India's Research Output: Quantity increases are sustainable, but enhancing quality is a bigger challenge

India’s share of world research output (3.5% in 2010) has been on an increasing trend since the late 1990s, but this growth is completely overshadowed by that of China. The citation impact of India’s research, though rising, continues to be below the world average. These are the main findings of a recent study undertaken by Thomson Reuters on behalf of the Indian government’s Department of Science & Technology (DST).

Access to Relevant Innovation Indicators

When I first started formal study of India’s innovation system a decade ago, finding relevant data on key innovation indicators was a major challenge. The global comparative studies of innovation such as the Global Innovation Index had not started at that time, databases were not that powerful, and even when databases existed, our access to them was limited. India’s own statistics painstakingly compiled by the Department of Science & Technology were restricted to research and development narrowly defined, and available with a lag of a few years. Given these data limitations, tracking trends in any kind of time frame that would be useful to policy-makers was a difficult, if not impossible, task.

Fortunately, that situation has changed. Globally, databases have become more sophisticated, database vendors see India as an important market, and are therefore making a serious effort to compile and present data that is relevant to us (and other developing/emerging market countries). Perhaps most important is the fact that policy-makers today realize the importance of such data in informing policy formulation.

Measuring Research Output

As I discussed in From Jugaad to Systematic Innovation, one of the important innovation indicators for any country is its research output. The simplest measure of a country’s research output is the number of research papers published by people working within its borders. While not all research is necessarily “useful,” a vibrant research community that furthers the stock of knowledge is considered an important pre-requisite of a modern nation. In R&D-intensive fields such as Biotechnology and Nanotechnology, this research activity often feeds into industrial innovation – e.g. today new drug discovery draws directly from the latest advances in different sub-fields of Biology. The ability to publish in journals with a strong review process indicates that scientists have inculcated the scientific method.

During a recent web search, I was pleasantly surprised to find a fascinating report on India’s research publication output during the period 2000-2010. This report reflects the results of a study undertaken by Thomson Reuters for the DST, and the DST’s conclusions from the study. Thomson Reuters is particularly well placed to make such a study as its Web of Science is one of the best regarded publication databases in the world. Only journals that are published regularly and have a credible review and selection process are a part of the Web of Science. (A competitive offering, Scopus, covers a larger and more geographically dispersed set of journals, but has been in existence for a shorter period of time and hence is not as useful to track long-term trends).

India’s scientific output, particularly vis-à-vis China, has been a subject of concern to the Indian science academies, the Scientific Advisory Council to the PM and the Indian government for some time. The first time I was exposed to these concerns was 7 or 8 years ago when I was invited by Dr. Mashelkar to speak on trends in China at a brainstorming session organized by the Indian National Science Academy in Delhi. It’s good to see the government diving into the details, and I hope we’ll see policy actions directed towards these issues.

Highlights of the Recent Thomson Reuters Report

• In 2010, India’s share of world research output was 3.5%.
• India’s share of world’s research output was on a decline from 3.1% in 1981 till the mid-1990s, and regained the 3.1% mark only in 2007. The current trend is therefore an ascending one. [As a benchmark, China’s share of world publications increased from 2.5% in 1996 to 11.7% in 2010, placing it at #2 globally!].
• In terms of disciplines, India’s share of world publications was highest in Agricultural Sciences, Plant and Animal Sciences and Chemistry in 1981. In 2010, the three disciplines in which India had the highest shares were Chemistry, Materials Science and Agricultural Sciences.
• Indian research still has relatively low impact, though this has improved over time. In 1981-85, India’s citation impact was 0.35 (compared to a world average of 1). By 2006-10, this had improved to 0.68.
• The disciplines in which Indian research has the highest citation impact are Psychiatry/Psychology (0.99), Engineering (0.95) and Physics (0.82). This means that the citation impact of research in India is below the world average in every discipline, but in at least two disciplines we are approaching the world average,
• In the period 2006-10, 20% of Indian papers received more than the world average of citations, and 35% received less than the world average. 45% of Indian papers received no citations at all.
• 2.7% of India’s papers received more than 4 times the world average of citations, and are labeled as highly cited papers. In 2006-10, Engineering had the highest proportion of highly cited papers (6.5%) and shows an upward trend on this dimension, while both Chemistry and Physics showed a downward trend in highly cited papers.
• India has 2.3% of the world’s researchers and accounts for 1.6% of world spending on R&D. India’s spending on R&D per researcher is about 80% more than that of China, but about half that of the US (in 2007, in PPP dollar terms).

What Needs to be Done

The good news from this report is clearly that the downward trend of research output that began in 1981 was arrested by the mid-1990s, and India’s research output has subsequently been on an upward trajectory. It is important that this trajectory be maintained.

The efforts in recent years to improve funding for Science & Technology, enhance the working conditions in academia and research institutions, and evangelise science education appear to have paid off. The government has programmes like INSPIRE that provide encouragement to budding young scientists. Tighter accreditation of the universities under the revised NAC guidelines and the new appraisal processes for faculty introduced by the UGC should also create pressure to enhance research output across disciplines. So, overall, I suspect that volume increases will not be difficult to sustain.

