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Unravelling India's innovative streak

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January 28, 2008

This was the high noon of the shortage economy. Necessity, the old cliche goes, is the mother of invention. That must make scarcity the father of innovation. India had to make do with very little, and as a result, every Indian, in his or her own way, became a master at jugaad, a Hindi word with pan-Indian usage that is, really, impossible to translate. It describes as nothing else does the ability to creatively "manage," to make do with quick-fix solutions. Jugaad developed into a survival skill for most Indians. It was the additional resource that gave greater returns within a framework of scarcity.

Every obstacle thus became an opportunity, a showcase for ingenuity. My first experience with this phenomenon was on the road to the boarding school in the Himalayan foothills where I studied. I encountered an invention that Henry Ford would probably have taken off his hat to. It was the reused chassis of a bullock cart, powered by the engine end of a motorcycle.

It had a chain connecting the motorcycle's sprocket to the axle, which in turn provided the rear drive for this unique "people mover." Later I found an even more intriguing "motor car": the mating of a water pump with a jeep gearbox mounted on a flatbed plank made of locally available wood, using old tires that roughly matched one another. For fuel storage, an iron drum was good enough. There were no headlights, of course. But the owner had solved the problem by seating a young boy on the plank; the boy held a flashlight in his hand and swore furiously as other cars whizzed past.

I sometimes wonder whether jugaad, a form of scientific innovation, represents a suppressed Indian inventive gene. After all, ancient India is replete with the names of scientists and examples of scientific inquiry. Indians first devised the decimal system and the concept of the zero, revolutionizing mathematics, only to have their ideas taken to Europe by Arab intermediaries. More than 2,000 years ago, the medical scientist Sushruta wrote the world's first known treatise on surgery, describing 300 procedures, including the plastic and cosmetic surgery necessary for a nose job!

Around the same time, the linguist Panini wrote Ashtadhyayi, the rules of Sanskrit grammar. The highly logical, nonintuitive structure of Panini's grammar has often been compared to modern computer language. By the fifth century a.d., the mathematicianastronomer Aryabhatta had already calculated the accurate value of

pi, was solving quadratic equations, and was teaching his students that the earth and other planets revolved around the sun. Use, reuse, recycle, never throw away. This was and remains the mantra in countless Indian homes, handed down from generation to generation. So India learned to economize on scarce resources. Truck tires that were beyond retreading were first used on the wheels of bullock carts and then became the raw material for rubber slippers and sandals.

No wristwatch was ever lost; in time it was reincarnated at the "watch repair shop," a countrywide street-corner presence that specialized in straightening the hands and reassembling them in a new case. Umbrellas, cooking stoves, car batteries, old radios: India had-and has-a flourishing repair industry for everything. Like the water pump doubling as a "people mover" engine, every artifact was open to multiple uses, to multi-utilitarianism.

In the state of Punjab, washing machines are sometimes deployed by roadside eateries to churn butter. Why is this assorted trivia about middle-income India relevant to the global economy? The reason is simply this: India's past tends to make it choosy about technologies and business formats it prefers. In most cases, India accepts the processes and technologies that it needs. Yet the rate, level, and chronology of their adoption are unique; India marches to its own drummer. Our past experience with scarcity determines our spending preferences. A purchase is expected to do more than just satisfy a basic need or demand.

What the world may refer to as "slow change," though we prefer to call it "careful adoption," has led to great opportunities and savings. We have jumped eras and technologies by leapfrogging over other adoption models. Take basic telephony. The landline, so common elsewhere, was a scarce commodity in India; hence, when the cell phone became affordable, it took off, not just as a toy for the rich but as a stand-in for the old-fashioned telephones that millions of Indians could not have because of an infrastructure deficit.

Thus the pager-the intermediate-stage communication technology in the West, between fixed and mobile telephones-was almost passed over by consumers. Similarly, India skipped the electric typewriter age almost entirely, adopting desktop computers even while mechanical typewriters remained in offices. This was because few Indians-even senior managers-were fussy about straining their fingers typing. In a land of high unemployment, there were plenty of willing fingers and plenty of manual typewriter repair stores.

India's competitive advantage

Idle fingers or busy hands: Indians know how to use their competitive advantage. Take the mobile vegetable seller and grocer, the chief competition for Wal-Mart and Tesco, if and when they arrive. He knows his neighborhood or business territory. He takes orders on the phone and he has a delivery boy who will cycle down with a bag of potatoes or a pot of yogurt.

The Indian concept of home delivery has been established for almost all essentials, which are available on call. New entrants may try to emulate this current system, which includes home delivery and credit for even small-value purchases. This will surely challenge the sales paradigm of a giant Wal-Mart, with its unending store shelves and relatively long distance between the outlet and the customer's residence.

