Innovation is the key determinant of economic growth and social welfare

Innovation is the key determinant of economic growth and social welfare

Innovation is the introduction of something new, a new idea, method, or device. Innovation is not same as invention, which means discovery of a new thing altogether. Innovation is rather the application of better solutions that meet new requirements, unarticulated needs, or existing market needs. In the business parlance, innovation means the process of translating an idea or invention into a good or service that creates value or for which customers will pay. Steve Jobs, the Founder or Apple Corporation summed up the importance of innovation, “Innovation distinguishes between a leader and a follower”.

Our world is constantly changing. On one side, many age old problems are solved, while on the other, many new problems are created in the world. As these problems never existed before and they can’t be solved by using any of the techniques used earlier, we have to constantly innovate to solve complex problems of life and move with time. It is due to the innovations that human beings have become the most evolved species on Earth.

Albert Einstein once said, “We can’t solve problems by using the same kind of thinking we used when we created them”. Hence, we must constantly innovate to overcome our challenges and create a better world. The present level of development and prosperity is the result of numerous innovations that were done by our ancestors.

Human body is designed to consume limited types of food only. However, with the invention of fire, we could cook various types of products and make it digestible for us. We could also use fire for keeping us warm in winters. At that stage, our ancestors had to work daily to hunt animals as they could not preserve the meat for long. All that changed once we invented the cultivation of crops, which could be preserved not only for months but even for years. The cultivation of crops provided food security to the human race in all seasons. Gradually, human beings discovered metals like iron and brass which helped them build tools for agriculture and equipment for protection from wild animals. Invention of bricks helped men build houses that provided them security and protection from weather.

The invention of steam engines provided human beings faster mobility and facilitated development of trade and industries. With the invention of cars and airplanes, people could travel from one place to another and even across continents. The invention of electricity, electric-bulbs, fans, air-conditioners, refrigerators increased the productivity of men and made their lives much more comfortable. Innovation of modern machines enhanced productivity, and reduced the cost that made even luxurious items within the reach of ordinary citizens. In the modern age, the invention of computer, internet, social media etc., has enabled us to connect with people across the world and perform numerous operations online at our place and time of convenience.

There have been many innovations in the field of business as well. The concept of a company itself was a great innovation which led to the growth of enterprise across the world; and so was the concept of corporation where the ownership and the management of a business entity were separated by creating a ‘legal person’. The concept of Public Sector Enterprise (PSE) was another innovation in the socialist countries that helped building of huge infrastructure and creation of large production capacities even in developing nations like India. India, after independence, set up many world class institutions like IITs, IIMs and AIIMSs which produced world class engineers, managers and doctors in India. In recent years, governments across the world have innovated on the method of infrastructure building and created the Public Private Partnership (PPP) model that has led to building of roads, airports, power plants and numerous other facilities across the world.

Government of India has recently introduced Goods and Services Tax (GST) which has subsumed almost two dozen taxes across India ensuring better compliance. In the field of business, the idea of Start-ups, Angel Investors and Venture Capital are transforming the world. Moreover, competition among businesses is itself an innovation to ensure that businesses never get complacent, but constantly innovate. Dennis Muilenburg, an American businessman, CEO of Boeing Company stated aptly, “In the long run, competition makes us better… it drives innovation”.

There has been constant innovation in the methods of governance. We have moved from the era of dynasties of kings and emperors to systems based on communism, socialism and democracy. Democracy is today the most popular form of government across the world. It has given power to the people to elect their own government and occupy any position of power irrespective of their birth. Democracy is the government of the people, by the people, for the people. The modern world is not governed today by the kings and queens, but by the rule of law, government institutions and independent courts. The concept of separation of powers ensured justice and balance of power. Selection in the government is not by birth, nor is done on recommendation, but on individual merit, thus giving every citizen an opportunity to occupy any post in government.

Innovations are not limited only to the techno-economic domains. There has been constant innovation in social structures as well. The concept of family itself is a great innovation that introduces stability in the society and ensures that children are taken care of till they are able to stand on their own feet. The concepts of tradition, culture, ethics and value in a society ensure that people work together to create a better society rather that working for their selfish interest. In order to cultivate common values, mankind has created mythologies and founded religion. The concepts of nation, nationalism and patriotism united millions of people as one and created cohesive societies. In the modern world, people enjoy rights and liberties, including freedom of thought and the freedom to choose their own religion and follow their culture and tradition. An important innovative push in social structure has been to create an egalitarian society by empowering the weaker sections including women. Today, the right to education is not limited only to a few, but it is available to all as a fundamental right. Weaker sections of the society are often provided reservation or given the benefit of positive discrimination to get social justice.

Innovation thus plays a key role in the economic and social growth of nation. All developed as well as developing countries must be innovative. The spirit of innovation is required to be cultivated in the children at an early age for the benefit of the society as a whole. Dr. A. P. J. Abdul Kalam, former President of India, and one of the most creative persons of our times, emphasized the need for innovation repeatedly, “My message, especially to young people is to have courage to think differently, courage to invent, to travel the unexplored path, courage to discover the impossible and to conquer the problems and succeed”.

Our education system must focus on innovation and creativity rather than on rote learning. We need to promote innovation in universities and colleges in all fields like science, arts, music and writing. The government must increase expenditure on education to improve the quality of education. Indian Universities including IITs are today low on global ranking on research publication. They need to focus on R&D (research and development) and innovate more. Online learning is another innovation that has the potential to redefine education and make it available to all citizens in India. There is also a need for innovations in digital infrastructure to connect our rural population with the rest of the world so that they too can benefit from the outsourcing of work to and from India and become partners in the development of the nation. It is only through innovation that we can create a prosperous and cohesive society.

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