However, increasing quality is a much trickier issue. Here a more focused effort may be required. The Thomson Reuters report has classified different fields according to a combination of output and impact. There are three fields – Engineering, Physics and Materials Science – that are the “stars,” i.e. above the Indian average on both share of world research output and citation impact. These may be the best bets for the future. Three other fields – Psychology, Computing and the Social Sciences are above average on citation impact but not on output – these offer the opportunity to scale up without losing quality. Of course, a more careful examination of resources, distinctive research opportunities from India, and the existence of a critical mass of researchers will be required before research priorities can be decided upon.

Having higher impact is also related to which journals you publish in. Journals with high impact factors tend to have larger citation impact. Building the right research agendas, being a part of the right networks, skills and aspirations to publish in the top journals are important to be successful in such an endeavor. Some incentivisation to target higher impact journals may also help. At IIMB, our research incentives that are sharply skewed in favour of publishing in higher ranked journals have had some positive impact.

In expanding research output, we need to take some precautions as well. One is to make sure that we guard against fraud. Increased pressure for research performance and incentives linked to output will put our academics whose research skills are poor or rusty at a disadvantage. Some of them may be tempted to resort to fraud to meet institutional requirements for promotion. India is already known as a major source of research fraud, and we will need to put in place better verification and validation processes if we need to prevent this from spreading. A second and related measure is to put in place support systems like mentoring and faculty development programmes to help faculty sharpen their research skills.

Head Held High: Creating Dignity through Integrated Rural Economic Development

As Meghraj walked on to stage confidently to tell his story, the audience watched, and then listened mesmerized. If his story of moving from doing casual physical labour across India to working in a BPO for a major IT company was captivating in itself, the fact that he told the story in fluent English gave it the romantic touch of Eliza Doolittle. How did this transformation of a primary school dropout to an IT services professional happen? That’s the story of Head Held High (HHH).

Henry Higgins was able to transform one flower girl into a high society English woman. In keeping with the times, and the challenges we face today, HHH has much more audacious goals. In the next decade, the organization hopes to take 2 million Indians out of poverty.

Inspired by an Interesting Medley of Thinkers

HHH is inspired by an unorthodox yet attractive mix of thinkers. Their first source of inspiration is, of course, Mahatma Gandhi. The Mahatma’s great grandson, Tushar Gandhi, is on the board of HHH, and he gave an inspiring talk at the HHH event I attended a week ago. Drawing on stories from Gandhiji’s life, Tusharji emphasized the importance of humility (learn from others rather than thinking you have something to teach them), action (based on the fascinating story of the Dandi Salt March, and how it was first opposed by Motilal Nehru and others), and a spirit of service (“we are privileged to have the opportunity to serve”).

HHH’s second inspiration (maybe I should call it the first?) is Rabindranath Tagore. His moving poem, “Where the mind is without fear” remains one of the few that I remember from my school days. HHH’s name comes from the first line of this poem, and signifies the mission of the organization to help every Indian live with dignity. I can’t think of a better way of putting it.

HHH’s third inspiration is our former president, APJ Abdul Kalam. One of Mr. Kalam’s favourite projects has been PURA, providing urban amenities in rural areas. The PURA philosophy seeks to prevent large scale migration to urban centres, and to allow people to live closer to their roots. That’s undoubtedly difficult to achieve, and goes counter to the way today’s developed nations evolved, but offers an alternate, and attractive model of development. HHH hopes to create a network of globally-connected rural ecosystems in line with the PURA philosophy.

A management guru completes the quartet. During his three-decade professional career, CK Prahalad covered amazing ground from strategic intent to core competence to the idea he is best known for today – the fortune at the bottom of the pyramid. Though CK’s first formulation of this idea focused on the poor as consumers, after some robust criticism by Aneel Karnani and others he broadened its scope to include the poor as key economic actors. It is this latter notion that is strongly embedded in the HHH model.

The HHH Model

At the core of HHH, is a powerful training engine. HHH has developed intensive training methods that allows them to transform non English-speaking, school dropouts from rural backgrounds into qualified and confident English-speaking individuals who can join the global workforce. The training is completed in a residential boot camp at a district headquarters town. It’s a tough course – long days, and very little time off - but the outcome is undeniably good.

But HHH’s goal is not to send more people from rural India into our crowded cities. Instead, it seeks to find them good jobs close to home. HHH has worked closely with rural BPO service provider partners to find jobs for the people it trains. But HHH soon came up against a major challenge – rural BPO accounts for less than 1% of those employed in the BPO industry. Large corporations are uneasy about using rural BPO services fearing difficulties in control and oversight, and hence quality control. HHH has worked on some technological solutions to this problem including android platform based dashboards that allow the client to monitor key output and quality parameters in real time. This has helped ease client concerns.

The Bigger Picture

Of course, BPOs can’t be the only solution to the challenge of creating rural jobs. HHH understands that there need to be many other employment opportunities created. One opportunity has already been discovered in doing rural market surveys. Helping FMCG and other companies penetrate beyond the block level through last mile rural distribution is another possibility. But, creating all these opportunities can’t be a centralized process.

