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Innovation in India: Where do we stand at the end of 2013?

As the new year approaches, its customary to review the year that has passed. Here is my take on where we stand on innovation at the end of 2013.

Positive Highlights of the Indian Innovation scenario in 2013

Innovation in the public/strategic sectors took two important strides. The first was the successful launch of the mission to Mars (Mangalyaan) which demonstrated India’s ability to undertake complex scientific and technological projects at low cost. The second was the initial operational clearance for the Tejas Light Combat Aircraft by the Indian Air Force.

The emergence of a new generation of Indian technology companies like Vigyanlabs, winner of the Nasscom Innovation Award in the Technological Innovation category for 2013 was another positive development. Vigyanlabs solves an important problem (high consumption of power by data centres) with a system solution that is backed by a US patent.

VigyanlabsSome of the most important innovations took place in the political sphere. Two new entities demonstrated the potential for such innovation. The success of a young political party, the Aam Aadmi party, in the Delhi elections demonstrated the value of a grassroots approach to politics backed by creative use of the social media. In Bangalore, the Bangalore Political Action Committee B.PAC seeks to be a catalyst for “good politics” by supporting candidates with a clean record. B.PAC also trains aspiring politicians.

Another timely organizational innovation was the launch of the Indian Software Product Industry Round Table (iSPIRT), a think tank devoted to the promotion of India as a power in the software product industry. Two initiatives of iSPIRT – one to connect Indian product companies with the requirements of India’s large small and medium enterprise (SME) sector, and the other to create a vibrant market for acquisition of software product companies (“M&A Connect”) have shown the potential of efforts to close the gaps that hinder the emergence of a vibrant product ecosystem [Disclosure: I am associated with iSPIRT as a member of its Founders’ Circle.]

iSPIRTMarket-driven innovation efforts by large multinational companies such as Renault (with the Duster) and Gillette (with the Guard) showed that some MNCs are coming to grips with what it takes to innovate for the Indian market. Yet, the overall MNC innovation scenario in India was mixed with some companies scaling down their efforts to use India as a base for emerging market innovation.

The Indian Industrial Innovation Scenario

2013 was a decidedly mixed year for industrial innovation in India. One of the mainstays of Indian industrial innovation, the transportation sector, had a poor year. Despite several efforts, Tata Motors was unable to revive the fortunes of the Nano, and sales remained muted. Mahindra’s earlier success in the SUV market with products like the Scorpio and XUV 500 was eclipsed by determined efforts by MNC automotive companies (Renault with the Duster, and Ford with Ecosport). By all reports, the initial results of Mahindra’s acquisition of Reva (India’s pioneering electric vehicle company) have not been great either with their first post-acquisition product, the E20 seeing only moderate success. Neither Tata nor Mahindra had successful launches during the year. In contrast, MNCs had several successful launches including Honda’s Amaze and the SUVs mentioned above.

Zydus Cadila successfully completed trials for what may become India’s first new chemical entity to reach the market. But the Indian pharmaceutical industry faced several setbacks as prominent companies came under the scanner of American and European regulators, and big names including Ranbaxy and Wockhardt faced regulatory action. Since, their ongoing operations in the bulk drugs (APIs) and generics space provide the cash to fund their innovation efforts, any setback to these businesses could have a long-term negative impact on the Indian pharmaceutical industry.

Traditional Indian business groups have begun to realize the importance of a more structured approach to innovation, but are struggling to evolve appropriate processes to do so. My co-author, Vinay Dabholkar and I received enquiries from such companies in different sectors, but few of them translated into specific assignments.

The Innovation Ecosystem

Reflecting India’s overall struggles with enhancing innovation output, India slipped two positions on the Insead/WIPO Global Innovation Index in 2013. India’s biggest weaknesses are in the institutional environment, and in higher education and R&D.

Where does India standThe latest available R&D statistics (pertaining to 2009-10, released on September 2013) show that India’s R&D expenditure as a proportion of GDP is static at around 0.88% since 2005-06. But, there are two important changes to note. The sectors accounting for the largest proportion of industrial R&D spending – pharma and transportation – continue to be the largest, but their share has come down to 27.7% and 14% respectively from 45% and 17% respectively earlier. This is a positive development as it shows other sectors increasing their R&D spend faster. The other interesting development is that private sector industry now accounts for 28.9% of all R&D expenditure and the entire industrial sector (private + public sector) for more than 34%.

Sector wise R&DOne piece of good news is that the proposed Inclusive Innovation Fund has taken a step forward with an in-principle approval of the first tranche of funding. But the operational details still seem some distance away. It looks unlikely that the Fund will be put in place before the next general elections, and it remains to be seen whether the next government will see it through to fruition.

