Accelerated Inclusive Growth. through. Inclusive Innovation

Accelerated Inclusive Growth through Inclusive Innovation R.A.Mashelkar 20 March 2014

Inclusive Innovation Drivers Emerging Economies Rising Incomes & Aspirations Rising Inequalities Rising Social Disharmony

Income Disparity in China Gini index of income inequality in China Rural-urban disparities in annual per capita disposable income

World Bank- Inclusive Innovation Summit China C

Cape Town, 21 Nov 2012

Inclusive Innovation is any innovation that leads to affordable access of quality goods and services creating livelihood opportunities for the excluded population, primarily at the base of the pyramid and on a long term sustainable basis with a significant outreach R.A.Mashelkar 21 Nov 2012

Key Words Affordability Accessibility Scalability Sustainability Quality

5 Mantras for Successful Scaling 1. Go for affordable excellence 2. Build entire ecosystem to support scale, not just a stand alone venture 3. Focus on end to end innovation 4. Remove internal barriers to inclusive business

5 Mantras (contd) 5. Remove external barriers to inclusive business Financial Infrastructural Regulatory Marketing, distribution & sales Collective action with Govt, local NGOs.

Affordable Excellence No Dream A Reality! Case - Hemoglobin Detection Affordable 25 fold Reduction in Price! High cost (~ $ 25 per test) to ultra low cost ($ 0.5 per test ) Excellence Breakthrough High-tech Innovation: From invasive with needles to non-invasive with no needles

Anjani Mashelkar Inclusive Innovation Award- 2012 12

Affordable Excellence through Cutting Edge Technology High Technology : Photoplethysmography + Spectrophotometry + Sophisticated photon scattering software

A Paradigm Shift Excellence More from Less Affordable For More (People) More from Less for More (MLM)

Innovation s Holy Grail - MLM C.K. Prahalad R.A. Mashelkar Harvard Business Review- July, August 2010

Special Session More From Less For More 16 Nov 2010

Aravind Eye Care Scaling Success through a Whole Ecosystem 2.5 million eye tests and 300,000 cataract surgeries per year Low cost ($5) lens manufacturing joint venture Extreme efficiency in opex through workflow innovation Research and training institutes Civil society groups that organize patient screening events in rural villages

Mobile Phone Revolution Inclusive Innovation that Scaled Ensured Access Equality despite Income Inequality Combination of public policy, technological and business model innovation

Income Inequality 1000 : 1? Access Equality 1:1!

Indian public policy innovation Leap frog from going for more land lines by laying more copper lines to voice over mobile and internet And also bold deregulation.

This policy innovation triggered other innovations! Handset $250 X $25 Call Rates 10 cents X 0.1 cent Technological Innovation (Nokia, Ericsson ) Business Process Innovation (Reliance, Airtel.)

Technological Innovation Policy Innovation Business Model Innovation System Delivery Innovation Inclusive Innovation Workflow Innovation Research Process Innovation Organizational Innovation 24

Why did Nanovation not Scale? Wrongly positioned as poor man s car rather than a technology marvel Affordable excellence but excellence should have been at the front end, not affordability! Nano customer could not go to showroom, the Show room needed to come to him! Innovative marketing and financing strategy for a first time low income user missed

Removing Internal Barriers OLD MINDSET NEW MINDSET Technologically sophisticated performance rich products with many features Remove features to reduce costs Premium Price-High Margins Frugal, functional but high quality products Reinvent the product from ground up Affordable Price- High Volumes Technology Push, Product Out Approach Customer Centric, Market Based Approach Current Markets- Old Money New Markets- New Money Use developed world products to transform emerging markets Build new global growth platforms based on emerging markets

5 Mantras (contd) 5. Remove external barriers to inclusive business Financial Infrastructural Regulatory Marketing, distribution & sales Collective action with Govt, local NGOs.

Explore Non-traditional Financing including Government DFID s Business Innovation Facility USAID s Development Innovation Venture Social Impact Funds ( Acumen Fund, Grey Ghost Ventures) Guarantee Facilities (Root Capital) Indian Inclusive Innovation Fund ($ 1 b final) 2% of PAT reserved in India for Social Corporate Responsibility (with corporates)

The Big Question Why should OECD be interested in Inclusive Innovation?

If we do not come up with innovations in poor countries and take them global, new competitors from the developing world The Mindray, Suzlon & Goldwind- will. That is a bracing prospect. - Jeffrey Immelt CEO, GE

REVERSE INNOVATION

Reverse Innovation ElectroCardioGraph Machine $10000 $600 X

Reverse Innovation Ultrasound Machine $30000 $1500 X

GE plans to spend $3 billion till 2015 to create at least 100 health-care innovations that would substantially lower costs, increase access, and improve quality..

Global Research For Global Good

GRA member organisations Nine countries, five continents

GRA Inclusive Innovation Project Green & Low-Cost Wireless Communication Network for Africa Fraunhofer (Germany) - terrestrial wireless infrastructure to bring this satellite connectivity into the wide area Fraunhofer (Portugal) - applications for targeted deployment CSIR SA- wireless mesh concepts, in particular community mesh and wireless backhaul CSIRO - efficient satellite-based infrastructure to reach rural areas VTT integration of network management Macha Works - supporting local deployment, training staff, testing and evaluation

Vietnam Inclusive Innovation Project (GRA as a Knowledge Partner) World Bank funded ( USD 55 million) Developing inclusive technologies Scaling up, and commercialization Capacity building

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