Local Innovation: The Key to Globalisation
Vol 25, No 4; Article by Srivardhini K Jha and Rishikesha T Krishnan; December 2013
The innovation activity of multinational enterprises (MNEs) in developed countries has received much scholarly attention. However, the recent surge of MNE research and development (R&D) activity in emerging countries brings up some interesting questions that are relevant for academics and practitioners alike.
The first part of this roundtable article gives a brief overview of our current understanding of MNE R&D activity in emerging markets. Outlining the course of evolution of MNE R&D centres in India, the note draws attention to the increasing importance of India and India-like markets and inquires how MNE R&D centres are adjusting their innovation strategy and structure to align with this emergent trend. The note further highlights the idiosyncratic nature of emerging markets such as India and questions how MNEs are approaching the challenge of innovating for these markets.
The second part of the article gives an account of the roundtable discussion comprising panellists who are leading and consulting with MNE R&D centres in India. Their collective wisdom illuminates the opportunities and challenges encountered in India and the strategies that have been effective in harnessing local potential.
Gopichand Katragadda, Managing Director of GE India Technology Centre, emphasises the importance of customer facing experience to build world class engineering teams. He says this experience was critical in driving an understanding of what was of value to Indian customers. GE used this understanding to create value products that were 1/20th of the price point of their global products. These products have now found a global market.
Vijay Anand, Vice President, Intuit India, stresses the importance of a clean-slate approach to innovate for emerging markets. He says, the willingness to innovate based on customer pain points, rather than existing technology, is the key. Such an approach combined with rapid experimentation has resulted in insights that have been adopted across Intuit's global products as well as new products.
Wido Menhardt, CEO, Philips Innovation Centre, advocates the approach of co-creating value products with customers, rather than engaging in value engineering of existing products. He underscores the importance of understanding the context, value consciousness, and business model innovation in order to bring a steady stream of products to emerging markets.
Ranjan Malik, Director, Erehwon Consulting, states that emerging countries such as India have unique challenges, a unique context and culture. The key to success in these markets is to understand their uniqueness and build products that cater to their requirements. This requires a systematic approach to innovation, creating value products by leveraging the ability to do more with less.