The National Manufacturing Innovation Survey (NMIS) 2021-22, conducted by the Department of Science and Technology (DST) and the United Nations Industrial Development Organization (UNIDO), evaluated the innovation performance of manufacturing firms in India.
The survey found that Karnataka is the most innovative state, followed by Dadra and Nagar Haveli, Daman and Diu (DNH&DD), Telangana, and Tamil Nadu. Among these, Telangana, Karnataka, and Tamil Nadu had the highest share of innovative firms.
Of the 8,000 firms surveyed, mostly micro, small, and medium enterprises (MSME), almost three-fourths did not innovate during the survey period of financial years 2017-2020. However, nearly 80% of the firms that did innovate reported significant gains such as expanding markets and reducing production costs.
The most frequent barriers to innovation were lack of internal funds, high innovation costs, and lack of financing from external sources. Gujarat and DNH&DD reported the highest frequencies of barriers to innovation, despite being among India’s most industrialized states.
The NMIS survey shows that innovation is profitable for firms, but it is not yet common in manufacturing. The study examined the innovation processes, outcomes, and barriers in manufacturing firms and studied the innovation ecosystem that affects innovation outcomes. The exercise is a follow-up of the DST’s first National Innovation Survey held in 2011.
The survey provides an empirical understanding of current innovation activities of the manufacturing economy in India as well as ways to navigate organizational rigidity to facilitate market demand for innovations. The evidence of the barriers and challenges to technological learning, innovation, and development, and up-gradation of Indian industries shall be used for devising policies, programs, and partnerships to strengthen innovation outcomes and benefits.