The Bottom of the Pyramid (BOP) refers to the poorest two-thirds of the global population which is over 4 billion people living on less than $2 or $5 a day. Popularized by C.K. Prahalad in 2004, it represents an untapped, high-volume market. Businesses target this segment with affordable, high-volume, low-margin products (e.g., small shampoo sachets) to ease poverty while generating profit.  Roughly two-thirds of the population, or about 68%, live on less than $5 per day. The global Bottom of the Pyramid (BoP) consists of approximately 4 billion people living in poverty, typically defined as those with incomes below $2.50 to $3.00 per day. This segment represents the largest, yet poorest, socio-economic group, often characterized as a major market opportunity. Roughly 4 billion people, representing the bottom two-thirds of the economic pyramid. This segment is characterized by subsistence-level income, high levels of informality in labor, and low literacy rates. It’s the lowest income tier (tier 3 and 4) of the global economic pyramid.

Market Opportunity

The collective purchasing power of the poor is immense, its voluminous creating a “fortune” for companies that can design sustainable, scalable business models, such as small-packet shampoos, low-cost banking, or affordable health services. The market size is roughly 4 billion people, primarily in Asia, Africa, and South America. The BoP is highly price-sensitive, often with irregular income streams.

While offering immense growth potential as a battleground for corporate revenue, BoP markets present challenges like poor infrastructure, which makes distribution costly.

Micro-distribution

Using local, community-based networks (e.g., selling through local women in rural areas) eg. Project Shakti of HUL. Even a kiosk (tapari)  business is a high-traffic, low-overhead retail model located in busy streets, offering products or services through small, often self-service booths. It offers a cost-effective entry for entrepreneurs, with opportunities in food, retail, or tech, often allowing for flexible, mobile, or fixed setups. Key success factors include prime location, eye-catching design, and efficient inventory. Allowing consumers with daily income to purchase products they cannot afford in large, upfront quantities in sachets.

Kiosks allow utilizing technology to offer services like telecom or solar power in small, manageable increments. They act as local solutions leveraging local knowledge and resources to create sustainable local enterprise networks.

FMCG products are the top-selling category

FMCG products are often sold in micro-packaging to reduce upfront costs for low-income consumers. Sachets, or single-use, small-unit packaging, are a foundation of marketing to the Bottom of the Pyramid (BoP)the largest but poorest socio-economic group. These products are designed for consumers with limited daily cash flow, allowing them to purchase branded goods in small quantities at affordable prices. Personal care products such as shampoos, soaps (e.g., Lifebuoy), toothpastes (e.g., Colgate), hair oils, and fairness creams. Detergents and cleaning soaps powder detergents (e.g., Nirma) and dishwashing soaps. And, edible items such as cooking oils, tea, spices, and sugar. To make the product accessible to BoP, Maggi introduced smaller packs at low, affordable price points, such as ₹5 (Chotu Maggi) and ₹10, allowing for impulse purchases. Companies such as Hindustan Unilever (HUL), Procter & Gamble (P&G), CavinKare, Dabur, Britannia, and Nestle use this approach to penetrate rural markets and, increasingly, to combat the rising cost of living in urban areas. Examples include small pouches for detergent (Surf Excel), shampoo sachets (Sunsilk), and small biscuits/snack packs (Good Day).

In many developing markets, small neighbourhood stores (“sari-sari” stores in the Philippines, kirana stores in India) are the primary source of goods, which perfectly suits the distribution of single-use sachets.

Functional and affordable technology

BoP consumers are eager to adopt technologies that improve their quality of life or productivity. Low-Cost mobile handsets: Budget-friendly, feature-packed mobile phones, especially from brands like Micromax, Spice, and Nokia. Solar-Powered lights and devices like D. Light provide essential, sustainable, and portable lighting and phone charging capabilities. Low-Cost household appliances low-energy products like the “ChotuKool” refrigerator. Chotukool is an innovative approach to tackling the problem of food storage in India, a country in which around one-third of all food spoils and an estimated 80 percent of households do not have access to or use a refrigerator. Chotukool is the brainchild of Gopalan Sunderraman, Executive Vice President of Godrej & Boyce Manufacturing.

Success at the BoP often requires reinventing the business model, not just the product. The model emphasizes that innovations should be co-created with the BoP consumers, shifting from “selling to the poor” to “working with the poor”.  For example, Tata Nano, Tata Ace is re-engineering automobiles for affordability. Aravind Eye Care System is  High-volume, low-cost eye surgeries. The strategy has made the eye-care hospital stand out as an ethical when it provides products that improve quality of life, such as basic health, hygiene, or connectivity solutions.

Bottom of Pyramid Business Model is Huge

Consisting of over 4 billion people, this market is not small; it constitutes most of the global population. BoP consumers are highly price-sensitive, yet value-conscious. They often require specialized products (e.g., smaller packaging) and yet are value-conscious. They exist in rural and informal urban economies. The market is estimated at around trillion annually, grows faster than the global GDP. It is considered a source of innovation, offering opportunities for companies to create shared value. Most of this population is concentrated in developing nations, with significant populations in China, India, Brazil, and Indonesia. Consumption at the BoP is often described as “frugal in size but voluminous in total,” meaning products are sold in small quantities like sachets to a vast number of people, leading to high total sales revenue. The population at the bottom of the pyramid is projected to swell to more than 6 billion people over the next 40 years as global population growth remains concentrated in this segment.

Conclusion

The “fortune” at the bottom of the pyramid, popularised by C.K. Prahalad, suggests that businesses can simultaneously drive profits and lessen poverty by treating this segment as consumers rather than merely as victims of poverty.

Strategic alliances are considered the “need of the hour” in today’s business world because they enable companies to achieve goals that cannot be achieved alone. Strategic alliances help companies to gain  competitive advantage, access new markets and technologies, reduce costs and reduce risks, and rapidly scale up their operations in a fast-paced and complex global business environment. In today’s VUCA world of complexities and competition is making survival of businesses difficult. Partnering with other companies allows businesses to combine resources and expertise to innovate and thrive.

Joint ventures are strategic collaborations where companies pool complementary assets and resources to achieve common goals, such as accessing new markets, sharing risks, or fostering innovation. The JV partnership is complimentary in many ways. Companies contribute supportive resources like technology, market access, distribution channels, or manufacturing expertise to the venture.

A joint venture (JV) typically creates a new, separate legal entity, while it is a formal legal structure because it involves the creation of a separate, new legal entity. A strategic alliance is a less formal partnership that can occur with or without an equity exchange. The key is the synergy created by combining unique strengths, expertise, and capabilities that a single company might not possess, leading to shared profits, losses, costs, and rewards.

How JVs work

Joint ventures create value for customers by bringing together combined resources and expertise to develop innovative products and services, offering access to new markets, and providing more compelling and higher-quality offerings than a single company could deliver alone. This collaboration results in a wider range of choices, competitive pricing due to shared costs, enhanced product features, and increased customer convenience through bundled offerings.

Partnering for specialized strengths

Companies form a joint venture to pool their unique skills, resources, and assets that complement each other.

Shared goals

They work towards a common objective, such as creating a new product, entering a new market, or developing a specific technology.

Defined contributions

Each partner contributes its specific complementary assets to the venture.

