Saturday, September 29, 2012

Geek Nation: How Indian Science is Taking over the World

When this book by UK-based science journalist Angela Saini was launched last year, it was prominent on the display at airport bookstores. I must confess that I thumbed through it a couple of times but found the sub-title so incredulous that I couldn’t get myself to buy it. After all, while India’s scientific output has improved in recent years, our overall impact in scientific research leaves much to be desired. I finally gave in and ordered this book from an online bookstore when I realized that this was the one prominent book on innovation in India in recent years that I had missed out.



Once I started reading it, I found a more balanced picture than the title suggests. While Angela lauds the successes of Indian science and technology (e.g. the Space programme, Atomic Energy), she identifies some of the paradoxes as well – the high quality of IIT students yet their apparent lack of creativity; the co-existence of superstitions and rituals with the scientific method amongst several of India’s top researchers; and the emergence of a successful modern software industry co-terminus with a belief that much of fundamental scientific knowledge was described in the Vedas.

Open Source Drug Discovery: An Alternate Research Paradigm?

Angela identifies correctly one area in which India could establish a new paradigm – the Open Source Drug Discovery programme of CSIR which brings scientists from around India (and even other countries) to work together and share data towards the development of a new drug for tuberculosis. She points out that such joint working can overcome resource constraints and use India’s key advantage – access to hundreds of relatively low-cost scientific and technical personnel who may lack deep technical knowledge but have the energy and enthusiasm to work long hours to, for example, map out the genome of the TB bacillus. However, I am skeptical of the picture she paints of the selfless Indian scientist who is happy to collaborate with others and is indifferent to receiving credit or rewards – that certainly doesn’t gel with the picture we get of rising individualism and competitiveness in the Indian workplace, and the challenges in getting teams to work well in India.

Does the lack of strait-jacketing help us produce breakthrough ideas?

Another observation of hers that seems plausible but is not corroborated in practice is that since the scientific method and paradigm boundaries are relatively less defined in India, scientific research can be less strait-jacketed and has greater potential to come up with new theories and insights. While it seems true that Indian science is not subject to the same rigid boundaries and protocols that western science is, there is hardly any evidence that this “freedom” is enabling Indian scientists to come up with new perspectives. Instead, we probably have the worst of both worlds – no genuinely path-breaking ideas, and not enough discipline to drive a steady output of what Thomas Kuhn called “normal science.”

Do we test new gadgets well enough?

But I do agree with her observation that we are willing to embrace and use gadgets that are inadequately tested and validated. Angela gives the example of an apparatus using Brain Electrical Oscillations test developed by an Indian inventor to identify whether accused are related to a crime that is in use by some of India’s police departments. From what she describes of the device, its scientific foundations are quite shaky, and I can’t imagine too many other countries being willing to use this in their criminal justice system. [In fact, another example that Angela doesn’t mention is the Electronic Voting Machine used by India’s Election Commission which has been criticized by many scholars for its low levels of transparency and verifiability.]

On Genetically Modified Crops

Angela’s contention that genetically-modified (GM) crops have been opposed only because they have been promoted by multinational corporations with monopoly profits in mind, and that finally the Indian farmer will adopt whatever raises his output and makes business sense could be true, though only time will tell. However, the opponents of GM crops can’t be taken lightly, and when you combine their fervor and passion with the lack of understanding of scientific issues by key decision makers, there is a good chance that those opposed to GM crops will hold sway for quite some time [remember the prolonged grounding of Indian Airlines’ entire A320 fleet two decades ago after one plane crashed? Key political decision-makers were paralyzed , and preferred to be over-cautious!].

Conclusion


Overall, this is a breezy read, with several interesting characters such as IIT students, ISRO chairmen, scientists from across the country, and even Vedic scholars thrown in. Angela is a capable journalist, and knows how to tell a good story. Perhaps the sub-title of the book – about Indian Science taking over the world – was put in just to help sell the book, but that’s just a red herring and doesn’t represent what she actually has to say! Her conclusion is that Indian science and technology is trying to solve people’s problems at low cost and this may not be reflected in the way S&T is usually measured. While the latter is true, as I have argued before, the jury is still out as to whether India has mastered the art of applying science and technology for such frugal innovation.

Saturday, September 22, 2012

Does India Lack High Impact Researchers in Frontier Technology Areas?

