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Innovation in Indian ContextInstructor : Dr. Sumati Varma Prepared by :Paper : Economics for Managers, Sunaina KainMaster of International Business, Suvdeep BaguiDept. of Commerce,Delhi School of Economics, Trapti SinghDelhi University. Utsav Agarwal
Index• Introduction – Innovation – Product & Process Innovations – Degree of Innovation – Global Innovation Index, India’s Rank – Need for Innovation in India• Examples of Innovations (India) – Sulabh International – Sixth Sense by Pranav Mistry – Sarvajal – Jaipur foot – Chotukool – Rural Jugaad and solutions to local problems – GE India – ECG Machine• Prof. Anil Gupta’s Journey (search for rural innovation)• Role of Govt. in promoting Innovation – National Innovation Council – Govt. Acts – Innovation Councils
Index Contd.• Understanding “Indianness “of our Innovations – Global Innovation Efficiency Index, India Rank 2, Foreign Leaders – Bottom up Approach – Contrast with Foreign Innovations – Jugaad Innovation – Frugal Innovation – Innovations in Corporate India – Trend : Reverse Innovation• Key Observations• Suggestions
INNOVATION• Innovation-Development of new customer value through solutions that meet new needs, unarticulated needs, or old customer and market needs in new ways.• Accomplished through different or more effective products, processes, services, technologies, or ideas.
Product and Process InnovationProcess Innovation• Moderate alteration of an existing good or service.• Includes an improvement in the good itself or how the good is produced.• E.g.- Increasing the processing speed and memory capacity of a personal computer.Product Innovation• Process of developing and making available a new product that is substantially different from, and an improvement over, what currently exists.• E.g.-Tata NanoSometimes an existing product can experience so many process innovations that itactually becomes a new product.E.g.-Television-Its been subject to so many process innovations that it effectivelybecomes a new product.
Degree Of InnovationIncremental Innovation• Builds upon existing knowledge and resources within a certain company.• Involves modest technological changes and the existing products in the market will remain competitive.Radical Innovation• Requires completely new knowledge and/or resources.• Involves large technological advancements, rendering the existing products non-competitive and obsolete.
Global Innovation Index (by INSEAD and WIPO*)GII recognizes the key role of innovation as a driver of economic growth andprosperity and acknowledges the need for a broad horizontal vision of innovation thatis applicable to both developed and emerging economiesPillars Of GII• Institutions• Human capital and research• Infrastructure• Market sophistication• Business sophisticationIndia witnessed a drop in the global innovation index (GII) ranking of 2012 to 64thposition from 62nd last year.* World Intellectual Property Organization
Need For Innovation in India• To improve its factors of competitiveness.• To improve productivity and various efficiencies.• To accelerate its growth.• To innovation to make growth more inclusive as well as environmentally sustainable.• To generate income to meet backlog of needs in education, health, water, urbanization, and in the provision of other public services.• To develop high value industries.
SULABH INTERNATIONAL• Although ancient Indian civilization had world’s most advanced sanitation and sewage system, out of 4500 cities only 232 cities of modern India have sewage sanitation availability.• In India, as many as 50 diseases are caused by lack of proper sanitation , affecting over 80% of the population.• According to Mr. R.S Jha who is a Senior Innovator at Sulabh International , women have to go for defecation before dawn or after dusk. The school drop-out of female child is also very high, as toilet facility in schools is barely available.• Sulabh is the brain-child of Dr. Bindeshwar Pathak who started ‘Sulabh Svachchh Shauchalaya Prashikshan Sansthaan’ (Sulabh Clean Toilet Training Institute) in 1970.
SULABH INTERNATIONAL• Sulabh has a workforce of over 50,000 volunteers in 25 states and 4 union territories, in 436 districts and 1247 towns in India.• It has set upto 11 lakhs household toilets and 7500 community toilet blocks.• Over 190 human excreta based biogas plants and made 640 towns scavenging free.• The Santitation facilities created by Sulabh are used by over 10 Million people everyday.
Innovations at Sulabh International One of the major achievements ofSulabh Technologies is ‘Twin-Pit PourFlush Toilet’, which provides an on-sitehuman excreta disposal mechanism andis an easy and cheap alternative to thedry toilets. It is not only easy to build andmaintain but also requires much smallerspace and financial resources. One pit isused at a time while the other oneremains blocked. When the first pit getsfilled up it is blocked and excreta isdiverted to the other pit which then isput to use. By the time the second pit isfilled up the excreta in the first pit driesand becomes free of foul smell and canbe use as a rich fertilizer for plants.
