Final Report_

AFFORDABLE
DIAGNOSTICS
FOR
INDIAN
BASE OF
THE PYRAMID
MARKETS
A PILOT PROJECT TO CONNECT
FINNISH AND INDIAN DIAGNOSTICS
INDUSTRIES

Adalgisa Santos Supervised by:
Chi Zhang Teija Lehtonen MSc. (Econ.)
Giulia Centonze Dr. Mikko Koria DSc (Econ.) MBA (DesMgt.)
Ramsankar Muraleedharan
Tuuli Hakkarainen

R

INDUSTRY PROJECT 2010/11

ACKNOWLEDGEMENT

T his report has been prepared
with the ardent support and
contributions of many persons. The
Further, the team also wishes to
thank everyone who has been in-
terviewed during the project; the
project work was supported by Auli representatives from diagnostics
Pere, Chief Technology Advisor, companies, Indian specialists and
Tekes and supervised by Dr. Mikko contact persons from the non-
Koria and head of BoP service governmental organizations.
project, Teija Lehtonen. The core
team is composed of Adalgisa
Santos, Chi Zhang, Ramsankar Mu-
raleedharan, Giulia Centoze and
Tuuli Hakkarainen. Valuable con-
tribution and comments were also
received from Dr. Minna Halme and
Paula Linna. Our gratitude also
extends to the Department of Bio-
technology, India for their support
and help during our field trip.

AFFORDABLE DIAGNOSTICS FOR INDIAN BASE OF THE PYRAMID MARKETS //i

EXECUTIVE
SUMMARY

A ffordable diagnostics for
Indian Base-of-the-Pyramid
(BOP) markets is a key pilot under
project Affordable diagnostics for
Indian BOP markets. Beginning
with a background introduction,
holders and their interactions in
and across Finland and India.
Lastly the Infogram, the end
the larger Sustainable Innovations the key concepts of BOP in the outcome of the project is present-
at the BOP service project at Aalto Indian context, the diagnostics ed. It is a tool for companies to ask
University. The project was funded industry, and Indian and Finnish the right questions concerning
by Tekes, the Finnish Funding innovation ecosystems are ex- their suitability for the BoP
Agency for Technology and Innova- plained. This theoretical section markets (for the visualisations of
tion and set on the assumption is then followed by the main find- Actors Map and Infogram, see the
that Finnish medical diagnostics ings on the Finnish innovation appendices). It is supported by a
companies desire to expand their ecosystem focusing on the actors hints section which provides keen
markets while India shelters a huge in both the Finnish and Indian di- insight into the Indian BoP sce-
BOP market that needs innovative agnostics industry. The connec- nario based on background re-
and affordable diagnostic tech- tions within and across Finland and search and observations from the
nologies. The objectives were to India are also discussed. field trip. The Infogram is expect-
visualise the complexity of both Afterward, the report will bring ed to help companies test their
innovation ecosystems and provide forth observations and case exam- products and assess the expecta-
helpful information and tools that ples of the BOP market in the Indian tions on the Indian BoP.
enable organizations analyse dif- rural areas where the team con-
ferent aspects of creating new ducted fieldwork. Based on the
business at the Indian BOP. findings, the Actor Map, one of the
This report discusses the key major deliverables of the project,
findings and outcomes of the is used to visualize the key stake-

AFFORDABLE DIAGNOSTICS FOR INDIAN BASE OF THE PYRAMID MARKETS //ii

TABLE
OF CONTENTS

i. Acknowledgement
ii. Executive Summary
5. Strategic Management Tool:
iv. Table of Acronyms
Infogram
v. Table of Figures
// 5.1 What is the Infogram 21
1. Introduction // 5.2 The Application 21
// 1.1 Background 1 // 5.3 The Information 22
// 1.2 Research Aim 2
6. Conclusions and Future Research
// 1.3 Limitation of Research 2
// 6.1 The Results 25
// 1.4 Research Method 2
// 6.2 Suggestions for Future Research 26
// 1.5 Related Concepts 2
vi. References
2. Observations in Finland
// 2.1 The Actors Map: Finland 7 vii. Appendices
// 2.2 Finnish Diagnostic Companies 9
3. Observations in India
// 3.1 The Actors Map: India 11
4. Field Experience: Exploring
health care in Rural India
//4.1 Rural Areas at a Glance 15
//4.2 Observations on the Environment 17
//4.3 Observations on people and 18
mind sets

AFFORDABLE DIAGNOSTICS FOR INDIAN BASE IF THE PYRAMID MARKETS //iii

LIST OF
ACRONYMS

AIIMS All India Institute of Medical Science
BoP Base of the Pyramid
BHC Block health centre
CHC Community health centre
CDSCO Central Drugs Standard Control Organization
DBT Department of Biotechnology
DGHS Directorate General of Health Services
DCGI Drug Controller General of India
GVL Global Venture Lab
FDA Indian Food and Drug Administrator
ICGEB International Centre for Genetic Engineering and Biotechnology
ICMR Indian Council for Medical Research
IIM Indian Institute of Management
IIT Indian Institute of Technology
IISC Indian Institute of Science
NGO Non-governmental organization
PPP Public-Private-Partnership
PHC Primary health centre
Sitra The Finnish National Fund for Research and Development
SHC Sub-health centre
Tekes The Finnish Funding Agency for Technology and Innovation
TEM The Finnish Ministry of Employment and Economy
VTT The Technical Research Centre of Finland
WHO World Health Organization

iv AFFORDABLE DIAGNOSTICS FOR INDIAN BASE OF THE PYRAMID MARKETS

LIST OF
FIGURES

Figure 1.1 Income segments of BOP market worldwide (Hammond, Kramer, Katz, 4
Tran, & Walker, 2007) //3
Figure 1.2 Structure of an Innovation Ecosystem Aimed at Solving Problems //4
Figure 1.3 Innovation Ecosystem in the United States //4
Figure 1.4 Finnish innovation ecosystem //5
Figure 1.5 Indian innovation ecosystem //5
Figure 2.1 Street views of New Delhi, Spring 2011 //8
Figure 3.1 A Busy day in AIIMS, New Delhi //12
Figure 4.1 Community Health Centre and Rural Health Centre //16
Figure 4.2 Interviewing people in the Rural Village //17
Figure 4.3 Invisible Barriers: Border between castes is respected //18
Figure 4.4 Information Booklet for Mothers //19

