Culture of innovation in the emerging economies

The need for innovation from the emerging economies is well established. 70% of the incremental GDP growth expected over the next ten years will come from there. If the future of incremental growth is with the emerging economies , it’s only fair and natural that innovation must be taken at an aggressive pace local to these economies and countries.

Feb 2011 report from WIPO PCT ( World Intellectual Property Organization, Patent Co-operation Treaty ) which tracks the International Patent Applications for obtaining patent protection globally, brings some very interesting insights ( http://www.wipo.int/pressroom/en/articles/2011/article_0004.html ).  Over the last 5 years ( 2006 – 2010 ) the total International Patent applications increased by 8.6% from approx. 150K in 2006 to 163K in 2010.

•  15 countries contributed 92% of the total international patents applications filed in 2010.

• Top 5 countries in 2010, on the basis of number of patent applications filed are ; US (44.8K), Japan (32.1K), Germany (17.1K), China ( 12.3K), Korea ( 9.6K). 71% of the global total came from these 5 countries.

• While the number of international patent applications filed from US has declined over this period from 51.2K in 2006 to 44.8K in 2010, rest all other top 4 have increased their international patent apps.

• There are clearly 3 blocks of innovation that have emerged – all of them driving at their own pace… 

  • China has significantly increased the momentum on innovation ; they have jumped from filing 3.9K international patent in 2006 to 12.3K in 2010, an increase of 315%. China has also overtaken Japan as the number 2 country in absolute R&D investment.

  • Developed Economies ( top 14 of the 15 countries in the list ) increased their international patent filing by 3.3% during the same period. Outliers were US ( which dropped by 12.5% ) and Korea ( which increased by 62%). Clearly innovation from developed economies are much lower than the overall global growth of 8.6%.

  • Emerging economies, a quick analysis of countries like India, Brazil, Russia, Turkey, Malaysia, Mexico, Chile, Poland, Saudi Arabia & Namibia showed a growth of 30% in international patent filing during the same period of 2006 – 2010, substantially higher growth than the overall global growth of 8.6%.

Clearly incremental growth in innovation is fast moving towards emerging economies. China has embarked on a much aggressive innovation drive than the rest of the countries and hence should be focused as its own block.

Culture of innovation in emerging economies have multiple attributes, I think 6 of the key ones are as follows:

1. Mindset and Discipline for Innovation:  getting the sight right on innovation is important, its key to think on a measurable goal as a discipline towards innovation rather than getting trapped only on tasks and projects. That’s what has happened with India, there is no reason why in-spite of starting more than a decade before China in IT and Engg services, the number of patents filed is so low. In 2010 India filed for 1109 international patents compared to 12300 that China did. 

    

2. Manufacturing Proximity:  Manufacturing does play a key role for not only the development of an economy but also for innovation. It brings the discipline and broadens the experimentation aspect to drive new thinking and innovation. All the top 15 countries in the innovation leaders are manufacturing driven economy. Emerging economies and remote global locations must strive to bring manufacturing prowess to their advantage in driving higher innovation. 

3. Universities and Industries tie-ups : It’s a very important and critical aspect to drive innovation. Research labs in universities are among the biggest drivers for new thinking and innovation. US universities filed for over 2100 international patents in 2010 much higher than any other country. All the developed economies have a well established structure that leverages the universities. Given so many world class educational institution, India has to step up the plate  here. A focused tie-up between the Universities and Industries with specific purpose to drive innovation is much required. 

4. Gen Y to take up research and PhDs:  with more than half the population in emerging economies as 25 yrs and under, the youth power must take up advance studies including PhDs and Research’s to drive sustainable innovation. Gen Y should focus and be mentored in being the innovators than just being the consumer of cool technologies.  

5. Risk taking and failures are the building blocks to success in innovation : Culture of innovation is directly proportional to a trained ability to take risks and building thru failures. Producing for themselves v/s producing to export will expand the ability to experiment more and hence the ability to risk as well. Emerging economies must bring this culture to play. 

6. Pride and Honor plus Reward and Recognition:  nothing succeeds like success,  there must be a special focus thru Govt. , Universities and Industries in the emerging economies to drive a huge sense of pride and honor towards innovators and celebrate success. Innovation must become the mainstream focus for emerging economies.