innovation deshpande

7/28/2019 Innovation Deshpande

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Indianhigh-technolog

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Innovate or Perish

Vinay L Deshpande

Chairman & CEO, Enco re Software Ltd

India Emerging

Bangalore Management Association

10 September 2005


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Overtaking the G6When BRICs' US$GDP Would Exceed G6


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Overheard

Ind ia has always had a lot o f potent ial ;Bu t unless Ind ians wake up,

Ind ia w i l l cont inue

to only have po tent ia l!


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Did you know?

India is the largest producer of milk and sugar in theworld?

yet, Europe produces the largest amount of milkchocolate in the world!

India is the second largest producer of fruits andvegetables in the world?

yet, 40% of i t is w asted due to imp roper transpo rt andstorage!


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Networked Readiness IndexWorld Economic Forum -- over 90 factors considered

1. Number of Scientists & Engineers

2. Quality of Mathematics andScience

3. Quality of Scientific ResearchInstitutes

4. Foreign Technology Licensing5. Level of Technology Absorption


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Networked Readiness Index 2Numbers indicate rank among 102 countries

India has Thirdlargest resource of Scientists &

Engineers(after Finland and Japan)

Higher qual ityof Maths and Science Training(14) Better thanUS(37), UK(43), Germany(53), China(46)

High qual ityof Business Schools (8) (after US, France, Canada, Switzerland, UK, Finland, and Sweden)

Reasonably high s tandardof Sci ResearchInstitutions (20)


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Think about it

Yet, India has

A highrate of Foreign Technology Licensing (6)China: 70

A lowrate of Technology Absorption (31)China: 38

This is a ticket to DISASTER for our

Human Resources (Waste, Disenchantment)

Economy


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Think about it 2

BRAIN DRAIN ranking(based on percentage of populat ion th ata lmost a lways remains in ow n cou nt ry) 2 Finland

51 China

65 India

UTILITY PATENTS ranking 7 Finland

54 India

55 China

HIGH-TECH MANUFACTURED EXPORTS ranking 8 Finland

44 China

82 India


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The Only Way Out

INNOVATE OR PERISH!

E d t


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Encourage and nurtureInnovation

No innovation: economic growth limited

by physical resources available

to marginal returns on employed capital

Best way for any country to break out ofmarginal returns is Innovat ion.

e.g., US economy has bounced back in the pastfew years to very strong health, owing toInnovation.


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Priority One

Create

an

attitude for innovation


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India : Tech Leader or ?

Why is it that India is by far the least

innovative of all 'tech' countries? Howcan we say we will be the technology

superpower without innovatinganything? Is drudgery and grunt-workalone going to make India the 'TechChamp' of this world?

-- TechTree(e-zine), February 7, 2003


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But, Im Not Creative

Yes, you are. We allare.

We just need to think what others havenot thought

The task is not so much to see what no one hasyet seen, bu t to th ink w hat nobody h as yet

thought about that which everyone sees.Arthur Scho penhauer

Dont be afraid to stumble If out of 100 ideas, you get one that works,

that is enough!


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God dont make mistakes-- thats how he got to be God

(Archie Bunker)

Innovators do make mistakes lots of them

thats how they learn!

Thomas Edison 50,000 experiments to develop a newstorage battery!

We should not let past failures frighten us Follow the crowd and you will never be followed

by a crowd!

A person who walks in anothers tracks leaves no

footpr in ts Go against your own instincts sometimes


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Innovation in India

STD / ISD / PCO Booths

Uniquely Indian solut ion for u niquely Ind ian need

CHOIS

Internet access, too. 300 homes in Jamnagar

100,000 homes in the metros over the next fourmonths

50 million homes in two years!

Uniquely Ind ian solu t ion fo r uniquely Indian need


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Innovation in India 2

Godrej Electronic typewriters to Adler

C-DAC

GIST

PARAM

TVSe Tamil POS

Tejas Networks

State-of-the-art fibre-optic networking products

WeP Peripherals Entire profit on account of peripherals indigenized

through local design and innovation


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Innovation in India 3

Indica / RevaBoth on UK roads now

ASIEO

LCA Mission Computer

Dhru c, LCA , Saras

The Simputer Creat ing a new market

Selected b y Time magazine in June, 2002, as one ofthe Ten Technologies for You and the Planet

The Mobil isand SofComp

Affordable computers for everyday use

D t b di d b


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Dont be discouraged by

detractors

A certain portion of the populace will alwaysreject new ideas outright Early horseless carriagesyou cant get people to

sit over an explosion!

