Where Are India’s Innovative Companies, Products and Solutions?

India produces some of the brightest minds in technology, science and medicine yet has not demonstrated any truly large scale and breakthrough innovations in those fields. The giant India corporations of Reliance, Tata (TTM), Wipro (WIT), and Infosys (INFY) have huge revenues but produce very little innovative intellectual property [IIP]. Yet, India has critical “Country Development” issues that can only be addressed through the immediate and creative application of technology, which in turn requires massive technology innovations in a variety of fields.

Fields requiring immediate and large scale innovation run the gamut from clean energy (energy independence), housing the burgeoning middle class, providing affordable housing for the vast pool of have-nots, elementary, primary and secondary education, health-care, national infrastructure (water, power, transportation) and finally, equality of opportunity. Solutions developed by India will be uniquely Indian, but potentially applicable to the huge swath of global population mired in poverty and living limited lives, with little or no hope.

India can lead the way because it now knows how to develop global solutions that work on a very large scale, especially those that are technology intensive (witness India’s response to Y2K). Interestingly, India still is a chaotic, third world country, so it understands the need to adapt First World solutions to the chaotic environment of the Third World. India just needs to put in place the culture, ecosystem and infrastructure needed to release the latent potential of its huge entrepreneurial pool of business people. In turn, India will not only create valuable companies that make shareholders wealthy, but could also pave the way for a more just and economically stable life for other third world countries.

So first, we will explore why India is not successful innovating on a large scale. Subsequently, we will examine two areas of technological innovation India should own and control in order to sustain its growth and accelerate its contribution to the evolution of an economically and environmentally sustainable planet.

Let us address the myth that I have heard repeatedly by pundits in the media or those with a Western centric view. That myth or some variation thereof is that Asian’s lack the culture or mindset for true technological innovation. For the purpose of this document, I do not plan to debate the myth head on as there are many examples of Asian innovation. However, I do want to illustrate why an “Innovation Ecosystem” is the principal catalyst for fostering rapid innovation and the translation of these innovations into large scale, successful businesses. In fact, the data suggests the ecosystem is the primary reason for the success of innovation or lack thereof.

For example, Jas Dillon was born in India and came to the United States at the age of 19 to study Electrical Engineering, and subsequently completed a graduate program in business at the University of Southern California. After heading up telecommunications strategy at KPMG, he founded a truly innovative company called BlueLine Online (now CTScape.com), in the heart of Silicon Valley, CA. In fact, BlueLine Online Inc. was pioneering large scale Software as a Solution (SaaS) as it went live in October 1996. It was also the first internet based infrastructure and construction project management solution online. It was real innovation in the industry because previous to Blue Line Online the industry was passing architectural and complex engineering documents around via fax or email or worse, Fed-ex or DHL. If asked today, Jas will tell you that it would have been impossible to create Blue Line Online in India because of the lack of an environment that led to innovation, what I call an “organized innovation ecosystem”.

The biggest advantage Western entrepreneurs have over Asian, and specifically Indian entrepreneurs, are that their innovation support systems are mature and systematized. By that I mean if an entrepreneur has a “killer app” and wants to make it a reality, they have access to the resources, support, funding and mentorship to create a solution, build a company around it, structure the appropriate corporate governance, line up the relevant strategic partners and take their product and/or service to market.

Fragments of this ecosystem exist in India, but compared to the US, India’s innovation infrastructure lacks the organized components to create a Google, Apple, FaceBook, Microsoft, GE, Microsoft, or even the next generation of MySpace, YouTube or Twitter.

To highlight the innovation gap, let’s examine a major indicator of inventiveness – the number of patent applications filed. In 2005 (see Table 1), there were only 14,500 patent applications recorded in India, however, by the end of 2007 that number had reached 35,000 patent filings. Yet over 60% of those were filed by foreigners! In contrast there were 417,508 patent applications in the US in 2005, and a further 456,154 patent applications in 2007.

Interestingly, further diligence revealed that one out of ten US patents in 2006 had an owner or co-owner with an Indian name helping to prove that Indians are exceptionally innovative, given the opportunity in an ecosystem that supports risk taking and innovation.

Table 1: 2005 Patent Statistics by Country [pdf file]
click to enlarge

Clearly something is amiss. While there are many reasons for the disparity in the quantity of patent applications filed in the two countries, clearly this is at least one significant indicator of the innovation difference between the two countries. So what are the reasons for the lack of India innovation today?

The missing ingredients required to jump-start India’s innovation ecosystem are;

