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India must take innovation to the poor: World Bank

Disparities in productivity levels across firms within manufacturing sectors is wider in India than in China, Mexico, Russia and Korea, says the report.

business Updated: Oct 05, 2007 17:30 IST

India is increasingly becoming a top global innovator for high-tech products and services, but it can do much more to reach its full innovation potential, especially by bringing the benefits of innovation to the poor, says a World Bank report.



Although the country is emerging as a top global innovator in sectors like biotechnology and IT, less than 3 per cent of its workforce is in the modern private sector, while roughly 90 percent remains in the informal sector.



Disparities in productivity levels across firms within manufacturing sectors is wider in India than in China, Mexico, Russia and Korea, said Mark Dutz, World Bank Senior Economist and editor of the report - Unleashing India's Innovation.



The output of the economy could increase over five-fold if all enterprises could achieve national best practices based on knowledge already in use in India.



India would especially benefit from fostering more inclusive innovation, the report says. This could be achieved by promoting more formal R&D efforts for the poor and more creative grassroots efforts by them. Improving informal enterprises' ability to better use existing knowledge could also be helpful, it added.



"Existing pro-poor initiatives need to be scaled up," said Dutz.



The report also stated that some 2 per cent of Indians live abroad; together they earn almost 2-3 per cent of India's GDP and recommended that new ways should be explored to leverage the entrepreneurs and technologists of the Indian diaspora.