Stats IQ: National Manufacturing Innovation Survey 2021-22

• National Manufacturing Innovation Survey (NMIS): It is a survey conducted by the government’s Department of Science and Technology in collaboration with the United Nations Industrial Development Organisation (UNIDO).
• Aim of the Survey: Both the Centre and State governments, as well as industry, can identify the gaps in manufacturing and remedy them to be able to compete on a global stage.
• Components: Firm-level survey and sectoral systems of innovation (SSI) survey (in 5 selected sectors i.e., food & beverage, textiles, automotive, pharmaceutical, and Information and Communication Technology (ICT).
• India Manufacturing Innovation Index (IMII): The firm-level survey captured data related to the process of innovation, access to finance, resources, and information for innovation etc. for firms. These data were then used to compile India Manufacturing Innovation Index (IMII), covering 28 states and 6 UTs.

Key Findings

The major findings of the Survey are:

• Overall High Innovative States and UTs: High degree of innovation among manufacturing firms is found in Karnataka, which is most “innovative” State, followed by Dadra and Nagar Haveli, Daman and Diu (DNH&DD), Telangana, and Tamil Nadu.
• States with High Share of Innovative Firms: Telangana, Karnataka, and Tamil Nadu had the highest share of innovative firms at 46.18%, 39.10% and 31.90%, respectively, among the total manufacturing firms surveyed from the respective states.
• States with Lowest Share of Innovative Firms: Odisha, Bihar, and Jharkhand reported the least share of innovative firms at 12.78%, 13.47% and 13.71%, respectively.
• Low Level of Innovation in Firms: Only 25.01% of the 8,074 firms surveyed (mostly MSMEs) were considered innovative. They have successfully implemented either new or significantly improved products or processes.
  •  The majority of the firms, 73.76%, did not introduce product or business process innovations.
• Barriers to Innovation: Lack of internal funds, high innovation costs, and lack of financing from external sources.
• Lack of Innovation in India’s Eastern Region: The Northeastern states have been identified as low-performing states.  The Eastern region is weaker in innovation in manufacturing while the Southern and Western parts of the country are stringer. This is because manufacturing is centered around major cities, Karnataka because of Bangalore, Telangana because of Hyderabad, Maharashtra because of Mumbai etc.
• Key Recommendations of the Survey:
  • ‘Innovate to Make in India’ as a manufacturing innovation strategy:  This should include broad-based awareness, promotional measures and investment incentives, along with sectorial sub-strategies with concrete innovation targets or roadmaps.
  • Make sectoral systems of innovation (SSI) a policy objective for handholding and incentivizing the system of innovation and collaborations to strengthen manufacturing innovation and ecosystem.
  • Support pre-competitive, collaborative industry-focused research and innovation.
  • Enhance state government participation for fostering innovation in MSMEs.
  • Implement innovation-linked incentives to help firms, especially MSMEs, to address the financial risks linked to innovation uncertainty.
  • Support firms to mitigate innovation-related risks.
  • Increase private sector innovation investment through crowding-in.

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