It’s hard to believe that Indians do not innovate. Despite having demonstrated creativity, Indians failed to scale up domestic innovations as global success stories due to a lack of relentless journey of perfection. On the other hand, technology import driven industrial, defense, and space programs are failing to empower the industry to attain an innovation edge. Furthermore, India’s staggering numbers in publications, and startups, and GII ranking have little or no relevance to create scalable innovation success stories. Is the weakness in empathy, passion for perfection, and winning trait through the relentless journey of incremental progression failing to scale up India’s demonstration in acquiring technology capability and producing quality graduates into large scale economic successes?
Recently, in an opinion article of The Economic Times, it has been claimed that Indians do not innovate. On the other hand, the Innovation Foundation of India has come up with a database of more than 300,000 indigenous innovation examples in India. Furthermore, India generates more than $100 billion from IT service export. In addition to producing fine engineering graduates from the Indian Institute of Technology, India also established a rich space agency with satellite launching capabilities and mission to moon program, runs 38 laboratories of the Council of Scientific and Industrial Research (CSIR), and produces many industrial products locally. Besides, India is the home of world’s fifth-largest automobile industry. Furthermore, India has strong nuclear weapons and missile programs.
Indians do not innovate–are India’s indictors misleading?
On top of it, India has occupied the global 3rd position in Scopus indexed scientific publications and improved position in global innovation index to 48 among 130 economies, from the 81st in 2015. Moreover, startup India has recognized 36,000 startups. The addition of 4 startups per hour has made India the home of the 3rd largest in the number of startups, and also the 3rd largest global unicorn community. Despite such remarkable progress in key indicators, where is the merit to claim that Indians do not innovate?
India’s innovation success in preindustrial revolutions
In the preindustrial era, India was as innovative as many other parts of the world. Among others, India had a rich textile industry. Indian’s were good at making many products, including glass and ceramic. However, those innovations were around the art form of knowledge. And they used to make them using tinkering and craftsmanship capabilities. Those innovations were not scalable. Indians could not take the lead to transfer art form of knowledge into science and craftsmanship into engineering. As a result, they could not figure out a scalable growth path by making their products increasingly better and cheaper by integrating a flow of intellectual assets.
India’s role in industrial revolutions seeded the fact that Indians do not innovate
In the 18th century, British scientists opened the path of updating art form of knowledge into science. It started to unfold with the steam engine. On the other hand, they also succeeded in updating craftsmanship into mechanical engineering. The combination of these advancements led to generating a flow of ideas in engineering increasingly better steam engines at decreasing cost. They also used engineering to mechanize the production process. Consequentially, cheaper and higher quality energy from steam engines started powering mechanized production in producing higher quality industrial outputs at decreasing cost.
Hence, the British opened the scalable path of producing increasingly better-quality industrial products at decreasing cost out of the flow ideas—originating from science, technology, and engineering. As a result, the British industry started demanding a growing supply of natural resources and labor to scale up the wealth creation out of their technology ideas. As opposed to following the path of the British in crafting a path for creating wealth out of the flow ideas, Indians preferred to be a supplier of natural resources to fuel the British wealth creation machines.
The role of India in supplying natural resources continued till the beginning of the 3rd industrial revolution. There could have been a claim that colonial masters did not allow Indians to open the scalable path of wealth creation out of an endless flow of ideas.
However, after the independence in 1947, Indians got the freedom to take the decision in designing the future of their industrial economy. And the decision was to pursue an import substitution strategy. Hence, India imposed a high tax differential to encourage local production. State-owned and patronized establishments started to produce copies of once imported industrial products. The strategy was to import capital machinery and product designs for making them locally by adding labor—and natural resources.
India fails to improve imported technologies and design of products—the root cause of the reality: Indians do not innovate
Well, by adopting the strategy of import substitution, India opened the path of adding value to the industrial economy out of labor, in addition to natural resources. However, India failed to improve both production technology and designs of products. As the production process’s advancement leads to the reduction of labor, India decided not to advance capital machinery. Instead, their national icons kept promoting labor-intensive manual approach production, including their hand-operated Charka for spinning cotton into threads.
On the other hand, profit-making certainty out of protection did not create any incentive for pursuing ideas for improving the quality and reducing the cost. Hence, the quality of products produced in India did not keep improving. Instead, due to the aging of imported capital machinery, quality started falling. On the other hand, foreign counterparts in Europe, America, and Japan kept making their products better and also cheaper out of the flow of ideas. Therefore, India’s labor-based value addition strategy in developing industrial economy kept falling behind—let alone creating innovation success stories.
