Story Of The Week

From Incrementalism to Radical Innovation: Is India Ready for The Change?

There is no innovation and creativity without failure. Period.

-Brene Brown

The dawn of India’s innovation set upon when India opened up to the world economy in 1991. Since then we have been witnessing numerous breakthroughs that have revolutionized the way we exist. Innovation has been at the heart of our business model and we constantly strive to outperform the set benchmark.

In the 1870’s Jamsetji Tata, The founder of the Tata group began with a textile mill in central India. His powerful vision inspired the steel and power industries in the country. Today the Tatas have acquired the biggest of the world’s businesses and triumphed in what is called innovation.

There are Three Ways to Innovate


Incremental Innovation

Incremental innovation is a series of small improvisations made to a company’s existing products or services. The thrust of improvisation is generally on the pre-existing market offerings. The aim is to improve the company’s market standing.

Radical Innovation

It is the introduction of an entirely new market offering that replaces the existing product or service. There are two ways to radically innovate:

  1. To find an effective solution to an existing problem
  2. To create a blue ocean within a red ocean, by differentiating the offering, hence making the competition irrelevant.

Disruptive Innovation

It actually a subtype of radical innovation. They differ in the ultimate goal sought. Disruptive innovation characteristically focuses on minimizing costs. This kind of innovation also affect the other sectors barring the one that is harnessing the innovation, directly.


Source: Economic Times

Sectors Most Likely to Embrace Innovation

  1. Agriculture: Invest in research capabilities for example Biotechnology Develop can an integrated digital platform with pre and post-harvest modules.
  2. Financial Services: Deploy alternative channels like mobile or online to expand last mile reach at lower costs. Explore contemporary  infrastructure solutions such as solar ATMs
  3. Education: Enable internet, satellite, and mobile-based distance learning to increase reach. Encourage education institutes to imbibe a practical approach in the curriculum. 
  4. Manufacturing: a gradual shift from low technologically advanced industries to high technologically advanced industries. Enable an increase in competitiveness through disruptive technologies.
  5. Power: Focus on advanced storage and transmission technologies Invest in new technologies such as distributed power. Adopt components of a smart grid solution.

  6. Infrastructure: Shifting the focus from the ownership to rental based innovative solutions. Create an integrated public transportation network. Outsourcing non-core infrastructural requirements. 

Where does India stand in Innovation on the World Map?

India leads the Central and Southern Asian region. We stand at the 60th position in the Global Innovation Index, a jump of 21 spots from the year 2015. In the Global Competitive Index, India stands at the 40th spot, a jump of 31 spots from the year 2014.

These indices speak aloud about India’s competency in the world. India is considered the home of  Asian innovation. It will be interesting to find out if India can transcend from incremental innovation to radical innovation in the near future.


Source: Hindu

However, as per the recent report of BCG, Indian companies could not make it to the ranks of top 50 innovative companies of the world.

This brings us to ponder upon the challenges and the room for improvements.

Challenges ahead in adopting Radical Innovation

  • Insufficient Research and Development Capability

The number of patents filed in India is around 17 per million people. This patent productivity is considerably low as compared to the figures in other countries like Japan (3716), S. Korea (4451), USA (910), and China (541). This challenge also involves complexity in the commercialization of patents, primarily by start-ups. India’s spending on R&D is 0.6% that is lower than most nations. 

There are 26 Indian companies on the list of the top 2,500 global R&D spenders compared to 301 Chinese companies as per the Forbes analysis 2017. Private investments in R&D have severely lagged behind public investments. The government is the primary source as well as a user of R&D funding

India’s spending on R&D that is about 0.6 percent of GDP is below than that in major nations such as the US (2.8), China (2.1), Israel (4.3) and Korea (4.2). 

  • Lack of Creative Thinking

The second challenge relates to the lack of creativity and the sheer scarcity of talent that has the aptitude, motivation and appropriate skill required for research work. Since 2015, around 1,503 startups have closed down in India. And the major reason is due to the replication of Western business models.

77% of venture capitalists surveyed believe that Indian startups lack new technologies or unique business models as per the IBM Institute

Since 2015, as many as 1,503 startups have closed down in India. And the major reason is due to the replication of Western business models. The highest number of failures were in logistics, e-commerce and food technology.

  • Inadequate Government Expenditure to Support Innovation

The third challenge is to urge the government to increase the expenditure on innovation in the economy. India spends only $1,248 per student and is behind countries such as Colombia and Vietnam.

India is ranked among the bottom six, behind countries including South Africa and Brazil. Poor investment in higher education means that India doesn’t do well in research outcomes.

The times ahead present both a challenge and an opportunity for Indian companies to become R&D leaders and make a quantum jump in terms of high-value offerings at the global scale.

However, the questions that arise after looking at the current scenario are

  1. Should India as a low income generating country, invest in radical innovation?
  2. What are the risks involved and the probability of success? Is it worth taking the risk?
  3. What are the sectors most likely to bring about radical innovation?
  4. Will disruptive Innovation encourage inclusive growth characterized by social development?

Perhaps the time will answer these questions and ask a few more.





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1 reply »

  1. Quite ambitious projections. Analysis is devoid of ground-level realities, which all the reports referred to are either unaware of or hesitating to reveal – reasons can be well-guessed. Unless we start believing in R&D, create hi-end skills and retain these skills or talent within the country, chances for which are limited, we will continue to free ride and clone.