India has always had the opportunity to position itself at the forefront of future economic growth - as a leading international hub for investment, human capital and innovation. The country's growth despite the global slowdown, fluctuating oil prices, political crises, challenges of terrorism and other social pressures and the lack of infrastructure development, still remains reasonably healthy. This, we all recognize, is fueled primarily by rising domestic demand. I often wonder if China with its modernized infrastructure continues to grow at 10% and India with its woeful support systems can clock in 5-6%, clearly the opportunities for us to grow and provide a better living standard to millions of people is immense. What makes the India story truly uncommon is the diversity within the opportunity. There is adequate demand potential both at the top and bottom of the pyramid. The aspirational Indian consumer is willing to pay a premium and wants to partake in the best the market has to offer and at the same time there is enough volume at the bottom of the pyramid market.
While corporates are continuously looking to create new markets for their products, Bottom of Pyramid (BoP) innovation offers a compelling path for growth. These markets essentially comprise of value conscious consumers that open up a whole new world of opportunities that could be the driving force for global trade in the next few years. Innovation of BoP essentially requires a transcendental approach. It requires us to rethink our approaches towards business, technology and innovation and it becomes all the more relevant in emerging economies. The concept is largely inclusive wherein the governments, the industry and the academia create a symbiotic ecosystem.
I firmly believe that in the absence of a sustainable eco-system no business can flourish. As is proven by recent events, such as the water wars in Gurgaon for example, social unrest due to unavailability of basic resources is bound to cause disruption that will not allow business as usual. In this kind of a scenario it is important for the industry to partner with each other and the government to ensure that the basic needs of the society are met. There is an intangible and at the same time a huge economic value in creating "public good". The focus need not be only on "private good".
In emerging economies such as ours, there is an imperative need for organizations to drive innovation to create value based products for the current needs of the market. Companies need to find ways to turn constraints into competitive advantage by designing new processes, creating new markets and services, collaborating and partnering. It is naive for organizations to think that they will be able to dominate the market through a singular "Core Competency" approach. There was a tremendous focus in the decades of 80s and 90s that was ingrained in the Management teachings that if organizations had to have leadership in the markets they operated, they should have strategized a "core competency" approach either with respect to a product, technology or market.
This approach needs to change as markets are demanding "converged solutions" at new value points that are environmentally sustainable. If common public resources continue to be plundered, the individual consumer may or may not be exposed to the larger negative impact that this will have on the society.
The future opportunity is all about converging technologies and collaborative approaches to create solutions that will be applicable not only to the BoP markets but can be applied across the spectrum. The industry today, needs to work with an objective to create markets "In India; For India; By India". At Ingersoll Rand, almost 40% of our engineers that work at our two Global Engineering and Technology Centres now work specifically to create products and solutions for India using the Technology and Innovation convergence approach. These could be locally developed or globally leveraged. If one is to be successful in these markets one needs to have to have a unique value proposition.
These markets cannot be ignored based on the "individual" purchasing power definition. An Innovative value that redefines the market acceptance based on collective ownership and also drives "Reverse Globalization" has to be created. This will also move the innovation paradigm for the markets at the top of the pyramid. In other words, companies need to use strategic innovation to achieve market expansion through a new definition of collective affordability and acceptability.
An example of such an innovation and technology convergence to bring solutions to serve the bottom of the pyramid in an emerging economy like ours is Ingersoll Rand's B 100. According to industry estimates, India wastes upwards of 20-30% of its agricultural produce due to the absence of an effective cold chain infrastructure. Rural markets are the locations from where most of the country's farm produce is transported to the trading centers and then onwards to the retailing centers. It is important that farm produce must be quickly transported to the consumers to ensure that food remains as fresh as possible. However, considering the complexities of distance, from farm locations to consumer locations, almost 20-30% of the perishable food that reaches the market deteriorates or gets wasted. The farmer earns less, the distributor builds this cost in the price of the product and the consumer pays more for a product that is not very healthy or hygienic.
To ensure a localized solution to cut wastage, Ingersoll Rand launched a refrigerated transportation solution that can negotiate the narrow Indian roads. The solution enables the delivery of perishable products for the last mile where the maximum wastage takes place. The system with its battery operated unit is an ideal innovation for India where small trucks typically run on low horse power engines. The unique technology is a great fuel saver and the first solution of its kind in the country. This addresses large lacunae in our value chain for ensuring food security in the country. Innovations such as these have the potential to create a positive impact on the lives of the farmers and the consumers. The supply chain could collectively own such assets and leverage the economies of scale. This converged solution was developed by bringing in a truck manufacturer, an IT enabler and Ingersoll Rand to a common platform. No single company had to develop all three unique technologies and that is where the power of convergence comes into play.
I believe that "Innovation Convergence" across organizations and technologies is the way forward in today's market scenario. With the unique skill sets India has in the area of Information Technology, it is time that as a nation we bring to fore technologies on a common platform and converge them to drive profitable sustainability practices. These could be in the area of Energy Management, Material Science, Solar Energy, Water, Healthcare, Homeland Security, Food Security and many others where a lot of societal good can happen and at the same time economic value can be created for the participating enterprises. Targets that are laid out by the government currently do not stipulate the methods in which they have to be met. It becomes the joint responsibility of the Government, Industry and Academia as partners to leverage capabilities together and drive comprehensive execution plans which in turn will drive in creating a cleaner and a sustainable environment for the future generations. These practices can be made financially viable without the loss of Intellectual property of the participating bodies and yet have a positive impact on the large unserved society.
For India as a country, I propagate the cause of developing such a unified capability. Couple this with application research in such areas at our University levels and we could be well on a path of reclaiming our lost heritage of becoming one of the most powerful nations in developing solutions that can serve mankind in improving their living standards.
These are exciting times in economies like India and we - the government, society and enterprises - need to be well primed to ride this new wave of growth. The stage is set for the emergence of new business models, ecosystems and innovations and the winners will be those who can position themselves at the forefront of this change.
