Dr Jaideep Prabhu: Traffic to India

Source: Exec Digital UK

Date :30/06/2008 17:24:02

On September 1, Dr Jaideep Prabhu (pictured) becomes the first incumbent of the Jawaharlal Nehru Chair of Indian Business and Enterprise at the University of Cambridge: Exec talks to him about innovation and the UK/India business relationship.

Written by John O’Hanlon

Jaideep Prabhu is looking forward to starting his new job. In some ways it’s not a big step for him because he already lives in Cambridge, so he will have a shorter commute than his present 55 minute train journey to Imperial College where he is currently Professor of Marketing at the Tanaka Business School. He will be able to see more of his seven month old baby son, though: “It will be nice to be able to take him to the nursery and do more of those family things,” he says. “Cambridge is a lovely place to bring up a kid.”

The new chair is funded by a £3.2million grant from the Indian government and is linked to a new Centre for Indian Business, established with financial support from the BP Foundation at the University’s Judge Business School. A major objective of the Professorship and Centre is to help forge closer links between India and other economies globally and to promote a deeper understanding of India’s interests and place in the world economy.

Unifying cultures

So it’s not specifically about UK/India trade, though its presence within the country’s leading management school can only strengthen existing links with the UK India Business Council and the Indo British Partnership, chaired by Lord Bilimoria. India is the UK’s 18th largest export market, and its second largest export market in the developing world after China. In 2005, the UK exported nearly £4billion of goods and services to India.

“That is why there is so much interest on the part of ‘India plc’ especially in London,” says Prabhu. “Indian companies are the second largest corporate investors in London after their US counterparts. Indian politicians love coming over here to talk about the Indian economy because they see us as closer both geographically and culturally than the USA.” Cricket, he adds, should never be underestimated as a unifying culture the Americans will never be able to share.

The Centre has more to do with understanding the dynamics of India’s resurgence as a global economic force since setting out on a process of trade liberalisation in 1991.

Since then India has become renowned for innovation, entrepreneurship and technological development. The Centre will have three main objectives, says Prabhu: “The first is to look at multinational companies investing and innovating in India. Why is this happening? What is the long term trajectory going to be? What sort of innovation will be done in India as opposed to the companies’ headquarters? How do they share their information in a global network?”

The second model reverses the first. Indian companies internationalise to be more innovative. There’s more to this than the high profile deals between Tata Tea and Tetley, Tata Steel and Corus or Tata Motors and Jaguar/Land-Rover, he says. “Lots of smaller and more medium sized companies have adopted the strategy of acquisition too.”

Born global

Thirdly, the Centre for Indian Business will look at the social implications of technology and innovation for India’s population. In this context, he says, the telecommunications sector will be crucial. “India has some sectors that are clearly world beating when it comes to innovation, and those are the ones we tend to hear about in the west.

Telecoms is an example of what people are calling ‘innovating from the bottom’. There is a great mass market in India, where the margins might be small but the volumes are big enough to make it profitable.

“Sunil Mittal, the founder of Bharti Airtel, recognised quite early that if you were to be truly successful in the Indian context with mobile telephony you’d need to reduce the cost of handsets to a level where people could afford them. The uptake of mobile telephony among that part of the demographic is phenomenal. India has now become the second largest mobile phone market in the world after China.”

Many people credit Dr Sam Pitroda with sowing the seeds of the telecoms revolution when in the 1980s he convinced Rajiv Gandhi that the future of India lay in telecoms and technology, says Prabhu. “This is probably such an innovative sector because it is a new sector, and therefore not subject to some of the quite crippling legislation that some more traditional Indian industries were subject to.”

Click here to read the full interview with Dr Jaideep Prabhu