“How do you judge innovation levels of an ninth standard drop out, whose robot won him the National Innovation Foundation’s award. Given the small resources, India’s innovation standing is spectacular, particularly at the bottom of the pyramid,” he says.

Compiled by INSEAD Business School, in collaboration with the Confederation of Indian Industries, the report hopes to provide benchmarking tools for business leaders and policymakers.

Amongst the challenges facing India, according to Dr Dutta, are the constraints of a coalition government. India, unlike other economies that typically go from agriculture to manufacturing to services, has rapidly moved from agriculture to services and needs to focus more on manufacturing. With literacy rates still weak, India also produces fewer PhD’s than Brazil or even leading American science departments.

The US leads the rankings this year too. Germany, followed by Sweden, the UK and Singapore are on the top of the list. Measuring innovation can no longer be restricted to vertical structures, or the number of patents, research papers and R&D spend. Innovation has to be judged on far more broad-based parameters, says Dr Dutta. The index considers Institutions and Policies, Human Capacity, and Market Sophistication amongst others on one side, and Knowledge Creation, Competitiveness and Wealth Creation on the other.