Another prong of HHH’s efforts is therefore to train rural entrepreneurs. If organizations like TiE can catalyse entrepreneurship in urban India, can’t something similar be done in rural India? HHH held an entrepreneurship workshop in Gadag last year – I saw the picture of a packed hall – and hopes to train high potential entrepreneurs from rural India (some of HHH’s top management, including CEO Madan Padaki come from an assessment background; this should help them identify these people!). But I was a little worried that I didn’t see a single woman either on the dais or among the participants in that Gadag event.

Ultimately, HHH plans to be the catalyst of rural ecosystems that generate jobs, sales and rural wealth. In a globalized world, these rural ecosystems will be connected to each other, and to bigger ecosystems elsewhere.  This will be the modern version of Gandhiji’s village economy, consistent with many of his principles, but aligned with the contemporary world.

HHH’s journey so far includes innovation in training methods and technology. It is likely that many more innovations will be required to make their dream come true. I will be watching them in anticipation…

Indian Industrial Innovation in 2013: A Mid-year Review

One of my first blog posts for 2013 expressed the hope that this would be the year for systematic innovation. Half-way through the year, this is a good time to take stock.

The Macro Situation

A quick look at the macro situation first. It’s been bad, much worse than most of us expected. High inflation, an uncontrollable current account deficit, the rapid slide of the Rupee (all three of these are, of course, related) and the recession in manufacturing (yes, the most recent GDP numbers show a contraction of the manufacturing sector!) are worrisome. In such a situation, firms’ posture towards innovation can take two paths – if innovation is seen as critical to a firm’s competitive advantage and a driver of growth, a firm could choose to invest more in innovation; but, if innovation is seen as a “nice to have,” discretionary expenditure, then a firm could choose to spend less than before.

I haven’t studied spending patterns across sectors, but I did come across an interesting report that FMCG R&D spends have been declining rather than increasing. The report suggested that FMCG companies are trying to increase the efficiency of their R&D, and tightening their belts to aid the bottom line.

In another prominent sector, Infosys, which took a courageous leap into the domain of innovation with its Infosys 3.0 strategy, now appears to be backtracking after the return of Mr. Narayana Murthy as Chairman. When I combine his comments about seeking more plain vanilla services business, and trimming flab to enhance margins, I see an obvious consequence looming – a cut-back on innovation investments.

Almost every time I speak to someone in industry who has worked in both Indian companies and MNCs, he comments on how Indian companies just don’t have the appetite for innovation investments that have medium to long term payoffs. That doesn’t seem to be changing easily.

The Pharma Sector

For innovation trackers in India, pharma is a key sector. The pharmaceutical industry accounts for more than 40% of the R&D expenditure by Indian industry. Here the news is decidedly mixed. On the one hand there is the good news from Zydus Cadila on the creation of a new diabetes drug for those who have high cholesterol – this appears to be the first “new chemical entity” from India to have crossed all the regulatory hoops of drug development. This is a welcome development considering that Indian firms have been involved in new drug development for 20 years. While my colleague Chirantan Chatterjee pointed out in his recent provocative talk on “Is 2013 an Inflection Point for Healthcare Innovation in India?” that Indian drug firms are yet to address unvalidated targets or technologically complex modules, that doesn’t, in my opinion, detract from Zydus Calida’s achievement.

There are other bright spots as well. I was speaking to the innovation head of a fast-growing domestic Over-the-Counter (OTC) drug maker the other day, and he told me that the company is investing in a structured innovation development process with a goal of 3 to 4X growth over the next few years. I hope this company is not just an outlier!

Unfortunately, there is a lot of bad news on the pharma innovation front as well, and this may outweigh the good news. The record fine of $500 million levied by the US FDA on Ranbaxy has brought the spotlight on manufacturing practices in India. Another major company, Wockhardt, has seen a ban on export of products from one of its plants to Europe. DRL’s new Chairman, GV Prasad, has put a brave face on this by saying that the increased regulatory scrutiny is good for the industry, but in the short run there is no doubt that this will result in higher costs of compliance. The NIH recently announced suspension of 40 different clinical trials projects in India. In parallel, the government is into a new round of price control. All this doesn’t bode well for the industry.

Multinational pharma has always been reluctant to invest in core drug discovery in India. The Glivec judgement and the compulsory licensing of the Bayer cancer drug to Natco have only reinforced this reluctance. MNCs were enhancing their investments in trials in India, but recent guideline changes that have made trials in India more onerous are bound to slow down this trend.

MNC R&D in India

I wrote about the cautious mood in MNC R&D centres in an earlier post. While MNCs across sectors are encouraging their Indian employees to be more innovative through innovation contests with attractive prizes, and focusing on a training and motivation (I have myself spoken at 5 MNC innovation events in the last quarter), there is no evidence of major new R&D investments in India. On the contrary, I recently had an interesting chat with the financial controller of a large MNC R&D center about how his parent company is trying to estimate the return on investment from their R&D investments in India!

