Innovation should create value, both for business and for society. This is particularly important in case of Sustainable and Inclusive Innovation or SI2. Based on the combination of sustainability and economic returns or impacts business might pursue more than one type of innovation.
The CESD sustainable innovation framework classifies four types of innovation – reactive, incremental, radical and transformative – based on combined scales of business and sustainable benefits.
Most companies in India innovate with incremental or radical solutions. In other words, innovations of Indian companies are incremental improvements or changes over existing products or business models that also allow for differentiation.
Characteristics of domestic markets, their needs and demands provide sufficient opportunities to companies
to innovate solutions that are radically different from existing offerings. That breaks saturation in certain markets, expands industry attractiveness, induces competition, and increases customer choice.
Cummins India is a diesel engine manufacturer located in Pune, western India. Cummins’ innovation reflects the four types of innovation from a customer point of view.
- Current markets or customers or technology: increasing value from current markets and existing technology offerings.
- New technologies to serve existing customers: New technologies address the next generation needs of the customers. The challenge is to make a shift from environment-driven innovation to customer driven innovation. Their innovation is incremental in nature as it is constantly evolving and developing to address new needs of their existing customers.
- Existing technology for the new customers: Identifying new customers in new geographies such as the UK and Vietnam.
- New technology for new customers: This is the most dif cult to achieve. Cummins’ does that by creating a dialogue between technology creators and marketing or service engineers so they co-own the new initiative. This makes sure that the new innovation caters to customer needs and that customers are involved in product designing and testing.
In a seemingly unrelated area to its popular business, Wipro has invested in radical innovation to create solutions for a market that is unusual for companies in that kind of industry.
Wipro’s Assure Health initiative is a platform that integrates medical applications, automated healthcare monitoring with the aim to improve the delivery of healthcare services. Patient monitoring is done through hosted services and mobile apps that integrate medical devices, IT infrastructure and 24/7 customer support. Remote Foetal Monitoring and Cardiac Care are two examples.
Through the foetal monitoring service, recordings of maternal and foetal heart rate and uterine activity from the expectant mother are sent to the mobile device of the concerned physician. This enables urgent and accurate medical care. This service is also used during active labour and delivery.
The other solution is for cardiac patients. Cardiologists can monitor and manage patients with angina, myocardial infarction, post-cardiac procedures like pacemaker and bypass as well as cardiac failures, from anywhere, through their smart mobile devices. It reduces the hassle of continuous follow up visits and helps in proactive management of complications, identifying them and addressing them urgently.
Transformative innovations are increasingly important to Indian companies. Transformative innovations are those that are absolutely new and that have changed the industry or created a new one. There are a reasonable number of companies that produce transformative innovations that are absolutely new and their solutions have changed the industry or created a new one. The Centre believes that conditions in India are characteristic of culture to breed innovation for sustainable development solutions.
Interestingly, transformative innovations happen to come from start-ups and social enterprises. That’s because they are more flexible, have higher risk taking capabilities and are driven by certain passion. For incumbents it means that competition is likely from enterprises that do not exist yet.
What drives India to innovate
Most important factors to innovate are cost reduction (reducing cost per unit produced or provided), broadening the range of products, and increasing value added. These drivers are not surprising since innovation in a large part is seen as a source for competitiveness to companies.
Many industries in India are only now opening up to new players. Also, as disposable incomes rise and aspirations turn to reality for millions of people, companies find new growth opportunities by broadening the range of products.
Also, more companies in India are moving from trading to processing or exporting finished products, thus increasing value add. Value-add as a driver to innovate will only gain importance as companies in India move up the product value chain.
Companies have also identified exploiting green growth opportunities and reducing environmental impacts as other important factors to innovate. Tightening environmental legislation in India, demand for demonstration of better environmental footprint by international buyers, business risks due to environmental challenges, and creation of new markets for green products, are the four reasons for companies to go green.
Source: CII Report on How India Innovates: The promise of sustainable and inclusive innovation