Jugaad

India's Indigenous Genius: Jugaad

By DEVITA SARAF

[Editor's note: This is the first of two articles]

Etymology aside, I have always been convinced that the word indigenous arose from India. To make something out of limited resources is India's genius and, therefore, indigenous. After centuries of foreign attacks, changing cultures and ever-evolving political stands, India has somehow managed to create an insular economy where we create what we need from what we have. In India, we call this jugaad and you can see a jugaad car on the highways of North India made from spare parts.

Devita Saraf

Innovation in the mature economies of North America and Europe has largely been linked with large research and development spending in basic sciences. Innovation normally gets associated with creating new technology backed up by years of R&D. This in turn is backed up by huge marketing spending to create a "capital entry barrier" which is, in most cases, priced high initially to target the most affluent customers before the normal commoditization process gets the product in the hands of everyday consumers.

However, there is an entirely new type of innovation thinking called "constraint-based innovation" - innovation that relies more on ingenuity in product, process and people to solve a customer's problem by creative improvisation rather than scientific and technological breakthroughs. In India, colloquially, we call this "jugaad" and it's now got a new name "frugal engineering." This kind of innovation generally starts with serving customers at the base of the pyramid by making the lives of millions of everyday individuals easier.

We always looked at automobile innovation coming from Japan or Germany until the Tata Nano caught the world's imagination and made us Indians very proud of what our engineers can create. It is a good example of constraint-based innovation – the constraint being building a car for 1 lakh rupees while most of the rest of the car manufacturers focus on "cooler" features, better looks and more horsepower.

One of my favorites is Amul, the Indian milk cooperative, a unique organization that equitably distributes the wealth it creates among its hundreds of thousands of stakeholders and yet has managed to hold its own against much more deep pocketed multinational competitors (ask Wal-Mart to match the prosperity Amul has created for millions!) Arvind Netralya's almost mass-production approach to high quality cataract operations is an example of how innovation that benefits people at large can be created through improvisation and predominantly process and people creativity rather than waiting for a scientific breakthrough. My last example of doing more with less is the low cost "Jaipur foot" prothesis.

So why is this relevant?

It shows that while China can manufacture for cheap, Indians can innovate around a budget and maneuver past whatever constraints are thrown at us.

While India has benefited significantly from the "services offshoring" wave in information technology services and call centers, I truly believe that the future of India's exports lies in our ability to create products and services for the world through our "frugal engineering and jugaad skills" – driven by the demand from similar emerging markets like China and Brazil, a slow and turbulent global economy, and the realization that it would take the resources of seven planets if India and China modeled our economic growth after Western countries.

While this presents Indians with the opportunity of a lifetime, it needs some serious work on two fronts: Being able to create more examples like those above on a sustainable basis and having the drive, patience and the long-term investment perspective needed to penetrate foreign markets. More on that in the next column.

—Devita Saraf is CEO of Vu Technologies and Executive Director of Zenith Computers in Mumbai