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Innovation – An imperative for survival of organizations!

There is a famous quote – ‘The only thing predictable about life is its unpredictability’. The Covid 19 impact is the most interesting and relevant example of the same. Even the best of minds cannot claim to have planned for the same. Especially from the point of view of the businesses and economy!
As per the Deloitte article (https://www2.deloitte.com/in/en/pages/consumer-business/articles/following-up-on-the-immediat-economic-response.html) the rampant spread of COVID-19 across borders and geographies has severely impacted almost the whole world and triggered significant downside risks to the overall global economic outlook. Due to the lockdown announced by the Indian Government, the Indian economy has also slowed over the last few months. For most businesses, the slowdown has been in the form of supply disruptions, a fall in consumption demand, and increased stress on the banking and financial sectors. However, like the Great Depression (1929), the dot-com bubble bust (1997- 2000), and the 2008 financial crash did in the past, the Covid-19 is changing the way the world works.

Many businesses are changing gears fast and can sustain and survive better than others. They are using innovation and design thinking to adapt to unprecedented times. Organizations, especially in the e-commerce, digital education and related, entertainment, wellness, FMCG industries have adapted to the customer need, the market environment, and its challenges, and have found little green shoots.

As per the Financial Express article dated 19th May 2020, the e-commerce firms that are doing well, are those that found innovative process solutions to the disruption of supply chain due to prohibitions in terms of deliveries across various regions. Amazon and other e-commerce majors tied-up with local kiranas or neighbourhood mom-and-pop stores to fulfil the market demand. Recently launched online store JioMart by Reliance Industries, which went live on WhatsApp in select locations in Mumbai and other locations claims to have tied up with millions of kirana stores. Paytm Mall, meanwhile, announced tie-ups with over 10,000 neighbourhood stores to scale up its grocery delivery services around the country. (reference article dated 6th June in TOI). Similarly, an organization like HUL which has been operating in Indian markets for over 80 years with over 35 successful brands, chose to re-plan their innovations, adapt to the “emerging demand patterns in the short term and prepare for any lasting changes in consumer behaviour.”

New age organizations were faster to innovate due to the sheer nature of their inception and culture. For example- Cultfit, owned by the founder of Myntra, Mukesh Bansal adapted fast to the market realities. They used the market conditions to increase trials of their digital platform of Curefit, further monetizing it to create relevant revenue streams. Lenskart integrated store inventory with Google to ensure that consumers could access products even before they come to the store by just searching on Google or could fix appointments to minimize out of home time. Useful innovations provided solutions to many challenges faced by different organizations during these hard times.

Historically too, it has been observed that the changing economic environment, socio-cultural changes, technological changes, digitalization, caused a profound effect on organizations’ growth. Many world-famous companies like Yahoo, Nokia , Kodak , Xerox, and many others are a patch of what they were earlier, revenues and market share, while some companies no longer exist. Legendary companies like American Motors and AT&T, which were part of the Fortune 500 list have been replaced. In India too, many large corporate organizations have lost their market shares due to the inability to adapt and grab opportunities thrown by the changing markets. A case for example in India would be Meru Cabs. While they were one of the first companies that entered early in the organized Indian Cab Markets, entry of Ola and Uber in the cab market displaced their market share and revenue. Similarly, brands like Airtel, Hyundai, who were strong market leaders in the late nineties and early twenties are now trying to adapt to the dynamic nature of the market to sustain and grow. On the other hand, new companies like Facebook, Amazon, Netflix, Google are prominent in the list of Fortune 500 companies. India has also seen young companies becoming Unicorns – Ola, Quikr, Snapdeal, Nykaa, and 30 others in the last 10 years. A particularly important contributor to these organizations’ reasons for the growth has been their culture of innovation. All these organizations have systematically created an environment to ensure innovation – in product and processes …. Thereby equipping them to perform better even during the trough periods in the economy.

Different organizations have adopted different corporate entrepreneurship models to ensure they invigorate their growth, through innovation. There are organizations like Google, which encourages all employees to have an interest in innovation and motivate them to create new ideas and products to grow business. Employees in Google are allowed to use 20% of the time to think of new ideas, sell their ideas internally to get more team members to work on the idea, to fine-tune their concept and reach till the development of a prototype (i.e a sample model of the final product/concept to be built, created with the objective of testing the idea in the market). Employees, teams can also approach the management for funding the idea. Further, these employee/teams get financially rewarded if the innovation reaches the market and gets acceptance from the customers. At any point in time, Google supports approx. 100 projects with 70% of the projects supporting Google’s core business, 20% representing emerging businesses, and 10% focusing on experimental ideas. (Google case study – Source – MIT Sloan Business Review). This ensures a consistent flow of disruptive innovation.

