The importance of innovation can be understood best from Henry Ford, who transformed the automobile industry through the development of the assembly line — an innovation that profoundly shaped the 20th century and characterises production, even today.
Growth and transformation in manufacturing cannot happen unless India embraces innovation. The Make in India initiative, intended to transform the country into a manufacturing powerhouse, will rely heavily innovation and benefit greatly by generating, protecting and utilising intellectual property (IP) assets. This, in turn, will widen the manufacturing base by induction of new technologies, new industries and expansion of existing ones. For Make in India to truly succeed, the industry has to recognise and act upon opportunities presented by technology-enabled value addition.
R&D spending
Interestingly, Digital India initiative also involves several pivotal components, like Smart Cities, e-governance, e-commerce, and expansion of digital infrastructure, all of which will benefit from innovation, including IP creation, protection and enforcement.
The chronic issues of low research and development (R&D) spending, low technology penetration and dependence on overseas inputs remain the bane of Indian industry. VK Saraswat, member of NITI Aayog, identifies R&D spending as a key factor in India’s pursuit of growth.
Total R&D spending still lags at less than one per cent of GDP. In Japan, South Korea or Israel, this figure is between 3.4 per cent and 4.3 per cent.
Tolerance for failure
Yet, the assumption that additional money will successfully address challenges is flawed. Innovation is not measurable by a metric which shows that one country has outspent another. What distinguishes companies in innovation-rich countries is a tolerance for failure that is fundamental to the creative process. Innovation is about establishing a culture that promotes experimentation and risk-taking.
India is ranked 29 out of 30 countries in the 2015 Global Intellectual Property Centre index, which measures commitment to innovation via intellectual property (IP) protection efforts. The Global Innovation Index puts India at 81st position among 141 countries. As such, the need of the hour is to give innovation a strong push.
Frugal innovation
Indians are not completely alienated from innovation — we practise it in the form of jugaad (frugal innovation). India has witnessed a gamut of frugal innovations ranging from Dr Devi Shetty’s path-breaking model of delivering affordable heart surgery at Narayana Hrudayalaya, in Bangalore, to the Tata group’s lowest-cost car, the Tata Nano. Jugaad can act as a building block in making an innovation hub of the country.
The Government has recognised the need to cultivate innovation and has taken certain promising initiatives, including the Atal Innovation Mission and Start-Up India. A National Skills Council, to oversee worker education and vocational training, has also been set up.
Innovation and entrepreneurship can be regarded as complementary, and some Indian firms are embracing innovation as an operational strategy, institutionalising innovation in the workplace through dedicated corporate roles. However, such initiatives alone may not be enough.
What needs to be done
To move further, the government should see its role as a catalyst of change, rather than a change-driver. It should introduce courses on innovation in schools, which can help stimulate curiosity among children at an early age. To leverage the strength and quality of university research, it should facilitate tie-ups between industry and premier educational institutes.
To make innovation a county-wide activity, ‘centres for innovation’ should be established, so that strategic priorities for innovation can be identified in each State. It is essential to establish a framework to promote NGOs and identify grassroots innovations, easing their path to success. To encourage idea generation, the government should set aside funds for the most innovative firms or practitioners in specific fields.
Reward-policy
Innovation should be made an integral part of a job by making policy changes. Rewarding risk-taking and research accomplishments by doling out financial incentives such as tax rebates can help engender path-breaking work in India.
We need to train managers to act as facilitators of innovation. To increase the potential for innovation, and sped up the inventive process, supportive infrastructure, such as incubation centres and innovation labs should be established. The government can ensure effective risk management by introducing easy exit policies. The experiences and insights of Indian researchers and scientists in Europe and the US need to be leveraged better.
By enforcing strong and effective laws with regard to IP rights that are consistent with international obligations, the government can protect the interests of innovators.
A strong push for innovation can help create the India of the future.
(The fourth runners-up are pursuing their PGP at IIM Indore)