Innovation is an absolute necessity in this world of competition, a fact that the 7 most innovative companies in India have thoroughly understood.
India’s economy has been presenting an increasingly positive picture over the last couple of years. People did not take this seriously until the last quarter of the fiscal year 2014 – 2015 when the GDP of the nation showed a huge growth rate of 7.5 percent, which earned it the label of the fastest growing economy in the world. Industrial development is always a major cause behind the economic progress of any country and India is definitely no exception. It has, over the years, produced several companies that not only had the ability to innovate but also put their ideas into action.
Innovation is a prerequisite to being able to gain a competitive advantage in a tough business environment. If there are innumerable brands selling the same product and your company does not have a new or differentiated product, it’s almost impossible to build a customer base. But for a company to be truly cutting edge, a sole innovative entrepreneur is not enough either. Recruitment of innovative employees is pretty much a requirement too. Sure it seems like Steve Jobs did it alone, but then again ever since his death, Apple is criticized quite often for its lack of new ideas. In fact, Harvard Business Review recommends training the staff to think in an innovative manner. It suggests that an individual is not inherently innovative or inherently inept at coming up with anything creative. They can be trained by the company to direct their minds towards revolutionary ideas.
Usually, large companies tend to forget about the concept of innovation, either due to smugness over their existing success or fear of incurring massive losses when investing in something new, but the ones that have the ability to set their sights on the long-term future know that only innovation can provide them with more triumphant times. Investment is what kick starts a business, but innovation is what keeps it going. However, if you are not one to take the risk of a heavy investment, our list of the 11 Most Profitable Businesses With the Least Investment in India may be of some help.
Getting back to the topic at hand: if you do a quick search of the most innovative companies in India, most of the hits you will get will be of the 5 Indian companies included in the esteemed list of the most innovative companies in the world published by Forbes every year. The catch, however? Well, the methodology employed by Forbes to create the aforementioned list is, frankly speaking, simply nonsensical. Forbes states that it uses “the difference between the market capitalization and the net present value of cash flows from existing businesses” to rank companies. Furthermore, an entity will not be included if it does not have 7 years of public financial data and $10 billion in market cap.
So basically, a small start-up company may be making waves in the industrial world, may be investing heavily in innovation and may as well have ideas no other company would dream of, but it would never find its way on Forbes’s list. Why? Just because of the fact that it’s small and therefore it does not have much of a market cap or because it’s a start-up entity and thus no public data for it is available.
Forbes claims that the companies included are those which are not only innovative now but are also expected to be so in the future. But think of Google when it was founded. It certainly would not have earned a prized place on Forbes’s list as it wasn’t really making any money and its market cap was less than $10 billion. Yet it went on to become one of the most profitable companies in the world and along the way it changed the advertising industry forever. Or let’s take Uber. It isn’t making any money right now and it isn’t publicly traded but we know that private investors are valuing the company at $50-60 billion, because of the fact that it has revolutionized the entire concept of cab hailing.
So for us, that is what an innovative company is: one that leaves a long-lasting impact on the industry that it enters or creates a brand new industry altogether. Not Hindustan Unilever, an Indian company that holds the 31st spot on Forbes’s list but has been selling the same soap and shampoo for decades.
Since we could not place our trust on Forbes’s list for obvious reasons, we scoured the internet looking to find the most innovative companies in India, companies that have not only had novel ideas but have also found solutions to some of the problems facing the developing nation. Let’s find out what we came up with!