Growth is going to come only through innovation, focusing on poor countries. In the current environment you can grow aggressively only by inventing and innovating.
Prof. Vijay Govindarajan is widely regarded as one of the world's leading experts on strategy and innovation.
The innovation agenda, people are also realising, has to be in poor countries. Because, ...the world's overall population of about seven billion now, there are three billion who are rich enough for the products which have already been invented.
But the four billion poor, who are non-consumers of just about everything, have to be brought into the consuming base.
...Reverse innovation first requires that you innovate in the poor country. That is step one.
Step two is to take it to other emerging markets. Step three is to bring it to the US or other rich countries. Most companies haven't even reached step one. That itself is a big one because American companies still think of India as poor and ‘therefore they want cheap products'.
They have to change that mindset; they are coming from a different mindset of innovations. They have to first think about changing the innovation paradigm itself and then about how to take it to other countries.
Two important traps Indian companies should absolutely avoid. The first trap is to ‘dumb-down' the technology and make something cheap. No. That is not what people want. People want technology-rich products, but also at the right price.
The Apple Nano is one example.
Keywords: Prof Vijay Govindarajan, Tuck School of Business, Dartmouth, American multinationals, product innovations, dumb-down technology, Flexibility, credibility