Innovation From an Indian Perspective: Concepts, Connectivity and Relevance
There is little doubt about innovation as an important factor for overall economic development. There is an increasing impetus being given by developing nations and developed nations alike to promote it at all levels. Innovation holds much significance for emerging nations like India who are struggling for a two digit growth for the alleviation of poverty.
In this article we look at the definition of innovation and the innovation ecosystem as per the definition of the Indian government while analyzing its connectivity with economic development. We also look at the relevance of innovation in the context of overall economic growth and delve into ways to promote it across all levels of industry.
The word ‘innovation’ has originated from the Latin word ‘innovatus’ which is the noun form of ‘innovare’ which literally means "to renew or change. The causative factor referred to is change, according to Professor J. Schumpeter (1939), who defines "innovation," as "doing things differently in the realm of economic life."
In the National Knowledge Commission (NKC) 2007, India defined innovation as, “a process by which varying degrees of measurable value enhancement is planned and achieved in a commercial and professional manner. The process could be a breakthrough or incremental occurring systematically or sporadically in an organization and can be achieved by the introduction of new or improved goods or services and/or, implementing new or improved operational, organizational, managerial processes with the aim to achieve an improved share in the market through cost reduction, improving quality and competitiveness.”
In a significant report submitted by Accenture (2011) to the Government of India (GOI) on ‘Enabling environment for converting innovations to knowledge based enterprises’ it refers innovation as a product of invention and commercialization. As per their definition of innovation, a product idea, technology, software algorithm, patent, new business mode idea, or similar invention is not an innovation unless successfully mated with commercialization. Recently, the government of India has amended its patent laws to accommodate software invention, allowing it to be patented in India.
For government, university, industry and research labs to be successful in supporting research with varied levels of output as innovative products and research, several levels of interactions need to take place. An appropriate ‘innovation ecosystem’ for all stakeholders provides the necessary sustenance to promote innovations which are presently missing in the Indian context. One relevant question remains as to how we define an ‘innovation ecosystem’.
In the above context, Massachusetts Institute for Technology research defines ‘innovation ecosystem’ or ecology as consisting of primarily seven key elements that need to work in symphony to maintain innovation equilibrium and for an innovation environment to flourish. These seven elements are comprised of: entrepreneurs, culture, government, demand, invention, funding and infrastructure. There are several key sub elements and constraints between these elements. Each element can also be a constraint between them.
Thus, an innovation ecosystem can be referred to as a complete ecology comprised of all the systems and subsystems that help the constituents and factors to intermingle, with each freely leading to constructive research and products as output.
The stakeholders, which are generally considered to have an influencing role in the innovation ecosystem, vary from the individual and institution, as well as varying at macro levels. Several individual factors and choices and their presence lead to an innovation ecosystem. They may involve personal tastes and requirements of an individual like the presence of required manpower, consultants, or presence of hospitals, shopping cents and restaurants, etc.
At the institutional level, the presence of an incubation facility, research lab support, university support, faculty member support, legal and patenting support provided by stakeholders, etc.
At the macro level, the innovation ecosystem depends on the quality of interactions between several stakeholders like government, industry and the university, R&D labs, etc.
Lundvall et al (2002) characterizes the innovation system and its relationship with economic development with innovation interconnected with the introduction of knowledge into the economy and the society at large. The researcher refers to the role of individuals and organizations and individual learning taking part in processes of innovation of different kinds. Lundvall et.al (2002), states the efficiency of learning activities refers to the dependence of the innovation system and its performance on several aspects of socio-economic and political institutions. The linkage of entrepreneurial activity to economic growth has also been referred to by several researchers who understood the relevance of entrepreneurial activity and innovation in economic development.
A relevant model established by Caree and Thunk (2002) distinguished the relationship between entrepreneurship, innovation and the resultant effect on economic development and growth refers to the Wennekers and Thurik model (1999). Researchers define the model in three layers of analysis consisting of the individual, firm and the macro layer.
The model proposed by (Caree and Thurik 2002) illustrated the contexts and conditions leading to entrepreneurship for economic growth. The model was adapted from Reynolds et al (2002) which discussed the national framework of entrepreneurship and its relationship with overall economic development. Reynolds connected several dots in his framework which included the contextual aspects (social, cultural and political) with conditions of entrepreneurship, environment, stakeholders, and technology, with small and the larger firms leading economic growth. Lundvall et al (2002) has also referred to the interconnectivity of innovation with entrepreneurship leading to economic growth.
Dr. Manmohan Singh, Former Indian Prime Minister, laid emphasis for pursuing an "innovation ecosystem" to drive the country's development over the next ten years (T.V Padma, 2010). The present Indian innovation ecosystem in India is comprised of several stakeholders who have either been partly interacting among themselves or working on an independent basis. While defining the innovation ecosystem, Manmohan vouched for “an environment where scientific establishments, industry and agencies pool up their resources to provide start-up support for unique ideas with regulators setting higher standards for development of products. According to Manmohan, “There was also a need felt to challenge the Innovators to produce solutions with the potential to be nurtured and as per the requirement of the society.”
In brief, a strong culture of innovation ecosystem is the prerequisite for an entrepreneurial environment with innovation ecosystem referred to in this case as comprehensively encompassing all dimensions of product, business, service, technological, social and economic innovations. A good entrepreneurial environment can be classified as one which values and promotes creativity while facilitating partnerships, helps ideas and technologies reach the stage of market commercialization, and encourages cub entrepreneurs to succeed. A good innovation ecosystem is a key driver for entrepreneurship development with basic institutional support provided by mainly economic, social and political state actors.
In the past, emerging nations like India, instead of formulating their own customized growth model, had put greater emphasis on replicating the models implemented in developed nations. Some of the nations in the process had emerged successfully, but many nations failed to emulate the success of developed nations owing to several factors such as demographic, geographic, cultural and social dissimilarities. For nations like India, a different model to create and support an innovation ecosystem is needed to customize the needs of the Indian requirements.
Krishnan (2011) quotes the difference in the developed nation and emerging nation context by stating the case of Silicon Valley consisted of a complete and reinforcing innovation ecosystem leading to its emergence as a technology hub while riding the technology wave; compared to the Indian objective to use the technology effectively and intelligently so as to meet the consumer as well as national requirements instead of an emphasis on cutting edge technology. Krishnan thus believed that emerging nations need not apply the models developed and implemented by developed nations and should instead try to conceptualize their own model which could be customized and adopted by them for their economic growth (Krishnan .R.T, 2011).
To conclude, merely copying of an innovation or its innovation system would not solve the existing problems of any nation, rather intelligent and creative conceptualization, application and maintenance of customized national systems of innovation would definitely do so. In the case of India and the emerging nations like her, there is no hard or fast rule to success but a thoughtful approach. Failing that, they might have to undergo a situation that China is facing on account of a gradual slowing of a primarily export driven economy. The problems with China remain a challenge for them as they do not have a safety valve to avoid a certain blast.
This researcher hopes the lessons in this regard ring loud and clear.
Dr. Punit Saurabh is an independent researcher in the domain of innovation and entrepreneurship actively engaged in activities across India. His expertise in innovation and entrepreneurship results from his involvement teaching entrepreneurship at kindergarten, school, undergraduate, as well as graduate and doctoral level students, and to small business. He has managed government innovation funding programs and has researched the design of a specialized innovation model involving government, industry and academia as a part of his doctoral thesis from India’s leading engineering and management university, The Indian Institute of Technology Kharagpur (IIT Kharagpur or IIT KGP). He regularly contributes to leading news, research and magazines and is presently based in Pune, India. Email: