India & innovation: Why hasn’t India produced an Apple, Google or Microsoft?

January 8, 2010

New York Times article recently made an interesting observation: While American and European workers worry about their jobs being outsourced to India, Indians are worried that their country will be more like “Scranton PA” rather than “Silicon Valley.” In other words they worry over the fact that while India has achieved phenomenal success in becoming the world’s back office, it has not quickly moved up the value chain into more lucrative work. So why hasn’t India itself produced an Apple, Google or Microsoft and can India actually innovate?

The New York Times article cites historical reasons for some of India’s present difficulties on innovation front. After all and during British colonial rule, economic activity was dictated by imperial interests while after independence, socialism and state ownership of companies and banks stifled entrepreneurism. India’s embrace of the free market staring in the 1980s and 1990s did lead to the creation of successful outsourcing giants like Infosys and Wipro and to the rise of Bangalore as a major IT hub but outside the services sector and especially in manufacturing, the economy remains largely mired in bureaucratic regulations.

canIndiaInnovate India & innovation: Why hasn’t India produced an Apple, Google or Microsoft?
And while India has made progress in freeing up the services sector which, in theory, should foster innovation, the country slipped by 18 ranks from 23rd to 41st position in the Global Innovation Index 2008-09 (which is compiled by the INSEAD Business School and in collaboration with the Confederation of Indian Industries). And although India did well compared to other developing countries in certain categories such as ranking 23rd place for knowledge (between Canada and Norway), 24th for competitiveness (between Malaysia and Norway) and 28th for human capital (between Chile and the United Arab Emirates); it also ranked 76th for ICT infrastructure (between Venezuela and Syria) and 50th for business sophistication (between China and Panama). Digging deeper into the category rankings, India ranked 3rd for the quality of its scientific research institutions and 11th for the extent of local staff training, it also ranked 51st for Intellectual Property (IP) protection, 64th for the burden of government regulations, 94th in ‘Internet Users per 100’ and 115th in ‘Mobile phone subscribers per 100’ categories. Furthermore, the report warned that overall, India could slip even further in the innovation rankings for 2009-10.

However and while the above statistics about India and innovation are mixed, some companies are betting big on Indian innovation. For example, the Hindu Business Line recently noted that when EMC Corp. held its third EMC Innovation Conference, 617 submissions out of a total of 1,400 were from India. The company has also announced that it will invest up to US$1.5 billion in India over the next five years and R&D spending will account for a major chunk of this spending. In addition, India has recently signed a Memorandum of Understanding (MoU) with the UN’s World Intellectual Property Organisation (WIPO) to help promote the use of Intellectual Property (IP) for economic, social, cultural and technological development as well as assist in the implementation of its national IP and innovation strategy and to build awareness about how critical IP is for promoting innovation.

Hence, we would like to ask our readers what they think of the state of innovation in India. Simply put, is India right now capable of creating the next Apple, Google or Microsoft? If not, what does India need to do in order to foster innovation at home?


Comments

12 Responses to “India & innovation: Why hasn’t India produced an Apple, Google or Microsoft?”

  1. India & innovation: Why hasn't India produced an Apple, Google or … | Drakz News Station on January 9th, 2010 4:30 am

    […] here to see the original: India & innovation: Why hasn't India produced an Apple, Google or … Share and […]

  2. process innovation vs product innovation on January 10th, 2010 3:46 pm

    Innovation can happen both in process and in product, after Indian government opened their economy, Indian IT outsource vendors created a global delivery model and their by created a new business model. What do you call this? Is it innovation or not? Yes I agree India is not been doing any innovation on product side, that too is changing with Nano car and others.

    As the Indian economy matures you will see more product based innovation.

  3. Anil on January 11th, 2010 6:22 am

    Make no mistakes, India innovates every day…look at people working in India in such difficult conditions in different sectors.