The recent release of the QS University rankings for 2012 once again put the spotlight on the challenges before Indian universities. India has no institution within the top 200 universities in the world, a sad statistic for a country that is aspiring to superpower status. There have been several analyses of why India doesn’t do well on these rankings, and I won’t cover that ground here. But, for a useful and practical assessment of how Indian institutions can bridge the gap, I recommend Dheeraj Sanghi’s blog on the subject.


Thomson Reuters 2012 Research Excellence India Citation Awards

One of the areas in which Indian institutions usually fall behind their global peers in such rankings is research output. Thomson Reuters announced its 2012 Research Excellence India Citation Awards a couple of weeks ago, and the list of awardees provides some insight into where excellent research is being done. The list also tells us something about the fields in which we have individuals doing outstanding research. Remember, that these highly productive, top notch researchers are responsible for creating the research reputation of a School.

The Thomson Reuters methodology is described on their website. Essentially, they have identified 10 Indian researchers who have consistently published highly cited papers over the period 2002-2011. Each researcher in their award list had at least 5 papers that were among the top 1% of cited papers in their respective field over the period of review.

The list is shown in the following graphic.



Key Findings

  • 4 out of 10 awardees are theoretical physicists, and a fifth, though classified by Thomson Reuters under Applied Physics and Materials Science, is a Professor of Theoretical Science. So, 50% of the top awardees are essentially Physics theorists.

  • 3 out of 10 awardees are Chemists.

  • Only 1 awardee belongs to an Engineering discipline. None of the awardees belong to Computer Science or Electronics.

  • Only 1 awardee is in a frontier technology discipline with strong industry relevance – nanobiotechnology.

  • Only 1 awardee works in an IIT. There is no awardee from the Indian Institute of Science.

  • 3 awardees out of 10 belong to the university system. 5 out of 10 are in specialized research centres. 1, who is now in industry, was at a CSIR national laboratory for a part of the 10 year period.

It’s good to see a couple of very high impact researchers at less renowned universities. We should salute these “bright spots” and understand how they have been able to do such good work amidst institutional constraints.

These citation awards underline a major challenge before Indian S&T research. Our strengths still lie in areas where we were traditionally strong like Theoretical Physics and Chemistry. We have not been able to nurture or support high impact researchers in emerging technology areas. Our top engineering schools, while producing lots of papers, are not producing enough high impact research. Changing this should be top on the agenda of our top science and technology academies.

A caution: Winners of previous Thomson Reuters India awards in 2004, 2006, 2009 were not considered this time. A more comprehensive analysis will need to take their names into account.

Saturday, September 15, 2012

Open Innovation: A Panacea?

Open innovation became a buzz word about a decade ago, thanks largely to the efforts of Professor Henry Chesborough (now at the Haas School, UC Berkeley). I must confess that I was initially skeptical about whether open innovation really represented a new perspective on innovation – after all, collaboration, particularly between universities and companies, was nothing new. But, in the last decade, some companies have showed how open innovation can be a distinctly different approach to innovation. However, one question remains: can open innovation be a substitute for developing your own strong innovation capabilities?


Procter & Gamble’s Connect & Develop

Procter and Gamble (P&G) is the company that comes to mind first when you talk about open innovation. When A. G. Lafley (picture below) became the CEO of P&G over a decade ago, he realized that P&G had become almost completely dependent on inorganic growth. Looking at the huge cost of acquisitions, he was convinced that P&G needed to embrace an innovation-driven approach to growth. While internal R&D was active, it was struggling to create the new products that could be meaningful to a company of P&G’s size. So, Lafley advocated collaboration with others as a way of accelerating the innovation process. To do this, he created the foundation for Connect & Develop (C&D), perhaps the most well known corporate open innovation platform in the world. [To learn more about this, read The Game Changer by Ram Charan and A.G. Lafley].


C&D has been successful in enhancing the diversity of innovation at P&G. The best contemporary example is Olay Regenerist. Sederma, a small French company that runs a skin and wound institute, had identified an amino peptide that helped wounds heal faster, and without leaving a visible trace on the skin. P&G collaborated with Sederma to use this compound to remove skin wrinkles, resulting in Olay Regenerist, one of the most successful (and expensive?) beauty wrinkle treatments available on the market today.


In the last decade, P&G has met Lafley’s target of getting 50% of its innovation ideas through C&D. P&G has an elaborate network to drive the C&D process. They have 70 C&D leaders worldwide, 11 regional C&D hubs, and thousands of networks.

