Breaking the Myth: How Scaling Applied Innovation Will Shape India’s Future

Welcome to this edition of the Spark Digest!

Introduction: A Call to Action Inspired by Narayana Murthy

What if the key to India's future economic growth lies not in inventing new technologies but in scaling existing innovations?

Consider Priya, a small business owner from rural Maharashtra. She struggled with cash transactions until the introduction of UPI—a digital payments solution that transformed her business operations, boosted sales, and enhanced community engagement. Priya’s story illustrates how effective applications of technology, like the digital payments revolution, can become game-changers when scaled appropriately. This transformation has the potential to uplift millions of small businesses across India when implemented nationwide. Narayana Murthy, co-founder of Infosys and a prominent figure in India's tech landscape, underscores the importance of focusing not just on innovation but on scaling existing solutions. In a recent CNBC interview on November 15, 2024, he stated:

“India has made decent progress. We have come from a time when we couldn't even use the inventions and innovations that were introduced in the developed world fifty or sixty years ago… Today, thanks to all the wonderful work done by the government and our institutes of higher learning, we have reached an orbit where we are in a position to use the inventions and innovations that take place in the developed world for the betterment of the country. We still have quite a few steps to go and quite a few years to go before we can say we too will invent things that are as good as the developed world.”

Murthy’s insight got me thinking about how innovation isn’t just about creating something new—it’s about scaling what already works. This raises an important question: How can we effectively scale the innovations that have already proven successful to impact millions, particularly in India’s vast and diverse communities?

The real opportunity for India lies in leveraging what we’ve already got to solve our pressing challenges.

The Case for Applied Innovation – Not Just a 'Nice-to-Have' but a Must-Have

India’s R&D spending at 0.7% of GDP is notably lower than the U.S. (3.1%) and Germany (2.9%), but this gap presents a unique opportunity. Rather than waiting for groundbreaking new technologies, India can scale existing innovations to solve pressing societal problems faster and more efficiently.

Applied innovation is not merely about replicating what works elsewhere; it’s about tailoring proven technologies to local contexts and scaling them effectively. This ensures that the benefits of these innovations reach every corner of India, from bustling urban centers to remote rural villages.

This approach not only addresses immediate challenges but also contributes to creating inclusive economies, reducing inequality, and improving quality of life across diverse communities. As global trends increasingly emphasize Environmental, Social, and Governance (ESG) goals, India's focus on applied innovation aligns perfectly with these objectives.

Nandan Nilekani, co-founder of Infosys and former Chairman of the Unique Identification Authority of India (UIDAI), emphasizes that India's economic transformation—from facing a Balance of Payments crisis in 1991 to achieving a surplus by 2021—illustrates how strategic policy changes can lead to long-term progress. This shift has allowed us to invest more in digital infrastructure. For instance, back in 2008, India was known as the most unbanked nation in the world; however, by 2019, significant strides in financial inclusion had been made—progress that would have traditionally taken decades through conventional means (Nilekani).

Developing groundbreaking new technologies can take years, sometimes decades, and often requires substantial financial investment. However, applied innovation allows for speed and efficiency, making it crucial in solving urgent problems such as healthcare access, climate change, and financial inclusion.

Take Sarvam AI, which has developed Sarvam-1, India’s first indigenous multilingual Large Language Model (LLM) designed specifically for applications in Indian languages and English. Trained from scratch using domestic AI infrastructure and resources, Sarvam-1 supports ten Indic languages and English, catering to diverse use cases like conversational AI, translation, and edge device deployment.

With a two-billion-parameter architecture optimized for sub-second inference latency, Sarvam-1 demonstrates superior performance compared to many contemporary models. By prioritizing technology that addresses the unique challenges of India’s socio-economic landscape, Sarvam AI exemplifies applied innovation. The potential impact of Sarvam-1 includes enhancing communication across linguistic barriers, boosting local businesses through improved customer engagement via conversational AI applications, improving educational outcomes by providing multilingual learning resources, facilitating government services through better citizen interaction with digital platforms, driving domestic AI development while reducing dependence on foreign technologies, and addressing socio-economic challenges effectively through tailored solutions. For a quick overview of Sarvam-1 and its capabilities, check out this out

Applied Innovation in Action—Examples that Should Inspire Us

Let’s take a look at some existing examples where India is already excelling through applied innovation:

• Unified Payments Interface (UPI): UPI is a shining example of applied innovation. By using existing mobile and internet technologies, India developed a digital payment platform that has significantly improved financial inclusion. According to the National Payments Corporation of India (NPCI), UPI processed over 8 billion transactions per month in 2023 with over 300 million active users. This wasn’t a brand-new invention—it was the application of existing technology to address a fundamental need in India’s financial system.
• Aadhaar: Aadhaar provides unique digital identities to over 1.3 billion Indians, enabling efficient authentication processes across sectors. This foundational technology supports initiatives like eKYC (electronic Know Your Customer), which simplifies onboarding for financial services.
• Open Network for Digital Commerce (ONDC): ONDC is leveling the playing field for small businesses and local retailers by enabling them to reach customers through an open-source digital platform. This initiative democratizes access to e-commerce tools.
• Telemedicine: India’s use of telemedicine to deliver healthcare services in rural areas is another successful example. By leveraging existing digital technologies, telemedicine enables millions of people to access quality healthcare without having to travel long distances.
• Agri-Tech Innovations: Startups like Ninjacart are revolutionizing agricultural supply chains by connecting farmers directly with retailers using technology platforms that streamline logistics and reduce waste.

