Centralization Vs Decentralization Context Innovation

Innovation inspires me. I always get attracted to things which are new or out of the ordinary. I believe there always is scope for improving human beings and processes.

Money excites me. Resource management, as a wise man once told me, is not one of my strengths. I am both; an impulsive and a compulsive spender.

However, this post is not about my attraction towards innovation or my spending habits. I am interested in finding out whether a centralized or a decentralized system, primarily economy, is more suited to the spirit of discovering newer concepts and processes to improve productivity of present processes. Unfortunately, so far this question has remained unanswered , like many other questions which keep popping up in my head.

Centralization leads to accumulation of resources in a few centres and resources are certainly needed for innovation to be nourished. Decentralization, on the other hand, leads to more flexible, adaptive and agile systems.

If we look at the latter half of the past century, the USA and Japan have been the two largest economies. The USA is a pretty young nation with a large landmass and abundant natural resources, it also houses a very diverse population and attracts talent from all corners of the world. Japan is a densely populated, ethnically homogeneous, resource poor nation with the oldest continuing monrchy in the world.

I havn't been to either of these nations and my knowledge about their social and economic setup is very limited. Succesful monetization of innovative technologies has played a key role in the global economic dominance displayed by these two nations. Ofcourse, the political, cultural and military might of the USA cannot be ignored.

Few years back I read a study on the net which said smaller, economically developed nations like Australia are perhaps more innovative as compared to the USA. What happens is, in most cases these concepts are commmercially exploited by big corporations in bigger, developed nations.

India is said to be one of the least innovative countries in the world. Could this be attributed to the centralization of political and economic power. Regional political parties are showing their might as the genral elections come near and the big national players are being forced to eat the humble pie, state after state, as far as the distribution of seats is concerned. Another reason could be our social and educational setup and our attitude towards risk and entrepreneurship. Overall, security is given prime importance. Though Indians have contributed to the development of new technologies and processes, most of these discoveries and inventions have materialised through non-Indian institutions.

China has recently announced a new initiative to attract foreign talent. Time for India to make some major changes as well. Copying wisely is an integral part of innovation.

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