With India aiming to increase its research and development expenditure in the coming years, the country is likely to emerge as the next global hub for innovation and join the club of developed nations, a study has said.

The country is expected to strengthen its position in the innovation space as it is targeting to increase its R&D spend to 2 per cent of the GDP by 2012 under the 11th Five-Year Plan, from less than one per cent, as per a study conducted by global research and analytics firm Evalueserve.

"The move will catapult India to the league of developed nations that spend 2.5 per cent of their GDP on R&D, on an average," the study titled 'R&D Ecosystem in India' by the British and Canadian High Commissions in India said.

Angel investors and venture capitalists have an important role in the commercialisation process, given the limited availability of funding for early stage companies and innovators, the study pointed out.

Further, venture capitalists are also providing a lot of late-stage funding and the number of private equity/venture capitalist deals in late-stage funding rose to 104 in 2006 from 33 in 2005.

The R&D ecosystem in the country comprises of various supporting infrastructure, government departments, research organisations, funding institutions and industry associations.

The scenario becomes feasible as the government is focusing on public-private partnerships, such as knowledge parks and incubator programmes, to promote commercialisation, transfer and diffusion of technology, it added.