"Business innovation and the growth of Indian firms"

In the ever-changing world, innovation is the only key which can sustain long-run growth of the country. More and more firms are realizing the importance of innovation to gain competitive advantage. Accordingly, they are engaging themselves in various innovative activities, ranging from manufacturing processes, product improvement, and brand building initiatives to customer satisfaction. Today, business environment has become very dynamic with more demanding customers and intense market competition. To meet this, firms are creating new products, solutions and services that provide a radically better experience for the consumers. Innovation is not only about technology, but is also about understanding and exploring untapped user needs that require to be addressed in an efficient manner. It must occur at every stage of a product or solution development and release cycle. Thus, managing innovation is fast becoming priority in a global business environment. Firms which innovate tends to survive and grow to a greater extent. The most successful individuals, managers and team leaders in latest business world are the ones who are not only innovative in their own work, but who encourage and assist others to be innovative in every aspect of their work. Some of the key innovation areas are: product development and improvement; manufacturing processes; creating entirely new set of products; etc. In area of supply chain management, innovations help in making the supply chain more responsive, flexible and efficient. Supply chain innovation can be used to reduce costs, offer better assortment of customer centric products, decreasing time to market and driving growth. Innovation is the main idea in shaping corporate life and helping companies to adopt various strategic options. It helps to reduce total cost of production; increase income avenues; maintain efficient operating systems; etc. It enables to see potential acquisitions not only on cost basis, but also as a means of accelerating profitable top-line revenue growth and enhancing capabilities. It also expands R&D base of the country and brings latest technologies into the country. It also provides an edge in being able to enter new markets faster and deeper. Thus, the term 'innovation' is rightly referred to as changes to products, services, processes or business models. To continue their growth and to attain newer heights, Indian firms need to recognise the importance of 'innovation' for maintaining their competitive edge and fuelling further growth. Innovation may be linked to performance and growth through improvements in efficiency, productivity, quality, competitive positioning, market share, etc.

Why business innovation is important

There are several reasons why the generation of new ideas can be critical to your business's success. Although every organisation will have its own priorities and sector-specific issues to balance, businesses that fail to innovate run the risk of losing ground to competitors, losing key staff, or simply operating inefficiently. Innovation can be a key differentiator between market leaders and their rivals. Responding to trends and competition Innovation can help you discover what opportunities exist now, or are likely to emerge in the future. Successful businesses not only respond to their current customer or organisational needs, but often anticipate future trends and develop an idea, product or service that allows them to meet this future demand rapidly and effectively. Innovation will help you stay ahead of your competition as markets, technologies or trends shift.

"Business innovation and the growth of Indian firms"

You should include innovation as a key part of your overall business plan. Make the most of what you already have Innovation is not only about designing a new product or service to sell, but can also focus on existing business processes and practices to improve efficiency, find new customer, cut down on waste and increase profits. Constantly innovating and improving business practices is also likely to help you attract better staff members and retain more of your existing staff - something which is crucial to the long-term health and performance of your business. Developing a unique selling point Consumers often see innovation as something that adds value to a company or to its products. Used properly, innovation can give you a commercial advantage - especially in saturated or rapidly shifting markets. Your customers may even be willing to pay more for your well-designed, novel and innovative product or service, rather than choosing a cheaper, but less exciting rival. In the growth of the Indian economy, Innovation is emerging as a key driver, although this may neither be apparent nor readily visible. In this respect, one of the aims of this study by NKC is to understand the role played by Innovation in India as a driver of such growth.

Key Results
1. Increase in Growth and Innovation
Innovation Intensity (i.e. the percentage of revenue derived from products/Services which are less than 3 years old) has increased for large firms and SMEs, with SMEs registering a greater increase in Innovation Intensity than Large firms. 42% of the large firms and 17% of the SMEs are also Highly Innovative firms (i.e. firms who have introduced new to world Innovations during the course of business in the last five years.) b. Nearly half of the large firms and SMEs attribute more than 25% of change in the following factors to Innovation: increase in competitiveness, increase in profitability, reduction in costs and increase in market share. For large firms Innovation has the most significant impact on competitiveness, while for SMEs, Innovation has the most significant impact on increase in market share. c. 17% of the large firms rank Innovation as the top strategic priority and 75% rank it among the top 3 priorities. All the large firms in our sample agree (of which 81% strongly agree) that Innovation has gained importance as being critical to growth and competitiveness since the start of economic liberalization in India. All the large firms agree (of which nearly half strongly agree) that they cannot survive and grow without investment in Innovation. An overwhelming 96% of large firms in our sample see Innovation spending increasing over the next 3-5 years

