It's a vicious power law curve - the top institutes and top companies are highly integrated into the global economy. But without the barebones infrastructure to deliver power, water, minerals or talent without paying far above global rates (due to corruption, high taxation and license raj regulations), their hands are tied in making fruitful investments in the future.
It's a great question on institutions. My view on this - we have amazing institutions at the top end, but the middle and low end of the bell curve are some of the worst in the world. We have an exceptional set of universities, strong PMOs office, and effective regulatory bodies, but we have dysfunctional courts, poor law and order, grim primary schooling and healthcare and non-existent municipalities. This is the part that matters for building things and is really lacking.