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3/10/2014
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Conference on
Innovation Ecosystem- Indian Perspective
27-28 February 2014
Innovation Ecosystem: How fertile it is?
Organized by
National Research Development Corporation
in association with
University of Petroleum & Energy Studies, Dehradun &
Uttarakhand State Council for Science and Technology
Contents
1. Understanding Innovation Ecosystem
2. Weaknesses in Indian Innovation Ecosystem
3. Ecosystem for Funding Innovations
4. Innovation in Government Departments
5. India‘s Patent Ecosystem
6. Innovative interventions required in MSMEs
7. Innovation Successes
8. Indian Innovation Ecosystem – the road ahead
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INNOVATION ECOSYSTEM Innovation eco-system must facilitate the birth of new ideas and also provide platforms for the successful implementation of these ideas.
In the case of a successful
innovation system - institutions
matter – yet cooperation
matters even more
It is now being acknowledged that
innovation is a result of
interaction between different
actors: research institutions only
being one group of actors.
Identification of key actors, the
promotion of their interaction,
inter-linkages and co-operation
and favorable framework
conditions are essential for
successful innovations.
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Interaction of various Stake-holders in Innovation System
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Concept to Market
:Risks in Scaling up S&T Innovations
Public Resources
For risk coverage
Contents
1. Understanding Innovation Ecosystem
2.Weaknesses in Indian Innovation Ecosystem
3. Ecosystem for Funding Innovations
4. Innovation in Government Departments
5. India‘s Patent Ecosystem
6. Innovative interventions required in MSMEs
7. Innovation Successes
8. Indian Innovation Ecosystem – the road ahead
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• According to the Global Innovation Index 2013, India
ranks 66th amongst 142 countries surveyed.
• It is inconsistent with India‘s economic strengths and its
current government policy, which claims to focus a
great deal on Science, Technology and Innovation
(STI).
• This ranking is below any of India‘s BRICS peers,
which either suggests that the models of innovation
currently utilized in India are not translating into
measurable gains in development, or that these gains
are not significant.
Indian Innovation System - Weak
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The Global Picture:
How Other Countries Compare to India
Source: OUR FRUGAL FUTURE: Lessons from India‘s innovation system, July 2012
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Efficiency of Invention and Knowledge
Source: OUR FRUGAL FUTURE: Lessons from India‘s innovation system, July 2012
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• India is not seen as an innovation hub, globally, despite
India‘s pervasive jugaad culture;
• Development gains produced by these innovations are not
as significant, on average, compared to those of other
countries;
• Political stability, workforce skill, infrastructure and ease of
business creation needs focused attention and dramatic
reform if India is to reach the levels of the more innovation-
friendly countries;
• India is an economy in transition and with ever more focus
on inclusive innovation, all constituents of its ecosystem
will have to develop the ability to influence reform;
• Creating and sustaining an innovation ecosystem depends
on building and strengthening interdependent links
amongst ecosystem players;
Indian Innovation System - Weak
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Contents
1. Understanding Innovation Ecosystem
2. Weaknesses in Indian Innovation Ecosystem
3.Ecosystem for Funding Innovations
4. Innovation in Government Departments
5. India‘s Patent Ecosystem
6. Innovative interventions required in MSMEs
7. Innovation Successes
8. Indian Innovation Ecosystem – the road ahead
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Eco-system for Funding Innovations
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Funding Options
Upside Downside
Angel Investors – they are High Net Worth (HNW) individuals
• More than money, they provide
networking opportunities
• Relatively patient about their investments
• Angels are not bound by all the rules that
VC firms are.
• Not easy to find Angel Investor
• Because they operate as angel networks, hard
to manage the divergent interests of group of
angels
• Angels only consider companies that have an
exit strategy—meaning companies that could
get bought or go public.
• Despite 100+ Angel networks in India (eg. Indian Angel Network & Mumbai Angels), each
year sees only tens of deals.
• Although, these angels have their own HNI/VHNI to tap into, yet few startups get funded.
• In US, angel funding is more than all VC funding, may be because of tax benefits, mature
ecosystems, risk-seeking, etc.
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Funding Options
Upside Downside
Venture Capitalists - VC firms are organized as funds, much like hedge funds or mutual funds.
• Professionally managed VCs bring not
just money but also experience and
advisory role
• Suitable for fast growth companies going
to launch IPO
• Typically have larger funds to invest but
take lesser risks
• Founder must be interested in selling the
business or going public within three to five years
• Founder must be prepared to share control
• VCs hand over a term-sheet; A term sheet is a
summary of what the deal terms will be when
and if they do a deal;
• Founders are usually required to accept "vesting―
i.e. to surrender their stock and earn it back over
the next 4-5 years.
