India’s Engine of Innovation
As India strives to become the next big innovation hub, it faces challenges ranging from bewildering regulations to educational shortcomings and inadequate infrastructure. But the country’s indomitable entrepreneurial spirit may well overcome the hurdles.
‘ India boasts 750 R&D and innovation centres where designers and engineers are working on global projects.’
Nirmalya Kumar is an internationally known authority on doing business in India, and professor of marketing at the London Business School.
“The thought that there are not enough people in India may sound strange for a country whose population is more than 1 billion,” Nirmalya Kumar says. “But when you are doing R&D and product development work, you need scientists, you need engineers, you need Ph.D.s – and in India these people are in a very small group. The country has been unable to ramp up its educational infrastructure so as to get enough of them in the pipeline.”
Kumar, originally from Calcutta, is a professor of marketing at the London Business School, the author of six books and an internationally known authority on doing business in India. He sees both strengths and weaknesses in India’s efforts to become a global innovation hub.
India has succeeded brilliantly in the past 20 years in breaking up operations that formerly had to be done in the same place, he says. Indians figured out how parts of tasks could be done in India, taking advantage of low costs and high expertise, and then reintegrated. For example, he says, “You may need to cook your hamburger in New York, but your table reservation can be made through India, and your bill processed in Bengaluru.”
When it comes to innovation, India is taking advantage of a similar partition of labor.
“In the old days,” Kumar says, “global innovation always took place in the developed world, where the company headquarters were located, such as in the UK, the US or Europe. Today, global companies typically divide the development of a major project into distinct pieces. One part might be given to China to develop, another part to India. For the Boeing 787 Dreamliner, the technology for landing in zero visibility was designed in India.”
This approach has been a boon for India, where innovation centers in the past typically focused on creating products for the Indian market. These days, India boasts 750 R&D and innovation centers where designers and engineers are working on global projects. “That’s a big change,” Kumar says. Historically, India has displayed great energy for commercial ventures, despite many roadblocks.
“India has always been a highly entrepreneurial nation,” Kumar says. “Indians are naturally inclined to start businesses.”
Under the British Raj, however, Indians faced oppressive restrictions on owning their own businesses. While independence in 1947 lifted some of them, India was left with such a rigidly controlled economy that many of its entrepreneurs chose to go abroad. Eventually, Kumar says, “practically every motel in the US and every little mom-and-pop store in the UK was owned by Indians.”
Today, while India has seen a remarkable economic rise, many hurdles remain before it can become a top world centre for innovation. For one thing, Kumar says, “there are too many regulations. In some states, it can take as long as 180 days to register a company. That’s unacceptable.”
Other challenges include poverty, educational deficits, and infrastructure shortages.
Kumar spent his childhood in Calcutta free from the distractions of TV and telephone. “I was a voracious reader,” he says. “I read anything that came into the house, including the paper wrappers that the vegetables came in.”
When he was 15, he picked up his father’s copy of Philip Kotler’s classic textbook Marketing Management. “I loved this book, and from that moment on, I wanted to do something in marketing.”
Ultimately, Kumar moved to the US for a decade, writing his Ph.D. with Kotler himself at Northwestern University in Chicago. “It was a dream come true for me.” Kumar has gone on to write three books on marketing and two on doing business in India. His newly published sixth book, Brand Breakout: How Emerging Market Brands Will Go Global, combines both of his main themes.
“Why is it that all the brands we know come from the developed world?” he asks. “My book shows eight different pathways that emerging market brands can follow to take their brands global.”
What makes Kumar tick? “I have very clear objectives, and I’m driven to achieve them,” he explains. In this, perhaps he serves as a role model for India itself.