Smart Business Study

4 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 application, e.g., products, services, processes, techniques, etc. Creativity is a prerequisite to innovation. But creative ideas have little value they are converted into new products, services or processes. Innovation requires action and 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 close inter-relationship between creativity and innovation. Creative ideas are useless until these 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 discovery of new materials, methods or principles. Innovation involves application of inventions for commercial purpose. Following figure shows the difference between invention and innovation.

 Technological Innovations, Skill Development and Make in India Movement

Innovation may occur in several forms such as the following:

(i) Introduction of a new product or new quality of an existing product (e.g.,Vim Gel for cleaning utensils).

(ii) Introduction of a new manufacturing process that has not been tested or commercially exploited (e.g., assembly line for cars by Henri Ford).

(iii) Location of a new source of raw material or semi- finished product (e.g., nylon based tyre code).

(iv) Opening of a new market (e.g., rural market for life style products).

(v) Developing a new combination of means of production (e.g., gas based steel plants).

(vi) Introduction of a new method of distribution.

(vi) Discovery of a new new form of Organisation of 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 is known as technological innovation. It involves creation of new and better products and technologies. Leading companies introduce new and improved products as their existing products reach the maturity stage of 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 the new idea.

2. 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.

3. 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:

(i) An outstanding person is an executive leadership position to support a strategic decisions that encourage creativity and innovation.

(ii) An operational leader to carry out the essential tasks of converting knowledge into a commercial application.

(iii) A clear need for the application by sufficient potential consumers to warrant the commitment of resources to the innovation.

(iv) The realisation of the product, process or service as a useful innovation providing value to society.

(v) Good cooperation among the crucial players and among diversified functions.

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

(i) Availability of resources and supporting technology to succeed in the endeavour.

(ii) Cooperation and support from external sources who can influence the success of a innovation, including government agencies, investors, vendors, suppliers and creditors.

Plastic water bottles and artificial sugar are examples of technological innovation. A technological innovation provide solutions to a problem. But it also involves the technological risk. For example, X-rays brought about a revolution in medical service but it causes risk of radiation and can be abused.

The 50 Most Innovative Companies

Source: Boston Consulting Group’s Most Innovative Companies for 2014 globally.

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. Application of the results of basic research is known as applied research. For example, steam engine was the outcome of basic research but its use in railways is applied research. Apple created iPod which can contain thousands of songs.

3. Disruptive Innovation. Making changes in existing products and services to build their improved versions is called disruptive innovation. For example, creation of LCD TVs in place of CRT TVs gave us the benefits of the better image quality, less battery consumption and light weight. 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 past few decades, several technologies and inventors have led disruptive innovation. Everything from the way humans travel, eat, sleep, communicate and socialise have been disrupted. One interesting pattern is that the 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 the existing principles. 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 new and changing needs of consumers.
  • Entry into new markets and segments.
  • Gaining competitive advantage.
  • Extension of product life cycle.
  • Cost reduction through 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.
  • Healthier environment due to reduced pollution.

National Policy will provide the following benefits:

(i) Ensure growth pathways to skilled workforce.

(ii) Improve employability and livelihoods of youth.

(iii) Increase productivity in all sectors of our economy.

(iv) Ensure easy and equitable access to training infrastructure to every citizen of the country.

(v) Establish an IT based information system which can be helpful in matching supply and demand for skilled workforce.

(vi) Take care of the skilled needs of disadvantaged and marginalised groups (e.g., SC, ST, OBC, minorities, differently abled,etc.)

(vii) Promote more participation of women in the workforce.

(viii) Involve employers in setting occupational standards.

Skill Development

India has a great advantage in demography because sixty percent of her population is young. This can be a great asset and competitive advantage provided the young population is healthy and we’ll educated. 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 (IIITs), Indian Institutes of Management (IIMs), Universities,etc.are caring to 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 on quality.