The Future

Overall, this doesn’t seem to be a good time for R&D-driven innovation in India.  I hope this gloom is short-lived. India’s new STI Policy announced at the beginning of this year at last moves away from the R&D institution centric policy of the past. And India continues to have some innovation-related advantages. One of these is the ability to innovate at low cost. I recently ran into Dr. Sumantran, who chairs all the automotive initiatives of the Hinduja group, and he told me that the development of the successful Dost range of Light Commercial Vehicles by Ashok Leyland was done at an estimated one tenth of the cost that would have been incurred if their alliance partner Nissan had done it. Can Indian companies convert this cost advantage into a durable source of innovation leadership? 

Health and Finance for All: Sugha Vazhvu Healthcare & Pudhu Aaru Financial Services

On a nice sunny day early last week, I set off from Trichy to Thanjavur to visit the field site of two exciting social ventures. The build-up was good – the 50-odd kilometres from Trichy to Thanjavur took less than an hour to cover on the well-maintained four-lane National Highway 67. En route to the office of Sugha Vazhvu Healthcare (SVH) in Thanjavur town, I passed streams of older girls walking to high school and college, a vivid testimony of Tamil Nadu’s impressive social indicators.

My visit started with a useful introductory meeting with the SVH team.  If the ability to attract a good team is evidence of a successful organization, this meeting was a clear indicator that SVH is on to a good thing. The SVH team includes a public health specialist trained at Johns Hopkins, an intern from Yale, doctors, and alumni of the Young India Fellowship programme. I then got to learn about the financial inclusion initiative run by Pudhu Aaru Financial Services (PAFS) in the same district.

The Visit to Alakkudi

After the meeting, we drove down to Alakkudi village where SVH and PAFS are co-located right on the main street. Visible from a distance is the wireless communication mast that provides access to the IT hub that provides the backbone of both these social enterprises.

Healthcare

The SVH micro health centre has a simple design. An open reception area offers benches for patients to sit, and a Health Extension Worker (HEW) registers patients or updates records. Behind her is a small examination room. To the right is the doctor’s chamber. Conspicuous in this room are the laptop on a table in one corner, a big medicine cupboard, and a smaller examination bed that doubles up as a chair for dental scaling. Overall, quite neat and unfussy.

I found a few distinctive and impressive features of the SVH approach.

The first is the emphasis on preventive healthcare. While patients tend to come to the health centre only when they are sick, SVH tracks community members to see whether they have any incipient signs of “silent killers” like cardiovascular disease or cervical cancer. While they take pains to avoid unnecessary tests, at the same time their focus is on early detection so as to save patients from expensive and complex curative options later. (SVH has its own diagnostic facility shared between a set of micro health centres).

The second is the collection and maintenance of data. The establishment of each micro health centre starts with a community engagement initiative. Each rural micro health centre has a Health Extension Worker (employed from the local community) with an android-based phone who visits homes to enroll community members. Each patient enrolled has a neat bar-coded registration card that serves as a unique identifier. Since the health record of each patient is maintained on the health information system of SVH, and updated directly online each time the patient visits the health centre, SVH has a comprehensive medical history for each patient who uses its services. At an aggregate level, such data will be useful for identifying disease patterns and epidemiological studies over time. (In contrast, Government PHCs still use paper and files; even today, some of the “best” hospitals in India do not maintain comprehensive, digitized medical records of their patients).

The third is the push towards evidence-based medical care. As the doctor speaks to a patient and captures the patient’s symptoms, the diagnostic process is aided by different menu options on the doctor’s laptop. These options prompt the doctor on what questions to ask and also ensure that important possibilities are not left out.

A fourth (related to the third) is the effort to train and use Ayush (Indian traditional medicine) practitioners as doctors. They tend to be more grounded and willing to serve in local communities, thus addressing the problem of retaining doctors in rural settings. Many of them practice as allopathic doctors anyway, and here they are both trained as well as provided support (through the online expert system) to do a better job.

Financial Inclusion

While excesses by some black sheep have brought the microfinance industry under a cloud, there is no doubt that better access to financial services is essential for people to improve their lives. India’s fragmented rural demographic makes financial inclusion through the conventional banking system unviable, and there need to be alternate ways of providing financial access.

With developments in technology, and new sophisticated identification systems like Aadhaar being put in place, there is optimism about the future of financial inclusion. In the meantime, several efforts are afoot to solve this problem.

PAFS represents one such initiative. PAFS brings a “wealth management” approach to rural financial inclusion. If you have ever dealt with one of the urban wealth management advisory companies, you know what this means – it usually starts with a listing of your assets (and liabilities) and your income. It then moves on to understanding your aspirations, financial goals, and appetite for risk. It then puts in place an investment plan as to how you can achieve your goals and aspirations consistent with your risk appetite.

The PAFS template follows a similar approach. It has four stages – Plan, Grow, Protect and Diversify. It is IT-enabled with easy-to-follow templates that allow the PAFS staff to capture and visualize the needs of each of their clients. PAFS is not a bank or an NBFC, but works on behalf of banks under the banking correspondent framework. I saw several women waiting patiently for their turn at the PAFS office in Alakkudi.

