Harnessing Stimulus for promoting innovations an entrepreneurship:
World over, there is a search for authentic, effective and accountable mechanisms for generating jobs and stimulating economy. Much of the thrust is on improving the working of the same large corporations which through greed and indifference to the large social purpose lead the world into the current mess. While some cases, the destiny of millions of workers and others involved in the supply chain may be so deeply intertwined with the viability of these corporations that there is no alternative but to help them to survive. But in many situation, an opportunity may lie ahead of us which might turn around the global economy in a manner that is much more polycentric, participative, meritocratic and emancipatory.
The New Creative, Compassionate and Collaborative Deal
There are lots of technological innovations taking place around the world. Many more are possible which will lend themselves to the evolution as innovation based enterprises. Large number of bright students in the decade of derivatives were lured by the financial markets and investments banks. In fact business schools had becomes schools of investment banks instead of management in general.
Science suffered. Best students went to technology. The crème of technology streams went to Management. And within the business/management schools, the top young minds neglected manufacturing and other social sectors. Dr Bill Clark at Kennedy School, Harvard University pointed out in a discussion few weeks ago that this year, there was only a two per cent rise in the application for management, compared to almost 40 per cent raise in the applications for science and public policy at Harvard. In India, the total number may not come down but technology and more importantly science may get better attention.
Some corrections have begun. But a lot more remain.
The decades of derivatives
Paradoxically, doing the time maximum wealth was invented in last century, new products were introduced, millions of cell phone were sold (from zero to 250 million and to one billion, with in six years), the capital supply for small ventures, small business, start up became more and more difficult. It was easier to get a larger loan but not a small investment without collateral, and a solid backup even in the developed countries. Big business grew, lot of mergers took place, consolidation took place, but new drugs, for instance, declined in the delivery pipe. As if the model of big business lead transformations had run it course. Innovations did not take place more in big corporations. But where they did take place, they did not get enough support.
Venture capitalists were investing in equity of listed companies in India. Angel Funds had evaporated almost completely, if they existed at all in many parts of the world. If a start up had to have a team, and business plan in place before an angle fund would look at it, then large number of start ups were not going to be funded. When I studied about 2500 patents every two to three years to select about 50-60 individual inventors and innovators for four Inventor of India Workshop during last ten years, not one had been approached by any investor in public or private sector. If I could discover them during patent database, similar discovery should have been possible for any other investor. It implies that what was in short supply was not an idea, or innovation (even in the formal sector not to say about informal sector). It was the early stage funding with a mentoring support with low transaction costs. TePP of DST is an exception.
When start-ups struggle, the society limps and staggers. Time has come to make a new beginning and bring back the spirit of start-ups, hope, faith, adventure and bit of gambling.
In many countries such as US or European union and in rest of the developed World, hundred of billions of dollars are being invested in stimulus fund to revive economy. In US alone, more than 800 billion stimulus package has been already put in place. This is the time for reinventing globalization. Institutions like United Nations have become so bureaucratic, costly and inefficient that there is no point in looking at them for mediating in the crisis at hand. An independent initiative of G20 plus India and China and few other countries has to take place to create a global innovation fund to invest in start ups anywhere so long as they generate opportunities for entrepreneurship and return on investment. In many cases ideas will flow towards the direction of investments. So it be. If a doctor in India develop a technology for healing spinal injuries with a needle costing Rs. 200, hospitalization of one day and total cost of Rs. 5000 as against 5 days of hospitalization in US costing 5000 dollars, than accessibility to this technology is in the interest of investors in US or elsewhere. Global well being hinges crucially on the availability of affordable and sustainable solutions. We should distinguish between ideas and ideators. Not many innovators, coming from lower middle class want to become entrepreneur. We should try to forge what I call as the Golden triangle for rewarding creativity i.e. linking innovation, investment and enterprise (Social as well as economic). We have to launch grassroots to global (G2G) model linking innovations in formal and informal sector in developing countries with the investment in developed countries and enterprises wherever entrepreneurs are available including developing countries.
For instance, in pharma sector, we have to let big companies continue with single molecule, single target approach. They have money to burn and they should be encouraged do so. But multi-molecule-multi-target designs are likely to be more sustainable, much more in sync with systems biology approach, i.e. the way nature works. In almost every technological intervention, integrity of nature and ecosystem that makes it resilient, frugal diverse and multi-functional, will be optimized. It is obvious that not all features of nature will be optimized in each of the innovation based enterprise.
A globalized world in which polycentric development will ensure democratic governance has to rely on distributed spurs of growth. The technological youth in India can be a driver of this development if international and national efforts can focus on empowering ideas, innovations and knowledge of individuals at grassroots level in the informal sector as well as in the formal sectors.
Anil K Gupta