• VCs don't want to invest millions in a company
the founders could just walk away from.
• One of the most difficult problems for startup founders is deciding when to approach VCs.
• You get only one chance, because VCs rely heavily on first impressions.
(a) they ask who else you've talked to and when and
(b) they talk among themselves.
(c) If you're talking to one VC and he finds out that you were rejected by another several months ago,
he also might turn away.
• There are about 200 VC firms and 160 Foreign Venture Capital Investors operating in India
with an estimated investment of US$10 b. However, in a boom year, there are only a few
hundred deals.
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Funding Options
Upside Downside
Seed Funding Firms - Seed firms differ from Angels and VCs in that they invest exclusively in
the earliest phases—often when the company is still just an idea.
Seed Firms are often called Incubators
Strategic Investors
• Enhances your credibility in the industry
• Money can come with access to benefits
like manufacturing, distribution, and
marketing
• Strategic Investor can force you to recalibrate
your entire business to serve them
• Dependency can be risky
• Strategic Investor can prohibit you from
selling to their competitors
Bankers - 'A banker is a fellow who lends you an umbrella when the sun is shining, and takes it
away from you when it rains'
Crowd Funding - ―the process of aggregating small amounts of money from a large number of
people in order to accomplish an objective‖
• Collaterals and credit score check is not
required
• Websites are easily setup by agencies for
raising funds for a cause, to which
audience is directed
• Agencies behind the website take a certain
percentage of money as their service fees
• Fund raising is time consuming
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Funding Options
Upside Downside
Government Funding / Grants - can be used to augment entrepreneurs own funds to run a
successful business venture
• Free money • Highly competitive
• How you use the funds is strictly defined
• Applying for funding often arduous
• Restrictions on use of grant found
burdensome by beneficiaries
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Government Funding
The government offers funding primarily for technology startups, from early-stage
development to full-scale commercialization
Government funding can be categorized into:
• Technology Development Funds:
SBIRI, SINE (IIT-B), CIIE (IIM-A), SIDBI Innovation & Incubation Centre (IIT-K), NSTEDB -
TBIs
• Funds for patent protection
NRDC, M/o MSME thru NMCC, DeITy (Int’l Patent Protection in Electronics)
• Funds for Technology In-licensing:
Incubator related seed funds
• Technology scale-up/validation/de-risking funds:
NMITLI, PRISM, PACE
• Market entry funds:
Network of Angel Investors, NIF-Micro-venture Innovation Fund, TIFAC-SIDBI (SRIJAN)
• Expansion funds:
IVCA, SIDBI
Contents
1. Understanding Innovation Ecosystem
2. Weaknesses in Indian Innovation Ecosystem
3. Ecosystem for Funding Innovations
4. Innovation in Government Departments
5. India‘s Patent Ecosystem
6. Innovative interventions required in MSMEs
7. Innovation Successes
8. Indian Innovation Ecosystem – the road ahead
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S&T Departments/ Councils
Building and Nurturing India‘s S&T Ecosystem...
CSIR
1942
1947
ICAR
ICMR
1949
1954
DAE
DRDO
1958
1971
DOE DST
DOS
1972
1980
DOEn
DOD
1981
1983
MNES
DBT
1985
1985
DSIR
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RFD: Innovation Action Plan
Implementation of a significant change in the way the Department operates or in
the products and services it provides.
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To further encourage R&D across all sectors of the economy,
weighted deduction on expenditure incurred on approved in-
house R&D units under section 35(2AB) of Income tax Act,
enhanced from 150 per cent to 200 per cent.
Weighted deduction on payments made to National
Laboratories, Universities or IITs for approved programme on
scientific research undertaken under an u/s 35(2AA) of Income
tax Act, enhanced from 125 per cent to 175 per cent.
An innovative product called 'soleckshaw' has been developed
to replace manually-operated rickshaws. It runs on batteries
which are charged by solar power.
- Union Budget 2010 proposes to provide a concessional
excise duty of 4 per cent to this product.
- Its key parts and components are also being exempted
from customs duty.
