In a refreshing departure from the Western practice of judging innovative capacities by reference to patent filings, research publication and citations, R. A. Mashelkar has been arguing for an alternative and more radical standard of evaluation. This has the merit of placing innovation within the context of a society’s needs and aspirations.

Mashelkar, former head of Council for Scientific and Industrial Research, has also been on numerous government committees. Of late, his reputation is evolving wonderfully, foraying as he is into that exotic territory where science meshes into ‘innovation’ and ‘confronts’ conventional economic theory to address social agendas--- through the mediation of private enterprise, not state interventions.

Delivering the R.B.R. Kale Memorial Lecture at the Gokhale Institute of Politics and Economics a few days ago, Mashelkar, Fellow of the Royal Society and currently, among other things, National Research Professor at Pune’s National Chemical Laboratory, offered his audience a glimpse of “inclusive innovation”. By its very name, it offers a sense of departure from existing epistemology on the subject -- though perhaps also a whiff of some populism.

Innovation as Magic Pill

In his talk “Innovation Economy: The Indian Challenge and Opportunity” Mashelkar told his audience that unlike neo-classical economics that studies how to use scarce resources to produce and distribute goods and services, innovation economics looks at “how societies create new forms of production, products and business models to expand wealth and quality of life.” Neo-classical economics in his view uses price signals to maximise resource allocation; innovation economics “spur(s) economic actors…to be more productive and innovative.”

To what end, Mashelkar asks implicitly. As the starting point for growth, innovation has, and must perform, a transformative role. It can and should address an agenda that state run welfare policies or the “standard economic development practices based on competitveness” important as they may be, have not.

His technological optimism extends to provision of access to essential goods and services at affordable prices; increasing purchasing power of the bottom of the pyramid (BoP) to “enable this segment to participate economically” (in what the speaker does not specify); and third, reducing income inequality “by making the daily experience of those with lower incomes more like that of the well-to-do.”

Mashelkar joins a influential band of technocrat-scientists-business leaders who believe in the power of technology to change lives. In this sense, their antecedents lie in the Enlightenment’s aftermath when great advances in science and technology fostered unprecedented economic growth. The sound of inclusive growth lets off a fairly populist echo, but Mashelkar locates his inspiration in the kind of growth the American economy witnessed through tremendous innovative skills. For Mashelkar therefore “inclusive innovation” is the “magic answer” to the goals he sets out for the innovation economy.

Predictably, digital technology serves the purpose most evocatively. India’s population with mobiles is amazingly high and growing.

The Internet changed the way we look at life and an increasing number in the BoP are being made aware of its huge potentialities.

But the promise of a good life is like window shopping for most of the poor. India makes cheap handsets, mobile telephony is extraordinarily cheap and as Mashelkar points out, Indian telcos made high-volume-low-price their marketing strategy.

Ground reality

An indigenised fridge or an ECG machine provide further examples of inclusive innovation: Mashelkar calls it “M-L-M” or More from Less for More. His belief in the capacity of Indian firms to follow this noteworthy dictum was evident. It was also his belief that over time, as the BoP’s potential gets to be recognised multinationals too will adopt this creed of making more goods with cheap and less resources for a wider audiences at “affordable prices”.

So what’s the problem? The problem is that innovation is a product of specific socio-economic pulls and pressures and of existing levels of technology.

Innovation cannot assume a dynamic outside itself and become a driver of socio-economic transformation. In fact, inclusive innovation is a sort of oxymoron.

There are barriers to its inclusionary promise. If the ChotuKool fridge using what in the late seventies would have been called “appropriate technology” may remain unsustainable, it is because of such barriers.

Stratified market

These barriers also explain why the most essential service in and for urban India has not received the attention in innovation that it deserves, namely, mass public transport.

Rather, the small car simply adds to the congestion on urban roads, reduces the space for public transport systems, encourages policy planners to think up highly expensive metro-rail networks when a gradual but systemic reduction of private transport in favour of public means would have many more benefits.

But the market and auto manufacturers think differently and a growing middle class from the bottom-up cannot wait to get behind a steering wheel, just as they cannot wait for interest rates to fall so that they can buy that Hitachi three-door fridge.

Innovation is value-bound. Its diffusion is more often than not a victim of inhibiting circumstances; it also has a right time which is decided by those who can make it sustainable (which means help it make more money than the earlier version did). Certainly, the Chotukool will not work unless Hitachi or other firms take the plunge, and they will not unless their existing products fail. Then they will “create” by tweaking or adding a sideshow to a product that advertising will convince consumers of its intrinsic value to the quality of life.

Why income inequality?

Income inequality is not just a result of policy lapse or failure of markets, so much as a precondition of market economics. Firms need low wage-workers. Steve Jobs flatly refused President Obama’s request to bring back jobs from China. Apple products would not be as cheap for American consumers had they been produced locally.

Income inequality is also important for innovation. It is the prospect of increasing refinement of products, say fridges or cars, that keeps innovation alive and cash registers ringing. Titan may make the cheap watch but it will also hit the Dalal Street broker’s pocket; Rolex will not bother with the BoP or even the pyramid’s large middle.

So, the M-L-M model can mean different things to different people. But when variety in incomes, that is, income inequality comes about, even essential service providers will innovate differentially; not inclusively.

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