India’s CSIR’s research outputs and staggering publications yet to improve competitiveness
To open a new frontier of innovation, India developed the Council of Scientific and Industrial Research (CSIR). As of 2013, CSIR ran 38 laboratories or institutes, 39 outreach centers, and 3 Innovation Centres throughout the nation. 4,600 scientists and 8,000 technical and support personnel have enabled CSIR to get more than 14000 patents worldwide since its inception. During the last decade of the 20th century alone, CSIR has developed 1,376 technologies or knowledgebase. India’s academic community has also geared up scientific publications. According to the recent data, India has occupied the global 3rd position in Scopus indexed publications.
However, the contribution of CSIR patents in developing a globally competitive industrial edge appears to be not significant. There has been no global Indian innovation success story out of CSIR’s patents. Moreover, academic publications appear to be also disconnected from pursuing commercial interests. The underlying cause of the weak innovation capability of India’s staggering number of startups appears to be due to this disconnect. On the other hand, India’s automobile industry has been losing its edge due to the uprising of Chinese and Japanese capability in Electric Vehicle. Loss of the domestic mobile handset market to Chinese firms appears to be due to the disconnect between India’s publications and the innovation edge–that domestic firms need in the globally connected competitive market place.
India’s jugaads are not scalable—an indication that Indians do not innovate
There has been increasing interest to patronize Juggad—makeshift solution out of the integration of easily available technologies. It has been a national level showcasing of Juggad. These innovations are examples of the preindustrial age. Unfortunately, they are not scalable. Beyond tinkering based creativity and craftsmanship centric fabrication, Indians have not so far demonstrated their capability to scale them up through the flow of ideas and engineering. Indians cannot make them increasingly better and also cheaper out of ideas around science and engineering. Hence, Juggad cannot help much to empower Indians to create an endless flow of wealth out of innovations.
India’s space programs yet to fuel private sector innovation
India has developed a space program out of a catchup strategy. Technologies that India’s space programs demonstrate are highly matured and sourced from the commercial market. So far, India’s space program has not developed any new technology to allow Indians to create a global innovation edge by changing major products’ technology core. Moreover, India’s space program appears to be focusing on defense’s catchup strategy and demonstrating capability what many countries did more than 30 years ago. Hence, such a technology capability demonstration has little significance in advancing the innovation edge of India.
IIT graduates excel outside; those Indians do not innovate in India
Yes, many graduates of IIT and other institutions have been showing excellent performance in the USA and other countries. However, mostly their excellence has been as employees, as opposed to building companies from scratch. Moreover, those graduates failed to develop any global scale innovation success story in India. In addition to individual capability, National strategy, policy, and culture matter. It appears that India’s protection-centric labor-based replication and the dominance of traders’ culture of profiting from selling those which are innovated in other countries have formed a high barrier to empower Indians to innovate. India’s industrialists are busy making a profit out of protection–by keep replicating foreign products. They appear are not focusing on a relentless journey of perfection out of innovative ideas.
IT service export knowledge-intensive labor—not innovation
There is no denying that India has created success in developing a large scale IT service export industry. However, this is not an innovation industry. Indians have been selling time—knowledge-intensive labor– to foreign firms. This is similar to Bangladesh’s RMG, Malaysia’s high-tech, and Indonesia’s shoemaking for export.
However, despite having expertise in IT, India has lost it’s domestic mobile handset market to the Chinese. Apart from, India could not develop any significant domestic firm in telecommunication equipment. The recent predatory telecommunication war rather created a huge demand of telecommunication equipment in India. A significant portion of it appears to be a wasteful investment.
India’s superpower dream is based on the import of weapons
There has been a new doctrine that India is a superpower. India has been developing this superpower capability being a top weapon importer. By the way, India could have leveraged this aspiration for fueling the industrial economy—out of innovation. In this context, it’s worth of reviewing two examples. The first one is of Russia. In order to be a global superpower, Russia—former the Soviet Union—focused on developing a domestic edge in weapons by developing strong science and technology capability. However, Russia could not leverage it to fuel the innovation economy. On the other hand, the USA became a superpower by levering domestic military industry to power the innovation economy.
Indians do not innovate–Lesson for others
India’s protection-centric import substitution strategy out of natural resources and labor has failed to empower Indians to innovate. Instead, it has created a very powerful—rent-seeking–trader community. India’s innovation aspiration out of Juggad appears to be an attempt to take India back to preindustrial age. India’s publications, patents, and GII ranking appear to be highly disconnected from succeeding in building an innovation economy. On the other hand, Space and Defense programs appear to have no contribution to empowering Indians to innovate. Besides, India’s IT competence appears to be limited to selling time to foreign firms. It appears to have little or no relevance in building domestic innovation capability.
However, India does not appear to be unique. Many developing countries have similar or worse situations. It’s time to rethink, realize, and respond to get empowered to create wealth out of ideas. Instead of keep making the same products and expecting to sell them at the same or higher price, the focus should be on constantly improving–constantly trying to make products better and less costly out of the flow of ideas, not being satisfied with what we have.