Why in news? A survey on the degree of innovation among manufacturing firms found that Karnataka, overall, is the most “innovative” State, followed by Dadra and Nagar Haveli, Daman and Diu (DNH&DD), Telangana, and Tamil Nadu.

Highlights:

• The findings are part of the National Manufacturing Innovation Survey (NMIS) 2021-22, a joint study by the Department of Science and Technology (DST) and the United Nations Industrial Development Organization (UNIDO),
• Aim of the survey: to evaluate the innovation performance of manufacturing firms in the India.
• The NMIS 2021-22 study was conducted as a two-pronged survey that examined the innovation processes, outcomes, and barriers in manufacturing firms, and also studied the innovation ecosystem that affects innovation outcomes in these firms. The exercise is a follow-up of the DST’s first National Innovation Survey held in 2011.
• The NMIS survey shows that innovation is not yet common in manufacturing but has proved to be profitable for firms.
• Focus on manufacturing innovation is needed in addition to expanding production

What does the survey reveal?

• Telangana, Karnataka, and Tamil Nadu had the highest share of innovative firms at 46.18% ,39.10% and 31.90%, respectively,
• Odisha, Bihar, and Jharkhand reporting the lowest share of such firms at 12.78%, 13.47% and 13.71%, respectively.
• Nearly three-fourth of the 8,000-odd firms surveyed, most of them micro, small, and medium enterprises (MSME), neither made any innovative product nor business process innovation during the survey period of financial years 2017-2020. However, nearly 80% of the firms that did reported significant gains such as expanding markets and reducing production costs.

 “Barriers to innovation”  according to the report

• The 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 industrialised States.