In global search for ideas, big companies mimic start-ups

Getting in on the ground floor in Boston, Bangalore and Belfast

By Nicholas Nehamas

Panel discussion on global innovation, hosted by The Indus Entrepreneurs (TiE). TiE’s mission, says Executive Director Vanita Shastri, is to foster entrepreneurship and help aspiring young entrepreneurs through mentoring, networking and education. (Courtesy: TiE)

Why did the government of Northern Ireland help sponsor a conference for Indian-American entrepreneurs in Boston last week?

Because “the next great idea can come from anywhere,” says Gary Hanley, Senior Vice President for Invest Northern Ireland, in an interview with Latitude News.

Hanley thinks Belfast, the capital of Northern Ireland, has a lot in common with Boston, where he’s based.

“In Northern Ireland, we’ve put education at the center of economic development,” he says. “We have two excellent universities and a lot of young engineers. We invest in telecommunications and infrastructure . . . it’s a great place to build software and produce technology.”

Northern Ireland has become a popular destination for Indian companies looking to expand in Europe, Hanley told the audience at a conference hosted by the Boston chapter of The Indus Entrepreneurs (TiE). He believes it’s a natural fit for American business too.

Innovation goes global

Mike Grandinetti, a professor of entrepreneurship at the Hult International Business School, agrees that globalization is changing the way we think about innovation.

“It’s a global story of supply and demand,” he says. “A lot of big American companies have woken up and realized there are bright people all over the world, not just in Silicon Valley or Boston. IBM actually employs more people in India than in America.”

And the Massachusetts-based tech multinational EMC now has innovation hubs, or “Centers of Excellence,” in North Carolina, Israel, Russia, China, India, Egypt and Ireland.

In the 50s and 60s, Grandinetti explains, big corporations like IBM excelled at taking groundbreaking research from their labs and bringing it to market. Then as corporate structures ossified — and Procter & Gamble became known as the “Kremlin on the Ohio River” — small, lean start-ups took the lead on innovation. Now Grandinetti sees the pendulum swinging back the other way.

“Corporations are more entrepreneurial than they’ve ever been,” he argues, describing how corporate giants have hired entrepreneurs to work inside their companies with limited top-down supervision — like a start-up — and given them resources on a much larger scale than a small business could provide. “These companies probably aren’t going to miss out on the next internet market like Microsoft did,” he says, “or on PC’s like IBM.”

Ultimately, Grandinetti says, that means consumers in America will have “access to better products more quickly.”

And as growth slows in the G7 economies, he believes big companies will find new opportunities in emerging markets.

A text in time saves . . .

With a text messaging service, Intuit has helped Indian farmers sell their produce at the best price. (Reuters)

Allison Mnookin is the Vice President and General Manager of QuickBase, a division of the large American software company Intuit. She also spoke at the TiE conference.

She tells Latitude News that innovation is one of Intuit’s top priorities, and it has to be self-generated.

“We believe in the value of unstructured time,” Mnookin says. “We give all employees the opportunity to use 10 percent of their time on projects that they see as having value.”

So when Intuit opened a development office in Bangalore, its employees set themselves a challenge: solve big problems in a way that would improve daily life in India.

One of the biggest: Indian farmers — Mnookin says there are around 270 million of them — told Intuit they weren’t sure where to sell the produce they had grown. The farmers had critical questions: Which market is buying what fruit or vegetable? Where does the middle man take the lowest cut? Where are the most consumers located?

Food spoils quickly in India’s hot climate, adding a time-sensitive dimension to the farmers’ concerns, and many desperate agricultural workers have resorted to suicide.

In 2009, Intuit came up with a solution: in India, even poor farmers usually own a mobile phone — not a smart phone necessarily, but something that can receive text messages. Within three or four weeks, Intuit employees were standing in marketplaces, texting farmers about the prices of various kinds of produce, allowing them to sell their goods at the best market value.

“Our goal is once you have a hypothesis, test it as fast as you can,” Mnookin says, “then improve it.”

Today, Fasal, as the text program is known, is a free service that earns revenue by selling ad space. It has over one million Indian users and, according to Mnookin, has boosted farmers’ bottom line by an average of 15 percent.

And Mnookin says Intuit’s experience in North America helps it operate in India: “It doesn’t really matter where you are. The challenges for small businesses — those are far more universal than we at first believed.”