Historically, products have been created in the developed world and then move to poorer nations. But recent "indovations" are reversing that path.
What is an "indovation?” As the name implies, an indovation is an innovation developed in India but the world would be wise to take note because India's mix of size, developing markets and geographic identity make the subcontinent fertile ground for world changing ideas and products. The point is to create more at less cost for more people.
A fine example of indovation is the Tata Nano, a low-cost car built by the Indian company Tata Motors. It is currently the cheapest car in the world with a sticker price of $2,000. The Nano makes owning a car much more accessible to the general Indian public, but indovation is India-inspired, not India-specific.
Navi Radjou, Executive Director of the Centre for India and Global Business at the University of Cambridge, is credited with creating the term indovation. According to Mr. Radjou, the ingredients are: diversity, liberty, interconnectivity, and scarcity. With these homegrown Indian conditions, one must “act as a mixologist” and bring them together to indovate.
In India, where there is sharp contrast between the haves and have-nots, innovation finds its roots in scarcity; herein lies the concept of ‘scarcity innovation.’ For instance, GE’s Vscan, a portable ultrasound device, found its beginnings in rural India, where accessibility to sophisticated medical equipment is limited.
The possibilities for innovation in developing countries are immense. Another version of indovation at play in the field is reverse innovation. From the point of view of larger multinational corporations, reverse innovation may translate into a way to reach the bottom of the pyramid. In an example of a PepsiCo India reverse innovation, a new drug treating anemia and iron deficiency is due to be unveiled in Andhra Pradesh in 2011. Geetu Verma, Executive Director of Innovation at PepsiCo, revealed at a recent event that the medication will cost approximately $0.44. PepsiCo began at that price point and only then worked backwards to engineer the medication.
GE’s Vscan and PepsiCo’s pilot medication highlight an important aspect of indovation. It is not about innovating in India for India, but about taking these indovations to the developed world as well. The Vscan, for instance, could be useful in the developed world for easier in-office diagnoses. This is new. Historically, products have been created in developed markets and brought to emerging markets. The track record of indovations, though, show the successful reversal is happening: develop a product in an emerging market and bring it to a developed one. A notable case is an EKG machine by GE that was developed in India and is currently in the process of being brought to the United States
How does one encourage indovation? In developed countries, staunch intellectual property rights assert an innovator’s work as proprietary. At present, India does not have secure IP rights in the same way western countries do. These rights are critical for continued indovation, but to make any innovation sustainable and scalable, IP should be less about intellectual protection and more about intellectual partnership.
Indovators need to effectively partner with the people they are trying to serve: the end-user needs to feel like a co-creator. To successfully implement a new technology, innovators need to make it relevant for end-users. As with PepsiCo’s pilot medication, the company cannot just educate its targeted consumers on the symptoms, effects and treatments of anemia and iron deficiency. Nor can the company solely focus on the scientific benefits behind taking the medication. PepsiCo has to clearly identify how this medication will improve a person’s daily life now: “This medication will give you more energy so that you can be more productive at work and make more money to bring home.”
If both indovators and their end-users are equally invested in a new product or service, the indovation is more likely to succeed, grow and spur further indovation.
Nisha Kumar Kulkarni is a Senior Associate at Beyond Profit where a version of this article appears.