India's output can go up five-fold: World Bank

New Delhi, Oct 4 (UNI) India can increase its economic output five-fold if all the enterprises could merely achieve national best practices based on existing knowledge, says a World Bank Report and calls for inclusive innovation that includes promoting more formal R and D efforts for the poor.

The Report, 'Unleashing India's Innovation', was released by Science and Technology Minister Kapil Sibal here today in presence Mr Mark A Dutz, World Bank Senior Economist and Editor of the Report, and World Bank Country Director for India Isabel Guerrero Mr Dutz said inclusive innovation could play a critical role in lowering the costs of goods and services and in creating income-earning opportunities for the poor.

Grassroots innovation networks, he said, should be formally evaluated and supported, and the Government programmes should promote more knowledge absorption in the productive sector and extend the power of innovation to the commonman.

''Existing pro-poor initiatives need to be scaled up,'' he said.

Ms Guerrero said India was capable of breaking new ground in technology that worked for the poor.

The Report, based on a 2006 World Bank Enterprise Survey of about 2,300 manufacturing enterprises in 16 States, recommends a three-pronged strategy to unleash India's innovation potential.

It calls for more intense competition among enterprises and suggests removing non-essential regulations in product, land, labour, capital and infrastructure markets.

It also recommends making it easier for enterprises to take risks and relocating resources when new ventures do not turn out as planned.

It suggests the easing of remaining limits on small industries, restrictions on foreign direct investment, and barriers to import competition.

Efforts should be made to create and commercialise knowledge, diffuse existing global and local knowledge and increase the capacity of smaller enterprises to absorb it, it says.

The Report also stresses on improving the ability of informal enterprises to exploit existing knowledge.

Mr Dutz said innovation in India must be thought of as improving practices across the country.

''While India is emerging as a top global innovator in biotechnology and information technology, less than three per cent of the workforce is in the modern private sector, and roughly 90 per cent remains in the informal sector.'' He said the disparities in productivity levels across firms within manufacturing sectors was wider in India than in China, Mexico, the Russian Federation and the Republic of Korea.

''The output of the economy could increase more than five-fold if all the enterprises could achieve national best practices based on knowledge already in use in India,'' he said.

The Report, however, observes that while public programmes supporting innovation have achieved significant success, their outcome have not been commensurate with the needs of the Indian economy or the resources invested in them.

Mr Sibal said innovative solutions should be local-centric and an ecosystem of partnership created between the industry, Government, universities, venture capitalists, NGOs and civil society.

He said a Bill would be introduced in the Winter Session of Parliament, which will seek to generate innovation by limiting the liability of a partnership.

UNI