Some interesting features that I saw – a suggestion/complaint box in which the customer has only to drop a slip with her mobile number – PAFS management will then call her back to understand her problem. This probably suits semi-literate customers well – they can write their names and phone numbers, but may struggle to write a detailed feedback note. 

The whole PAFS approach is neatly depicted on some graphics that are fixed neatly on the wall, thereby ensuring transparency of the process.

In Conclusion…

Having seen both SVH and PAFS in action, I would rate both of them high on effectiveness. But what I am not sure about is the financial viability of these models. I am not privy to the numbers, but the cost of some of the basic infrastructure like a dedicated communication link can’t be low. The cost of the highly educated team behind SVH must also be very high though I guess this could be spread across a large network once the model is scaled up. Since PAFS is not a bank or NBFC, it has to manage not on spread but on the commission paid by the bank for which it is a correspondent.  

But, I imagine that with some financial experts behind these ventures (Nachiket Mor, former Deputy MD of ICICI Bank, is one of the driving forces), they know what they are doing! SVH is part of a network of organizations under the umbrella of the IKP Trust, and works in close conjunction with the IKP Centre for Technologies in Public Health (ICTPH).

I particularly liked the simplicity, and integration of people and technology in the SVH model. I hope they are able to strengthen the links with public health and preventive healthcare further. In recent years, there has been too much emphasis on curative health, particularly in expensive tertiary care hospitals in cities. Some state governments like Andhra Pradesh are now paying out huge sums of money for treatment of their citizens in these hospitals, and I can’t see how this will be sustainable over time particularly with the predicted increase in “lifestyle” diseases. 

C-DOT Gets a Second Life, but will it be successful?

India has seen a telecom boom over the last decade and today has 700-800 million mobile phone connections. But, though thousands of crores of investments have gone into creating the infrastructure for telecom services in India, very little of the equipment has been sourced from, or manufactured in, India.

Why has this happened? The simple answer is that we failed to build up a competitive telecom equipment manufacturing industry in India. Till the 1980s, telecom was a public sector monopoly with the Indian Telephone Industries (ITI) set up to manufacture exchange equipment and telephone instruments. ITI followed the traditional model of sourcing technology from other countries/companies and manufacturing products under licence. Though it had its own R&D, it never succeeded in developing good products of its own. ITI’s woes were compounded by poor decisions on technology and investment – for example, ITI set up a crossbar exchange manufacturing facility in Rae Bareli just when this technology was being phased out elsewhere in the world. Later, ITI’s first move into modern electronic switching systems was located at a new plant in Mankapur (UP) which had absolutely no ecosystem to support it.

C-DOT: History and Achievements

The first serious effort to build indigenous capability in switching technology was the creation of the Centre for Development of Telematics (C-DOT) in 1984. Under the leadership of Sam Pitroda, C-DOT took on the challenge of developing Electronic Private Automatic Branch Exchanges (EPABX), Rural Automatic Exchanges (RAX) and Main Automatic Exchanges(MAX) suitable for Indian conditions (high temperatures, high dust levels, poor handling, power fluctuation, etc.) at low cost. While the first two were developed on time, and were comparable to the best in the world at the time they were developed, the MAX (a much more complex project) took longer, though it was ultimately able to meet the specifications of the then monopoly Department of Telecommunications (DOT).

The main impact of C-DOT’s technology was ushering in an era of nation-wide connectivity, providing the base for the huge network of “STD booths” that dotted the country by the late 1980s. The low prices of C-DOT’s equipment resulted in multinational telecom vendors lowering the prices of their own equipment as well. C-DOT played a stellar role in building local skills and capabilities – in the 1980s (remember this was before the software and IT revolution took root in India), C-DOT provided challenging opportunities for Indian engineers, and C-DOT projects were the first large projects where structured software development processes were used.

In its early years, C-DOT benefited from the relationship its charismatic founder Sam Pitroda enjoyed with Rajiv Gandhi. C-DOT got sufficient funding to develop its equipment, and was allowed flexibility in its organizational arrangements to pursue its mission. But full credit should go to Sam and his team for demonstrating the ability to develop complex products in India at a time when local capabilities were limited.

However, Sam’s rapport with the Congress government proved a mixed blessing when the Congress lost power and was replaced by the VP Singh and Chandrashekar governments. He was literally hounded out of C-DOT.

After completing the MAX project, CDOT went through tough times. Apart from the shift in economic philosophy of the country, the telecom environment in India changed, with the shift from the DOT (now BSNL) to private players; from fixed lines to mobile; and to convergence of information and communication technologies. It’s not surprising that CDOT found it difficult to cope with these changes. Globally, the telecom equipment industry also suffered serious convulsions after a peak during the dotcom boom resulting in bankruptcies (Nortel), consolidation (Alcatel-Lucent, Nokia-Siemens) and the birth and success of new players, particularly from China (Huawei, ZTE).

C-DOT: Second Life?