Complimenting Partnership TATA-Starbucks JV

The Tata-Starbucks joint venture, called Tata Starbucks Limited, pooled assets by leveraging Tata Group’s real estate and properties (like Taj hotels and Star Bazaar) for opening Starbucks outlets, and Tata Coffee’s sourcing and roasting facilities for the Indian market. Starbucks contributed its global brand, modern retail expertise, store design, and supply chain capabilities, while Tata provided its local market knowledge, existing brand equity, and access to consumer segments. Tata leveraged its existing properties and relationships with other Tata Group firms like Taj Hotels and Star Bazaar to find locations for Starbucks outlets. Tata Coffee provided its facilities and expertise in sourcing and roasting green coffee beans from India for the Indian market.

Tata provided crucial understanding of the Indian consumer, market dynamics, and regulatory environment, which was essential for adapting the Starbucks brand to Indian tastes. Starbucks brought its globally recognized premium brand, its extensive experience in running a global coffeehouse chain, and modern retail strategies. Starbucks shared its expertise in establishing and managing supply chains and introduced innovative products and store designs. Starbucks provided its advanced management systems and operational processes for managing the business effectively. The 50:50 joint venture used its combined resources to create a unified, integrated business model. Tata’s physical infrastructure and knowledge of the local consumer were integrated with Starbucks’ global standards and brand management. This allowed Starbucks to enter and establish itself in the Indian market quickly and efficiently, while simultaneously giving Tata a position in the premium coffee retail sector.

Creation of Synergy

When two or more things work together to produce a combined effect that is greater than the sum of their individual effects, essentially meaning “the whole is greater than the sum of its parts”. It describes a cooperative action where combined efforts create a more valuable or effective outcome than those same efforts would achieve separately.

Another example is of Honda-LG

In 2022, Honda and LG announced a joint-venture aimed at leveraging LG’s expertise to boost the production of lithium-ion EV batteries for Honda’s electric vehicles. Plans included the construction of a state-of-the-art battery plant in Colombus, Ohio, by the end of 2024 and commencing mass production by the end of 2025.

The companies jointly agreed to set up their battery manufacturing facility in the U.S., stemming from their mutual understanding that increasing local electric vehicle production and securing a timely battery supply would optimally position them to tap into the fast-expanding North American EV market. The venture will not only help meet the increasing demand for electric vehicles but also bring significant economic benefits to the region . 3,000 new jobs in Ohio. What made this JV successful? It created synergies

Combined expertise

This partnership allows Honda to build on its expertise in vehicle manufacturing while benefiting from LG’s expertise in lithium-ion battery technology.

Strengthening the supply chain

By pooling resources from both companies, the joint-venture has been able to strengthen the overall supply chain.

Developing innovation

The collaboration has resulted in a cross-pollination of expertise that will feed the growing demand for EV vehicles and create profits for both companies.

Conclusion

Joint ventures (JVs) between two or more companies have proven to be a highly effective way to develop new business opportunities or expand into new markets.

The best way to define collaboration is to outline it as the process of two or more people or organizations working together to complete a task or achieve a goal. Collaboration is a working practice whereby individuals work together for a common purpose to achieve business benefit. 

Joint ventures are a type of collaboration, where two or more companies pool resources and expertise to achieve a specific goal, often forming a separate legal entity to manage the joint undertaking. Joint ventures involve the pooling of resources, expertise, and technology by the participating parties. They are typically formed to achieve a particular objective, which could be a one-off project or an ongoing task. Joint ventures often involve the creation of a new legal entity to manage the joint undertaking. For example, Maruti – Suzuki. A well-known example of a joint venture between the Government of India and Suzuki Motor Corporation (Japan), formed in 1981 and now known as Maruti Suzuki India. Suzuki Motor Corporation owns 56.2% equity in the company. In the financial year 2023-24, Maruti Suzuki India’s net sales reached ₹1,349,378 million, with a net profit of ₹132,094 million. They currently offer 18 models in India, sold through NEXA, ARENA, and commercial retail channels. 

Maruti Suzuki’s core competencies lie in its ability to deliver affordable, reliable, and fuel-efficient small cars, coupled with a strong focus on customer satisfaction and a vast network for sales and service. 

In collaborations which are also called strategic alliance. A strategic alliance is an arrangement between two companies to undertake a mutually beneficial project while each retains its independence. The participating entities share the risks, rewards, and responsibilities according to the terms outlined in a joint venture agreement. Joint ventures are often used as strategic alliances for  market entry into new territories or undertaking large-scale projects. 

Tata Starbucks Private Limited, formerly known as Tata Starbucks Ltd, is a 50:50 joint venture company, owned by Tata Consumer Products and Starbucks Corporation, that owns and manages Starbucks outlets in India. The outlets are branded Starbucks “A Tata Alliance”. India. As of 2023, Tata Starbucks operates over 300 stores across the country, offering an extensive range of coffee beverages tailored for Indian preferences. The joint venture created a strong brand recognition and a loyal customer base, store expansions in metro cities and tier-2 locations with localization of menu items to appeal to Indian tastes.

Licensing in business collaboration that involves one entity (the licensor) granting another (the licensee) the right to use their intellectual property like trademarks, patents, or technology under specific terms, enabling the licensee to leverage that Intellectual Property for their own business purposes. 

Licensing partnerships offer partners access to established brands or technologies, enabling them to enhance their offerings or enter new markets without developing these assets from scratch. And the licensor benefits from additional revenue through licensing fees or royalties, while also extending their brand reach.

One real-practical example of a brand licensing deal is Barbie. The global brand is known all over the world and has licensing deals with all kinds of businesses, retailers included. One such retailer is Shopify merchant and the Oodie, which sells limited edition Barbie products.

Netflix’s success in India, including successful licensing of content which stems from investing in local content, securing exclusive streaming rights, and adapting to the Indian market with diverse offerings, including regional content and tiered subscription plans. Netflix partners with content and studio providers to license rights for other titles. These titles may only be available in certain countries or for a limited time. The Indian subsidiary of subscription-based US streaming services company Netflix reported a net profit of Rs 52 crore for the last fiscal year.

Collaborating with global partners helps in mitigating risks associated with market entry, expansion or innovation initiatives. By sharing responsibilities and resources with trusted partners, businesses can more effectively navigate challenges, uncertainties and geopolitical complexities.

Franchising is also a business collaboration which inherently involves collaboration between a franchisor (the original business) and franchisees (those who operate under the brand’s name). This partnership allows for brand expansion and shared resources and expertise. This relationship is built on cooperation, where both parties work together to achieve shared goals, such as brand consistency, customer satisfaction, and business growth, new products etc. The franchisor provides the brand, systems, training, and support to the franchisee, while the franchisee operates the business according to the franchisor’s guidelines. 

To open a McDonald’s franchise, one needs significant capital, experience in the food service industry, and a willingness to follow the McDonald’s system, with initial investments potentially exceeding $1 million. The cost to open a McDonald’s franchise in India can range from ₹6.6 crores to ₹16 crores, depending on factors like location, size, and restaurant format, with an average franchise fee of ₹25-30 lakhs. 

Starting a KFC franchise in India requires a substantial investment, typically ranging from ₹1 crore to ₹2 crore, covering licensing fees, infrastructure, equipment, and initial working capital. The estimated start-up cost can range from ₹ 96 lakhs to ₹ 2 crores. Also, ₹ 36 lakhs are required as a franchise fee to become a KFC franchise owner in India. Franchising is a viable and increasingly popular collaborative model in India, offering benefits like brand recognition, established business models, and ongoing support, contributing to economic growth and employment. 

