Role of information technology in innovative entrepreneurship final

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It is about the role of IT in encouraging the investment in non traditional ventures.

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Role of information technology in innovative entrepreneurship final

  1. 1. Sanjay Mishra , PhD (B.H.U.) Disclaimer: Contents of this presentation have been borrowed as and where needed.
  2. 2. <ul><li>Success of Indian professionals and companies in Information Technology during the last decade has put India into race of major global players. </li></ul><ul><li>Availing a chance to entrepreneurs, bureaucrats and companies how can the opportunity be tapped. </li></ul>
  3. 3. <ul><li>Fact is that 79% Indian population live in villages without basic amenities, while 60%population considered to be literate they can somehow read and write in any language of their choice without a formal schooling. </li></ul><ul><li>And Indian Govt. investing millions of dollars every year in promoting IT based initiatives and IT is the carrier of Indian social and economic transformation. </li></ul>
  4. 4. <ul><li>To review the overall scenario of Innovative entrepreneurship in Indian business and industry environment. </li></ul><ul><li>To seek out the causes , potentials, status of R & D to innovate new area and efforts/share by the private/MNCs/ IMNCs and the Indian Government. </li></ul><ul><li>Application of Information Technology and innovative entrepreneurship. </li></ul>
  5. 5. <ul><li>Competition breeds innovation—when competition is absent or minimal, there is little incentive for corporations to innovate. </li></ul><ul><li>If markets are competitive investment to curtail the cost and to enhance the product quality increases. </li></ul><ul><li>innovation is broadly defined to include </li></ul><ul><li>“ new to the world” knowledge creation and commercialization as well as “new to the </li></ul><ul><li>market” knowledge diffusion and absorption. </li></ul>
  6. 6. <ul><li>This second type of innovative activities </li></ul><ul><li>Involves enterprises applying existing technologies in new locations and product </li></ul><ul><li>areas. </li></ul><ul><li>Both types of activities seek to provide better, cheaper products in response to </li></ul><ul><li>consumer needs—creating more and higher-paying jobs. </li></ul>
  7. 7. <ul><li>Both types of activities seek to provide better, cheaper products in response to </li></ul><ul><li>Consumer needs—creating more and higher-paying jobs. </li></ul><ul><li>2,300,manufacturing enterprises in 16 Indian states found that applying existing technology </li></ul><ul><li>In new settings is more likely to be associated with increases in productivity than are efforts to create new knowledge. (World Bank Enterprise Survey,2006) </li></ul>
  8. 8. <ul><li>Less than 3 percent of the Indian workforce is in the modern private sector, while roughly 90 percent is in the informal sector. </li></ul><ul><li>The heterogeneity of the Indian economy calls for a broader definition of </li></ul><ul><li>innovation—one that distinguishes between “new to the world” innovation (creation and commercialization), “new to the market” knowledge (diffusion and absorption), and explicit promotion of innovation to reduce poverty (inclusive innovation). </li></ul>
  9. 9. <ul><li>India falls behind the global frontier in most sectors of its economy. Thus, innovation in India should not be thought- </li></ul><ul><li>of as simply shifting outward the global technological frontier, but as improving </li></ul><ul><li>practices across the entire economy. Innovative activities are not restricted to new </li></ul><ul><li>products but include innovations in processes and organizational models. </li></ul>
  10. 10. <ul><li>India’s stock of scientists and engineers engaged in R&D is among the largest in the world. But another critical - </li></ul><ul><li>innovation input is domestic R&D spending, which in India has never exceeded 1 percent of GDP. </li></ul><ul><li>Evidences indicate that the sizable increase in R&D activity by MNCs in India since 2002 has had a significant impact on total R&D spending. </li></ul>
  11. 11. <ul><li>Indian automobile industry once characterized by “fossil on wheel” because of outdated 1940 models. </li></ul><ul><li>With FDI allowed up to 100 percent and no minimum investment requirements for new entrants—now accounts for more than </li></ul><ul><li>$13.5 billion in investments and employs 500,000 workers directly and 10 million indirectly. </li></ul><ul><li>India is emerging as a global center of innovative automotive design. </li></ul>
  12. 12. <ul><li>Mahindra & Mahindra spent only $120 million to develop its fast-selling Scorpio model—one-fifth of what it would cost in Detroit. </li></ul><ul><li>Tata Motors recouped its development costs within a year on the Ace, a small truck that costs about $2,500. </li></ul><ul><li>The world has acknowledged India’s R&D potential. More than 300 MNCs have set up R&D and technical centers in India. </li></ul>
