Mumbai (Maharashtra) [India], July 8: Aditya Shukla delivered a strong and thought-provoking address on India’s innovation challenges at the GCC Summit in Mumbai on Tuesday.
In his keynote speech, Shukla asserted that India’s greatest long-term challenge is not unemployment but a deep innovation deficit that threatens its ambition of becoming a developed nation by 2047.
“Great economies are remembered not for how much they consumed, but for how much they created. We are creating consumers, not creators — and this must change urgently,” Shukla told the gathering of policymakers, industry leaders, and GCC delegates.
Highlighting India’s young demographic, Shukla noted that the country has approximately 371 million people aged 15-29, constituting nearly 27 per cent of the total population. However, he pointed out that this demographic dividend is at risk due to a significant skills gap.
“Employers frequently struggle to find candidates with the required skills, while many graduates face challenges in securing quality employment,” he said. India produces around 5 million graduates annually, but the creation of high-quality jobs has not kept pace.
Shukla was critical of the education system, saying that despite initiatives like the National Education Policy (NEP) 2020, implementation has been slow. He highlighted persistent issues such as rote learning, inadequate teacher training, weak foundational skills, and poor industry linkages in skill development programmes.
In the era of Artificial Intelligence, automation, and emerging technologies, he warned that the current system risks preparing youth for jobs of the past.
Economic Policies and Limits of GDP Growth
Shukla highlighted structural weaknesses in India’s economic model. While headline GDP growth has remained relatively strong, he cautioned that it is increasingly driven by consumption rather than investment and high-value manufacturing.
“Manufacturing’s share in GDP has stagnated around 14-15 per cent for years, far below the 25 per cent target set under Make in India. Despite schemes like PLI, progress in electronics, semiconductors, and advanced manufacturing remains limited, with heavy dependence on imports for critical components,” he said.
He pointed to challenges such as regulatory hurdles, implementation gaps in reforms, and an over-reliance on services (which contribute over 50 per cent of GDP) and domestic consumption. This model, he argued, limits job creation in tradable sectors and exposes the economy to vulnerabilities in global value chains.
Why Other Nations Are Surging Ahead
Shukla drew sharp comparisons with other countries that have successfully transitioned into innovation powerhouses. South Korea invests nearly 4-5 per cent of its GDP in R&D, while the United States spends around 3-3.5 per cent and China approximately 2.5 per cent. In contrast, India’s Gross Expenditure on R&D (GERD) continues to remain low at around 0.64-0.66 per cent of GDP.
“These nations succeeded because they made sustained, high-level investments in research, created strong industry-academia linkages, and built ecosystems that reward risk-taking and original discovery,” Shukla said.
He noted that countries like South Korea and China focused heavily on deep technology, advanced manufacturing, and semiconductors, moving beyond consumer services. Israel, despite its small size, has become a global innovation hub through heavy R&D spending (over 5 per cent of GDP) and close military-civilian technology collaboration. The United States continues to dominate through world-class universities, massive private sector R&D, and venture capital support for frontier technologies.
“These countries did not just celebrate growth — they built institutions and policies that produce breakthrough technologies the world depends upon,” he added.
Call for Urgent Reforms
While acknowledging progress in digital infrastructure and the startup ecosystem, which has produced over 100 unicorns, Shukla said most activity remains concentrated in consumer services, fintech, and e-commerce.
“Deep tech, semiconductors, biotechnology, and advanced manufacturing continue to receive limited focus and funding,” he added.
Shukla called for bold reforms, including raising GERD to at least 2 per cent of GDP with strong private sector incentives, overhauling the education system with greater emphasis on quality, creativity and employability, granting more autonomy to universities, streamlining bureaucracy, and directing patient capital towards deep technology sectors.
“The future will not belong to countries with the largest populations. It will belong to those with the greatest ideas and the ecosystems to realise them. India has the talent. Now we must build the system that allows that talent to change the world,” Shukla said.
His address received wide attention at the summit, with many delegates engaging in discussions on potential collaboration opportunities in innovation, education, and technology between India and GCC countries.
The event underscored growing calls for India to shift from a consumption and services-led growth model to one driven by original innovation and scientific advancement.
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