The recent slowdown in India’s economy has everybody from stock investors to grand strategists and foreign policy poohbahs concerned. In a Project Syndicate piece we found while scanning Lebanon’s English language newspaper The Daily Star, Indian parliamentarian and intellectual Shashi Tharoor showcases reasons for optimism about India’s future.India, Tharoor tells us, thrives on “frugal innovation,” or the art of transforming luxury goods by designing cheaper and more accessible versions, building markets for such items where none previously existed. To “reincarnate” these high end products, Indian entrepreneurs must get creative:
Indian ingenuity has produced a startling number of world-beating innovations, none more impressive than the Tata Nano, which, at $2,000, costs roughly the same as a high-end DVD player in a Western luxury car. Of course, there’s no DVD player in the Nano (and no radio, either, in the basic model); but its innovations (which have garnered 34 patents) are not merely the result of doing away with frills (including power brakes, air conditioning, and side-view mirrors).
Reducing the use of steel by inventing an aluminum engine; increasing space by moving the wheels to the edge of the chassis; and relying on a modular design that enables the car to be assembled from kits proved conclusively that you could do more with less.
The transformative ingenuity isn’t limited to mere consumer products like cars. By thinking both frugally and outside the box, Indians were able to pull the rural poor into the rest of the country’s modern banking system:
Even the financial sector has seen innovation. Just three years ago, there were only 15 million bank accounts in a country of 1.2 billion people. Indians concluded that if people won’t come to the banks, the banks should go to the people. The result has been the creation of brigades of traveling tellers with hand-held devices, who have converted the living rooms of village homes into makeshift branches, taking deposits as low as a dollar.
For those Americans wondering what’s behind India’s astounding dynamism, and what could sustain it through the economic winter, Tharoor’s treatment of “frugal innovation” is a good first peek into the shifting gears of the powerhouse on the subcontinent.And here’s a thought for the future: the products and delivery systems Indians develop in South Asia have a lot of potential to solve problems in Africa. Historically, India and East and South Africa had close and beneficial trade relations; a new wave of Indian commerce and know how could do more to change Africa than all the big budget western and Chinese aid projects have yet managed to accomplish.