Among retail brands Adidas, a global leader in sportswear, and Allbirds, came together for its sustainable footwear, came together to design a shoe with an exceptionally low carbon footprint.

The first Futurecraft Footprint sneakers were considered the most sustainable in the world and took the fashion world by storm. While an average pair of Adidas sneakers has an average carbon footprint of 10 kg and 15 kg, the new shoes had a lower footprint of only 2.94 kg of CO2 emissions per pair. Both Adidas and Allbirds were aligned in their commitment to sustainability. While both brands approached shoemaking differently, their combined efforts were rooted in reducing environmental impact.  Adidas brought decades of sportswear design experience to the collaboration, while Allbirds contributed its unique knowledge of sustainable materials and production methods.

Conclusions

Business collaboration can work well, leading to increased innovation, productivity, and employee satisfaction, but requires clear communication, trust, and the right tools to be effective. 

Few centuries ago, India was called ‘Vishwaguru’ The expression Vishwaguru is a Sanskrit phrase which translates as global teacher, the Guru of World. Prime Minister Narendra Modi uses the phrase in all his speeches globally during his visits to foreign countries such as Germany, Denmark and France, Italy, UK, Japan etc. The Prime Minister expects positive effects in terms of advancing ‘Make in India’ initiatives, free trade agreement discussions, and making India’s positioning in world stronger.

So why does Narendra Modi keep calling India Vishwa Guru? Education in the Indian subcontinent began with teaching of traditional elements such as Indian religions, Indian mathematics, Indian logic at early Hindu and Buddhist centres of learning such as ancient Takshashila (in modern-day Pakistan) and Nalanda (Bihar, India) where those days 10,000-15,000 students studied and most came from other countries.

Travellers from various regions having different climates and cultures began to visit parts of India from early times. To them, India was a land of wonder! The fame of Indian culture, wealth, religions, philosophies, art, architecture, as well as its educational practices had spread far and wide. The education system of ancient times was regarded as a source for the knowledge, traditions and practices that guided and encouraged humanity.

From the time of Rigveda, our ancient education system evolved over the period and focused on the holistic development of the individual by taking care of both the inner and the outer self. The ancient system of education was the education of the Vedas, Brahmanas, Upanishads and Dharmasutras. Some of the great scholars such as Aryabhata and Baudhayan (mathematicians) Panini (philosopher and grammarian) Katyayana (mathematician and grammarian) Patanjali (Yoga), Charaka and Sushruta (medicine and surgery) and many more scholars had made ancient India in true sense Vishwa Guru. 

To add to it, ancient South Indian temples to the finest Mughal ruins, Indian architecture is as old as civilization itself. The earliest traces of recognizable building activity in India can be traced back to the settlements of the Indus Valley. India is home to a myriad of temples, ornamental, and modernistic structures that tell the stories of their era. UNESCO lists 830 World Heritage Sites consists of 40 Indian heritage sites.

Becoming a Vishwaguru again is a sentiment of the present Government’s ambition and there is nothing wrong about it. To rub it off or to believe that India is incapable of pursuing this aspiration is an injustice to our past, present and future too. From our traditional occupation of agricultural to advancements in nuclear and space technology, from ensuring affordable healthcare to setting up world-class educational institutions, from ayurveda to biotechnology, from giant steel plants to becoming an IT power and having the third-biggest start-up ecosystem in the world, what we have achieved in our post-Independence journey is highly creditable.

Our ancient civilisational culture has provided us with a strong philosophical foundation that has several unique features. Our strong spiritual foundation cannot be unwiped. Back in the 17th century, India, a key player in the world economy, was a leading exporter of spices, sugar, textiles, handicrafts, and much more. It was also one of the first countries to adopt a money-based trade.

Education is the most powerful tool to change mindset from an older setting to new one. It has the power to change the way people think and execute. Progressive nations in the world invest in education of teachers and youth to empower a new generation of leaders. Nelson Mandela said that ‘Education is the most powerful weapon which you can use to change the world.’ Education is not all about studying to get good marks. It is a medium to discover new things. It helps us understand new concepts; new skills, new meaning, and new vocabulary thus increase our awareness. An educated person has the ability to differentiate between right and wrong. It is the most primary responsibility of a society to educate its citizens.

Our county’s education system needs to be remodelled as per the necessities and ambitions of today’s world, instead of taking it back to the old ages. However, in India the education system has evolved in a completely different manner. Our education emphasizes on rote learning. We don’t train young minds to focus on critical thinking, expressing new ideas and debating and writing critically on any issue. We don’t emphasize on entrepreneurship, instead we motivate students to become clerks with basic understanding of the language and mathematics, to support their administrative system. Today our education system has tuned into only cramming degrees.

We lag behind in the research domain. Our universities and colleges lack a multi-disciplinary approach to stimulate inquiring skills among students. Our education system has failed to develop industry linkages with academia to promote research, it limits the faculty and students to work in this area.

We give too much importance to marks; instead of focusing the evaluation on a three-hour exam, the focus of evaluation should be classroom participation by a student, live projects conducted by them, communication skills and leadership skills and extra-curricular activities. Teachers play the most important role in schools and colleges. They should be given the best of class training. After all, they are shaping the future of the nation, the children.

I conclude my article by saying education is most important for mental, physical and spiritual democracy. India must regain its intellectual leadership and once again emerge as a global hub of learning and innovation. It is possible and it is the destiny of India. And, to do this, we need strong will of the Government, Universities and Industry. Alongside the change in curriculum, businesses have an increasingly key role to play in providing extracurricular support for education. The initial role of universities is to provide education to individuals and basic research. It’s like a Linear Model of Innovations; universities are supposed to provide the research on which industry builds commercial goods. The other interactions take place through the involvement of industry managers and university faculty in both sectors. A university flourishes because of research, and industry grows on research in universities.

We need universities with a core mission of producing the educated population that’s needed to build, run and work for flourishing an economy. Today in India how many universities have been able to connect their activities to society and the nation’s economy? Hope the present Government takes keen interest in regaining the ‘Vishwaguru’ title back for the nation.

Abstract

Brands like Apple, Google, Nike, Amazon, and PepsiCo have been established because of practicing and using design thinking to create innovative products. For example, Nike is the best sports company because they have great technology and equipment to boost the performance of the athletes. In basketball shoes, Nike provides cushions and lightweight materials to accommodate the sport.  Design thinking indeed has led to the success of products design and to the operational processes. Innovation is synonymous with design thinking.

In this article, I want to present how design thinking is particularly relevant in the context of Human Resource practices. Quite recently, at Deloitte, the company developed Human Resources solutions that focus on creating a positive employee experience by using Design Thinking principles. These Human Resources solutions have built standard operating procedures (SOPs) and processes that put the employee experience in the centre and by doing so made it simple, gratifying, and fascinating. Deloitte incorporated design thinking elements through digital designs to experience work processes, behavioural economics, and much more. Traditional Human Resources solutions are built around process steps, forms, and formal training. Individual employees want to experience one on one information and interaction in the organization. The previous format of broadcasting information has been discarded and mails are sent to individual employees pertaining to their scope of work and scope to improvise the process.  