Others are willing to experiment, but lose faithor interest quickly when setbacks occur Mrs. Fish, in the 1900s

Visionaries are able to see past the problemsand appreciate the promise of new technologies Henry Ford: first handmade car $ 9,000

model T $ 800

eventually, $ 284,

built 15 million, changed America forever!


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Opportunities for India

High level of design expertise

Fast becoming the source for a range of chipdesigns

Fast growing domestic market

Availability of professional & skilled manpower

Experienced & enlightened leadership

NRIs in key positions in US companies


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Priority Two

Make

Design / Innovation / TechnologyKey elements of national strategy


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Design / Innovation / TechnologyKey elements of national strategy

Technology: tool for faster economic growth

No innovation: economic growth limited by physical resources available

to marginal returns on employed capital

Best way for any country to break out of marginalreturns is Innovat ion.

e.g., US economy has bounced back in the past few years tovery strong health, owing to Innovation.

C ti l M k t


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Conventional Marketsfor Indian IT Companies

Software services for foreign clients most of Indias software development effort goes

towards productivity and competitiveness

improvements of other countries -- USA, Europe,

Japan, etc

Domestic hardware and software sales

The unique needs of Indian society havebeen largely un-addressed.


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Time to be Unconventional

The task is not so much to see what no one has yet seen,but to th ink what nobo dy has yet thoug ht about that

which everyone sees.

Arthu r Schopenh auer

Time is now ripe for societal needs in India tobecome a new driver of markets for Indian IT

companies

Think laterally; think out-of-the-box

Unconventional thinking will generate strategy notin terms ofHardwareorsoftware, but so lu t ions.


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Facts to ponder over

USA: 70% of overall growth is through newproduct development

US companies spend more than $250 bneach year on R&D

Copyrighted material contributes more than$400 bn to the US economy and is theirsingle most important export

Compare ou r $17 bn of so ftware servicesexport w i th that !


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Priority Three

Initiatives for development of indigenoussolutions for product requirements

uniqu ely Indian productsforun iquely Ind ianneeds.

Advantage: Additional markets in the Third

World.


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Examples of Applications

HEALTH SERVICES

Foetal Monitoring (Portable Ultrasound)

Telemedicine

TelediagnosisTest samples collection and coordination

for remote areas

Clinical Decision Support System

Patients bedside clipboardHealth Statistics

More applications for the Indian


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More applications for the IndianMarket

Mobile banking Bank officials, customers thrilled with anyt ime,

anywherebanking

Crop data collection

Real-time data on standing crops feasible Time, Date, and GPS stamp

Health statistics collection

Time, Date, and GPS stamp

Electricity Billing

Ration-shop inventory control


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Priority Four

Facilitate

IPR Protection

The Age of


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The Age ofINTELLECTUAL PROPERTY

Aim to create IP rather than skinware

Develop products for local needs, keeping in view

the world as our market Design contracts

New products creation

Adaptation /Customization

G t h l


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Govt. can helpcreate large public markets

Individual project success: low probability

High need for interacting disciplines

Times to payoff: too long

The quest ion is not w hether government has a

role in foster ing innovation and wealth-creat ion,

but w here and how i t can par t ic ipate mo reeffect ively

US Government Support to Some


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US Government Support to SomeIndustries

Industry Examples & Modes of Current MarketGovernment Support Size ($ b)

1. Software Basic Maths research, military R&D,encryption, language standardization,military purchases of systems, IP

rights, interface standards >180

2. Computers Basic research, large-scale development,f i rs t purchase, software support,component development, mass-marketdevelopment through education >300

3. Semiconductors Materials research, f i rs t quant i typurchase, military research, Sematech,advanced system development, large-scale system deployments >150


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Public / Private Partnership

Mission mode projects tostimulate industry

Smart-card based multi-application Citizen Card

Electronic Commerce

Wireless Reconfigurable microprocessor chip

DNA chip

Biodiesel

Promote Industry-Academiapartnership

Uniquely Ind ian so lut ions for Uniqu ely Indian needs


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R&D for Defence / Public Sector

Commit production orders in addition to R&D

contracts for new IT products

IP must be given due recogni t ion

Government funded development projectsIPR first rights to developer

US examp le: NSF, NIH, DOA


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Recognition for IP

Encourage capitalization of IT productdevelopment expenses, and recognize them astrue assets (Intellectual Property)

Allow income-tax exemption on export revenuefrom royalty on IP

Preference in government procurement toindigenous-developed products.