2. Innovation Strategy
a. Area of business: For large firms, Innovation is most highly concentrated in operations and sales and marketing. b. Factors influencing Innovation: More than half of the increase in market share, competitiveness, profitability and reduction in costs due to Innovation has occurred in SMEs due to three types of

"Business innovation and the growth of Indian firms"

Innovation new products, new processes and new services. At the same time, the customer is the primary external factor that leads more than half of the large firms to innovate. c. Breakthrough and Incremental: 37.3% of large firms have introduced breakthrough Innovation, while 76.4% have introduced incremental Innovation, which may be an indication that large firms in India are still in the mindset of incremental Innovation as compared with breakthrough Innovation. d. Timeframe: The average timeframe (from idea generation to market) of Innovation projects for half of the large firms is 1 3 years. Innovation projects in manufacturing firms have longer gestation period than in services Conclusion The NKC survey confirms the rising Innovation activity and awareness in India as well as the need to continuously and publicly encourage this trend as a key enabler in Indias economic growth and competitiveness. However, there is need for further effort along a range of parameters in order to fully realize Indias Innovation potential. Some of the important steps are: Systematic reform of the higher education system (including skill based marketable vocational education) in India, which would act as an enabler for developing the required intellectual capital as well as lay the foundation for effective collaboration between industry, educational institutions and the government. Therefore, the mandate of the NKC, which is to guide policy and direct reforms to allow India to effectively use and create knowledge capital, is critical and extremely relevant in furthering the cause of Innovation and entrepreneurship in the Indian economy. The synergistic use of cumulative energies of the industry, the government, the educational system, the R&D environment and the consumer. The Innovation ecosystem is a complex environment that requires the coordinated functioning of a number of diverse factors in order to function effectively. Innovation also needs to become as wide spread as possible, spreading across the entire economy, from the grassroots to the large firm level. It is felt that a comprehensive effort to address these issues would act as a critical enabling factor for India to be amongst the global leaders in Innovation.

The 10 Most Innovative Companies in India

01 Shaadi.com
For proving that marriage, Indian-style, works online as well as off. This year, the world's largest matrimonial site plans to open retail sites for marriage counsellors for its 20 million registered users.

"Business innovation and the growth of Indian firms"

02 Tata Motors For leveraging its knowledge of the Indian market. Since the launch of the Indica in 1999, Tata Motors has launched products such as the Nano, Aria, Indigo and a host of commercial and utility vehicles that meet the particular transport needs of Indian consumers and businesses. 03 HarVa

For expanding India's outsourcing industry to rural areas. Created to "harness the value of rural India"--and head off the loss of outsourcing businesses to even lower-cost locations than Bangalore or Mumbai--HarVa is one of India's first rural business process outsourcing (BPO) operation. HarVa trains young rural people, especially women, to develop technical skills, from data entry to software testing. 04 Apollo Telemedicine Networking Foundation

For scaling telemedicine. With more than 150 telemedicine centers across the globe, Apollo offers mobile telemedicine units in areas where there are no hospitals, remote consultations, and ICU monitoring. Its web-enabled telemedicine app, Medintegra WEB, allows doctors, nursing homes, and hospitals to better treat patients in rural areas. 05 Gram Vaani (Village Talk) For making community radio possible in villages and small towns. Gram Vaani's simple server and software helps rural communities create their own radio stations. Twelve are broadcasting today, with even more in the queue. 06 Invention Labs For giving a "voice" to speech-impaired children. The company's AVAZ device interprets the gross motor movements of a child and uses predictive software to help users form sentences, which it then reads aloud. It also includes a portable touch-screen voice synthesizer, which can be easily mounted on a wheelchair. 07 A Little World

For taking banking to the remotest of villages in India. Relying on biometric authentication, it connects more than 3 million customers to 25 major banks, which allows them to expand without branches. It also provides a means for disbursing various government payments to the poor. 08 Digital Green

For crowd sourcing instructional videos. To reach the legions of Indian farmers that ignore instructional media from the agriculture industry, Digital Green turned the camera over to a

"Business innovation and the growth of Indian firms"

more trusted teacher: their peers. The company lets select villagers film themselves demonstrating new agricultural techniques. Then, after checking for accuracy, it screens them for the farmers using handheld projectors. 09 Fabindia

For connecting more than 40,000 traditional craftspeople with the world's growing urban middle class. Through its website and 136 retail stores (including one each in Rome, Kathmandu, and Dubai), Fasbindia sells clothing and products for the home, all of which are sourced from villages across India.

10 / Godrej Group

For introducing refrigeration to India's rural masses. What Tata Motor's Nano car is to automobiles, the Godrej ChotuKool is to the refrigerating industry. The fridge, which costs roughly $70, does not have a compressor and runs on batteries.