Telangana : Fourth most innovative State in India

Innovation is the key driver of growth and prosperity for state. Telangana has been ranked as the fourth most innovative state in the country in the NITI Aayog rankings under the India Innovation Index 2019, while Karnataka, Tamil Nadu and Maharashtra were the top three and Haryana was fifth and the other five states among top ten states are concentrated mainly in southern and western India.

The India Innovation Index 2019, developed on the lines of Global Innovation Index (GII), looks into the innovation ecosystem of Indian states and union territories to help policymakers design policies to drive innovation across regions.

According to the NITI Aayog, the index is to analyze innovation at state level and promote competitiveness among the states. It seeks to move states from competitive populism to competitive good governance. The innovation index will also help to pursue interventions that play an important role in developing cooperative and competitive federalism.

It ranks the states based on their innovation capability, opportunities and challenges that lie for states and actions needed by policy makers to foster innovation.

The index measures innovation inputs through five enabler parameters and innovation output through two performance parameters.

The Enablers are the factors that underpin innovative capacities, grouped in five pillars: (1) Human Capital, (2) Investment, (3) Knowledge Workers, (4) Business Environment, and (5) Safety and Legal Environment.

The Performance dimension captures benefits that a nation derives from the inputs, divided in two pillars: (1) Knowledge Output and (2) Knowledge Diffusion.

Telangana scores 22.06 in the overall performance while Andhra Pradesh got a score of 14.51 (10th rank).Telangana stood third in the Innovation Index among the south Indian states.

Telangan's score under enabler dimension which captures five input pillars of the economy that enables innovative activities is 17.29 and got 9th rank among major Indian states.

Telangan's number fourth position in the overall ranking is partly attributed to its rank in the performance dimension. It is also among the best performers in infrastructure, knowledge workers, knowledge output and business environment.

It is because of prevalence of numerous higher educational institutions, research labs and a cluster of business that help to drive innovation forward.

The report noted that the stark disparity between the performances of Andhra Pradesh which stood at 10th rank, while Telangana secured 4th rank, through Telangana was carved out Andhra Pradesh in 2014; the contrast in their innovation capacities is hard to miss.

Since the both states are geographically and demographically similar, the varied performance on the innovation front presents an interesting case on what drives innovation in India.

It is probably the case that a single city, Hyderabad was driving bulk of the innovative capacity of the State, which has benefited the Telangana. But Andhra Pradesh can also draw actionable insights from Telangana to build a similar innovative ecosystem.

Among both enablers and performance parameters, human capital is the best performing pillar on an average in the innovation index.

Telangana, perform well on producing human capital on an average, it got score 31.04 and ranked 9th position among the major Indian states.

However, the report noted that Telangan being young state, it has to devote more resources towards building human capital, because the administration is simple and focused in smaller regions.

Telangana is attracting FDI through its TS-iPASS, which can be emulated by other states highlighted the report. However, Telangana got 7th rank with 6.55 score. Therefore the state has to invest more in higher education and science and technology.

Telangana has been producing substantial graduates but has issues in employing them in Knowledge-intensive sectors; this means that adequate employment opportunities are not available in such sectors or the graduates not employable in that sectors. Under knowledge workers pillar, Telangana got 5th rank with 15.82 score.

The business environment is conducive for innovation in Telangana, this is because of more internet connections, presence of incubators, industrial clusters and number of common facility centers (CFCs). Telangana stood first in ease of doing business rankings.

In Telangana, creating a safe and legal landscape still remains an elusive goal, though the state is best performer in business environment, it fares poor among the major states under the safe & legal environment parameter, it scores 9.63 percent against the country average of 28 percent and ranks 16th position.

The report notes that the State can enact and enforce fair and open procedures, protect property rights, regulate markets efficiently and lower burden of regulations.

Among the southern states, the knowledge out is well in Tamilnadu, Karnataka and Telangana occupies the top four spots, Telangana got score 18.76, this is because a lot of patent, design, trademark applications are filled more in the State.

The report emphasis that a curious anomaly lies in the contrasting performance of Telangana and Andhra Pradesh, which were united state until 2014, but in terms of knowledge output, Telangana is an over performer, while Andhra Pradesh is opposite.

Telangana is unambiguously outperforms Andhra Pradesh across all indicators within the pillar, this makes an interesting study on what drives innovation.

Among the major India states, Telangana's ICT exports constitutes 13%, out of 97% of the total ICT exports in the country are from nine states such as Karnataka (40%), Maharashtra (19%) and Tamilnadu (9%), this is because knowledge diffusion other parameters such as high and medium tech manufacturing, registered GIs and citation of academic publications are also high in these nine states.

The report also highlighted these states can serve as role models for other states, as they reflect how resources can be used more efficiently.

Gudipati Rajendera Kumar, Hyderabad