V Innovation refers to the ´introduction of something newµ or ´a

new idea, method or deviceµ.

V Dosi defines innovation as ´the search for, and the discovery,
experimentation, development, imitation and adoption of new
products, new production processes and new organisational set-
upsµ. As such then he suggests that innovation has a number of
key characterstics:

ñ Innovation involves uncertainty of outcomes.

ñ Innovation increasingly relies upon advances in scientific
knowledge.
ñ There is an increasing formalisation of innovation within
manufacturing firms.
ñ Much innovation is in learning by doing or using.
ñ There is a cumulative process of innovation building upon
existing developments within technological paradigms.
m An industry where success depends on
obtaining, managing, and using knowledge in
a particular area.

m These organizations that mainly deal with

information or developing information
technology.

m For example, education industry.

m Innovation create intellectual capital which is,
today, often more valuable than financial capital.

m Affect companies' long term capacity to stay in the

market as active players, to maintain and renew
their range of products and services and
ultimately to create conditions for sustainable
employment.
 

 

  
 
 

m ’erious challenges faced in sectors which are globalized,

because major innovations have the potential to
completely disrupt existing work-flows and radically
alter processes.

m For example, revolutionary tools for software

development (software that writes software) could have
a huge impact on India·s IT sector.

m ’imilarly, next generation voice recognition systems,

combined with rapid advances in related areas, could
affect the call centre industry.

m ’uch technological challenges can be met only by

organizations that are nimble, adaptable and innovative.
m A classic example of this is IBM: a mammoth
organization that reinvented itself when faced
with the prospect of its main-frame computer
business being threatened by the then new-
fangled Personal Computer and other
developments.

m Today IBM ² now as much a services company

as a hardware one ² continues to prosper,
 


   


 
  
  

  


m aapidly-evolving technologies creates huge

opportunity for growth.

m Countries and organizations around the world are

looking for partners who can bring them value.

m Initially, the India-advantage was based primarily on

cost-arbitrage ² whether it was in manufacturing or
in services.

m Now, those who came for cost, have stayed and

grown because of the quality, productivity and
rapidly scaleable skills
available in India.
m Thus, better customer service and reduced time-
to-market have become as important as cost.

m These will continue to be important factors, and

India·s unique advantages in delivering these
will ensure large on-going business.

m However, when we look at the next phase of

growth, it is clear that this will be fuelled by
innovation.
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V In areas like IT software, services and BPO, India has an

enviable reputation for efficiency, quality and low cost,
due to innovation.

V On these counts, as on skills and scalability, they are way

ahead of any competition.

V However, customers are now looking beyond this.

V No longer do they want to move 30 processes to India and

have each done efficiently at lower cost: instead, they are
looking for ways of reducing the 30 processes to 10. It is
here that innovation comes in and is at least as important
as efficiency.
m xample: From early days of the space programme.
m NA’A required astronauts to make notes while in
space. It put out a request for proposals and selected a
contractor after careful evaluation.
m After months of work and a million dollar budget, the
contractor delivered, as required, a ball-point pen that
could write in the low-gravity environment of space.
m Meanwhile, the ’oviets, faced with the same problem,
solved it by using a pencil!
m A perceptive customer of India·s IT industry expressed
the view that had the problem been outsourced to
India, NA’A
would have got the zero-g writing instrument
quicker and cheaper, but it would yet have been
a ball-point and not a pencil.
m Technology will play an increasingly important role in the
hospitality equation. Web-savvy India is in a good position to
engage its international competition on search engine optimisation,
web advertising, and e-marketing.

m Many innovative concepts developed in the Indian market can also

be easily adapted by other nations such as Nepal, Pakistan, China,
and Brazil. One interesting innovation export might very well turn
out to be the quality budget hotels that are mushrooming in India.
m Innovative concepts of diversification hold the key to survival in the
hospitality industry in the long run. Fierce competition has led to
innovative ideas by hotel majors, thereby delivering impressive
hospitality products and services. xotic spas, gorgeous golf
courses, multi-cuisine fine dining, spacious conference and
convention facilities are all among the growing list of facilities
found in leading hotels.
m Hotels are adapting to innovative operating models
by bringing in external brands of restaurants, spas,
and lounges on lease or management contracts to
capitalise on proven concepts that generate
substantial revenue by attracting hotel guests and
local residents. Cafes and bars which have high
profit margins are increasing their presence in hotels
and are quickly developing into core profit centres. A
prominent example is Café Coffee Day found at
Ginger Hotels.