Innovation Policy in India: Ongoing Experiments and Emerging Challenges

A large variety of innovation policy related experiments are underway in India. These experiments not only relate to conventional policy instruments but also in the non-conventional domain wherein the key idea is to create a vibrant eco-system for innovative and entrepreneurial activities. In this paper, we have explored the emerging innovation policy challenges for India. We start with a broad conceptualization of innovation and innovation policy that encompasses all types of innovation (in products, processes and practices) and all policy instruments that influence firm choices with respect to development, adaptation and adoption of innovation. We argue that policy formulation needs to consider complementarities across various policy instruments of innovation policy and focus sharply on those instruments that have the maximum externalities for other policy initiatives. Given this perspective we review a variety of policy initiatives in India, especially the non-conventional ones. It is suggested that policy interventions with respect to skill formation, especially in higher education may be the biggest challenge for innovation policy in India today.