AFFORDABLE DIAGNOSTICS FOR INDIAN BASE OF THE PYRAMID MARKETS //v

INTRODUCTION

T o provide solid ground on
the project, this chapter
begins with briefly introducing
new business (Prahalad, 2009;
Rangan, 2007).
Finland is a technology and in-
research on both Finland’s and
India’s innovation ecosystem,
then through visits to various
the background of this project. novation driven nation, and it’s representatives of the actors
The research aim, limitation and investment in the same has been within the system, we understood
research methods used in the ranked among the top three in their operational models and the
study are also described and the the world for quite a while (OECD associations operating between
third stage elaborates on the as- Science, 2008). Hence, we take the actors. Subsequently, we
sociated concepts including Base the model of the Finnish inno- also went deep into the Indian
of the Pyramid (BOP) and diag- vation ecosystem as a starting BOP community. We conducted
nostics industry. Finally, Finnish point for preparing the Indian interviews inside the villages in
and Indian innovation ecosys- market entry. For the BOP market Gujarat area, trying to make clear
tem models based on a literature in particular, a well-founded the needs of ordinary people at
review are presented. platform is a key prerequisite the BOP and their awareness and
for business operations. In this attitudes towards medical care
study, we intended to combine service, diagnostics in particular.
1.1 Background innovation ecosystem concept This study is based on learning
with the actual situation of BOP and understanding innovation
A wide range of literature to help Finnish companies and ecosystems and industrial net-
reveals the importance of large relevant organisations explore works, combined with a bundle of
population, but low-cost markets a proven business development practical experience for the first
which provide potential op- methodology. Keeping in mind hand material which we called
portunities and challenges for this purpose, we first conducted fact-finding process.

AFFORDABLE DIAGNOSTICS FOR INDIAN BASE OF THE PYRAMID MARKETS //1

1.2 Research Aim 1.3 Limitations of Research period of research part: Stake-
holder analysis, Actor-Resource-
Affordable diagnostics for All of the information and con- Activity analysis, and Actor Map.
Indian BoP markets is one of the clusions are based on the field work Based on the understanding of
pilot projects under the larger Sus- made by the Aalto University team. the complexity of the whole
tainable and User-Driven Innova- The discussion on the rural areas network, we further developed
tions at BoP Markets service of India is mainly based on one canvas framework tool which is
project at Aalto University. The region in India and there could based on the widely used strategic
project is funded by Tekes and un- exist variations across the country, management tool, Osterwalder’s
dertaken by four master´s level so the conclusion from this study Canvas. When the canvas tool is
students of International Design may not apply to other parts of used together with the Actor Map,
Business Management (IDBM) of India. Also, due to the limited time they are intended to facilitate the
Aalto University. Its aim is to help frame of 16 working days in India, understanding of the project ob-
Finnish diagnostic companies to it was possible to cover only a small servation. The result is also ex-
operate in a sustainable way in the part of research topic. The report pected to make contribution to the
Indian market, and also assist in aims to bring up relevant issues for Indian market entry for the Finnish
delivering affordable and innova- further research and does not guar- companies.
tive technologies there. Thus, both antee comprehensive information
countries will benefit from this regarding the Indian BOP market.
collaboration. Moreover, there exists dynamics 1.5 Related Concepts
This study has taken Finnish in the emerging economy such as
companies’ interests to enter the India, therefore the information 1.5.1 Indian Bop Market
Indian low-cost market as an provided here could become out-
example and analyses, observes, dated if no follow-up research is The Base of the Pyramid (BoP)
and elaborates on the recognition conducted. refers to the largest, but low-in-
of the entire industry network come socio-economic group. The
along with some first-hand infor- population of this group is still
mation of the Indian low-cost 1.4 Research Method growing rapidly (London & Hart,
market. It is intended to help 2004). According to the report
Finnish companies and organiza- This project was started with from World Bank Group (2007), the
tions to get some insights when Objective-Attributes criteria anal- BOP market constitutes four billion
building up the initial stages of ysis, conducted by means of Logical people whose annual incomes are
this strategy. Framework and Context Map. below $3000 (measured in 2002
This study mainly utilizes Actor Within this sub-section, we also international dollars and equiva-
Map as the visualizing tool to map utilised problem tree analysis for lent to €2090 as of July 2011). The
out both Finnish and Indian inno- better understanding of the core annual income contributed by BOP
vation ecosystem in Diagnostic problems and their relationships. market is around 5 trillion dollars
field. Also, based on the under- As the preliminary objective of the globally. The income segmenta-
standing of connections between project is to build a network map tions are shown in Fig 1.1.
innovation ecosystem and Indian which can visualize the collabora- However, even though there is
society, a strategic tool, Infogram tion between the two countries, it significant business potential in
was made to provide perspective is important to understand the this BOP market, the transnation-
on the process of setting up the stakeholders, their roles and the al business strategies cannot be
business strategy to BOP market connections among them in the directly used for this low-income
in Indian context. network. For these purposes, we market. BOP market differs from
utilized three methods to develop the other markets and the charac-
the project during the second teristics of the BOP market itself