So, I was pleasantly surprised to find that C-DOT is today getting a new lease of life under the leadership of VVR Sastry (former CMD of BEL) and Vipin Tyagi. My first meeting with Vipin was fortuitous – we were fellow speakers at a seminar organized by a Ghaziabad college last year. We had some sporadic correspondence after that. I finally got an opportunity to visit C-DOT and interact with some of their people when I was invited to speak at a C-DOT internal symposium recently.

In terms of hard infrastructure, I must say that the government has provided the best to C-DOT. It has a fully-equipped, modern campus in South Delhi, a far cry from the rented premises where C-DOT used to operate earlier. I was impressed by the motivation and expertise of C-DOT’s young engineers – they look very committed to the challenging tasks they have at hand.

C-DOT’s bigger challenges today lie in the areas of strategy (technology, product choices) and business models. The current leadership of C-DOT has made some focused choices that make sense: upgradation of the existing installed network of 30,000 RAXs (which were built essentially for voice) to handle data with contemporary technology; a Shared Radio Access Network, which will allow upto three operators to share infrastructure, thus bringing down the cost of rural wireless access; and a Data Rural Application Exchange (DRAX) which helps provide people who are not computer savvy access to broadband information and services. A major thrust of work is on C-DOT’s GPON family of products, optical networking products that will create the long term backbone for advanced digital data access. (Picture below shows Vipin Tyagi and I standing in front of one of the GPON products.)

Many of C-DOT’s current products have an Indian flavor – they are designed to meet Indian requirements but incorporate current technology and have a low cost base. This is a good approach, one that is being followed already by leading Indian telecom players like Tejas Networks (see my earlier post) and even multinationals like Cisco (see another post on ASR901, Cisco’s successful cell site router, developed by Cisco in India). But, what is still not clear is how will C-DOT’s technologies and products reach the market?

Will C-DOT Succeed?

C-DOT is following the same approach they followed earlier – licensing their technologies to multiple Indian companies, who will then take them to market. I wonder whether this will work. In the case of C-DOT’s earlier switching products, remember that they were developed at a time when self-reliance was an official policy of the government, and there was a single (monopoly) telecom services provider owned by the government. Today, there are multiple service providers across the country, and the state-owned BSNL and MTNL are both in poor shape. Competition is fierce and there are frequent allegations of some multinational vendors “dumping” their equipment in India. It is not clear as to how C-DOT’s licensees will deal with this challenge. Pre-qualification requirements (such as proof of operation in networks for a defined duration) that were earlier used to delay and thwart the induction of IIT Madras’s TENET network’s solutions may come up again. And, though the new Preferential Market Access norms for products manufactured in India have been announced, it’s anyone’s guess how effectively they will be implemented.

I always felt, and continue to believe, that we made a major mistake in our failure to create one or more integrated telecommunication equipment companies. ITI never had distinctive technological capabilities of its own; but C-DOT as a technology organization always remains one step away from the market. This prevents it from dynamically responding to market and technology changes. It is instructive to remember that most Chinese companies had their origin in government laboratories, and were the result of spin-offs from these laboratories.

Today, it is not essential for a technology organization to do manufacturing itself. Most companies using electronic technologies (including iconic companies like Apple) rely on specialized third parties like Flextronics or Foxconn to take care of manufacturing. But decisions on technology, brand, products, marketing and pricing need to be taken under one roof in order to be competitive in a fast-changing marketplace. The licensing model doesn’t support such an approach.

C-DOT looks poised to create great technologies and products. But will these reach the marketplace?

Can Higher Education Drive Social Change? The Case of Ford Foundation's International Fellowships Program

In just a week from now, the curtains will close for the last time on the stage of the Ford Foundation’s International Fellowships Program (IFP), an ambitious effort to use higher education to promote social change. Under the IFP, agents for social change from a variety of disadvantaged backgrounds from 22 countries were provided scholarships for postgraduate education to some of the best universities in the world. The goal? – to equip them with the confidence, perspective, and tools to enable them to return to their communities and play a much more impactful role in their transformation.

India was a major participant in, and beneficiary of, the IFP. 330 outstanding individuals from India were granted the Fellowship since its inception in 2000. They come from parts of the country with the greatest challenges, and most of them faced multiple dimensions of disadvantage arising from caste, religion, gender, economic deprivation and physical disability.

My Exposure to the Potential of the IFP

I had the good fortune to experience at close quarters the potential benefits of a programme like the IFP. In mid-2009, the director of IIM Bangalore asked me to set up a structured mechanism to support the students admitted under India’s Persons with Disabilities Act. I started off by looking at what other leading institutions in India had done in this respect, and visited the Jawaharlal Nehru University in Delhi which had what was believed to be the most comprehensive infrastructure for disability support. But we figured out the most appropriate way of creating better access for students with disability only after I met Meenu Bhambhani at a meeting of the CII Karnataka Disability Forum.