Biogas plants• This design is known as the ‘Sulabh Model’.• This model does not require manual handling of excreta and ensures complete resource recovery.• The biogas generated can be carried through pipelines and can be used for cooking, lighting, electricity generation, and body- warming.• Sulabh presently runs 160 biogas plants all over the nation. These plants run on human excreta. This is an innovation by Sulabh and provides three-pronged benefits of hygienic sanitation, renewable bio- energy source, and mineral-rich manure.
SIXTH SENSE – Pranav Mistry• Sixth Sense device augments the physical world around us into digital information and lets us use natural hand gestures to interact with that information.• The hardware that makes Sixth Sense work is very simple: a pendant or any other wearable interface that has a camera, a mirror and a projector and is connected to a smart phone. It can be easily sourced and customised, and costs a modest Rs 15,000.• Pranav Mistry, Research assistant and PhD candidate at MIT ,has developed the device. Video link : http://www.ted.com/talks/pranav_mistry_the_thrilling_potential_of_sixthsense_techn ology.html
SARVAJAL-WATER ATM• Sarvajal, which is run by Piramal Water Private, was started back in 2008 with the mission of providing affordable, accessible and pure water for all. Based in Ahmedabad, Sarvajal recruits local entrepreneurs to run water service franchises.• Sarvajal, which means water for all, is providing clean water for almost 70,000 people with their solar powered water ATMs. Powered through a franchise business model, Sarvajal provides the water filtration equipment and the maintenance while a member of the local community runs the business and sells the water.
• Their water filtration devices, which utilize reverse osmosis and ultraviolet rays to clean the water, are equipped with real time monitors to alert the company of their status• If a filtration unit begins to not operate correctly and water quality drops, the unit notifies Sarvajal immediately and the company sends someone to maintain it.• Customers get 24-7 access to clean water and pay using their pre-pay cards (or coins), which they can recharge just like mobile phone minutes• Now there are 127 rural franchises serving almost 70,000 people and families pay around Rs100 month for clean water.
JAIPUR FOOT• The Jaipur foot is the unpatented innovation of Mr. Ram Chander Sharma that has made a normal life possible for lakhs of amputees around the world.• In 1975, the society began with a very modest fitment of 59 artificial limbs but is now fitting about 20,000 artificial limbs and about 30,000 Polio Callipers, and other Aids and Appliances every year in India and abroad.• The Jaipur foot costs less than $30 compared to $8,000 for a comparable prosthesis in the United States. In fact, the Jaipur foot is given free to all by BMVSS(Bhagwan Mahaveer Viklang Sahayata Samiti )
Godrej Chotukool• In India more than 80% of the households lack basic appliances such as refrigerators.• Electricity is unavailable or unreliable in many rural parts of India, where families earning under Rs200 per day cant afford major appliances.• People needed an affordable way to keep milk, vegetables and leftovers cool for a day or two—both at home or away.• Innovation• Instead of traditional compressors, ChotuKool is based on a thermoelectric chip that maintains a cool temperature on a 12-volt DC current or an external battery. The unconventional opening ensures cold air settles down in the cabinet to minimize heat loss and power consumption. The unit is highly portable, with 45 litres of volume inside a fully plastic body weighing less than 10 pounds.• Priced between Rs 3000- 3500, about half of an entry level refrigerator.
GE MAC 400 – ECG Machine • Innovated by GE India • Portable, original US product wasn’t. • Sturdier • Battery Powered, US product didn’t work in rural India. • Reason for innovating – power outages. • GE India innovation at 20% of cost of GE US’ innovation. • US Medical Industry dumped GE US product and adopted GE India Innovation.
