India is hot in innovation and design with Cisco, Microsoft and Intel piling in.

Posted by: Bruce Nussbaum on December 9, 2005

India is growing at 8% a year, rivalling China’s rate, and it is beginning to attract a huge amount of high tech investment. With great schools graduating first rate engineers, an increasing amount of innovation is being generated in India and US, British, Continental, Japanese and Korean companies are pouring in to tap it. Global auto companies are piling in to do innovative engineering. Design in India is beginning to take off as well, as American companies discover the inexpensive but high-grade work consultancies such as Elephant Design and others.

The government is bolstering the National Institute of Design and is investing in making India a global design center. Niti Bhan is my guide to design in India. Her analysis, China is to India, as Wal-Mart is to Target, is brilliant. Here is a bit of her thoughtfulness on the subject: “In the international economy, China is a commodity player. India’s promise lies in its control of cultural particulars. And by this I mean, India understands and participates in the culture of the First World West in ways China does not.

As long as the world wants its merchants to “pile ’em high and sell ’em cheap,” China will flourish as Wal-Mart does. But as Virginia Postrel’s vision of the marketplace comes to pass, and all consumer goods begin to add value and win share by embracing design intelligence, India will flourish as Target has.”

I can’t wait to see how this plays out.

Reader Comments

niblettes

December 9, 2005 7:13 PM

"India is growing at 8% a year, rivalling [sic] China’s rate"

Statements like these trouble me. They are pronounced, with no substantiation, then widely parroted, and somehow become the "truth".

Before this happens lets be honest. It's hard enough to believe the growth figures of individual public corporations here in the US. And that's with SEC regulatory controls, independent media inquiry, shareholder demands, and the courts, all geared to help maximize honesty and accountability.

Now when we're talking about India or China, there is no SEC, no regulatory bodies, often no independent media, no shareholders, and no courts with power to enforce honesty. Further complicating things, for example, is the sheer opaqueness of the Chinese government.

Not only do these countries have the unbounded freedom to fudge the numbers anyway they please, but there are incredible economic and international status incentives to keep these growth numbers buzz-worthy, and keep the buzz buzzing.

So not only is 8% more likely than not a highly inflated figure, but repeating it like gospel does even further damage to a media whose credibility is already in tatters.


(Please note that I’m not singling out India or China for criticism any more than they are being singled out for praise—besides the focus of my criticism is actually media hype)

Jack Yan

December 9, 2005 8:36 PM

Despite being Chinese by ethnicity, and darned proud of it, India is tapping in to everything more successfully. Bruce, you’re right that culture is being more successfully embraced—India perhaps has to, with its many cultures and its desire to remain democratic. It’s not trying to assimilate minorities by shifting the majority race into, say, Tibet.
   India’s attempting to learn from others, too, but then injects its own character into things—as you correctly state. Red China is pragmatic, but when it comes to its own products, only a handful of innovative Chinese firms are forging ahead in a country with little protection for new ideas.
   Indians are also aware of corporate social responsibility and their brands will stand up to western scrutiny. In a totalitarian state such as Red China, such considerations are still handled by the Politburo. Hence, it is harder for a Red Chinese brand to win over consumers, unless it competes on price alone. Once Red China moves past this, then it could overtake India, but in the immediate term, I’d rush to the subcontinent, too. I am always made to feel welcome and respected by Indian business people, while domestically, the Red Chinese ambassador can only try to humiliate me and others in public—all because I want the best for my own people.

Niti Bhan

December 10, 2005 5:02 AM

Bruce,
Full credit for that analysis should go to Grant McCracken. If you'll click through to my blog post, you can find a link to his full analysis titled "India:China:Walmart:Target". I'd put a link here, but I'm sitting here in Gurgaon, a suburb of New Delhi on my brother in law's (Alok Lall) very slow wireless connection and each link is time consuming. However, I'm here until the 14th and would be happy to answer any questions from the field for you :) Alok heads Saatchi & Saatchi's New Delhi office and is my rough and ready source for the changes taking place here in product launches, marketing and demographics. I've given my gmail address instead here, it's easier to access than logging into my website.

