what is your global innovation strategy? implications for
TRANSCRIPT
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Shirish C. Srivastava
HEC Paris
What is Your Global Innovation Strategy?
Implications for CEE Region
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Cost of the Mission: $73 million
This is about 1/10th of the cost of
other similar Mars Orbiter Missions
Road Map
• Meaning of innovation.
• Differences in innovation approaches in the
developed and developing world.
• Global innovation strategy framework.
• Implications for the CEE Region
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What is Innovation?
• Innovation across different dimensions
• New product, service, process, idea, method,
brand, business model, offering, customer
segment, delivery, revenue channel ….
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Source: http://www.spigit.com
What is Innovation?
• Innovation – highly contextual – relative to a
company’s current processes, culture and goals
• Developed versus developing world – does
geography make a difference?
• Embedded contextual differences between the
developing and developed world influence
approaches to innovation. Two key factors:-
– Economic factors
– Cultural factors
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Economic Factors
• Resource constraints
– Innovation not always for new state of art products & services
– Products and services of comparable quality at affordable prices
– Necessity (developing) versus opportunity (developed)
– Affordable “good enough” solutions
– Narayan Hrudayalaya – Open heart surgery
– $2000 compared to $100, 000 (US Hosptials)
– Another example ...
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Cultural Factors
Cultural Reasons
• Collaboration and collectivism
– Tata Nano – customers serving as Beta testers
– Follow your heart approach not always a formal structured approach
– Carrefour, Walmart versus Big Bazar
• Curvilinear and not linear thinking
– No one right or wrong way (Pluralism)
• Karma Yoga, Dhyana Yoga, Raja Yoga, Bhakti Yoga
– Different ways of reaching the same goal, unending evolution
– Tolerance in cultural philosophy --- leads to risk tolerance
– Acceptance of imperfections and failures
– Unstructured innovation process
Good-Enough Emergent
• Emergent and intuition driven innovation
process focused on having a sufficient workable
solution.
• Forte of emerging economies – some examples
from developed world
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Good Enough- Structured
• Good enough structured approach initially used
by developed world for bringing down
operational cost in a standardized way –
Walmart, Carrefour …
• Economies of scale and scope
• More recently in services industry by developing
world to bring down cost, Aravind eye hospitals,
Narayan Hrudyalaya …
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Augmented Structured
• Structured innovation process – goal of
achieving augmented products or services –
latent customer needs
• Generally in the developed world – Jaguar,
Mercedes, BMW
• Some developing world companies trying to
acquire such ventures
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Augmented Emergent
• Striving for excellence with and emergent and
intuition driven innovation process
• Very complex to implement
• Unstructured innovation along with excellence
• Appetite for failures also, Google and 3M
• Google Earth and Google mail - success
• Google Health and Google Powermeter - failures
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Mixed Approach
• Siemens and GE are good examples
• Siemens SMART solutions
• GE low cost X ray machines,
• Have different strategies for different geographies
What do we learn?
• Innovation for being good enough• Innovation for being good enough involves mindful bricolage of
available technology, institutions, knowledge to satisfy the needs
of the user optimally.
• Innovation for excellence• Innovation for excellence involves radically redesigning the
canvas so as to identify and satisfy evolving user needs in the
best possible way.
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Challenges for CEE
• GDP growth rate down - 4.6% to 2.8% (post 2008)
• Needs investment led growth – both FDI & domestic
savings important – Not consumption led growth
• McKinsey 2013 report identifies focus areas:-
– Infrastructure – especially roads, networks
– Urbanization – service innovations, smart cities
– Regulatory reforms – ease of doing business
– Institution building – focus of policy makers
– Labor force skills – knowledge intensive sector
– Innovation and R&D
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R&D Spending in CEE
• 2.9% of GDP in the US
• 2.1 % in EU-15
• 1.4 % in BRIC countries
• 0.9% of GDP in CEE (2010)
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CEE Needs to Invest in Innovation
• Invest in education and skills especially in
advanced manufacturing, outsourcing and
agribusiness & food processing
• Invest in outstanding research universities – skill
based and management
• Increase industry-university collaboration
• Develop industry clusters in knowledge intensive
industries
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