Karnataka, Telangana, Tamil Nadu top NITI Aayog Innovation Index

The 2021 Index, formulated on the lines of the Global Innovation Index (GII), was released by the apex think-tank’s Vice-President Suman Bery in the presence of members VK Saraswat, CEO Parameswaran Iyer, and Senior Advisor Neeraj Sinha.

India jumped two places to 46 in the 2021 GII report from its 2020 rank.

The global report is released annually by the World Intellectual Property Organization.

Performance of South India states

List of Major States in the NITI Aayog India Innovation Index 2021. (NITI Aayog report)

According to the NITI Aayog report, Karnataka’s high score can be attributed to its consistent performance in attracting Foreign Direct Investment (FDI) inflow and a high number of venture-capital deals.

The state, known as the IT hub of India, received the fourth-highest FDI inflow and secured the highest number of venture deals in the country.

Telangana, considered the next IT destination in India, was ranked at the top in providing a robust business environment — comprising trade, competition scale, and digital infrastructure — along with Andhra Pradesh, Tamil Nadu, and Kerala.

The business environment of a state is considered essential before industrialists and investors decide to put in their money, the report said.

In the knowledge-worker pillar — an outcome of an improved business environment due to new startups, patents, industrial designs, publications, and grass-root innovations — Telangana and Tamil Nadu were named among the top five states.

The report said that the states that scored high on the knowledge-output pillar also have universities in the top 100 NIRF composite scores.

Interestingly, the educational institutions of Tamil Nadu — the second-largest contributor to the Indian economy after Maharashtra — fared among the top 25 institutions in India, besides Karnataka and Telangana.

All three states also led in the knowledge-diffusion category, which means the states have become an innovation hub for software exports, high-tech exports, and manufacturing entities.

These states were also successful in promoting creative and artistic sectors like OTT platforms, audiovisual content, and film production, alongside Maharashtra and Uttar Pradesh.

However, none of the five South Indian states was placed under an adequately safe and legal business environment, which is decided through three indicators — pending court cases, charge-sheet rate, and percentage of pending corruption cases.

Karnataka, Tamil Nadu, and Telangana also bagged a place in the top five in the 2019 and 2020 innovation indices released by the NITI Aayog.

UTs and City States

UTs and City States List. (NITI Aayog report)

In the Union Territories and City States category, Puducherry was ranked fifth and was adjudged best in the human-resources category.

Human resources are considered the prime ingredient for innovation, knowledge, and necessary practices required for the socio-economic growth of a region.

However, the report said that both Puducherry and Lakshadweep — last in the UTs category — showed hardly an improvement in the other major indicators, and that their performance was largely restricted to human capital.

New framework

With the introduction of 66 unique indicators as compared to the 36 used in the preceding edition, NITI Aayog and the Institute of Competitiveness adopted a more comprehensive methodology to determine the top-performing states in the country.

The new framework is reportedly based on a more comprehensive outlook for measuring innovation performance in India.

The states and Union Territories were divided into 17 Major States, 10 Northeast and Hill States, and nine Union Territories and City-States to analyze the performance findings.