The launch of the NASSCOM – Boston Consulting Group report on Innovation in the IT and IT Enabled Services industry in Bangalore at the end of July demonstrated the industry’s determination to create a new sigmoid of growth for the industry.
After successfully using the “value for money” wage arbitrage advantage to get a toe in the door of global multinationals and then making the transition from onsite to offshore delivery through the perfection of high quality processes and the ability to migrate technology development and business process management to Indian centres, the third wave if success in this industry may well come from innovation, adding a potential $50 billion of new revenue in the next five years.
It’s not that innovation is a new mantra for this industry. The tremendous success of the innovation forum of NASSCOM in the last couple of years has got not just innovative startups a place in the sun but also recognised the success of product, process and business model innovation among larger Indian and even multinational players with the innovation awards being given by none other than President Abdul Kalam and Prime Minister Manmohan Singh at the annual leadership conferences of the association.
The commissioning of the study with BCG is recognition of the fact that the time has come to take instances of successful innovation and build an environment where an entirely new paradigm can be created, for all aspiring firms as well as the entire industry.
The recommendations of the report and the true imperatives for the coming months can broadly be grouped into three areas.
Firstly at the firm level, diagnostic exercises on the present state of innovation activity and the path to reaching a desired state of extensive innovation need to be undertaken so that serious projects are planned and executed.
Secondly, new product creation in intellectual property oriented firms and process innovation to look at new delivery methods and collaboration with customers and partners should be attempted in all services firms.
And finally, all the participants in the eco-system the government, research and academic institutions, financing agencies in addition to the firms and the association need to work in concern to build an enabling environment for innovation.
The formation of innovation clusters IT for automotive innovation in Pune and IT for Telecom innovation in Chennai for example could be one step in the right direction where the ability to multiple the velocity of innovation can be demonstrated and then proliferation through chosen clusters in a variety of locations and industries.
Dr Mashelkar, eminent scientist and scientific administrator, in cautioning the industry that it was better to aim high and fail rather than aim low and achieve, hit the nail on the head the industry has had a marvellous decade with revenue growing tenfold and has demonstrated abundant resilience and the capability to reinvent itself and look at new avenues of growth in both IT and BPO.
The possibilities in the next decade are enormous but so are the challenges and it will need innovative thinking and innovation in action for the trailblazing growth to continue.
The writer is Deputy Chairman & MD of Zensar Technologies