DSIR Policy Interventions: 2009-2010
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Scientific Entrepreneurship Scheme: Researchers permitted to have equity stake in scientific enterprises/ spin offs while in
professional employment
Knowledge to Equity Scheme: Scientific Establishments
permitted to invest knowledgebase as equity in the enterprises
Setting up of Technology Incubation Centres: Scientific
Establishments allowed to set up incubation centres
Mobility of Researchers: Researchers mobility permitted among
Industry, Research Institutions, Academic Institutes, Universities and Industries and other Scientific establishments
Boosting Creation of Knowledge Enterprises
A national effort pioneered and led by CSIR/DSIR:
Cabinet Note Approved on 25th May, 2009, OM Issued
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Tridiagonal Solutions Pvt Ltd
Software products for process
industries
Dr Ranade
Scientist
Entrepreneur
Tridiagonal Solutions Pvt. Ltd.:
• Develops products and
solutions by harnessing power
of computational modeling to
enhance effectiveness and
efficiency of industrial
processes
• Sites in Pune and San Antonio
Science Policy for Scientific Entrepreneurship
Vyome Biosciences Pvt. Ltd.:
• Biopharmaceutical company focused
at best in class drugs for
dermatology care
• To exploit modern Functional
Genomics, Biotechnology, Medicinal
& Polymer Chemistry and
Nanotechnology
Vyome Biosciences
Leadership in Dermatology
Dr. Gokhale
Scientist
Entrepreneur
CSIR Researchers spin-off companies
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CSIR Innovation Complexes Driving World Class Translational Research…
Challenge Driven
Innovation Strategy
Industry Cluster
Specificity &
Connectivity Leveraging Regional
Innovation Ecosystem
Catalysing
National &
International
Market
Opportunities
• Affordable Healthcare
• Drugs and Therapeutics from Novel
Sources
• Clean Energy
• Green Infrastructure and Innovative
Engineering
• Zero Emission Technologies
• Fourth Paradigm
• Agri-Biotechnology
• Specialty Chemicals, Grass Root
Innovations and CSIR 800
• Nutragenomics
• Bio-Inspired Chemistry and Chemical
Technologies
• Innovative Products and Processes/
Biomedical applications
• Co-creation as a resource for
developing technological
solutions for critical needs of
industry and society
• Crowd sourcing as a model for
trans (industry) cluster
collaborations for developing
products, technology, new
application and service models
Str
ate
gy
Key A
reas
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CSIR Innovation Complexes
The Outcomes
• Inclusive Innovation
• Newer markets based on tapping
yet – undiscovered innovation
opportunities
• Innovative products, technologies,
new applications, service models
embodying cross-sector solutions
• Demand driven sustainable
innovation initiatives which balance
supply based research effort
…Motivating Indian Industry to embrace Innovation & Collaboration…
…Creating Entrepreneurship in New Formats…
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DBT: Build an Innovation Ecosystem for 21st century
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• SBIRI, BIPP, BIRAC
• Stanford India Biodesign To develop the Indian medical device innovation ecosystem
ENT surgeon and 2012 fellow Jagdish Chaturvedi has already invented 12
devices, of which five are already successfully licenced.
Limits clinical work to two days a week, spending four days working on his
inventions as director, clinical innovation and partnerships at start-up
accelerator InnAccel, Bangalore.
• DBT Centre at IITM Research Park
• Wellcome Trust DBT Initiative on Affordable
Healthcare
• Grand Challenges Programme
Opportunities for Electronic Design and Manufacturing (ESDM) The Cabinet has approved setting up of two semiconductor units entailing
investments of Rs. 51,550 crore and will now prepare a detailed project report and
has announced to issue a letter of intent to the participants.
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Contents
1. Understanding Innovation Ecosystem
2. Weaknesses in Indian Innovation Ecosystem
3. Ecosystem for Funding Innovations
4. Innovation in Government Departments
5. India‘s Patent Ecosystem
6. Innovative interventions required in MSMEs
7. Innovation Successes
8. Indian Innovation Ecosystem – the road ahead
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Utilization of CSIR‘s Inventions
Total Patents in force (India)
Total patents in force (abroad)
2350
3250
Total Patent granted (India)*
Total patents granted
(abroad)*
1507
1282
* Figures for 11th FYP only
Utilization of CSIR‘s
Patents in Force : 9 %
Worldwide Rate of
Patent Utilization : 3-5 %
US Patents Granted (till September 2011)
Organisation No. of
Patents
Granted
% Contribution
CSIR 1231 90.32
IITs + IISc 43 3.15
Others 89 6.53
Source: USPTO
High Quality
Research
Leadership in
Innovation
Transdisciplinary
S&T Education
(AcSIR)
CSIR
Today
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Streptokinase – CSIR‘s Success Stories
in Licensing - I
• Cause of death – development of a blood clot causing vascular blockage in Heart
• Prevention by timely intravenous administration of a thrombolytic agent
• IMTECH developed first indigenous clot buster drug
‗Streptokinase‘ and it was launched in market in 2000
through Cadila Pharma
• IMPACT – crash down of the price from Rs. 3,500 to
Rs. 2,000 per dose
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Sea Weed Technology-CSIR‘s Success
Stories in Licensing - II
• Integrated method for production of carrageenan and
liquid fertilizer from fresh seaweeds - United States
Patent 6,893,479 (CSMCRI)
• An integrated method is developed to utilize to a
maximum extent the fresh biomass of seaweeds
such as Kappaphycus alvarezii that can be crushed
to release sap and where the sap is useful as a
potent liquid fertilizer
• Liquid Sea Weed Fertilizer increases yields from
same seed by 10% for wheat, 30% for peddy, 20-
30% for fruits and vegetables to 35% for corn and
chana, BT cotton 20%, Banana for 19%.
