Some of the the reasons for lack of creativity are:
Running after grades at educational institutions. This race has to come to an end.
Then, at the university level plagiarism is destroying creative thinking. Not only the students but a number of professors regularly and rigorously indulge in plagiarism. It is nothing but theft in simple words. It is eating up whatever creativity we may possess.
For engineering graduates FYP (Final Year Project) is extremely important. It has to be based on a creative and innovative idea to apply their acquired knowledge for practical problem solving. On the contrary I have seen young engineering graduates taking it very easy and picking ideas from the internet, mostly. As a result, they fumble quite a lot during interviews for entry level technical jobs.
Another major issue at university level is the gap between industry and academia. In the west, almost all inventions and research projects are undertaken at the university level in collaboration with local industry. Our universities are neither equipped nor have sufficient research grants for taking up such projects. Not to mention lack of vision and competence level of professors.