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Accelerated Inclusive Growth
through
Inclusive Innovation
R.A.Mashelkar
20 March 2014
Inclusive Innovation Drivers
Emerging Economies
• Rising Incomes & Aspirations
• Rising Inequalities
• Rising Social Disharmony
Income Disparity in China
Gini index of income inequality in
China
Rural-urban disparities in annual per
capita disposable income
World Bank- Inclusive Innovation Summit China
C
Cape Town, 21 Nov 2012
“Inclusive Innovation is any innovation that leads
to affordable access of quality goods and
services creating livelihood opportunities for the
excluded population , primarily at the base of
the pyramid and on a long term sustainable
basis with a significant outreach”
R.A.Mashelkar
21 Nov 2012
Key Words
• Affordability
• Accessibility
• Scalability
• Sustainability
• Quality
• Grassroots Innovation
5 Mantras for Successful Scaling
1. Go for ‘affordable excellence’
2. Build ‘entire ecosystem’ to support scale, not just a ‘stand alone’ venture
3. Focus on ‘end to end’ innovation
4. Remove ‘internal barriers’ to inclusive business
5 Mantras (contd)
5. Remove ‘external barriers’ to inclusive business
• Financial
• Infrastructural
• Regulatory
• Marketing, distribution & sales
• Collective action with Govt, local NGOs….
5 Mantras for Successful Scaling
1. Go for ‘affordable excellence’
2. Build ‘entire ecosystem’ to support scale, not just a ‘stand alone’ venture
3. Focus on ‘end to end’ innovation
4. Remove ‘internal barriers’ to inclusive business
Affordable Excellence
No Dream – A Reality!
Case - Hemoglobin Detection
Affordable
25 fold Reduction in Price!
High cost (~ $ 25 per test) to ultra low cost ($ 0.5 per test )
Excellence
Breakthrough High-tech Innovation:
From ‘invasive’ with needles to ‘non-invasive’ with no needles
Anjani Mashelkar Inclusive Innovation Award- 2012
12
‘Affordable Excellence’ through Cutting Edge Technology
High Technology :
Photoplethysmography + Spectrophotometry +
Sophisticated photon scattering software
A Paradigm Shift
Excellence – More from Less
Affordable – For More (People)
More from Less for More (MLM)
Innovation’s Holy Grail - MLM
C.K. Prahalad
R.A. Mashelkar
Harvard Business Review- July, August 2010
Special Session
More From Less For More
16 Nov 2010
5 Mantras for Successful Scaling
1. Go for ‘affordable excellence’
2. Build ‘entire ecosystem’ to support scale, not just a ‘stand alone’ venture
3. Focus on ‘end to end’ innovation
4. Remove ‘internal barriers’ to inclusive business
Aravind Eye Care Scaling Success through a Whole
Ecosystem
• 2.5 million eye tests and 300,000 cataract surgeries per year
• Low cost ($5) lens manufacturing joint venture
• Extreme efficiency in opex through workflow innovation
• Research and training institutes
• Civil society groups that organize patient screening events in rural villages
5 Mantras for Successful Scaling
1. Go for ‘affordable excellence’
2. Build ‘entire ecosystem’ to support scale, not just a ‘stand alone’ venture
3. Focus on ‘end to end’ innovation
4. Remove ‘internal barriers’ to inclusive business
Mobile Phone Revolution Inclusive Innovation that Scaled
Ensured ‘Access Equality’ despite ‘Income Inequality’
Combination of public policy, technological and business model innovation
Income Inequality 1000 : 1 ?
Access Equality 1:1!
Indian public policy innovation
• Leap frog from going for more land lines
by
laying more copper lines
to
voice over mobile and internet
• And also bold deregulation…….
This policy innovation riggered other innovations! This policy innovation triggered other innovations!
Handset $250 $25
Call Rates 10 cents 0.1 cent
X
X
Technological
Innovation
(Nokia, Ericsson…)
Business Process
Innovation
(Reliance, Airtel….)
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Inclusive Innovation
Technological Innovation
Business Model
Innovation
Workflow Innovation
Organizational Innovation
Research Process
Innovation
System Delivery
Innovation
Policy Innovation
• Wrongly positioned as poor man’s car rather
than a technology marvel
• Affordable excellence but ‘excellence’ should
have been at the front end, not ‘affordability’!
• Nano customer could not go to showroom, the
Show room needed to come to him!
• Innovative marketing and financing strategy for
a first time low income user missed
Why did Nanovation not Scale?
5 Mantras for Successful Scaling
1. Go for ‘affordable excellence’
2. Build ‘entire ecosystem’ to support scale, not just a ‘stand alone’ venture
3. Focus on ‘end to end’ innovation
4. Remove ‘internal barriers’ to inclusive business
Removing Internal Barriers
Technologically sophisticated performance rich products with many features
Remove features to reduce costs
Premium Price-High Margins
Technology Push, Product –Out Approach
Current Markets- Old Money
Use developed world products to transform emerging markets
Frugal, functional but high quality products
Reinvent the product from ground up
Affordable Price- High Volumes
Customer Centric, Market Based Approach
New Markets- New Money
Build new global growth platforms based on emerging markets
OLD MINDSET NEW MINDSET
5 Mantras (contd)
5. Remove ‘external barriers’ to inclusive business
• Financial
• Infrastructural
• Regulatory
• Marketing, distribution & sales
• Collective action with Govt, local NGOs….
• DFID’s Business Innovation Facility
• USAID’s Development Innovation Venture
• Social Impact Funds ( Acumen Fund, Grey Ghost
Ventures)
• Guarantee Facilities (Root Capital)
• Indian Inclusive Innovation Fund ($ 1 b final)
• 2% of PAT reserved in India for Social Corporate
Responsibility (with corporates)
Explore Non-traditional Financing including
Government
The Big Question
Why should OECD be interested in
Inclusive Innovation?
“If we do not come up with innovations in
poor countries and take them global, new
competitors from the developing world –
The Mindray, Suzlon & Goldwind- will.
That is a bracing prospect.”
- Jeffrey Immelt
CEO, GE
REVERSE INNOVATION
Reverse Innovation
ElectroCardioGraph
Machine $10000 $600 X
Reverse Innovation
Ultrasound Machine $30000 $1500 X
GE plans to spend $3 billion till 2015 to
create at least 100 health-care innovations
that would substantially lower costs,
increase access, and improve quality..”
Global Research For Global Good
Nine countries, five continents
GRA member organisations
GRA Inclusive Innovation Project Green & Low-Cost Wireless Communication Network for Africa
Fraunhofer (Germany) - terrestrial wireless infrastructure to bring this satellite connectivity into the wide area
Fraunhofer (Portugal) - applications for targeted deployment
CSIR SA- wireless mesh concepts, in particular community mesh and wireless backhaul
CSIRO - efficient satellite-based infrastructure to reach rural areas
VTT – integration of network management
Macha Works - supporting local deployment, training staff, testing and evaluation
Vietnam Inclusive Innovation Project
(GRA as a Knowledge Partner)
World Bank funded ( USD 55 million)
• Developing inclusive technologies
• Scaling up, and commercialization
• Capacity building
Thank You