‘The next 10 years will make or break India’
Tuesday, June 25, 2013
In 2011, Vijay Govindarajan, Professor at Tuck School of Business, Darmouth College, US, was ranked No. 3 in Thinkers 50 – a global, bi-annual ranking of the world’s most influential business thinkers. Every year, he leads a team of future business leaders from top global companies to India and China to help them understand the innovation opportunities emerging markets offer. He speaks to N. Madhavan about how Indian companies can promote innovation. Edited excerpts:
Q. What would you say is the innovation opportunity for Indian business?
A. It is tremendous. India has rightly named this decade as the innovation decade. A National Council for Innovation has also been established. I think India is recognizing the huge opportunity innovation presents. The India story of the last 20 years, while impressive, is not an innovation story. It is really a performance management story. All that Indian companies have done is to make themselves globally efficient. That followed liberalisation, as the country opened up and competition increased with the entry of multinational companies. We have cleaned up our act and next phase of growth will be through innovation.
Q. While innovating whom should companies target – local consumers or global ones?
A. The focus has to be the Indian consumer, or rather the Indian non-consumer. India can be classified into three sections – ’developed’ India with a population of 100 million people who live in the 15 major cities. Companies have already targeted and satisfied these consumers. Then there is ’developing India’ – a population of 300 million people living in 6,000 small towns. Finally we have ’underdeveloped’ India – the bottom of the pyramid – a population of 700 million living in the 600,000 villages. The one billion people who are part of the developing and underdeveloped India are the non-consumers. They have the same problems and needs as consumers but they cannot afford the solutions that are presently available. Tapping non-consumers means innovating to make products and solutions affordable while retaining their quality. That is the biggest opportunity. Indian companies can chart their global story once they meet the demands of the Indian consumers.