India and Innovation at Davos

Posted by: Bruce Nussbaum on January 20, 2006

The full shape of the program at the World Economic Forum in Davos, Switzerland that starts on Jan. 25 is now clear and it is very simple—India and innovation. Compare that to previous years when the focus was on China and outsourcing. This is an important shift that is not apparent yet to many, particularly the Chinese. And I wonder if they are ready for what it implies.

Here are the facts as I know it. Innovation, Creativity and Design Strategy is the dominant intellectual theme of the conference. Some 22 sessions, six CEO workshops, some of the top design and innovation gurus of the world participating, from Roger Martin, dean of the Rotman School of Management at the University of Toronto to Tim Brown, head of IDEO. This much I knew.

What I didn’t realize was the enormous presence India will have at Davos this year. Billboards, buses, parties, sessions, workshops restaurants will all have an Indian theme to them. Delegates will get Indian pop and classical music, pashmina shawls and a cd with tons of economic data on it when they sign in. The Saturday night soiree will have Bollywood dancing and music. India’s 115 person delegation will dwarf China’s.

There are lots of dots here but I connect them in the following way. Outsourcing of manufacturing has been one of the great economic, social and political movements of our time. Nearly all of this outsourcing has gone to China, making it the center of the global economic universe.

But that kind of outsourcing is becoming common, normal and done. The next round of outsourcing is outsourcing innovation. And here India is the center of the global economic universe. By language, training, education, and diasporadic disposition, India’s role in the world economic is more brain-driven, service-driven and ultimately innovation driven. And India, chaotic though it may be, is free and democratic. You don’t have an army of censors watching over the internet and blogs, as you do in China.

Now, of course, one can go too far. Great innovation is happening in China right now. Lenovo, Motorola, Haier, and some others are doing wonderful work. Huge efforts are underway to broaden the teaching of English. And universities are expanding their graduates in design, engineering, etc. Besides, the Chinese economy is so vast, it may generate its own growth and innovation.

But the Chinese economy remains defined by manufacturing. India’s economy is defined increasingly by knowledge-economy work. And it has centuries of English-speaking behind it (thank you British imperialism).

Davos this year may be sending a message to China: The big challenge ahead for China is to break out of its dependence on outsourcing manufacturing and show it can be as innovative as India or any other nation. That means big changes in education, politics, economics and business.

Reader Comments

Alex Osterwalder

January 21, 2006 2:01 AM

Every few years and decades India is hyped to really make the breakthrough to become a global economic power. Yet, despite its brillant thinkers and its knowledge economy outsourcing, fact is that this country is still dominated by poverty, terrible infrastructure, discriminating social structures, rampant corruption, an agricultural society and protectionism. India's "thinking economy" is limited to a very small fraction of the population and has only lifted very few people out of poverty, while China's manufacturing led progress has had a strong impact.

As much as I hope for India that it will rise to become a global power, it will only achieve it if it can create more jobs for the Poor and tackle the most pressing of a long list of difficult issues.

Warm regards from Chiang Mai, Alex

Niti Bhan

January 21, 2006 3:25 AM

Taking your dots one step further, what you're saying is, that in one case, the focus is on the bottomline (i.e. cutting costs) and on the other hand, the focus is on the topline (i.e. adding value).

In short run, one is an excellent source of revenue, in the long term, the other is always required for continued growth.

Would bonsai be a metaphor?

ps. Is diasporadic a word? sounds random to me.

Dan Harris

January 21, 2006 3:37 PM

You have hit the nail right on the head in terms of what China need to do to increase competitiveness. China does recognize this and has begun throwing massive amounts to redress its shortcomings in these areas. It, of course, remains to be seen as to whether it will succeed. I think its greatest barrier will be language.

Ram

February 3, 2006 12:14 PM

As we all know, business is all about creating a product or service and sell it at a profit and repeat that process and improve upon it. Try explaining this to China. The whole of China's economy runs on subsidy and hence is subsidizing the world's consumption. As long as it continues to do so, it will be a manufacturing revolution. The day it becomes a market economy in true sense, it has to bite the dust in manufacturing. If an indian business made a cent in service or manufacturing, that is its profit and it can keep the same. A chinese business does not make a profit, but exploit the free capital made available to it and calls it profit!! I love chinese goods. Who else can sell me below cost!!!

Anuja

January 29, 2009 4:33 PM

In the medium and long term, unless India(India Inc) and Innovation are not linked directly to the NEED of the country - development - whatever "fruits" are produced at Davos will only provide succour for those outside of India. This will be a true tragedy, especially in light of the GREAT & INTOXICATING presence of Indians at Davos in 2009.

Gajender

January 30, 2009 12:14 PM

I think it is very important to reduce the social and economic gap through sustainable projects so that people at the grass-root level can define next priorities in their life. Here I definitely think innovation is neccessary to bring a widespread change and wider collaboration between government, NGO, professionals and common man is necessary. I will really happy to see such innovation emerge and sustain for next 10-20 years.

Merle

January 30, 2009 2:15 PM

We have learned nothing from the global economic train wreck we're now experiencing if we don't provide viable human and environmental context for economic actions.
This hoopla in Davos is tired old hype about mythical boom times ahead. There are 200 million haves in India, but 800 million havenots. This is another reality of "Incredible India" that must be addressed by internal and external forces before India can pretend to position itself as a 21st century global leader.

Avinash

February 2, 2009 7:46 AM

The Chinese diaspora has been key in feeding investments and ideas back into China. That isn't happening in India (as yet) but will be a key part of making India succeed.

Rvaidya

February 2, 2009 1:22 PM

The big corporates and toxic derivative sharks have screwed up the US/European Economy and now salivating to benefit from the Indian and Chinese markets. If it is understood that for the first time human history Economic power has shifted to non-abrahamic civilisations namely India/China --it will do a lot of good to all.The three children of abraham should ceasefire every where and shut up for next hundred years.Their time is over.

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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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