Make in India Movement

Make in India Movement

Innovation refers to the process of doing new things or doing old things that are already being done in new ways. It involves the transformation of creative ideas into useful applications, e.g., products, services, processes, techniques, etc. Creativity is a prerequisite for innovation. But creative ideas have little value unless they are converted into new products, services, or processes. Innovation requires action, not just conceiving new ideas.

Innovation needs to be differentiated from both creativity and invention. Creativity is the process of generating new or novel ideas, whereas innovation is the process of translating ideas into business opportunities. There is a close relationship between creativity and innovation. Creative ideas are useless until they are converted into useful products and services. At the same time, innovations are not possible without new ideas.

Innovation is also different from innovation. Invention involves the discovery of new materials, methods, or principles. Innovation involves the application of inventions for commercial purposes. The following figure shows the difference between invention and innovation.

Invention	The creation of something new	Results in new knowledge
Innovation	The transformation of an idea or resource into useful applications	Results in new products, services, or processes.

Innovation may occur in several forms, such as the following:

• Introduction of a new product or a new quality of an existing product (e.g., Vim Gel for cleaning utensils).
• Introduction of a new manufacturing process that has not been tested or commercially exploited (e.g., an assembly line for cars by Henri Ford).
• Location of a new source of raw material or semi-finished product (e.g., nylon-based tire code).
• Opening of a new market (e.g., the rural market for lifestyle products).
• Developing a new combination of means of production (e.g., gas-based steel plants).
• Introduction of a new method of distribution.
• Discovery of a new form of organization in industry (e.g., limited liability partnership and one-person company).

Innovation may be non-technological or technological. Non-technological innovation involves incremental improvements in existing work processes, distribution systems, management systems, etc. These are also known as process innovations and are very common, especially in the service sector.

Technological Innovation

Concept and Nature

1. Technological Innovation: Developing new products and new production methods is known as technological innovation. It involves the creation of new and better products and technologies. Leading companies introduce new and improved products as their existing products reach the maturity stage of the product life cycle. Technological innovations thus refer to the tangible products or processes resulting from technological development. A general model of technological innovation is given in the following figure.
2. Creative Source: The creative source is an individual who discovers a new idea.
3. Champion: The individual who pursues the idea, plans its application, acquires resources, and establishes its market is called a champion. He converts a creative idea into a marketable application.
4. Sponsor: The sponsor is an investor (e.g., an angel investor or venture capitalist) who provides support to the innovation.

Technological innovation can be successful when the following conditions exist:

• An outstanding person is in an executive leadership position to support strategic decisions that encourage creativity and innovation.
• An operational leader carries out the essential tasks of converting knowledge into a commercial application.
• A clear need for the application by sufficient potential consumers to warrant the commitment of resources to the innovation.
• The realization of the product, process, or service as a useful innovation providing value to society.
• Good cooperation among the crucial players and among diversified functions.

These three must work together to bring the idea to fruition.

• Availability of resources and supporting technology to succeed in the endeavor.
• Cooperation and support from external sources can influence the success of an innovation, including government agencies, investors, vendors, suppliers, and creditors.
• Plastic water bottles and artificial sugar are examples of technological innovation. Technological innovation provides solutions to problems. But it also involves technological risk. For example, X-rays brought about a revolution in medical services, but they pose a risk of radiation and can be abused.

The 50 Most Innovative Companies

1. Apple	4. Microsoft	7. Tesla
2. Google	5. IBM	8. Toyota
3. Samsung	6. Amazon	9. Facebook
10. Sony		43. Tata

Types of Technological Innovation

Technological innovation may be classified into the following forms:

1. Basic Research: Laboratories, research and development departments, science Universities, and institutes undertake basic research. J.C. Bose, Albert Einstein, and other scientists experimented for years to make discoveries. The objective of basic research is to make advances in scientific knowledge.
2. Applied Research: The application of the results of basic research is known as applied research. For example, the steam engine was the outcome of basic research, but its use in railways is applied research. Apple created the iPod, which can contain thousands of songs.
3. Disruptive Innovation: Making changes to existing products and services to build improved versions is called disruptive innovation. For example, the creation of LCD TVs in place of CRT TVs gave us the benefits of better image quality, less battery consumption, and lightweightness. Similarly, mobile phones were developed by modifying landline phones. Laptops replaced large and bulky desktop computers. Clayton Christensen, who coined the term disruptive innovation, defines it as “a process by which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves up, eventually displacing established competitors.” Over the past few decades, several technologies and inventors have led disruptive innovation. Everything from the way humans travel, eat, sleep, communicate, and socialize has been disrupted. One interesting pattern is that innovators are disrupted by inventors and competitors from outside their industries. Sony’s famous Walkman is a classic example of disruption. But Apple’s iPod made it redundant. Similarly, it was Google that first came up with the concept of driverless cars, not General Motors or Toyota.
4. Breakthrough Innovation: Revolutionary change in science is known as breakthrough innovation. It involves developing new principles without using existing ones. The shift from analog to digital watches is an example of breakthrough innovation.