1. Access to intellectual and relational capital. There are plenty of brilliant people in India with world-changing ideas. However, they have no way to act on these ideas because they are all Lone Rangers, with limited or no access to business and mentoring networks, required to take ideas from concept to companies. In other words, I have a great idea but I can’t assemble the necessary people with the required skill sets to help me execute it. In fact, talent that existed in-country moved outside of India to more innovative ground in order to realize their visions. Fortunately, this trend is reversing as Non-Resident Indians (NRI’s) are moving back to India.
2. A well developed Angel and Venture Capital industry does not exist in India. Sure, there are the global players with India outposts, but for the most part they are only investing in profitable companies with a well established track record. India’s Angel and Venture Capital industry today looks more like Private Equity in the United States.
3. An active segment of the Press focused on promoting early stage ventures and building Entrepreneurs into Business Celebrities. In the United States there are publications and news channels (print, radio, TV, and online) that specifically target almost every conceivable industry segment, the emerging Stars in that segment, as well as the established movers and shakers in the target segment. Additionally, there are clearly defined process and businesses that work actively to network entrepreneurs into the media and are vested in their success. In contrast, the business press in India is limited and solely focused on promoting the majors. An active “emerging business media segment” could do wonders in elevating entrepreneurship to a higher level and be instrumental in catalyzing the maturation of evolution of the India innovation ecosystems. The key message this media segment would send to the younger Indian generation is that it’s OK to take risks, it’s desirable to dream big, it fine to fail and try again until you succeed – in other words, using the motto of the British Air Service (the very first Special Forces Group in the world) -- “He Who Dares Wins.”
4. A Comprehensive Understanding of the Indian Consumer and the lack of formal Government support to promote Entrepreneurship and Innovation. There is a significant (if not complete) lack of understanding of consumer trends inside India. The challenge in India is that there are almost 3 different civilizations (and their associated populations, cultures, and needs) coexisting simultaneously in India today. There is the India of the ultra-rich, ultra-mobile and super educated (they are the Indians who impress the World at Davos); there is the India that works in call centers to serve the West, and then there is the India that lives on $2/day. There are massive opportunities within each of these segments but actual market data is lacking. This is where a public/private partnership would be the most interesting. Western Market Research companies and the Indian Government could work hand-in-hand to create a national blueprint and schedule that would accelerate India’s transition. This blueprint would also serve as a guidepost for areas of entrepreneurship and innovation. Furthermore, the Indian Government could select specific regions of the Country where they would create Small Business Investment Corporations (SBIC’s) – the entities that jump started the US Venture Industry. The SBIC’s would be chartered to promote innovation, entrepreneurship and investment in specific, critical national areas, primarily by promoting the growth of small, aggressive and agile technology companies that are targeting the blueprint.
5. Establishing Compelling Reasons to Innovate: Unfortunately, most Indian companies are not in a hyper-competitive domestic market thus reducing the pressure on them to Innovate or Die. Opening up all the maximum of highest priority sectors of the Indian economy to global competition will force these incumbent players to start innovating aggressively in a variety of ways – products, services, business models, organizational structures, operational execution etc. Internationally, Indian companies are competing and winning using a low pricing model and not with new innovative ideas. As India continues to open its market to foreign competition, the pressure to innovate will increase, and this will only be “good” for accelerating the development of the Indian Innovation Ecosystem. We are already witnessing this in the real estate industry as demand for higher quality buildings is increasing due to foreign developer competition.

Innovation Unleashed --- Key Mission and First Idea

To unleash the power of innovation, to establish an agile, rapidly evolving Innovation Ecosystem, and to accelerate India’s innovation engine from nascent to unstoppable India needs to establish an Innovation Platform. This platform would be a synthesis of public/private partnerships, the key Indian institutes of higher learning, and Indian diaspora spread across the planet in positions of power and influence.

This innovation platform would have one mission – “to unleash the creativity and dynamism of the average Indian to solve pressing public sector and private sector challenges, while simultaneously creating valuable, globally competitive private enterprises as the vehicles to deliver and profit from these solutions.”

One guaranteed way to ignite the development of this innovation platform would be for the Indian Government to create an I-Prize Innovation Foundation (IPIF), funded with $1 Billion US that would offer outright, unrestricted cash prizes to individuals, institutions, and/or companies providing solutions to critical, time sensitive problems required to accelerate India’s continued growth. The I-Prize would target specific domain areas e.g. energy, transportation, communications, education, ethics, health care, rural development, job creation etc. The prize would be open to Indians, Indian Companies or global companies willing to operate in India.

The IPIF would start at the federal level but would rapidly establish offshoots at the state level, similar (but different) to the US SBIC program. The IPIF could be complemented with additional low interest business loans, tax incentives, or subsidies to encourage large scale commercialization of winning solutions. At the very least the IPIF will provide a tangible reward for solving a particular problem, with protection to the Innovators in order to allow them to succeed in commercializing their innovations. This could potentially jump start the creation and formalization the innovation ecosystem, and start attracting a constant flow of people into the entrepreneurial world as they would be able to see a more defined path to see profits, recognition, and career advancement.

Imagine a gifted inventor receiving a 40 crores (US $10 million) reward for inventing a solar powered mobile phone or even a smaller 1 crore (US $250,000) prize for inventing a very safe, zero emission, 3-4 passenger vehicle. The I Prizes would invigorate inventors in waiting and provide them a clear path to become wealthy and widely recognized while helping to solve challenges critical to India’s continued growth. The possibilities are endless.

Fundamental Innovations Required for Sustaining and Accelerating Growth

Amongst all the opportunities in India, I can identify six areas where the Indian Government urgently needs quantum leaps in capability in order to insure stability and long term economic growth. The Indian Government or leading Indian companies should establish IPRIZES or other incentives for fundamental innovations in each of these areas and unleash the creativity and entrepreneurial spirit of Indians. Specific innovation areas are:

1. Clean, Renewable and Reliable Energy Sources and a National Energy Grid that insures a continuous, expanding, and uninterrupted supply of energy to meet India’s soaring energy requirements. This should be the highest priority as without clean, secure and plentiful power India will never be able to pull the majority of its population into the 21st century. The Indian Government needs to immediately engage it’s huge pool of intellectual talent in the experimentation, development and trials of multiple forms of renewable energy, with the objective of finding one that is clean and eliminates the reliance on fossil fuels. Think it can’t be done, just look at Iceland – the first truly (almost 100%) hydrogen and thermal energy economy, where public/private partnerships are starting to produce amazing results.

2. Communications, Transportation and Logistics: Once you have established a reliable energy grid you need to insure real-time fault tolerant communications, insure the ability to physically (and reliably) connect the far reaches of the vast Indian sub-continent country via a working road, rail and air transportation system and associated transportation hubs, and insure the development/implementation of a logistics management system that insures the smooth flow of people, goods and service from any point to any point within the India and to points outside.

