Friday, November 27, 2009

Brain Gain: Oxygen for "Reverse Innovation"??

Coincidences. I am increasingly getting convinced that there isn't such a thing! There is almost always a bigger purpose!

Yesterday morning, I listened to a podcast of Prof Vijay Govindarajan-on HBR talking about "How GE is Disrupting Itself" -and evangelising "reverse innovation' for all companies to have a cultural mindset change to be able to unlock opportunities in emerging markets.
The model that GE and other industrial manufacturers have followed for decades—developing high-end products at home and adapting them for other markets around the world—won’t suffice as growth slows in rich nations.
To tap opportunities in emerging markets and pioneer value segments in wealthy countries, companies must learn reverse innovation: developing products in countries like China and India and then distributing them globally.
While multinationals need both approaches, there are deep conflicts between the two. But those conflicts can be overcome.

During the day, I came across two more articles:

1.Mr Shyamal Majumdar of Business Standard, who wrote 'that almost 30 per cent of companies in the 2009 Fortune Global 500 list have been developing global talent by long-term assignments in the Asia Pac region.' and cited examples from companies like the Unilever group, Volvo, Essar Telecom, Sony and Nokia!

2. Elsewhere half way across the globe, the Prime Minister of India, Mr. Manmohan Singh was exhorting all Indian Americans and Non resident Indians to leverage on "Modern technologies" and invited the diaspora to 'return back home'!! Highlighting the Five Es - economy, energy, environment, education and empowerment - Mr. Singh mentioned that it forms a critical part of the “next phase” of the relationship between the two countries -US and India.

I somehow have this nagging feeling that global migration of professionals is very imperative for a WIN WIN for all concerned!

And as I listened again to the podcast repeatedly this morning, the writing is very clear on the wall. To quote Prof Vijay Govindarajan, "Companies that don't have a sense of urgency in this area are going to face serious threats to their very existence"!

May be we should look for more answers?

1. How long would off shoring or outsourcing continue relevant? May be it works for cost rationalisation -when one is able to migrate low end repetitive tasks?

2. Unlike globalisation and glocalisation, which needs a very highly centralised organisation structure and decision making process, to implement 'reverse innovative' processes, there is a need for a leadership roles at local /country level-across functions-strategy/R&D/Supply chain etc.
Ala Cisco? (Interesting to read interview with their CGO) Wim Elfrink admitted that the Bangalore office provided them access to 70% of the world's population within 5 hours of flying time!)

3. Will the quality of the professional in demand be different? As pointed elsewhere in my blog, I would anyday back a returning Indian -who has had prior Indian experience before going abroad- as a better bet as he would be able to bridge the ethos much better.

I look forward to hearing from you!!


Unknown said...

Very Well said Achyut.

I strongly believe that reverse brain drain is good news for India. Indians returning to homeland (myself included) is a boom to Indian economy as they are a perfect blend of cultural awareness required to work in a global environment and best in class knowledge gained from premier institutes in the world.
At the same time Indian economy provides that "incubator" effect to all the young entrepreneurs which this country is producing...

To your point about outsourcing, i think sometimes in this century we will see "reverse outsourcing" as well because of rising standard/cost of living in countries like India which will eventually bridge the price arbitrage which we enjoy right now. To me it's all a cycle which will come into effect in due course of time.

That's my 2 cents :-)

AK Menon said...

Yes,Sam. I am with you. Cost artbitrage can only to help 'open doors'.

Thereafter, one must build process efficiencies, and use analytics to do 'more and more with less and less'. One must exhibit increasing ROI by leveraging on the economies of scale.