Providing an opportunity for co-creation, creating common interest based communities and acting as a nodal agency in the global supply chain are some of the key innovation drivers in the future, said a top management guru.
"To create such a delivery network, it would require re-configurable capability and intensive investment in information technology (IT). India has an edge in the latter," CK Prahalad, a professor at the University of Michigan, US, said in Chennai on Friday.
Speaking at the Member Fellowship Evening of the Confederation of Indian Industry (CII), Tamil Nadu, he said the new experience environment was very different from the conventional supply chain that represented a pre-determined sequential chain.
"From mass production to mass customisation, we are now heading towards personalised co-creation. This means the focus is shifting from vertical efficiencies to creating of nodal chains," he added.
Citing the case of a retail innovation in the US, Prahalad said a retail store would be able to sell products with high margins by offering a platform for consumers to co-create products and experience.
Prahalad said, as opposed to the conventional wisdom of selling goods in large volume at low margin, the new logic of innovation thrives on selling low-cost product at high margin.
Since the product is being co-created by customers, the risk of the product design being out of fashion is also reduced.
India should focus on "next practices instead of best practices". The latter puts "firms at the centre of the universe".
Comparing the Indian and Chinese growth, MS Srinivasan, secretary, Ministry of Petroleum and Natural Gas, told the audience that China was able to attract foreign direct investment (FDI) from non-resident Chinese.
He said China's growth was village based but lacked strong financial institutions and much of its drive came from the public sector.
N. Kumar, former CII president and chairman of CII membership services council, Gopal Srinivasan, chairman of CII Tamil Nadu state council, Manikam Ramasami, vice chairman of CII Tamil Nadu state council, V. Ranganathan, chairman of CII Chennai Zone and G.R.K. Reddy, vice chairman of CII Chennai Zone also addressed the gathering.