• CSIR licenses Sea Weed Technology to Pepsico
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• Process for the preparation of ultrafiltration
membranes of polyacrylonitrile, using malic acid as an
additive showing high purification and water
permeating ability - United States Patent 6,858,141
(NCL)
• Cost of water purification (Bacteria + Virus free) few
paise per litre as compared to Rs. 10 per litre of
mineral water
• Licensed to the industry (Membrane Filters (I) Ltd);
Social Impact- Very high
Ultra-filtration Membrane-CSIR‘s Success
Stories in Licensing - III
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India‘s patent ecosystem — encouraging
strong patents or discouraging innovation?
When India issued a compulsory licence for the
anticancer drug Nexavar (sorafenib) in 2012 —
meaning that cheaper copies could be made without
the permission of the patent owner — the eyes of the
world were drawn to the Indian patent system.
This move has been followed by the rejection or
revocation of several patents that protect anticancer
and other drugs which have patent protection in
many other countries
Does this indicate that the patent system in India is
weak, or rather that it is well placed to weed out
weak patents at an early stage?
34
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Contents
1. Understanding Innovation Ecosystem
2. Weaknesses in Indian Innovation Ecosystem
3. Ecosystem for Funding Innovations
4. Innovation in Government Departments
5. India‘s Patent Ecosystem
6. Innovative interventions required in MSMEs
7. Innovation Successes
8. Indian Innovation Ecosystem – the road ahead
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Innovative interventions required in MSMEs
MSME‘s Low Access
to Credit
Lack of Skilled
Manpower
Inadequate
Infrastructure
Low Access
to national
and global
markets
Low Levels of
Innovation
and little R&D
High Cost of
Raw
Materials
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Pilot CICs Focused at MSME
Cluster
CSIR Laboratory
Units Workers Turnover S&T Interventions
Brass Cluster,
Moradabad
CSIR-NML
CSIR-CECRI
29000 3.5 Lakh
Rs. 2500
Crore
Making brass shine more,
low cost Jhama coal to
replace expensive imported
coal
Mango
Cluster,
Krishnagiri
CSIR-NIIST
CSIR-CFTRI
73 2.5 Lakh
Rs. 700
Crore
Enhancing the shelf life of
Mangoes and creating new
products
Bamboo
Cluster,
Agartala
CSIR-CIMAP
16200 > 2 Lakh
Rs. 74
Crore
Developing alternate for Jiget
binding glue for Agarbatti
and Hand rolling to Machine
rolling of Agarbatti
S&T Intervention for Technology Depth for MSMEs CSIR-NInC Initiative : 6 Clusters on Pilot Mode
Additional 60 MSME Clusters identified for S&T intervention covering:
Leather, Pharma, Clay, Rubber, Dyes & intermediates, etc.
Contents
1. Understanding Innovation Ecosystem
2. Weaknesses in Indian Innovation Ecosystem
3. Ecosystem for Funding Innovations
4. Innovation in Government Departments
5. India‘s Patent Ecosystem
6. Innovative interventions required in MSMEs
7. Innovation Successes
8. Indian Innovation Ecosystem – the road ahead
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Amazing Innovations • Shantha Biotech which through good indigenous research and
innovation has been able to develop a vaccine which drastically reduces the price of hepatitis B vaccine from imported version of Rs. 1500/dose to Rs. 15/-.
• EKO India –Finacial Services for the Common man • Sparsha Pharma –Transdermal patch for cancer patients • Jaipur Foot • Low cost cancer detection kits
• IIT-Madras IIT-M has developed a method that will let electricity
boards provide a small amount of uninterrupted DC power to every house in the country, enough to run three lights, two fans and a mobile charger.
