INDUSTRY NEWS India’s Engine of Innovation
As India strives to become the next big innovation hub, it faces challenges ranging from bewildering regulations to educational shortcomings and inadequate infrastructure.
“ T
he thought that there are not enough people in India may sound strange for a country
whose population is more than 1 billion,” Nirmalya Kumar says. “But, when you are doing R&D
and product development work, you need scientists, you need engineers, you need Ph.D’s, and in India these people are in a very small group. The country has been unable to ramp up its educational infrastructure to get enough of them in the pipeline.” “India has succeeded brilliantly
in the past 20 years in breaking up operations that formerly had to be done in the same place, he says. Indians figured out how parts of tasks could be done in India, taking advantage of low costs and high expertise, and then reintegrated. For example, he says, You may need to cook your hamburger in New York, but your table reservation can be made through India, and your bill processed in Bengaluru”. “When it comes to innovation,
India is taking advantage of a similar partition of labour. In the old days, he says, global innovation always took place in the developed world, where the company headquarters were located, aka the U.K., the U.S. or Europe”. “Today, global companies typically divide the development of a major project into distinct pieces. One part might be given to China to develop, another part to India. For the Boeing 787 Dreamliner, the technology for landing in zero visibility was designed in India. This approach has been a boon for India, where innovation centers in the past typically focused on creating products for the Indian market. These days, India boasts 750 R&D
4 IMT April/May 2014
and innovation centers where designers and engineers are working on global projects”. “Historically, India has displayed
great energy for commercial ventures and despite many roadblocks. India has always been a highly entrepreneurial nation, Kumar says. and they are naturally inclined to start businesses. Under the British Raj, however,
Indians faced oppressive restrictions on owning their own businesses. While independence in 1947 lifted some of them, India was left with such a rigidly controlled economy that many of its entrepreneurs chose to go
abroad. Eventually, practically every motel in the U.S. and every little mom-and-pop store in the U.K. was owned by Indians”. “Today, while India has seen a remarkable economic rise, many hurdles remain before it can become a top world center for innovation. For one thing, there are too many regulations and in some states, it can take as long as 180 days to register a company. That’s unacceptable, and other challenges include poverty, educational deficits, and infrastructure shortages”. Kumar spent his childhood in Calcutta free from the distractions
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of TV and telephone. When he was 15, he picked up his fathers copy of Philip Kotlers classic textbook Marketing Management, and from that moment on he wanted to do something in marketing. Kumar has gone on to write three books on marketing, and two on doing business in India. His newly published sixth book, Brand Breakout: How Emerging Market Brands Will Go Global, combines both of his main themes.
Nirmalya Kumar is an internationally known authority on doing business in India, and professor of marketing at the London Business School.
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