2 AFFORDABLE DIAGNOSTICS FOR INDIAN BASE OF THE PYRAMID MARKETS

differs by nations and regions gregate value of Indian BOP (WBG, 2007), the BOP market for
(London, 2007; UNDP, 2008). For market, this provides huge poten- pharmaceuticals in Asia is $30.8
example, the daily income of Brazil tial for companies and organiza- bn (€21.45 bn), out of which $26.6
BOP is $3.35 (€2.33) while in China tions that possess advanced tech- bn (€18.53 bn) is from India. In
the number is $2.11 (€ 1.47) nologies that can better serve the addition, the BOP market accounts
(Hammond, Kramer, Katz, Tran, & needs of local customers. There- for 85% of the national expendi-
Walker, 2007). fore, it is an important first step to ture in health care; however the
The daily income of Indian BOP carefully observe the local market spending in health care from BOP
market as given by the report is and to identify business opportu- market is only 2.9% sector wise.
$1.56, and the BOP accounts for nities. Based on the observations This gap to some extent indicates
95% of the Indian population. Al- and findings, relevant business the business potential of providing
though the individual’s purchasing models and products are to be de- high-quality and affordable diag-
power in Indian BOP market is veloped for the market entry. nostics in India.
weak, yet the aggregate purchas- Diagnostics cover a range of
ing power implies significant busi- 1.5.2 Diagnostics Industry advanced technologies: optics,
ness opportunities. The annual microelectronics, industr ial
expenditure of the Indian BOP The diagnostic industry consists Design, nanotechnology, bimo-
market is more than 1.2 trillion of companies and organizations lecular recognition, materials
dollars, representing 85% of the that offer analytic or diagnostic science, mathematics, micro ma-
services, i.e., to apply chining and printing. Finland in
imaging and laboratory this area has its competitive ad-
capabilities to deter- vantage. In Finland, there are 30
mine the cause of an companies with approximately
illness. Diagnostics 2000 personnel in the diagnostics
plays an important role industry (Jouko, 2010). The annual
in health care sector. It net sales are about €350 million.
detects symptoms of The personnel and the investment
heath risks and disease in R&D will increase by 8% and 12%
at an early stage, by 2014 respectively. It is, there-
Figure 1.1 thereby decreasing the fore, expected that the combina-
medical costs and improving peo- tion of Finnish know-how in diag-
Income segments of BOP
market worldwide (Ham- ple’s health. Along with the pro- nostics and massive Indian market
mond, Kramer, Katz, Tran, & gress of the economic situation in would create a double-win situa-
Walker, 2007)) India, the spending in health care tion.
has been increasing. The Indian
diagnostic and pathological labs 1.5.3 Innovation Ecosystem
national expenditure. Please refer test services market was valued at
to page 128 of (WBG, 2007) for Rs. 66.87 bn (€1.05 bn) in 2008, Ecosystem is an environment
more details of these statistics. and is expected to reach Rs. 159.89 where there exist certain relation-
The Indian BOP market is mostly bn (€2.51 bn) by 2013, reflecting ship and interaction between in-
rural, and it is a poorly served, in- a growth rate of 18.9% during dividual, the living organisms and
efficient and noncompetitive 2009-2013 (Cygnus, 2009). nonliving components (Dai, Chen,
market. According to (WBG, 2007), Although the continuous moder- & Ye, 2007). Innovation is defined
many people in the BOP have to nisation and improvement in living as a new idea, a certain practice,
pay higher prices for the same or standards, the BOP market still or object that is created through a
even lower-quality goods and ser- play an important role in the Indian process that various factors such
vices. Considering the size the ag- health care sector. According to as talent knowledge, funds,


novation ecosystem in various
countries, it turns out that there
are mainly three key factors, i.e.,

Figure 1.2

Structure of an Innovation
Ecosystem Aimed at Solving
Problems.(Japan Science,
2011)

public community, industry com-
munity, and research community.
Public community refers to the
government and administrative
agencies who take the role of le-
gitimacy. They support the crea-
systems, and markets are related ganizations interact to produce tion of scientific knowledge and
to one another in a complex manner and use the innovations (Japan goods and services, and also
(Japan Science, 2011). An innova- Science, 2011). Due to the cul- develop new policies to promote
tion system is a “set of institutions tural and economical diversity of cooperation between the innova-
whose interactions determine in- various countries, it is not feasible tion organizations (Japan Science,
novation performance” (Kim & to find a universal model, even 2011). Industry community stands
Nelson, 2000). National innovation among developed countries. For for enterprises in various indus-
systems have been identified as example, innovation ecosystem in tries producing goods and ser-
the primary engine for innovative Japan aimed at solving problems vices. Research community refers
capacity and fast growth (Kim & (As shown in Fig. 1.1), while in- to universities and research insti-
Nelson, 2000; Freeman & Soete, novation ecosystem in the United tutes generating scientific knowl-
1997). Such systems are becoming States aimed at sustaining indus- edge (Japan Science, 2011). Each
increasingly open to innovation trial ecology (As shown in Fig. 1.2). actor plays a role in developing and
systems of other countries, as their Based on the observation of in- adopting innovation, and the in-
efficacy increasingly depends not teractions among
only on local institutions, but also them are also impor-
on global connectedness. To main- tant.
tain the continuous creation of Nowadays, innova-
innovation, we need to organize a tion ecosystem at
well-defined environment sur- national and regional
rounding innovation. Within the level is needed to
system, each member’s knowledge bring innovations to
of the innovation is dependent on commercial reality.
and subject to the “cycles of inter- And many countries
pretation” happening in the larger have realized that
community (Swanson & Ramiller,
1997). Figure 1.3
Inside the innovation ecosys-
Innovation Ecosystem
tem, networks of innovations and in the United States
communities of people and or- (Judy, 2009)


