Sunday, May 20, 2012

Innovation in India: Do we set our sights high enough?

During a discussion after a recent talk to a group of managers from one of India’s leading pharmaceutical companies, one of the participants suddenly asked me a thought-provoking question: do we in India set our sights high enough when it comes to innovation?

This question was prompted by some prior discussion on what is innovation, and what is not. This is not an unusual debate given the haze surrounding the notion of innovation. In recent years, a lightning rod for this discussion has been the Tata Nano – does it constitute an innovation or not?

Ironically, there is not much debate on this point in the western world: they think it does, because they see the Nano as establishing a price point that was thought to be inconceivable. They are driven largely by the outcome or impact, and are not overly concerned by how novel the Nano is as a concept.

Though the Nano project started with some revolutionary ideas such as a plastic body and decentralized assembly, in its final execution the Nano did not incorporate these. Girish Wagh, who led the Nano project for Tata Motors, is on record that “If somebody comes and asks me what fantastic innovation solved the problem, I would have to say there was none. It was small, small things that engineers did.” A fanatical commitment to cost reduction led the Tata Motors team to optimize on multiple fronts, resulting in a significantly lower cost, and hence attractive price for the customer.

So, while the Nano has perhaps not established new automobile technologies, it’s certainly an innovative product in the way it has been engineered.

But, let’s return to the question we started with: do we set our sights high enough when it comes to innovation?

A couple of years ago, India Today magazine asked me whether I could identify the top 10 technology or product innovations by Indian companies during the decade of 2000-2010. I accepted the invitation with alacrity thinking this would be an easy task . But when I applied the twin criteria of novelty and impact, I struggled to find 10 outstanding innovations.

Was this due to a lack of aspiration, or was it because we were not able to execute successfully?

The answer varies across sectors. The Indian pharma industry has seen some ambitious efforts to develop new drugs - Parvinder Singh at Ranbaxy, Anji Reddy at DRL, Glen Saldanha at Glenmark, and Kiran Mazumdar at Biocon have invested serious resources in their efforts to create new chemical entities, even if these efforts have not been commercially successful so far. The automobile industry has taken significant strides as well, but in a step-by-step fashion: companies like Tata Motors and Mahindra first developed new vehicles (Indica and Scorpio respectively) with considerable involvement of foreign suppliers and consultants, but have graduated to doing more internally in some of their recent product development projects. These two industries deserve high marks for trying.

But, in some other industries, there is clear evidence of what my friend Chandra Vikash once called an “aspiration deficit.” The IT industry is a case in point. It prides itself on its talent, and the leading companies are sitting on piles of cash, but there has been a lack of imagination and a reluctance to commit resources to high-impact innovation projects.

Many Indian companies tend to fear the risks involved in technology-oriented innovation. They see R&D as a bottomless pit that eats up lots of resources but often does not deliver commensurate results.

As a function, R&D has a credibility problem. The source of this is partly historical – public research institutions, where most R&D in India was performed in the past , developed a reputation for incomplete technologies or exaggerated claims. But the problem is institutional as well – very few of our academic institutions are oriented towards application-driven research, so when their graduates join industry, they struggle to cope with the demands of industrial R&D. Finally, there is an organizational dimension to this: there are many ways of managing the risks of R&D including building a robust innovation pipeline (instead of depending on the prospects of one or two innovations), using alliances, in-licensing and out-licensing (where appropriate), and understanding technology trends and evolving needs of customers well, but these practices are not widespread in industry.

There is thus clearly an important capability dimension to innovation. But capabilities don’t get built by accident. And this is where aspiration re-enters the equation. In the 1980s, India’s desire to improve the quality of telecommunication infrastructure by building contemporary switching equipment domestically led to the establishment of C-DOT. Many C-DOT trained engineers later became evangelists for robust software processes in the Indian IT industry. The Light Combat Aircraft programme launched in the mid-1980s has not yet met the Air Force’s needs, but it has built domestic capabilities in avionics, composite materials and airframe technologies.

Aspiration-led capability building is not restricted to the public sector. The Nano may not have been a commercial success so far, but I am sure the Nano engineering team will play a leadership role in automotive innovation in India in the years ahead.

Setting aspirations high is important for the future of Indian innovation. Not only for the outcomes that we all desire, but also to build more robust innovation capabilities. And, most importantly, for a potential demonstration effect. Indian industrialists are conscious of their image and don’t like being outsmarted by their peers. Once we have a few instances of successful, big ticket innovation projects, the momentum will pick up across industries. And, hopefully, if India Today comes back to me in 2020, the problem will be how to choose (rather than where to find) instances of successful innovation in India.


  1. Looks like the Government of India is indeed the most ambitious innovator after all!


  2. Sir,Craving for innovation does not come from seating on pile of cash and developing
    Methods/process to avoid RISK.
    Developing an android app to get updated cricket score or an app for agile service delivery is not innovation.
    Imagination (Some call it wild thinking) is the first step toward innovation and we somewhat lack that.
    For example I know of an Israeli company “Like a fish technologies” founded by Alan Bodner in 2001, that is currently testing an artificial gills prototype.
    It is not yet successful and may never become commercially viable but the thought leadership matters.

    We are genetically engineered to follow a conventional path and avoid wild ideas.
    We even don’t like the people who are not stereotype.