Innovation worries us. At one level, many perceive it as a threat to their jobs and, in fact, to their way of thinking and behaving. It challenges what they are used to. At another and more profound level, there is genuine fear of failure. After all, not all innovations succeed. Indeed, most fail. A combination of these factors is often the cause why governments and institutions are usually averse to innovation and thus change.
Today, disruptive change has become a buzzword that CEOs and politicians have incorporated into their vocabulary and feel compelled to use, as if not doing so would project them as not being futuristic. We are literally badgered to "think different". Indeed, the pressure has become so oppressive that many have started to complain of change-fatigue which has come, in fact, as a big relief to the naysayers of innovation.
Can we truly afford to shun innovation?
To answer that question, we first need to decode or understand what innovation really is. In my view, innovation is not restricted to the searching for a better idea or thinking outside the box. It is, in fact, that next big step that makes all the difference! Innovation is figuring out how something can be done better. It is the leap from idea to execution. Google, for instance, is a great idea because it exists and works. In other words, unless innovation makes the transition to becoming a compelling business proposition, it remains only an attempt at trying to be different.
According to data, the average life span of most companies is around 20 years. This is because they stick with what they know -- the tried and tested. They refuse to learn how to see through the fog and what pitfalls lie ahead. In corporate culture, competition is the biggest pitfall that companies have to cope with. Companies fail because they refuse to embrace change and redefine themselves.
This is not restricted to business enterprises alone. Indeed, as Daron Acemoglu and James Robinson demonstrated in their seminal book, even nations fail. They point to Joseph Schumpeter`s "creative disruption" as the key to survival and success. Countries survive and thrive because they learn to change and to adapt.
Today, India stands at the crossroads of either a transformative upliftment or an abysmal downslide. The route opted for will determine the future for generations to come. The choice is a no-brainer but it entails tough decisions and a clear departure from past practice.
One of India`s great failures has been the lack of investment on R&D as a percentage of GDP, which stands at 0.63 compared, for instance, to Israel, which is 2.61. The telling point is that Israel has a population of eight million people compared to India`s one billion plus. Further, Israel has 12 Nobel laureates, including several others of Jewish descent in various parts of the world. This is a telling statistic because it is reflective of the low priority India gives to research.
Take China by contrast, which is often referred to as a country in a perpetual state of innovation. Shenzhen, for instance, was a factory city churning out cheap goods for the world. Today, it has pushed boundaries and is home to global giants. It is expanding further and hopes to soon emerge as the gateway to 5G and the Internet of Things. Chengdu is, similarly, another powerful story where the interface of science and technology drives the passion for innovation. Indeed, as many have documented, China`s economic story is built around innovation.
But the China innovation map has started to extend beyond its borders, as Beijing starts to tap into international researchers. A week ago, China agreed to take its flagship TORCH programme, which is credited with generating 10 per cent of its industrial output and 16 per cent of its export value to the first TORCH technology precinct outside China. The partnership is with the University of New South Wales and exposes UNSW to a funding pool estimated at $40 billion. It is this hunger that constantly seeks new partners and ideas to fuel the innovation flame that will spur the Chinese economy.
For India to take advantage of its current growth trajectory and address the myriad developmental challenges that are holding its take-off hostage, it needs to embrace the innovation challenge. This requires unwavering political will and commitment.
At the same time, it is critical to recognize that ideas need to be monetized. For this, corporate venture capital is a pathway. Incubators or hatcheries need to be set up with corporate sector funding and government support, which funnel and encourage innovation. Unless new ideas and new ways of doing things become part of our DNA, we face another lost opportunity.