Figure 1.4 Figure 1.5

Finnish Innovation Ecosystem Indian Innovation Ecosystem

promoting national innovation and universities. The three parties form curately describe the operation of
entrepreneurship to maintain the close relationships and interac- the innovation ecosystem there.
economic growth is a common chal- tions through formal or informal Based on our previous analyses and
lenge for both social and econom- cooperation. Policy makers provide the field trip in India, it is not easy
ic perspectives (Charles, 2005). The for the company funding, policy to implement a sustainable innova-
benefits of this ecosystem include assistance, research centres, aca- tion ecosystem. In order to achieve
decrease the risk of innovation, demia and so on. Companies accept such a long-term system, it is
decrease the cost of sustaining in- the assistance from the policy simply not the close cooperation
novation, increase learning cycles makers, and at the same time, carry among the important actors. More
and diversity of innovation (Jeff, out various short-term or/and important factors. e.g. culture,
2008). Realising the needs and the long-term projects with research leadership, funding, policy, educa-
benefits of innovation ecosystem institutions. tion should be carefully considered
we were led us to first examine both and planned. The realisation of
Finnish and Indian national innova- Indian Innovation Ecosystem innovation process is not a quick
tion ecosystem model. fix, it requires a long-term gradual
According to CII (2010), due to process. First of all, it should start
Finnish Innovation Ecosystem the challenges in the fields of edu- from the culture, education and so
cation, infrastructure, water, that people can realize the impor-
According to Ilkka (2010), the energy and so on, it is difficult to tance of innovation. This topic is
Finnish innovation ecosystem is identify such an innovation eco- beyond the scope of this study, so
composed of three components: system in India. We have made our we will not expand our discussion
policy maker, company and aca- assumption of the model based on on that here.
demia. Policy makers include the our preliminary research as shown
government and relevant decision in Fig 1.3.
makers. Companies refer to those However, after the information
companies and organizations that from the field trip and interviews
are operating for profits from the conducted in India, it is found that
industry point of view. Academia our previous assumption of Indian
includes the research institutes and innovation ecosystem does not ac-


OBSERVATIONS
IN
FINLAND

I nnovation Ecosystem in our
work refers to a network of
interconnected actors working
Finnish innovation ecosystem.
Such relevant actors for diagnos-
tics industry are discussed in the
Tekes is one of the founders
of an important player FinNode,
which is the access node to hook
around a core platform of tech- following section and visualized up with partners in Finland. It is a
nology and business. Accord- in the Actor Map on the following community of Finnish public and
ing to our findings, the Finnish page. nonprofit organizations, made to
innovation ecosystem is well- enhance international R&D coop-
structured where the main eration and business (FinNode.
actors—policy makers, compa- 2.1 The Actors Map: Finland com). Along with Tekes, the
nies and academia—have their founders are Academy of Finland,
well-defined roles. In a relatively The Actors Map is given as Finpro, the Finnish National Fund
small country like Finland, coor- Appendix A. for Research and Development
dinating the roles and common (Sitra) and the Technical Research
objectives is possible and it is Concerning the connection- Centre of Finland (VTT). FinNode
gainful for every actor to cooper- enablers between Finland and is steered by The Finnish Minis-
ate towards a common goal, such India, we observed that The try of Employment and Economy
as aiding to understand a starkly Finnish Funding Agency for Tech- (TEM). India became the fifth op-
contrasting country such as India nology and Innovation (Tekes) erating country of FinNode in the
in terms of doing business there. has a critical role in connecting beginning of year 2011, which
We assume that it is important the private sector, academia and shows a growing interest towards
to understand the key players in research organizations; India has India as an important market po-
medical diagnostics sector and been one of the focus countries tential for Finnish companies.
the rest of the ecosystem and the of Tekes for some years already. FinNode is helping Finnish


1
2 3

4

Figure 2.1
Street views of New Delhi,
Spring 2011.

Photos by:
Tuuli Hakkarainen (1,2,3)
Adalgisa Santos (4)


