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Millennium Post

Is India falling for cappuccino?

The opening of the first Starbucks outlet in South Mumbai in October last year triggered quite some frenzy among Mumbaikars, with long queues of venti-mocha-frap verve translating into a major rock concert hysteria. And it was all for a coffee shop! Imagine the burst of marketing energy from Starbucks to take advantage of this excitement. Within five months of opening its first outlet, four each were opened in Mumbai and Delhi (taking the footprint of the coffee chain to nine outlets in India). It reminded me of the kind of madness that was witnessed during the launch of Pepsi and the relaunch of Coke in India, way back in the early 1990s. Here’s the simple truth – our craze for foreign brands has never ceased, despite our progress in almost all dimensions of socio-economic parameters. Why? Because as a nation, experience has taught us that our brands have never quite had the gumption of American, British, European or even Japanese brands. The halo was and is missing. This lack of unique proposition in our brands is due to the shoddy products and services offered in the name of Indian brands!

In the past, so many Indian brands – from the Ambassadors to the Vimals – were whipped and almost but sent off packing when foreign brands came knocking. These foreign brands piggybacked on their global popularity and our lack of expertise due to substandard innovation. If India has to reverse the ongoing trend of the influx of foreign brands into its market, it has to invest on innovation on a large scale, and frame and implement comprehensive policies to support innovation.

The low count of patent applications that is filed in India is some warning. In 2011, only 42,291 patent applications were filed in India. China on the other hand saw 526,412 applications being filed – highest in the world that year, followed by US with 503,582 applications (source: World Intellectual Property Indicators 2012, released by the World Intellectual Property Organisation; December 2012). In the Global Innovation Index (GII) ranking 2012, India stood at a dismal 64th – two spots below where it stood in 2011! Shameful it is that India, in terms of GII ranking is last amongst the BRICs. No wonder, a June 2012 Standard & Poor’s report revised its outlook for the Indian economy and warned that India could become the first amongst all BRIC countries to lose its sheen [The S&P report was titled, ‘Will India Be The First BRIC Fallen Angel?’]. It is disheartening to observe that despite Sam Pitroda’s efforts to pump life into India’s innovation machine, and PM Manmohan Singh’s call to promote India as an ‘Innovation hub’, the country is still largely seen as a ‘screwdriver nation’, only capable of assembling together parts of foreign-branded products.

It is true that a fish rots from the head. That is precisely the reason for India’s innovation lag – because our policymakers never bothered to roll up their sleeves for the cause. There is hardly any constructive policy in place to encourage innovation in the country. This year, our prime minister announced $880 million towards upgrading our innovation books, which he termed as a “game changer”, but then no concrete holistic innovation policy was either drafted or designed!

A few decades back, China was no more a developed nation than India. In fact, it was far behind on the development scale. The country began with manufacturing products on assembly lines; and today manufactures global brands! Today, it boasts of a number of globally respected brands like Lenovo, Haier, China Mobile and many others. In fact, it is only an outcome of working on and reaping the fruits of innovation that three of the ten largest Global Fortune 500 companies today are Chinese! Similar was the innovation trend in Japan, South Korea, Taiwan over the past few decades, with brands like Toyota, Honda, Canon (all Japanese), Samsung, Hyundai, Kia, LG (all Korean), HTC, Acer, Asus, Transcend (all Taiwanese) creating global benchmarks in innovation.

Innovation shapes economies. The problem is not that India did not realise this truth in time. Yes, there are exceptions on the radar – like Infosys, L&T and Reliance. But these are too few to mention or feel proud about. Most critically, these big brands are also finding it very uncomfortable to survive with the Western helping hand! Today, there is no Indian automobile company that can produce a vehicle that in true sense can be called an Indian innovation. There is virtually no Indian company that produces a ‘truly Indian’ brand.

India would be biting the bullet if it depends too much on foreign brands to lift itself out of the current rut, instead of encouraging indigenous innovation. What we need today are not branches or manufacturing units of Intel, BMW or Microsoft but an Indian answer to Cisco, Bell Labs, Ford, Apple or GM! Our innovation policy should encourage completely indigenous innovation rather than encouraging reverse engineering or smart compilation. There is an urgent need for a breath of fresh air in our economy to turn the dull table around, instantly!

The author is a management guru and director of IIPM Think tank

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