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The Innovation engine – firing on all cylinders February 4, 2008
Speaking at the launch of the NASSCOM-Boston Consulting Group report on the Innovation plans for the Indian IT and ITES sector, eminent scientist and administrator Dr Mashelkar rightly pointed out that the biggest mistake people make is not when they aim too high and fail but when they aim too low and succeed. While this altruism applies to all fields of human endeavour, it could really be appropriate in the third wave that the knowledge sector is now embarking on. Innovation has the potential to add over fifty billion dollars of revenue to the industry by the year 2012 and it would be a shame if all the partners in the Innovation eco-system do not pull their weight in enabling this to happen.
Who are these partners and what are they really contributing to the movement at this point of time? Unlike in Cuba and Singapore, where innovation is almost entirely Government led and funded, it is now a matter of folklore that Indian IT has had very little dependence on the Government. NASSCOM has done yeoman work in the last few years with the well received and publicized Innovation awards attracting the attention even of President Kalam and Prime Minister Manmohan Singh and attracting participations from a wide cross section of multinationals, large medium and small firms and even entrepreneurial startups. Other associations like the CII have also done their bit in promoting the cause of innovation across all industry sectors. The real weak link continues to be the academic and research institutions that have been mired in their own red tape and in the case of private education, in their need to make money by holding out promises to more and more classroom and distance learning students. And of course for a very long time the availability of finance for innovative startups in the form of angel or VC money has been a small trickle resulting in the innovative ideas in the minds of many entrepreneurs not seeing the light of day.
At the firm level too, the focus on innovation has been more in the form of continuous improvement, necessitated by operational excellence and quality initiatives rather than conscious search for discontinuous benefits. As James Abraham BCG partner pointed out at the presentation to the industry in Bangalore, the fear of failure and short term profit concerns in many listed firms has inhibited their entrepreneurial or intrapreneurial initiatives and while some process innovation has happened, the focus on new product innovation and business model innovation has not been at the pace that many industry analysts would like to see. New product creation in intellectual property oriented firms and process innovation to look at new delivery methods and collaboration with customers and partners should be attempted in all services firms. To start the activity, diagnostic exercises on the present state of innovation activity and the path to reaching a desired state of extensive innovation need to be undertaken so that serious projects are planned and executed.
The other key recommendation of the study concerns all the participants in the eco-system – the Government, Research and Academic institutions, financing agencies in addition to the firms and the association need to work in concern to build an enabling environment for innovation. The formation of innovation clusters – IT for automotive innovation in Pune and IT for Telecom innovation in Chennai for example – could be one step in the right direction where the ability to multiple the velocity of innovation can be demonstrated and then proliferation through chosen clusters in a variety of locations and industries. The focus on engineering services has already demonstrated that there are new vistas of opportunity that hold great potential and the best way to build significant domain understanding could well be to partner with traditional incumbent industries to build new value propositions for the domestic and global market. The outstanding work done recently by Professor Michael Porter of the Harvard Business School has amply demonstrated that the cluster approach could transform the fortunes of any industry or country and needs to be embraced in a collaborative format in our own industry to see breakthrough success!
Where does the future lie for the innovation movement and what are the solutions to the malaise that seems to pervade the eco-system? The hundred crore innovation fund announced by NASSCOM is one step that will surely boost the confidence of innovator wannabes in the industry and we can seriously expect that companies – new and old in IT and BPO will embrace innovation as their new mantra for profitable growth in the months to come.