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

1. National campaign to create awareness and foster an environment conducive to skill development.

2. Setting up of National Skills Universities for capacity generation.

3. Establishment of new ITIs through Public Private Partnership (PPP) mode.

4. High order skilling through ITIs and Multi Skill Institutes (MSI) having strong linkage with industry.

5. Seamless movement between formal education and vocational training.

6. Greater participation of industry in Curricula, assessment and certification.

7. Setting up of Labour Markets Information System (LMIS) to generate key analysis and reports.

8. A national portal on entrepreneurship as one-stop shop to provide information services.

9. Alignment of all formal and vocational education.

Objectives of Skill Development

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

(i) to improve the employability of school dropouts, ITI graduates, workers, etc. by providing them vocational training.

(ii) to test and certify the existing skills of these people.

(iii) to build capacity in course curricula, learning material, competency and assessment standards in India.

(iv) to make optimum use of the available infrastructure of Government, private institutions and the industry.

The mission of skill development is five fold:

(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

(i) It is fully sponsored by the Central Government.

(ii) The operational part of providing training is the job of State Governments in the private sector.

(iii) In order to make training cost effective, focus will be on optimum utilisation of the available infrastructure.

(iv) Short- term training courses will be demand based. Modular employable skills will be decided in consultation with the industry.

(v) Young persons who have completed 5th class or higher can participate in the courses.

(vi) To ensure impartial assessment of skills of trainees are to be tested by independent bodies like FICCI, CII, etc.

(vii) Part time, week ends and other flexible delivery systems will be created to suit the needs of specific groups.

(viii) For different target groups, different levels of programmes (foundation, skill upgradation, etc.) are to be designed.

(ix) Registered Vocational Training Providers (VTPs) will impart training.

(x) 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 a part of which over 40crore people will be trained in various skills by 2022. The initiatives launched include National Skill Development Mission, National Policy for Skill Development and Entrepreneurship 2015, Pradhan Mantri Kaushal Vikas Yojana (PMKVY) schemes and the Skill Loan scheme.

Make in India Movement

The ‘Make in India’ programme was launched on September25,2014 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 multinationals, to increase manufacturing in India.
  • Upgrade share of domestic manufacturing in GDP from 16% to 25% by 2022, create 100 million additional jobs by 2022.
  • Foster innovation.
  • Protect intellectual property rights.
  • Enhance skill development.                                                   

Benefits of Make in India

  • Growth of manufacturing sector.
  • Increase in exports.
  • Employment generation.
  • Rise in per capita income.
  • Increase in the national income.
  • 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 producing in India, whether of agricultural commodities, mining, manufacturing,or services.

(a) To achieve the goal, it has to implement its ambitious plans on building out infrastructure. This includes:

(i) Physically linking every corner of the country to domestic and international markets through roads, railways, ports and airports. The kond 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.

(ii) Ensuring the availability inputs such as power, minerals and water at competitive prices.

(iii) Linking everyone electronically and financially to the broader system through mobiles, broadband, and intermediaries such as business correspondents.

(iv) Encouraging the development of public institutions such as markers, warehouses, regulators, information aggregators and disseminators, etc.

(v) Making possible affordable and safe homes and workplaces.

(b) 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 labour markets and jobs where firms have the incentive to invest more in their learning.

(c) The government is examining the cost of doing business in India with a view to bring 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 of closing 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 to have to continuously examine the costs and benefits of the regulations we impose.

(d) Finally, we need 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 programme because:

(i) Demand for low cost and value for money articles is rising rapidly from those emerging from poverty.

(ii) Share of workforce in industry is rising.

(iii) Increasing spread of electricity in semi-urban and rural areas facilitates industrial activity.

(iv) Desire to produce locally defence equipment which is at present being imported.


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 who took 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 and 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 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. Proposed national procurement policy will give special preference to firms making in India.


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

Skill Development Developing the required skills through education, training and experience. It is the prerequisite to 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.

Meaning of Make in India? / What is Innovation? How does it differ from creativity and Invention? / Short note on: Skill Development / Make in India Movement / Explain the advantages of technological innovation for business and for the country. / Describe the benefits of Make in India Movement. / What do you meant by Technological Innovation?

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