativeness. In India to kick-start the project, Dutta spoke to Mint on the contours of this exercise. Edited excerpts:
Why do we need an innovation index?
Innovation is the hallmark of most advanced economies. The measurements that exist today of innovation are very narrow and not holistic enough. So we need to capture innovation in a more formal model. Though innovation, of late, is a much discussed concept, it is still pretty abstract. We are trying to make this much more concrete. Also, it triggers a lot of questions. For instance, why does a big country like India, rank below another big country, say the US, in terms of innovation? If you know this, you are able to identify best practices. Thus you can look at some countries that are doing some things well, and learn from them.
What’s the basic structure of the model going to be like?
We have five pillars of inputs and three pillars of outputs. The input pillars are: how solid are the institutions in the country, human capital, infrastructure, business sophistication and the capital market’s sophistication. In the output, if you are innovative you create new knowledge, create new wealth and basically you become more competitive. Then you aggregate these inputs and outputs for your results.
So, how are you going to go about this process of measurement?
Today’s meeting, for instance, is one of the steps. We have to get hold of the key stakeholders. So I have to sell the idea to people within CII, who have bought into the idea, as it weaves into their innovation mission. Then we have to build discussion forums around it. Now since we are still in the process of identifying variables, I’d also like to hear from people how do they see innovation. Is it different from the way innovation is perceived in the West? Then there will be the process of data collection, which will be done through surveys. Then there will be the analysis phase, and the dissemination phase.
Have you decided on the sample size, how many companies et al?
We are trying to do it, per state and per sector. So for each set of analysis, that is sector X and company Y, we would like at least 30 respondents for each. We are still looking at how broad the scope should be, in terms of how many sectors.
So when can we expect the results?
By January, where the results will be announced at a partnership summit.
How will we measure the robustness or accuracy of the model? For instance, weather modellers can always compare their model with actual observation.
You go back to the output. Outputs are also measurable by various parameters. So there will be predictions that will come out of this, and this too can be compared with actual experience. For instance, a more innovative state could have more exports, which can be actually verified in the future. Weather forecasting is many decades old, whereas innovation forecasting is a very new idea. So, it will have its own deficiencies, but at least a beginning has been made.