On the other hand, there are organizations like Samsung, Cargill, and ITC that follow a focused approach to corporate entrepreneurship and ensure innovations continue to grow and expand the markets. For example, the ITC Research and Development Centre has played a crucial role in sustaining a competitive advantage for the company. Its mandate is to go beyond supporting its existing products and services and create innovations that not only meet but anticipate consumer needs. Many Indian Information Technology firms like TCS, Wipro, and Infosys as well as pharma companies follow this model of the innovation to create products and services that are ahead of the markets.
Each organization identifies and adopts its own model of innovation depending on the type of innovation it is targeting – be it a routine innovation versus radical innovation versus disruptive innovation versus architectural innovation. However, to be successful in its endeavour to invigorate or re-invigorate, each organization needs to build its strategy, internal systems, and the right kind of culture for innovation.

To summarize, as the speed of change and uncertainty in the business environment increases, no organization can afford to be complacent on innovation. And the words of Peter Drucker ‘Innovate or Die’ hold even truer today.

Do share any other interesting examples of process or product innovations that have been adopted recently

Innovation is the mechanism of entrepreneurship

A country with large publicly funded science and technology infrastructure and a considerable education base, India has not been able to comprehend its innovative potential due to a fragmented innovation ecosystem. Many initiatives have been taken by the government towards intensification of the innovation ecosystem, the most imperative ones are: i) the establishment of the National Innovation Council, whose mandate is to coordinate various innovation-related activities, and ii) the new Science, Technology and Innovation Policy 2013, which is intended to encourage entrepreneurship and science-led solutions for sustainable and comprehensive growth. Centering on the new policy initiative, this article describes the current innovation ecosystem and the challenges it faces, and it discusses the efforts made by the government towards the promotion of innovation for entrepreneurship development and sustainable growth. With the implementation of this new policy the early indications are that India is poised to take a big leap towards innovation-led growth.

The aim of the government has been to build employment opportunities for youth while edging on economic growth. Entrepreneurship development is one of the mechanisms adopted by the Government of India towards the creation of job opportunities. There have been notable efforts taken by the government by announcing conducive policies and also efforts by various government departments towards fulfilling the above vision. The government’s assumption is that support for innovation will augment entrepreneurship development, which will in turn accelerate economic growth.

This article provides the necessary background to place the current innovation ecosystem within the Indian context, highlights some of the related challenges facing India today, and describes efforts made by the government towards the promotion of innovation for entrepreneurship development.

The core of India’s current economic systems goes back to the time of colonial rule and its dictatorial and fragmented formation. The country was made to forcefully serve as a market to its colonial bosses and their industrial products. The foundations of the today’s legal, financial, educational, bureaucratic governance systems were inherited from the colonial period. However, one key area of change following independence involved the adoption of a closed economy that relied heavily on central planning, restricted imports, and nationalization of industries. The people of India, especially the young, crave employment. There is a constraint to employment opportunities offered by the various sectors of economy, but the government does provide employment guarantee programs. However, these programs are targeted at providing basic needs and tend to provide labour-intensive jobs that have no link with innovation. To sustain rapid growth and alleviate poverty, India needs to aggressively harness its innovative potential, relying on innovation-led, rapid, and inclusive growth to achieve economic and social transformation. The innovative potential of the young Indian population, if  provided support through an effective innovation ecosystem, holds potential for developing entrepreneurship and providing the growth and job opportunities that India needs.

India’s national innovation system

National innovation system in India is a huge and multifaceted system comprised of knowledge producers such as science and technology institutions, academia, and innovating individuals and knowledge users (e.g., industry-production/services in the public and private sectors). There are financial institutions such as the Industrial Development Bank of India (IDBI) and the Small Industries Development Bank of India (SIDBI), which lend support for innovation and also for commercialization of innovative technologies besides entrepreneurship. Also, various fiscal incentives are offered by the Department of Scientific and Industrial Research towards the R&D activities performed by institutions, academia, and industry for supporting, nurturing and leading their innovations towards completion. Strong efforts have been made to harness the innovative capabilities of these structures by connecting them to one another and to industry and society, forming an innovation ecosystem.

India’s innovation ecosystem

Broadly speaking, an innovation ecosystem is a combination of two distinct but largely separated economies: i) the knowledge economy (comprised of knowledge producers), which is driven by fundamental research, and ii) the commercial economy (comprised of knowledge users), which is driven by the marketplace. In India, the innovation ecosystem includes the entire national innovation system described in the previous section, plus individual innovators and entrepreneurs; mentors; government policies; angel, venture capital, institutional, and industrial funding mechanisms, intellectual property rights mechanisms; technology transfer mechanisms; market inputs; and incentives, awards, and other innovation-recognition mechanisms, among others. Ideally, these various structures and mechanisms facilitate the smooth translation of innovations through the various segments of a complex innovation chain that takes ideas from “mind to market”.

