UNCTAD Report Highlights India’s Strong Performance in R&D and Industrial Capacity Despite Challenges in ICT and Skills
In a noteworthy advancement reflecting the country’s growing technological capabilities, India has secured the 36th position among 170 nations on the ‘Readiness for Frontier Technologies‘ index, according to the recently released 2025 Technology and Innovation Report by the United Nations Conference on Trade and Development (UNCTAD). This represents a substantial improvement from its previous ranking of 48th in 2022.
The comprehensive index evaluates countries based on five key parameters: Information and Communication Technology (ICT) deployment, skills development, research and development (R&D) activities, industrial capacity, and access to finance.
Breaking Down India’s Performance Across Key Parameters
India’s performance across the different components of the index reveals both strengths and areas requiring further development:
- Research and Development (R&D): India demonstrated exceptional strength in this area, ranking 3rd globally
- Industrial Capacity: The country secured an impressive 10th position worldwide
- Financial Access: Ranked 70th for access to finance
- ICT Deployment: Positioned at 99th globally
- Skills Development: Ranked 113th, indicating a significant area for improvement
The report specifically mentioned that several developing nations, including India, Bhutan, Morocco, the Republic of Moldova, and Timor-Leste, have made substantial progress in human capital development. This improvement is attributed to increased years of schooling and a growing proportion of high-skill employment within their respective workforces.
Outperforming Economic Expectations
UNCTAD’s analysis highlighted that Brazil, China, India, and the Philippines are notable examples of developing countries that are outperforming expectations in terms of technological readiness relative to their economic status.
“It might be expected that countries with higher per capita GDP are better prepared for frontier technologies. Overall, this is true but… some countries perform far better than their levels of income may suggest, as indicated by their distance from the regression line of the index score on GDP per capita,” the report stated.
While developed nations continue to lead the rankings, the report specifically recognized Singapore, China, and India as developing economies that have secured prominent positions, demonstrating their growing technological capabilities despite economic constraints.
India’s Strengths in Artificial Intelligence
The report identified several countries showing particular scientific strength in Artificial Intelligence (AI), with China, Germany, India, the United Kingdom, and the United States being specifically highlighted.
In terms of private investment in AI:
- The United States leads globally with $67 billion invested in 2023, representing approximately 70% of worldwide AI private investment
- China secured the second position with $7.8 billion
- India ranked tenth globally with investments totaling $1.4 billion
This positions India as one of only three developing nations making significant financial commitments to AI development.
Cloud Infrastructure and Developer Talent Pool
The report assessed the top 10 economies in terms of cloud infrastructure services from major providers, noting that China and the United States collectively have more services than the rest of the world combined. India and Brazil were identified as two developing countries on this elite list, alongside Singapore.
In the realm of software development talent:
- The United States leads with the most GitHub developers globally
- India follows in second place
- China holds the third position
“China and India have the world’s largest populations and, despite relatively low shares, can leverage a significant mass of AI developers, which puts them in favorable positions with respect to AI development and the production of AI-related scientific knowledge,” the report observed.
The UNCTAD analysis quantified India’s developer talent pool at approximately 13 million professionals, while Brazil has around 4 million. “These two countries are also among the leading countries in creating GenAI projects on GitHub, and are significant contributors to advances in AI,” it noted.
Government Policy Driving Technology Leadership
India’s rising prominence in the technology sector is not merely coincidental but reflects deliberate policy initiatives. According to the report, “The lead of India partly reflects government policy. The Government has closely collaborated over the years with the private sector and academia to build centres of excellence.”
Examples of these centers include:
- Indian Institute of Technology Hyderabad (focusing on AI)
- Indian Institute of Technology Kharagpur (AI specialization)
- Kotak Indian Institute of Science Artificial Intelligence–Machine Learning Centre
- National Association of Software and Service Companies Centre of Excellence in Data Science and AI
The report also highlighted India’s forward-looking approach, noting that in 2024, “the Cabinet approved the India AI Mission to strengthen the AI innovation ecosystem, aimed at, for example, reducing barriers to entry into AI programs and increasing the number of AI courses in tertiary education, focusing on small and medium-sized cities.”
Specialized Technological Advantages
The UNCTAD report observed that different countries often develop specialized expertise in particular technological domains. This specialization is reflected in what’s termed as a country’s “revealed technology advantage” – defined as its share of patents in a specific technology field divided by its share across all fields.
According to this analysis:
- Germany shows high specialization in wind energy
- India demonstrates particular strength in nanotechnology
- Japan leads in electric vehicles
- The Republic of Korea dominates in 5G technology
Challenges and Opportunities in the AI-Driven Future
While highlighting India’s achievements, the report also addresses broader concerns about the future of AI and frontier technologies that are relevant to all developing economies:
- AI market value is projected to reach $4.8 trillion by 2033, becoming a dominant force in digital transformation
- Access to AI infrastructure and expertise remains concentrated in a few economies
- Just 100 firms, primarily based in the US and China, account for 40% of global corporate R&D spending
- AI could potentially impact 40% of jobs worldwide, offering productivity gains but also raising concerns about automation and workforce displacement
The benefits of AI-driven automation often favor capital over labor, which could exacerbate inequality and potentially diminish the competitive advantage of low-cost labor that many developing economies currently rely upon.
However, the report emphasizes that AI is not solely about job displacement – it can create entirely new industries and empower workers in novel ways. This underscores the importance of investing in reskilling, upskilling, and workforce adaptation to ensure AI enhances employment opportunities rather than simply eliminating them.
Implications for Economic Development
The UNCTAD report reaffirms the critical role of manufacturing and technological advancement in economic development, noting that these sectors stimulate growth across various upstream and downstream industries while generating significant employment opportunities.
“Examples from developing countries such as Brazil, China, and India show how industrialization can reduce poverty and accelerate economic growth,” the report concluded, highlighting the transformative potential of technological readiness for developing economies worldwide.
Comparative Performance of Major Developing Economies
| Country | Overall Ranking | R&D Ranking | Industrial Capacity | Notable Strengths |
| India | 36th | 3rd | 10th | AI development (13M developers), Nanotechnology specialization |
| China | Not specified | Among leaders | Among leaders | 2nd in AI investment ($7.8B), Large AI developer pool |
| Brazil | Not specified | Not specified | Not specified | 4M developers, Strong in GenAI projects |
| Philippines | Mentioned as outperformer | Not specified | Not specified | Technology readiness relative to GDP |
This comparative analysis shows that while India has made significant strides, particularly in R&D and industrial capacity, each developing nation demonstrates unique strengths and specializations in its technological development trajectories.
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