Is “Open Innovation” a Good Innovation Strategy?

Where does innovation at P&G stand today? I recently had the opportunity to listen to a presentation by Bert Grobben from P&G’s Singapore Innovation Center. Bert pointed out that partnerships were a part of P&G’s DNA as P&G was founded by two men who were married to sisters! Historically, P&G had hired people from different backgrounds and rotated people across jobs, thus ensuring broad thinking. So, according to Grobben, openness to new ideas has been an integral part of P&G’s DNA. Today, P&G believes that the most collaborative will succeed.

Now, as a $90B company with 23 $1B+ brands, P&G hopes to become an even greater part of people’s lives by addressing both luxury and “Bottom-of-the-pyramid” customers with new products. This will pose a new test for C&D as P&G’s strength has traditionally been in the mid-market, i.e. middle class consumers. P&G’s current CEO Bob McDonald (picture below) wants to push C&D even further so that 80% of ideas come through C&D.


However, recent reports on P&G suggest that my doubts about a dependence on collaboration as an innovation strategy may have been well-founded. A recent article in Businessweek suggests that P&G’s ability to come up with blockbuster new products has actually declined over time. Ironically, the article attributes this to the weakening of the core R&D function within P&G, and a business focus on short-term results (which usually drives incremental rather than breakthrough innovation).

Other reports suggest that P&G’s challenge to growth is not only on the innovation front, but speeding up decision-making and action on all fronts. As often happens to large companies, P&G has created multiple layers of management that stand in the way of the company moving fast enough to contend with more agile competitors.


Implications for Other Companies

I see some broad lessons from P&G’s experience with open innovation:

First, there is no doubt that today good ideas can be found all over the world. And, improved information and communication technologies allow companies to locate and access these ideas at low cost. If you don’t access these ideas, you will be at a competitive disadvantage compared to companies that do.

Second, combining ideas makes them more powerful. Bringing together the other characteristics of Olay creams with the anti—wrinkle properties of Sederma is what makes Regenerist a powerful product.

Third, open innovation and collaboration is a complement but not a substitute to doing your own R&D and innovation. I think there is an important lesson for Indian companies in this!

Fourth, complementary assets (brands, distribution, agility, speed) continue to play an important role in making innovation successful. But brands and distribution are not enough. Agility and speed are dependent on more conventional organizational design principles such as structure, process and reward systems. Revving up your innovation engine will not yield good results if there is a mismatch between the engine and the rest of the company.

Monday, September 10, 2012

Grassroot or Corporate Innovation?: Which is the Way to Go?

“Grassroot innovators” – innovators primarily from rural India, unlettered in a formal sense, but highly practical in solving their own problems – have been in the spotlight in recent years thanks to the untiring efforts of Anil Gupta, a professor at IIM Ahmedabad. Anilji’s quest to identify and document such innovations goes back to the late 1980s when the Honey Bee network was formed. Over a decade later, this movement got government support with the creation of the National Innovation Foundation and gathered further momentum during the tenure of Dr. Kalam as President of India (2002-2007) and of Dr. Mashelkar as DG, CSIR. Dr. Kalam started the tradition of providing the inspiring environs of Rashtrapati Bhavan to felicitate outstanding grassroot innovators, and this practice has sustained since then. India’s support for grassroot innovations has now been emulated by several other countries.



Challenges in Commercializing Grassroot Innovations

One of the challenges Anilji and others working in the grassroots innovation movement have faced is how to go beyond identification, documentation, and recognition of the innovations and their creators. Many of the innovations would appear to have great practical significance, and be of utility to others facing similar problems. In other words, they have the potential to be scaled up, and become the core of successful businesses.

The NIF and network organizations created by Anilji and his colleagues have taken several steps towards commercialization. Grassroot innovators who have the interest and potential to take their inventions forward have been nominated for government support under the Technopreneur Promotion Programme (TePP). The NIF has worked with the innovators to obtain patent protection wherever possible as a precursor to licensing the inventions to others. To enhance the effectiveness of the inventions, remove any rough edges, and supplement the technology where needed, formal scientific institutions such as the CSIR laboratories have been sought out as partners. Engineering students have been encouraged to work with and on these grassroot inventions with a similar objective. Laboratories have been set up within the NIF’s broader network to facilitate testing and standardization. And, corporate partners have been sought to take the products of grassroot innovators to the market. Big Bazaar is one of the prominent corporate partners working with the NIF, and some products are already being sold in Big Bazaar stores in Ahmedabad.

