The UN World Intellectual Property Organisation (WIPO), India moved from 81st last year to 66th this year in the overall global rankings.
The Global Innovation Index 2016, released by the WIPO, Cornell University, and the multi-nation business graduate school INSEAD, said India ranks among the top 50 economies overall in two pillars: Market sophistication, 33, and Knowledge and technology out-puts, 43.
The country maintains stable or improved rankings across all pillars, with the most significant improvements in Human capital and research, up 40 spots and Business sophistication, up 59 spots.
Within Human capital and research, India data coverage increased, specifically in graduates in sciences and engineering, ranked eighth overall this year while this was a missing value last year, affecting the jump in its ranking.
India's ranking in the Business sophistication pillar is affected most by a substantial improvement in Knowledge workers, up 46 spots and Knowledge absorption, up 33 spots. India also improves in the ranking of firms offering formal training by 56 spots to reach 42nd place.
"Furthermore, India improves across all indicators within the Knowledge absorption sub-pillar and it turns in a solid performance in the GII (Global Innovation Index) model's newly incorporated research talent in business enterprise, where it ranks 31st," the report said.
However, India shows weakness in two sub-pillars of business environment, 117th, and education, 118th and within this has potential to improve in the the ease of starting a business and pupil-teacher ratio.
"India has all the ingredients needed to become a global driver of innovation: A strong market potential, an excellent talent pool and an underlying culture of frugal innovation.
Innovative countries have demonstrated the leverage of their cultural advantage to capture markets," the report said.
Similarly, India can build on its cultural bias of frugality and sustainability to capture markets not only within its shores but globally.
"For this to happen India's industries need to have the hunger to be at the top of the value chain, its customers have to be more demanding, its policies have to be more transparent, and its talent pool has to get more hands-on experience while simultaneously growing to leverage the global talent pool," the report said.
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