   As an example the innovation in communications requires a platform that is ubiquitous, high bandwidth, relatively cheap, and impervious to the vicious Indian weather patterns. This logically leads us to an ultra high speed wireless network created by the government in partnership with mobile operators. At the end of 2007, India had 233 million mobile phone subscribers, an incredible 56% increase year over year. If your neighborhood experienced 56% growth last year and the government didn’t improve the infrastructure to allow new roads, retail establishments, and businesses you’d probably vote them out of office. However, if the government in cooperation with Indian mobile companies produced an ultra high speed cellular network, innovative Indian entrepreneurs would create entirely new forms of mobile video on demand, wireless education programs, gaming, mobile commerce, and location based applications that can immediately be leveraged by 20% of India’s population. This market alone is larger than the US mobile network.

   Unfortunately (to date) it is not evident that there is an Indian mobile industry group pushing for a subsidized high speed mobile phone information highway that allows new innovative mobile businesses to be built on top of this infrastructure? As an analogy South Korea implemented a high speed broadband wireless telecommunications network as a foundation to build a “knowledge-based society” in the 1990’s. Since then there have been numerous businesses built on top of the network that never would have existed without the foundation. South Koreans’ became innovative because there was a subsidized high speed wireless network to build and profit on.

   Think it can’t be monetized successfully? There are already free mobile solutions subsidized by advertising that are working in the UK. National or local businesses, merchants and retailers could subsidize mobile phone use while giving India’s poor the opportunity to participate in the India growth story. Better, you now allow the poor to create innovative mobile business opportunities that target the poor - a group that is largely being ignored today. What will power this phenomenon is not just the subsidy, but the ability to innovate and improve in ways that generate profits, knowledge, or an improved brand or company.

3. Elementary, Primary and Secondary Education: Long term national security, economic opportunity, and economic prosperity requires the development of a world class education system with a dedicated teacher core, focused on providing India’s masses with strong grounding in education fundamentals. It also requires the development of a national network of physical education infrastructure, standardized curriculum, and measurement systems. Getting primary education right is critical for jump starting economic advancement --- the AESAN countries have done an incredible job here, thus changing the lives of entire populations for the better. India should create an IPRIZE here and solicit input from the huge pool of talented Indian educators, professionals and private enterprises as to what it would take to create a world-class, fair and equitable education system. The Government could play the role of insuring or subsidizing physical infrastructure and educational standards while leaving the actual teaching to the private sector.

4. Affordable Housing: As I stated in my previous article on the global credit crisis, India is in a short-term real estate cyclical downturn in some areas (mainly Tier I cities). Nevertheless, there is clearly a need for low cost, high quality housing that is resistant to any real estate downturn now or in the next decade. I recognize there are some current attempts to address this market but it’s a small pebble in a large ocean of opportunity. India needs a set of innovative technology housing solutions combined with a government subsidized platform of tax incentives, innovative financing, low cost land, and guaranteed utility (gas, electric, water, access roads, etc.) infrastructure. In principal, a high density Special Residential Zone [SRZ] with clear rules and goals for all participants. Once that platform is guaranteed by the local or national government, innovative developers will create low cost housing solutions because they will be assured of a reasonable profit.

   Iqbal Jumabhoy, who by the way was born in India and now lives in Singapore, is constantly pushing our team to develop green technology solutions to incorporate into our commercial buildings. Iqbal is a firm believer in developing innovative solutions to complex problems and is resolute in his quest to develop a better India. Due to Iqbal’s guidance and a market need, we’ve managed to budget in innovative green technology solutions without affecting the cost of construction. If real estate developers were able to see a reasonable profit by developing low cost housing on top of a government subsidized platform, I can assure you the innovations in this area would render even Steve Jobs speechless. Of course the quality of construction will need to be monitored along with some necessary training, but the opportunity in this area for real estate developers is too rewarding weighed against any inconvenience of maintaining quality and attending training courses.

Why India Needs to Innovate

India needs to quickly develop its innovation ecosystem in order to maintain growth projections. Threats to India’s outsourcing business are on the horizon. New emerging lower labor cost countries show signs of appearing and may cut into India’s lucrative outsourcing business. Combined with a weakening dollar and Indian salary inflation, the cost savings to Western countries grows less every day. Fortunately, the use of English in India is allowing India to maintain its outsourcing lead and growth, but eventually this advantage will no longer be enough to sustain India’s outsourcing lead.

We know that many Indians living outside of India are extremely innovative and like Jas Dhillon have developed innovative solutions because the US and Europe provide an innovative ecosystem. We also know that some US companies like Lockheed Martin are utilizing young Indian innovators to create new products. These foreign sponsored programs have shown early success and help prove that if an innovative platform opportunity exists, Indians rise to the challenge.

In the end, India can’t keep competing on low cost labor alone and needs to develop a new innovation strategy. Innovation capability must be slowly ingrained into the DNA of the society while the government provides a level playing field to promote innovation. India can start small, build a few platforms with well defined goals and rules, and then let Indian creativity burst into producing the next mobile banking application, energy neutral housing, or solar powered mobile phone. In my next article I’ll discuss how India’s social graph can be leveraged to create new products and services faster. I believe as NRI’s return to India, they will demand and implement an ecosystem that encourages innovation. Yet, India must give them more reasons to return.

Do you know of any innovative India companies? Please comment below and share them with the readers.

Comments

[CrossProfit]

Nice article.

[C2C]

You nailed it. Good Concepts. Would love to be part of such effort.

