Editor’s Note: Navi Radjou is Executive Director of the Centre for India & Global Business at Judge Business School at the University of Cambridge where Jaideep Prabhu is the Jawaharlal Nehru Professor of Indian Business and Enterprise. Dr. Simone Ahuja is the founder of Blood Orange Media. This post is part of the Global Innovation Showcase created by the New America Foundation and the Global Public Square.
By Navi Radjou, Jaideep Prabhu, and Simone Ahuja
General Electric recently introduced the Vscan, a portable ultrasound device that looks like a cross between a cell phone and an iPod.
The inspiration for this product did not come from the U.S.; it came from India.
India’s rural physicians, who at most use a thermometer and stethoscope, were put off by the bulky, expensive and hard-to-use ultrasound devices that GE traditionally sells in Western markets. But Indian physicians are not technophobic. After all, they all use cell phones. Observing this, GE’s engineers had a eureka moment: What if they designed an ultrasound device that was as simple to use as a cell phone?
The result was the Vscan, which is now being rolled out in emerging and developed markets alike.
GE’s Vscan was inspired by resource-constrained rural Indian markets, but it has relevance to the U.S. market too. One can imagine the portable device being used to more easily treat patients in rural America, as well as bedridden or elderly urban patients who are unable to travel to doctors’ offices and hospitals. More importantly, the Vscan was co-developed by an integrated global R&D team spread across Norway, France, China and the United States.
GE’s U.S. managers orchestrated this global innovation network. The Vscan wouldn’t have seen the light of day if it had been developed exclusively in either the East or the West.
In coming decades, as the global economy becomes more tightly integrated, talented innovators in both developed and emerging markets will combine their expertise with specialized R&D capabilities in other regions to co-create breakthrough solutions that no single region could have developed on its own. We call this collaborative and synergistic cross-border approach “polycentric innovation.”
Our research shows that American companies such as GE, Xerox, and PepsiCo are leading the way in the practice of polycentric innovation. However, their pioneering approach is at odds with U.S. policy, which seems to be betting that the best way to keep America competitive is to keep all R&D within the United States.
This “monocentric” innovation model is a recipe for disaster in our increasingly interdependent global economy.
Linking home-grown innovation with national competitiveness is a hopelessly outmoded policy — a relic of the Cold War when the launch of Sputnik in 1957 spurred America into an innovation arms race with the Soviet Union. In the 50s, America dominated the global economy, so it made sense to depend exclusively on domestic R&D talent to innovate for a relatively-insular U.S. market.
Today, however, America’s domination of the global economy is shrinking, with emerging economies such as India, China, and Brazil poised to account for more than 50% of global growth in coming decades. Welcome to the post-American world, as Fareed Zakaria puts it.
The Us vs. Them thinking of the 50s has little relevance in a post-American world, which is economically more interdependent and culturally more integrated. Don’t take our word for it; take your kids’!
Their Facebook and Skype buddies are spread out across continents and cultures — and they have no inhibition sharing all kinds of information with their online friends irrespective of their country affiliation. Increasingly, cooperation not competition is driving the prosperity of nations in the global economy.
American policymakers must recognize that in today’s multi-polar world, it isn’t national knowledge alone that confers power; rather, it is global knowledge networking that brings power. The U.S. innovation agenda must reflect this shift. Here are four concrete steps that U.S. policymakers can take to make America a world leader in polycentric innovation:
1) Shift the R&D paradigm from “not invented here” to “best from anywhere”. At a fundamental level, the U.S. energy problem is no different from the Chinese energy problem. The U.S. healthcare challenge is not essentially distinct from the Indian healthcare challenge. U.S. policymakers shouldn’t worry about which country the “innovation hammer” is made in as long as it helps nail America’s (and the world’s) pressing problems.
The Vscan was inspired by the Indian market, designed by European and U.S. engineers, and manufactured in China — but it helps reduce cardiovascular disease for all, whether Indian, Chinese, European or American.
The United States must partner with talent-rich nations like India and China to co-create solutions like the Vscan to address critical socioeconomic problems like healthcare and energy that affect both Americans and citizens worldwide.
2) Encourage US entrepreneurs to co-innovate with their peers in emerging markets. The U.S. government should enable small and medium American businesses who lack the global resources of the GEs and IBMs to establish innovation linkages with emerging markets.
For instance, the Small Business Administration (SBA) could link up with India’s National Innovation Council to set-up a “match-making” website that allows entrepreneurs in the United States and India to learn about each other’s creative capabilities and collaborate online.
A good template for this transnational collaboration would be The Indo-US. Science and Technology Forum which stimulates peer-to-peer partnerships between U.S. and Indian scientists and entrepreneurs in a bottom-up fashion.
3) Attract foreign R&D investments into the US. American universities and innovation hotbeds like Silicon Valley are the envy of the world. That’s why, for instance, Indian IT outsourcer TCS finances cutting-edge R&D projects at MIT and in Silicon Valley, and transforms the resulting technology into advanced business solutions for its American clients — making these U.S. firms globally competitive.
Rather than erecting protectionist barriers, policymakers should facilitate foreign companies to fund and gain access to the amazing science and technology capabilities available in the United States.
California has taken the lead in globalizing its technology clusters. Under the guidance of the Bay Area Council Economic Institute, Californian policymakers are repositioning the state as a broker in global innovation networks by forging linkages between inventive Silicon Valley start-ups and universities like Stanford and Berkeley and global financiers and marketers.
4) Train a new generation of globally-minded U.S. engineers and scientists. To make America a beacon for global innovation networks, private-public sector cooperation is needed to train a new breed of multitalented U.S. engineers and scientists who can collaborate with innovators worldwide and connect global ideas with markets everywhere. A good template to follow would be the Stanford-India Biodesign initiative, which trains physicians, engineers and designers from the U.S. and India to co-develop affordable and accessible medical devices (like the Vscan) that have huge value to both countries.
American policymakers must hurry or risk being left behind by other countries whose governments are already embracing polycentric innovation wholeheartedly.
For instance, the British government is offering a host of incentives to attract foreign R&D investors and entrepreneurs — especially from emerging markets like India and China.
That partly explains why Indian carmaker Tata Motors has chosen to co-develop its Indica Vista Electric Vehicle with the University of Warwick and not MIT.
Similarly, Indian drug maker Dr Reddy recently opened a cutting-edge biotech lab at the University of Cambridge’s Science Park as the company seeks to combine high-tech drug discovery techniques with its low-cost manufacturing capabilities to develop affordable drugs for global markets.
To stay competitive, the U.S. must shift the locus of its technical creativity from inventing everything on its own soil to identifying and harnessing global creativity to its advantage. In a polycentric world, America must master the art of creating and orchestrating global innovation networks. The onus now rests squarely on U.S. policymakers to help make that happen.