Advantages of Technological Innovation

To Business

• Development of low-cost substitutes or solutions.
• Higher sales through new products and services.
• Ability to meet the new and changing needs of consumers.
• Entry into new markets and segments.
• Gaining a competitive advantage.
• Extension of the product life cycle.
• Cost reduction through the economics of sale.
• Conversion of waste into useful by-products.
• Higher profitability.
• Better public image.

To the country

• Growth of the national economy.
• Leadership in productivity and quality.
• Increase in exports and reduction in imports.
• Higher standards of living.
• Better employment opportunities.
• A healthier environment is due to reduced pollution.

National Policy will provide the following benefits:

• Ensure growth pathways for a skilled workforce.
• Improve the employability and livelihoods of youth.
• Increase productivity in all sectors of our economy.
• Ensure easy and equitable access to training infrastructure for every citizen of the country.
• Establish an IT-based information system that can be helpful in matching supply and demand for a skilled workforce.
• Take care of the skilled needs of disadvantaged and marginalized groups (e.g., SC, ST, OBC, minorities, differently abled, etc.)
• Promote more women’s participation in the workforce.
• Involve employers in setting occupational standards.

Skill Development

India has a great advantage in demography because sixty percent of its population is young. This can be a great asset and a competitive advantage, provided the young population is healthy and well-educated. The government of India has launched Skill India and several other schemes for educating the young. Indian Institutes of Technology (IITs), Indian Institutes of Information Technology (IITs), Indian Institutes of Management (IIMs), Universities, etc. are caring for higher education. Industrial training Institutes, Polytechnics, etc. are looking after Vocational Education and Training. But despite all these efforts, only one-third of graduates in India are really employable. The focus is more on quantity than quality.

Salient Features of the National for Skill Development and Entrepreneurship, 2015

• A national campaign to create awareness and foster an environment conducive to skill development.
• Setting up of National Skills Universities for capacity generation.
• Establishment of new ITIs through Public Private Partnership (PPP) mode.
• High-order skilling through ITIs and Multi Skill Institutes (MSI) has a strong linkage with the industry.
• Seamless movement between formal education and vocational training.
• Greater participation of industry in curriculum, assessment, and certification.
• Setting up the Labour Markets Information System (LMIS) to generate key analyses and reports.
• A national portal on entrepreneurship as a one-stop shop to provide information services.
• Alignment of all formal and vocational education.

Objectives of Skill Development

The skill development initiatives have been undertaken to achieve the following objectives:

• to improve the employability of school dropouts, ITI graduates, workers, etc. by providing them with vocational training.
• to test and certify the existing skills of these people.
• to build capacity in course curricula, learning material, competency, and assessment standards in India.
• to make optimum use of the available infrastructure of Government, private institutions, and industry.

The mission of skill development is fivefold:

1. create a demand for skilling across India,
2. align skilling with needed competencies,
3. match the supply of skilled people with sectoral needs,
4. certify and assess skills as per global standards, and
5. develop an ecosystem for the growth of innovative entrepreneurship.

Key Features of Skill Development Initiative

• It is fully sponsored by the Central Government.
• The operational part of providing training is the job of State Governments in the private sector.
• In order to make training cost-effective, the focus will be on the optimum utilization of the available infrastructure.
• Short-term training courses will be demand-based. Modular employable skills will be decided in consultation with the industry.
• Young people who have completed the 5th grade or higher can participate in the courses.
• To ensure impartial assessment of the skills of trainees to be tested by independent bodies like FICCI, CII, etc.
• Part-time, weekend, and other flexible delivery systems will be created to suit the needs of specific groups.
• For different target groups, different levels of programs (foundation, skill upgradation, etc.) are to be designed.
• Registered Vocational Training Providers (VTPs) will impart training.
• Skills acquired by a person informally will also be tested and certified.

To make India a skilled country, Prime Minister Narendra Modi has launched four initiatives, as part of which over 40 crore people will be trained in various skills by 2022. The initiatives launched include the National Skill Development Mission, the National Policy for Skill Development and Entrepreneurship 2015, the Pradhan Mantri Kaushal Vikas Yojana (PMKVY) schemes, and the Skill Loan scheme.