[MuddlingInvestor]

Government side solutions require quite different governments on federal and state levels. Current governments are used to quite different methods of control (and never mind communists at power in Bengal for the last 30 or so years). Historically, the less government was in industry, the more successful that industry was in India.
There are two areas where governments have to play key role:
1. Fighting corruption, which is a huge force in India. It's a huge problem, because for many Indians it's a part of life. Sometimes they don't even understand that it's a problem. Known fact: you can't come to India, enter the office of some company and talk business. You need somebody who knows somebody to introduce you. Doesn't look good from innovation point of view.
2. Scrap internal customs. Surprise! they exist in India between states, you have to pay duty to import goods from one state to another.
3. Infrastructure. Roads first of all, ports second. India is about 20 years behind its own infrastructure demand.

[User 43900]

A very interesting article with an objective analysis focussing on the lack innovation in India. NRIs should be able to fill this gap in Indian developmental map.

[ivebeentold]

There has been some movement in the mobile innovation department but nothing on the scale of what Fidelman described in this article. South Korea is a good model for what India should be doing with their mobile platform.

[DreamRaj]

Great article, Mark!! Looking forward to your next piece on how India’s social graph can be leveraged to create new products and services faster.

[Ketan Desai]

Being an NRI who has created two innovative companies in the US (and sold one at a good profit), I find this topic interesting. While this article does address some issues, there are several others that it misses:

1. Culture. The struggle for survival is very intense in India. As a consequence, folks tend to become conservative - as in conserve what you have, for you never know when you may need it. Taking risk and becoming innovative is a major mental change.

2. Politics. Indians have, now for some 80 years, been told capitalism is bad. Socialism good. Two legs bad. Four legs good. Take a look at the founders of "modern" India - including Nehru, a fabian socialist. This mindset is only now being dissipated. Not without a fight - after all, the communists and Congress still sleep together.

3. Religion. This cannot be overemphasized. The concept of consumerism and materialism is foreign to Indian religions such as Vedism/Sanatam Dharma, Sikhism, Jainism, Buddhism. Where there is no want, there is no need to innovate or create.

4. Opportunities. In education, career, etc. Too much of the "sameness" mentality. That is also changing, but it has a ways to go.

[AKinSS]

Nice article .. well written. Agree mostly but am suspicious of govt participation. With a very high level of rampant corruption I would be wary of involving too much of it. On the other hand I think it is a good opportunity for NRIs who have witnessed innovation in US to take advantage of such opportunities in India as angel or seed investors.

[Deepak9]

I found this article immensely interesting and satisfying. Satisfying because it sort of synthesized my various ideas and opinions into one article. You have a deep understanding of the Indian challenge and I think you should take it one step further. Give lectures or seminars in India so that people become motivated and aware. Most Indians are too apathetic or just too comfortable in their niche to take the risk to do something. The rewards idea is the correct stimulator for them. Once your ideas go into effect there is NO stopping India.

[Geetha]

So astoundingly true. I am an electrical engineer graduated from one of the top university in India, having taught in a reputed Institution for 10 years, preferred to quit job for my kids and now looking for an investor endlessly for a very lucrative business proposal. Completely befuddled as to the "who and how" of Angel funding. Will be delighted to get information on angel funding from India or abroad. Fingers crossed......

[Anish J]

Here is an innovative Indian company. www.ittiam.com/

[ronee2]

The article ignores one important issue that is destrying India's educational system -- CASTE BASED RESERVATIONS
Reservations have been a curse on the Indian society. The actual percentage of reservations has increased over the years instead of declining. Students are being admitted to Institutes of higher education based on their castes instead of merit. Actually the biggest beneficiaries of this political pandering has been the USA, UK and Australia. This has prompted most of the bright and talented people to flee the country to places like USA and Australia in droves. Just look at the number of Indians in graduate programs in USA. Most of them are forward caste and shut out of their own country. Most of the people left behind excel in mediocrity and are happy in their artificial comfort zones.

The education system in India is a complete mess and it is getting worse. The cost of good primary education is getting prohibitive. Parents are askedto shell out donations (another word for bribes) of as much as $10,000 just for a Kindergarten seat. The monthly fees are outrageously high. The situation is even worse in primary and secondary schools.
With this kind of screwed up caste based education system, there is going to be a severe talent shortage in the next few years and I won't be surprised to see companies finding it that their cost of operations sky rocketing prompting them to move their operations back to US and other areas.

[phil dewey]

India is a factory. It always will be. The VAST majority on India's population are more than happy to scoop up the pennies of factory work and consider innovation a bad/dangerous/ostentat... endeavor. India is a factory. It always will be.

[Amit Mehra]

I couldn't agree more with the primary article and to some extent it's contents would amount to stating the obvious that innovation holds the key to the future. Having said that, every nation, every society is driven by their primary needs.

Though no effort is exclusive and different things can be developed at the same time, we as Indians need to first get our basic concepts in order before we can start flying with it and innovating.

The biggest lesson I learnt in filmmaking was in order to break the rules, we must first learn them. 18 years later, I am still learning new rules and trying to break few old ones.

In a nation where basic amenities, infrastructure and fast eroding moral fabric are the biggest plagues affecting it, innovation should be looked at as a medium and not an end.

Getting numbers on patents is no small achievement but we need to focus on solving problems so that the nation can shine in an honest sense of the word and not only in the cleverly drafted advertising campaigns or over-enthusiasm of corporate dwellers.

I feel, the time has come for us as a nation, as a society to stop looking at the charts, graphs and numbers on our computer screen and start looking outside our window.

