Innovation and

Inclusive growth
 Most companies imitate best practices of industry leaders, and try to
implement them. Such benchmarking has a limited role to play in business,
argues C. K. Prahalad .
 Imitating best practices may enable companies to catch up with their
competitors, but it will not turn them into market leaders.
 Organizations become winners by spotting big opportunities and inventing
next practices. Next practices are all about innovation: imagining what the
future will look like; identifying the mega opportunities that arise, and
building capabilities to capitalize them are next practices.
 Apple’s Steve Jobs and Tata Motors’ Ratan Tata do just that. Best
opportunities are “visible, but not seen,” said Peter Drucker.
 In this connection, and measured by this yardstick, Prahalad proposes
“inclusive development” as an obvious mega opportunity .
 That is, our innovation efforts and market development should not exclude
anybody on the planet.
 The organized economy has focused only on the 1.5 billion people of the
developed world.
 But there are the other 4 to 5 billion low-income consumers of China, India,
Nigeria, Uganda, Taiwan, Thailand, Vietnam, Sri Lanka, Indonesia, Pakistan,
Bangladesh, Myanmar, and elsewhere, living on three continents that are
trying to join and compete in the organized economy.
 Innovators that focused on inclusive markets and growth have generated
inexpensive yet quality products and services such as $2,000
Nano cars, $100 laptops, $30 cataract surgery procedures, $20 hotel rooms,
and cell phones that cost 0.2 cents per minute.
 The sheer size of the markets creates fresh opportunities and capabilities.
 This ubiquitous mobile connectivity is transforming industries such as
financial services, retailing, education, media, and health care.
 Today patients and doctors can text each other remote
health symptoms and diagnostics, and brokers and rural
investors can transact financial services.
 For instance, Unilever and Proctor & Gamble, world’s largest consumer
products companies, are each projecting that by 2020, low-income
consumers in the developing world may account for 50% of their
global revenues.
 The focus on microconsumers and microproducers is forcing
the giant companies to confront the link between inclusive growth and
global sustainability. That is, thus far multinational giants have served the
1.5 billion people of the developed world for the last two centuries
 Inclusive growth should not be viewed merely as corporate social
responsibility, but as a path to corporate growth and global development.