Sunday, March 31, 2013

New Frontiers in Innovation? Vigyanlabs & Persistent Systems

As an observer of innovation in India, one of the challenges I face is assessing how the quality of innovation is changing with time. Some of the questions I keep asking myself are: Are the ideas behind the innovations more powerful than before? Are the innovations likely to have a greater impact? And, are we going to see companies from India attain global leadership in their respective fields thanks to their innovative prowess?

A couple of companies/innovations in recent months look particularly promising… Please decide for yourself whether these herald a new frontier in Indian innovation!

Vigyanlabs: The Power of Identifying the Right Challenge Book

Whether it is the Indian cricket team or students coming in to our MBA class at the IIMs, there is a perceptible shift away from the metros. It looks like this phenomenon is spreading to innovation as well. One of the more innovative companies that I have seen in recent times, Vigyanlabs, is based not in Bangalore, but in Mysore, about 130 km away.

In our recent book 8 Steps to Innovation, Vinay Dabholkar and I emphasized the creation of a challenge book to guide the process of idea generation. Powerful challenge books have their origin in pain, wave and waste.

The focus of Vigyanlabs’ innovation, intelligent power management of IT systems, straddles all three of these. The creation of huge data centres has been an important wave of the last decade that shows no sign of abating soon; these data centres generate lots of heat and then need strong cooling systems resulting in the use of huge amounts of electricity and contribute in a big way to global warming; and power bills are a big pain point for data centre operators. According to Vigyanlabs, in 3 years, the power costs of a server exceed the cost of the server itself!

In most IT systems, optimization of power consumption happens at the individual component level. For example, the chip maker optimizes power consumption of the chip, the operating system (OS) designer that of the OS, etc. Vigyanlabs’ distinctiveness is its focus on the application level. Their power management system comes with standard policies for selected applications, but also the option to customize where necessary. The use of application sensors is at the heart of their system.

A few things impressed me about the Vigyanlabs innovation. Firstly, their core idea is covered by a US patent (No. 8, 201, 007). Secondly, they have a clear quantification of the power and cost savings they are able to offer customers, based on a mathematical model they have developed (typical power savings for a data centre is 30%). Thirdly, they already have an OEM customer who is using their power management system.

Vigyanlabs won the 2013 Nasscom Award for Technology Innovation.

Persistent Systems: Successful Application of the Sandbox Approach

Pune-based Persistent Systems has been around for some time. The company’s CEO, Anand Deshpande, has been an articulate supporter of the need for IP-based and product-based innovation in India. Though I don’t know Anand personally, I have had the pleasure of being a fellow member of iSPIRT’s Founders’ Circle.

Persistent did some really nifty work with the trail-blazing TV show Satyameva Jayate (SJ) last year. Aamir Khan and the producers of SJ were very keen that the show should have a strong participative element continuing after the show, and also wanted to have a quick and ongoing sense of the audience responses to the (controversial!) themes the show raised. The challenge was to convert huge amounts of unstructured data (e.g. 1 – 1.5 million tweets, posts on FB and other messages after each show) into a reliable assessment of audience sentiment within just a few days (each episode was aired on a Sunday. The assessment had to be completed by the following Friday!). The challenge was particularly pronounced before and immediately after the first episode because the whole concept was new.

While sentiment analysis is not a new problem, SJ posed some complicating factors. Audience communication was in a mix of languages with English interspersed with the local lingua franca. The messages were emotionally-laden. Many messages (particularly those submitted to the show’s website and on FB) had long paragraphs, and partitioning these appropriately was a challenge. SJ’s producers wanted only 60 representative messages from the million+ submitted to be shown on the website – how were these to be picked? Further, since the show was dealing with controversial issues like child sexual abuse and disability, the messages displayed on the website had to be clear of any identifiers that could intrude into anyone’s privacy.

At the end of all this analysis, Aamir Khan and the producers were interested primarily in the 60 representative messages, a dashboard giving a bird’s-eye view of the responses, and, most importantly, an insights analysis that would suggest post-show follow-up and advocacy.

The key to this entire process proved to be what we have referred to as an innovation sandbox in 8 Steps to Innovation. Here the sandbox focused on the rapid creation of a dictionary after the first episode, and the development of a proprietary tool that would attach a sentiment tag (on a scale of -5 to +5) to each message. Rapid validation of the performance of this tool was an important step in making sure that the analysis of audience response was accurate. A 5 social scientist team (with a background in ethnographic research) made significant contributions to the entire interpretation process.