companies internationalise and 2.2 Finnish Diagnostics almost every interviewed com-
connect to right partners in Companies panies mentioned cultural dif-
India. As part of this project, we ferences as one of the challenges
interviewed Finnish diagnostics In order to understand the or concerns. These challenges
companies. Based on these, one Finnish diagnostics industry five included differences in the way
can observe that, while there companies were interviewed. The of communicating and the issues
are many relevant issues that aim was to get a general picture in creating mutual trust when es-
the companies are well aware on the possibilities for them to tablishing a partnership far away.
of, deeper understanding on the venture into the Indian market There was also discussion on the
Indian markets is something or learn about their experiences, limited resources that small and
most of the mention to be still if they already were operating medium-sized companies have.
lacking. As such, the fact that in India. The companies have It was several times mentioned
FinNode included India as their high-end products with premium that large companies are able to
operating countries is significant quality, conferring them high po- expand to India because they are
in improving the flow of informa- tential but operating in India is able to take bigger risks.
tion within parties that are inter- complex, and has unique factors One can observe the impor-
ested in India. to be taken into consideration. tance of networking with rel-
In Finland, universities are Broadly conceived, the com- evant actors in Finland in order
working closely with companies panies were on different levels to achieve a common goal of un-
and research centres. University in their expansion to India; some derstanding the Indian markets
of Turku could be stated to have had already established partner- and thus enable company success
the leading position in the re- ships and certain others were in Indian operations. As we have
search in diagnostics in Finland. thinking about the expansion learned during the project, no
The connection is beneficial to all possibilities. They often men- one can survive alone in India
parties as companies are inter- tioned operations in China and and we emphasize the impor-
ested in the newest technology it appears to be a more familiar tance of support networks, such
and University of Turku is devel- market, but owing to the huge as FinNode.
oping new technology together potential, companies may want
with the best know-how on diag- to consider India as well. It was
nostics in Finland. as well widely known that the
Another interesting actor to markets of China and India differ
mention is Global Venture Lab highly, yet there was lack of in-
(GVL) which is an entrepreneurial formation on the Indian markets
and university-based business and challenges in practice. Also,
creation platform. Their Indian the fact that there is huge poten-
health kiosk program is further tial for diagnostics companies in
discussed in the Indian part. India was discussed with every
GVL is an interesting issue in the company.
Indian context, as it was founded Many of the Finnish companies
by three professors: one from stated that they aim to keep man-
University of Jyväskylä, another ufacturing or other key functions
from University of California and in Finland and primarily look
the third from Indian Institute of for distributors in India. Some
Technology (IIT). also expressed interest in col-
laborating with manufacturers
in India, typically if there would
be someone to finance it. Also,


OBSERVATIONS
IN INDIA

O n a quick note, the multi-
tude of actors and the level
of complexity of the Indian eco-
400 Indians, which interest-
ingly enough, is many times the
number of primary schools and
3.1 The Actors Map: India

The Actors Map is given as
system seem to be the main dif- primary health centres in India. Appendix A.
ferences compared to the Finnish (Source: The Indian Express,
innovation ecosystem. It is quite www.indianexpress.com) In the policy makers in The
characteristic of such huge and As part of the project the team Actors Map of India the most rel-
emerging countries to have a travelled to India for 16 working evant to diagnostics industry are
large number of actors; like, or- days to learn and understand the Ministry of Health and Family
ganizations (both profit and how the health care system works Welfare as well as Ministry of
nonprofit making ones), policy in the rural areas in the state of Science and Technology, under
makers, research centres, and ac- Gujarat. The field trip was an es- which the Department of Bio-
ademia, all of which are relevant sential part of the project, since technology (DBT) functions. DBT
to the diagnostics industry. In the official viewpoint (such as has connections with Tekes, and
the case if India, the presence of from the health officials) and the as revealed during our fieldwork,
non-governmental organizations actual situation (for example, ex- they are at the crux of collabo-
(NGOs) is more significant than plained by rural health workers) ration in diagnostics between
in Finland. According to a recent seems to differ and therefore it is Finland and India. DBT is also the
study commissioned by the gov- essential to go to the grass-root actor connecting policy makers
ernment, the number was esti- level and observe how the system to diagnostics laboratories and
mated at 3.3 million, accounting works. companies in India.
for all such entities until 2009. J.Mitra is chosen here as an
That is one NGO for less than example of an Indian diagnostics


company as it enjoys 70% market rectorate General of Health Ser- Figure 3.1
A Busy day in AIIMS, New Delhi
share in low cost in-vitro diagnos- vices (DGHS) play an important
tics in India and, it focuses on af- role and it administers Indian Photo by:
fordable diagnostics for the BOP. Food and Drug Administrator Tuuli Hakkarainen
We also found out in the course (FDA) and Central Drugs Standard
of the interview that they have Control Organization (CDSCO),
established collaboration with which leads Drug Controller their comments, the collabora-
the Finnish diagnostics company General of India (DCGI). These tion could be more intensive and
Medix Biochemica. The managing actors are relevant to all diagnos- might be something to develop
director of J. Mitra mentioned, tics companies working in India in the future. One may state that
that the main benefit from the (both Indian and foreign) as the this linkage would be beneficial
partnerships with Finnish compa- regulators. for fostering innovation within
nies for the Indian companies is In between governmental a country by joining company re-
the latest technology. and research organization is In- sources and university research
J.Mitra is merely one example ternational Centre for Genetic to benefit all. This collabora-
of an Indian diagnostics company Engineering and Biotechnology tion could be one of the building
and others that were mentioned (ICGEB) which has a collabora- bricks towards a more coherent
during the interview were com- tion with Tekes. ICGEB also has innovation ecosystem.
panies such as SpanDiagnostics, collaborations directly with diag- Another future possibil-
The Tulip Group India, Abbott nostics companies in India. ity could also be collaboration
Diagnostics, Bayer and Beckman Nevertheless, the collabora- between universities in Finland
Coulter India Pvt. tion between the industry and and in India. Some institutes
From the manufacturers´ the academia does not appear like the Indian Institute of Man-
side there is Orchid Biomedical to be very strong in India. From agement, IIM conducts research
Systems and to illustrate con- our interviews with professors at on the Base-of-the-Pyramid
nections to the policy makers. Dr. Indian Institute of Management markets. Other relevant insti-
Toprany Laboratory, serves as an (IIM) and the ICGEB, the link tutes to diagnostics are Indian
example of a private laboratory. seems not to be strong at least Institute of Science (IISC) and
From the policy makers´ side, Di- in the diagnostics field. Based on Indian Council for Medical Re-


