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September - 2013 - issue > In My Opinion

Is India Innovating Fast Enough?

Jayaram Pillai
Managing Director-National Instruments (India, Russia and Arabia)
Wednesday, September 18, 2013
Jayaram Pillai
National Instruments (Nasdaq: NATI) is a producer of automated test equipment and virtual instrumentation software. Founded in 1976, the company is based out of Texas and has a current market capitalization of $1.14 billion.

A friend of mine asked me this question sometime back, ‘Is India Innovating Fast Enough?’. As I started thinking about this, I soon realized that innovation is a highly loaded and excessively used word. To the extent, that is often considered as a cliché. It’s high time that we go back to the basics and try to understand the basic definition of this word and how it applies in Indian context.

A Google search on the definition of innovation yielded 62,500,000 search results with 200+ definitions in the first 10 pages. The Organization for Economic Cooperation and Development (OECD) and the Statistical office of European Communities (EuroStat) published the third edition of their manual on GUIDELINES FOR COLLECTING AND INTERPRETING INNOVATION DATA. This manual defines innovation as the implementation of a new or significantly improved product (goods or service) or process, a new marketing method or a new organizational method in business practices, workplace organization or external relations. The global innovation index looks at both the business outcomes of innovation and government's ability to encourage and support innovation through public policy.

As per the 2009 rankings, India ranks number 64 in this index. India has a rich tradition and history of innovation. Starting with the invention of the number zero, to Nalanda and Takhshila Universities, to scientists like Ramanujan, Bose and Raman, to the father of our nation Gandhiji. You were probably intrigued by my use of Gandhiji in this list. But if you think about it, Gandhiji brought in innovation through his application of a non-violent approach to independence. Post-independence, somewhere along we seem to have lost the race, even though our founding fathers rightly invested in education and scientific research. Some exceptions are our successes in the space program and milk revolution. However, a lot more can be done.

A big challenge today is that the best brains in developed nations are trying to solve problems for the rich; who in my opinion really do not have problems to solve. Innovation should be driven at the grass-roots levels by small and medium enterprises which are more closely connected with the challenges of India. Problems at the bottom of the pyramid can be best solved by such SMEs. It is often very difficult for an incumbent to come up with disruptive innovation because their success is bound to a business model, which thrives on maintaining status-quo. At best, incumbents can indulge in sustaining innovation, which brings about systemic improvements either in process or product. SMEs do not suffer from such shackles. This type of push for innovation is what will drive the growth of more SME entrepreneurs in India. However, it’s easier said than done. There are three key challenges facing such SMEs today. Mainly it is availability of finance, marketing and access to affordable technology.

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