Deloitte used Design Thinking to convert Human Resources from a “process developer” to an “experience architect”. From redesigning the physical work environment to optimising the digital workspace and directing how managers use their time, Design Thinking has helped Deloitte reimagine the entire process of hiring, training, engaging, and evaluating employees. Deloitte has invested in their employees, studying how people behave at work to create profiles and personas to model their solutions on. These profiles are specific to the employee demographics, work environment, and the set of challenges they encounter. Ideating and prototyping have enabled the company to come up with quicker solutions and effective tools. Feedback mechanisms based on questionnaires have helped them bring specific requirements to light and facilitate learning and awareness. Few companies are even using agile methodologies to teach people to do less and focus more.

Design thinking is a multi-disciplinary tool. It is non-linear. In the Human Resources context, the principles of design thinking are applied to answer humanistic questions by assuming challenges faced by people and trying to make them easier. Each individual has a different approach to looking at a challenge in the organization; each individual has a different perception. 

Design thinking develops an in-depth understanding of people for whom solutions are being designed and involves them in the process so as to come up with out-of-the-box ideas to enhance their workplace experiences.  It seeks to integrate the skills and methodology of designers from multiple disciplines into a collaborative effort. Multidisciplinary designers need to understand how diverse areas of expertise can come together to solve complex design problems.

While brushing teeth, it’s not easy to reach the deep inside of the mouth, leaving molars and teeth not brushed thoroughly. GE designed an electric toothbrush that made rapid automatic bristle motions, either back-and-forth in rotation in order to clean teeth. A modern electric toothbrush is usually powered by a rechargeable battery charged through inductive charging when the brush sits in the charging base between uses. This is an example of design thinking in production.

Helping people find safe water sources near them is one of the ways in which non-profit tech start-up mWater has improved thousands of lives. mWater apps and software let users find, monitor, and map the quality of water and sanitation sites.  This also helps local authorities detect water infrastructure gaps. Designed for field use, the apps work both online and offline – using the cloud for automatic data syncing when online and GPS for finding locations offline. With over 10,000 active users in 93 countries, mWater already has a database of over 350,000 public and private water sites around the world.

Innovation is at the core of businesses. Delivering differentiated and satisfying customer experiences can lead to a boost in loyalty, market share, and revenues.

Imagine what a similar focus on employee experiences could mean for business. Leading companies are already recognizing that the employee experience is the new battleground for competitive advantage.

Organisations and world economies are constantly evaluating ways and means that can restore balance and help jumpstart slumping livelihoods. In the ongoing Covid pandemic, and at this critical juncture, organisations are leaning on Human Resources (HR) to restore employee morale and boost confidence in the company’s future. Adapting to this rapidly changing environment requires a renovated approach. The Human Resources fraternity has been prompt and agile in shedding the old ways and facing unprecedented challenges with new and innovative ideas. HR plays a crucial role in enabling organisations to transition from working-at-office to working-from-home, almost overnight. In short, the pandemic catapulted HR teams to occupy a seat on the strategy table from being just a support function. 

Design Thinking in Human Resources can enable organizations in understanding, envisioning, and designing how employees experience work, perceiving the employer-employee relationship through talent solution platform, storming, norming and forming ideas quickly with employee experience ideas, and prioritizing action to ensure consistent employee experience as described in team development by Bruce Tuckman.

It is difficult for organisations to attract and retain talent. Regardless of a company’s location or size, attracting and retaining talent at the top, middle and bottom positions. Employee expectations are racketing up against Human Resources as comparisons are made to frictionless customer experience outside of the office. Organisations are expecting the Human Resources teams to build agility in the internal and external environment. Organizations demand Human Resources to help in making better decision making, for giving actionable insights, increasing creativity in all processes for making better people decisions. How can Human Resources help the organisation, its employees, and themselves?

Changing the expectations of customers require new ways of thinking about people and designing people management strategies. Design thinking helps in this area.  Design thinking and design research help in making strategic decisions at many levels. This is an example of how AirBnB’s strategic team uses data to address current user experience challenges on the social media platform. The year 2009 was tough for Airbnb as it was very close to going bust. The start-up registering only $200 per week as revenue and were nowhere close to making a sustainable business out of their initiative. The founders noticed a pattern that all their listings in New York had poor images and it was very difficult for customers to see what they would be paying for. One of them – Graham suggested a completely non-scalable and a non-technical solution to the problem. He advised travelling to New York, renting a camera, visiting all the properties to take good quality images and replace the old amateur images with the new high resolution and beautiful ones. Even though the resolution was not backed by data, the results were amazing. After improving the quality of images for the listings, the revenue generated rose to $400 per week. Design thinking requires strong backup data as well as customer feedback.

Design Thinking enables Human Resources to think beyond the typical process and pragmatic approach to service delivery and focus instead on the experience and outcomes that it is looking to drive. The principles of repetition, trying, failing, retrying, and improving are critical to success in design thinking. It cannot be a do it once approach, where one solution is rolled out, the program ends, and then for years it’s never improved or assessed.

Design Thinking is based on understanding the in-depth needs of different stakeholder profiles; to conduct design thinking is to firmly put your feet in the shoes of your stakeholder. This is why empathy is a crucial element of the practice. Its goal is to generate solutions that bring value to all stakeholders. In the case of Human Resources, this could be the managers, employees, or candidates that experience any part of the Human Resources process.

Since Human Resources primarily handles the recruitment, employment experience, and the exit process of employees and represents the company, understanding human needs and executing accordingly becomes crucial. In Human Resources design thinking focuses on building a structure, a design for operations that would align the goals of the company with its employees. It starts by building the problem statement to find ways of resolving that. In most organisations, a fast-paced work environment demands quick solutions to the challenges of humans. Unlike machines, humans are after all, not engineered to deliver automated accurate results around the clock. Innovation is the only way to meet this challenge and design thinking is capable of driving that innovation. Tim Brown, one of the pioneers of Design Thinking believes that “leading through questions” is the best way to drive innovation. Questions bring us closer to stakeholder requirements and help us understand the scope of improvement. In the following areas of Human Resources let’s see how design thinking helps:

Human Resources Planning

Human Resources planning involves recruiting, selecting, hiring, and training the right candidates to make them ready for the job. This is one of the crucial processes for any company since it builds the branding for them. Design thinking can optimise this process by incorporating empathy. It can help recruiters to create a welcoming environment for new recruits at the company. Continuous interaction between both employer and employee seeking the job opportunity helps set expectations. Empathy will also help the HR team to identify any intrinsic challenges and address them. Ideation, another crucial step in design thinking encourages users to be creative and think of newer ways of addressing an issue. Interactive sessions and understanding the core characteristic of employee is vital to innovation. Human Resources teams must discard conventional approaches for driving innovation in recruitment policies.

Continuous Performance Management

Performance management aims at recognising the meaningful work that employees do and rewarding that appropriately. Employees feel elated when their good work is lauded by the organization. For understanding the human potential, organizations must have measurable Human Resources tools for assessing performance. Employees like to get recognition for their talent and domain knowledge. Design Thinking can make this process more effective by using tools of surveys to connect and empathise with the employees and understand their concerns and expectations. The Human Resources teams in organizations must keep updating their performance management policies and tools.  

