Wednesday, January 20, 2016

Reignite the spirit of innovation by embracing Globalization!

For those of us in the vibrant field of Technology, President Obama’s question during the State of Union address this week How do we reignite that spirit of innovation to meet our biggest challenges? struck a chord.   Mr. Obama’s emphasis was on rekindling the American “spirit of innovation,” but what was unsaid was the need to embrace globalization in the quest.
Perhaps to underscore the point, Microsoft CEO Satya Nadella was invited to be Michelle Obama’s guest at the State of the Union.  Microsoft, like most hi-tech companies, embraces ideas and people with ideas from around the globe while retaining its “American” identity.
It’s not just Microsoft. Other American tech giants like Amazon, Apple, Google, and firms in Silicon Valley have leveraged extensive global networks in order to retain an edge in digital technology innovations. Hubs of technology innovation also continue to grow in Ireland, Israeli and increasingly in Bangalore.
Case in point: SUVs Designed in the US but made in India
Just this week, there was an interesting article in the Wall Street Journal that described how the Indian auto giant Mahindra was betting big on sourcing Detroit's expertise in Auto design (link)
“Mahindra & Mahindra Ltd., a Mumbai-based conglomerate with a thriving tractor business and information technology operation in the U.S., quietly has amassed an engineering staff about a dozen miles north of Detroit. Plucking talent from Ford Motor Co., Tesla Motors Inc. and Fiat Chrysler Automobiles NV, the company aims to catch up with industry leaders by developing a vehicle able to meet American buyer’s demands and the nation’s tough regulatory standards. ….. The company’s senior executives say they are still intent on becoming a global force and Detroit, which Mahindra’s product planning chief Rajiv Mehtacalls “a Mecca for SUVs,” is a natural place for the company to learn how to do that.”
The article quoted an auto executive Lynn Bishop emphasizing how “Detroit isn’t outsourcing anymore, we’re being outsourced to.” Outsourcing Innovation in Automotive and other sectors is just tip of the iceberg. The trend seems to be much more pronounced in the digital startup space.
So, what does this mean?
In an election year, American leaders are bound to take a cue from Mr. Obama’s call to “Reignite the spirit of innovation.” Likewise, leaders in other countries are going to try and promote innovation within their shores: India, for instance has several initiatives like Startup India, Make in India and Digital India campaigns.
In the past, when confronted with outsourcing and offshoring, western governments began to erect protectionist barriers like visa and immigration restrictions. However, they will find it harder to erect barriers on innovation and ideation that continues to span geographic boundaries. This is a good thing for innovators and businesses that wish to benefit from the ideas.
  • Lower cost and barriers to entry. Access to ubiquitous internet in developing economies means ideation will go global. Many digital tools to aid innovation and development are on the cloud and available in the open source or free from vendors. Young entrepreneurs who dream up new ideas or digital “Apps” in their dorm-rooms or garages could do it just as easily in Bangalore, Delhi or Mysore, and not just in San Jose or Research Triangle. 
  • Smart money will follow smart ideas. Money already seems to be following innovation to their global hubs. For instance, a recent Times of India article highlights how “Over the past two years, investors have pumped in billions of dollars into hundreds of startups, many of which have grown into thriving businesses.”
  • Faster adoption. Smart ideas and skills developed in startups are being adopted in a corporate environment at a faster pace.  For example, mobile development skills honed in developing a “cool App” at a startup can easily be used to mobile-enable legacy corporate applications: an opportunity waiting to be tapped at Fortune 500 organizations. Likewise, technologies to cloud enable and virtualize IT applications and software are finding their way into corporate IT shops at a faster pace. 
  • Convergence of outsourcing and innovation: Large enterprises and corporations that source IT Operations and Business Processes and services to offshore service providers are increasingly expecting them to also tap into the innovation ecosystem. Leaders of offshoring firms like TCS, Infosys, and Wipro have long talked up the need to innovate and develop solutions, tools and automated services for global clients. They are realizing now is finally the time to walk the talk. (link TOI: What Infosys CEO Vishal Sikka wants bigger startups to do)


(Reposted from my LinkedIn Pulse)