Prime Minister Narendra Modi has called for a national mission of “Make in India". The time has come for elevating this mission to “Innovate in India".

Notwithstanding India’s recent rise in ranking on the Global Innovation Index from position 88 in 2015 to 66 in 2016, India faces significant challenges in making innovation its hallmark on the global stage. For one, India’s brand of innovation is associated with frugal innovation and jugaad.

While a useful concept for bringing innovative products to the masses, these labels are often misconstrued as the creation of low cost and low tech products. Two, both the public and private sectors in India invest a woefully small amount in research and development (R&D)—less than 1% of the country’s GDP. This compares poorly to leading nations such as Israel, Finland and the US who invest anywhere from 3-6% of their GDP in R&D and innovation.

The results of this low investment in R&D are visible in India’s leading sectors such as Information technology where the global leaders such as IBM and Microsoft have revenues per employee 15 to 30 times the comparable value for Indian leaders such as Tata Consultancy Services Ltd and Infosys Ltd.

Three, despite the many successes of Indian talent at home and abroad, Indian students are far outranked in global science and reading tests conducted by the OECD and no Indian university ranks in the top 50 in global rankings.

Indian universities also suffer from poor linkages to industry and it is rare to see strong research collaborations across universities and companies of the kind that are the hallmark of leading American and European universities.

Overcoming these challenges will not be easy. Yet the need for action is clear. Time is also of the essence as global competitiveness is a relative game. Even as India improves, it will continue to lag behind if others improve at a faster pace. Here are some strategies for action.

First, it is important to articulate a national vision of innovation. This can only be done as a successful collaboration across the government and other key stakeholders including the private sector and academia.

Time after time, nations such as Finland, Japan and South Korea which have successfully transformed themselves into innovation destinations have shown that a collective national vision and strategy for innovation are critical.

While India’s initial innovations in the IT sector happened despite the lack of a national vision, this is not the best strategy for moving ahead today.

In this context, while it is heartening to see that the NITI Aayog has formed the Atal Innovation Mission, a cohesive national strategy for innovation is yet to be articulated.

Second choices have to be made and supported. A strategy of letting private venture capital firms decide which firms or sectors to support may not be the best approach for India.

The government in partnership with industry and academics should seek to identify areas of focus—areas where India seeks to innovate with appropriate technologies and create solutions for India and the world.

India and Indians face a myriad of problems and challenges—ranging from health to sanitation and from transportation to the environment.

Countries such as China and South Korea have shown how a focused approach on a few sectors that mobilizes resources and leverages knowledge transfer can lead to success. Doing this is not easy and India has had its share of failures in the past.

The capacity of the country to absorb new technologies and to innovate further will need to be enhanced by investing in the core intellectual capability of universities and building appropriate innovation ecosystems in partnership with leading firms.

Third, it is important to recognize that entrepreneurship and innovation are related but not the same. For one, not all entrepreneurs are innovative.

While encouraging entrepreneurship is important for creating jobs and promoting self-employment, one should note that significant innovations happens in existing companies.

Encouraging innovation in the private and public sectors of the economy is critical, especially if these companies are to become more competitive globally.

India fares poorly in the World Bank rankings on the ease of doing business.

There should be a determined focus on correcting this and on making life simple for businesses.

Clear incentives should be provided to firms to invest in research and development. Effective regulatory regimes should be encouraged to support intellectual property and the longer term investments of firms.

Firms should be encouraged to build strong partnerships with leading research universities.

Similar to the role of Total Quality in improving manufacturing companies, determined efforts should be made to make innovation a strategic priority for both private and public sector firms.

Finally, the government should make itself the showcase of digital transformation and innovation. Government services touch the lives of hundreds of millions within India, in all parts of the country ranging from remote villages to large cities.

By embracing digital technologies, and redesigning processes, the government can lower costs, create the capacity to invest in critical growth areas and help improve the quality of lives of all Indians. The government is a major change agent and catalyst for innovation in many spheres life for Indian citizens.

We are on the cusp of the fourth industrial revolution where all sectors of the economy and the lives of all will be transformed in significant ways in the years ahead. India has a unique opportunity in this time of immense change.

A smart pro-active strategy for innovation, supported by appropriate leadership from the government and the private sector can help elevate India’s mission to “Innovate in India".

Soumitra Dutta is the founding Dean of the College of Business at Cornell University, New York.

This article has been produced in collaboration with the World Economic Forum and in line with the programme topics of the India Economic Summit on 6-7 October 2016 in New Delhi under the theme “Fostering an Inclusive India through Digital Transformation." For more information visit http://wef.ch/ies16

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