search (ICMR) as they fund re- the state of Gujarat, and Save more successful and creative in
search on affordable diagnos- the Children as an example of an its operations directly with the
tics. They coordinate projects for international NGO with notable Indian BOP markets. In a discus-
World Health Organization (WHO) influence. sion with the Aegle representa-
in India, which is one example of Concerning other organiza- tives, we were informed that
the collaboration between a re- tions that are operating direct- they are considering expanding
search institute and NGOs. ly with the BOP, an excellent their business and according to
Other player in the health example would be Aegle Angels our field trip, there is demand
care system of India is AIIMS Foundation. They have health for innovative businesses around
which stands for All India Insti- kiosks called Aegle Angels Kiosks, health care to cover for gaps in
tute of Medical Science, which is which are stores equipped with the typically government-funded
a leading medical college and a vital measuring equipment. The health care system in the remote
large hospital in New Delhi. The strength of the kiosks is that they rural areas.
patients at AIIMS come from can be located close to the com-
all around India as the hospital munity in remote areas (www.
provides affordable health care aegle.org). They are centrally
which is free of cost for the pa- connected with hospitals. We
tients who are classified as un- wish to emphasize their work, as
derprivileged by the government. it is a good example of a business
In the non-governmental or- model in the sector of affordable
ganization (NGO) area, we took diagnostics for the Indian BOP.
the example of Deepak Founda- After an academic year´s research
tion, a local NGO, which is doing we haven’t been able to identify
significant work in rural areas in another entity which has been


FIELD
EXPERIENCE:
EXPLORING
HEALTH CARE
IN RURAL INDIA

T his section describes our
observations on the Indian
Base of the Pyramid (BOP) based
are divided into districts. Each
district is further divided into
sub-districts, which are known
huge volume, reaching the BOP
market is challenging. There are
diverse needs and possibilities
on our field work, which included differently in different parts in for new businesses; however, the
trips to rural regions near Va- the country. Villages in rural access to the people seems to be
dodara and Ahmedabad, in the areas are, along with towns in one the key challenges.
state of Gujarat. Our experience urban areas, the lowest primary
on the rural areas, villages, and administrative units of adminis-
health centres will be noted in tration (Census India). Therefore, 4.1 Health care system in
this section, along with exam- the many levels of administration Gujarat
ining the BOP and the mentality and divisions affect the organiza-
towards health care. In the rural tion of health care system in the The complexity of the health
areas we visited health centres of country. care system in India is visualised
all levels (see their description According to Census India in the Actors Map. In the rural
in more detail in Indian actors´ there are total 638, 365 villages areas in Gujarat, the health care
section and in the The Actors (Census Data 2011). As large as is organized on the state, region-
Map). 70 percent of the population live al and community level. The roles
in these villages, and they are of each centres are discussed in
Rural Areas at a Glance of different population density the following. The examples and
depending on factors such as emphasis is on our field trip to
India is formed of 28 states geography of the area as well Gujarat and villages which are re-
and 7 union territories. These as availability of land and water ferred to are located in the state.
states and the union territories (Census India). Owing to such


Block Health Centre and medical treatment and basic Figure 4.1
diagnosis are provided hence- Left: Community Health Centre
Above: Sub Health Centre
Block health centres are the forth. Whatever advanced diag-
administrative offices, which nosis they may require,patients Photos by:
operate in the same building to- are charged Rs.20. The centre we Ramsankar Muraleedharan

gether with a local health centre. visited was a Public Private Part-
Health centres report to the nership (PPP) between Deepak
block office, except for the sub- Foundation and the Government private clinics. But, neonatology
health centre, which operates di- of Gujarat and is an Integrat- diagnostics are yet to be avail-
rectly under a primary health care ed Child Development Scheme able.
centre. (ICDS) facility.
The main activities are focused Primary Health Centre
Community Health Centre on the mother and child (which
seemed to be the case in all Serving a population of nearly
The community health centre health facilities visited), and 30000, PHCs are arguably ill-
is a major health facility in the there is a gynaecologist working equipped when it comes to equip-
region, which provides services on spot, available 24 hours a ment and whatever might be
for a very nominal fee, this is to day. All basic diagnosis for this available seems not to be used
say almost free of charge. Pa- purpose like haemoglobin/HIV frequently. There is a general
tients are requested to take tests can be done in-house but physician available and the place
an OPD (out patient diagnosis) more advanced tests need to also serves as a storage facility
ticket for which Rs.5 is charged be referred to district hospital/ for vaccines. Like CHCs and all


other government medical facili- emergency. Apart from nurses, year calls for diagnostics that
ties, devices and medicines are they are also counsellors who are robust and can handle hot
provided by the state with an provide advice on HIV, family weather and humidity.
annual budget allocation of Rs. planning and related issues. Equally, the overall hygiene
100000 (€1592) which might be ASHAs also contribute greatly and sanitation levels are low.
hardly adequate. to this purpose. They are women Access to clean water is another
from the community and play a problem and future efforts on
Sub Health Centre key role and social mobilization water purification were stated by
and awareness regarding health the health officials as important.
Hardly a health centre, SHCs
resemble more a kiosk within
the village where a public health
nurse resides and provides basic
medical advice and treatment.
They cater to about 5000 people
and also act as a local centre for
dispensing the polio vaccines.
For instance, the vaccines are
taken to the houses by the nurses
along with an ASHA worker on
the second and third days of the
vaccination. The nurses are also
close with the community and
and safety. Figure 4.2 : Interviewing people
the ASHAs are from the local in the Rural Village
The environment of remote
village which facilitates access
rural areas is challenging in terms Photo by:
to people´s homes. Treatment is
of adequate and sophisticated Adalgisa Santos
done in SHC only when the doctor
health care. Drought is not un-
is visiting, the rest of the time
common, especially in Northern
hardly any equipment based diag-
and North West of India, which From interviews with health of-
nosis is performed and no devices
poses challenges with health and ficials, we learned that there is
are available.
food in the areas. In contrast, power supply in the rural villag-
during monsoons, heavy down- es. But, based on our experience
pour constrains the already de- and discussion with the people
4.2 Observations on the
ficient infrastructure with roads working at rural areas, power
environment
are flooding and muddy. Rural cuts are not uncommon, which
health workers mentioned this as is an important issue to take into
On the whole, public services
a key problem as ambulances are consideration when planning
provided under this system are
not always able to reach villages. health care. For example, as one
basically free of cost and cover
Besides, vector-borne diseases, cannot rely on the distribution
therapeutic and preventive
especially malaria, is a problem of electricity, health care equip-
health care. Vaccination kits and
during this time. The health of- ment is best when portable and
such are provided from the PHCs
ficials mentioned prevention and work with a back-up battery for
which the female health workers
cure of malaria and early-stage instance. Also, as rural health
deliver to the village people with
diagnosis of tuberculosis as some workers frequently make house
the help of ASHA workers. They
of the major areas of health care calls, anything easily portable is
visit each house in the village
that needs improvement. Harsh a working solution.
for this purpose or in case of any
climate prevailing for most of the


