Raghunath Maskelakar, President of the Global Research Alliance, discusses how inclusive innovation focusing on "affordable excellence" will turn out to be a game changer in the 21st century, enabling the delivery of high quality, sustainable, and affordable products and services in emerging and advanced economies alike. He begins by explaining how turning value for money into "value for many" is becoming mainstream in India.
Title: From Value for Money to Value for Many
Description: Raghunath Maskelakar, President of the Global Research Alliance, discusses how inclusive innovation focusing on "affordable excellence" will turn out to be a game changer in the 21st century, enabling the delivery of high quality, sustainable, and affordable products and services in emerging and advanced economies alike. He begins by explaining how turning value for money into "value for many" is becoming mainstream in India.
Global Research Alliance
Q: To what extent is your concept of “value for many” a reality in developing economies like India?
A: Look at mobiles for example, now, you see a rich woman and a girl from the slums standing at a traffic light both of them speaking on a mobile – access to wireless communication despite the income inequality. Look at what General Electric has done, ECG Machine is $10,000, can I do it in $600 and the Bangalore engineers did it for $600. And that machine now, portable ECG machine is getting sold not only in India and China but around the world. Our $30,000 ultrasound machine has been created for $1500 by GE Healthcare in China. It is opening up the market all around the world. So, affordable excellence implied that the execellence in terms of the quality is at the same level as the high end products which is price tag.
Q: What kind of innovations have enabled products or services usually only available to the wealthy to be consumed by those on a low income?
A: Innovation, for example in this GE Healthcare product that we talked about, there’s a very intrigant software that they built, which got integrated in a way were the cost got substantially reduced.
You have number of ways of delivering services for example. I’m going to give you an example – the contact surgery costs $3000 question is can you do it in $30, hundred times cheaper not 100%. Answer is yes. Who does it? Aravind Eye Care in India. How many patients do they serve every year? Close to 300,000. So, there’s your scale. But then how do they do it? Can they deliver the same quality? Answer is yes. In fact I have a table where on the left hand side, Royal College of Optalmic Surgeons from UK and on the right hand side, we have Aravind Eye Care. Nine parameters post operative, can you believe it? In all nine, they beat them in terms of quality, so it is getting more from them. How did they do that? Technological innovation, creating the polymethacrylate lens for $2 not $100 but of same quality.
Now for these, every where you don’t require highly skilled, very expensive surgeon. There are things that are routine, so if you change the work flow and then subdivide the skill level that are required for different operations, cost can get substantially lowered. System delivery innovation and organization, combination of these 4 delivers you the item.
Q: Central to providing value for many is scalability, what kind of political and social changes are needed in developing economies to extend “value for many” to the maximum number of people?
A: Technological innovation can take you thus far but if the products are affordable, accessible but not acceptable because of social and cultural milieu, they can’t. And therefore, there you need to label the emphasis. Policies also matter, for example, the mobile example that I gave was a combination of policy innovation, technological innovation, and business model innovation. Policy level because the government said mobile, internet allowed let’s not moved for more copper lines, landlines take a straight jump. Technological, a $250 handset became $25, and business model, because of the call rates if they were $0.10, no body would dare use them because $2 per day is your income, 20 minutes call and you’re gone. But there were fraction of a cent per minute, Indian companies did that.. So, it’s a combination of these 3, if one of these was missing you would have a hard time.
Q: Companies like Tata are bringing millions of affordable cars to low income families across Asia, but what of the environmental and health costs? Surely “value for many” has to be sustainable?
A: Very important, I think you’re spot on there. And therefore we could use the public transport as a transport. But individuals have aspirations, so public transport will remain but your own personal transport will be the key. There’s a study there in Tata Nano, by the way, comparing it with a two-wheeler, three-wheeler, and a big car. And you will find it is so fuel efficient, 25 kilometer per liter. So in terms of impact that it will have because of the growing population, growing aspirations, there will be people requiring cars. But there, the performance levels have to be taken to certain extent that there’ll be no damage to the planet. Finally, it is people, planet, and profitability. Prosperity for all, not profitability for some.
Q: Looking forward, what kind of costly products and services can be easily extended to millions of low income communities in the 21st Century?
A: The future products will have to have 3 characteristics. People wouldn’t buy only one quality, quality at any cost. Then one day we will say, “Oh my God what are doing for environment, ecology.” So we said, quality and sustainability. And now the people are saying, quality, sustainability, and affordability. So, the new products which will win will have a combination of these three. And if one of them is missing they can’t win.
They could win several sectors. For example they could win in education sector, affordable, high quality education through distant learning by dropping the cost can affects hundreds of millions who are entering that space. Health, particularly health delivery. You know across the value chain that is diagnostics, therapeutic, vaccines, and finally health delivery systems, you will see the cost will dropping particularly as new technological breakthroughs take place like mobile internet and so on, so forth. In communications we’ve already seen the dramatic change. In the same way financial services, for example, you will find that bank accounts, writing checks, huge transaction costs, etc. were things in the past. In fact, I asked somebody the other day, you were talking about future banking, is there a future for banking, because we are talking about money exchange by mobiles. Big coins for example that can influence the whole world. This intermediation is going to be the key so practically in all sectors you’ll find there’s some changes.