SJ was a highly successful show. It generated 15 million responses, from 8 million unique community members. Aamir Khan was able to take some of the issues to the highest authorities in the land and, in some cases, have almost immediate action taken to change laws and policies. All this was possible because of the rapid and accurate analysis of audience sentiments soon after each show, based on the Persistent system.

Monday, March 25, 2013

NK Firodia's life triggers a thought: Could we have enabled innovation much earlier?

When I talk about innovation in Indian industry, I usually start by recounting the story of Indian industrialization.

After independence, we faced the challenge of trying to catch up with a world that was far ahead at that time. Our national strategy was to set up heavy industry (steel, capital goods, fertilizers, etc.) and since we didn’t have the technological know-how to do so, we sought technological support from others. For geo-political reasons, our preferred source was often the Eastern bloc.

We lacked experienced workers and supervisors, so our first challenge was to “learn to produce,” i.e., to make the plants we set up deliver the right products. Later, we tried to find ways of adapting the processes to local materials and conditions, in an effort to improve productivity. In a few cases, we went beyond this to seek a competitive advantage in the particular product. In other words, all “innovation” was restricted to putting in place and then improving the processes that would allow us to produce the products we needed.

In this narrative, I usually say that things changed – and other forms of innovation such as changes in the product itself or the development of new products happened– only after economic liberalization changed the Indian industrial context.

Could things have been different?

But was this inevitable? Could India have embraced innovation much earlier in the post-independence era?

I got an inkling that this was possible when I read Nasir Tyabji’s book Industrialisation and Innovation: The Indian Experience some years ago. I can’t recall the exact details of what he wrote, but one chapter of his book referred to a Coimbatore-based company wishing to set up a factory to produce automobiles based largely on its own technology, but the government denying them an industrial licence on the grounds that it lacked the capability to do so. This was back in the 1950s.

I was reminded of this recently when I read a beautifully produced book on the life of Navalmal Kundanmal Firodia. (I got to see this book completely by accident – during a recent visit to Pune, I was waiting to meet Mr. Pramod Chaudhary of Praj Industries, and this book was on the table of his office ante room. Subsequently, I wrote to Mr. Abhay Firodia, and he was kind enough to send me a copy).

Navalmal Kundanmal Firodia

Navalmal was a Gandhian, strongly immersed in the freedom movement. But, after independence, he decided that his best contribution to the country would be to enter industry. His belief in the power of industry to re-build the nation reminds me of the mission statements of several Japanese companies that included the goal of re-building Japan through their efforts.

Navalmal and his brother Hastimal set up industrial units whose successors exist even today in the form of Bajaj Auto, Jaya Hind Industries, and Force Motors. The lineage of Kinetic Motors, subsequently acquired by Mahindra & Mahindra, and now Mahindra 2 Wheelers, can also be traced back to the pioneering efforts of Mr. Firodia.

Motorization to Ease the Pain

A discussion in the Bombay Legislative Assembly on the drudgery faced by rickshaw pullers led Navalmal to explore motorization of the rickshaw way back in 1947. Going through product brochures, he saw a 3-wheel goods carrier that inspired him to pioneer the auto-rickshaw. While the chassis for the autorickshaw came from Piaggio, the body was iterated on and developed locally. A memorable demonstration of one of the early prototypes took place before Pandit Nehru at the Bombay Congress session of April 1948.

Navalmal’s comrade-in-arms and technical support was none other than his brother Hastimal who was educated at College of Engineering Pune and Syracuse University. Reading about the duo reminded me of other famous business-technical partnerships such as that between Bill Hewlett and Dave Packard at HP, and Ibuka and Morita at Sony.

Navalmal and Hastimal took their theme of motorization to the next level when they sought to replace the bullock cart by the Tempo in the 1950s. The Tempo was designed and manufactured based on collaboration with a German company that was ultimately taken over by Daimler Benz. They spent what now seems as unnecessary time and effort in getting an industrial licence for this endeavour. I just wonder how much more they could have done if they had not been distracted by these constraints of licence-permit raj.

The Firodia group had to establish a high level of vertical integration to ensure localization of parts and reasonable costs. That was typical of industrial development in those days.

Other Efforts at Product Innovation

In 1958, in response to a proposal from the government to produce small cars in India, the Firodias proposed a 3-wheel car, virtually turning the tempo around. But the project never took off as government policy changed.

In 1969, the Matador was added to the Firodia product portfolio. And, in 1970, they developed the Luna moped, which according to this book, was the “first fully Indian automotive vehicle.” The Luna had quite a long and successful run till it was eclipsed by more advanced vehicles.

