Hr VideosInnovation

Innovations & Intstitutions

Source | Pavan Soni, Research Fellow, IIMB & Innovation evangelist

The topic of this video is how institutions shape innovation and creativity, and the kind of innovations India excels in. The speaker opines that cultural nuances play a very important role in which we innovate.

He proposes three types of Innovation that India is known for –

1. Process Innovation in case of Indian pharmaceutical companies

2. Frugal Product Innovation – making good low cost products like Tata Nano

3. Grassroots Level Innovation – having makeshift solution to a given problem like peddle washing machine

But these innovations have not made significant impact on the world as we have failed to  move from process to product mindset, take our products from good enough level to worldwide and allow the innovative solutions travel to states in India which face similar problems. The reason for this is identified as culture as it shapes the way we innovate. Culture shapes our behavior through formal and informal means and Innovation is thus a cultural phenomenon.

Formal Institutions – Significant gap has been identified for India on Press Freedom Index, Property right protection, Corruption perception, Infrastructure and Ease of doing business. And this makes us move to process innovations – imitations & improvisations.

Informal Institutions – All countries in the world vary in 7 dimensions as per Hofstede’s research on culture.

Top ones are as below –

1. Power Distance – we don’t talk to people

2. Individualism – we are more as collectivist society

3. Uncertainty avoidance – we easily workaround with uncertainties

4. Indulgence – we abstain from good products/great services

Two significant developments with the advent of MNC’s in India have led to innovation.

1. Large families broken to nuclear families – as social contracts are now replaced by economic contracts which facilitate innovation. With innovation being scalable, replicable & understandable, we can export anything to the world.

2. Cities inculcate a behavior of individualism and risk taking ability. The speaker concludes by saying that we must always challenge the cultural domains, ambiguity, collective behavior & process innovations to facilitate worldwide innovation.

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