The Global Innovation Index (GII), jointly developed by Cornell University, the Paris-based business school Insead and the World Intellectual Property Organisation (WIPO) in Geneva ranks 126 countries based on 80 indicators. It is a major input for policymakers on innovation around the world. The process of translating an idea or invention into a good or service, that creates value or for which customers will pay, is innovation.
Innovation is synonymous with risk-taking and organizations that create revolutionary products or technologies and since they create new markets. As opposed to innovation, imitators take less risk because they start with an innovator’s product and take a more effective approach. Examples are IBM with its PC against Apple Computer, Compaq with its cheaper PC’s against IBM, and Dell with its still-cheaper clones against Compaq. There are any number of Indian products in the imitator class, the difference being that they serve only multiple local markets. However, can we boast of a single Indian innovated product?
Employee creativity and innovation are essential for the success of any business, particularly in times of economic turmoil. There is a clear connection between employee engagement and innovation according to a 2006 Gallup poll. Engaged employees are more creative and more willing to accept innovative ideas from others. Most CEOs value creativity, and employees who are allowed to be creative are more engaged with their current positions. A company’s culture can either foster or stifle innovation.
The GII has ranked India as the 57th most innovative nation in the world in 2018. It has been steadily improving its ranking which was 81st in 2015. Switzerland ranks first. This year, Netherlands follows at second place and Sweden at third. The US drops down to sixth from fourth last year. Apart from a rearrangement among themselves, the top 10 nations in GII have not changed. Our neighbour China, whom we use for several comparisons, improved its ranking from 22 in 2017 to 17th this year. What then is the way out? What makes innovation tick? Five pillars on which innovation is measured are its Institutions, its human capital, its Infrastructure, its Market sophistication and its business sophistication. Obviously, its political, regulatory, business environment, its education standards, R&D culture, its ICT, general infrastructure, ecological sustainability, credit, investment, trade, competition, market scale, its knowledge workers, innovation linkages and knowledge absorption all make an impact on the innovation ecosystem.
In order to be an innovator and the country to evolve as an innovative hub, a culture of innovation must be fostered among its people and systems. Education is an important vehicle in that pursuit. The other is the great strides needed in many areas including high-tech manufacturing and high-tech net exports. Technology innovation to be integrated into the local economy will need original innovators in multiple numbers. We need to encourage local talent who can create enterprise solutions to local problems that have the potential for international scale. It can happen if we promote high-quality home-grown companies in large numbers. If they disrupt the big players, so be it. So, how do we do it? The start must be made in Business Education.
Our conventional business schools have not kept pace with the leaders in the business, except a few. The admission to our business schools is still archaic, rule driven, marks and credits oriented and straight jacketed that does not provide an access to mavericks. Even entrepreneurship is taught from old and dusty case studies such as Google and 3M and fail to develop the instincts needed for breakthrough innovation. What is encouraged to explore, is just linear and incremental. No game changing technologies or processes evolve from such mundane thinking since the gestation time often seeks radical and aggressive thinking. Mere research into ancient barter theory, probably would not have evolved a digital economy and transited to Bitcoins. Learning business principles like minimum viable product and risk-based approach towards business which encourages entrepreneurs to commit the least resources needed to build a functioning product must be translated to working models.
Currently, traditional business schools in the country, inculcate short-term thinking. Students are subjected to continuous short-term scholastic testing, including examinations, essays and class participation. Instead of fostering much needed imagination, creativity or a can-do attitude, business schools saddle students with academic endeavours and conditions them to prioritise their resources and attention for the short term.
Can we turn this paradigm on its head? Admit students who have nothing to do with grades, have a fire in the belly to excel, push them to ideate and experiment and teach them to take risks, in the best of schools? An entrepreneurship model that is willing to challenge all frontiers of established businesses must be taught and must actively be tied up with potential financiers too. In Japan in 1917, a 23-year-old apprentice at the Osaka Electric Light Company with no formal education came up with an improved light socket. His boss wasn’t interested, so young Matsushita started making samples in his basement. He later expanded with battery-powered bicycle lamps and other electronic products. Matsushita Electric, as it was known until 2008 when the company officially changed its name to Panasonic, is now worth $66 billion. Can such children be identified and inducted into our elite business schools?
Most business schools, are tasked with grooming professionals climbing up the corporate ladder and helping people switch industries mid-career. This does not necessarily help people innovate. Steve Wozniak and Steve Jobs, both friends since high school, were also college dropouts. They gained considerable exposure to the computer world while working on game software together on the night shift at Atari. The third Apple founder, Ron Wayne, was also an Atari alumnus. Their case studies must be studied in our business schools in addition to a coffee supply chain that generates ideas for what can be done to equalize returns across various stakeholders or an IBM corporate service corps case study or the success story of a shake shack IPO.
The world is full of infinite possibilities and countless opportunities, but a life and career are finite, meaning one has a limited time to find what one is searching for and make a mark on the world. This is the time. It’s limited, so one can’t waste it. One should find something one likes to do and just do it. That’s how real entrepreneurs always start. Innovative thinking later, drives them to their goals.