While all these efforts have yielded some results, my impression is that they have fallen short of what was expected. It’s been particularly difficult to get the formal and informal systems to work together on a sustained basis. That’s not surprising as I imagine they don’t even speak the same language.

Should we be worried?

Personally, I don’t think this is a big cause for concern. As I wrote in From Jugaad to Systematic Innovation, creating a supportive social environment for innovation in India should be an important part of our innovation agenda. Respecting inventors contributes positively to the creation of a society where innovation is valued, and in this respect the NIF’s efforts so far are unparalleled in creating a conducive environment for innovation in our country.

But there is some tension between the formal and informal systems. Many in our formal institutions (companies, national laboratories, etc.) wonder whether grassroot innovations will ever be able to make a major impact. The grassroot innovators (and their supporters) believe that only they have a genuine understanding of local problems, and that the corporate sector is only interested in making money at the cost of the consumer. In their perspective, corporate innovations are over-engineered and contain unnecessary features that are not required by most users.

Relationship to the BoP Debate

This tension is reflected in one of the longstanding debates in the Bottom-of-the-Pyramid (BoP) paradigm. When the first articles on BoP appeared about a decade ago, one of the major criticisms against it (e.g. by Karnani) was that it saw the poor only as consumers, as markets to be targeted by large corporations. Why shouldn’t people at the Bottom of the Pyramid be partners/producers in the process rather than merely consumers?

This thinking became stronger as large corporations struggled to develop products and services that could meet the needs of people at the BoP and make money at the same time. BoP pioneers such as Stuart Hart who had worked closely with companies came to believe that the old “Structural Innovation Paradigm” would have to be replaced by an “Embedded Innovation Paradigm” in which local communities co-created products with companies (Simanis & Hart, 2009).

At the heart of this debate, is an issue that Simanis & Hart point out was raised in Polanyi’s classic The Great Transformation. While the industrial revolution used mechanization to enable mass production and thereby raise productivity, efficiency, and access to goods and services, the ensuing marketization process resulted in economic life getting “disembedded from society.”


Seen from this historical perspective, grassroot innovators who solve their own problems in a local milieu seem to have more in common with a pre-industrial paradigm than a contemporary post-industrial world.

Counter-arguments

There are counter-forces to this argument. One is the broad movement towards the democratization of innovation, and the increasing diffusion of open innovation. Another is the importance of lead user insights so vivdly captured by von Hippel and others.

One dimension of the grassroot-corporate divide also arises because of the great heterogeneity of education levels across our country. Better educated individual inventors don’t shy away from treading the entrepreneurial path, raising external capital if necessary. These inventors tend to be seen as closer to the corporate side of the innovation spectrum than the grassroot side.

Conclusion

But if there is one thing that the innovation literature agrees on, it is that diversity helps innovation. We must therefore do all we can to support innovation in different settings and by different people. And, we should not take a mechanistic view of innovation by seeing scaling up of grassroot innovations as the only way to demonstrate their success. Ideas build on other ideas, and with enough interaction between ideas of all types, we should see the ideas of grassroot innovators being used, but perhaps in very different ways than the innovators themselves first intended. Rather than thinking of the question as “grassroot innovation or corporate innovation,” may a thousand flowers bloom.

Saturday, September 1, 2012

The Newspaper Industry: Innovate to Survive?

I recently had the privilege of addressing the International News Media Marketing Association (INMA’s) South Asia conference. Major print media organizations are members of the INMA, and the INMA’s conferences provide a great opportunity for people from the “business” side of the media industry to come together and share notes about current trends. Mr. Bhaskar Das from the Times of India group was the inspiration behind this year’s conference, and his endeavour was to bring fresh thinking into the print media industry by inviting a diverse set of speakers from outside the industry to share their perspectives. My talk was a part of this initiative.

Crisis in the Western Print Media

In the west, all discussions in the print media center around just one word – internet. Like many other industries that have digitisable content (music, books, films), the print media has gone through a tumultuous time over the last decade. Circulation has plummeted as readers preferred to get their news from the internet when they want it, and in the form they prefer. With the decline in circulation, advertising revenues have gone down, putting the basic business model of the average newspaper or magazine in peril. While the print media embraced the internet, most newspapers were slow to adapt to the medium and initial websites were just html versions of their printed newspapers. Only now have most newspapers realized the power of the internet, and today media websites contain additional stories, multimedia content, interactive features, and more active reader participation.


