The speakers were :
- Keerthi Lal Kala, Program Lead for the Industry Innovation Cluster Initiative
- Sunil Mani, Professor in Development Economics at the Centre for Development Studies
- Navi Radjou, Innovation and Leadership Strategist and Fellow at Judge Business School, University of Cambridge
- Anand Tanikella, Director of Saint-Gobain Research, India
- Sarabhi Rajaghopal, Principal Analyst at SELCO Foundation
- Mustapha Kleiche, Senior Investment Officer and leading Expert in Green Finance at Agence Française de Développement (AFD)
Please find below the summary :
Making innovation more sustainable in India “requires the blending of culture and tradition with scientific knowledge”, according to Rajendra K. Pachauri. “Innovation can be in technology, but also in social, institutional or financial endeavours”, noted Anne Paugam. India needs this comprehensive approach to innovation to foster sustainable and green well-being that is supported by economic growth.
The Indian government’s innovation policies : strengths and weaknesses
“Innovation occurs in most countries where production takes place”, that is, primarily in business enterprises (Sunil Mani). The Indian government recognized this early and created R&D tax-based incentive policies. India currently has the most generous R&D tax incentive system in the world. However, companies still pay for only 30 % of R&D expenditure while the Indian government funds 70 %, compared with Korea’s 20-80 % split. For the Indian government to get a better return on its tax incentives, it must encourage business enterprises to commit more resources to innovation. Another challenge lies in the fact that innovation and production remain extremely concentrated in only a few regions. Moreover, few industries pursue innovation, and within those industries, only a few firms expend resources for R&D expenditure. The Indian government must find ways to promote spending on R&D across more (all) industries. At the same time, the government must find ways to help local companies benefit from research and innovation done primarily by multinational enterprises, so that the output of that innovation remains in or comes back to India.
How to innovate better and cheaper ?
However, “firms do not innovate solely through R&D” (Sunil Mani). “Frugal Innovation”, known as Jugaad in Hindi, “is a new approach to creating better business and social value using fewer resources” (Navi Radjou). Jugaad is diametrically opposed to the Western model of innovation that dominated the 20th century, one predicated on big R&D budgets, very top-down planning systems and highly structured processes. The recent Indian Mars mission proved that Indians could innovate faster, better and cheaper than Americans ; it also debunked the myth that North invents and South copies. Moreover, many innovative solutions initially designed for emerging markets find their way to the Western world. Witness the low-cost Nano vehicle, which Tata Motors conceived for the Indian market. Renault Nissan copied the concept and will soon commercialize its version of a low-cost automobile Western countries. Jugaad’s success has led the West to adopt frugal approaches to innovation. “India is not [only] an emerging market for innovation, but is becoming an emerging source of innovation” (Navi Radjou). In the 1970s, India was the first country to create a specialized agency to leverage local resources and combine them with very limited grant funding : the Indian Renewable Development Agency (IRDA).
Key factors for sustainable innovation
India has become a laboratory for innovative approaches to innovation. Several ways to make innovations more sustainable have been identified :
• Innovation must be connected to grassroots needs : “Science is universal, but technology is local”. Innovation must “meet the needs of the world, the needs of the people” (Anand V. Tanikella). It has to be fit specific situations. “It cannot be driven from the top expecting things to pan out on the ground” (Keerthi Lall Kala).
• Innovation policies must be conceived in collaboration with local actors : The end-user, the local bank manager or operational staff in a local community, the village head person – all are actually critical to building a sustainable mission or policy”(Sarabhi Rajaghopal).
• Innovation must be sustained within a holistic and cross-sectorial perspective : equipment-oriented projects are not enough – comprehensive strategies must be promoted ; one must “structure the various actors and ensure they are driving in the same direction” (Mustapha Kleiche).
• Financial innovation is needed : government and development banks must “provide dedicated resources and focus more on capital than debt, because innovative technologies are capital-intensive in the early stages, but have lower running costs.” (Mustapha Kleiche).
• Innovation has to be diffused so that it can be used in different contexts. “Innovation is not just generating innovation, but diffusing it across different sections of society and the country” (Mustapha Kleiche).
• New solutions must be implemented in the field : “eco-system creation” and “end-user finance” are critical issues to create sustainable markets (Sarabhi Rajaghopal).
• Skills and training must be expanded : an approach to innovation that is limited to technology transfers cannot be sustained : Technicians and micro-entrepreneurs must be created ; “it is a matter of emphasising skill-building versus education” (Navi Radjou).
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