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―A near fanatical focus on cost reduction‖ 40
AT
LOW
COST
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TATA Swach Water Filter
Providing clean
drinking water at low cost?
41
• Originally created for Gujarat Earthquake relief
• ―Not good enough‖
• Filtration process refined by Tata Chemicals R&D team-
nanosilver
• Appliance design by Titan
• Today, sold by Tata Chemicals
Environmentally-friendly + high tech + economical
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New Rupee symbol was crowd-
sourced….
42
Uday Kumar
Designer of the New
Rupee Symbol
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Other successful business model innovations
• Until a little over 10 years ago, Bajaj Auto was an insignificant player
in the motorcycle industry. Today, it is the second-largest motorcycle
company in the country and a strong leader in more powerful and stylish
sports bikes. The root of Bajaj‘s success was the development of the
Pulsar, a bike that combined power, style and fuel economy based on its
proprietary DTSi engine technology. The timing of the launch was
perfect, as it coincided with the take-off of the software and business-
process outsourcing industries that employ thousands of young,
qualified, and aspirational males, who have the disposable income and
the desire to own such a bike.
• Biocon entered the biopharmaceutical business only in 1998. Yet, today
it is regarded as India‘s leading biotech company. It is well ahead of
other Indian companies in the production of biosimilars (the biotech
equivalent of generic drugs) and hopes to launch India‘s first locally
developed novel, biotech-based drug in the next few years. Biocon has
used product and process innovation to exploit a core capability in
fermentation technology, built during its earlier incarnation as an
enzyme company.
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• Titan Industries, India‘s largest watchmaker, has long been known for its
stylish watches and tastefully designed retail stores. Yet, till well into this
millennium, it struggled to grow its sales revenue. But those struggles became
history once Titan transformed itself. The company‘s turnover has shot up to
the U.S. one billion dollar mark, riding on the back of accelerated growth in its
jewelry business. Innovations like having a karat meter in every store to
establish the purity of the gold in its jewelry attracted customers, who also
liked the designs the company created to address the mass market.
• Pantaloon (the flagship company of Indian retail King Kishore Biyani‘s
Future Group) is today one of the country‘s foremost multi-format retailers
with a national footprint. The company has constantly experimented with new
formats, based on a culturally embedded, intuitive understanding of the Indian
consumer.
The emergence of innovation as a differentiator in the Indian
market is a recent phenomenon which has enabled
companies to tap a mass-market sweet spot.
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Contents
1. Understanding Innovation Ecosystem
2. Weaknesses in Indian Innovation Ecosystem
3. Ecosystem for Funding Innovations
4. Innovation in Government Departments
5. India‘s Patent Ecosystem
6. Innovative interventions required in MSMEs
7. Innovation Successes
8. Indian Innovation Ecosystem – the road
ahead
46
Will India be the next Silicon Valley or Boson Route
128 or Cambridge, UK?
Will we see a Google or an Apple emerge in India soon?
That‘s probably unlikely in the next few years because
these regions have a complete and reinforcing innovation
ecosystem that has enabled it to ride one technology wave
after another.
• Existence of infrastructure in the form of venture capital,
• Availability of specialized legal services and personnel
with technical expertise
• Presence of the R&D organizations producing technology
• Availability of local entrepreneurial climate for spin-offs
(sometimes called ―entrepreneurial fever‖) .
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―The trick for government is to strike the balance between trying to let
as many flowers bloom as possible and recognizing those which are
really not going to bloom and to stop feeding that pot plant.‖ - David Gill,
Managing Director of St John‘s Innovation Centre
Despite weaknesses in India Innovation Ecosystem, all is
not lost and by no means is India in an irreversible position
The main objective of promoting innovation in India at the
moment is not to really worry about development of cutting edge
technology per se but to nurture and support intelligent use of
technology to meet important consumer and national needs.
India‘s innovation ecosystem should reward those displaying creative
confidence, facilitate partnerships, help ideas and technologies reach
the market, and encourage young professionals to set up their own
business ventures i.e. support incremental or frugal innovations.
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To contribute towards India being a Centre
of Frugal Engineering
• Frugality is not just about low cost but also about
more value;
• Need to be sensitive to low resource environment and
integrate these into innovations
• Industries need to practice ―reverse innovation‖ –
process of developing products in India for the global
market • to institute ‗frugal, distributed and affordable‘
innovation - develop products and services that are
affordable by people at low levels of income without
compromising the safety, efficiency and utility
Need to focus on promoting an inclusive and sustainable model of innovation
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