Potential for India to be a hub for developing affordable products and solutions for the developing world

1. India can be a hub of innovation for affordable technologies
Ashok Antony, March 2008
The past week saw the dawn of a significant new era in a neighboring country. After
more than 100 years of monarchy, Bhutan became a democracy as it went for polls.
While, it was a historic moment for the small neighboring nation, one of the key elements
of the elections which went unnoticed was the use of around 865 electronic voting
machines (EVMs) from the world’s largest democracy - India. In April of 2007, India had
also provided EVMs to Nepal for its elections. Indian Space Research Organization
(ISRO), whose satellite launch vehicles provide services at half the international costs,
believes in low cost access to space. ISRO has also announced plans to launch a Third
World remote sensing Satellite (TWSAT), images from which can be used by research
institutions in developing countries. These are just few instances of India exporting
affordable technologies which can benefit a large number of people in the developing
world.
India on the global innovation map
Private sector companies in India have also jumped on to the innovation bandwagon to
become globally competitive. Tata motors Nano, the world’s cheapest car at $2500, is set
to change the way people travel in developing countries. Another Tata company built
Asia’s fastest Super computer at a low cost of around $30 million in 2007. Multi National
Companies are also making India a hub of innovation for tapping other emerging
countries. An article in Business Week on innovations in emerging economies also cites
the example of Cummins India’s low cost generators developed for the low-end of the
market which has now become popular in Latin America and Africa. Many other global
majors including Intel, IBM, Microsoft, Texas Instruments, General Motors, Nokia,
Siemens, Monsanto and Exxon have established research and development centers in
India
The changing world order has also brought about huge potential for Indian companies.
The past decade has seen increasing number of multi national companies moving to India
to take advantage of the skilled low cost labor in India. It is critical for India to move up
the value chain from being just a low cost source for products and services by creating
expertise in designing low-cost products and services. India also needs to learn from
countries such as US to foster an environment which encourages innovation
Innovation systems in India and the US
The Institutionalization of innovation in the US, normally referred to as the US
innovation system has been widely successful due to various factors -- A free market
system, which rewards innovation thereby encouraging enterprise and technology
startups, industry-academic collaboration and the need for companies to innovate to be

2. ahead of competition. In comparison to US, while India has a talented young population,
inadequate research infrastructure and low levels of industry-academic collaboration, and
the inability to commercialize innovation have limited our innovation capabilities.
However some of the positive developments of late include increased R&D spending, the
reverse brain drain with the return of NRI techies and researchers as India becomes an
attractive destination due to its booming economy and private investments in R&D in
Pharma, IT/Telecom and automotive segments. India’s renowned educational institutions
like IITs have a higher role to play as hubs of knowledge and expertise and incubate more
startups. One such example is Midas Technologies (incubated by IIT Chennai's Tenet
Group) whose innovative technology for enabling rural telecom and internet reach is
deployed in more than 20 countries across Asia, Africa and Latin America.
Affordable solutions need to be profitable
Commercialization of innovation also is also critical Experts advocate approaches
different from the traditional model for profitable business models to reach the lower
stratum of population. John Hagel and John Seely Brown of Deloitte advocate a
collaborative approach among various groups including companies, suppliers, and rural
institutions/NGOs for creating products or services and product service delivery
mechanisms. C.K. Prahalad advocates an innovation sandbox where broader parameters
on low-cost, affordability, scalability and word class quality are fixed and business
models are fine tuned based on the constraints.
India has 70% of its population living in rural areas. Harnessing the human resource
potential in this enormous market and to tap these rural markets need innovative products
and distribution models. India is rightly placed to design and implement innovative
models such as ITC’s e-choupal thereby creating a model for other third world countries
to replicate. If India can not only create new affordable products and services but also
establish profitable and practical business models around them, then India can be a centre
of innovation and can make a difference to around 4.5 billion people in the developing
world