    But does that innovation translate into world class products ? unfortunately no, barring few exceptions, some also quoted here. But why? Because product development is a different ball game requiring its own set of eco system to succeed.

    Products are being developed in India without our knowing because they’re owned by International entities.

    Most of the comments here touch upon – government, mindset, legacy, colonial rule. Well, they’re right. Then what ?

    INSTEAD of just finding reasons for why google, apple doesn’t come from India, fruits would lie in taking it forward to – “what could be done to make India a “leading world class product developer & owner ?”

    For that, you could join me in that discussion (what could be done to make India a “leading world class product developer & owner”?) that I have posted in India outsourcing group on Linkedn, in case you wish to.

    Best

    Anil

  4. Rushin on January 20th, 2010 12:02 am

    Apple, Google or Microsoft…..hmmmm….well how did these companies show up??? Any Ideas??? Simple – The Indians invented the decimal and the number system.

  5. Sam on January 20th, 2010 5:03 pm

    Guess its becuz we donot really THINK and DO but only FOLLOW.

  6. Shubhendu on January 31st, 2010 8:16 am

    Innovations are not new to India’s economic fabric. Infact the best example of innovation can be traced in the recent growth in mobile communication business and its use in boosting earning potential of rural and semiurban population. The story of Kerela fishermen using mobile phone to know the daily prices of fish and accordingly get the best price of their catch is now replicated in other agricultural produce. Similarly, the mobile service providers are now launching unique solutions for rural masses to fetch the information with huge economic value in a user friendly manner. Infact Prof. C. K. Prahlad’s book entitled “Fortune at the bottom of the pyramid” depicts some of these successful innovation stories in Indian environment.

  7. Partha on February 3rd, 2010 2:26 am

    Hi,

    We have companies with large cash without knowing what to do and also at the same time there main source of business is not doing well i.e the service.

    However our biggies are not comfortable venturing outside service to product.

  8. Nil on February 17th, 2010 5:33 am

    Some of the reasons are touched upon in this article Complete Telecom Products “Made in India”? http://bit.ly/5wzvM3

  9. kamonasish aayush mazumdar on May 15th, 2010 6:28 am

    Here is the answer :)
    http://www.nationmaster.com/graph/eco_res_and_dev_exp_of_gdp-economy-research-development-expenditure-gdp

    on a more broader term, its because we as Indians don’t teach to innovate, we teach to employ people as workers and our education system is maniacally rote learning based.

    It kills a lot of innovation that we have.

    This comes from a student who is trying entrepreneurship and someone who has been taught in 3 of the biggest cities in India across the best schools.

  10. Vignesh on November 3rd, 2010 5:31 am

    The answer in my opinion is availability of a strong local market in India. For this to happen, the following are necessary,

    Increase in buying power (on the rise)
    Increase in entrepreneur support eco system (on the rise)
    Increase in national pride (on the rise, if you have not noticed)
    Increase in pride and focus on local products (will happen due to previous point)

    This is why companies in west innovate, they create products for themselves which eventually goes global based on the strong local foothold. Right now, we (in India) try to create products/services more towards US/Europe so effectiveness would be lower. The easy answer due to this is a ‘me too’ product/service which leverage on cost arbitrage.

    If you pick top innovative companies in India, I bet they serve the Indian market!

  11. Letter to the Prime Minister on Independence Day | NextSutra on August 12th, 2011 1:23 pm

    […] speak about the Indian IT industry. India as a geek nation has been eulogized and overrated. The story of India as laggards in innovation is well documented. Industry reports like this one are nice to read but remain as they are – […]

  12. Raju on August 16th, 2011 5:54 pm

    India’s average IQ is 81 and ranks 134th in the world for “average” intelligence. You can pick those top IQ Indians out of India and habitate them on an island and most likely you will see some innovations coming out of that Elite Indians island. But no one can deny the rule of average. On average India ranks below 100 on majority of statistics, and hence for centuries to come don’t expect any innovations.

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