Of course, India innovates. Is the scale good enough to meet India’s aim to be one of the top three economies in the world? After 75 years of independence, why has India failed to emerge as a global economic powerhouse? Of course, for that reason, India needs to innovate at scale. Does it mean that Indians do not know how to innovate or how to manage innovative companies? Ironically, according to the Times of India report, Indians had the top position in 13 global technology companies in 2021. Notable examples are Microsoft, Cisco, and Google. Despite it, an opinion article in economic times in 2020 came up with the observation that Indians do not innovate enough. Subsequently, The Waves shared its analysis. But India must innovate to make it an economic powerhouse. Hence, as emphasized by The Indian Express in 2022, India innovates at scale on its 100th birthday.
Grassroots and Frugal innovations are not enough
Indians have a rich history of grassroots and frugal innovations. Grassroots innovation capacity is at the core of survival in rural India. People do rearrange, reshape and connect whatever they find in their reach with their intuitive ideas and craftsmanship. Yes, it’s a vital means to develop tools to get their jobs done better. Starting from sprinklers out of discarded water bottles to shoes made from waste automobile tires, there are countless examples. To foster such innovation capability, India has come up with National Innovation Foundation.
Some of the notable examples of India’s frugal innovations are Sewage Pipe Home, Multi-harvester, and Tupik Bed AC. Pod-style homes built from sewage pipes are good in certain cases. But does it mean that all Indians are going to adopt it? Is there a scope for incremental advancing this idea so that it becomes a creative destruction force to home building all across the world? Furthermore, is it feasible for the innovator to sustain this innovation in the competition space resulting in growing revenue and profit-to-revenue ratio? Similarly, multi-harvester and Bed AC are useful in certain situations. But can innovators keep growing them with a flow of ideas so that they grow as creative destruction forces to existing competing products?
Such issues should be explored in other highly acclaimed frugal innovations, even winning national awards. Some of them are (i) Amphibious Bicycle, (ii) Mitti Cool, (iii) Jaipur Foot, (iv) Voice Box, (v) Bullet Santi, and (vi) Solar Rickshaw Home. Like others, these innovations are useful on small scale. But they are not amenable to continued progression through a flow of ideas to keep making them better and cheaper. Furthermore, they need to sustain in the global competition. Otherwise, these award-winning ideas are not going to scale up to make India an economic powerhouse.
Scaling up the Research mindset is not good enough to make India innovates
There has been, often, cited the urgency of scaling up research mindsets of Indian students. Of course, it matters. We should also acknowledge that Indian students have been doing very well in American graduate schools. More or less every major computer science and electrical engineering department of the US universities has Indian professors. Furthermore, a study finds that 44 percent of Indian students studying in US universities are in graduate programs, and 78 percent of them are in Science, Technology, Engineering, and Math (STEM). Such data indicate that Indian students have good exposure to the research mindset. But unfortunately, upon graduation from the US universities, most Indian STEM degree holders do not return to India. Even if they had returned, could they have made India innovate at a scale?
Increasing the R&D budget, publications, patents, and GII ranking are not sufficient
Yes, India’s R&D budget as a percentage of GDP is far less than many other countries. For example, India’s Research and Development spending of 0.7% of GDP is quite low. On the other hand, the USA spends 3%, and Israel spends 4.5%. More importantly, China has accelerated R&D spending reaching 2.6% of GDP. Does it mean that India should just increase the R&D spending to be in the league of R&D spending nations?
Of course, offering an additional R&D budget will increase India’s output in the number of graduate students, publications, and patents. Due to emphasis on innovation, patent filling in India has substantially increased over the last decade, reaching 58,502 patents filed in 2020–21, compared to 39,400 patents filed in 2010–11. During this period, patent granting in India has increased from 28,391 to 7,509. Of course, these numbers are far less than other notable countries. For example, China granted 530,000, while the USA granted 352,000, Japan granted 170,000, and South Korea granted 135,000 patents in 2020-2021.