Retention policies

A sense of belonging is most important for human relations. When employees feel that they are cared for by the organization they put in more effort; when they are appreciated, their productivity augments. The Human Resources department is responsible for maintaining a harmonious relationship between the employees and the company. The biggest problem is faced when organisations don’t have clear communication channels with employees. Lack of a proper communication channel can lead to various issues and misunderstandings. Employees must stay well connected with the organization. Design Thinking can enhance this process with an empathy-driven approach towards issues that concern both parties. By using the design thinking methods, the Human Resources team can assess problematic situations with good solutions that pacify both equally. 

Compensation

Compensation and benefits comprise a large part of what the HR department handles. Right from the time a candidate joins a company, gets promoted to the time he quits or retires, the Human Resources department reviews and updates his/her compensation. Design thinking methods can help the Human Resources team to understand the requirements and expectations of the employees and the budgets of the employers and optimise the compensation accordingly in cash and kind. Even while designing policies, empathy-driven approach can help formulate policies that meet the needs of the employees and truly benefit them.

Employee engagement

This is a priority area for HR. Design thinking can offer a variety of practices to create inspiring workplaces. There are many organizations that make work place environment fun-filled. The tagline “all work and no play make Jack a dull boy” is brought into practice. Monthly/Quarterly outings, monthly get-togethers, recreation nights, pipe music played during work hours are some examples of how employees are kept entertained. User-friendly IT systems, weekly changing canteen foods made as per choice, and some other welfare practices are some ways of cooperation in which the employee feels cared for. The aim is to improve engagement, creativity, and productivity. Empathy is a basic requirement of design thinking.

Design thinking is at core of innovation

Many organizations fail to create innovative work culture. Design thinking helps in infusing innovation culture in organizations. Some organizations have succeeded. One such organization is 3M Technologies. In 1968, Spencer Silver, a scientist at 3M’s headquarters was working to create a strong adhesive. Accidentally, he developed a new material that was light enough to easily remove and peel apart. Silver felt that he had invented something unique and useful but struggled to find what that use could be. Another employee Art Fry used Spencer’s adhesive to anchor his bookmark in his hymn book which became one of the stellar products of 3M. A few years later Fry utilized 3M’s sanctioned “permitted bootlegging” policy to develop the idea. Design thinking flourishes on empathy, expansive thinking, and experimentation.

Conclusion

Modern Human Resources and design thinking go hand. Employee experience is most important in employee value proposition and retention. It helps engaging employees more actively in organisational change and by creating an environment and experiences that inspire people and make them more creative and productive.

International Human Resource Management (IHRM), as the name suggests, refers to the recruitment, management, and development of employees who come from other countries or who are stationed in other countries for their jobs. Many organisations that manage their human resources activities at an international level deal with diverse workforce. By the end of 2021, it’s predicted that 87% of businesses will have presence in one or more foreign markets as their expansion strategy.  When MNCs expand around the globe handling different payroll systems, country wise HR policies can become a huge strain on a company’s HR team. HR conduct will affect the company culture. Positive results can be achieved by having communication channels that allow for open talks and exchange of feedback. 

3M Corporation’s culture is made for thriving Innovation. It was founded by five businessmen in 1902.  3M has managed to expand and thrive for over 100 years because of its culture of innovation. The company has been able to slowly, but relentlessly, develop their 46 technology platforms of which every 3M product is based on. The organization believes in empowering employees. They allow employees to work on projects they are passionate about. They promote innovative ideas and empower employees to look at their daily tasks through an innovation lens. And, most importantly the employees are acknowledged and rewarded for innovative ideas.

IHRM practice emphasizes on innovation

In 1948, 3M launched its 15 per cent program, where 15 per cent of employees’ time was dedicated to innovation. The Post-It note was invented during 15 per cent time.

Organizations such as Hewlett-Packard and Google have both replicated this approach. Gmail and Google Earth were conceived during Google’s 20 per cent employee time dedicated to innovation. IHRM practices encourage workers to deliberate and implement on their ideas. Of course, they must complete their daily work first. When innovative ideas make it through the ideation phase, employees are given technology grants to pursue these ideas.

IHRM thrives on cultural diversity

Progressive companies all over the world recognize the advantages of integrating workers from culturally diverse backgrounds. These companies view diversity as a business plan as in today’s global marketplace companies interact with different clients with cultures and different code of conduct.  In the early stages, International business was conducted with an ethnocentric outlook that means the orientation and type of operation was based on the parent company.  The modern multinational corporations have geocentric orientation. The total organization is viewed as an independent system operating in many courtiers.  The relationships between headquarters and subsidiaries are collaborative.  Communication flowing from both directions encourages viewpoints of workers at all levels.  Furthermore, managers of different nationals occupy key positions.

The orientation of multi-national corporations is truly international and goes beyond a narrow nationalistic viewpoint. MNCs recognize business opportunities in many different countries.  They raise money for its operations throughout the world.  Moreover, multinational firms benefit by establishing production facilities in countries where their products can be manufactured more effectively and efficiently and at lower cost.  Companies with worldwide operations sometimes have access to natural resources and materials that may be available to domestic firms only.  Also large number of MNCs can recruit management and other professionals from a worldwide labour pool.   Companies have recognized the various plus points of diversity.

The diverse workforce Increase creativity

When people from different cultures are put together towards a common solution there is no one best answer to any question because the organization can obtain more and more ideas.  Different cultures of the employees can offer insightful alternatives to a problem.

Increase in Productivity

When people of variety of culture and variety of backgrounds are made to work together it increases their productivity exponentially. This happens because it kills monotony of work culture, brings freshness in work atmosphere.  Different people have different styles of performing work.  Every employee motivates the other with his difference of style.

Managing cultural diversity is an art

We all need to address the myths, stereotypes and cultural differences that interfere with our daily chores.  The age-old gender fact that only male and females exist in organizational workforce has lost ground; today we have gay and transgender individuals making vital contributions to our economy. Nations and workforce are both becoming more diverse. The share of people of different color, cast, creed, religion, tradition, language, diction, practice, and ethnicity is part of organizational workforce.

More women taking leadership positions

More and more women are increasingly seen at the forefront. They are occupying vital roles and are the decision makers in more organizations. The fact is that businesses that embrace diversity have a more solid footing in the marketplace than others. Whatever color, black or brown or white.  That is it.   The word “global village” may appropriately describe the world we live in today.  The fibre optics, aerospace and satellites link the globe like never before. The geographical boundaries are shrinking day by day.   Obsolesce has no space, organizations need to move forward to improve productivity.

IHRM facilitates talent management

The HR functions include a broad range of tasks including: processes for recruiting new staff, on boarding, orientation, performance management and evaluation. .

In some cases, a system may allow an HR representative to create a job posting online, view incoming applications and track candidates through the hiring process.

Increasingly, orientation materials such as filling out payroll information and other paperwork are being relegated to online applications so HR staff is not required to be physically present to handle some of the basics, freeing them to do other work. Once great employees are on board, other components work to track performance metrics and provide professional development to retain top performers.

