Innovate in Rural India

Innovation had been there in rural India since ages. In North India, it is called Jugaad. Joseph Schumpeter contributed greatly to the study of innovation, famously asserted “creative destruction is the essential fact about capitalism”, had argued that industries must continuously look to innovate with better or more effective processes and products through economic and marketing strategies, such as the connection from the craft shop to factory. The emergence of start-ups in the last two decades or so can be termed as innovation. Writing for Business Standard, recently, Rapidi2i CEO, Srikanth Srinivas & Harvard Business School Professor, Vijay Govindarajan argued that how the start-ups, especially in the rural India can solve local problems through different innovation possibilities.

They identified the three key factors that have created the right conditions for a start-up boom in India:

1. The existence of huge, latent demand; an intensive need for disruptive, low cost solutions that can reach the masses, in order to meet challenges on many fronts - education, health care, water, and agriculture to name just a few. Start-ups are designed to create disruptive solutions.
2. The success story of start-ups like Flipkart, created a positive spillovers, and there is a large supply of eager entrepreneurs that want to make an impact and make it big. The millennials are not driven by getting a 'steady job'. They are more independent and willing to take risks.
3. The barriers to entry have never been lower with respect to infrastructure (easy to get in, elastic, cloud-based infrastructure such as Amazon Web Services), and global reach (ability to leverage Google, Apple and the marketplace that has democratised access). Large scale cell phone penetration can be tapped to provide innovative solutions to the masses.

..What is needed now is to shift focus to solving the problems faced by Indians. For instance, most Indians lack adequate health care. If start-ups can use digital technologies to provide affordable good quality medical diagnosis, those solutions will have applicability not just in India but all over the world, including in rich countries like the US. This is the reverse innovation opportunity that Indian startups should target. By shifting the focus and solving local problems while at the same time keeping in mind reverse innovation possibilities, start-ups can serve as the catalyst to channel the energy in areas that will help take India global.

For example, Amazon introduced Easy Ship in India because sellers in India lacked the logistics capabilities. Amazon takes care of picking up from the seller's location. At the same time, customers get trackable shipments. Now, this is a service that is available in other countries.

They cited the potential...low hanging fruits in the areas of healthcare and education. If start-ups can create disruptive solutions here, there is a latent market of 3 billion people that can be served with these same solutions. In addition, many so-called advanced countries, are struggling to cope with out of control healthcare costs and an expensive education system that is out of reach for many, and are looking for solutions that will bend the cost performance curve in a disruptive way. On the other hand, start-ups by their very nature are very risky. Amidst all this euphoria, this message of risk may get lost. It is therefore, important to build a strong and robust ecosystem.

Some potentialities of The 'village' start-ups include:

• Mentoring organisations: For example, Lemon Ideas, based in Nagpur, is a start-up mentorship organisation dedicated towards fostering the start-up ecosystem in India that has a formal programme and a partnership with several funding organisations.
• Venture capital: TLabs is a start-up accelerator as well as an early-stage seed-fund focused on Indian internet and mobile technology start-ups.
• Early adopters: Consumers and enterprises that are willing to give these start-ups a chance; those that see the early benefit of the disruptive cost-performance curve (knowing that there may still be deficiencies that need to be ironed out along the way)
• Academic and research institutions: CIIE, for example, is an IIM Ahmedabad initiative to promote entrepreneurship and bridge gaps in the ecosystem.
• Government: Kerala Startup Village is a good example of a public-private partnership that aims to launch 1,000 technology startups over the next 10 years and start the search for the next billion-dollar Indian company.