Along the way, the Firodias had a very visible and acrimonious split with the Bajaj family with whom they had started the scooter plan at Akurdi near Pune.

Looking back, it just seems that in a more conducive industrial environment, a team like Navalmal and Hastimal could have achieved much more. Between them, they clearly had both the business and technical acumen to build an innovation-based business venture.

NK Firodia: Much more than just an industrialist

Interestingly, Navalmal Firodia’s contributions were not restricted to his business ventures alone. He was an important part of automotive industry associations and the ARAI; he supported a long-term study of Prakrit and Jain religious texts; he supported institutions for the disabled; and he even wrote a note on the need for electoral reforms that had several interesting new ideas. He was one of Anna Hazare’s mentors, and set up the Hind Swaraj Trust to support Anna’s work. Clearly, his penchant for innovation and entrepreneurship found important social outlets as well!

Saturday, March 16, 2013

Dr. Mashelkar's Reinventing India: Inspiring, Food for Thought

I have been reading Reinventing India, a set of essays focused on India’s innovation potential by Dr. Raghunath Mashelkar. These essays are based on talks given by Dr. Mashelkar over the years, and have been compiled with his introductory notes.

I first met Dr. Mashelkar sometime in early 1994, when I visited the National Chemical Laboratory, of which he was the Director, for my thesis work. I remember being impressed by his obvious passion for what NCL was doing, his clear articulation of NCL’s plans, and his ability to engage energetically on a wide range of subjects. As Director of NCL, Dr. Mashelkar charted a new course for the laboratory, making it internationally-oriented. Looking back now, what is particularly impressive is that NCL embarked on this process in 1989 even before economic liberalization started, though obviously the economic deregulation process that started two years later provided formal policy support. Dr. Mashelkar and NCL can legitimately take credit for being the pioneers of providing outsourced R&D services from India – they identified this opportunity many years before the IT industry and pharma industry discovered it.

Later, as Director General of CSIR for over a decade from 1995, Dr. Mashelkar had the opportunity to make greater impact at the national level. I consider his most important contributions during this time to be raising awareness of intellectual property and its protection, and creating a foundation (with Anil Gupta) for inclusive innovation in the country.

I am very glad that Dr. Mashelkar took the time to compile and edit this set of essays and lectures. And, I recommend them strongly to anyone who has an interest in the future of innovation in India.

What follows is not a review of Dr. Mashelkar’s book, but a pot-pourri of thoughts that were triggered while reading it.

Will Access to Natural Resources or Knowledge Intensity be more important?

One of Dr. Mashelkar’s early points in the book is how industry and commerce is becoming more knowledge-intensive, and that knowledge-driven industry is becoming a major generator of wealth (p. 32). He calls for aggressive policies and initiatives to help India embrace this knowledge revolution. While I agree with his overall assessment, it struck me as ironical that the biggest locus of corruption in India is land; one of the major show-stoppers of industrial development is our inability to manage our coal reserves to generate power; many predict that the most nasty battles over the next 100 years in India will be over water; and the hunt for natural resources including oil and rare metals is taking countries like China and India to unfamiliar locations all over the African continent. In fact, our inability to manage natural resources may well thwart our ambitions of becoming a more prosperous nation. Knowledge is powerful, but natural resources are far from losing their importance in the world!

Labour Cost Arbitrage and Durable Cost Advantages

In many of the essays, Dr. Mashelkar predicts that India will become the centre of knowledge in the years ahead. While his optimism and earnest desire to see India ahead in this arena is motivating and infectious, I have difficulty in accepting that our lower costs will constitute a durable advantage. Already, in the IT industry, wages have gone up to the extent that our cost advantage over the developed world has reduced from 5:1 to 3:1 or even 2:1. It is only because out IT services industry has built other layers of advantage like superior project management capabilities, quality processes, domain expertise, and the ability to quickly adopt, diffuse and scale-up new technologies that it has been able to sustain its competitiveness. In fact, I could even say that in the past our low cost manpower was more of a curse than an advantage – we tended to throw people at projects rather than find more intelligent (and knowledge-intensive) ways of solving them.

