Global Innovation Policy Center

The sixth edition of the U.S. Chamber International Intellectual Property (IP) Index, “Create,” is a blueprint for countries seeking to become true knowledge economies through an effective IP architecture. Take a look at 5 things the 2018 IP Index reveals about the world’s fastest growing economy and what it means for its impending path to a knowledge economy:

1.Top Improver: India made the largest percentage improvement of any country measured on the sixth edition of the Index. India’s overall score increased by 5 percentage points (25 percent in 2017 v. 30 percent in 2018), and its relative score increased by a total of 20 percent compared to the fifth edition of the Index in 2017. (Compare data points here.) With absolute and relative gains, India outpaced even China in this measure.

2.Innovator on the Move: For the first time, India has broken free of the bottom ten percent of economies measured, ranking 44^th out of 50 countries. India’s performance on the Index mirrors its performance on many other global indices, reflecting positive spillovers from its overall economic environment and investment climate. GIPC’s Patrick Kilbride breaks this down further in his op-ed for The Economic Times.

The World Bank’s 2017-18 Doing Business similarly notes, “India for the first time moved into the top 100…on the back of sustained business reforms over the past several years. The report also recognizes India as one of the top 10 improvers in this year’s assessment…India is the only large country this year to have achieved such a significant shift.” 

The 2017 Global Innovation Index (GII) notes, “Key findings show the rise of India as an emerging innovation center in Asia.” India rose from 66 to 60 with “improvement in most areas, including in infrastructure, business sophistication, knowledge and technology and creative outputs.”

3.First Among Equals: The Index also shows India’s upward trajectory as standout among its emerging economy peers, including Brazil, South Africa, and Russia, whose scores have either increased marginally or slipped compared to 2017. (See more on page 22 of the Index.)

The 2017-18 WEF Global Competitiveness Index notes a similar trend: “Among the emerging markets seen as having great potential in the early 2000s, Brazil and Turkey have now lost much of the ground they gained before 2013, but China, India and Indonesia continue to improve.”

4.Building Strong Foundations: In this sixth edition of the Index, a new methodological category called “systemic efficiency” reflects the fundamental programs and policies that countries implement in order to create the basis for a robust IP framework. This category includes three indicators: coordination of IP rights enforcement; consultation with stakeholders during IP policy formation; and educational campaigns and awareness raising. India receives two full points on the indicators on consultation with stakeholders and education campaign/awareness raising, reflecting the steps its government took to implement some of these tenets of the 2016 National IPR Policy. In total, India scores ahead of 21 other economies benchmarked in the Index in the systemic efficiency category.

5.This Time is Different: In 2018, the Index included six new indicators on which India outperforms its overall score by a large margin; 25 percent on the old indicators versus 58 percent on the new indicators. Even looking only at the old indicators, it is clear that there was improvement compared with last year – India has improved its overall score from 23 percent to 25 percent excluding the impact of the new indicators and controlling for the removal of an indicator included in previous Indices but not included in the sixth edition. Moreover, the five new countries added – Costa Rica, Ireland, Jordan, Morocco, and the Netherlands – all rank above India in the 2018 edition, revealing that India’s score actually improved; it was not simply bolstered by the addition of new countries.

India can use the Index as a roadmap to improve its IP framework and innovation ecosystem, spur economic growth, and transition into a true knowledge-based economy.

As GIPC’s Hemal Shah writes, “Systematic progress in three key areas can sustain India’s growth momentum and hurdle the middle-income trap. One, India can harness its prowess as a services-led economy to create a knowledge-based and innovation-driven economy. Two, India can put legal and economic infrastructure in place to commercialize its established role in incremental innovation, while creating an enabling environment for transformative, high-end innovation. Three, through strong public policy and administrative efforts, India can position itself to transition from facilitating innovation to inspiring innovation as an innovator nation.”