The Western print media has struggled to find sustainable models to keep afloat. Advertising on their websites has provided an alternate source of revenue, but this has been inadequate to cover the advertising revenue lost from their print editions. Except in publications offering specialized content like the Wall Street Journal, media sites have been hesitant to charge readers for accessing web content because early efforts in this direction were largely unsuccessful, and such approaches seem to be in conflict with the culture and philosophy of the internet.

Emerging Business Models

Crisis for some represents opportunity for others! Some new business models have evolved in the last few years:

1. Embrace the Internet & proliferate across the Web: This strategy is often associated with Schibsted, a prominent Norwegian media house, which has built a strong position in Norwegian language portals. Its goal is to bring readers directly into its website so that its webpages are more valuable to advertisers. According to reports, more than one-third of its operating revenue comes from the Internet.

2. Build a multimedia brand: Germany’s Bild group has used this approach to extend its prominent position in the tabloid market across other media including the mobile internet through partnerships with leading telecom service providers.

3. Internet only, leveraging the power of the Internet: The Huffington Post is closely associated with this approach. The Post has a small core staff, and most content is user/reader-generated, so costs are manageable and can potentially be covered by advertising revenues. Articles written by celebrities help drive more traffic to the site. The Post’s model got a formal endorsement when AOL-Time Warner acquired it for $315 million!

Print media companies have used the traditional survival methods of companies as well – reduce costs through downsizing, close unviable editions, reduce the size of the newspapers, share printing and distribution arrangements, merge with other companies, etc. But while these efforts have succeeded in buying some more time, they haven’t solved the fundamental problem of long-term sustenance.

Capturing Value from Digital Content

As advertising revenues are inadequate to cover their costs, the print media confronts the challenge of deriving more explicit revenue from their content. So, some prominent names including the Times of London and the New York Times have now turned back to attempts to charge readers for accessing digital content.

The initiative which has attracted the most attention is that of the New York Times. Since March 2011, it has charged readers for any content in excess of 20 articles per month (subsequently reduced to 10). Some interesting features of the New York Times strategy are:

  • Its social media savvy: access to an article through social media sites is free and not covered by the article limit.
  • It covers all content rather than just columns or op-eds.
  • The pricing suggests that the long-term strategy is to shift all readers to the web. In fact, Arthur Sulzberger, Editor of the New York Times, is on record saying that “We will stop printing the New York Times sometime in the future, date TBD”


A recent Harvard Business School analysis suggests that a web-only strategy that includes user payment could be viable for the Times, but the chief challenge is how to make the transition from the present strategy to the new one!

The Indian Print Media Industry: Challenges & Innovations

So far, the Indian Print Media industry has remained relatively insulated from the disruptive changes elsewhere. Low internet penetration in India has meant that the shift to the internet has not been as pronounced as in the West. Circulation figures for Indian newspapers, particularly in local languages, continue to climb reflecting increasing literacy. Volatility in the financial performance of Indian print media houses has been due to other reasons largely outside their control such as economic/business cycles and changes in the price of newsprint. Business decisions such as pushing for leadership in markets dominated by competing brands (such as the Times of India’s push in Delhi & the Hindustan Times push in Mumbai) have also taken a toll on profitability.


Innovations have been largely on the marketing front. These include “invitation” pricing, co-creation approaches to enter new markets (Dainik Bhaskar has been the most successful proponent of this approach), and “private treaties” (equity stakes in exchange for media access). The private treaties in particular have come in for some criticism as they threaten to blur the line between “objective”and “paid” content.



However, the dangers of the Internet are not far away for English language newspapers in India. When I recently did a straw poll in my MBA class, I found that less than 10% of the students read a traditional newspaper regularly. Among mid-career executives, almost all of them buy a newspaper, but most of them depend on the internet to get their news. It seems unlikely that our current MBA students will buy newspapers even after they enter the corporate world. So, my prediction is that the internet will be a serious threat to English language newspapers in the next five years.

Given the reluctance of Indian consumers to pay for things they access from the internet, the Indian print media is likely to be more dependent on online advertising than their counterparts elsewhere. I believe that the shift to the internet, when it happens, will be more disruptive for the print media in India than elsewhere in the world.