The ISO 56000:2020 defines innovation as “a new or changed entity realizing or redistributing value”. Simply put, innovation is implementation of an idea that results in new products or improvement in processes and services. Whereas innovation seeks risk-taking and disruptive organizations, that create revolutionary products or technologies, creating new markets, imitators only produce products that serve multiple local markets.
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 132 countries on 80 indicators. The major categories for the index are Business Sophistication, Market Sophistication, Infrastructure, Human Capital and Research, Institutions, Creative Outputs, Knowledge and Technology Outputs.
India’s six-notch jump to the 40th spot with a score of 36.6 in 2022 from 46th rank in 2021 is commendable. The World Intellectual Property Organization (WIPO) reports that India is now the top most innovative lower middle-income economy in the world, overtaking Vietnam. Whereas Europe is the most innovative, Switzerland with a score of 64.6 leads the countries in the world for the 12th year in a row due to its high number of patents and institutional strength. The top ten countries besides Switzerland this year are the US, Sweden, UK, Netherlands, South Korea, Singapore, Germany, Finland and Denmark in that order. Our neighbour China, whom we use for several comparisons, improved its ranking from the 12th place in 2021 to 11th place this year with a score of 55.3
Employee creativity and innovation is essential for the success of any business, particularly in times of economic turmoil. Engaged employees are more creative and more willing to accept innovative ideas from others. A company’s culture can either foster or stifle innovation. Business R&D spend, FDI, GDP, infrastructure, energy efficiency, per capita spend, quality of education and institutions, political stability, safety, ease of doing business, number of most valuable brands, patents filed and granted, labour productivity and digital transformation are all important to a better rank.
In order to be an innovator and the country to evolve as an innovation hub, innovation culture must grow among its people and systems. Quality education is an important vehicle. Others must include high-tech manufacturing and high-tech net exports. Local talent must be encouraged who can create enterprise solutions to local problems. This will need high-quality home-grown companies in large numbers. Contemporary business education must lead.
Our 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. Out of box thinking and mavericks must lead the way. Entrepreneurship is taught from old and dusty case studies such as Google and 3M that fail to develop the instincts needed for breakthrough innovation. The ability to explore, is just linear and incremental. No game changing technologies or processes evolve from such mundane thinking. Often gestation time is large.
Innovation seeks radical and aggressive thinking. Business thinking must move from research into ancient barter theory to digital economy and Bitcoins. Minimum viable product and risk-based approach must be encouraged. AI, ML, Information and security Analytics, IoT, Big Data, Project Management, Fin Tech, Digital marketing and strategy must become part of curriculum.
Currently, traditional business schools in the country, inculcate short-term thinking. Students go through continuous short-term testing in acquired skills, examinations, essays and class participation. Instead, we must encourage imagination, creativity, a can-do attitude and innovative disruption.
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 2.93 trillion dollars. We need to identify such potential in our business schools. To start with, can we admit students who have nothing to do with grades, but have a fire in the belly to excel? Steve Wozniak and Steve Jobs must become the role models. Arthur Clarke once said, “The only way to discover the limits of the possible is to go beyond them into the impossible.” That thinking, leads innovation.