In just a few minutes of discussion with Meenu, I found that she had in her head the entire blueprint for the creation of an Office of Disability Services (ODS). She saw the ODS as the nucleus for providing students with disabilities an educational and life experience on par with what other students received. Not only was Meenu keen to share this with us, she went one step further offering to provide seed support from her company to help us set up an ODS at IIMB. Over the next few years, Meenu was our mentor for the ODS as she goaded, coaxed and prodded us to set it up to the highest standards.

Meenu is one of the 330 Indian IFP Fellows. As part of the IFP, she did a Masters in Disability Studies at the University of Illinois, and that’s where she not only learnt about how an ODS works, but also saw one working at first hand. Before IFP, Meenu was an Assistant Commissioner for Disabilities in her home state of Rajasthan where she struggled to overcome bureaucratic constraints to make an impact. Today, she is the head of CSR for a prominent IT company, and she has spearheaded the creation of a disability-friendly workplace in her company resulting in it becoming one of the biggest employers of persons with disability in India. She has taken up the challenge of making India’s elite institutions of higher education disability-friendly, and after working with us at IIMB has shifted her attention to other highly ranked institutions.

If Meenu’s experience is anything to go by, programmes like the IFP have tremendous potential to be successful as catalysts of social change. But that didn’t happen by chance.

IFP Design

The IFP’s India office has recently published a wonderfully inspiring book titled Opening Doors that documents the philosophy, objectives, process and outcomes of the IFP in India. A few features of the IFP stand out:

• A four stage rigorous yet empathetic selection process to select the most appropriate candidates for the Fellowship. I was impressed by the efforts they took to spread information about the fellowships across the states they targeted. And, to uncover the potential of individual candidates. They realized, for example, that for people who grew up amidst considerable hardship, prior academic performance may not be a good indicator of scholastic aptitude and ability to cope with a challenging academic programme.

• Careful matching of Fellows to academic programmes and institutions. The IFP office in India worked one-on-one with each selected Fellow to identify the courses that would best suit their interests and domains of activity. They then worked with each Fellow on the entire application process.

• Elaborate preparatory coaching and study. Each Fellow spent several months on filling gaps in their knowledge of English and academic subjects prior to leaving to the University where they had been admitted. Fellows were also coached on how to adjust to a different culture, and about social etiquette in that country. All these efforts were very important because the Fellows had been out in the field for a long time after their initial degrees and were therefore not immediately ready to step into a graduate classroom in the US or UK.

• Close mentoring and continuous support. Not surprisingly, in spite of the careful preparation, many of the Fellows experienced serious challenges when they entered academic campuses in the developed world, as the expectations and experience were quite unlike anything they had seen before. Many of them also had to cope with personal challenges such as deaths of close relatives while they were pursuing the Fellowship. The IFP India office played an important role as loco parentis in helping the Fellows weather these challenges.

Some Reflections on Higher Education and Social Change

Higher education can undoubtedly benefit individuals. It is a powerful vehicle for economic stability and social advancement. That’s the rationale behind the scholarship programme of the Foundation for Excellence, an organization that I have had the privilege to be associated with. FFE provides scholarships for undergraduate education in engineering and medicine to students with outstanding academic backgrounds but disadvantaged economic circumstances. We have seen how FFE’s scholarships can transform the lives of these students and their immediate families.

But can higher education of an individual have a large societal impact? The designers of the IFP believe the answer is “Yes.” The short essays on individual Fellows in Opening Doors, and the survey conducted among the Fellows suggest that the opportunity to study in a high quality graduate programme outside India gave Fellows an opportunity to reflect on their lives and aspirations in a completely different setting. This allowed them to take a fresh perspective and re-calibrate their expectations of themselves. The experience not only sharpened their ability to think critically, but also gave them a new set of frameworks and tools that would enable them to enhance the scope of their impact. More than anything else, it increased their confidence and motivation.

While it’s still too early to do a detailed cost-benefit analysis of the IFP, if Meenu’s experience is anything to go by, it has changed the canvas on which Fellows can paint and the arena in which they can play. I, for one, will be watching with considerable anticipation, how the IFP India Fellows evolve.

But, to end on another more sobering note, I really wonder – when will educational institutions in India be able to provide an educational experience similar to what the IFP Fellows received in the US and the UK? Will that happen in our lifetimes?

Guest Blog: Hamsini Shivakumar on Innovation and Branding

Hamsini Shivakumar is a co-founder of Leapfrog StrategyConsulting, a firm that focuses on informed imagination for breakthrough solutions. She has more than 25 years experience in premier marketing and advertising companies like Procter and Gamble and JWT.

Innovation without strong branding is incomplete

In this blog post, I wish to put forward three ideas for intending innovators in India, to consider.

a)       A supply gap is not a demand gap. 

b)       Innovation without strong branding is incomplete.

c)        Even a radical innovation, which by definition is highly differentiated, needs to be well positioned and well branded to generate demand and grow consumption. 

In my experience, many professionals and entrepreneurs in India are good at spotting ‘gaps’ in the market.  However, the problem is that these are often supply gaps, spotted due to the entrepreneur extrapolating from his/her personal passions or capabilities.  As India is an under-supplied country in many areas still, it seems perfectly reasonable to believe that supply will generate demand automatically.  Or that it is a matter of concept ‘selling’, viz, pushing hard(er).