4.3 Observations on people a person from a lower caste has types of tests and diagnosis could
and mind sets towards touched a device, a person from be performed during the same
health care the upper caste may well refuse visit. Health workers told us that
to touch it. people try to avoid hospital visits
In the villages, the caste According to several interviews and “faith in destiny” affects
system cannot be neglected and and observations, one can argue their attitude towards diseases.
it seems to affect the every- that health does not seem to be Rural health workers (usually
day life. In one village which we a priority in India. For example, one to two women) have solved
visited there were four different even entertainment goes before the problem of people avoiding
areas for people from different health care. Education for boys the health centres by walking to
castes. First we met people from is another issue which families the villages to see the people in
the lowest hierarchy and we were may invest in before health care their homes. For example, nurses
told that their income level is low for the whole family. Like, when and ASHA workers keep record
as they do not own land and are we visited the poorest part of one on pregnant women and go for
mainly working on fields. And, on village, the father of the family regular visits to the women´s
top of that, there is no work all told us that he paid for his son to homes. The rural workers are wel-
year round and they are forced to go for a computer class. The lack comed to the houses as mutual
migrate sometimes even tens of of money might not always be trust has been built. As ASHAs
kilometres in order to find work. the reason for neglecting health are people from the village them-
An ensuing problem is that chil- issues. Still, as awareness on the selves, they are well trusted
dren remain absent from school. health care rises, this could then among the village inhabitants.
A concrete example of the caste lead to more understanding of The government distributes
system inside the village was that the importance of both preven- pregnancy kits free of charge. The
people do not cross the invisible tive and curative health care in health workers told us that they

Figure 4.3: Invisible
Barriers: Border between
castes is respected.

Photo by:
Chi Zhang

aim to promote the kits and en-
courage in their usage. However,
the usage rate is relatively low.
We were told that one of the
reasons for this is that as price is
the sign of quality in India, free
products are not trusted. There-
barriers. Even children who were people´s minds. fore, even a nominal charge may
first following us stopped and Currently, diseases are cured be beneficial in health care.
stayed in their own part of the as they occur, and even in a case Child nutrition is another issue
village. In health care and diag- of sickness, regular check-ups are that all the rural health workers
nostics the strict caste rule poses not typically followed. This could emphasized and health care for
challenges. For instance, sharing be taken into consideration when mother and child appeared to
a device or other items would designing diagnostics services be underlined both from the of-
not be practical across castes. If in a sense, that more different ficial point of view as well as at


the village level. One practical doctors in the
example of such initiatives in the rural areas was
rural areas was an informative mentioned fre-
booklet given to the mothers. quently by health
Form the booklet they can follow workers of differ-
if their child´s growth is healthy. ent levels. In one
Many (according to our research, rural area where
the average of 50%) of the women we visited, there
at the BOP are illiterate thus was a new, only
there are informative pictures in couple of years
the booklets as well. Using pic- Figure 4.4: Information old primary health centre built by
tures for communication seems Booklet for Mothers the government which now was
to be a relevant issue in every Photo by: empty due to the lack of employ-
product aimed at the BOP and is Adalgisa Santos ees. The fact that the daily life in
advised for diagnostics products a health centre is mainly run by
and services as well. Spoken com- nurses and other health workers
munication can be considered ef- doctors the same amount of with basic health education, puts
fective too. salary, so doctors tend to prefer emphasis on the fact that diag-
Concerning challenges, as we working in cities. Moreover, if is nostics in the health centres need
discussed with the rural health there is the opportunity to work to be simple and easy to use.
workers and DBT, there is a chal- for a private hospital, it is often
lenge in attracting doctors to the first choice because of higher
work in the remote rural areas. salary. The problem of not having
The government pays all public adequate amount of qualified


INFOGRAM:
STRATEGIC
MANAGEMENT
TOOL

A fter the analysis employing
the Actor Map had been per-
formed, we realized it was neces-
5.1 What is the Infogram?

