Spatial Dynamics of Innovation Capabilities across Indian States and Union Territories: Evidence from a Fuzzy Set Qualitative Analysis

Abstract

To evaluate the innovation ecosystem of various States and Union Territories (UTs) and to improve the existing innovation outcome, the National Institution for Transforming India (NITI Ayog) has constructed the India Innovation Index (III) in line with the Global Innovation Index (GII) methodology. This paper studied the relationship among various innovation enablers (INEN) and innovation performance (INPER) of Indian States and UTs, based on data from the India Innovation Index (III) 2021. A fuzzy set qualitative comparative analysis (fsQCA) on the innovation index dataset is applied in the study to investigate the causal relations between INEN and INPER. Three sub-samples namely Major States, City States and UTs and North East and Hill States are used for comparing performance across different categories. The analysis shows that for the Major States, Knowledge Workers (KN_WORKERS) acts as a core condition along with Human Capital (HC) Business Environment (BE) and Safety and Legal Environment (S_L_ENVT) on INPER. For City States and UTs, HC and BE are the core factors on high INPER whereas for North East and Hill States, Investment (INVST) comes first as the major INEN along with all other enablers as peripheral conditions. This concludes that existence of any one of these conditions alone is not necessary enough to predict high INPER across all three sample sets. Additionally, there are considerable differences in the configurations of INEN sufficient enough to forecast high INPER across the three categories of States and UTs. It recommends policy making taking into consideration the influence of different region-specific configurations of INEN on INPER.