Innovation in India - Cows or Karma?

Just back from a journey straight into the Indian IT-wonder, there is one comment from the CEO of the IT-consultancy Mindtree I just cannot stop thinking about: ”Jonas, if we have all the competence within the IT-area, have a considerable cost advantage, talks a lot better English than for example you Swedes [a correct statement!]… just using common sense – don’t you think in a couple of years we will be leading not only in IT-outsourcing services, but in product development and innovation as well?” Well, what do you answer? We have gotten used to that everybody is outsourcing IT-services left and right (or more accurately, east and south), but the question is if this also means that the Western world is outsourcing its future innovation potential?  Is India an innovation power to look out for? My answer is: maybe and maybe not – let us look at some basic facts.

According to the recently published INSEAD Innovation Survey, India finishes at the top of the BRIC-countries at place 23. India’s strong point is its base in the knowledge society, India produces more engineers than any Western country, only surpassed by China, and that is good education based on the global language of English and with a British educational system as a positive remnant of colonialism. The most important thing for an Indian family today – as well as the largest form of household spending after food and lodging – is to give their children a good education, and see to it that they learn to speak English fluently. A good education is wildly looked upon as the only way out of poverty.

And this is also one of India’s biggest problems when it comes to innovation – the country of Ashoka and Gandhi still has most poor people in the world. Over 800 million people have less than two dollars per day to spend. This can be compared to China which has something like 300 million people that has less than two dollars per day to spend, which is around 25% of the total population. Out of that perspective the communist one party system and its fast decision making seems more effective when it comes to fighting poverty than the bureaucratic pace of the world’s largest democracy, the democracy of India. I met the American business leader George David (CEO of United Technologies) a couple of months back, and he said that after 30 years of doing business in India and China, little brother India was standing still compared to its red big brother in Northeast. David especially pointed to the poor infrastructure of India as a major concern. The Indian government is very proud over their newly built highway triangle going between the three major cities of Delhi, Mumbai and Bangalore.  But the medium speed at this highway is 30 km per hour (!) depending on the lack of restrictions concerning cows, elephants, tuctucs and so forth. And even though the internet highway is being built in India, the basic infrastructure has to be in place to get true innovation going.

If we keep comparing India to China – which the Indians are almost over doing – the protection and respect of intellectual rights seem stronger than in many other developing countries. If you walk the streets and markets of Shanghai and Beijing it is impossible not to notice the wide variety of copied goods, ranging from luxury brands to software labels and films. This is not visible neither in the Bollywood hoods of Mumbai or in the IT-metropolis of Bangalore.

But the major pro of innovative India is the culture - the tolerant and happy-go-lucky culture based upon the freedom of speech and the philosophical and religious diversity. In India there is no direct threat when you speak your mind, instead debate is cherished. Even one of the most popular forms of Hinduism, tantra (which is so much more than the Western notion of sex techniques), is a method of how to reach unity with God through provocation of the deity. Pretty far from the, for example Catholic, religious constraints that Richard Florida means is a major destructive force for innovation in countries like Southern Europe.

But still India has a long way to go before the real innovation snowball gets moving on its own outside of the glamorous IT- and Telecom palaces’ gated communities. And the real avalanche of Indian innovation will of course come when the physical, intellectual and virtual global infrastructure becomes truly open to the Indian masses.