The Infogram (given as Appen-
sideration of business at the base
of the pyramid.

sary to use a business approach dix B) is a tool for organizations
for analysing the outputs. As it which are planning to do business 5.2 Application in this
takes significant effort to develop at the Indian BOP. It helps gain an project
the business model, and with the overview of different aspects that
time constraints, we developed need to be taken into account There are two parts of the In-
the strategic management tool, before making a move and even fogram; the first being an info-
Infogram, based on the Osterwal- acts as a filter to check if they graphic questionnaire, which is
der Business Model Canvas. are actually ready for the market. referred to as the ‘infogram’, as
This chapter presents Infogram Alex Ostwerwalder’s well rec- shown in Figure 8, and a hints
as a strategic management tool ognized Business Model Canvas section which provides key
for analysing the market entry (Osterwalder, 2010) is used as the insight into multiple facets of the
to Indian BOP market. The first framework and the nine ‘building Indian BOP as shown in Figure 9.
part briefly introduces the Info- blocks’ also make an appearance The Infogram poses the user(s)
gram tool. Next, the application here. The factors, namely; key with a series of carefully chosen
of the Infogram in this project is partners, key resources, key ac- questions, which span the nine
described. The last part of this tivities, cost, value proposition, business building blocks, and can
chapter explains how to utilize revenue streams, customer rela- serve as a reflection on why and
this tool, and the information re- tionship, channels and customer how an organization is intending
trieved from the Infogram. segments cover basic business to do business at the BoP.
operations, and is a holistic con- The questions are further cat-


egorized into three colour-coded However, due to the very the field trip to India. Some are
segments of green, blue and red, complex nature of BOP markets in cultural insights, others factual
emerging from the line of the India which demanded such a tool data, yet all from the socio-eco-
same colour. Green stands for as the Infogram, it is not feasible nomic fabric woven around the
‘safe-zone’, organisational level to classify questions black and Indian BOP market. These could
questions like ‘can you scale your white. There are always overlap- be hard to find elsewhere, in any
production up?’ which the user ping and intersections and the theoretical references or busi-
is expected to be able to answer. most determinative questions, ness literature for that matter. As
Blue is for ‘hazy-zone’ questions like ‘is your offering affordable?’ such, using this part in conjunc-
which do not come directly under may fall under these. tion with the infogram will prove
the organization’s scope, but to be a strong tool in assessing
something they might have an the suitability of your offering or
idea about, or has been consid- 5.3 The Information organization with respect to the
ering. Examples would be ques- BOP and as a guide for contem-
tions like ‘what problems can A glance at this first part might plating any future explorations
you solve?’ and ‘have you con- leave the user(s) with an im- into the same. One can even chart
sidered partnerships?’. The red pression of how complex things their progress by marking the
or ‘ambiguous-zone’ questions can be at the Indian base of the white spots provided on the line
are the most difficult to answer pyramid, and it’s to assist the an- for each question.
and could be even beyond com- swering of these that the ‘hints’
prehension at the present. An section exists. These, again, span
excellent example would be ‘how all the ‘business building blocks’
to reach the BoP?’—so simple, yet and are based on real-life obser-
so startlingly difficult. vations that the team had during


CONCLUSIONS
AND
FUTURE
RESEARCH

T his chapter gives a conclud-
ing review of the study made
in this paper. A concise descrip-
From the Finnish side, col-
laboration with relevant players
seems be helpful for everyone in-
there appears to be a technology
gap, which has been indicated
by Indian companies and which
tion of what has been achieved is terested in expanding their oper- Finnish companies could tap into.
given and finally the implications ations in India. Therefore the role There seems to be a constant
and recommendations for future of FinNode seems to be of high need for new technology.
research are briefly discussed. importance since one could argue Although there are many chal-
that no small to medium organi- lenges in India, the huge poten-
sation can survive in India alone. tial attracts new business also in
6.1 The Results The ecosystem in India is a health care. The health kiosk idea
complex issue and this project is a concrete example that doing
With its rapidly growing popu- aims to give insight on the key business at the Base-of-the-Pyr-
lation, India serves huge poten- actors and issues concerning the amid is possible and the govern-
tial for new business around the key actors and their relations. ment is not the only possible way
diagnostics industry. The poten- Also, the cultural issues and to the health care system in rural
tial is possible to reach, with one other important factors in the areas in India. The Infogram tool
of the key elements being under- operating environment around aims to help companies test their
standing of the environment and health care are in the focus of the potential for the BOP markets and
the key actors in India. The Actors project at hand. To overcome the provide useful hints about India.
Map visualizes the complexity complexity, collaborating with
and relations between key actors Indian organizations and com-
in the diagnostics field. panies seem to be a good way
to access the markets. All in all,


6.1 Suggestions for Future In conclusion, we have pre-
Research sented a real Actor Map providing
links to health care actors in both
As the topic of our research is India and Finland, and based on
wide, there are many interesting understanding of the complexity
points for future research under of the innovation ecosystem, a
the topic. strategic tool is made that is suit-
able for building up first step into
• In the interviews with the Indian BOP market. The results
Finnish companies, there were achieved so far are satisfactory.
suggestions and questions on The feasibility and applicability
concrete issues that could be an- of this tool will motivate further
swered in detail if work continues improvement and research.
around the India project:
• Are there start-up compa-
nies in India that could lead to
future collaboration with Finnish
diagnostics companies? What
kind of business models would be
possible?
• How does the health care
and diagnostics in the urban poor
areas work? Does it differ from
that of rural India?


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AFFORDABLE DIAGNOSTICS FOR INDIAN BASE OF THE PYRAMID MARKETS //vi

APPENDICES

APPENDIX A

vii AFFORDABLE DIAGNOSTICS FOR INDIAN BASE OF THE PYRAMID MARKETS

APPENDIX A

AFFORDABLE DIAGNOSTICS FOR INDIAN BASE OF THE PYRAMID MARKETS //viI

APPENDIX B

vii AFFORDABLE DIAGNOSTICS FOR INDIAN BASE OF THE PYRAMID MARKETS

APPENDIX B

AFFORDABLE DIAGNOSTICS FOR INDIAN BASE OF THE PYRAMID MARKETS //vii

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