Oh, and niblettes? That 8% is probably a safe estimate of growth rather than an overestimate, I arrived yesterday in New Delhi, India and went shopping later with my sister. The markets, the malls, the products, the customer service, AMAZING!!! And I'm comparing to the changes I saw three years ago, as well as from the late nineties when I used to live in Delhi and work for McCann and HP in marketing and advertising. In less than 10 years, New Delhi had embraced many of the basic tenets of customer experience and more - expect detailed reports on my blog later today. What you have to remember, when you make that statement about India/China is that you cannot lump them together, one is the world's largest democracy, one is not.

Namaste,
Niti

Grant

December 10, 2005 1:10 PM

Dear Bruce,

I am grateful to make my small contribution to the wisdom of powers, but what, below, you attribute to Niti Bhan was in fact written by me. I have great regard for Niti but I am a person too small, and run a blog too obscure, to be inclined to share! Thanks, Grant
p.s., you will find the passage in question on my blog at www.cultureby.com. I don't have the URL. I will return.

Your quote:

The government is bolstering the National Institute of Design and is investing in making India a global design center. Niti Bhan is my guide to design in India. Her analysis, China is to India, as Wal-Mart is to Target, is brilliant. Here is a bit of her thoughtfulness on the subject:

"In the international economy, China is a commodity player. India's promise lies in its control of cultural particulars. And by this I mean, India understands and participates in the culture of the First World West in ways China does not.

As long as the world wants its merchants to "pile ’em high and sell ’em cheap,” China will flourish as Wal-Mart does. But as Virginia Postrel’s vision of the marketplace comes to pass, and all consumer goods begin to add value and win share by embracing design intelligence, India will flourish as Target has."

Grant

December 10, 2005 1:16 PM

Bruce, the post in question was "China : India :: Wal-Marts : India." Posted June 9, 2005. The URL http://www.cultureby.com/trilogy/2005/06/china_india_wal.html. Thanks! Grant

Vinay Rao

December 14, 2005 12:34 PM

Bruce, Niti, and Grant,
For someone who (a) works with some of the best 'technology' companies in India, and (b) travels often (not quite as often as Grant as I see from his site)to China and to Gurgaon, the pace of change is almost frenetic and the cultural transformations, even in those that come from traditionally orthodox mindsets, are palpable. The 8% growth claimed seems very conservative when you're here.

But that is where I would draw the line on the likeness. Behind the facade in India, is a nation that is struggling to bridge the gap between the have-much's who are getting more, and the have-less's who are where they were decades ago. Design and innovation have done precious little to become a part of the dialogue there. In India, the average urbanite, thanks to the media's obsession with peroxide hair do's and the little night life the city offers to its wealthy hedonists, understand only one kind of design (or at best know that there is at least one kind of design) - Fashion Design. It is true to say that Indian fashion design is not only coming of age, but is participating and influencing cultures and long held design principles in faraway first world western nations. The malls are providing wonderful experiences and driving this industry forward at a pace it can scarcely keep up with itself. This accumulated success of fashion design can be atteibuted to the fact that Indians never really lacked self-expression, they just lacked the medium to do so.

But the other kind of design - product design coupled with good or great technical content, that has made the nokia's, motorola's and sony's of this world what they are, has little more than a token presence and worse than a token effect here. There is a near complete absence of an ecosystem for supporting this kind of innovation and enterprise. For example, many indian companies rely on expensive American or Taiwanese Firms to provide them with prototyping support. This is not because of non-availability of facilities locally, but simply because most prototyping inherently requires ingenuity and experimentation (and hence innovation), both of which have been chronically suppressed by a rigid by-the-book education system.

The little innovation that happens here, takes place in industries that are not capital intensive (where the risks are lower) like software, or in industries which have been around for decades and are (still) run by well-grounded veterans who've built their empires by the sweat of their own brow - like the Auto Industry. Within the software industry, a handful of indian innovators are filling their little pots of gold by licensing out their innovations to big device manufacturers, who in reality had neither time nor resource to invest in a peripheral innovation. On the other hand, India has been making automobiles of all kinds for decades. While there was little or no change in what was being made for over 30 years, that changes when international competition came in, and the average indian stepped out of his inward looking pseudo-socialist mindset. The local manufacturers had to change (and innovate) to survive. It surprises many (and is almost a matter of national shame) that the west chose China as a manufacturing investment destination when there was so much talent with years of experience available locally.

Having said India is probably more than a decade away (even at todays pace of change) from taking on the big players in the technology and automotive industries. Unless some serious changes take place. I'll reserve that for another post.