Barriers to Scaling Innovation in India

Despite these successes, scaling applied innovation in India faces several challenges:

• Infrastructure Divide: Only 14.9% of rural households have internet access , creating significant barriers to technology adoption across sectors such as healthcare and education . For example , telemedicine initiatives struggle without reliable internet connectivity , limiting access for many who need it most .
• Regulatory Bottlenecks: While initiatives like Startup India and Digital India aim to foster innovation , regulatory reforms often lag behind technological advancements . A notable example is how delays in regulatory approvals have hindered some startups from scaling their solutions effectively .
• Fragmented Ecosystem: Many innovations are concentrated in urban areas like Bengaluru , leaving rural regions underserved . According to NASSCOM , 50% of rural India remains digitally illiterate , limiting the potential for scaling applied innovations .

These challenges are not insurmountable; they require coordinated action . Addressing infrastructure gaps could involve greater adoption of low-cost networks and affordable internet-enabled devices through public-private partnerships .

Opportunities for Entrepreneurs

For Indian startup entrepreneurs , there are several key takeaways from this focus on applied innovation :

• Identify Local Needs: Entrepreneurs should focus on developing solutions that address specific challenges faced by Indian consumers—such as language barriers or access to healthcare services .
• Leverage Existing Technologies: Instead of reinventing the wheel , startups can enhance and scale existing technologies like UPI or telemedicine platforms to meet local demands more effectively .
• Collaborate with Initiatives: Engaging with government-backed initiatives like ONDC can provide startups with valuable resources and access to new markets .
• Focus on Sustainability: There is increasing demand for businesses that prioritize sustainability . Startups should consider how their innovations can contribute positively to environmental goals while also being economically viable .
• Seek Investment Opportunities: With growing interest in applied innovation , startups that demonstrate potential for scalability and social impact may attract investment from venture capitalists looking for meaningful returns .
• Adaptability is Key: The ability to pivot and adapt business models based on market feedback will be crucial as technology continues to evolve rapidly

The Path Forward

To fully harness the economic and social potential of applied innovation , India must focus on strategic actions :

• Expanding Digital Infrastructure: Strengthen digital infrastructure in rural areas by investing in internet connectivity and affordable devices .
• Creating Inclusive Policies: Reform regulatory frameworks that support rapid scaling while ensuring benefits reach all segments of society .
• Fostering Ecosystem Collaboration: Strengthen partnerships between government , private enterprises , and academic institutions .
• Driving Skill Development: Promote STEM education across rural India .
• Increasing Investment in Early-Stage Innovation: Focus on funding startups targeting underserved communities .
• Building Trust in Digital Solutions: Establishing trust through transparency will be key for scaling applied innovations in sectors like healthcare and finance .

Conclusion: A Unified Vision for India's Future

India has the potential to emerge as a global leader in applied innovation at scale . By prioritizing innovations that deliver tangible benefits—through digital health solutions , smart city initiatives , green energy projects , and financial inclusion strategies—India can unlock a new phase of growth and development.The urgency of scaling applied innovations cannot be overstated; it is essential for driving India's next phase of growth . Now is the time for action—government officials , businesses , and entrepreneurs must come together to scale solutions ready today so no citizen is left behind as we look toward India's future .

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I’d love to hear how you’re using platforms like India Stack or other innovative tools to create change in your community . Share your story with me [email protected] , or DM me on LinkedIn! You might even be featured on my podcast , The Spark & The Forge Podcast , where we spark conversations that drive change!

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Additional Resources

1. McKinsey & Company : India's $1 Trillion Digital Transformation Opportunity (Published : 2023)
2. NASSCOM Report : State of Digital Literacy in Rural India (Published : 2022)
3. Government of India : Startup India Annual Report 2023
4. Telemedicine India : Telemedicine Adoption and Impact on Rural Healthcare (Published : 2023)

Acknowledgments

I would like to acknowledge Narayana Murthy for his leadership and valuable insights that inspired this article's central theme . His words have sparked an important conversation about how India can best scale its innovations for mass impact . Additionally , I recognize Nandan Nilekani's contributions through his advocacy for digital transformation in India—highlighting key achievements such as Aadhaar's impact on financial inclusion and the importance of robust digital public infrastructure . I also acknowledge Forbes India as the content creator of the YouTube video titled "AI for India: Vivek Raghavan on Sarvam’s dream of building for a billion Indians."

Multimedia

For further insights into India's innovation landscape:Watch Nandan Nilekani's Talk on India's Digital Transformationdiscussing key advancements over the last 15 years.

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