Innovation in India: Overhauling needed urgently

Without discounting the genius of our ancestors, I want to analyse why historically lacking and continues to lack innovators. Both #BoycottChina and #AtmanirbharBharat are trending, it is imperative now that we analyse why we have become a country of traders (and good ones at it) rather than innovators. This was the culmination of larger Covid-19 situation (bad testing kits, faulty thermometers, fake masks — all made in China) and border conflicts with India (Doklam in 2017 and Galwan in 2020- also aggressed by China). Innovation in India is limited to copying what a foreign company did a few months or even weeks ago and doing that today, I have been guilty of trying to ape a company with an innovative model abroad to India. A few friends and I hustled for a few weeks to make an Indian version of HQtrivia, but somebody beat us to it!

As Josy Joseph rightly puts in his book, A Feast of Vultures, “..we are a nation of middle-men..”, so much so that even marriages are brokered through middle-men. This is so true because we are historically a very rich country and have followed Dharmic religions that put contentment above everything else. Unless we have had an extra-ordinary famine or war, we have been prosperous and at peace. Our rivers brought fertile soil, our climate was ideal, our livestock was revered and we were made docile, hence we never found reasons to venture into new businesses or create innovations. We have also had kings who focused on art, music and mastered sculpture and temple architectures while the kings forsook their palaces or army. This has naturally led us to become middle-men (aka traders) to innovators and inventors and the final consumer. We have essentially perfected this model of trading from even Greek/Egyptian times.

While trading came easily to us, we find that most innovators in this country are solving very personal problems and usually come from underprivileged backgrounds. Take the example of Chintakindi Mallesham (link to his brilliant TedxHyderabad talk and his extremely wholesome biopic), his ingenious innovation was born from desperation, seeing his family and mother struggle to complete the laborious handmade Poochampally saree and end up making meagre amounts out of it. Against great odds, he took hand loans to do research and development and was on the verge of giving up on his dream several times in his life. His lifelong dream was only fulfilled when he perfected the Laxmi Asu Making Machine (you can read about it here), essentially with no “support” other than from predatory money lenders and his family. There is also no support for local innovator unless the project reaches critical mass and is going to be a definite success. There is essentially no risk-taking in R&D and there are no loans for individuals who would like to take loans out with maximum interest moratorium periods. This is even true for people with working prototypes, bankers just don’t see the vision for the products and usually brush it off without a second glance.

Now we have a country with youth bursting with home-grown innovative ideas both born out of desperate jugaad and gap-filling ingenious, but there is no support from the government. New business owners are overwhelmed by compliance and are left to resort to middle-men who will have to help them file GST, PF, Tax returns, etc. It is too cumbersome for someone to learn and or the websites don’t work like they have to. All this serpentine bureaucracy leads the innovator to be stuck filing returns and avoiding prosecution most of their business life. We essentially stifle creativity and promote mundane compliance. Many schemes launched such as Make in India or modernization of older scheme don’t work as they intend to and any genuine efforts made by the Government to cut middle-men are thwarted. All this while India’s ease of doing business index ranking keeps improving.

Sometimes even when surprisingly innovation in India is keeping pace with the rest of the world, Government has passed laws against it with its archaic knowledge, such was the case of the Cryptocurrency ban in India. The ban was overturned recently and but it wasn’t without consequences, several Cryptocurrency and Blockchain companies shut shop. The same technology has the potential to eliminate all servers worldwide and many other fantasized Utopian scenarios. The ban severely demotivated several Indian entrepreneurs and setback any development in the segment by many years. There is still a lot of ambiguous laws governing block-chain and not even experts can tell if it’s legal today or not with conflicting statements from different branches of Government. Read the very upsetting announcement of termination from India’s largest crypto-currency Koinex founder Rahul Raj.

While doing any business in India is hard, family businesses find niches for themselves and are passed on from generation to generation. They find a working algorithm through the bureaucratic maze and stick to it. You rarely ever hear of children of traditional family businesses pivot to another sector and succeed. There is just so much fear that the first few years of doing business will be spent in just figuring out this maze. It’s also unfortunate that the Government sees and treats hard-working businessmen as greedy and unethical. Being appreciated for creating jobs and leading innovation will surely go a long way in bringing India to the forefront.

As u/kolikaal summed up on this particular Reddit thread debating about the origin of the company RealMe:

The Indian law penalizes productivity. Ask people who tried opening a normal business, forget a tech start-up, how scary it is. The scope of interface with university labs is non-existent. The tax and labour compliances are insane. Getting land clearance in time, LOL. And if by some miracle you succeed, IB and tax authority can raid your house any night on the whim of some babu, specially if it is election time. Who needs that kind of stress before going to sleep every night?

While the historic Indian could look at his bountiful crop or his intricate sculpture and feel proud, we modern Indians needs to compete and keep up on a global scale, right to be able to create should be made fundamental and laws such as patent, taxation, interest, funding etc should support this innovation. We can no longer stand idly doing back-end work for multi-nationals and maintain databases of foreign banks. There is an urgent need in this country to not punish innovators and inventors. I believe with the right Government support we can be lead the world with next-generation of innovation and truly help create a better world.

On a side note, I have been taking classes on Writing with Flair on Udemy and I’d like to believe that my writing has improved.

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I like talking finance and other things.

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Mahadev Ittina

Mahadev Ittina

I like talking finance and other things.

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