During the year, the Department of Scientific & Industrial Research re-jigged its schemes for supporting R&D by industry. New schemes include “Patent Acquisition and Collaborative Research and Technology Development” (PACE) and “Promoting Innovation in Individuals, Start-ups and MSMEs” (PRISM). As far as I can make out, the PRISM scheme is not too different from the TePP programme that was quite popular earlier. The PACE programme provides loans for companies to acquire patented technologies and then work on them further. In the past, the common problems of government support schemes included processing time, centralization in Delhi and inadequate scale. Let’s hope the government is able to address such issues this time.

Another useful development is the incorporation of innovation into the Results Framework with which the Performance Management Division of the Government of India measures the performance of government ministries and departments. This will hopefully result in a greater focus on innovation in the government.

Conclusion

2013 wasn’t a great year for innovation in India. Industrial innovation, in particular, seems to be at the crossroads. I hope that a focus on innovation will return once we have a new government in place later this year.

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Building a great product takes time and happens over a number of years…

Getting patented has immense aspirational value for product developers, but it is a long drawn process and takes normally anything between 5-8 years. Our story this time is about how a bunch of very intelligent individuals, who got together to build a product and have it patented within two years.  If it is aspirational to have a patent against one’s name, it is certainly inspirational, the time frame in which it was achieved.

We got talking to Anand, who is based out of Bangalore, and was only 15-days old at Vigyanlabs  handling the marketing activities there. The passion with which he spoke, belied his short stint and seemed as if he had spent his entire lifetime in the organisation. Shortly thereafter, we were joined by Srini & Vatsa, the founders of Vigyanlabs. Hugely experienced, cumulatively they both have 50 + years (Vatsa 30 + & Srini more than 20) of building products and software architecture in very large organisations like HP, IBM & Hughes Network Systems.  Both had held senior positions in HP, where Vatsa was the Chief architect, and with Srini later, went on to hold Senior Technical Positons at Dell-Perot, just before starting Vigyanlabs. Vatsa had also worked in Processor Systems India, where he did some very innovative and cutting-edge work. These would prove to be building blocks, someday. A very potent combination indeed, which helped file 9 Patents. Slowly but surely the spirit of building an Indian product was taking shape.

Early days:

After  calling it quits with their present employers, the duo spent two weeks in just defining Vision & Mission of the company that they would build, and establishing short-term & long-term goals. This brainstorming session helped them in creating the DNA : It was going to be an innovative Science & Technology Organisation; it would focus on green technology and social responsibility to be a key driver. All this would be achieved by harnessing the power of teamwork. The customer and his needs would be primary to all business concerns. A deep-dive helped identify the three major problems that the world was facing: Food, Environment & Energy. The seeds were sown – it would be a Science & Technology company where IT would play a vital role.

Vigyanlabs would primarily focus on : Consulting, Architecture & Design and aim to solve problems related to food, environment & energy.   The name itself was very Indian and spoke of the future, The “Science” of it, being right here. Vigyan.

Ideation:

After much study and prior experience, the team soon identified a “hole” in the market and a plausible approach to address the same. Efficient power management was still not very popular in India. The existing solutions were not upto the mark and this was evident, the way laptops consumed power. The battery would get heated and run out sooner than desired, putting user at a disadvantage. The higher income group consumed a lot of power through a freakish number of gadgets and electronic devices. The wastage was huge and put immense pressure on the environment as a whole.  This was early 2009, and out of an Incubation Centre in Mysore, was born the idea which took shape and one day be the product IPMPlus.

The concept that was used to build this product had widespread usage and would be extended to other industries as well. In the US markets, patents were filed for something similar, but not so India. It was built around power consumption and its optimization in laptops – all this without causing any obstruction in the normal flow of work.  Intelligent Power Management Plus was about maintaining user experience.   

The Passion:

For Srini and Vatsa, it was always about building an Indian product which aimed at fulfilling the vision and mission of the company. They found obvious role models in the likes of Ratan Tata and Sir M. Visvesvaraya, who is also a Bharat Ratna awardee – the doyens of innovative thinking in this country.  

Wow Moments:

The Beta version itself helped a customer save 40% on energy cost and the need to come out with a marketable version was even more palpable. Within two years of filing for patents, the founders  got it done, a record of some sorts, which normally takes anything upto 5 years or even more.

Marketing Outreach & Strategy:

The stretch has been to create a global footprint and get the product onto the AppStores so it can be used with Android, Apple and Windows applications. The other initiative, is integrating with device OEMs and capture a major chunk of the market.  On the Enterprise segment, tablets and servers opened a whole new world of opportunity. Just to give an example of how big the problem really is, the amount of power consumption in large organisations is enough to even run a small town, cited in a recent NYT article. Large businesses have 50 – 100 data centres and do not have many tools which harness power optimisation.

Key Learning:

Building a great product takes time and happens over a number of years. The gestation period is long and during this time patience and sustainability is what really matters. Unlike the Valley, the market in India is not so matured and there is an initial resistance to try out Indian products. Somehow product developers should aim to break that.  Finally good products come through good people – who are technically sound, who you can trust and who have the business acumen too.