Make in India Movement

The ‘Make in India’ program was launched on September 25, 2014, to make India a global manufacturing hub. ‘Make in India’ aims to boost domestic manufacturing by cutting red tape and bureaucratic hurdles. The main aims are:

• Encourage companies, both domestic and multinational, to increase manufacturing in India.
• Upgrade the share of domestic manufacturing in GDP from 16% to 25% by 2022, creating 100 million additional jobs by 2022.
• Foster innovation.
• Protect intellectual property rights.
• Enhance skill development.                                                   

Benefits of Make in India

• Growth of the manufacturing sector.
• Increase in exports.
• Employment generation.
• Rise in per capita income.
• Increase in the national income.
• The greater inflow of foreign direct investment.
• Better infrastructure and public utilities.

The government has the commendable aim of making more in India. This means improving the efficiency of production in India, whether of agricultural commodities, mining, manufacturing, or services.

1. To achieve the goal, it has to implement its ambitious plans for building out infrastructure. This includes:
   • Physically linking every corner of the country to domestic and international markets through roads, railways, ports, and airports. The kind of economic activity that is generated when a pukka all-weather road is built into a village-the explosion of horticulture, poultry, and dairy farming; the opening of clothing and assorted goods shops; the increasing use of powdered vehicles-is extraordinary, as is the kind of activity that emerges around national highways.
   • Ensuring the availability of inputs such as power, minerals, and water at competitive prices.
   • Linking everyone electronically and financially to the broader system through mobiles, broadband, and intermediaries such as business correspondents.
   • Encouraging the development of public institutions such as markers, warehouses, regulators, information aggregators, disseminators, etc.
   • Making possible affordable and safe homes and workplaces.
2. A second necessity for increasing productivity in India is to improve human capital. This requires enhancing the quality and spread of health care, nutrition, and sanitation to start with so that people are healthy and able. People also need better and more appropriate education, skills that are valued in the labor market, and jobs where firms have the incentive to invest more in their learning.
3. The government is examining the cost of doing business in India with a view to bringing it down. The woes of the small entrepreneur, as she confronts the myriad mysterious regulations that govern her, and the numerous inspectors who have the power to close her down, are well known. The petty bureaucrat, empowered by these regulations, can become a tyrant. It is appropriate that the government intends to make him help business rather than hinder it. As regulators, we have to continuously examine the costs and benefits of the regulations we impose.
4. Finally, we need to make access to finance easier. I’ve spoken about that in other contexts, and will not dwell on it here. Before I move on, let me add some caveats.

Make in India is a realistic program because:

1. Demand for low-cost and value-for-money articles is rising rapidly among those emerging from poverty.
2. The share of the workforce in the industry is rising.
3. The increasing spread of electricity in semi-urban and rural areas facilitates industrial activity.
4. Desire to produce local defense equipment that is currently being imported.

Precautions

There is a danger when we discuss” Make in India” of assuming it means a focus on manufacturing, an attempt to follow the export-led growth path that China followed.

First, the world as a whole is unlikely to be able to accommodate another export-led China.

Second, industrial countries themselves have been improving capital-intensive flexible manufacturing, so much so that some manufacturing activity is being re-shored.” Any emerging market wanting to export manufacturing goods will have to contend with this new phenomenon.

Third, export-led growth will not be as easy as it was for the Asian economies that took the path before us.

A second possible misunderstanding is to see “Make in India” as a strategy of import substitution through tariff barriers. This strategy has been tried, but it has not worked because it ended up reducing domestic competition, making producers inefficient, and increasing costs to consumers. Instead,” Make in India” will typically mean more openness, as we create an environment that makes our firms able to compete with the rest of the world and encourages foreign producers to come to take advantage of our environment to create jobs in India.

India is all set to launch version 2.0 of Prime Minister Narendra Modi’s flagship ‘Make in India’ initiative to turn around the nation’s manufacturing sector. While the first level focused on easing processes to help businesses, the next one is aimed at turning it into” a people’s movement,” on the lines of the Swadeshi movement.

“This would not just be a campaign but a movement of the people of India through initiatives like Skill India, Digital India, and another big ticket item, start-up India. It is now or never for India’s manufacturing story.”

India has become the sixth-largest manufacturing country in the world. The proposed national procurement policy will give special preference to firms making products in India.

SUMMARY

Technological Innovation: Developing new products and processes through basic and applied research. It can be disruptive or a breakthrough.

Skill Development: Developing the required skills through education, training, and experience. It is the prerequisite to the country’s growth and employment for the vast majority of young Indians.

Make in India Movement: The scheme encourages and assists foreign and Indian companies to manufacture products in India so that India becomes a manufacturing hub.