Now for China. They did the smart thing. Like the Indian Auto Industry, they started with the hard nuts and bolts rather than the air conditioned ivory towers bolstered by some slippery software dollars. That gave them lasting power, and the understanding of how to go the last mile. Once they figure out the softer issues of development and innovation, they will be in an enviable position (for various reasons) like the Japanese were 25 years ago, and the Koreans have been for the last decade. I would not be surprised to see some of the western companies being taken over by their Chinese competitors, or even erstwhile suppliers.

Sure, the Indian designers-and-engineers-to-be that I happen to teach are upbeat about the rest of their life, and I'm only to happy to see this translating into less fettered creative thought. But I'm yet to see true design and engineering with intelligence and depth.

Sid

December 21, 2005 8:00 AM

To help Indian leaders spark innovation and creativity in their organizations while revolutionizing work culture and reducing employee attrition, Innovation Trip announces a 7-day tour of innovation and inspiration in America.

Highlights of the tour are :
1. A workshop at Harvard Business School on Disruptive Innovation
2. A workshop on Customer centered Innovation by leading innovators
3. A workshop on creating a culture of innovation at stanford campus
4. A workshop on employee retention by experts who guide fortune 500 companies on employee retention.

Here is the URL to a press release:
http://www.businesswireindia.com/PressRelease.asp?b2mid=8494

For details Visit
http://www.innovationtrip.com

Jack Yan

December 27, 2005 11:49 PM

There’s a bit more praise from folks like Bill Gates and Toyota’s Okuda Hiroshi in today’s news, proclaiming, ‘India, the hottest investment destination’. It’s at Rediff, at this link:

http://inhome.rediff.com/money/2005/dec/27spec.htm

Satya Rao

January 2, 2006 10:51 AM


I'm always wary of joining the China vs. India debate. Wal Mart or Target, there's room for both. As an entrepreneur heading a product innovation company in Bangalore, I look to leverage the innovation skills of India and the manufacturing skills of China to deliver a product to my customers in North America. Our Asian context makes this feasible and our customers love it.

Without a doubt both these countries will host giant consumption markets in the future. Hopefully that augurs well for design outfits in both countries in the future. In the meantime, the challenges to succeed remain in both countries. It helps to think that they're not insurmountable.

Dwight Ken

January 17, 2006 11:02 AM

India is obviously doing very well in BPO and other services. I will not be drawn into this meaningless India vs China debate. Both will do well in the years to come.

The problem I have is the outdated, complacent view of China as a low-margin, passive supplier to Walmart or as a lawless pirate of Western intellectual properties.

That is not only ignorant, it is downright dangerous. There is an innovative side of China, one which is fast making China a world-class innovator in telecom, solar energy and internet software-as-services. Think of China not as Walmart, but as Toyota, Samsung and Google in the making.
The future Chinese threat, or opportunity, depending on your perspective, derives from the fact that China is now bubbling with entrepreneural startups getting funded by local and Silicon Valley VCs.

Most will fail, but world class enterprises will emerge and we should be well-aware of the challenges to come. On a personal note, my startup company has recently opened an office in Shenzen and we are finding first-rate engineering talent.

Check out some of the remarks from top VCs -
http://www.chinaventurenews.com/50226711/churchill_club_places_china_high_on_agenda.php

Shubhendu Singh

March 23, 2006 2:46 AM

I am a big believer in the Disruptive Innovation Model which inherently coerces me to side with the underdogs and the challengers rather than the incumbents. Probably my being an Indian has something to do with it, but I try not to believe it.

From Google to Kodak, from Intel to Ford, from Microsoft to SouthWest, the world is full of examples of how the underdog or challenger persisted and snatched the advantage from the incumbent. That said, most advantages in this world are transient. Companies who were innovators of yester years are incumbents of today. And the law applies uniformly to all.

India is in a stage where it could cause a lot of disruption in the global market. I am sure that given our education and entrepreneurial spirit there is no dearth of ideas However, not all innovative ideas could be shaped into disruptive strategies. On occasions, new entrants have caught the incumbents napping and have succeeded. Unfortunately, with all eyes trained on India, it is going to be much tougher.

