Going Up The Value Curve A Guide for Indian Companies in International Business
Adaptiveness is best in systems where elements/pieces are optimally connected. Too rigid connection causes obstructions and too loose a connection results in chaos.The challenge is to first observe and diagnose the latent socio-cultural perspective of society, and see how the target customer fits in there

This is a good time to be in Asia – India and China
- Asia can expect to contribute about 55 per cent to the world population by the year 2300, slightly lower from a 60 per cent contribution in 2000. The continent will maintain a high 50 per cent contribution level in between 2000-2300. - China and India would continue to be the most populous countries in the world till 2300. By 2050, India is expected to surpass China as the world’s most populous country, thereafter remaining so till 2300. The above predictions from the United Nations ring a bell about the shifting of order of global business. And this is being vindicated by experts such as Professor Jeffrey Sachs of Columbia University who recently told ET, how indeed ‘Asia led by countries like China and India will emerge as the centre of gravity for economic growth’.

Add to that the fact that Asia increasingly is becoming innovative too. A recent report from the World Intellectual Property data shows how in terms of patents filing Asian countries are leaving developed economies behind. To get a sense of that one needs only to look at compound annual growth rates (CAGR) of emerging economies in filing of patent applications at the World Intellectual Property Organisation. Numbers available for 2000-2004 indicate that in the last 5 years, emerging economies like India have witnessed an astonishing CAGR of 22 per cent along with China and Korea at 12.6 per cent and 12.1 per cent respectively.

How does one take it forward?
Thus aided by innovative capacity and an entrepreneurial culture, firms large and small are upping their ante to gain a larger share of the global trade. To acquire trade competence is however not easy – club that with the premise of being innovative – things get doubly difficult.

Is there a prescription available at large for India Inc?
That was the premise of the 2005 Fedex Spirit of Success Seminar – under the theme ‘Innovation and Trade Competence – twin levers for Success for emerging India’, held during early February in Mumbai and Delhi. The grid of panelists represented the basic spectrums that could be of interest to Indian business to learn about innovation and gaining competitive as well as comparative advantages. “India can be not only a exporter of goods but also of innovations” – pronounced Dr Bhaskar Chakravorti, Partner and Thought Leader of Monitor Group, while speaking at seminar. “What Y2K did for IT, Y2K5 could do for Textile Industry”, hoped Mr Akhil Jindal President of Welspun Group talking of the company’s journey in innovation and trade competence to gain a mindshare of global retailers like JC Penny and Walmart – an apt lesson in competitiveness for Indian textiles especially after the end of the WTO quota regime. And if you though manufacturing India was lacking behind – “build on your retainment, improvement, and breakthrough organisational skills” advised chief operating officer Mr Kiran Deshmukh, of Sona Koyo Steering Systems, India’s and the world’s only steering maker to be awarded a Deming Award in quality.

But then whatever happened to India’s much-trumpeted intellectual prowess? Stepped in Mr John O’Halloran, chief operating officer of Cummins Research and Technology India, a fully dedicated unique entity of Cummins Inc USA set up as a 50-50 joint venture with Cummins India. “A large number of highly qualified engineers, excellent academic institutions, English language usage for engineering education, an excellent IT infrastructure” are India’s weapons to establish its supremacy in the global innovation speedway he asserted.

Their broad prescriptions laid out, Dr Chakravorti, Mr Jindal, Mr O’Halloran and Mr Deshmukh proceeded to flesh out their prescription for success in emerging India.

India – an Exporter of Innovations
Dr Chakravorti outlined his thoughts on India’s march to capture a greater share in the global innovation and trade pie. Citing from chip design to rain water harvesting, micro finance to language processing, Dr Chakravorti raised an optimistic question at the start of his presentation, questioning India’s capability to be an exporter of innovations. But he didn’t stop there outlining how these lofty thoughts of his can be achieved. Referring to a Monitor Study in 2004, Dr Chakravorti outlined how the five leading innovators in technology and communications have significantly outperformed their industry peers in growth, profitability, and shareholder return metrics.

Thus he raised the question as to who is the mother of innovation saying how managing complementary networks or dealing with customer insight could be the key to a successful innovation route. Quoting from his now famous book, published by the HBS press, ‘The Slow Pace of Fast Change – Bringing Innovations to market in a connected world’ – Dr Chakravorti talked about how to bring innovations to the market, companies need to break existing status quo and bring about a new status quo – thus involving management of the various players involved in the status quos mentioned above.

He then went on to outline the four basic steps companies need to adopt for success in bringing innovations to the market. One should play for a winning endgame, align incentives to all critical constituencies, complement power players, and design for uncertainty, said Dr Chakravorti. Thus he gave examples of how Adobe used the US Treasury for greater reach of its acrobat files, or Fedex’s own innovative use of information technology to solve the global logistics quagmire.

He added perceptively, “I am thinking not only of issues such as fuel from indigenous resources or Internet education and access to rural areas but even more banal things such as word-of-mouth and social networks (used by dabbawallahs in Mumbai or eunuchs in Delhi) or double auction mechanisms (used in bazaars everywhere) that are being replicated in an electronic setting by social networking websites or auction sites such as eBay in developed economies. Adversity - and there is plenty of it in developing markets - makes entrepreneurs and innovators out of most of us. The challenge often is to channel that entrepreneurial energy into something that can be commercialized, can be scaled up and has wide impact.”

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