I think the time has come to take out the plug on the matrix so to speak and feel the reality and perhaps only then can we truly create an environment where these graphs mean something , where biggest innovation need of a nation will not be a device to do some reality check.

[Sam Sur]

Interesting article and I definitely find the factors you identify with the lack of innovation to be true.

India has a great education system that produces great engineers, doctors and lawyers but does not produce entrepreneurs - our education system does not encourage innovation. This needs to change and the industry will have to play a big role in this. There needs to be a healthy partnership between our industries and our educational institutions so that innovations can be harnessed. That is very minimal currently.

[User 191619]

Interesting article. The govenment due to its inherent corruption is averse to resolving problems of innovations in areas 1 and 2 ie energy, transportation, communication and logisitics. This itself would mean that a platform for innovation is setup. It is a very good idea to vote out a government which is resistant to positive growth. Opening markets to foreign players is a good idea but it must be opened in areas in which innovation is needed, high tech, manufacturing, services, design, engineering. Some areas like the food, textiles, and other indigenous industries supplying local domestic products should be infact shielded from foreign competition for their survival. There should be a balance between which sectors and opened and which are closes. Continuously there should be a review on this matter.

[User 191619]

sorry, the sentence in line 11 should be "which sectors are open and which are closed"

[A.S.Rao]

Interesting and timely. Two comments- first most of the suggestions made are implemented in India -though on a limited scale. The only missing action is on `the culture of celebrating creativity' -the third ingredient in the article. Second- about innovative Indian firms- there are plenty- see my blog www.indiainvents.blogs.../.
I orchestrate a network (TePP) that has more than 200 innovators developing low cost innovations- say innovations for BOP market.

[Hardik]

A very well researched article here.

[roshanis]

India has no shortage of innovators. The problem is in
1. funding ...lack of VC infrastructure
2. Lack of IP protection
3. Shortage of good talent...as you know all the best people fly to UEA(US,Europe,Australi...
4. Endemic corruption at every level...
and more

Here are some innovative companies...
Reliane, Tata Steel, Suzlon

[anil gupta]

i could agree with some of the author's analysis but not all. There have been three inventor of India workshop organised at IIMA since 1998. The fourth one will be organized during Nov 28-30, 2008. Come and see how many very good innovations have been developed by individual innovators. I invite generally only those patent grantees or applicants who have worked individually or with one's own resources rather than through sponsored mode. during last three years.

But you are rights such a workshop will have many patrons, supporters and stakehodlers. Such has not been the situation unfortunately so far. So in that sense eco-system is lacking. But things are changing fast. Have you seen National Innovation Foundation ( nifindia.org) set up by Honey bee network started twenty years ago to bring out creativity and innovations by the knowledge rich economically poor people.

We have discovered thousands of creative peopel from over 500 districts of India, files 154 patents, more than that developed open source solution in thousands and shared the data base of innovations and tk ( see also indiainnovates.com and sristi.org and gian.org with wider publics.
When it comes innovations by comapnies, i could not agree with you more. But recently when i talked to the top teams of several companies. One insights was counter intuitive. Many companies had far more innovations than they had the courage or capacity to acknowledge. One of the major 100 year old company in construction and many other hard high tech lines recognised that in IRaq, most houses being built were single stories. Why then use buidling material of strenthg required for multi storey buildings. Saved huge resources, reduced cost, and its innovation generated revenue for the company and satisfaction for the consumers.

There are innovative companies, individuals and some empathetic policy makers. They are under strangleholds of insensitive bureaucracy and some times myopic leaders. But in many science departments, things are changing and i hope results are visible soon.

i liked your article sent by a friend and visit the creativity on ground, you will change your views in general about how India is turning around.

all the best

anil
[e-mail]

[Dampers andSolutions]

A very good and timely article. You have covered much ground on most of the key points.

Let me highlight a few specific dampers which may also explain why an "innovation ecosystem" does not exist or thrive in India as of today :

1. Corruption. This includes corrupt Income Tax inviduals harassing innovators etc ( philipji.com/incometax... ). If an I-Prize fund is set up as suggested, it should necessarily come with mechanisms to prevent corruption and abuse.

2. Serious lack of "Real" Education, as opposed to the pursuit of paper qualifications, which often stop with knowing how to write the exam, or how to carry out certain operations with certain things with partial or no understanding. Education is just a gateway to a "job" which is more about having a secured income than about producing something of value. By and large, the education system promotes rote learning. (Example: tinyurl.com/3lnurx which is also about corrupted organizations in the education sector).

3. Certain inherent traits. What Phil Dewey refers to as "happy to scoop up pennies.." is part of that. There is a whole bunch of stuff here, but I diverge with Phil Dewey in my strong belief that these can all be overcome through educating and motivating the upcoming generations. (The generations that grow up seeing corruption and misgovernance everywhere tend to accept the status quo and grow into their slots within the system and perpetuate it. So, breaking out of this requires considerable push and enlightenment).

4. Political meddling in the education system, and in employment (not only in the government sector!) is a big big problem.

Parts of the solution:

1. The government should start viewing individuals on their own merits, and not based on their birth. (I am referring to the "caste" of the individual, which is basically defined by the family the individual was born into. Imagine that the government practices discrimination, favouring one family over another, instead of looking at absolute merit of the person). This kind of meddling exists today in education and employment (mostly government employment). This is done in the name of social justice, discriminating against the historically "high castes" against the historically "low castes" purportedly to equalize the two ! It ensures "vote banks" for politicians who practise and further the discrimination, so this is very hard to stop even if an equlibrium has been reached (or even surpassed!). Laws have been (and are being) created to legitimize this kind of discrimination citing historical reasons and social justice.

