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A Lot of India’s Innovation is Invisible

A Lot of India’s Innovation is Invisible

In a recent article titled “A lot of India’s Innovation is Invisible” Samar Srivastava brings out that much innovation going on in India is not visible to the consumer since it is carried out in the B2B context. As skill sets improve, Indians will move up the value chain in innovation and will develop iconic new products. How much time will this process take and when are we likely to see “India Inside” on product labels?

Two co-directors of the Aditya Birla India Center at the London Business School have studied the innovation situation in India. It is true that no big bang innovations like iPod, Google or Viagra have emerged out of India. What then is the state of innovation in the country?

The biggest finding of the study was that much of the innovation going on in India is incremental and invisible. To begin with, there is process innovation. While the big idea may be invented in the west the process innovation going on here cannot be discounted since manufacturing is in Asia. While process innovation is not clearly marked as having originated in India, it is there nonetheless.

It has also become the norm for innovation on a product to be globally segmented. This makes it near impossible to tell where a product originated. Since most innovation in India takes place in a B2B context, end consumers rarely come to know that the innovation originated in India. One indicator of innovation is the numbers of patents filed by Indian subsidiaries of US firms – these have risen from 35 in 2001 to 800 in 2007.

Earlier only low end jobs were coming to India; however this has changed as skills get better. A typical example of expanding skill set is the progress of Indian IT majors on the back of the work obtained at the height of the Y2K scare. These companies have used the opportunity to move to the higher end of the IT value chain.

Many Indians working in the R&D labs of multinationals are acquiring new skills and consequently more complex work will come to India. Many Indian companies are doing outsourced work for global companies on contract basis. Dr. Reddy’s Laboratories for example has set up offices in the US to take outsourced work from Western pharmaceutical companies.

With declining call centers margins, companies like 24/7 Customer have switched to analyzing customer trends and predicting customer behavior using data mining methods. This brings new efficiencies to targeted sales. This transformation was waiting to happen because call centers routinely employed large numbers of overqualified people.

Presently, investment in R&D in India is low. Indian companies spend a fraction of what their American counterparts spend on R&D. But as Indian researchers working for multinationals begin to set up their own firms, India will get a Silicon Valley culture too and develop iconic new products.

Note: The preceding is a summary of an article found though our research, and is provided here with editorial comment for members only. Please see the full article at the following link for full original content.

The New Asia Innovation Team