Innovation leads to product differentiation with agreat force-multiplier effecton economy

There is tremendous belief that with the vast talent pool and with people coming back to India!, the Nation has the wherewithal to become an innovation hub, particularly in the manufacturing sector. Thankfully, we are witnessing a number of Indian companies on the cusp of innovation already clued on to this concept. Most have realized thattechnological innovation is going to be the critical differentiator both for sustainability and growth. Appropriately, this decade has been named the ‘Innovation Decade’. The National Innovation Council and the National Skill Development Corporation have been established by the Indian Government.

That brings us to the question, what is innovation?

Simply put, it is a novel idea or product or process that ‘gains entry” into the market or society. Innovation truly impacts our lives to make it better. It creates improved process technologies, enabling platform technologies, new products and services specialized to the target group. It cuts across the supply and value chain. The benefits of innovation are many including improved performance, efficiency, scalability, speed and it typically improves affordability or access-ability to the consumer.

Dr Babu Padmanabhan

Integration into global value chain is important given fast changing global trade scenarios. Trade agreements are for the same purpose, precisely. Signing such mega trade agreements has certain temporary disadvantages, but permanent advantages in long run. Minimum temporary damage to domestic industry and maximum benefits in near/ far future to economy can only be ensured by timely inputs by stake holders/ interested parties during negotiations and critical analysis of the adverse effects by the Government. RCEP is into similar debate- how to minimize adverse effect and ensure maximum benefits?

The other shades of innovation, namely improvement and improvisation are also important and have occurred in societies leading to great economic prosperity. Japan is known for continuously improving on licensed technology from Europe or America. India’s Generic Pharmaceutical industry relies on improvisation to have succeeded in establishing a strong position in the world market post patent expiry or sometimes using patent challenge.

To accelerate the pace of innovation, an eco-system has to be created that provides an incentive to innovate; namely strong patent protection; facilitating technology commercialisation and other measures. India, after observing 500 years of patent laws in the world, is in a very good position to inspire innovation, having just signed the patent cooperation treaty to include design patents as being legal.

Creating new world of opportunity

Technology development is the result of systematic evolution of opportunities by integrating applications. Evolution allows adaptation to the current environment allowing an organization to reach and retain leadership position. Vertical Integration includes starting with the product and services and building competence and capability till the primary basic pieces. Horizontal integration is about venturing into different areas or applications made possible with the central core competency.

While intensive research with in-house teams is an essential feature of an innovative organization, organizations that have excelled have learnt from achievers who have extensively contributed to the field by absorbing their vision, their direction and their understanding of the field. It is important to collaborate, consult, partner or engage with subject matter experts. This is possible when a sphere of learning exists within the organization and people enjoy transferring the learning to each other.

There is need to encourage people to learn and grow, use their minds, help others, transfer knowledge, and take on bigger challenges. It is essential for an organization to invest in people who truly believe in the value of sharing.

There are measures for research and development effort that takes place around the world. Based on these parameters, India is ranked 26th, ahead of Russia (34th) and Brazil (41st) by the Martin Prosperity Institute. The top countries known for innovation are the United States, Japan, Switzerland, Finland, Israel, Sweden, Germany, Canada, Denmark and Hong Kong. India would certainly improve its position very soon. There are several companies which are keen to leverage the talent pool in India, a talent pool that is looking to work at companies which innovate and grow rapidly. A survey indicates that over 70 per cent of the young workforce in the country is keen on working in innovative companies.

Overall, the innovation culture is setting in, and companies irrespective of their size, need to capitalise on this situation. The innovation engine is on the move and we need to provide the necessary steam for it to keep rolling and gain traction. India’s manufacturing sector could touch US $1 trillion by 2025, thus accounting for 25-30 per cent of the country’s GDP and create up to 90 million domestic jobs. Innovation is going to be at the core of all this transformation.

Skill development

While India has a large talent pool, it lags behind in skills. Korea and Japan are much ahead than India in skills. The skill deficiency in India needs to be addressed by industries collectively. In terms of employment sectors that need a high level of skills, India is ahead in three areas:

  • Jewellery making
  • Accounting or Financial Management
  • Medical Care

It is interesting that in each of the above fields, there is a concept of internship, articleship or residency - some kind of apprenticeship. For skills to develop in any field, apprenticeship is a must. It is again encouraging to not the work being done by the National Skill Development Corporation to nurture skill in India. Ultimately, all patent disclosures actually refer to a “person skilled in the art”. We need more of such real persons in every domain and every field.

There is urgency for India to accelerate the pace of innovation and bringing it to market. ‘Innovate or Perish’ is the bottom-line of growth and remarkably, it is a favourite phrase of the remarkable innovator and one of India’s foremost engineers Sir M. Visveswaraya!

Dr. Babu Padmanabhan

The Islamic Republic of Iran Business Guide

Edition 2011

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