Innovation – Solving Local Problems Africa India United States Substituting : Footwear Waterproof Enclosure for Cables --Cost Substitution :1$ by nil 2-4 $ by nil #/240 $ Innovation result = Substitution of a Innovation result = Substitution of Innovation result = Introduction of a new product product product (more in developed economies)
The Great Indian-JUGAADNewly Defined Rural Mobility
Because powerful ideas for fighting poverty and hardshipwont come from corporate research labs, but from our needs -Prof Anil Gupta• Pomegranate de-seeder by Uddhab Bharali (Left) and• Coconut tree climber, Water-Walking Shoes and Peddle-Powered washing Machine(Right)
Nano-Ganesh• Video link : http://www.youtube.com/watch?v=Q5gfWt30Pjk
Professor Anil Gupta• Documented 25,000 rural innovations• SRISTI (1993)- Society for Research and Initiatives for Sustainable Technologies and Institutions• Grassroots Innovation Augmentation Network (1997)• Honey Bee Network• Innovation Inc.• Shodh Yatra – 12+ years
Governmental Innovation• Mr. Sam Pitroda is an internationally respected development thinker, policy maker, telecom inventor and entrepreneur who has spent over four decades in Information and Communications Technology and related human and national developments initiatives thereby Increasing Skills, Productivity and Competitiveness of Industry and also promoting SME’s.• The India Inclusive Innovation Fund• Tod Fod Jod - Supporting Childhood Innovation• Innovation Clusters - Pilot Update & Scale Up Plan• Innovation Challenge to reduce worker drudgery
INNOVATION COUNCILS• To help implement National Strategy & Prepare Roadmap for the Decade 2010-2020: National State Sectorial Innovation Innovation Innovation Council Councils Councils 27
Disparity Demography- Rich & Poor - 550 million below 25- Urban & rural years- Educated & - Health, Nutrition Uneducated - Education, Jobs Development -Expedite the process -Create new methods & new models
Global Innovation Efficiency Index• Index measures Input to Output Ratio.• Second Best in the World.• Hong Kong 4/66 Singapore 3/94 US – 7/26 Canada – 8/54 UK 10/50. (GII/GIEI Ranks)• Lower efficiency rank of above countries can be attributed to the profit seeking nature of their innovations.• Doing more with less.
Bottom Up ApproachSulabh Intl. Chotukool Sarvajal Jaipur Foot Increasing Affluence Target Customer # Sample consists only amputees Population Coverage Population unaffected by the innovation Population affected by the innovation *not to scale
Non- IndigenousApple IPhone Sixth Sense Facebook Increasing Affluence Population unaffected by the innovation Population affected by the innovation *not to scale
Jugaad Innovation• Opportunity in adversity.• No R&D.• No huge budgets.• No Ph.D. holders.• Totally opposite to conventional wisdom.• Diametrically opposite to management practices employed globally to encourage innovation.
Jugaad Innovation• Following the heart.• Little or no monetary incentives.• Best incentive to them is the knowledge that their idea matters.• Above points experienced in the interactions we had with various relevant people we interviewed.
Frugal Innovation• Addressing real needs of common poor people with the right product at the right price. Exploring innovations in segments neglected by developed countries.• Frugality = Cheaper Substitute ?• Does it mean people in India innovate only cheaper products?• Or Frugality = Greater Price-Value Substitute ?• Frugality resulting in greater social welfare – is frugal innovation the better kind of innovation ?• Is Frugal innovation the best competitive cost cutting exercise ? – a way to avoid wage suppression, subsequent exploitation and social unrest.• Case : in absence of Jaipur foot innovation, an average Indian earning 2$/per day would have to spend earnings of 15 years to get an artificial leg from US.
Corporate India Innovation (Labour)• Case of Expats : – Pranav Mistry – Dr. Ramachandran (Phantom Limb)• Case of Indians based in India : – Trend : Shifting R&D centers from parent countries to India. – 750 R&D Centers (Setup by MNCs in India, Each Indian innovator working on Global Projects). – Indian innovation masked by the MNC brands. – Are Indian based in India, creative enough ? – LBS study utilizing “Forward Citation Criteria” concluded Indian R&D subsidiaries file equally innovative patents than its US subsidiaries. – Why no Google/ Facebook from India?
Corporate India Innovation (Capital)• Underdeveloped Investment Ecosystem (Far lower ratio of Investor per Entrepreneur as compared to GII leaders. (VCs, Angel Investors)• Low risk appetite of investors.• Dominant funding Ex-CEOs, Ex-COOs etc. and not on the merit of innovators.• Dominant funding for adaptation of western ideas. e.g. flipkart.com a spinoff of amazon.com.• Govt. funds limited yet handled inefficiently. E.g. NIF funds frozen for 9 years in 12 years since its inception.
Trend : Reverse Innovation• Innovating in poor countries and moving it to developed countries.• Defying Raymond Vernon’s Product Life Cycle theory which states Innovations will happen in advanced countries and then later adoption by developing countries will follow.• Counter Intuitive. Almost everyone in a developing country desires apple iPhone but Why would a rich man buy a poor man’s innovation ?• Example : GE Healthcare India, Tata Nano, REVA
Key Observations• Innovating for masses is a recurrent theme in non-corporate Indian innovations.• Frugality is inherent in most of Indian innovations.• Evidence of brain drain at play in Corporate India - Innovations.• Availability of very able innovative human capital.• Scarcity of funds to promote and utilize human capital and their innovations.
Suggestions• Joining hands of rural innovators and corporates.• Incentivizing innovation.• Reverse Innovation trend be encouraged by identifying scope of innovations in areas neglected by developed economies.