Progress by indices

Global indices are increasingly becoming the yardstick by which countries — especially developing countries struggling for foreign direct investment — seek to judge themselves on the world stage. Can they be considered accurate signals of a nation’s progress? India’s variable performance on a range of indicators suggest there is room for doubt — lots of it.  

There is, for instance, considerable excitement now that India has jumped five places up the rankings in the latest Global Innovation Index, from 57 to 52 out of 126 economies. As with India’s rapid promotion up the World Bank’s Doing Business rankings, which saw India jump 23 spots from 100 to 77 in 2018 among 190 countries, this promotion, too, is the result of some energetic action on the part of the Modi government. For the Doing Business rank, the government created a task force that adopted a laser focus on critical metrics that helped India gain 65 positions in the last four years, a commerce ministry press release proudly informs us. 

At the release of the Global Innovation Index in New Delhi — the first time the report has been released in a developing economy  — Commerce and Industry Minister Piyush Goyal exultantly spoke of “a new approach and engagement has become a new hallmark of India as we move towards a more prosperous country.” 

Stirring words, but they surely overstate the position. The IITs and Indian Institute of Science are among the handful of world class institutions we have and India is justly proud of its global IT and engineering prowess. Yet, consider that the Indian telecom industry (like its global counterparts) is currently split between choosing technology provided by Chinese, Korean and American companies for 5G services.  

 Indian corporate R&D spending, even accounting for the relatively high-spending pharma sector, is famously low, and rarely a week goes by without some commentator or other pointing to China’s impending global tech prowess (the Asian superpower’s R&D spends per head are eight times India’s). 

That said, there is little doubt that this regime has a genuine interest in promoting the cause of innovation, and the World Intellectual Property Organisation commended the improvement in the policy environment and the reduction in the time taken to examine and award intellectual property rights.

The broader problem is this: Merely focusing on specific marque indices alone cannot ensure a desired outcome. Just as the promotion in the Doing Business ranks made no appreciable difference to FDI inflows (in fact, they have slowed), a bump up the Innovation Index won’t accelerate India’s journey to world tech championship because such achievements do not occur in isolation. 

A look at any of the leaders on any of the indices that proliferate these days will reveal a pattern: The US, Scandinavia, Germany, China, Taiwan, Singapore tend to inhabit the top rungs. Crucially, these countries do not just lead on hard metrics such as Doing Business, Innovation and so on but also in terms of Human Development Indicators and other quality-of-life metrics. 

On Human Development Indicators alone, India has lagged with depressing consistency. In 2018, India climbed just one spot to 130 out of 189 countries, and in several critical aspects it scores worse than Pakistan, Bangladesh and sub-Saharan Africa. On the Corruption Perceptions Index, it improved its position only marginally to 78 out of 180 countries in 2018 from 81 in 2017. Also worth noting is that the country dropped two notches in the latest Global Press Freedom Index to 140 out of 180 countries. 

When we get into the more wacky indices that are in vogue these days, India’s performance doesn’t get much better. Take the World Happiness Index. According to this, the Finns are the happiest people on earth. Why they should be so happy when they don’t see the sun for half the year and eat terrible food beats me. But Incredible India, with 365 days of sunshine, Bollywood, and the world’s best cuisines, fell seven spots to 140 in the latest World Happiness Report, behind Bhutan, Pakistan, Bangladesh, Nepal, Bangladesh and Sri Lanka. 

Our corporations don’t figure too well either. There is something called an Empathy Index that ranks companies (listed ones) according to the internal culture, CEO performance, ethics and social  media presence. Empathy, you understand, is the favoured management-speak term in these hard times. No Indian company figured in the top 20 most empathetic corporations. Eight figure in the 20 least empathetic of the first index.  

It’s going to take a lot more than focussed task forces, however well-meaning, to improve India’s ranking on these variables. But without them, progress up the other “hard” indices will be tough to achieve.