2. Part-2 of the "Caste System", is in the minds of people irrespective of their birth. The "culture" needs to restore the nobility of "doing" as opposed to "preaching". The caste-ridden Indian mind deludes itself that "doing" is somehow inferior to preaching. (Whether it is the colonial masters who brought about this view, or their royal/feudal/brahmanic forerunners, is a matter of debate, but that is immaterial). Having this tendency at work today in the Indian mind is very debilitating -- for example, every engineer wants to be a manager. (Apart from the fact that many Indian company structures are unable to reward the good engineer more than an average manager). As everyone wants to only manage / preach, and nobody wants to do, quality and innovation takes a hit.

3. Increase Transparency. The Right To Information (RTI) act has been a bold step in this direction to combat many ills.

The reason India shines irrespective of the ills I have mentioned is that there is a large population that must compete, and that a good filter can always pick out the best. My main point is that the education system and the government haven't done enough to help India on the large scale to which they could/should have to improve the statistical averages. In fact, they have impeded India.

[User 192417]

Indians have basically been good planners, thanks to the 'innovative' minds brainstorming (and blamestorming) in the cosy boardrooms fleshing-out the plans. Five Year Plans (of the Planning Commission) are good examples of it. But when it comes to implementation and delivery, all the plans go phut! Resources get diverted due to 'innovative' political interferences. Layers of bureaucracy take the steam out of projects thanks the the 'innovative' babus adept at finding 100 ways to make a thing 'not' happen, if it is not coming their way. Not to be left behind are even those reponsible for implementation and delivery who also 'innovate' and find ways to make their contribution in the non-performance. Agencies with whom funds are parked, are on a look-out for 'innovative ways' not to release funds on time. Who says that Indians are not 'innovative'?

But despite this 'something' happens and this radiates a hope that a lot can happen. The problem seemingly is in the implementation phase of projects. If projects are implemeted within the time-frames and budget and also adequate autonomy, there will be some delivery. Therefore, implementation remains a weak link and all the more in government projects/ schemes.

In most cases the planning is strong, but there is a disconnect between planners and implementors and this makes all the difference. Planners are quick to take credit if the project is a success but disown the project if it is a failure putting all the blame on the implementation team. It is unfortunate that the implementation team never gets it due and remains demotivated. In the absence of transparent, review and monitotring appartus, proactive elements are suspected and punished, the non-performers get benefitted the most. Discontinuities/change... at top often force change in gears or shift in priorities and all the plans/ project go haywire. As a result of this and several other factors, implementation and delivery remains poor. The funds remain underutilized for the fear of non-performance and non-delivery. At times, the funds are not utilized because the custodians of fund act more as 'dogs in the manager' than managers.

These problems are not unknown and also it is a fact that Indians are highly 'Innovative'. Unless there is a drastic and all-encompassing change in the mind-sets of the people here, the Indian (crab) culture and many such attributes will continue to keep us laggards, despite being 'innovative'.

[LNRaja]

My experiences as an 'entrepreneur' with not much success of taking innovation to market fruition are testimony to every thing said in this article. Even my idea of forming 'The Entrepreneur Network Initiative ( Teni India) (www.teniindia.org/repo... ) could not be successfully 'sold'. For those still in India and still wanting to innovate, this website maybe useful.
Thanks,
L.N.Rajaram, PhD
[e-mail]

[leadpb]

I think, not having enough infrastructure is one thing, and not having the mindset is another. Indians are too ready to compromise, that they almost always have a workaround for a problem rather than a solution !!
www.kidunltd.com/scrib.../

[Sameer]

Good detailed thoughts on what could drive innovation in india!
However, one must highlight the fact that the article essentially measures innovation in a certain way, and ignores a lot of less formal, grassroots level innovation that happens a lot in India. A lot of people are either unaware of, or not keen on patenting.

A few examples of work in various sectors some patented, some not - the Nano, the Rainwater Club, www.wondergrass.in/, various guys making solar power affordable. True, these are largely small scale, individual efforts and not all have achieved scale. That could surely be helped by some of the tips you suggest.

Merely wanted to try and balance things a bit :)

[Bhamy VShenoy]

Mark Fidelman has done an excellent job in terms of identifying the critical factors affecting India's development. However his recommendation based on western centric assumption of I Prize Innovation Foundation will not work. I am surprised that having stated at the beginning that India should have its own unique way of solving its problems, he goes to recommend western strategies.

The biggest problem in my view is the non-functioing governance system because of indifference educated people who having been educated at the expense of the poor of India have either immigrated geographically like Jason whom Mark gives as an example as an innovator or those resdient Indians who have immigrated psychologically by being indifferent to Indians realities.

Just look at number of patents of NRIs (about 45000) is more than by RIs which is about 35000. This can be used to explain the absence of innovation ecosystem and also to explain how India lost so much wealth beacsue of the brain drain.

When robber barons like Rockefeller, Carnegie were alive, they werebusy in establishing and operating huge fchaitable oundations which contributed significantly. What have our IT sector rich enterpreurs quoted by Mark done for India? Yes they have established some charitable NGOs. But their contribtion is only at micro level and not attempted to bring about any significant policy changes which is badly required for the government to function.

How was the revolution in communication in India which has connected millions of people? How did the cable TV net work develop in such a short time serving more than 60% of the market? How did airline industry flourish in India? How did we start getting several brands of cars (now the world famous Tata Nano) when we had to choose from just three in 80s? This was because of liberliaztion of economy brought about by policy changes. What we need is major policy changes for the invisible hand of the selfish interests of people to function for the needed innovations to take place to solve India's problems. Incidentally we should not aim for the "so called development of western countries" and we should have Indian development pardign based on our own culture of "simple living and high thinking". This is the point which has been either ignored or rejected by Mark. We should try to minimize the use of energy while meeting our minimum needs unlike the west who want to maximize the use of energy to meet the ever increasing demands based on higher GNP.

