The Dynamics of Innovation


Prof. Dr. Vidya Hattangadi
Director cum Professor of Marketing
Anjuman-I-Islam's Allana Institute of Management Studies

Innovation leads to the dynamics that governs the interaction between science, industry, and society. Innovation comes in two ways. One is the technology-push and the other is customer-pull. Technology-push introduces new products based on progressive and cutting-edge research. On the other hand, in the globalized markets the customer-pull represents customers' increasing demand to engage marketers and brands on their own terms. Customers are becoming more diverse, educated, and demanding, to keep them satisfied a steady stream of products, services, marketing strategies, and sales plans are required by the marketers. The more sturdy the offering, the more strong is the belief of the customer.

The liberalization policies in the most of developing countries have brought about sea change in their economies. This fact has also brought with it destabilization for the existing businesses in those countries; they are constantly fighting to retain their market shares and profits. Many companies are trying to fine-tune their spreads to the new corporate environment.

Science, technology, and innovation have long provided the foundation for America's prosperity. Naturally curious and imaginative, the Americans have developed new products and technologies that have fueled their economy and improved their quality of life. Consider how different our lives would be without electricity, air travel, antibiotics, computers, and the Internet. The commitment of the Americans to science, technology, and innovation has created entirely innovative products, services and industries. Science, technology, and investment into research & development is the top priority for this country.  It tops their national agenda.

Innovation and creativity are critical to nation's future for a variety of reasons. First, the development of new products, services, and processes drives economic growth and job creation. Innovation is important not only for high-tech sectors such as advanced manufacturing, aerospace, clean energy, the life sciences, semiconductors, and the Internet. It is also essential for companies that are using technology to develop products more rapidly, harness the "collective IQ" of their customers and employees, and coordinate sophisticated global supply chains. Innovation is not solely the territory of the venture capitalist, the entrepreneur, the scientist, and the molecular researcher, but of a cleaner, a house wife, a nanny, a nurse, a primary teacher, a student everybody has to use creativity to just right their jobs. Creativity and innovation can create jobs for workers who are installing broadband networks, retrofitting buildings with energy-efficient technologies, manufacturing biopharmaceuticals, and building a 21st century infrastructure.

Innovations increase productivity also; in the long run, it has a huge impact on a nation's long-term standard of living. It is a source of competitive advantage for a nation. But, to bring in an innovative and creative culture an investment is required into a number of research universities, harnessing entrepreneurial culture, flexible labor markets, and deep capital markets. We are often misinformed with the concepts of creativity and innovation because they are connected with terminologies such as intangible, unscientific, non-usable, undefined, mysterious, enigmatic etc. These terminologies are used because creativity and innovation are believed to be the domain of a few people. 

Innovation in healthcare plays a pivotal role; good healthcare can provide with longer, healthier lives hence a healthier and peaceful nation.  The civic sector too requires a lot of creativity and innovation to bring about changes in the lives of people. It lifts people out of poverty, prevents crime, and builds vibrant communities. Innovation in the civic sector has the potential to help address some of our toughest and most persistent societal challenges. It helps advancing the frontiers of human knowledge and increasing our understanding of ourselves and the world around us.

According to the Global Innovation Index (GII) that examines the degree to which individual nations are currently responding to innovation, US ranks first with an index of 5.8 followed by Germany and UK, whereas India ranks in the 23 rd place with an index of 3.57. What we need for a developing country like ours is innovations and research.  The total number of patent applications filed in China is about a lakh, whereas India files about 17,00 applications of which 80 per cent applications are from foreign companies and individuals.

Perhaps one of the intriguing reasons why India failed to create an industrial revolution is that the government has always lacked the vision of encouraging entrepreneurial culture. The so called architects and planners of this country did not trust private entrepreneurs who have the strength and might to practice innovation, to do things differently, to try out new ways. The Government made them sit in the backseat instead they made the state the entrepreneur. State entrepreneurship stuck the monotony, autocratic thinking, reservations and leisure in working style. Not surprisingly, they failed miserably and India is still paying a huge price for this folly.

But, there has been a spurt in the private enterprises since the late eighties.  Creative and innovative brains are succeeding in the knowledge economy.  In the wake of the new millennium, the BPO and KPO bug has bitten us. As per a McKinsey study it has created more or less created millions of jobs and $ 50 million in revenue.

The entrepreneurial miracles in the private sector have showcased our nation's strength in innovations and creativity. In the post reforms in India the new millionaires did not inherit wealth. They have risen through sheer creativity, talent and hard work and innovative skills. We have Harsh Mariwala of Merico, Sunil Mittal of Bharati Telecom, Laxmi Mittal the steel tycoon, Azim Premji of Wipro, Nandan Nillenkani of Infosys, Ranganathan of Cavin Care, and Kishore Biyani of Future Group these and many others have let out their suppressed energies. Their intuitive minds are surging in new directions like never before. This change is proving a demand for creativity and innovations. The youngsters are restless; they want to do something different.

The new progressive companies respect the demands of their consumers, they respect the viewpoint raised by their customers, and they appreciate their restlessness for creative and modernized products and services. The progressive companies are research-oriented. These companies have realized that to do research, they need a critical mass of people. They invest a chunk of their profit in R & D because research fosters innovation which in turn critically addresses the question of appropriate levels of policy action. New product design and development is more than often a crucial factor in the survival of a company. This is necessary due to continuous technology change and development as well as other competitors and the changing preference of customers. A system driven by marketing is one that puts the customer needs first, and only produces goods that are known to sell.

Finally, creativity and innovations purges poverty and inequality it also helps to examine and seeks to illuminate or positive effects of the same on the political economy of a nation. All developed countries in the world have experienced equitable development due to constant innovations.

Prof. Dr.Vidya Hattangadi. The author is Professor of Marketing Management and the Director of Allana Institute of Management Studies, Mumbai. She may be contacted at

Prof. Dr. Vidya Hattangadi
Director cum Professor of Marketing
Anjuman-I-Islam's Allana Institute of Management Studies

Source: E-mail March 16, 2009


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