Inside India’s Innovation Ecosystem

When I left Delhi last August, I never imagined I would be back so soon, riding autos through the traffic-jammed streets of Bangalore, admiring the Gateway of India alit at night in a million colors, visiting Mahatma Gandhi’s ashram in Ahmedabad, and learning once more about the incredible potential of this beautiful country.


From December 28 to 31, I took a Global Modular Course on Technology and Entrepreneurship in India taught by Professor Kartik Hosanager on the IIM-Bangalore campus with 30 students from Wharton (executive MBA, full-time MBA, and undergraduate) and 30 students from IIM-B. We heard from executives of Flipkart (India’s version of Amazon), Myntra, Zoomcar, Uber, and Teamlease on the growing opportunity for e-commerce, tech, and mobile startups. Although India has the third highest number of smartphone users and the private and public sectors have increased incubator and accelerator support for startups, India still suffers from poor transportation infrastructure, stringent hiring laws, and lack of quality higher education to serve the needs of its 1.2 trillion people.

After my course ended, I began fieldwork for my Wharton Research Scholars thesis on frugal innovation, funded by a Wharton research grant. Under the guidance of Professors Devesh Kapur and Saikat Chaudhuri, I am conducting case studies of healthcare companies that have achieved high performance under cost constraints through process, product, and business model innovations.

My site visits included two of the most cited sources of “frugal innovation”: Narayana Health, which runs cardiac and multispecialty hospitals in Bangalore, and Aravind Eye Care Hospital in Madurai. NH is a highly scaled operation with 29 hospitals in 17 cities, which provides surgeries for 1% of the cost of similar surgeries in the US. NH has achieved one of the lowest mortality and infection rates in the world (around 1%). A surgeon gave me a tour of the pediatric ward and the telemedicine facility, through which they have offered 53,000 free consultations to people from around the world.


I also had the great privilege to speak to NH’s founder Dr. Devi Shetty, who served as one of the primary caregivers for Mother Teresa in Calcutta. I then spent two days at the Aravind complex, during which I met up with Vignesh and toured all the medical facilities as well as Aurolab, Aravind’s in-house lens manufacturing company.


Although NH and Aravind have both achieved incredible success by international standards, they have different operational models – for example, Narayana is a for-profit which provides subsidized operations to 13% of patients through the microinsurance plan Yeshaswini, while Aravind is a financially sustainable nonprofit that treats 70% of patients free of charge through payments from wealthier clients, who receive more comfortable amenities, but the same quality of care.

Later in my trip, I was able to interview Raghu Dharmaraju, VP of Embrace Innovations, a social enterprise that produces low-cost baby incubators, and compare his marketing approach with that of a large multinational, GE Healthcare, in their launch of the Lullaby Warmer. Both and Ashish Gupta, former Global Product Manager for GE, commented on the difficulty of tailoring their price point and distribution strategy to meet the needs of the Indian consumer.


On January 8, I spoke with Professor Anil Gupta from IIM-Ahmedabad, who founded the Honeybee Network and the National Innovation Foundation to source, license, and commercialize grassroots innovations (e.g. agricultural machinery, herbal remedies, etc.). Although the government has become more receptive to innovation, Gupta said that it is still difficult to secure funding from traditional sources and shift engrained cultural mentalities, which prioritize engineering as a field of study and job security over risk-taking and the creative arts. The NIF holds Shodhyatra (journeys of exploration) to meet innovators in remote areas, tests scientific methods in the Sristi laboratory on the Gujarat University campus to identify traditional processes for patenting, and holds competitions to find new ideas from children, the most open and free-spirited segment of the population.



India is at such an exciting time in history with huge commercialization potential for basic business ideas from developed countries adapted to the Indian culture as well as grassroots innovations that can serve the BoP (bottom-of-the-pyramid) market through unique cross-subsidization models and knowledge of the local landscape. As much as I am glad to be home, I know that India holds a special place in my heart and I am grateful to have spent a warm winter break amazed once again by the hospitality of its people.

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About Leah Davidson

Class of 2016, intending to concentrate in management and finance in Wharton. Intern at IFMR IRCS in Chennai, India in summer 2014.