Dr. Mashelkar argues that we should be proud that we have done so much in science and technology with so little resources. For example, he points out that our entire national Science & Technology budget is often lower than that of a single multinational company (p. 44). There is undoubtedly some truth that India is an efficient innovator – this has been found in many comparative studies of innovation across countries, and even at the level of companies (in its annual study of innovation, consulting firm Booz has identified India’s Tata Motors as a “high leverage” innovator). But I wonder whether there is a need to break down this cost advantage into labour and other cost advantages. Cost arbitrage from labour will not be sustainable, and we need to find more defensible forms of cost advantage. Looking back at history, I often think that Henry Ford was one of the most successful frugal innovators – the automobile assembly line enabled mass production that made the car an affordable product. In more recent times, the Toyota Production System and associated lean manufacturing techniques provided Toyota with cost and efficiency advantages that took almost two decades for others to emulate.

India vs. China

In The Rise of the Creative Class, Richard Florida argued that a region’s support for social diversity and maverick behavior is an important factor in determining whether it will be an innovation hub. Tarun Khanna has for long argued that India will do better than China in the long run because of our traditional entrepreneurial strengths and our support for entrepreneurial communities. Somewhat in this vein, Dr. Mashelkar argues that democracy, demography, and diversity are India’s major advantages over China (p. 63). While this line of argument is consistent with what we all like to believe, I wonder how it squares with what we see on the ground. Though China and India were neck-to-neck on patents awarded by the US Patent Office till 2005, subsequently China has moved onto a different trajectory altogether. China is well ahead in terms of research paper output as well, and the gap is, if anything, increasing over time. China is no slouch when it comes to start-ups either, particularly in emerging areas like clean energy or mobile commerce. This is an area that needs considerably more study, and I hope to return to it in a future post.

What will it take for a resident Indian scientist to win the Nobel Prize?

Dr. Mashelkar asks this question which, I am sure, has struck many of us at some time or the other. His answer? – the need to work on inter-disciplinary problems that cross traditional scientific boundaries; the ability to pose the right problems and questions; and strong aspirations. He encourages the cultivation of a spirit of irreverence that is needed to break out from tired old ways of thinking. Interestingly, he also suggests that a certain component of elitism is necessary – I guess what he means is that we may have to differentially support those who by their prior work have demonstrated higher potential.

Dr. Mashelkar’s recipe gels well with a discussion I recently had in class with a group of research scholars from Bangalore’s leading research institutions like the Indian Institute of Science and NCBS. We were discussing a case on Robert Langer, the prolific researcher, inventor and innovation catalyst at MIT. Professor Langer’s work has been used in more than 25 startups. He has more than 800 US patents (or applications) to his credit. And, hundreds of research papers. He has won almost every prestigious research award except the Nobel prize. Trained as a chemical engineer, he collaborates with physicists, biologists, chemists, and scientists from many other disciplines. His first major scientific discovery was a novel method to prevent angiogenesis (the creation of new blood vessels) in tumors, based on extracting cartilage from sharks. To start with, his papers were rejected (a problem often faced by those working across disciplinary boundaries) and his method questioned, but he persevered to silence both his academic and industrial critics! There is plenty of evidence of irreverence, asking the right questions, inter-disciplinary thinking and just dogged persistence in Langer’s life story (See “The Langer Lab: Commercializing Science,” Harvard Business School Case Study No. 9-605-017 and “Hatching Ideas, and Companies, by the Dozens, at MIT,” The New York Times, November 24, 2012, for more details).

The Power of Dreams

The power of dreams, of aspirations and intent well beyond one’s current resource endowments and achievements, is well known. Dr. Mashelkar’s good friend, C.K. Prahalad, was well known for his concept of strategic intent in which he and Gary Hamel showed how companies like Komatsu had used the power of dreams (and well thought out strategies!) to achieve international leadership positions. Dr. Mashelkar’s thoughts on Reinventing India contain several powerful dreams that should inspire all of us to strive to put India on a completely different innovation trajectory. Dr. Mashelkar is a great believer in the power of positive thinking, and repeatedly urges us not to give in to defeatism or self-doubt. Building creative confidence is central to building strong innovation capabilities, and Dr. Mashelkar’s message should go a long way in sowing the seeds for such creative confidence.

Sunday, March 10, 2013

Guest Column: Vijaya Kumar Ivaturi on "Winds of Change in Indian Ecosystem"

[In an effort to get a better sense of how the Indian innovation system is evolving, I plan to occasionally invite expert commentators to contribute to this blog. The first guest columnist is Vijaya Kumar Ivaturi (IVK). IVK is a co-founder of India Innovation Labs, and an over two decade veteran of the Indian IT industry. He was CTO of Wipro before he decided to pursue his own dreams a couple of years ago. IVK is actively involved with the Indian Angel Network, and has a ringside view of how Indian start-ups are evolving.]


