Let's put some obvious facts and observations into words.

The only things that govern any progress or growth are incentives. Incentives make humans do remarkable things, like building computers or sending people to the moon. They can also make humans do the bare minimum (or even less).

Let's do a couple of examples.

I'll start with my alma mater (where else would I start with other than NIT Hamirpur, that microcosm simulating the real world in so many ways). Getting into the college involves passing a mind-numbingly competitive exam and realistically only very hard working people are admitted into the college. However, the quality of the engineers (or researchers) graduating from the college is very obviously sub-optimal. This isn't a controversial claim at all, and the same can be said for thousands of colleges across India. Here's the most probable cause in my opinion. The examinations at NITH are essentially fake, with students getting great grades for writing long paragraphs that don't even need to make sense into paper. What this means is that there is no real incentive to actually understand the course material. Even if a student is particularly hard-working, the thing they'll work hard on is rote learning which won't lead to any long term benefits. The college is incentivizing the wrong thing and that's why a majority of graduating engineers are sub-par.

Let's do another example. A idealistic person gives a competitive exam and gets a job in the Indian public sector, the coveted government job well-paid and stable. The person has worked hard for the job and is prepared to work hard in the future as well. However, they soon realize that growth in the public sector is not dependent on performance or hard work or such trivial things, what really matters is who you know and who knows you. The way to get ahead is not to work hard (leading to personal and organizational growth), but to play politics, push others down and get head. Everyone else in the organization is doing it, you won't go anywhere if you don't. The incentives in most government organizations are upside-down, which is why they're inefficient and corrupt. There's a reason why the market cap of HDFC is twice the market cap of SBI. It's because HDFC doesn't incentivize playing a zero-sum game of politics and status, instead incentivizing performance.

Humans are remarkably resourceful creatures. The amount of technology we as a two limbed species have developed in our small lifetime is mind-blowing. However, growth is faster in some places and slower in others. Most of these differences in rate of growth can be attributed to different incentives. As individuals in control of organizations and institutions today (or in the future), we should be very mindful of what incentives we're creating and whether they will actually lead to the outcome that we want. If you want something to grow, you need to give stakeholders the incentive to help it grow.