Fruitful exchange on business and innovation at NIBM 2013

If there is only one single word that visitors of the Netherlands India Business Meet (NIBM) will remember it is probably Jugaad. The Hindi word that refers to a quick, smart and cheap fix, was coined by Dr. Jaideep Prabhu of Cambridge to show that there is an interesting alternative for structured innovation often done in the West. Jugaad innovation was one of the many examples presented at NIBM that made clear that Indian and Dutch businesses can learn from each other.

 

Partnership

The event, hosted by former eight o’clock news anchor Sacha de Boer, is organized annually by ING, KPMG and the Netherlands India Chamber of Commerce and Trade (NICCT) to build and strengthen ties between the Dutch and Indian business community. A record of over 300 people gathered at KPMG’s beautiful head office in Amstelveen to discuss this year’s theme: building an innovative and profitable partnership. After welcome speeches of KPMG CEO Jurgen van Breukelen and Raj Kumar Singh, the deputy ambassador of India in the Netherlands, Tata’s Girish Ramachandran pointed out five sectors in which he sees interesting opportunities for cooperation: agriculture and food, R&D and manufacturing, solar and wind energy, life sciences and water management. “Both countries are aware of the possibilities for cooperation,” said Simon Smits of the Dutch Ministry of Foreign Affairs. Smits, who recently returned from a trade mission with minister Ploumen to India, announced the establishment of a Joint Economic Committee to discuss economic policies between India and the Netherlands. “Long term commitment, mutual benefit and mutual respect are crucial to build fruitful relations between our countries,” Smits said.

 

Innovation

The dialogue on innovation, excellently moderated by Vipin Moharir, director of NINtec, was kicked off by Dr. Bhattacharjee, R&D director at Tata Steel. “I believe that technology is the solution to fight the challenge of scarcity,” Bhattacharjee said. The steelmaker faces the challenge of scarcity of raw materials and high energy prices and feels the need to reduce its CO2 footprint for environmental reasons. Bhattacharjee sketched how Tata is working on these challenges, pointing towards its innovation centers in Europe and India, Tata’s support for 133 PhD’s and university chairs, and its participation in international innovative platforms. These efforts have already resulted in innovations such as Hlsarna, a radically new way of making iron with a serious reduction of CO2 emissions. Also, new, lighter steels for the automotive industry have been developed, partly in Dutch labs. “50% of all steel being used in cars today did not exist 6 years ago.” Although Tata is keen to work together with Dutch innovative parties, Bhattacharjee warned the Dutch Government that the Netherlands is becoming less attractive as an innovation hub compared with its European neighbours as material and metal science dwindle, industry steer is weakening in ‘top sector’ mechanism and other EU countries offer new and attractive leverage schemes.

 

Dr. Jaideep Prabhu of Cambridge University and co-writer of the book Jugaad Innovation shared a completely different approach towards innovation. “Jugaad innovation can offer frugal, flexible and inclusive solutions both in emerging markets and in the West,” Prabhu argued. He showed the audience a series of products that are smart, improvised and a cheap alternative for high tech products, such as a 30 US dollar clay fridge that doesn’t need electricity, a 35 dollar tablet computer, a water filter that is 50% cheaper than Unilever’s model and a 200 US dollar baby warmer that has 80% of all features of a modern incubator which costs 20.000 US dollars. He convincingly argued that a Jugaad mindset is needed to serve the 4 billion people in the world that live on less than 9 dollars a day. But Jugaad has relevance in the west as well, Prabhu emphasized. “With rising R&D expenditure and an increasingly lower ‘Return on Innovation’, Jugaad offers Western companies an interesting alternative.” Jugaad innovation and structured innovation are not mutually exclusive, argued entrepreneur Erik Vermeulen in the following round table session. Vermeulen: “Jugaad adds something to the innovation process. It makes innovators aware of scarcity.” Both Prabhu and Bhattacharjee agreed. “It depends on the context,” said Prabhu. Bhattacharjee: “You need a healthy mix.”

 

Entrepeneurship

After the break three start-ups in India pitched their companies to the audience.

 

Henk Schouten of Schouten Europe pitched GoodBite, the brand that produces and sells meat replacing products based on soy, wheat and peas in India. Schouten: “More and more Indians start to eat meat, but we all know it’s better to eat less meat. Better for our health, better for animals and better for the environment. GoodBite products have the bite and taste of meat, but it’s not.” Schouten joined minister Ploumen to India in September and signed manufacturing contracts.

 

Marcel van Heist presented his start-up Rural Spark that hopes to build a smart energy network in rural India. Rural Spark rents out solar panels to so-called light entrepreneurs, who use the electricity they generate themselves and sell the overcapacity in the form of rechargeable lamps to neighbours and other villagers. Van Heist hopes that rural India can leapfrog the Western centralized energy system and create a smart energy grid from the start. The company was established in 2013 and its network currently consists of twenty light entrepreneurs.

 

Finally, Wilko Stronks pitched Reeleezee (pronounce Real Easy), an online bookkeeping software product for Indian SME’s and accountants. After launching in the Netherlands, Stronks decided to skip the usual European markets and instead ventured out into India. It took his team two years to understand what he calls “the most complex tax regime ever” and implement all these rules in his cloud-based tool. Stronks is convinced that cloud-based bookkeeping is the future and sees huge potential on the Indian market where market leader Tally sells an old-fashioned product.

 

While these start-ups dream of Indian success, Pierre Hermans, CEO of Syntech International shared the incredible success story of his Indian business. Since 1994 Hermans offers a one stop shop for cash management in India. His company transports cash, fills ATM’s and destroys money when needed. While Syntech’s IT system is its big weapon, the real success is based on picking the right Indian people and giving them an interesting stock option package, says Hermans. Other advice: “Be patient and take your time for negotiating contracts.”

 

India Business Monitor

Finally Rob Ruhl, chief business economist at ING shared his views on the macro economic developments in India, highlighting recent troubles such as lower economic growth, high inflation and the fall of the exchange rate of the Rupee. “It is not as bad as the economic crisis in the early 90s,” said Ruhl, who expects a strengthening of the Rupee in the medium term. The ING economist also presented some outcomes of the first India Business Monitor the bank carried out together with the NICCT and the Netherlands Embassy in New Delhi. Ruhl: “First, there are not only opportunities for multinationals in India, but for SME’s as well. Secondly, success comes sooner than expected. Thirdly, 75% of entrepreneurs interviewed would recommend to do business in India, but they underline the need to prepare well, use local expertise, be flexible and learn from peers. Finally, the most common hurdles for Dutch entrepreneurs in India are cultural issues, bureaucracy, infrastructure, finding the right business partner and corruption.