I am sure my friends from the IT community will be able to relate to this. I have read a number of articles and have heard many people giving their insights on this topic. Some will say ecosystem matters a lot and start blaming the government and the state, some will allege “skills are missing”(some will state India produces less PhDs compared to other countries) , and some will say “they need proper funding”.
Let me not get into all these for the time being but, let all of us for sometime start thinking from a different angle.
To start with I want to make a simple statement “You don’t need to invent, rather innovate”
It is completely wrong to say India do not have products (IT products are not included here). Let me give you some examples of products, which are built on Indian innovations and are now slowly moving into world markets (developed countries) – a) Ford, Toyota want to sell their India designed low cost cars globally b) Maggi noodles – a low cost and high nutrient product of Nestle which have been primarily developed for India is on its way to Australia and New Zealand c) General Electric’s low cost versions of ECG and ultrasound machines primarily for Indian markets are now moving to world markets d) Pepsi’s – Kurkure and Nimbooz e) McDonald’s Aloo Tikki Burger. The list can go on. All these products are “innovated –in-India” and then slowly are moving towards the global markets.
So how such innovations (non-IT) are possible? Why cannot the same happen for our own IT Industry?
If you analyse carefully – traditionally products were designed in developed markets and adapted by the rest of the world. Technology came first followed by price. But what is happening now and will continue to happen is called “reverse innovation” that is low-cost but high value products being developed primarily for emerging markets (like India), which will eventually graduate to the developing world. Now technology is tailor-made keeping cost in mind.
Now back to the IT Industry. Indian IT companies (start-ups and SMEs) are unable to build a product on Indian innovation and then scale up globally. But MNCs or foreign companies have been building products (example many MS products are build from India development centre, many small start-ups in India are working on product development, which have been outsourced to India) How is it is happening? In my opinion “Cost” is a major factor. I totally do not agree with the fact that “we do not have ideas”, we do have ideas but the “cost of execution” and “scaling it up” is a hindrance to this.
By the year 2020, total IT addressable market (NASSCOM-McKinsey Report- Prospective 2020) from new geographies – BRIC region (Brasil, Russia, India, China) will be around USD 380-420 billion ( For India – USD 90-100 billion). That means we will see a lot of IT Innovations happening in Indian Markets. But the question is can our IT start-ups/SMEs do it? US IT Companies can achieve their growth, build products and reduce cost by outsourcing it to India but how can we (Indian IT start-ups/SMEs) innovate? – outsource (how? and to whom?) or focus on our frugal engineering skills (Jugaad)?
Because of these numerous questions I sometimes see a bad dream quite often – Re-birth of East India Company .