Base Salary

This term has a slightly different meaning in an international context than in a domestic one. In the latter case, it denotes the amount of cash compensation that serves as a benchmark for other compensation elements like bonus, social benefits. For the expatriate, it denotes the main component of a package of allowances directly related to the base salary and the basis for in-service benefits and pension contributions. Base salary actually forms the foundation block of the international compensation. Foreign Service Inducement Premium is a component of the total compensation package given to employees to encourage them to take up foreign assignments. This is with the aim to compensate them for the possible hardships they may face while being overseas. Organization also pays relocation allowances, spouse assistance allowance, education allowance besides, some additional benefits such as pension plans which normally differ from country to country due to difference in national practices. Thus all these and other benefits (medical coverage, social security) are difficult to imitate across countries.

IHRM gives importance to employee engagement

Some HR departments may extend their HRMS tools by also utilizing social media and online applications to engage their employees and stimulate interaction within the corporate environment. Through these channels, employees can collaborate on projects, learn more about the corporate brand, refer qualified friends for job openings, and respond to company surveys designed to measure job satisfaction.

Meet Compliance Standards

Industries that operate in financial, health, insurance or public sector capacities are required to follow specific regulations and are subject to reporting and compliance standards. An HRMS component specifically designed to keep track of frequently changing regulations allows HR departments to stay on top of the necessary record-keeping and reporting requirements. Automated maintenance informs the HR department when background checks, licenses or continuing educational requirements need to be updated and assures that the company is operating in compliance.

People Analytics is one of IHRM Trends

The growth of people analytics is global and not confined to one country. The areas of people analytics are wide in the organization from talent acquisition in identifying right talent to minimizing bias in hiring, employee retention, increasing employee engagement, measuring culture, workforce readiness, and employee experience to name few. For example, Google has turned people analytics into a winning culture with project oxygen. The tech giant has turned into one of the best companies known for hiring the best, and retaining them with the highest engagement rate. With people analytics Google has registered significant improvement in metrics like employee turnover, performance, and satisfaction.

It’s observed that in most MNCs analytics are increasingly important to upper level managers and HR departments. Programs that track the effectiveness of HR initiatives and recruitment methods help key executives pinpoint what works in attracting new talent to the company. They can also compare salary levels within the industry and make adjustments if needed. Data that is compiled from the fluctuating workforce also helps leaders gain a better understanding of turnover trends, such as why employees move on to another company or how to improve worker retention.

Business Incubation is a unique and highly flexible combination of business development processes, infrastructure and people, designed to nurture and grow new and small businesses by supporting them through the early stages of business progress. Though in the initial phase of business new entrepreneurs do bootstrapping – which is building a company from the scratch with nothing but personal savings and, waiting for the cash coming in from the first sales. In the initial phases of businesses entrepreneurs depend a lot on other’s help in areas such as management of funds, marketing and sales, networking, hiring the right people, maintenance of day to day expenses and accounting etc.

Incubators provide numerous benefits to owners of startup businesses. Their office and manufacturing space is offered at a low cost, almost below market rate, and their staff supplies advice and much-needed expertise in developing business and marketing plans as well as helping to fund, helping the businesses to grow. In India, startups typically spend an average of two years in a business incubator, during which time they often share telephone, secretarial backup, office, and production equipment expenses with other startup companies. This helps them to reduce the overhead and operational costs. While there are some independent incubators, there are many run by venture capital firms, angel investors, government, some major corporations, universities, educational institutions such as IITs and IIMs, and some renowned B Schools. Some incubators have an application process, but others only work with companies and ideas that they come in contact with through trusted partners. A good example of an incubator is Idealab.

Idealab was founded by Bill T. Gross in March 1996. Prior to Idealab, Gross founded GNP Loudspeakers, an audio equipment manufacturer. It got acquired by Lotus Software and Knowledge Adventure an educational software company, later it was acquired by Cendant. Idealab has historically hired many alumni of California Institute of Technology from where Gross passed out. Gross now sits on the Institute’s board of trustees. Idealab has created, invested in, and spun off a diverse array of companies such as AirWave Wireless, vendor of wireless network management software acquired by Aruba Networks in 2008, Answer.com, Aptera Motors, electric car manufacturer, Blastoff.com, CarsDirect, Citysearch, acquired by IAC/InterActiveCorp, Commission Junction etc.

Business incubation programs are often sponsored by private companies or government entities and public institutions, such as colleges and universities. Their goal is to help create and grow young businesses by providing them with necessary support and financial and technical services. There are approximately 150 business incubators nationwide in India, according to the National Business Incubation Association.

Not all business incubators are alike. An entrepreneur must however choose a suitable incubator to suit his/her business idea. For example, the Amity Innovation Incubator is a pioneering concept in the context of Indian Universities. Supported by DST (Ministry of Science & Technology) GOI, in a very short time of its existence it has earned desirable position for itself with start-ups which have regularly been on top of the innovation curve and have been recognized on platforms like ‘The Power of ideas’, Red Herring Global winner, Tata NEN and NASSCOM Innovation Awards to name a few. It is located in Noida and founded in 2008. Its focus area is Rural Innovation and Social Entrepreneurship, Information and communication Technologies (to include Social media and ecommerce, Mobile computing and technologies, Analytics, Cloud computing and Big Data), Education and Education Technologies, Food and allied Technologies, Biotechnology and Life Sciences, Nanotechnology and Material Sciences. It funds up to INR 1 Cr. Some of its notable startup projects are ApnaCircle.com which provides opportunities for careers and social networking. Anduril Technologies which specializes in the business domains of Payments, Microfinance, Telecom and ERP.

It is advisable for new entrepreneurs to visit National Business Incubation Association Website to find the incubator that best suits their requirements. You can find an incubator in your state, also you can visit economic development agency, located in the phone book under the listing for your state government. You can also call the information offices of your local colleges and universities to see whether they have any business incubation programs.

AnglePrime is another business incubator located in Bangalore which is focused on startups in the middle that need seed capital (initial capital required for a business) it invest in not more than 3-4 companies a year. Angle Prime was founded in 2011 and its focus area is Mobile internet, ecommerce and tablet/mobile app. It funds up to 2 lakhs to 6 lakhs; some of its notable startups are: Ezetap which is a universal payment platform and Hacker Earth which provides enterprise software solutions that help organizations with their innovation management and technical recruitment needs.

Centre for Innovation Incubation and Entrepreneurship (CIIE) was setup by IIM Ahmedabad with support from the Government of India and Gujarat Government it operates through an autonomous not-for-profit entity. CIIE comprises of IIMA faculty, alumni and other individuals and partners with like-minded organizations to foster entrepreneurship through incubation, ecosystem development and academic initiatives. It is located in IIM Campus in Ahmadabad; it was founded as a research institute in 2002 and was turned into a full-fledged incubation centre in 2007. Its focus area is Information Communication Technology, and Social Entrepreneurship. It funds up to INR 20 lakhs. Its notable startups are Travelyaari, which is largest online bus booking portal headquartered at Bangalore; Innoz, is a young and exciting venture on mobile & wireless innovation which was founded in 2008; Thrillophilia is India’s biggest online platform for adventure tourism for discovering and booking travel experiences.

If an incubation program seems interesting to you, be prepared to submit a well prepared and detailed business plan. The plan will be reviewed by a screening committee to determine whether or not you meet the criteria for admission. Incubators carefully screen potential businesses because their space, equipment, and finances are limited, and they want to be sure about their choosing to nurture businesses with the best possible chance for success.