[Susan Sharma]

To make India grow in an inclusive fashion, we need more social entrepreneurs - firms engaged in sustainable social activity. These firms need not have a superlative growth pattern ( which is what VCs look for) but a balanced growth with more emphasis on the job satisfaction quotient.
We need to develop a model where donations are not the way forward, as it seems to be globally, for any social activity. It will be great to hear the author's comment on this.

[sinha]

Well, your stats regarding patents is slighly outdated - the number has grown by 8X (www.pluggd.in/2008/04/...)

Interesting products are happening out of india (e.g. Zoho), just that they aren't big in number and don't have a global appeal (probably it's not even needed at this stage)

[Mukul.Singhal]

Mark - I don't agree a lot of it and doesn't believe that number of patents is an indicator of Innovation. The term and concept "Innovation" can be different in different countries. "BlueLine Online" - an Innovation in United States might not be an innovation in India. Or might not be relevant in India at this point of time. I don't think it's lack of Venture Capital or Government Support. At lot of places market is not present in business models, which are proven in United States. Let me put some of the Innovation in India and some of these are almost irrelevant in US.

1.) SKS Microfinance - Microfinance business to lend amount as small as $100 to Individuals. AND MAKING MONEY - lot of VC money has gone into such companies. No bank in United States can work at such low levels of credit.

2.) Oxigen - It's a chain of kiosks and retail stores which are used to collect cash from individuals and deliver services like Bus Tickets, Train Tickets, Utility Bills etc - India is a cash economy and internet penetration is less. It's an innovation in Business Model and Microsoft has invested in it.

3.) mChek/Paymate - You can pay your utility bills, transfer money, top up pre paid card using mobile on a SMS. India has low GPRS connectivity and people love SMS. Totally irrelevant for US

And there are many more which can't be thought by western thinkers. Does it mean that West lacks innovation? I suppose not. My small message is that Innovation is depended on user needs. And there are challenges I agree. India is very young on Angel Investing/ Venture Capital etc etc. But definition of innovation is different in Indian contest.

Regards,
Mukul Singhal
Canaan Partners

[Mahi]

I agree to most of the analysis, but I skeptical about amount the role IP protection can play in this scenario. But one thing thats plays a major role is retaining the right talent. A innovative technology company in the making can never recover from the continuous exodus of talent for whatever reason it might happen. And I see this as bigger challenge than corruption.

[samiam]

Mr.Fidelman hit the nail right on the head. Present day India is lacking infrastructure of every kind, not the innovators. In my opinion overall there are only two countries where innovations took place in this world, India in the east (where man truly became civilized) from ancient times till about 800 years ago, and Germany in the west, in modern times. Every one else copied from these two innovating countries, and interestingly neither country gets the credit. Since Muslims started invading India and then the British, it went downhill, from a wealthiest nation to the poorest one. British left the country with poverty and under development, they only cared about taking as much wealth from India to Britain as soon as possible.
Hindu majority is ruling all of democratic India again, this has not happened since 800-1000 years. India is on the rise again. As soon as the infrastructure is in place, world will once again benefit from Indian inventions. World needs to solve energy and health problems; Cancer needs to be wiped out. Although Indian government is improving at the top ranks, there still exists a great amount of British left bureaucratic legacy thinking, it will take major shift in thinking to change this bad habit. Perhaps US or US companies could set up a prize fund in India, it will attract great minds and the world will benefit ultimately.

[bjlchem]

The idea of customer sservice needs to enter the Indian psyche. No matter where you go, banks, cell phone rentals,railways, Income tax dept., airlines etc the lack of decent customer service is missing. Even my chartered accountant shoows a total lack of customer service. Everybody is looking for a quick buck without any sense of obligation. In India there is a total lack of need to service the customer promptly with efficiency. A simple thing like an income tax refund is unheard of. Lets not get too sophisticated but look at simple things in daily life.

[RavindraNeriyanuri]

Three things why innovation seems missing:
1. We like doing what is being told (could be due to our culture). That's the reason we have great service companies (Infosys, Wipro, etc) and the customer should pay for us to think. Innovation should not be about volume or margins
2. Inability to take risk.
3. Innovation comes from within, not from market demand or competition. It comes from passion, a burning desire to be original, simple, useful and commitment to quality

[TechWatch]

Very well analyzed. What the valley did for US, something like that in India will help. Access to funds (and rich people interested in investing), brains, and supportive (non intrusive) government policies. Bangalore was touted as the valley, and to an extent it did happen. Wait for the next wave! A lot of innovative ideas are there - it's just that the funds and ideas don't meet easily in India's business ecosystem.

techwatch.reviewk.com/

[DrMoriarty]

Common misconception is that India has a great education sytem. That is false. India has a great competition system that masquerades as the education system. Thus, this system's products are ultracompetitive youngsters who, when let loose in a conducive environment, thrive beyond ones' wildest imagination, for example the engineers and doctors of Indian origin in the US.
Second, India ia a versatile petri-dish. Too many people being born (it is a good thing). Thus genetic material has avenues to go through lots of iterations and produce the fittest individuals with great survivial instincts.

