Can’t be complacent about innovation
The New Year is upon us. It has been 17 years into the 21st century and if one word has to define this period, ‘innovation’ is bound to reign supreme. Technological innovation in every field has taken place at such a rapid pace over the last two decades that most of it is taken as given.
It is hard to imagine that a world obsessed with acronyms like AI, VR, and EV was still very much dependent on the post office barely 17 years ago. It is unfathomable and potentially scary from some aspects as to what the future holds for mankind. With the world innovating at breakneck speed, no country wants to be left behind the curve. China is the latest kid in the block. It is no longer the low-labour-cost country that makes it the manufacturing powerhouse of the world. Now, the country's manufacturing strengths lie in its strong supply chain networks and advanced production knowhow.
In fact, in its 13 Five Year Plan that began in May 2016, China laid out a roadmap to become an "innovative nation" by 2020 and an "international innovation leader" by 2030. Even before these goals were set, the country had doubled its spending on R&D between 2000 and 2016 from 0.9 percent of its GDP to 2.1 percent. It is no surprise then, that the greater ShenzhenHong Kong area finds itself ranked second in terms of global inventive clusters as measured by patents. It is clearly time for India to adopt innovation as a paradigm and a long-term principle to be competitive on the world stage.
Like China, it is critical that India works upon building an enabling conducive environment for innovation to take place. This includes, but is not limited to, access to technology required for scaling, availability of funding, leadership and skill, and also a market for all this. As per the Global Innovation Index, India has shown consistent improvement since 2011 and its performance has been ahead of the average lower-middle- and upper-middle-income countries of the world.
However, the India State Innovation Report 2017 has brought out some interesting highlights on the state of innovation in India. First, on a national scale India lags considerably behind the major economies of the world. As of 2015, India spent 0.88 percent of its GDP on R&D while Brazil, the US and Japan spent 1.2, 2.8 and 3.4 percent respectively. As for patents, India had filed 17 per million people while Brazil, China, the United States and Japan were at 34, 541, 910 and 3,716 respectively.
Finally, India's share of global publications stood at 4.2 percent while China and the US were at 20.2 and 25.3 respectively. Therefore, there remains a vast gap for India to cover if it to catch up with the global economies in the field of innovation. It is not a preposterous argument to make that the economy which stays ahead in the race for innovation will dictate global dominance.
As things have panned out over the last year, the USA seems to have been ceding that ground to China. Denying realities like climate change to support industries of yesteryears like coal and closing doors on the very people who built the country seem inimical to the innovative spirit that has come to define America. A huge vacuum will probably be left behind, and India needs to grasp the opportunity while the time is ripe. Second, coming to the sub-national level, India shows a very mixed performance. Delhi, Tamil Nadu and Maharashtra were the most innovative states in 2017. A three-way categorisation was also done based on the classification for developmental stages of economies by Michael Porter, considered the guru of competiveness. Delhi, Karnataka and Uttar Pradesh turned out to be the leading states in their respective stages. Union Minister Shiv Pratap Shukla on Tuesday said no proposal regarding merger of Public Sector Banks (PSBs) is under consideration of the government. However, the government has put in place an approval framework for proposals to amalgamate nationalised banks, the Minister of State for Finance said in a written reply to the upper house of Parliament, Rajya Sabha.
The Banking Companies (Acquisition and Transfer of Undertakings) Acts of 1970 and 1980 provide that the central government, in consultation with RBI, may make a scheme for amalgamation of any nationalised bank with any other nationalised bank or any other banking institution, he said. To facilitate consolidation in the public sector banking space, the Cabinet in August gave in-principle approval for PSBs to amalgamate through an Alternative Mechanism (AM). Subsequently in November, a panel under the chairmanship of Finance Minister Arun Jaitley was set up to examine proposals from banks for in-principle approval to formulate schemes of amalgamation. A report on the proposals cleared by it will be sent to the Cabinet every three months. Last year, five associates and Bharatiya Mahila Bank merged with the State Bank of Inida (SBI), catapulting the country’s largest lender to among the top 50 banks in the world. Software veteran Salil S. Parekh, who took over as the CEO and MD of Infosys on Tuesday, said he is excited to lead the IT major on its path of helping clients digitally reinvent themselves. "I am excited to lead the company on its path of helping clients digitally reinvent themselves for sustained growth," said Parekh in his maiden address to nearly two lakh Infosys techies operating at its development centres the world over.
Admitting that 2018 got off to a great start for him as he began his journey as CEO of an iconic company, he told the Infocions that each of them had an important role to play in the world of continuous technology disruptions. Earlier in the day, senior executives, including Chief Operating Officer UB Pravin Rao, welcomed and greeted him at the company's corporate headquarters, on the outskirts of the southern city. "Soon after the senior management briefed Parekh about the company's activities and made a presentation on its current business, he addressed the employees through video-conference," a company official told the IANS.
"We are delighted to have Salil joining as the CEO and MD of Infosys. He has nearly three decades of global experience in the IT services industry. He has a strong track record of executing business turnarounds and managing very successful acquisitions," the Chairman of Infosys' Board, Nandan Nilekani, said in a statement to the Bombay Stock Exchange. Parekh taking over as CEO is hugely positive for Infosys, as he is a team builder who understands the business and the changing market environment, the company's former chief financial officer, T V Mohandas Pai, told the PTI. "He is a customer-facing person and that's exactly the kind of talent that's required. Working in a services company (in Capgemini where he worked earlier), he understands, he knows how to deal with people and how to carry teams along with him," Pai added.
The Infosys Board on December 2 appointed Parekh, 53, for the top executive post for five years with effect from January 2 to December 31, 2022. Parekh is the second non-founder executive of the $10-billion firm after the exit of the first non-promoter CEO Vishal Sikka in August, following a spat with its cofounders over governance issues last year. The company, however, has not disclosed details of Parekh's annual compensation, including perks and stock options, if any, so far.
Prior to joining Infosys, Parekh was an executive board member of the Parisheadquartered global consulting, technology and IT major Capgemini. Parekh has a masters degrees in computer science and mechanical engineering from Cornell University in the US, and a B. Tech degree in aeronautical engineering from the Indian Instiute of Technology-Bombay. The fulltime CEO post has been vacant since Sikka quit, stating that he could not continue to work amid "malicious personal attacks".