Location: London Business School (London, United Kingdom)
Date: April 23, 2009
Innovative India: Creating value and opportunities
INDOLINK has attended the 7th Annual India Business Forum at the superb facilities of the London Business School (LBS) located at the doorstep of Regent's Park in London. The subject in this edition is Innovation in India.
Sanjeev Sanyal, well-known Indian economist and advisor to Deutsche Bank, looks at the Indian history and points out that its civilization (like it happened to other civilizations such as Roman, Chinese, etc..) began a long road to decline when one thousand years ago they decided to close its doors to the world and focus only internally, developing infinite self-imposed limitations. According to Sanyal India, after a millennium of continuous decline, has finally opened its doors to the world, not only economically but also culturally, thus increasing their ability to innovate. Through this opening India, if not the guaranty for success, holds a real chance to achieve a globally determinant position.
In the first discussion panel Alastair Newton, Director & Policy Analyst for Nomura International,
says that innovation is and has always been present in India. As an evidence of this he introduces an Indian expression and, like others, quite impossible to translate: jugaad. People are encouraged to use some "jugaad" when faced with a blank wall, or a difficult problem. Jugaad is creative improvisation, a tool to somehow find a solution, ingenuity, a refusal to accept defeat, initiative, quick thinking, cunning, resolve, and all of the above. The Indians have an instinct for jugaad, to find a solution to a problem (extract from the book Being Indian by Pavan K Varma). The necessity and the limited resources require the use of innovation every day. There is a lot of innovation at the micro level but not enough at the macro level.
Some of the reasons that were exposed for a lack of innovation at the macro level and a low registration of intellectual property are:
• Inappropriate patent legislation
• High bureaucracy
• Corruption
• Poor governance
Referring to the investors and FDI they mentioned that in the current situation of global crisis, most surely FDI will increasingly come from China and the Middle East.
In the second panel they presented several successful cases of innovation related to India. It is worth mentioning the case of Reuters Market Light whose director is Amit Mehra. Reuters has developed a system of personal information for rural India (which accounts for around 70% of the total population) through SMS to mobile phones. Farmers, who subscribe for about $ 5 per month, receive 3-5 SMS daily with information about prices, weather and markets for products and areas in which they are interested and which they have previously chosen. In their own words, this tool has enabled them to win and/or save large amounts of money and not to feel excluded. The scope of this service is 220,000 subscribers, which in turn report to share information with 5 more farmers, so the impact accounts to a million people.
Ramesh Vangala, Katra is president of a diversified group of companies and is an example of innovative companies in India. The group covers welfare, agribusiness, marine, leisure & lifestyle and technology sectors. Among the created companies is Kerala Ayurveda Limited, the only full spectrum, listed ayurveda company in India.
After an excellent Indian cuisine lunch, LBS professor, Costas Markides awakens the audience with an entertaining presentation on "Strategic Innovation". The Cypriot teacher conducts a discussion on key aspects that promote an innovative organization, which can be summarized in: Incentives, Culture, Structure and People.
He suggests that the real problem in the organizations to innovate is the lack of action by all. Everyone has ideas, but too often the implementation fails. Innovation must come from each individual, it must be forced pro-actively, without waiting until the environment conditions are optimal. As an example, he cited the Nespresso product which was invented almost two decades ago and almost dismissed for a lack of commercial success. The determination of a director of Nestle, who was convinced of the potential of the product, finally made the product to become the success it is now.
The following speech was delivered by Dr. Rakesh Mohan, Deputy of the Reserve Bank of India and member of the G20 Working Group "Enhancing sound regulation and strengthening transparency." Dr Mohan said the financial sector in India is healthy because they have been conservative in their policies and have no toxic assets as other countries. Also FDI has not declined in India after the global crisis.
Contrary to what some experts suggest, he said that India does not maintain protectionist policies in the financial sector. Their policies encourage equity flows and foreign investment. Their main concern and, therefore, control it’s in the debt flows.
He states that a country like India, where a large percentage of the population still lives below the poverty line, must maintain conservative financial and economic policies for the welfare of hundreds of millions is at stake. Countries must look inwards to its specific characteristics and establish appropriate policies accordingly. It is not prudent to follow the fashion of foreign countries just because everybody does it. It is very possible that those measures are not appropriate for all countries.
The main measures applied by the RBI in its financial policy are:
• Avoid high volatility,
• Controlling leverage
• Active financial regulation
• Maintain safety buffers.
When asked about the future of India after the elections, he noted that he holds no doubt that India will continue to grow and develop. India has gone through all kinds of governments since independence and he has full confidence that the economy will continue growing with the new government, whatever the result.
Naiara Alonso
Consultant at INDOLINK Consulting