It has been a typically hectic and energetic start to the week at Ishan Institute of Management & Technology, one of the top PGDM colleges in Delhi NCR. Very soon we shall be starting with a new academic year and begin afresh with lecture sessions for the new batches of students in B.Com and PGDM. Amidst all the routine work of taking classes, attending classes, doing assignments and reporting them, there is a sense of disciplined learning that fills us with a sense of pride. Each year when the academic curriculum is completed on time with some days to go before the exams begin academicians take note of the joust in time delivery. Each year when students come out with flying colours in exams and final year students ink the terms of contract with a top notch blue chip corporation, academicians commend themselves on a job well done. There are many PGDM colleges in Delhi NCR and across India and probably all of us go through the motions in the same way. Does this leave any room to conceptualize, create and execute something new? Does this enable academicians to be intellectuals and thought leaders? Does this enable students to be revolutionaries or conformists? India’s innovation profile speaks volumes on the monumental scarcity of a brand new revolutionary culture in academics. If an emerging economy like India does not need innovation, then who else in the world does? These are serious questions that are bothering us at the top PGDM college in Delhi NCR. We shall not stop here. We will ask a few more.
United States of America: A Model Nation for Innovation
United States of America has got many things right if no everything. As an academician you cannot help but be humble enough and appreciate the fact that over the last century, United States of America has bagged the lion’s share of Nobel prizes awarded in the fields of physics, chemistry, medicine and economics collectively. The fact that modern day economics is on the verge being accorded the status of being a fully fledged science in many countries including India is also an original achievement of American economists, mathematicians and statisticians working together to enrich it. Are there key result areas and takeaways for an emerging economy like India? Can we in India and specially the top PGDM colleges in Delhi NCR adopt and follow a strategic blue print to foster innovation? Let us take a close look.
The KRAs of United States of America as a Model Nation of Innovation
The United States of America invests USD 450 billion annually on R&D activities. It is a monumental budget that they have set aside for their R&D agenda. Budgeting for innovation is a key aspect of the American way of life. The young prodigies of America in schools, the academicians working in top notch American universities, the Federal Government, start up firms and blue chip multinational corporations come together to create an innovation echo system and play their respective parts to near perfection. China ranks second in the world in terms of R&D investment at USD 340 billion. Israel and South Korea rank third. The above list of champion nations in innovation might lead us into believing that innovation is a capital intensive agenda and hence emerging economies like India do not stand any chance. The reality though is something else.
Second, large companies like Apple, Google, Tesla, General Electric, Microsoft, IBM, CISCO, Hewlett Packard and Dell invest regularly and heavily in R&D activities. These large companies maintain a strong linkage effect between innovation and new product development. Each innovation project has led to new product development or process innovation. They compete aggressively to sell these new products in the global market. While it is true that the probability of getting a new commercially viable product or process out of a research and development project is on the lower side, it is equally true that one new successful product development and launch in the global market more than compensates them for the investments of time, effort and capital.
Third, U.S. corporate spending on R&D is the highest among all countries in the world. In the year 2014 the gross U.S. corporate R&D spending registered a growth of twice as much as the last year. It is only a matter of time before these projects on R&D bear fruit and end up as new products in stores near us in India and the rest of the world.
Benchmarking the Takeaways from United States of America for India
In the preceding paragraph we have highlighted the different aspects of government and corporate budgeting for innovation. While many people believe that the entire spectrum of innovation and the ecosystem is captured by capital intensive methods of R&D and hence emerging economies like India have no chance, there are other metrics to objectively assess the truth. Bog companies have the financial resources to innovate. Where do they get the finances from? Corporate finance in India and the rest of the world is the same. But investor sentiments differ. Today, if Indian investors were told that there is a team of young researchers working at the R&D labs of a university, IIT or IIM or a start up or a big public company on a project to develop a new technique of treatment for cancer that is more reliable and cost effective and hence worth a try in terms of investment, how many of us would buy into that story? How many investors would dare or actually care to invest in such an enterprise that thinks of innovation as its bread and butter stream? Hope begets hope and foolishness begets foolishness. There is a possibility for us to create a situation where every stakeholder wins. But do we care to spread the hope? Let me leave it at that to avoid further pain in the heart. India is home to free markets of the best variety in Asia. We are the largest consumer market in the world. We buy anything. But we don’t invest in R&D? Cannot venture capital firms, stock brokerage firms and banks come forward with risky yet entrepreneurial ideas? Can’t public sector banks invest as institutional investors in R&D programs of IITs, IIMs and top notch universities with a consistent track record in R&D and innovation? Is not it better to incur bad loans on R&D projects than on business leaders who flee to England after drinking and making merry on banks’ NPAs? Are the profit hungry investors of Dalal Street listening?
Second, an entrepreneurial culture is required. In addition to the public and private sectors, there is a need for pirates to establish a personal sector of their own. In the post capitalist era of Peter Drucker’s knowledge workers revolution comes is born out of enterprise and research work that can be commercially scaled up for markets. There are three takeaways from the U.S. innovation agenda: optimize innovations in products and processes for time, space and scale. Innovate with an eye on sustaining the markets in the present and then look to create the future. Think of substitutes and the likely direction of competition in the next wave of innovations and proceed. Explore innovation opportunities in the challenges that people in different countries are facing. Ask yourself if you can repeat the effort taken to produce one prototype of a new product or process for a large number of times and cycles. Scalability is an imperative. Don’t let the cement concrete mixer stop. Innovation is a race to the top and one who stops mid way is automatically ejected out of the race by default. Can our students love what they do and engage in attending lab work than just attending lectures? Are the students listening?
Third, a city has got to showcase opportunities for enterprise and new venture creation to youth not just malls and amusement parks. What keep us awake in cities like New Delhi, Kolkata, Mumbai, Chennai, Bangalore, Pune and Hyderabad? United States has developed a culture of throwing the youth out of their cosy homes at an early age. Look at the social liberalism of cities like Boston, Los Angeles, California’s Silicon Valley and New York. Social liberalism is about parents daring to throw their 19 years and above children out of their homes without a second thought. Sponsoring education is fine and permissible, given the values and lifestyles (VALS) of India. But beyond that it makes no sense to sponsor the online purchases, weekend parties, burgers and pizzas. Are the parents and academicians listening?
When an eagle teaches the yet to be born kids to fly, the mother eagle flies high into the azure sky with eggs and drops them from a height of 9000-10,000 meters. The yet to be born eagles inside these eggs experience the risks of free fall and in excitement of beastly passions to live life and not succumb to death, stretch their wings out in desperation. The egg crumbles and a new generation of predatory, enterprising and fearless eagles is born. That is how winning is done. That is how innovation is done. Innovation is the brainchild of necessity. Natural selection applies to start up firms, business leaders and technocrats as much as it applies to eagles.
At Ishan Institute of Management & Technology, one of the top PGDM colleges in Delhi NCR we believe now is the time to innovate. Let us begin by budgeting time, effort and money to streamline and address issues in our lives. It makes no sense to warm the benches in classrooms and sofas in the homes when they should be out there flying high above in the sky. Experience the free fall and understand that it is now or never.