Through running a business initially in incubation entrepreneurs can:

Share basic operating costs: Tenants in a business incubator share a wide range of overhead costs, including utilities, office equipment, computer services, conference rooms, laboratories, and receptionist services. In addition, basic rent costs are usually below normal for the region in which the new business is operating, which allows entrepreneurs to realize additional savings. It is worth noting, however, that incubators do not allow tenants to remain in the program for long; most lease agreements at incubator facilities run for two to three years.

Get consulting and administrative assistance: Incubator managers and staff members can often provide insightful advice and/or information on a broad business spectrum of business issues, from marketing to business expansion financing. Small business owners should remember that the people that are responsible for overseeing the incubator program are usually quite knowledgeable about various aspects of the business world. They are resourceful.

Access to capital is easy: Business incubators provide entrepreneurs with access to the kind of early-stage capital that emerging companies desperately need. According to a recent survey of National Business Incubation Association members, 83 percent of incubator owners and directors provide access to seed capital.

Respect and credibility comes easily: Many entrepreneurs have stated that when their start-up businesses are accepted into business incubator programs, the rewards include an aura of legitimacy and credibility among both vendors and customers. The fact that a business has been accepted into an incubator offers due diligence value to potential investors because incubators allow only diligent business plans.

It develops comradeship with fellow entrepreneurs: The presence of fellow entrepreneurs’ works as motivating factor. You see another business going through different stages; you witness ups and downs in other businesses as well as yours.  Incubators by gathering entrepreneurs together under one roof, create a dynamic climate wherein business owners can provide encouragement to one another in their endeavors; share information on business-related subjects; and establish networks of communication that can serve them well for years to come.

All over world incubators run on common idea: The concept of incubation works in all communities, practically all industries, all demographics on a particular strength of an ability to aid companies that fulfill specific needs, technology transfer, stimulating mankind and creating jobs.

India’s largest incubator for startups is T-Hub also known as Telangana Hub. On 5 November 2015 the first phase of T-Hub was set in operation by E. S. L. Narasimhan, Governor of Telangana and Ratan Tata, Chairman Emeritus of Tata Sons, and Telangana IT & Panchayat Raj Minister K. T. Rama Rao. It is spread in a 70,000 square foot building called CatalysT, it is entirely dedicated to entrepreneurship. It is a partnership between the private sector and the Government of Telangana along with three of India’s leading academic institutes – IIIT-Hyderabad, ISB and National Academy of Legal Studies and Research.

A paradigm shift which is also called radical theory change is a concept identified by the American physicist and philosopher Thomas Kuhn (1922–1996); it is a fundamental change in the basic concepts and experimental practices of a scientific discipline. Kuhn described scientific work done within a prevailing framework as paradigm. His 1962 book ‘’The Structure of Scientific Revolution’’ talked about term paradigm shift, which has since become an English-language idiom. People tend to use the word paradigm shift loosely sometimes.

Kuhn made several notable claims in his book concerning the progress of scientific knowledge that scientific field undergoes periodically. It does not solely progress in a linear and continuous way, and that these paradigm shifts open up new approaches to understanding what scientists would never have considered valid before; and that the notion of scientific truth, at any given moment, cannot be established solely by objective criteria. Competing paradigms are frequently incommensurable (not able to judge by the same standards) that is, they are competing and incompatible accounts of reality. Thus, our comprehension of science can never rely wholly upon “objectivity” alone. Science must account for subjective perspectives as well, since all objective conclusions are ultimately founded upon the subjective conditioning. If there are few scientists working on a topic, each one will be having a different viewpoint on it.  This means one fact can have different meanings when seen from different perspectives. The perspective each person adopts influences what is considered central or obvious. Some perspectives can appear as obscure.

Kuhn also has mentioned in his book that some innovations took place without evocative research. Archimedes had been working on a method to find the density of an irregularly shaped object, and was taking a break at the baths. In other words, he suddenly got an insight which he called “eureka moment” the principle was the result of previous study combined with a sudden insight.

Since the 1960s, the notion of a paradigm shift has also been used in numerous non-scientific contexts to describe a profound change in a fundamental model or perception of events, even though Kuhn himself restricted the use of the term to the physical sciences.

A truth about Paradigm shift is that it is sporadic. In the modern world we have got so used to creative destruction; it refers to the nonstop product and process innovation mechanism in scientific, education and business world.  The concept was coined by Joseph Schumpeter (1942), who considered it ‘the essential fact about capitalism’. A paradigm shift can be defined as an important change that happens when the usual way of thinking about or doing something is replaced by a new and different way, which Schumpeter called ‘’creative destruction’.

Whether we like it or not a sporadic paradigm shift in business management keeps happening. It’s a shift from a firm-centric view of the world in which the firm’s purpose is to make money for its shareholders to a customer-centric view of the world in which the purpose of the firm is to add value for customers.

Another paradigm shift is an up-and-coming corporate governance framework that derives from the recognition by CEOs, board of directors, institutional investors, banks, and asset managers. The economic impact of a myopic approach to managing and investing in businesses has become abundantly clear and has been generating rising levels of concern across a broad spectrum of stakeholders, including corporations, investors, policymakers and academics. People look at organizations from ethical point of view; therefore corporate governance requires two levels of analysis: the internal concerns of corporate agency and the emergent effects on social welfare. People at large disapprove of organizations which don’t practice transparency.

There are many paradigm shifts occurring in medicine today. Hospitals have started thinking at their business model from patient cantered point of view. The patient’s experience matters. The biggest shift is happening in the field of psychiatry. The world is seriously concerned about mental health today. Most medical scientists and pharma companies are researching on underlying pathology of diseases for and treating it. The paradigm shift towards treating psychiatry as an important and valuable field is slow, yet the tides are turning in its favour. It is amusing to see that in a world where we know so much, where technology is so advanced that varied information is available to a person in split seconds; we still have not been able to discover the mystery of the human brain and what exactly is mind and its full effects on the body.

Another shift in medicine is the issue of overspecialization. As more information is exposed because of Internet, it is deemed unfeasible to be well versed in everything and so specialties began to arise and collaboration between teams of doctors have started working together. The problem is that this trend of overspecialization has led to an undetermined amount of doctors consulting on one patient case. This makes the patient feel disconnected from their care and more confused due to often contradictory instructions placed by various expert doctors.

The field of education is under transformation at all levels. In a globalized marketplace with advancing technology is a pressing concern for educators and policymakers in order to help students learn and develop and prepare students for life after graduation.  According to the U.S. Department of Labor, 65% of today’s grade school students will end up employed in jobs that have yet to be discovered. This signifies a shift in demand for competencies and expertise, where jobs are now utilizing skills such as non-routine interpersonal and non-routine analytic skills, compared to previous decades that were more focused on routine cognitive and routine manual skills. Additionally, the kind of things that were once easy to teach are now easy to automate, digitize or outsource, creating the need to rethink the role of teachers in education.

As the role of teachers change, the question before educators and policymakers is how schools can adopt to the changing demand of skills, and the digital revolution. This is further compounded by shifts in the economy, where the digital economy is now becoming the main economy, and schools will now be confronted with challenges and opportunities as they adopt to help students learn. Paradigm shift is taking place in organization of schools itself. While education today is mostly about the system, content, and mastery (specialization again), we are getting half baked masters everywhere. The fact is that inexperienced substitute teachers go to the class rooms to teach.