Thus, the functional goal of the innovation ecosystem is to enable technology development and innovation. But, how well is India’s innovation ecosystem performing today? According to the Global Innovation Index (WIPO, 2014), India ranks 76th among the 143 countries surveyed, having fallen 10 positions since the last report and having fallen relative to other BRIC economies.

Key challenges faced by India’s innovation ecosystem and entrepreneurship in general are listed and described below are fragmented policy and policy implementation, Inadequate funding of R&D,   Difficult and lengthy funding procedures, Constrained regulations for Angel, venture capital and private equity investors,  Inadequate infrastructure facilities in villages

Conclusion

India has a large, demographically diverse population, with many young people seeking employment. The country is on a path to growth, but the rate of growth has been slow. The government has realized the roots of the basic problems and made appropriate reforms, mainly in the areas of administration, economy, and labour, as it tries to free itself from negative aspects of its colonial legacy. There has been a significant development in the area of science, technology, and innovation in past 20 years, and many initiatives have been undertaken in that direction. Realizing that the innovation-led entrepreneurship development holds promise for expansion, the government has taken key policy initiatives with a robust innovation agenda.

There are formidable challenges in realizing the goal, but as this article has shown, the Science, Technology and Innovation Policy 2013 is a big step in the right direction, because it addresses most of the key challenges in developing an effective innovation ecosystem. The main initiatives are provision of funds and removing the sluggishness in the ecosystem for innovations by improving linkages and making it vibrant in a comprehensive way. The policy is in place; now, its success depends on its implementation. Some time will needed before conclusions can be drawn about the policy’s ultimate effects on the growth path. However, the new direction reflects strong growth aspirations and resonates with the zeal and zest of the youth who wish to journey on the risky path of innovation-based entrepreneurship.

In a broader sense, innovation is important to the advancement of society around the world. New and innovative products can increase the standard of living and provide people with opportunities to improve their lives. Breakthroughs in medicine and technology have significantly improved living standards around the world. Innovation has also lead to significant improvements in the way businesses operate and has closed the gaps between different markets.

Ideation , Innovation & Creativity in Business

If you want to study business, launch your own startup or manage your family business, IILM is the place for you !

Requirements in the job market are dynamic and change constantly.  At IILM we have introduced an exceptional programme to incorporate the trend of startups and entrepreneurship. We have collaborated with the SBS Swiss Business School to bring to our students the change to earn a BBA in Entrepreneurship. The degree is awarded by the Swiss Business School and teaches modules that are aimed to equip students with the skills need to start their own ventures ,take on the responsibilities of entrepreneurship or manage their family business..

The programme spans over 3 years or 6 semesters and covers a variety of topics starting from the basics and moving up in difficulty. The initial semesters have introductory modules that introduce students to concepts of Accounting, Marketing, Management, Information Systems, Economics, Finance, Statistics and Law. These basics are aimed at bringing all students on the same platform as we have students from varied backgrounds applying to this course. Similarly, Foreign Language is also offered to students over the 3 years in order to diversify their knowledge base and give them an edge in the job market.

After the basics students study modules like Small Business Field Studies, Venture Capital and Private Equity, Entrepreneurship Case Studies and Mergers and Acquisitions – topics related to managing real world situations. These modules as well as the others offered are not only case study based but also incorporate learning through simulations in order to effectively instill the theories involved.Case studies used are from the Harvard Business School so that our students have access to the very best resources.

Experiential learning is also encouraged through Company Visits as a module students visit various companies belonging to various industries and interact with staff and department representatives to gain understanding of the working of the companies and respective departments. In tandem with the aim of experiential learning is the module of Internships. Students are attached to a company for a month long internship during their breaks and learn what it is like to be on the job in real life from experts.

Mentoring is a unique aspect of student life at IILM. Faculty and industry mentors are assigned to the students to guide them through the course of the programme. They advise the students so that effective decisions are taken with regards to modules, internships and careers. Students gain a lot from their expertise and experience.

Our programme is exceptional because of the unique mix of theory and practical application. We have understood the need for dynamism in curriculum and have molded our modules based on the requirements of the time. Our students study with the best resources, the best faculty and the best industry mentors, making them a cut above the rest when it comes to taking on the roles of an entrepreneur or top management of their family business.

Learn more about our exceptional programme at www.ubs.iilm.edu


Ms. Lekha Mukherjee