Sustaining a technology-based business heavily depends on innovation. One has to think out-of-the-box and implement those ideas in order to survive in this ever evolving world of cut-throat competition. Here we cite certain examples of success through innovative thinking and present some data to explain why India is lagging behind in coming up with technological breakthroughs…
Article by Arijit Nag
Technology and innovation go hand in hand. One can never imagine technology sans innovation. In fact, it won’t be far off the mark saying that innovation is the basis of inventing technology. In a wider context, it can be said that to sustain any business over a long period of time innovation is imperative. Moreover, as a business matures and the market evolves various innovations help it survive its tumultuous journey.
Talking of innovations and metamorphosis the greatest success story that comes to mind is that of Wipro Enterprises Private Limited. The company started off as an FMCG selling vegetable oil, detergent, electrical products and other such consumer products way back in 1945. Over the years, as the company evolved, it metamorphosed into a global information technology giant. Today, if you ask someone how do they identify Wipro as a company, hardly anyone will mention about its consumer products origin.
Today Wipro is one of the top five companies of India and is traded on the leading stock exchanges of the world. The immense success of Wipro can be attributed to Azim Premji’s innovative vision and the enterprising spirit.
Look at the journey of Reliance Industries and later the bifurcation of the mother company. While Reliance evolved from a textile company into a giant petrochemical company. Today very few people remember Vimal Suitings and, in all probability, a few years down the line will identify RIL as a telecom major. One has to appreciate the vision of Dhirubhai Ambani which led the company into becoming the largest corporate entity of India.
These are just two examples of some of the greatest innovation driven success stories. There are many more in the pantheon of Indian industries. On the other hand there are also examples of great, established companies perishing in the absence of innovation or vision.
Hindustan Motors, a Birla Group company was once the most popular automobile company in the country. So much so that every government department and every ministry singularly bought Ambassador cars for their travel. It was designated the national car of India. Unfortunately, over the years Hindustan Motors failed to come up with any out-of-the-box idea and after the economy opened up Ambassadors slowly started vanishing from the roads.
Let’s consider some data (Department of Technology and Science) in this regard. R&D funding by the Indian government is just fraction of its national GDP which is just 0.6 per cent. In comparison China allocates 2.1 per cent and the US 2.8 per cent of their GDP respectively.
Furthermore, there is a big question mark on the quality of Indian research papers. For example, though the number of papers and patents has increased from 46,904 in the year 2016 to 47,857 patents in FY18, very few modern technological breakthroughs can be claimed based on these efforts.
Poor education, health, and infrastructure prevent broader engagement in research and development, while weak protection of intellectual property rights discourages risk-taking, and nascent innovation ecosystems are not able to train, mentor, and support researchers and innovators on any significant scale.
Let’s see how does India stack up in the global R&D game?
This table underscores the crux of the R&D scenario in India. Not only is the R&D spending in India low as a percentage of the GDP but has also remained stagnated at the same level since 1996. During this period, not only large economies but also small economies from Eastern Europe and Central Asia have moved ahead in the R&D stakes.
Meanwhile, digitalisation, robotics, artificial intelligence have become an integral part of production though even recently all this sounded like science fiction. Today, these developments are changing industrial production fundamentally. “Industry 4.0” is aimed at digitalisation of the entire value chain. Physical and digital processes are becoming increasingly intertwined in the manufacturing scenario. This also includes networking with customers: Their needs and demands are and remain the guiding principle of every company’s functioning.
The only way manufacturers can stay ahead of competitors and win market share in the quickly morphing environment is to embrace change. Those who wish to thrive and not just survive are leveraging the latest in growth-inducing Industry 4.0 technologies. The top ten trends expected to be seen in the world of manufacturing are as follows:
Producers and manufacturers are increasingly leveraging the Internet of Things (IoT) g cost reduction, increased efficiency, improved safety, meeting compliance requirements, and product innovation. IoT’s existence is primarily due to three factors: widely available Internet access, smaller sensors, and cloud computing. Roughly 63% of manufacturers believe that applying IoT to products will increase profitability over the next five years and are set to invest $267 billion in IoT by 2020.
According to experts, an hour of downtime can cost a company $100,000. Ensuring all equipment is functioning optimally remains a key priority for manufacturers, many of whom are turning to predictive maintenance technology to do so. Adoption of predictive maintenance technologies could reduce companies’ maintenance costs by 20 per cent, reduce unplanned outages by 50 per cent and extend machinery life by years according to management consulting firm McKinsey & Company.
Many manufacturers who traditionally had a B2B business model are shifting to a B2B2C (business-to-business-to-consumer) model due to the many benefits of selling directly to consumers.
To remain competitive one has to deliver more value to their customers than their competitors. While pricing is extremely important, savvy manufacturers will continue to distance themselves from price wars by leveraging new technology that simplifies supply chain management, which in turn delivers many competitive benefits.
The lengthy implementation of traditional ERP systems can be frustrating for manufacturers. Now, however, you have the option choose a rapid implementation ERP system, which can be up and running much faster and more affordably than traditional ERP systems.
IoT is transforming almost every surface into a sensor for data collection and providing real-time insights for manufacturers. This ability to collect data from so many sources combined with increasingly powerful cloud computing is finally making big data usable. Manufacturers can slice and dice data in ways that provide them with a comprehensive understanding of their business.
Assistive technologies, such as augmented reality (AR) and virtual reality (VR), will continue to create mutually beneficial partnerships between man and machine that positively impact manufacturers.
Manufacturers will benefit from faster, less expensive production as a result of 3D printing. It makes rapid prototyping, which is a highly cost-effective way for product designers to test and troubleshoot their products, possible. In addition, it enables manufacturers to produce items on demand instead of having to manufacture and warehouse them.
As manufacturers increasingly rely on technology, their need to hire tech-savvy employees is increasing. The challenge is there are not enough skilled employees to fill the number of existing vacancies. To fill the void, manufacturers will have to do two things:
However, very soon Industry 4.0 will give way to the next level of innovation as Industry 5.0 has already started making foray into the world of manufacturing. In fact, Mercedes Benz has already started adapting to Industry 5.0. Perhaps by the middle of next year we will be witnessing the full-fledged transformation to Industry 5.0.
Arijit Nag is a freelance journalist who writes on various aspects of the economy and current affairs.
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