  13. 13. <ul><li>Despite their recent increases in R&D spending, national corporations and other domestic enterprises are not - </li></ul><ul><li>Systematically exploiting this potential to India’s advantage. </li></ul><ul><li>Indigenous R&D spending as a share of GDP remains low and dominated by the public sector. </li></ul>
  14. 14. <ul><li>Furthermore, much of the knowledge that is created—especially by the public sector— is not commercialized. </li></ul><ul><li>Huge potentials in creating and commercializing the knowledge for the private companies using innovative skills. </li></ul><ul><li>MNCs have discovered that India is an excellent location for R&D and innovative enterpreneurships. In several international surveys, investors have ranked India as their preferred destination for locating innovation centers. (See,Silverthrone [2005], who reports </li></ul><ul><li>that 69 percent of firms consider India their preferred site—compared with 8 percent for China.) </li></ul>
  15. 15. <ul><li>The bulk of India’s public R&D infrastructure is mission oriented to defense, space, and energy, with much less applied to problems of agriculture, industry, and health. </li></ul><ul><li>The public sector (central and state) accounts for 70–80 percent of India’s total R&D investment, equal to 0.8 percent of GDP. </li></ul><ul><li>India stands 9 th in R&D investment While China is second largest after the Japan in 2004. </li></ul>
  16. 16. <ul><li>Mobile phones: Ultra low-cost handsets are being produced by Nokia and LG, reflecting </li></ul><ul><li>the 5 million new mobile phone connections being added each month in India. </li></ul><ul><li>Simputer. Amida’s Simputer is designed to enable word processing and e-mail, regardless of language. Prices for the computer range from $240–480. It was developed for use in rural areas. </li></ul>
  17. 17. <ul><li>Microlending. The SKS smart cards project is a microfinance project catering to marginal farmers and agricultural workers. ICICI lent $10 million to SKS and led multiple initiative. </li></ul><ul><li>SKS Microfinance is an innovative nonbanking financial company- </li></ul><ul><li>that has a variety of loan products, encourages membership of women, and provides loans of </li></ul><ul><li>$100 or less. So far it has loaned about $57 million to more than 200,000 people. It has also created a network of 8,000 self-help groups, each with 20 female members, to create microfinanced businesses. </li></ul>
  18. 18. <ul><li>Hypermarkets and access to cold storage supply chains for poor farmers: intends to build a nationwide retail network of 2,000 supermarkets and </li></ul><ul><li>1,000 larger hypermarkets based on a distribution supply system, an integrated “farm to fork” </li></ul><ul><li>logistics supply chain. Reliance will not enter the farming business. Instead it will be the “offtaker of last resort,” relieving farmers of risk. It plans to revolutionize both farming and retail by </li></ul><ul><li>investing $5.7 billion by 2011 to modernize both farms and stores. </li></ul>
  19. 19. <ul><li>Direct-to-home distribution network. Consumer goods firms such as Hindustan Lever are seeking new ways of doing business among the rural poor. Its Project “Shakti “recruits women- </li></ul><ul><li>to self-help groups that offer tiny loans—microcredit—to support a direct-to-home distribution network. The project already reaches 80,000 villages, and by 2010 expects to employ 100,000 </li></ul><ul><li>“ Shakti entrepreneurs,” covering 500,000 villages. </li></ul>
  20. 20. <ul><li>Low-cost Internet connectivity for poor villages: </li></ul><ul><li>Indian Tobacco Company’s e-Choupal initiative </li></ul><ul><li>has equipped more than 6,000 villages with computers and satellite connections to the </li></ul><ul><li>Internet—part of its agribusiness procurement network. Farmers can use the computers to </li></ul><ul><li>check prices for their products and sell online, freeing them from middlemen who take a big cut of farm earnings. </li></ul>
  21. 21. <ul><li>Drishtee.com: This initiative delivers fee-based e-governance, education, commerce, and insurance services to rural populations in northern and northeastern India. These services are </li></ul><ul><li>delivered through more than 700 kiosks owned and operated by local entrepreneurs. The International </li></ul><ul><li>Finance Corporation’s Grassroots Business Initiative is providing Drishtee with a grant to establish 50 new kiosks in Meerut, Uttar Pradesh. </li></ul><ul><li>Sources: Usher 2003; Shell Foundation 2003; Tata 2007; Economist 2005a, 2005b, 2005c, 2006; Sharma 2004; Bellman 2006; Prahalad 2004; Moreau and Mazumdar 2006. </li></ul>
  22. 22. <ul><li>The analysis indicates that :- </li></ul><ul><li>Leader innovators are tapping the opportunities of the innovative entrepreneurship and this sector has huge untapped potentials. </li></ul><ul><li>Very minimal involvement of Private companies with thinking that traditional business is safe business. </li></ul><ul><li>Only MNCs and some front runners IMNCs are showing interest thus, IE is a complete philosophy of profit is the output of the intensity of risk- if risk is high benefit is high. </li></ul><ul><li>IT is under utilization but now on way to process and in initial phase </li></ul>

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