Will india make it – 2016? From jugaad to innovation

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Updated: Dec 31, 2015 9:57 AM

The start-ups, the unicorns … the result of a transforming India as well as what will transform India

India now has the world’s third-largest number of start-ups, with $5 billion pumped into them this year. India now has the world’s third-largest number of start-ups, with $5 billion pumped into them this year.

sunil jainAs the year ends, and begins, rather than the macros which are both good and bad, focus on a more fundamental change which is both the result of a changing India and will also transform India as never before.

Over the years, many top MNCs have set up R&D centres in India, doing cutting edge work. GE comes to mind immediately with its 4,500 people in Bangalore and the work being done to re-engineer medical equipment and lower costs to 30-40%; there is the work on machine-to-machine feedback which allows a ‘digital twin’—on a computer—to mimic, and simulate, what’s happening on the real-life machine so as to know the best time to schedule maintenance, there’s the ‘brilliant factory’ in Pune which incorporates this…

IBM and Accenture have large work forces in India and, as compared to 10,000 people in its Bay Area headquarters, Google has 1,500 people here already. On his first visit to India as its new chief, Sundar Pichai—who announced a plan to train 2 million Android developers over the next 3 years in India—talked of how innovation was coming of age now that there was a big market in India; it has already surpassed the US in terms of the number of internet users and, in 2016, will beat it in Android handset sales.

Market + innovation, that’s the feedback loop you are going to hear of continuously over the next few years. With a huge market opened up, thanks to 400 million Indians being on the internet—and  800 million more yet to come on!—as Pichai pointed out, there is finally a market to spur innovation.

It is not just MNCs doing cutting edge work here, it is now Indian innovators doing work for Indian firms for an Indian market. Aadhaar and the NPCIL—both government programmes, incidentally—have potentially changed the dynamics of the way money/subsidies will be transferred and are world-class in their ambition and delivery; as Nandan Nilekani argues in his page-1 piece today, the dynamics of various industries in the financial sector will change as a result of what he calls the ‘India stack’.

We are focussed on the unicorns like Flipkart and Paytm—8 of the world’s 140 billion-dollar firms being in India says a lot about the ecosystem being developed—but India now has the world’s third-largest number of start-ups, with $5 billion pumped into them this year. Think of Hike messenger which is more than just a copycat version of WhatsApp or of Team Indus which is working with ex-Isro scientists to land an unmanned vehicle on the moon.
Or of Rohan Parikh, who’s struck out on his own having used innovative solutions like ‘radiant cooling’ to lower Infosys’s energy bill by 30% in its Hyderabad campus—with 40% of the world’s energy used in buildings and 40% of that in cooling, his solution can potentially cut energy usage by 5%; and the payback period is negative since it is cheaper to construct buildings Rohan’s way.

But, won’t the political class stop this as it has stifled India so often in the past? It will, and it won’t—the political class has the most to lose from Aadhaar going mainstream as the subsidy loot will stop, but it went ahead with it. The PM talking of Swachh Bharat sounds hypocritical, but when lakhs of geo-tagged pictures are posted online, that forces the political class to fix things, pronto. Rohit Sabherwal, formerly of CMIE, has a toilet app laid upon Google Maps that allows users to give feedback on each public-use toilet in a state—that will raise quite a stink if left unaddressed, won’t it?

Be wary of government because free markets are what drive innovation, and even the BJP is anti-market in many ways. But in a globalised economy, bad policies can’t last for long—that’s why the FM quickly rolled back his bad MAT-tax on FIIs; they were walking away if he didn’t. Two, when the middle class grows to a certain size, as it is in India, that puts a pressure on the politicians to fix governance. The size of the markets will bring in players like Foxconn to produce mobiles here, for instance, and that, in turn, will lead to other changes—look at how Suzuki chang-ed India’s manufacturing paradigm.

Keep in mind, India’s telecom revolution, driven by the size of the market and telco innovation in terms of pricing models, has witnessed the best and worst of government policy, but two decades later, 60% of Indians are connected, and a fifth are on the internet.


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