Smart Mobility for India: Needs, Opportunities and Challenges

India finds itself in a precarious situation. While the lack of efficient and effective mediums of mobility for public-at-large outside metropolitan cities continues to cause loss of productivity and stifle economic growth in a considerable manner; the economic growth in major urban centres and the resultant growth of passenger vehicles and two-wheelers is leading to heavy traffic jams and pollution, again causing loss of productivity and chocking of economic growth. This article argues that a viable solution to these entwined and complex challenges lies in implementing “smart mobility” solutions. This could prove to be the next growth driver and present immense opportunities for Indo-German collaboration, in both private and public sectors. []

This article, authored by Rajnish Tiwari, has been published in GermanyContact India (issue 02/2012, August). To continue reading click here. An extended, unedited version of the article with additional information/graphs can be accessed here (PDF, 524 KB).

“India – A Lead Market for Frugal Innovations? Extending the Lead Market Theory to Emerging Economies”

The Institute for Technology and Innovation Management at Hamburg University of Technology (TUHH) publishes a new working paper on the topic: “India – A Lead Market for Frugal Innovations? Extending the Lead Market Theory to Emerging Economies“. The paper is authored by Rajnish Tiwari and Cornelius Herstatt (Working Paper 67, January 27th, 2012).

India has emerged as a vibrant and versatile source for cost effective, “disruptive innovations” of various varieties. Price-sensitive consumers in a large and growing market keep inducing firms to apply “frugal engineering” for creating affordable products and services without compromising excessively on quality. Because, as The Economist asserts: “Frugal does not mean second-rate”. Such innovations are characterized by high affordability, robustness, and “good enough” quality in a volume-driven market. Resource constraints motivate firms and entrepreneurs to think out-of-the-box. The trick lies in creating solutions that are able to circumvent given environmental constraints in a cost effective way. India’s large and enormously young population faced with limited budgets, but well-endowed with high aspirations, provides an ideal experiment ground for many firms. Solutions created for the Indian market are often suitable for other developing countries in Asia, Africa and Latin America that frequently face similar socio-economic conditions. In some instances they succeed even in developed country markets by enabling significant cost reductions. This emergence as a hub for “frugal innovations” possibly suggests a “lead market” role for India.
On the other hand, lead markets, as understood today, are characterized by high per capita income, great customer sophistication and high quality infrastructure. Such assumptions imply that lead markets, almost by default, can only exist in economically developed countries because only they can finance the development effort. Using two anchor-cases of product innovations aimed at price-sensitive segments in India we generate preliminary evidence to challenge some of the core assumptions of the “lead market” theory and propose that lead markets can emerge in developing countries too because market attractiveness (e.g. volume of demand, export possibilities) and technological capabilities are able to offset many other deficiencies. The supposed absence of customer sophistication is channelized into a challenge for supplier-side sophistication to design cost effective, “good enough” solutions (“low-cost, thin-margin”) that can meet the aspirations of consumers in a highly competitive market. In order to master this challenge companies need access to a competent and sufficiently large technical base with first-hand knowledge of the ground situation of targeted customer groups (“social capital”).
Keywords: Lead Markets; India; Frugal Innovations; Frugal Engineering; Disruptive Innovations; National Innovation System; Sectoral Innovation System.

Media Reports: Suzuki dissolves partnership with Volkswagen

12.09.2011. Media reports suggest that Suzuki has decided to dissolve its partnership with German carmaker Volkswagen (VW). There was apparently discontentment because of Suzuki’s decision to source diesel motors from Fiat. The partnership was especially interesting as it was meant to enable VW a strategic leverage for its India operations. Suzuki’s Indian subsidiary Maruti Suzuki is a dominant automobile player in India especially in the segment of small cars.


For some news reports in German media click here.

Zeit-Online: „Suzuki kündigt Volkswagen die Zusammenarbeit“

12.09.2001. Mehrere Medien, darunter auch „Die Zeit„, melden, dass Suzuki die Partnerschaft mit Volkswagen nicht mehr weiterführen will.

„Der japanische Konzern gibt wegen des Streits um Dieselmotoren seine Beteiligung an Europas größtem Autohersteller auf. Volkswagen aber sträubt sich gegen eine Trennung.“

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