India wants to become a major innovation economy. The ambition is visible everywhere: in the language of startups, artificial intelligence, digital public infrastructure, semiconductors, venture capital and global capability centres. We rightly speak of talent, capital and technology as the engines of the future. But there is another condition of innovation that is easier to ignore because it usually works silently in the background: institutions.
Entrepreneurs like to think of themselves as agents of progress. They build products, raise money, hire engineers and disrupt old sectors. In technology, especially, there is a strong belief that the future belongs to those who move fast. But innovation does not happen in a vacuum. A founder can write code, build a platform and attract investors. Still, none of this matters much if contracts are uncertain, policy changes unpredictably, visas are difficult to secure, courts move too slowly, regulators act arbitrarily, or public trust collapses.
The entrepreneur plays the game. Institutions write the rules of the game. For several decades, many business leaders worldwide forgot this distinction. They inherited a relatively open world in which trade, skilled migration, predictable regulation and the rule of law could be taken for granted. In that world, the main constraint on ambition was often a lack of capability. Could one build the product? Could one scale the company? Could one raise capital? The background conditions seemed stable enough to ignore. They no longer are. Trade wars can reroute supply chains overnight. Immigration restrictions can prevent companies from hiring the best researchers. Sudden regulatory shifts can freeze investment. Political polarisation can make long-term planning difficult. What once seemed like permanent infrastructure now appears fragile.
This is the lesson India should absorb early. A successful innovation economy cannot be built on entrepreneurs alone. It needs dependable courts, policy clarity, protection for property rights, academic freedom, open debate, regulatory restraint and trust in public institutions. These are not abstract liberal values meant for textbooks. They are productive assets. They lower uncertainty, encourage risk-taking, attract investment, protect dissent and allow talent to flourish.
The danger is that the people who benefit most from these institutions often invest the least in maintaining them. Business philanthropy tends to prefer visible and measurable outcomes: a research lab, a school programme, a health initiative, a climate project, a fellowship or a startup incubator. These are valuable and often necessary. But they also encourage a bias towards projects rather than principles.
It is easier to measure the success of a coding boot camp than the value of a culture that protects free inquiry. It is easier to fund a laboratory than to fund the intellectual work that defends the rule of law. It is easier to support entrepreneurship than to defend the institutional conditions that enable it.
However, the intellectual infrastructure of a free and innovative society does not work like a startup dashboard. One cannot easily calculate the return on investment from supporting a political economist, a legal scholar, a serious policy journal or an institution devoted to regulatory reform. The benefits are diffuse, long-term and often visible only when a catastrophe is avoided. But that does not make them less real. It makes them more important.
The post-war generation understood this better than we do. During the Cold War, liberal democracy faced a powerful ideological rival. Communism was not seen merely as a fringe idea. It appeared to many as a plausible alternative to capitalism. Western economies then suffered stagflation, industrial unrest and crises of confidence. In response, scholars, philanthropists and institutions invested seriously in defending free markets, limited government, constitutional order and open societies. They understood that ideas shape institutions, and institutions shape prosperity.
Today’s challenge is different. Markets have lost legitimacy not because people have read the wrong economists, but because many have experienced insecurity, unaffordable housing, precarious work, financial crises and the unequal gains of globalisation. For younger generations, markets can appear less like engines of opportunity than systems that reward a few while leaving others anxious and exposed. In this climate, simply celebrating growth or entrepreneurship is not enough. Liberal institutions must be defended, but they must also be renewed to command public trust.
This is especially important for India. The country has immense entrepreneurial energy, a large pool of technical talent and a growing role in global technology. But the next stage of growth will require more than unicorns, digital platforms and manufacturing incentives. Investors need confidence that rules will not change arbitrarily. Researchers need freedom to ask difficult questions. Universities need space for genuine inquiry. Startups need regulatory clarity. Citizens need to believe that markets are fair enough to deserve legitimacy.
Business leaders often respond to institutional weakness tactically. If trade policy hurts them, they ask for exemptions. If immigration rules constrain them, they frame the issue as a talent shortage. If regulation affects them, they lobby for sector-specific relief. These responses may be understandable, but they are not enough. They treat symptoms rather than causes. The deeper problem is the weakening of the ideas, norms and institutions that make open markets possible. What is needed is patient investment in the foundations. That means supporting scholars who can explain both the moral and practical case for economic freedom.
It means funding journalists and public intellectuals who understand markets without being blind to social discontent. It means creating forums where business leaders, policymakers, academics and civil society can think beyond immediate lobbying. It means defending universities not merely as talent pipelines, but as institutions of inquiry. It means taking the slow work of institutional maintenance as seriously as the fast work of technological disruption.
Innovation is not just a technical achievement. It is also a political and institutional achievement. Software can improve a platform, but it cannot create free speech. Capital can build companies, but it cannot, by itself, produce the rule of law. Artificial intelligence can accelerate discovery, but it cannot substitute for trust.
The most important long-term investment for business may, therefore, not be the next product, fund or laboratory. It may be the maintenance of the liberal order that allows all of them to exist. Roads, electricity and clean water are recognised as infrastructure because their absence is immediately visible. The rule of law, open exchange, institutional trust and intellectual freedom are infrastructure too. Their decay is slower, but the consequences are deeper.
If India wants innovation to flourish in 2050 and beyond, it must nurture the soil in which innovation grows. That means celebrating entrepreneurs, but also protecting the institutions that make entrepreneurship possible. The future will not be secured by disruption alone. It will be secured by rules, trust and freedoms strong enough to make progress durable.
(Mousumi Roy is a columnist. She writes on politics, material culture and economic history)