But is there a linear correlation between these R&D outputs with economic growth? In many cases, the answer is no. Unless those R&D outputs are integrated into products and processes to produce them at a profit, they will remain idle. As a result, an increase in R&D spending runs the risk of wasteful investment, making the Indian economy weaker. Perhaps, for this reason, despite India’s uprising in the Global Innovation Index (GII) from 81 in 2015–16 to 46 in 2021, India’s economy has yet to show signs of proportionate prosperity.
India’s startups are yet to scale up to show that India innovates
In recent times, there has been significant growth in the startup scene in India. According to the economic survey report for 2021-2022, the number of newly recognized start-ups has increased to over 14,000 in 2021-22 from only 733 in 2016-17. This survey finds that between January and September 2021, India’s startup ecosystem received a funding value of $23 billion, producing 33 unicorns in only nine months. As a result, start-ups that were anointed unicorns in 2021 were 44. Hence, as far as the unicorn number is concerned, India is the third highest country, after the U.S. and China.
But these startups, including unicorns, are mostly in e-commerce and digitization of local processes. Instead of pursuing reinvention in taking over the global market, startup success in India is mostly for transforming local business processes in creating a market for foreign technologies. Hence, how far they will make India an economic powerhouse deserves further investigation. Furthermore, there has been a very high mortality rate, low innovation, and high reliance on investors’ money to sustain.
Outperform global players in the incremental innovation race
To make India innovates on a global scale, India must participate in the global innovation race. To create success stories, Indian companies must outperform global players. One of the options is to perform better than others in advancing existing products and processes. For example, after 20 years of the rollout of hard disks by IBM, Japanese Toshiba joined the race in 1977. Within 20 years, Toshiba outperformed all others, including IBM, to emerge as the global leader. Although, through import substitution-based protection India created an entry route for Indian companies, any of these companies have yet to show such success.
For example, despite having a large domestic market and protection, Indian automobile companies mostly remained busy in making, as opposed to incrementally advancing. Hence, Indian automobile companies have so far failed to be globally competitive. On the other hand, Japanese automobile companies have shown how to leverage incremental innovation to be global players.
To make India innovates, focus on reinvention and discontinuity
Another area for India to focus on is reinvention and leveraging discontinuity. For example, although India is desperate to create a high-tech industry, India’s strategy has been to offer subsidies and give protection to the exploitation of the large domestic market. On the other hand, both Japan and Taiwan have created innovation success stories out of reinvention and leveraging of discontinuity. For example, Japan made an entry into the global consumer electronics industry by reinventing them through the replacement of matured vacuum tube technology core with the transistor. In this mission, Japan focused on R&D for refining the technology, improving the product design, advancing production processes, and increasing the aesthetic look. Through the process, Japanese companies also established a strong coupling between R&D, publications, patents, and economic prosperity out of innovation. Such examples are extremely missing in India.
India has been after alluring Taiwanese semiconductor firms with as high as 50 percent subsidies in capital investment; but India is failing to draw a lesson from Taiwan. Like India, Taiwan did not go out with billions of dollars for alluring foreign direct investment in semiconductors. Instead, it detected discontinuity and started leveraging it through a flow of ideas, creating the market of homegrown ideas for silicon processing. Unfortunately, like India, most of the aspiring less developed countries are failing to draw such valuable lessons to leverage innovation to reach high-income status.
Have a synchronized national reinvention response to selected products and industries
So far India has been after offering subsidies to foreign high-tech firms and startups, giving protection to local firms, and increasing R&D funding for publications and patents. Yes, such efforts are contributing to the GII ranking. But, perhaps, it’s failing to make India an economic powerhouse by creating a flow of local ideas and selling them in the international market. With the given nature of complexities, as opposed to pursuing a generic solution through strengthening the innovation ecosystem resulting in a higher GII ranking, the focus should be on outperforming global competition through reinvention and incremental advancement of selected industries and, more specifically, products. Hence, to make India innovates on a global scale, India needs a synchronized response, in partnership with the Government, Industry, and R&D community.
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