Over the course of last 10 years India has been known as a place for business processing, but recently there has been a shift toward moving up the value chain. Has this created scope for a new movement for innovation?
What you are going to see is a very interesting shift. A new division of labor is emerging across India. For example, some of the low-paid call centers will still be in India. Some firms say they are going to move to the Philippines, Malaysia, and Vietnam. They might to some extent. But what will happen is some of the jobs will move from Bangalore not to Manila but to smaller Indian cities like Nagpur, Nashik, and Thiruvananthapuram. These are basically secondary cities which have good infrastructure and human capital. This is something very exciting because with new jobs being generated in these second- and third-tier cities, we can practice inclusive and equitable growth. The second thing that is going to happen is that as these relatively low-paid jobs move to secondary cities, the workers in large cities are going to move up the value chain.
So with polycentric innovation if you look at CISCO, they do employ engineers, but they are increasingly employing more managers. My prediction is that within 10 to 15 years at CISCO and other MNCs, what you will see is an equal if not 40 to 60 percent distribution, where 40 percent of the talent will be managers who are handling projects with global impact, and 60 percent will be engineers developing products. That's going to be fundamentally different from what we see today, where 90 percent of workforce is made up of engineers. That's why I see India moving up the value chain, from execution-focused workers to management workers.
Who are some of the most interesting innovators from India who are doing pioneering work?
Two sectors important for India are health care and energy. Health care because we don't have a health care system. In the US, we talk about reforming the health care system, but in India we don't even have one. So if you look at Dr. Devi Shetty, a Bangalore-based heart surgeon, he practices this system of inclusive innovation by providing heart surgeries to people from poor economic backgrounds at a very low price. What we have to create is a model that allows more people in India to avail of health care at a very low cost. The strategy is "more for less for more." Deliver more health care for less cost for more Indians. Dr. Shetty has cracked the code on that. His model is very successful in India and is going to be brought to Cayman Islands, so that US patients can also afford low cost/high quality health care.
In the energy sector, Harish Hande heads SELCO, a company which distributes solar lighting systems to poor people across India. The company has installed this system for 100,000 households. So this person brings light literally and figuratively speaking to people's lives. Electricity is a luxury for people in rural areas, but he has found a business model to make it affordable.
So again the business model both these people have adopted is not about providing goods or services for free. You can use the market mechanisms of supply and demand to identify what is a price point that demand can bear and then come up with and supply the right products. These two innovators have come up with an innovative business model that allows them to deliver more value at less cost for more Indians.
What, according to you, are the top five innovations from India?
2) Life Tools (developed by Nokia)
3) Solar Energy initiatives for rural markets such as SELCO
4) Microfinance and micro-payment solutions (e.g., Obopay)
5) Affordable healthcare solutions (e.g., Dr Devi Shetty's cardiac surgery hospitals, Dr Mohan's Mobile Clinic).