If its to be believed, China is ranked 30 notches higher on the global innovation index (GII) than India, and steals premier position amongst its BRICS peers.

According to the Global Innovation Index 2012 which was released by international business school INSEAD and World Intellectual Property Organisation (WIPO), China stood 34th, down four places from last year while India slipped to 64th position from 62nd last year. The Index which ranks 141 countries/economies on the basis of their innovation capabilities and results considered institutions, human capital and research, infrastructure and market and business sophistication, as well as as the results of innovation such as patents and software in determining how countries fared. Switzerland, Sweden and Singapore secured the top three places in the GII rankings.

Nonetheless, both China and India stood successively first and second when it came to the Innovation Efficiency Index, which examines how economies leverage their enabling environments to stimulate innovative results.

India which had initially invested millions in R&D and now calls innovation by the colloquial hindi term ‘Juggad’ lags behind China who is steadily rising up the value chain. With Beijing offering lucrative incentives for those that innovate, China is seeing a rise in innovation.

Take for example, Electric vehicles – this is an industry that is still very much open to innovation at the global level. Beijing is planning to invest US$8 billion in R&D at various companies in an attempt to meet a numerical target for market size by 2020. Government commitments to buy the cars for official fleets combined with incentives to consumers will guarantee a certain amount of demand. But, crucially, the actual innovation will be left to the private sector and how well Beijing implements its innovation policies.

India on the other hand, has successively curtailed R&D spending, leading to a fall in innovative products and services. The nation who gave birth to Ganpati, the elephant God who when challenged to walk around the earth, took three steps around his mother as a symbol of his world, is failing when it comes to bettering existing products and services. Barely managing to keep up with manufacturing demand, India’s lack of innovation is fueling a stagnant economy thats failing to invigorate itself.

Here India can take a page out of China’s five year plan, in mooting to scale the value chain, aspiring to build better products and services in order to improve the standards of living of her citizens.