A couple of examples will illustrate this point.

E.g., I am interested in coffee being from a coffee growing area or agriculturist family, I travel abroad and see some specific types of coffees or coffee making products and I think to myself, these are not available in India, why not be the ‘first mover’ / ‘innovator’ to bring these in? 

E.g., I travel in the interior villages of UP, see how people struggle with power cuts and shortages and think, why not provide them with solar lamps – as far as I can see, solar lamps are not easily available here. 

E.g., I see full families travelling on two wheelers and think there must be a market for a Rs. One lakh car, if only someone were to make it. 

E.g., I see that there is no forum or portal for marketing knowledge to be shared and discussed, so I propose to launch India’s first and only marketing portal.

All of these ‘well-spotted’ supply gaps talk to the entrepreneur and innovator’s need to blaze new trails, be a pioneer, do something innovative which has not been done before and hence is exciting, with the seeming potential to grow into a big business over time.   

The million dollar, unanswered question at this stage is, will there be demand for this innovation?  And assuming that the innovator team could identify a set of potential target consumers for the innovation, would those consumers be able to give a reliable answer to the question of whether they would want this innovation or not – when they can’t see it, smell it, taste it or know it in a concrete way; hence clearly appreciate the value that it can bring to their life, vis-à-vis existing alternatives.  Concept testing may be valid for known categories and established markets, but does it really work for the radical, the new, the somewhat unknown?

With these thoughts in mind, the innovator often has to make a bet and get down to the hard work of translating the idea or concept into a product or service which can be launched into the market.  And that is what he/she does, with full enthusiasm, often cheered on by an excited media audience.

However, the potential consumer for these innovations, sitting at the other end, is oblivious to all this new supply that could enter his/her life and is going about his-her life in their usual way.  Which means that the innovator has to think harder about who is exactly the intended consumer and why would he-she want it compared to his-her existing alternatives.  The innovator must be prepared to be surprised because, experience shows that demand for the innovation can come from unexpected places and the market for the innovation could be built in unanticipated ways.  And sometimes, in fact, very often, as the track record shows, the innovation that has been created with so much passion, effort and commitment meets with a cold reception and the consumer demand-market potential turns out to be far less than was imagined it could be.

One of the key reasons that the supply gap sought to be filled by the innovation does not translate into high demand is that the innovator believes that his creation is new and different enough to sell itself.  Or rather, if ‘sold’ through distribution channels, the demand is bound to grow.  However, a critical step between the innovation converting to demand is not marketing and sales, but positioning and branding.  Even a unique product or service, has to attract potential customers through perception enhancement viz branding.  It not only needs an attractive name and identity, it also needs to be well-positioned with an attractive image, to draw its target consumer.  It has to reflect the aspirations of its consumer and align to the cultural current of the place and time.  It needs a communication campaign and a conversion strategy that will translate interest into purchase.

Two types of errors lead to misguided positioning of the innovation.  The first is the innovators passion and conviction that he ‘knows’ the customer and what the customer needs, better than the customers themselves.  Linked to this, is the unwillingness to be classified and compared, looking through the eyes of the potential customer.  The pioneer is resistant to accepting that in the buyer’s eyes, his innovation may not be so radical or unique after all.  Or if its uniqueness is perceived and accepted, the buyer is unsure about what to do about it, given that it is so new and unfamiliar.

One of the common views of branding as image is that it is akin to stylists who dress the stars and give them the most attractive ‘look’ for the context of their appearance.  However, in reality, positioning a brand is all about classification and framing.  It is about understanding the mental classification and categorization that the prospective buyer makes and the conclusions and emotional meaning that he assigns to the innovation based upon that categorization.  If this is not properly understood by the innovator and his campaign team, not enough time, attention and effort is given to this stage.  The launch team follows the direction of the innovator in defining the positioning, sometimes this can be right and sometimes it can be spectacularly wrong.

These errors of judgment by innovator teams, of mis-positioning their innovation, are not just what individual entrepreneurs can make, they can be made by large corporations too.  The Tata Nano is a spectacular case study that illustrates the above.  The Nano is a radical innovation in cars, the first of its kind in the world and so on.  However, the consumer who it was intended for, the first time car buyer in India, rapid upgrader from two-wheelers, was left under-whelmed by the launch positioning of the brand.  It had to be re-positioned with a young and trendy image; sales are still less than anticipated.  This happened despite two years of media coverage from all around the world.  In the case of the Nano, mis-positioning issues were compounded by product safety issues as well.  Godrej Chotu-kool, a small, battery-operated refrigerator intended for small town and rural markets is another case in point.

Thus, in my view, the company that intends to move from opportunistic growth strategy or the ‘jugaadu’ approach to sustainable innovation as a source of competitive advantage must be willing to invest its efforts in two directions:

•              Develop processes for innovating more consistently
•       Give importance to completing the offering to the consumer, through adequate focus on positioning and branding.  To get this right, setting aside innovator ego and having adequate humility to respect the consumer and potential buyer’s perception and value frames is a must.