The innovation landscape in India is changing for the last couple of years, and I am sharing my observations and analysis of these trends both as a practitioner and as an investor in this evolution.

I think there are four key changes in the last few years which resulted in the current state, andit is the point of inflection for innovation in India.

The first change is the shift in market dynamics, in India.There are original designs meant for Indian markets, which are built grounds up. They are no longer a tweak on an existing design of the developed world but a new India centric design. This is driven by the fact that India is now a significant market for consumption, in addition to, being a leading supplier of talent.

The second change is a technology one. In the era of internet platforms like amazon, there are few upfront IT costs to start a venture. With the proliferation of laptops, tablets, mobiles and broadband access, it is quicker for any entrepreneur to get started than in the earlier decades, without any latency for IT setup.

The third change is a significant one and a social phenomenon. Start-up career is now an acceptable career choice in India and is not limited to traditional rich or mavericks. This is perhaps the biggest factor for the changing innovation landscape in India.

The fourth change is the availability of Angel and venture funds in India. While they were present before, there is an influx of both new funds and mentors who come from business functions of different sectors in Industry and not limited to finance professionals. This results in the financing ability at an early stage of idea and supports it to turn into a scalable business. There are many incubation programmes in the country now for new start-ups, and they offer both patient and smart capital.

There are some key features of this new innovation that is taking place in India. I am listing some of the salient features from a start-up sector perspective.

o India and Bharat

    Most solutions include Bharat and not just India as a market. (India rural and Urban poor are significant segments for volume)

o Last mile

    Many solutions address this problem with low cost or frugal engineering solutions

o Content

    Traction building up for Indian language content.

o Government

    Many solutions are built around key Govt programs. (UID, NAPCC etc.)

o Local communities

    Cluster specific solutions are getting popular. (Homogenous crowd)
o Funding

    Social impact funds are gaining traction and are involved in the field.

Given the above trends, it is perhaps the best time to create a venture in India, and it is often stated that Bangalore is one of the top five start-up destinations in the world today.

As it is true for any ecosystem, there are challenges in Indian ecosystem, as well. There are some key challenges which make the solution engineering remarkably different from those designed for developed markets.

• Network access- The data rate is still lower and error prone.

• Power - Most of the solutions built for rural assume 15 day powercycle for charging.

• Skill sets - Interface design skills are lacking for new product ventures, and complex solutions built on foundation layers are difficult to engineer in India.

• Buyers - Buy only when it solves a real and urgent issue for them.

• Investor - The scale of investment in Angel funding is still lower than the valley.

• Branding - Dependence on big names for global branding.

Orangescape is a Chennai based company which offers a cloud based application platform as a service. It is perhaps unusual for an Indian company to offer a cloud based platform where others develop solutions for different segments. India is often seen as a country, which builds solutions on platforms from developed world.

Another example is an Indian product called Rural ERP, which offers ERP solutions in SaaS model, and supports more than six Indian languages. This shows that there is a market for non-English interfaces in India and challenges the correlation between IT usage and English speaking users.

There is a Mumbai based company called Bird Eye Systems, and they offer traffic solutions in different cities. The unique feature here is that they depend on other sources like cab companies for primary data while they compute the traffic patterns and arrival times in a city. These examples show that Indian start-up’s have evolved in concept, content and business models and balance the needs of Bharat with the aspirations of Indian metro consumer.

While it is good to follow some Indian success stories like the above, It is worthwhile to pay attention to where we differ from developed market systems, and this drives many of our local design choices.

• Lack of sectoral depth in the market as the top 2 or 3 companies in a sector dominate the field and the quality of the business in terms of revenue quality, governance and product offering drops dramatically beyond the key players.

• Bias towards size or volume as we are primarily a scale driven economy where being big is more valuable than being better.

• Functional view rather than performance view is our pre dominant mind set, and we pay more for features than for performance.

• Under developed in refinement and advancement, in choice and taste. As utility dominates our thinking preference, our tastes are not well developed for non-functional aspects of the system.

• Community based conformance in business and social practices. Social practice driven by local community has got unusually strong influence in our business methods.

• Trust in person is more important than trust in the system. This is a unique feature of any developing market where system level trust is absent or minimal.

• Living with chaos and vagueness every-day.The life in personal space is full of chaos while the life at work life is more defined. This paradox is amusing for any visitor in India. You may write kernel software in your work place, but you will still run for water tanker or cooking oil at home. In other words, basic living consumes a lot of time.