Finally, India will innovate; but not in terms of what the West calls as innovation. India is a world unto itself. The system will start producing innovations for the system (to heck with the Western construct of patents; it is like Google v. Microsoft--letting everyone access information versus controlling information. Case in point, and tongue in cheek, of course, Dr. Mashelkar was in news for having allegedly plagiarized from a Bristish paper, you know what? The intellectual property policy for the Govt of India; now that is chutzpah. Or is it? Maybe he believes in freewheeling information:))

[Savita Kini]

Mark:

You have covered a lot of points in your article. You have understood a lot about India, though at a very high level. This understandable because you have really live in India and really experience the culture inside/out

Let me cover a few points that I have observed -

1. Patents are not the only indication of innovation. Especially when the concept of Patent itself was a construct from the US and then spread out through the rest of the world. Lot of India entreprenuers are not 'english speaking nor technology savvy' that they understand 'patent'. There is a lot of 'crony entrepreneurs' who have done some interesting things, amassed wealth for themselves and for their next 4 generations. They don't pay taxes, hence don't declare incomes, do business in black, bribing is common and are in bed with the corrupt politicians. Since my return to India I see much of wealth and growth coming from this sort of crony entreprenuership, leaving the rest of the either honest entrepreneurs or the underprivilegded to fend for themselves. They are never going to Angel investors to those who really need the money that could benefit the masses and really take India on a steady growth path.

2. Culture is a huge impediment. Indian culture of 'deference' based on age, gender, caste, religion is so deep rooted, that it will take enormous of 'brain unwashing' to really allow the younger generation to some free spirited idealism and innovation. Like some one else mentioned, there has to be a burning desire to do something, to make an impact. But if you have a large majority of 25 year olds in this country already becoming cynical and satisfied with what they have achieved, then you are not going to see innovation. Even the captive R&D centers are not able to capture more out of the talent because of 'cultural problems' with their engineers. Engineers will say yes to their managers or to the clients - whether it's an infosys or a google-India.

3. Gender discrimination is still a huge problem. I see very well qualified women from even top institutes like the IITs/NITs who could potentially fill the gap in the 'talent shortage' staying at home either by choice or because the societal brainwashing. How can you create a diverse workforce if 50% of the intelligent population is being shunted into the 4 walls. Innovation thrives in diversity. Even in silicon valley, it was the european, india, chinese and japanese immigrants that pushed the frontiers of innovation.

4. Lack of angel funding and corruption will continue to be the biggest road blocks. I have known of entrepreneurs with very neat ideas in the restaurant and retail business struggling because of lack of funding, corruption in licensing etc. Even the most successful entpreneurs who are now millionnaires don't believe in giving angel funding, but they would rather send money into their foundations because it gives them more tax breaks. That is also important but a few lakhs in angel funding by 100 individuals across the country could really benefit this country. Maybe if the government included tax breaks for high net worth individuals to invest as angels, we will really see more businesses coming out faster.

Let me just end for now.

savita.

[dru]

What is so interesting about this article to me are the comments. And I suspect mark (correct me if I'm wrong) is attempting to motivate us smart Indians into solving Indians woes through innovation. As someone had put it "blamestorming&qu... - so much “ink” used for congratulating or correcting mark.

Raised entirely in the US (over 40 years), I've just started working closely with some really talented and clever group in India. I had a lot of expectations but one I was not prepared was the aversion from doing it differently. Like American investors – a school of fish. Enough said.

My idea …

Hey you new billionaires, how about backing an organization whose agenda is to combat the top ten social, economical and environmental problems that are suffocating India.

Fund only the vetting, assessment and marketing of ideas. Then throw the ideas into the public domain (dare I say open) for someone else to implement. At some point this meat grinder would gain some traction and provide the genesis of a new way of positioning problems. A 10year plan before shutting it down. (Details to follow in a white paper or global summit)

With the execution in somebody else’s hands with an alternate motivation to implement. Maybe, just maybe this could get India out of the “British raj stupor” (service only nation) and start having Indians start doing for India what they have done for other nations. (my apologies for the editorial rant)

[e-mail]

[delam]

Dear sir,

I am an Indian Airforce engineerand innovator having 20 yrs exp on the maintenance of the flying machines. I have designed a vehicle that moves up straight to any height on the earth. It needs earth's contact to travel up . Hence it's journey is limited to the heights on the earth. It's journey is speedy, very smooth and it can carry great loads or passengers up. . This is the ultimate in the hill transportation technology. I visualise the mt everest a tourist destinastion in very near future. This vehicle is absolutely weatherproof . Wind ,rain or freezing temp has no effrect on this. That is why I say that this machine will realise the commonman's dream to be on the top of the world with complete safety and in cheapest possible way.It has a great tourism potential on the Himalaya,the european Alps and other peaks of the world .It will make the settlement on the inaccisible peaks much easier .For example the movement of a truckload of cement or passenger load from the punjab plains to the hights in Himachal eg .Shimla can be transported in 30 minutes flat at the fraction of the cost by the road transport.This machine is capable of making living much cheaper and comfortable than in the plains .I have tested the concept several times and each trial promises new use of the vehicle. It can revolutionise the mining industries by lifting the ore etc from the depth at the fraction of the cost by the present methods .
[e-mail]...

[Deepster]

While I do agree with a lot of the observations, there is activity that is going on. Check this recent article that i came across:

www.livemint.com/2008/...

[Deepster]

For some reason, I dont see the link appearing properly. Go to livemint.com > Corporate News . Article is dated June 06 2009.

www.livemint.com/2008/...

[Atul Hajela]

Has anyone considered a simple reason for all the failings of India - The usage of "English" language by the government, intellectuals, the industrialists, the decision makers, even the Films and TV media?

Imagine common people in US understanding "english" and the government, industry, intellectuals operating operating like "French" people using French language! How innovative US would be??

Thanks for your time.