Will india make it – 2016? Leveraging India’s frugality bias

By: | Updated: December 31, 2015 9:59 AM

India has all the ingredients to become a global driver of innovation, led by a strong market potential, an excellent talent pool, and an underlying culture of frugal innovation.

India has all the ingredients to become a global driver of innovation, led by a strong market potential, an excellent talent pool, and an underlying culture of frugal innovation. Innovative countries have demonstrated the leverage of cultural advantage to capture markets. Japan leveraged its cultural emphasis on efficiency and team work to revolutionise the manufacturing and engineering industries. Korea leveraged its cultural emphasis on speed and built world-class companies such as Samsung and LG. China has capitalised on its action bias to sustain a GDP growth in excess of 10% for more than two decades. The US and Israel have leveraged the diversity of their population to lead aggressively on innovation. Similarly, India can leverage its cultural bias of frugality and sustainability to capture markets not only within its shores but globally. For this to happen, our industries need to have the hunger to be at the top of the value-chain, our talent pool has to get more hands-on, our customers have to be more demanding, and our policies have to be more transparent.

Indian corporations and the government should first focus on innovation for the significant internal market needs in energy, water, transport, healthcare, and food security to deliver tangible human and environmental benefits.
Energy: India would need to generate 0.5 kW electric power per person to provide reasonable level of opportunities to its population. Based on current projections for 2025 population, India needs to increase its generation capacity 2.5X, from roughly 280 GW to 710 GW. The energy requirement of 0.5 KW per person is roughly half of the European average and a quarter of the US average. Transmission and Distribution (T&D) capacity should be upgraded accordingly.

Water: India needs to double usable water from 1,000 to 2,000 cubic meters person per year. Less than 1,700 cubic meters of water person per year is considered to be water-stressed. Currently, the US provides 8,000 cubic meters person of water per year to its citizens. Also, India would need to double the sewage treatment facilities in urban areas to even meet its current needs.

Transportation: It is estimated that India will add 1,000 passenger and freight locomotives over the next 10 years and the passenger and freight aircraft market will grow to be 100B+ by 2025. An additional resource to consult is the report submitted to the prime minister of India by National Transport Development Policy Committee in 2013-14, India Transport Report: Moving India to 2032.

Healthcare: The country will need to grow from 4%-of-GDP healthcare spend to 5.5%-of-GDP, as per the CII-McKinsey report on Healthcare, “India Healthcare: Inspiring possibilities, challenging journey”. The report presents the vision for India’s healthcare with clear goals for 2022.

Food security: India will have to develop innovative, accessible, diversified food plans and supply chains to enable at least around 2,100 kcal per capita per day diet for the urban population and 2,400 kcal per capita per day for the rural population.

From a technology leadership standpoint, start-ups should accelerate innovating for the digital economy and large corporations should develop new opportunities at the confluence of emerging scientific knowledge and materials. One such opportunity is the intersection of biology, computing and materials. New developments in genomics, connectomics, deep learning, and 2-D materials provide the palette to create global-first products and services. Applications include higher efficiency energy life-cycles, sustainable fuels for transportation, predicting and preventing disease, improved wellness and better nutrition. In these emerging research areas, industry R&D should double and the government should provide direct R&D grants to industry.

With a positive demographic, political, and market outlook today, India has its best opportunity in many decades to position itself for a century of innovation. India has the ability to create a unique spot in innovation history to meet its requirements using its cultural advantages of frugality and sustainability. It is our time to make it happen!

Gopichand Katragadda, Chief Technology Officer, Tata Sons

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