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Promoting Innovation Among Private Sector in India

Kartik Bhatt - IGNOU

Innovation In India

In 1991, the industrial policy of India moved towards Privatization, Liberalization and Globalization. Since then, the private sector has been growing. It has increased its influence in almost every sector. But the growth of private sector is not solely dependent on liberalization and privatization, it is based on the ability of the private sector to innovate.

In 2010, Mrs Pratibha Patil, the then President, claimed the decade 2010-2020 as “the decade of innovation”. India is a country with over 1.2 billion people, 379 million (31%) of which are between the ages of 18 and 35 (Census of India, 2011). Despite being educated the youth is unable to get jobs.

For example, only one in every four urban males under 29 years is employed even though they hold at least a certificate or diploma (National Sample Survey Office, 2013). The aim of the government has been to create employment opportunities for youth while focusing on rapid economic growth. Entrepreneurship development is one of the mechanisms adopted by the Government of India towards the creation of job opportunities.

The government's assumption is that support for innovation will enhance entrepreneurship development, which will in turn accelerate economic growth. The government of India has taken many initiatives towards strengthening the innovation ecosystem, the most important of which are: i) the establishment of the National Innovation Council, whose mandate is to coordinate various innovation-related activities, and ii) the new Science, Technology and Innovation Policy 2013, which is intended to promote entrepreneurship and science-led solutions for sustainable and inclusive growth.

Policy tables turned when in 2014 the NDA government took over Congress. Since then a lot of emphasis has been given to promote innovation. The following policies have been introduced since then:

i) Skill India program ii) Start Up India iii) Stand Up India .


The problem with innovation in India is rooted in its past. Since, colonial times the foundations of various systems like legal, education, bureaucratic governance have all been inherited from Britishers. Even the complex public research system has been adopted from Britishers only. After Independence the nation opted for a closed economy and hence the public sector has become so vast. This led to incompetency in Indian industries and hence after 1991 need for innovation arose among the private sector.

The challenges of the present are as follows:

1. Multiple, complex and fragmented policies: There has been no comprehensive policy focusing on innovation and entrepreneurship so far. Also, the mechanisms to operate existing, fragmented policies were not uniform, which resulted in gaps in understanding and failure to achieve the desired effects of such policies. The intense bureaucratic environment leads to ‘Red Tapeism’. </