The Art of Innovation
“Research & Development”(R&D) refers to a systematic approach to creative work undertaken to increase scientific knowledge and introduce products with new technology in the marketplace. We may imply that the pace at which technology progresses is proportional to the R&D spend, which in turn, is an indicator of innovative capacity.
R&D spend in India has remained below 1% of GDP for more than a decade. In 2012, approx. $40 billion was spent, which translates to just 2.1% of the total global expenditure. A large portion (~75%) of this amount was spent by the Government. R&D spends and the innovation output in the private sector continue to be very low.
Studies by leading management schools reveal that the greatest obstacles companies face in innovation are often non-technical and people-related. In India, such obstacles are related to education, management, and cultural and social issues.
Barring few institutions such as the IITs and IIMs that emphasize on applied learning, the emphasis of our education system is generally on theoretical learning and high scores. This leads to students merely memorizing from their books and writing their exams. As a result, the workforce that comes out is generally not innovative and adaptive. A credit-based course on innovation was offered for the first time only in 2011 (Cluster Innovation Center, University of Delhi).
Lack of leadership commitment to innovation is another challenge. Leadership in most companies still has not recognized innovation as a systematic process. A recent survey by the CII revealed that Indian companies innovate only when their markets are threatened by competitors. There are only three Indian companies in Forbes Magazine’s list of "100 Most Innovative Companies", namely TCS, Infosys and Bajaj Auto. The success of these home-grown companies, and that of foreign companies such as GE and Hyundai in India, can be attributed to the leadership's vision and commitment to innovation.
Mr. Adi Godrej once rightly said, "In India Inc., we have a bit of a rigid hierarchical structure that needs to be changed". Employees act on instructions from their superiors and deviations from such instructions and failure are not encouraged. Cultural and social issues also include the risk-averse nature of Indian society, upbringing of children, as well as social stigma attached to failure. Children in India are taught to be socially respectful and are not encouraged to deviate from well-trodden paths into paths less travelled. Warren Buffet, who supports charity initiatives in many countries has stated that the key to the success of his initiatives is identifying people who take calculated risks based on their local knowledge.
As India transitions from a developing economy to a developed one, the nation is set to face huge developmental challenges, especially on the environmental and agricultural fronts. The need of the hour is to skillfully inculcate a work culture which stimulates innovation, especially in the private sector, which will help transform the nation into an innovation hub. To achieve this, the following steps can be considered:
Work environment - A relaxed and flexible work environment will help stimulate innovation. A case in point is the work environment in IDEO, the California-based global design consultancy, where employees are given freedom to design their own work areas. Their work routines are modeled on children's playfulness. Further, encouragement is given for generation of wild ideas and learning through hands-on building. This has led to the creation of many products that combine the best of form and function.
Diversity - Hiring people from a diversity of backgrounds and encouraging multi-disciplinary learning are also key stimulants to innovation. Interaction between the employees of different departments and cross-functionality tend to produce better results than working within "silos" or verticals. The creation of "Watermelon Forums" in PricewaterhouseCoopers, Australia is an excellent example of how to break the silo structure. These forums were formed when the company recognized the need to encourage communication between the different verticals due to the broad nature of client issues. The forums provided a platform for bringing together different people with different views from across the business and ultimately resulted in the creation of powerful and effective solutions for client problems.
Incentives - Providing incentives to employees is also a means to encourage innovation. The incentive could be financial, social and and/or psychological. Tata Innovista, an annual innovation awards held by the Tata Group is aimed at "encouraging, recognizing and showcasing outstanding innovations" of the Tata Group. Innovista signifies the growing culture of innovation in the group, with elements of technology-orientation, cross-pollination, and risk-taking ability. Over 70% of the participants in the 2013 edition were in the age bracket of 20-40, indicating that the innovation ecosystem in the group is empowering young managers to think beyond the ordinary.
Time-off - This aspect is often overlooked. Employees should be encouraged to take adequate time-off. Innovation cannot be expected from over burdened employees. A fresh and relaxed mind is more efficient and creative than one that is stressed out and in dire need of rest.
PGD (IPR), M.F (Biotech), B. Tech (Biotech)
Surana and Surana International Attorneys