Change is imperative, and in the last few years of the digital wave, new technologies and scientific breakthroughs have opened up on many fronts. Disruptive innovation is a process whereby new technologies or business models disrupt established industries, creating new markets and consumers. Disruptive innovation is not just about creating something new; it’s about disrupting the status quo and creating new opportunities. Disruptive innovation can be seen in various industries, from transportation to finance to healthcare. The advent of Industry 4.0 and the eight megatrends, such as artificial intelligence, the Internet of Things, blockchain, augmented reality, virtual reality, 3D printing, drones, and robotics, has demonstrated the ability to bring about large-scale socioeconomic change.
Disruptive innovation and disruptive technologies occur when a small company, new product, or innovation enters the market and disrupts established norms, displacing existing industries and introducing new products. This revolution leads to changes. The term ‘disruptive innovation’ was first coined by Professor Clayton Christensen from Harvard. In his 1997 paper in the Harvard Business Review, he explained how new technology disrupts existing practices. For example, when smartphones were introduced, they combined several functionalities like a notepad, music device, watch, and phone, rendering separate devices unnecessary. This disruption affected the existing norms. Similarly, the advent of digital photography disrupted the industry dominated by Kodak and Konica, which used to manufacture film rolls. Innovation creates new products, adds value to the economy, generates jobs, and changes our perspectives on technology and product development.
If you enjoyed reading this article, you can help support our journalism by adding OHeraldo as a preferred source.
Companies that engage in disruptive innovation, such as Apple and Google, often create significant value for themselves, their shareholders, and the countries in which they operate. If India aims to achieve its goal of a trillion-dollar digital economy (currently at around 300 to 400 billion dollars), disruptive innovation is essential. India’s digital revenue primarily comes from IT and enabled services, but to reach higher levels, the country is investing in electronics manufacturing. This includes not only mobile phones but also laptops and other digital electronics, with efforts to establish the entire supply chain within India. Additionally, India is focusing on developing semiconductor manufacturing capabilities through programs like Fab Labs and the 76,000 CR programme announced by the government. The goal is to secure a significant share of the electronics manufacturing space in India.
The second area contributing to the trillion-dollar digital economy will be emerging technologies such as artificial intelligence (AI), blockchain, the Internet of Things (IoT), and augmented reality/virtual reality (AR/VR). Although most AI and algorithm-based innovations currently originate from the US and China, India possesses substantial talent capital and a thriving startup ecosystem in AI. The plan is to invest in computing infrastructure and leverage the existing data ecosystem to develop AI-related projects and products in healthcare and agriculture. Once Indian companies build these products, which revolve around disruptive innovation and disruptive technologies, the goal of a trillion-dollar digital economy can be realised.
This is a significant achievement driven not only by government policies but also by the investments made by Indian companies and the trust placed in India by global companies to relocate their supply chains and manufacturing units. Companies like Apple, Samsung, and Google are actively establishing their manufacturing bases in India. In fact, recently, 27 projects under the PL scheme were approved. In the laptop and notebook manufacturing sector, companies like HP, Dell, and Lenovo are also considering shifting their manufacturing operations to India to meet global demands. This shift is necessary due to the geopolitical situation we find ourselves in. The world recognises that relying solely on one manufacturing base, such as China, is not sustainable in the long run. Thus, India is being viewed as an ideal location for setting up manufacturing bases for mobile phones, laptops, and other electronic products.
We take great pride in the fact that mobile manufacturing assembly is now happening in India. These initial steps are crucial for any country looking to advance in the manufacturing sector. They have significantly reduced our dependence on imports. Moving forward, this progress will only strengthen and create an ecosystem that attracts companies willing to invest in building manufacturing capabilities. As we know, electronics manufacturing and semiconductor production are capital-intensive areas with high risk. Many Indian companies, even those with large cash reserves, tend to explore alternative investment channels rather than mobile manufacturing. However, as people witness the value and growth potential, we can expect a shift in this mindset in the future.
While we often romanticise the success stories of startups and the value they create, it’s important to acknowledge that it’s not as easy as it may sound. For every successful unicorn, there are many others that face struggles, including difficulties in securing investments at the right time. When a company performs well and becomes a unicorn, many investors are eager to buy into their IPOs or provide funding. However, it is during the ideation, product development, and go-to-market stages that startups require the most support. Our domestic venture capital (VC) ecosystem has a lot of potential but needs further growth in that direction.
Although we can take pride in having 100+ unicorns and witnessing the formation of 100,000 startups, the global investment landscape has experienced a lull in recent years. Therefore, it becomes crucial to energise the Indian VC ecosystem. We need to ensure that people have trust in our high-performing startups and that these startups receive the necessary support to achieve their full potential. While it’s natural to feel happy about our achievements, we must also take strong steps to nurture and support startups that are performing well or have the potential to do so.
(The author is an advocate by profession)