• We are more duty based society than rights based society, and this drives a lot of our work life balance decisions.

There are many other shifts in the ecosystem today, and one of them is the emergence of social science as a critical input to design many of the next generation solutions using technology. This is the move towards crossdiscipline opportunities which is driving unique and engaging collaborations across sectors, regions and subjects. I will elaborate more about this in my next blog, but it is sufficient to say that our formal learning systems have got a lot to catch up on this front.

Saturday, March 9, 2013

Innovating for the SME Market

Large companies are attracted by the size of the SME market, but struggle to create products that find traction with SME customers. In a recent column in Outlook Business, I explored this challenge and identified some ways to address it.

For Indian technological innovators, Internationalization is key to growth

Given the lack of depth in the Indian market, most Indian technology innovators have to internationalize to survive and grow. My recent column in The Hindu Businessline focuses on a few companies that have pursued this route successfully.

Sunday, March 3, 2013

Innovation in India will not flourish without demand

In my earlier analyses of the evolution of the ecosystem for innovation in India, I tended to believe that the main challenges were with the inputs to innovation (supply side) and the innovation processes within organizations. My assumption was that, post-liberalization and the new intellectual property rights regime, the demand side had improved. But some discussions and happenings in recent months are forcing me to re-think this position.

Consider the following:

  • On March 1, I attended an event organized by the Indo-American Chamber of Commerce in Bangalore titled “Local Innovation: Key to Globalization.” Professor Pankaj Chandra spoke about the transformation of companies in the Rajkot cluster like Patel Brass Works into flexible and responsive manufacturing firms. And, where do they get their business from? - largely from companies outside India.

  • After Professor Chandra’s presentation, a manufacturing entrepreneur lamented that in spite of offering quality and a competitive price he was unable to get any orders from the Indian market.

  • At the same event there was a wonderful presentation by Prashanth Sakhamuri of Hind High Vaccum Private Ltd., Bangalore (HHV). Started in 1965 out of the Instrumentation department of the Indian Institute of Science, it became a major supplier to Indian strategic programmes like Space and Atomic Energy. Some of HHV’s significant achievements include a hypersonic wind tunnel designed and executed with other partners to test space vehicles for re-entry; a rotary vacuum brazing furnace used for the GSLV launch vehicle (thanks to a unique design that allows for rotation of components during brazing, the furnace can finish the process in 1 cycle instead of 7 otherwise!) and an aerospace engine welding technology installation for the Sukhoi aircraft at Koraput. This is a completely robotic facility that uses a unique combination of an external robot and internal robots – the external robot is used to control the internal robots as there are small differences in the sheet metal configuration of one fighter compared to another. However, in spite of all these significant demonstrations of their technological prowess, HHV was finding it increasingly difficult to sustain itself on the domestic market alone, The CVC guidelines resulted in projects being given to companies with the lowest bids even though they often lacked the technological capabilities to execute the projects. Long term growth prospects looked uncertain, and HHV had to finally turn to the international market to control its own destiny.

  • At iSPIRT, we have been hearing more and more instances of how small Indian product companies are kept out by large (MNC) rivals by persuading customers to include experience and installed base pre-qualification criteria that a small product company can never hope to meet. We have put out a Blue Paper flagging these issues, and asking for policy changes.

  • Kishore Ramisetty of Intel’s Ideas2Reality programme recently told me about how a mobile Automated Teller Machine designed in India around an Intel chip had more than a million installations outside India before it started selling in the domestic market.

Other regulatory issues are also stifling innovation:

  • Revised clinical trials regulations issued by the government within the last month have brought the clinical trial industry to its knees. This was one part of the pharmaceutical innovation process that was getting some traction in India, but the recent changes in regulation though intended to stop illegal or unethical trials are only likely to result in legitimate trials shifting elsewhere.

  • Last October, an expert panel appointed by the Supreme Court of India recommended that trials of all genetically-modified crops in India be stopped for the next ten years. Even though the Supreme Court did not uphold this recommendation fully, now many state governments are setting up panels of their own to provide an additional layer of scrutiny to the central government’s process. While there is no doubt that food security and safety is important, most people would have serious doubts about whether this scrutiny by the state governments would be a scientific process, or just another rent-collecting activity.

As Sunil Mani has pointed out in his recent review of the new Science, Technology & Innovation Policy (STIP) in the Economic & Political Weekly, the STIP is focused on supply side initiatives. What all these instances I have listed above suggest is that without attention to the demand side and regulatory issues, none of our dreams for Indian innovation will be realized.