Encourage financial institutions to finance credit-based product exports, against the sole security ofthe export goods

GOVT SUPPORT FOR


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GOVT. SUPPORT FORINNOVATION

RBI Rules Export receivables

Return of exported goods incompatible with DistributionChannels requirements (90 - 180 days credit; return ofunsold goods)

Simplify / Eliminate anachronistic provisions ofFERA/FEMA, RBI, Enforcement Directorate regulations.

Encourage financial institutions to finance credit-basedproduct exports, against the sole security of the exportgoods.

Facilitate local availability of input material(s) Permit stocking distributorships for imported components

Permit air-courier services to Be Customs- cleared at any metro ports.

Apply all CD exemptions available to EOU/EHTP/STP units.

GOVT SUPPORT FOR I T


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GOVT. SUPPORT FOR I.T.INNOVATION 2

Encourage development of appropriateinfrastructure

Permit stocking distributorships for importedcomponents

Permit air-courier services to carry samples, quick-turn-around PCBs, etc.

no insistence on customs clearance only at gatewayports.

all CD exemptions available to EOU/EHTP/STP units.

FINANCE FOR I T INNOVATION


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FINANCE FOR I.T. INNOVATION

The bank never gives you money when you need i t ,

and you dont need the bank when youve got the

money!

Is venture capital the answer?

Most Indian VCs are not very aggressive, yet.

GOVERNMENT MUST ASSUME THE ROLE OF ANAGGRESSIVE VC

Taiwan

Singapore Research / Development Grants for IT Product

Development

FINANCE FOR I T INNOVATION


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FINANCE FOR I.T. INNOVATION 2

Float a large VC Fund expressly for IT ProductDevelopment?

Collateral-free loans.

Low interest on such loans.

Encourage Exim Bank to give low-interestloans


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Priority Six

Encourage, FacilitateDesign-based

Manufacturing

Large-scale blue-collar employment

India : Manufacturing


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India : ManufacturingSuperpower?

Ind ia can and w i l l compete w ith developed

coun tr ies / Taiwan / Korea / China !

Not simply low-labour-cost manufacturing

Value addition through R&D/innovation

Design -based Manufactur in g

Rs. 50,000 crores Exports & 5,000,000 new jobs

Stimulus to the manufacture of products in India.

High Value-Addition

Wh t b d ?


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What can be done?

Encourage IT usage in Govt, business and education.

Think BIG! Allow unified manufacturing for exports/domestic markets;

economies of scale. Higher volumes pull down fixed and variable costs. Global + Local market

Low cost will allow access to lower end of domestic marketwhich is many times larger than the current premium market >>

higher volumes.

Enable an efficient supply chain Stable policies

Smooth procedures

Infrastructure

Improve the velocity of business Self declaration approach procedural not physical controls

Reduce transaction times at ports and increase the operating periods.

Flexible labour policy to manage global demand swings

Reduce paperwork and rules e-governance, avoid multifarious tax systems.

F d f th ht


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Food for thought

Value addition Move up the value chain; avoid becoming a

labour commodity.

Focus on Design and R&D activities and skill

building. Academia and industry to work together in

meeting global customer needs.

Short term focus - services (contract

manufacturing?) mid/long term focus products.

It i hi bl i i !!!


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It is an achievable vision !!!

the recipe for success is

Start believing in our ability to innovate Take risks and think BIG !!! Think out-of-the-box Uniquely Ind ian Solut ion s fo r Uniquely

Ind ian Needs Pride in Made in India >> Made in India,

with Pride

Vi i Y 2008


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Vision : Year 2008

India emerges as a true economicsuperpower.

Widen scope from local market to global

markets Entrepreneurs & medium corporates as

economic driving force

IT-driven national economy, educational

system, communications, and government-citizen interface

N Mi d t


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New Mindset

The greatest waste of our natural resources is thenumber of people who never achieve theirpotential.

Get out of that slow lane. Shift into the fast lane.

If you think you cant, you wont. If you think you

can, there is a good chance you will. Evenmaking the effort will make you feel like a newman.

Reputations are made by searching for things that

cant be done, and doing them Aim low : boring

Aim high : soaring!


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LETS AIM HIGH MAKE INDIA ANECONOMIC SUPERPOWER

OF THE WORLD

Thank you JAI HIND !

www.ncoretech.com

[email protected]

innovation deshpande

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