-Shubhendu Singh, Princeton, NJ

Priyadarshini

November 13, 2006 9:35 AM

Design has still to permeate the lives of most Indians. As a marketing consultant who regularly visits consumer homes for research, I can tell you with all honesty that the brown, gold fringed upholstery on furniture, the tacky cloth covering the TV and the sunmica covered dining table don't insipire much optimism on that front. On the other hand, the Swift, a hi-design car by Maruti, has been one of thye most popular new cars on the block despite being not so fuel efficient. Maybe there's hope!

PS. Niblettes - a word to the wise: don't club India and China together when it comes to things like open markets a regulatory authority like the SEC or free media. India has all of those, including a free media with more English newspapers and magazines than exist in the US of A.

V Ramamrutham

November 17, 2006 5:27 PM

I could not resist adding my bit after reading all that has been posted so far. Firstly, it is really of no practical use to comapare and measure India vs China. Each has its own characteristics and they are different - geography, history, culture, tradition and education. An aspect of India that is often ignored is the nearly 600 years of foreign rule - 300 years by the Moguls and 300 years by the British. Both left their mark. Some were good undoubtedly. For close to 50 years after independance, India went through a vast Socialist experimentation with controls, licences and permits. Believe me, they stifled a naturally innovative population. All the innovative energy was spent in getting around the myriads of controls and licensing - in a legal way !! There were still designs and innovation which have not been documented or published. India is just beginning to stir and is yet to really wake up to a new found liberation and entrpreanurship. We still have some hang ups and old mind sets. Our education has to reorient to the new ambience. The advent of Satellite TV, a vastly improved teleom network and in particular the wireless netork , the rapid penetration of the broadband and Internet, rapidly developing transportation - just last evening I met a peson who covered four cities in the course of a single day on work. Starting in Mumbay in the morning tavelled by Road to Pune, flew to Hyderabad by the afternoonreaching Chennai late that night and achieved what he had set out for. This is not a sole example. It is happening eery day now. All this without a single prior seat reservation - unimagimable just few years back!! This is a simple example and there are many more and will start showing results rather soon. Design and innovation can be market driven or technology pushed and we now see both. Industry leaders are recognising the challenges opportunities as they come out of the security of a protection and regulations. As it is often said, Neccesity is the mother of invention. Omdoa has the skills, the knowledge but perhaps lacks experience. That is time related and exposure to a global environment. That could be the India of tomorrow as we will see new products and new designs. Innovative solutions to problems arising from or conditioned by social conditions of countries like India. Will that be the future ? Distinctly Indian?

Vinod Kumar

December 22, 2006 7:48 AM

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Vinod Kumar

December 22, 2006 7:49 AM

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Abhi Hupare

January 16, 2008 6:35 PM

Bruce,

I totally agree to your comments about India turning a hot innovation destination. But I would also try to add from my experience, it still needs lot of changes in terms of "Design thinking". Nowadays We are seeing most of the products hitting the Indian market has "design" as the main ingredient, a very recent example is Tata's "Nano" ($ 2500)car, which has a cute design looks as well as smart engineering embedded in it. A couple of decades ago the Indian consumer had very limited choices of products in the market to choose from, but now scenario has drastically changed. A classic example of the earlier times was about Fiat or Ambassador car which ruled the Indian market for decades altogether, which gave no other choices for people to choose their car.

I am really excited with all the new trends and changes happening presently. I would further add, if India really wants to become a Hot destination for Innovation and design. We should inculcate the "design thinking" in every aspect of the products we design or manufacture. Just like India is IT, I would say US is for Design. The analyst's say, India has great number of engineering colleges and a huge talent pool to cater technology companies. US had large number of design colleges than what we have in India. The entire scene needs to change, we also need more Design colleges in India along with engineering colleges to truly make it a hot innovation and design destination.
We still have only a NID and couple of IITs who have courses in designing. To conclude start on the design colleges, being them in as well ...
- Abhi, Bangalore

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Want to stop talking about innovation and learn how to make it work for you? Bruce Nussbaum takes you deep into the latest thinking about innovation and design with daily scoops, provocative perspectives and case studies. Nussbaum is at the center of a global conversation on the growing discipline of innovation and the deepening field of design thinking. Read him to discover what social networking works—and what doesn’t. Discover where service innovation is going and how experience design is shaping up. Learn which schools are graduating the most creative talent and which consulting firms are the hottest. And get his take on what the smartest companies are doing in the U.S., Asia and Europe, far ahead of the pack.

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