8th July 2021, Mumbai: Great Lakes Institute of Management, Chennai hosted Dr. Vijay Govindarajan, Coxe Distinguished Professor, Tuck School of Business at Dartmouth College & New York Times and Wall Street Journal Best Selling Author, for the latest edition of Distinguished Thought Leader Series – Term Zero. Dr. Govindarajan interacted with the students on the topic of ‘Reverse Innovation’ and India’s opportunities to grow the economy and solve income inequality.
Dr. Govindarajan opened by differentiating the ‘rich’ and ‘poor’ countries based on the classification by World Bank. Historically, companies innovate in rich countries and sold those products in poor countries. Reverse innovation is the exact opposite of this process. ‘Reverse Innovation’, according to Dr. Vijay Govindarajan is a significant growth opportunity to cease, especially for India being one of the emerging economies.
He further elaborated on how a rich country would be interested in the products and services of a poor country. Dr. Govindarajan further explains through a comparison between the healthcare industry in United States of America, a ‘rich’ country and India, a ‘poor’ country. He says, “U.S health industry is characterized by high-cost and not necessarily the world-class quality and without universal access is preferred less compared to poor countries which are making breakthrough innovations based on world-class quality, ultra-low cost and universal access.”
Reverse Innovation is about doing a lot more with lot less and the quality demanded by poor countries tend to be higher than those in rich countries. Even with same high-quality equipment’s used in both the hospitals in US and India the cost for treatment in US will be approximately 75 times higher compared to that in India. He reasons the statement saying, “if we utilize the system fully the cost of production will be low”, quoting Henry Ford on Mass Production. He further clarifies, more surgery done by a cardiac surgeon will also make them cutting-edge with their skill unlike the under-utilized healthcare system in U.S.A which faces fewer challenging situations.
Dr. Vijay Govindarajan, answering the queries of students said creativity and innovation should be focused at framing a point of purpose. Greatness, he says, for an organization comes if they can answer the question ‘why they exist?’ rather that ‘What they do?’ or ‘How they do?’ He further answered questions on the effect of ‘reverse innovation’ in western education, emerging markets, and perception of products from new markets etc. Dr. Vijay Govindarajan, concluded by emphasising the importance of innovation in bringing down the cost and to change the mindset of people towards the products and services from the ‘poor’ countries. “With reducing income inequality India will be one of the major beneficiaries in ‘reverse innovation’”, says Dr. Govindarajan.
Speaking on the occasion Dr. Sanjoy Sircar, Professor and Program Director at Great Lakes Institute of Management, Chennai, thanked Dr. Govindarajan for his insightful session and continuous support towards various initiatives by Great Lakes and added that the inputs from the interaction will be a life changing lesson for the students at Great Lakes Institute of Management, in their career and way ahead.