Attempting to find rough and ready solutions to problems is a deeply embedded Indian trait. I have no doubt that it is the byproduct of an entrepreneurial attribute that is hard-wired into the Indian psyche.

Jugaad is, in a sense, the herald of free enterprise. Gamely, with a shrug of the shoulder, with equanimity, citizens relentlessly pursue the proverbial pot of gold at the end of the rainbow. The Indian-origin residents of Uganda were robbed of their wealth, thrown out by Idi Amin, stripped of their last jackets (literally), and put on a plane to London. These refugees-India's "boat people"-soon managed to establish a near-monopoly on corner shops in London. Today, they are spread across a variety of businesses and professions and are among the richest ethnic groups in Britain.

I am told that the secret of the Gujarati (many of the Ugandan exiles had their roots in the Indian state of Gujarat) success at establishing grocery stores was that they, the Indians, first rented a small space next to a big store, matching or sometimes beating prices, staying open longer hours, working seven days a week. There was an initial cost to pay, and much effort to keep overheads low, but the British neighbor was eventually forced to move out. Such conditioning historically has also made India a streetsmart nation, poor in cash, perhaps, but never poor in ideas and never afraid to multitask.

Look at India's biggest festivals-the Kumbh Mela in Allahabad, for example, a masterpiece of multipurpose intent held every 12 years, where millions turn up for a dip in the Ganga in a ritual going back to the time when the Greeks were still worshipping Zeus.

The Kumbh is a concourse of all India. Business barons arrive in their helicopters and planes; ordinary people trek for days to reach the holy river from the deep interiors of India. It is the quintessential great Indian ritual-enormous, eternal, in a sense egalitarian. Even so, not everything here is otherworldly.

These religious congregations are also huge business fairs. They are filled with pilgrims from the hinterland combining prayer and devotion with retail therapy-buying clothes, getting good deals on kitchen utensils, you name it. As a friend of mine says in jest, Indians didn't discover Christmas, but they probably invented the Christmas sale.

And it is this ingenuity, this ability to create opportunity, coupled with liberalization that has lifted the nation from the depths of poverty and put it on the world's second-fastest growth trajectory, not far behind China. In the late 1990s, when the computer dependent

West racked its brains for ways to save oceans of data from disappearing at midnight on 01/01/00 (the Y2K fear), Indian information technology (IT) firms were already readjusting the date lines on millions and millions of pages of code. This early opportunity-based engagement with Western clients was converted into a lifelong embrace: India is now the most favored offshore destination for the business enterprises of the United States and Europe.

Revenues worth $32 billion were brought into India in 2006 and are expected to reach $60 billion by 2010. In June 2007, the Economist magazine reported on Indian entrepreneur Krishna Ganesh's venture, TutorVista. It uses the Internet to offer unlimited tutoring to American (and British) schoolchildren for a monthly subscription of $100. It is an Indian answer to a problem in a faraway country where personal tutoring of schoolchildren is unaffordable for most parents, yet deemed necessary.

The Internet is offering India's instinctive entrepreneurship an ever-expanding platform-be it for scientific research and development (R&D), restructuring, medical diagnostics and clinical trials of drug molecules, cutting-edge research with stem cells, or nanotechnology; or, in the softer spheres, like long-distance publishing, accounting, or, as a lawyer friend tells me, "in drafting every document relevant to a litigation, except the judgment."

Call it jugaad, or see it as a nation wedded to derring-do. Whatever it is, it has made India very comfortable with the outside world. This outlook shows in the country's competitive, and not adversarial, attitude toward the West. There is little or no rancor, much less hate, in popular discourse. The Indian entrepreneurial spirit respects competition and salutes pioneers, so much so that the Hindi film industry is nicknamed "Bollywood," an acknowledgment of the Dream Factory in southern California. Yet we see in India a greater sense of self-belief and a confidence in homegrown enterprise.

In the context of globalization; there is no paranoia about "Hollywoodization" or "McDonaldization." Indian film companies and food chains have cheerfully taken on Hollywood and McDonald's in the fight to win Indian minds, palates, and wallets.

India's resilience and its ability to assimilate ideas and technologies make it a very interesting place. But this alone may not be enough for it to lay claim to global preeminence in this century. It also has time on its side, literally. Forty percent of India-a full 440 million people-is under 18. This is India's demographic dividend: this century will be driven by the energy, risk-taking ability, open thinking, and innovation of youth.

Excerpt from India's Century, written by Kamal Nath, Union Minister of Commerce and Industry.
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Reprinted with permission of Tata McGraw Hill Publishing Company Limited. All rights reserved.

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