Innovation leads to imitation

Bajaj, Nissan (the world's 7th largest automaker) and Renault (the world's 9th largest automaker) have announced a joint-venture to chase Tata (the world's 20th largest automaker) in the market for low-cost cars. With their announcement of their own 1 lakh car, to be available in 2011, it is clear that the value of the innovations leading to the Tata Nano are sufficiently clear that other (much larger) automakers are imitating their formula and releasing their own ultra low-cost automobile.

Leaving aside the risks of growing congestion, this is a good example of how radical innovation can lead to enhanced consumer benefit :: Tata's Nano has spawned (so far) one imitation which, competing with the original idea, will ultimately lead to a better quality product available for the consumer. I think it inevitable that the other major Indian players will follow suit and these ultra low-cost cars will lead to an entire new segment of transportation for India and, eventually, globally.

Tata's innovation has spawned a new world-view of transportation before a single consumer has logged 1km on the road.

Impressive.

India enters Business Week's "Innovation Ivy League"

On Friday, Business Week announced its list of the '25 most innovative companies' and, for the first time, Indian companies have made the list. Tata and Mukesh Ambani's Reliance Group have joined the likes of Apple, Google and Toyota, ranked 1st, 2nd and 3rd.

Tata, placed 6th, ranks ahead of stalwarts such as Nintendo and Amazon and just one position behind Microsoft. Reliance, at 19th, beats innovation blue-chip 3M and upstart Facebook. The full list is available here.

It was just over 1 month ago when Bill Gates spoke to the US House Committee on Science and Technology about the importance of innovation in driving national economic performance. Gates said "For decades, innovation has been the engine of prosperity in this country" - it is apparent that the same engine has started in India and while prosperity has arrived for some, the road to be travelled remains dauntingly long.

With the Tatas and Reliance as models, we at LRAMP encourage the rest of India, from the city corporates to the village farmer, to think differently about your products, services and business models so that India can increasingly prosper and to build businesses where the prosperity will include those currently living in poverty. As Gates says, innovation is the key.