Tuesday, November 23, 2010

Gandhian Innovation - the three kinds ..HBR paper ..

Gandhian Innovation , a new term coined by Prof Prahlad and R A Mashelkar, meaning serving more people with less resources and at a lower cost ..

Existing Innovation models look at improving the product, process, packaging and pricing. New trends in Innovation emerging from India are turning the tables upside down.

Let us analyse two of the quotations from Gandhiji which has influenced this new wave of innovations.

"I would prize every invention of Science made for the benefit of all. !"

"Earth provides enough to satisfy every man's need, not every man's greed !!"

The above two quotes are the basis for the terms Gandhian Innovation which has come up in modern day Innovation Literature. This was proposed by top Management gurus Prof C K Prahlad and Prof R A Mashelkar in their article on Innovation's Holy Grail in Harvard Business Review, July-August 2010.

           Gandhian Innovation works on the principles of

                      a. Affordability (for the masses, especially the burgeoning middle class) and 
             
                      b. Sustainability (for earth and whole of humanity).

The three kinds of Gandhian Innovation emerging from India, categorised by the authors and which has rocked the world have been the following :
1. Disrupting business models
While the existing model of software development was on-site, Indian software companies redefined the landscape by shifting software development off-site, reducing costs. Outsourcing , though accounting for only 6% of the s/w business, by creating better quality processes Indian cos. have redefined the space and created a niche for themselves in the world. 
2. Modifying organisational capabilities
By deploying high quality design skills and speedy deployment of resources on a large scale, Indian companies have developed products and processes of world class, for eg . the development of the Super Computer Eka from the Computational Research Labs of Tata Group or ISRO ..
3. Creating or Sourcing new capabilities
Besides building disruptive Business models and honing up existing organisational capabilities, Indian innovators have created new technologies by collaborating with other companies.Tata Nano is such an example where the company has collaborated with companies across the world
Innovation which has defied existing Industry metrics has helped change business dynamics. it helped Airtel emerge as one of the world's largest mobile telephone operators. Instead of looking at "Average Revenue per User" metric, Airtel looked at "Return on Capital" metric and became a successful and profitable Telecom player with 100 million customers presently and hopeful of doubling by 2012..

Emergency Management and Research Institute (EMRI) which uses the latest communication, computing, medical and transportation technologies to provide affordable emergency services in tribal, rural and urban areas has been another impact of low cost innovation in India. By using the principle of Public-private partnership (PPP) and tying with Govt hospitals as most of the hospitals are run by govt. so are the fire and police dept. This has helped to keep govt interference and bureaucracy to the minimum as EMRI runs as a private foundation.

EMRI serves 366 million people in the states of Karnataka, Gujarat, Goa, TN, Rajasthan, Assam and Uttarakhand, attends to 60-80,000 calls a day, has a fleet of 2600 ambulances, attends to 7000 emergencies a day, saves 100 lives a day and employs almost 11000 people. While EMRI has spent only 50 cents per person treated to build up the infrastructure here, in US the expenditure has been $ 100 per patient treated. The expense per ambulance visit in India is less than $ 15 while in US it is about $b 600-$800.

The other case in Innovation has been that of Lupin Pharma which is in a very advanced stage in the development of a drug for Psoriasis. By challenging existing theories and working on shoestring budgets, Indian companies have been able to innovate faster and effectively. Instead of following the practice of developing drugs from Labs to clinics which could take 10-12 years and almost a billion dollars to develop, why not go from clinic to lab and back to clinic. Use clinical and qualitative data to develop target formulations that undergo preclinical and clinical research trials.

Lupin has developed the drug which will be released in India this year end by only spending $10 m and 8 years. Treating the disease with Lupin's drug will cost $ 100 per patient while with another company in US it would cost $ 15,000. Lupin developed a medicine for Psoriasis collaborating with a Sidha practitioner who told that the Mexican herb Argemone Mexicana can cure the disease completely. After developing the formulation they started the trails in early 2000 on patients and found it was successful. The drug will be released by the end of the year.

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