In the words of Sean Covey, paradigms are like glasses, when you have incomplete paradigms about anything in general, it’s like wearing glasses with wrong lenses, which affect how you see everything.

The Global Competitiveness Report began as a research project by Professor Klaus Schwab. He is a German engineer and economist, best known as the founder and executive chairman of the World Economic Forum.  In 1979 he designed a report to measure and analyse competitiveness of 16 European countries. The study was based on Schwab’s innovative concept of competitiveness, which extended beyond the traditional notion of labor and capital productivity. That year, of the 200 indicators selected for the Forum’s first competitiveness index, 50 were derived from a survey.

The survey was mailed out in English, French, and German to potential respondents throughout Europe, mainly Chief Executive or Chief Planning Officers of European companies; Managing Directors of subsidiaries of US companies operating in these 16 countries, leading representatives of industrial and employers’ associations, labor unions, economic and social institutes; university faculties of economics or business administration; and the economic media. Median values were calculated for each question and by country. In parallel, Forum researchers visited statistical offices and ministries in order to gather relevant quantitative data. The report was finalized in November 1979. The report was the first attempt to support policymakers and business leaders in their efforts to formulate improved economic policies and institutional reforms.

Thirty five years down, in 2004, WEF (World Economic Forum) started regular practice of ranking the economies to reignite economic growth. The Global Competitiveness Report is a tool to help governments, the private sector and civil society work together to boost future prosperity. Comparative analysis between countries allows leaders to measure areas that need strengthening and build a coordinated response. It also helps identify best practice in various nations in the world. The Index measures how productively a country uses available resources.

At present the Global Competitiveness Report has grown to cover over 140 economies to assess the key drivers of development. The methodology behind the analysis has been improved over the years in order to reflect the newest thinking in matters of economic growth. In parallel to this development of the index, the original survey has evolved and is today known as the Executive Opinion Survey (the Survey). Over the years, it has undergone a number of revisions and audits, which have enabled an improved administration process and methodology. The Survey has grown in scope, too. It now includes over 140 questions distributed in 14 sections.

The 12 pillars of competitiveness are grouped under three sub-indexes according to three main development phases: basic requirements, efficiency enhancers and innovation and sophistication factors. Depending on each country’s stage of development, weightage is added to the sub-indexes. Here are the 12 pillars of competitiveness that WEF uses to rank nations according to productivity and prosperity.

Pillar one is Institutions: The way institutions are managed, has a direct link to a nation’s level of competence. Efficient management of both private and government institutions is the basis of business environment. Good business practices combined with ethics and corporate governance guarantee success. Physical security and independent judiciary provide the fundamental protection of intellectual property rights (IPR).

Pillar two is Infrastructure: Infrastructure includes connectivity like road, rail, ports, electricity and telecommunications. These are fundamental to economic development and growth. Because of connectivity an economy opens to outside world, trade and commerce will flourish. Quality and quantity of infrastructure decides a nation’s level of productivity.

Pillar three is Macroeconomic Environment: Macroeconomic stabilization is a condition in which a complex framework for monetary and fiscal institutions and policies is established to reduce volatility and encourage welfare-enhancing growth. Inflation, price levels, rate of growth, national income, gross domestic product and changes in unemployment are some vital macroeconomic indicators of a nation.

Pillar four is Health and Primary Education: Education is fundamental to development and growth. The human mind can achieve advancements in healthcare, agricultural innovations to efficient public administration and private sector growth. Education helps to unleash progress of human. Health of people also makes an important contribution to economic progress; healthy populations live longer, are more productive, and save more. Clean environment, peace of mind, non corrupt government administration is some factors to provide good health for its people.

Pillar five is Higher Education and Training: High education and technical skills are crucial for the growth of an economy. Progressive nations therefore invest more in higher education and skill development. Higher educational facilities and on-the-job training can only assure growth as a nation moves up the ladder. Human capacity development is enhanced through quality education at many levels, including primary, secondary, technical and vocational, and higher education.  As the world is growing more complex, higher education is an increasingly more critical pillar for human capacity development.

Pillar six is Goods Market Efficiency: A successful economy has to market its products and services worldwide. Growth depends on open markets and liberal marketing policies. Domestic and foreign competitiveness demands good marketing efficiency. It ensures the planned economic growth in the developing economy where the scarcity of goods, services, ideas and excessive unemployment, thereby marketing efforts are needed for mobilization of economic resources for additional production of ideas, goods and services resulting in greater employment.

Pillar seven is Labour Market Efficiency: Productivity depends on the quality of labour. Trained, organized and sincere workers are extremely important for organizational growth.  A nation with a large scale of unemployment will never progress. The business environment has to assure promotion and development to the workers. Nations which promote gender parity have grown faster. Job market needs to be efficient and flexible.  Skilled labour is always in demand.

Pillar eight is Financial Market Development: The financial system comprises all financial markets, instruments and institutions. The financial system is particularly important in reallocating capital and thus providing the basis for the continuous restructuring of the economy that is needed to support growth. In countries with a highly developed financial system, we observe that, a greater share of investment is allocated to relatively fast growing sectors. The banking system has to support business by channelling the resources saved by its people. Efficiency, stability, reliability and credibility of the financial system are crucial for the economy. Transparency and efficiency help in financial market development.

Pillar nine is Technological Readiness: Technology transfer and development is vital to the process of transforming economies to enable inclusive growth within the framework of sustainable development and poverty eradication. The definition of technology readiness is the set of capacities to plan for, catalyse, sustain, and monitor and report on technology transfer and development in ways that are fully integrated with national development priorities. In today’s world, technological readiness can only ensure quality and quantity of production and service.

Pillar ten is Market Size: Large markets without entry barriers allow faster growth. Both domestic and foreign markets are considered for the market size. Market sizing gives the business a sense of market trends. It gives clue on the necessary drivers of demand, as market movements often continue in one direction or another for a period of time. What’s more, those trends often indicate whether substitutions are available and whether that could potentially affect market size.

Pillar eleven is Business Sophistication: The eleventh pillar of GCI is sophistication in business practices that improve efficiency of production of goods and services. Sophistication is a key factor for innovation-driven economy and concerns the quality of a country’s overall business networks, as well as the quality of operations and strategy of individual firms. This pillar indicates local supplier’s quantity and quality, business cluster development, nature of competitive advantage, value chain width, control of international distribution etc.

Pillar twelve is Innovation: High competitiveness needs technological innovation. Advanced countries invest more in developing technologies. But other nations too can improve their productivity by making incremental improvements. Fundamentally, there are only two ways of increasing the output of the economy: (1) increase the number of inputs that go into the productive process, or (2) think of new ways in which you can get more output from the same number of inputs. Innovation drives the economic growth faster in people management, money management, processes management, materials management practically every aspect off business.

India’s ranking:

The most recent 2017-2018 edition of Global Competitiveness Report assesses 137 economies. This graph provides the latest reported value for – India Competitiveness Rank – plus previous releases, historical high and low, short-term forecast and long-term prediction, economic calendar, survey consensus and news. The actual data, historical chart and calendar of releases were last updated in May 2018.

Globally, Switzerland ranks at top for past six years. In 2018 at number two stands United States, at third position Netherlands, fourth Germany and fifth United Kingdom.

India has a long way to go.