Friday, July 19, 2013

Affordability - innovation in India..

Any innovation to succeed in India has to have the basic parameter of affordability factored in. 
Let the innovation be on technology, products, services, for the innovation to succeed in the country , it should be affordable for the masses. I shall try to explain my statement with the help of a few examples.
The recent innovation in mobile phone telephony is a case at point. When the mobile phones were expensive, rarely few people had mobile phones in their hands and tariffs used to be exceedingly prohibitive, like Rs 20/ minute for an outgoing call and the same rates for an incoming call, in the early 2000s.
In just 10 years everything changed. Due to advances in hardware and large quantities of production, the costs came crashing down. When the telecom companies realised the truth that more phones were in the hands of the people, the next question was , how do we make the new users take our mobile telephony plan. They started reducing the tariffs progressively till one day in 2009 TATA came up with the 1 paisa per second plan. Indians embraced mobile phones in large numbers and the result is there for the world to see.  Now we are the second largest mobile phone users in the world with about a billion phones, just lagging behind China and almost 3 times as big a market as US, 10 times as big as Japan, or any country in Europe.
The next example I wish to point out is that of Tata Nano car. It was the cheapest affordable quality car priced at less than 1.5 lakhs, in the country. This forced other manufacturers to come up with cheap models and the latest is Datsun Go under Nissan to plan to make an entry and capture the Indian market. The auto majors of the world rolling their offerings include GM Beat, Huyndai Eon, Maruti 800/ Alto (already there) and now the Datsun Go ..
Why is it so ? Indian per capita GDP is now about $ 4000. The basic difference is that the Indian society is one of giving and sharing, while the western community is one of individualism and materialism. We cannot remain complacent claiming that we are a peaceloving society, looking at the societal welfare and so on.
The Indian population is well informed about the need, the product or the service, but the question is only of affordability. This makes the innovators to really burn the midnight oil and offer great products and services at the lowest price. In India even the people who can afford would spend less with plans of saving his wealth for the future. People are not yet ready to spend out of the way and outside the thrifty methods practiced by their forefathers. It will take some time for the culture to change, but only if it has to. Large demands seeking lower costs are driving the innovators to do even better and come out with real value products, this is the real innovation !
Innovation which never had cost as a factor embedded in the system and in literature earlier, now finds affordability and low cost a very important factor responsible for the success of any innovative technology, products or process in the world as of today.
The innovation wave in the Education arena sweeping the world , Massive Open Online Courses, MOOC, is yet another example of free learning for the masses. The recent plan for Cognizant, TCS and Infosys to join hands with 7 IITs to offer MOOC courses for the Indian public who can access these courses from anywhere in the country, may be even from other developing countries from other parts of the world, may be really a defining factor in ensuring the roaring success of this model. Affordability, reach for the masses and scalability are thus the important factors for its success.

1 comment:

  1. This is such a nice Blog. I am amazed that such things are been applied in India
    affordable used cars


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