Fifty years ago, if you had asked the average person to paint you a picture associated with the word 'invention', he or she would have conjured up a scene of a vast clinical-looking space, infested by hordes of busy -looking, white-coated, bespectacled technicians surrounded by an array of vats, test tubes and electronic monitoring machines.

Today, if you make the same request to the average bystander, you will be presented with a completely different scenario. Most likely, the picture will be of a ramshackle garage, still occupied by vats and test tubes, but completely cluttered and untidy, with perhaps a solitary human inhabitant looking contemplative while wolfing down Chinese take-out cuisine.

This is because in the 1950s, most people thought that giant American multinational corporations-masters of the universe-had perfected the process of innovation and made it more systems-driven and predictable.

Indeed, many of the dominant players in the appliance, engineering and pharmaceutical industries had invested monstrous sums of money on enormous laboratories that housed graduates from prestigious universities. This bunch of the best and the brightest was meant to regularly churn out a host of innovations that would boost the corporation's income streams.

In subsequent decades, as the technology trajectory became steeper, and especially when the information technology era first presented itself, it became apparent that the original paradigm of the 'garage inventor' was alive and well. In fact, even during the 1950s and 1960s, there were arguably more breakthrough inventions made through solitary quests and serendipity than in the laboratories of mega corporations. It is quite another matter, of course, that those inventions were rapidly acquired and monetised by large companies.

The notion of innovation being a decentralised and individual-driven phenomenon took even stronger root during the internet boom of the 1990s. I recall the vociferous advice of a young Californian who was helping our group float a dot-com initiative at that time, that we should strictly limit the size of the startup team to nine people, and resist demands to escalate their allocated budget, or else we would not benefit from the so-called 'garage effect'. He proved his point by disappearing to Pune with a shrunken team, locking himself up with them in an impromptu office, and delivering the website in an unimaginably short period of time.

Small wonder then that large corporations around the world have changed their approach to the management of innovation. The giant labs may still be built, and the investment in shiny new equipment continues, but the human resources are increasingly structured as clusters of small business-driven innovation units, which create their own physical spaces, forming, in effect, 'garages' within the umbrella research centre, much like the concept of boutique stores within a large department store. The clusters have focussed objectives and are incentivised to deliver breakthrough results. The size and composition of these teams may vary, depending on whether the projects they are working on are mainstream, or are of the shot-in-the-dark variety. At Mahindra, we call the latter 'skunk' or 'sand-pit' teams.

Even though such approaches are bearing fruit around the world, no one will deny that in terms of sheer numbers, the majority of innovations still emanate from widely dispersed individuals who are driven by their own motivational ghosts. In India, the champion of such endeavours is the National Innovation Foundation, chaired by the indomitable Dr. (R.A.) Mashelkar and administered by the tireless IIM professor, Anil Gupta.

Anil has set up a network that monitors, encourages and rewards a multiplicity of inventors who thrive in mainly rural areas. Some examples of this breed provide true inspiration.

The first prize in 2003 in the general machine category of the NIF awards went to Radhey Sham Tailor, 62 years old, and Nathulal Jangid, 52-residents of Sikar, Rajasthan, one of whom is a commerce graduate and the other a fifth standard dropout. In 1999, during a bus journey through Rajasthan, they looked out of the window and saw labourers digging trenches under the scorching desert sun. Unable to forget their plight, they went back home and invented a trench-cutting machine attached to a tractor, which could dig 65 metres of trench per hour. They've already sold 15 such machines for Rs 1.5 lakh each.

Or take the case of Yusuf Khan, alias the 'mumphalli machinewala', who won the first prize in the farm equipment category. Khan is an eight standard dropout who runs a small tractor-repair workshop in a groundnut-growing region. Farmers would often tell him how difficult it was to get labour during the harvest season, and how they wished their lives could be made easier. Tinkering around for a year, Yusuf produced a machine that could draw power from a tractor and dig out as many groundnuts from one hectare of land as a hundred labourers. Additionally, it sifts out all the mud from the groundnuts. Not bad for someone who never finished school!

There is a clear trend of the increase in the number of such innovations since the onset of liberalisation in India. As a consequence of the growing aspirations for a better life, the dramatically improved confidence in our own technical capabilities, and the significantly greater prospects of being rewarded through entrepreneurial initiatives, the number of patents, both domestic and international, filed by Indians have shown a sharp rise. The number of patents filed is an excellent metric for measuring the innovative nature of a society or country. Of course, this presupposes a widespread awareness of the gamut of Intellectual Property Rights (IPR) issues, but such awareness has risen sharply in the Indian corporate sector, and thanks to bodies such as the NIF, in rural areas as well.

Interestingly, this is one of the areas in which we are neck-and-neck with China. However, when we compare ourselves to the western world, or to South Korea, we are still laggards, and clearly there's a long road we need to travel before we can claim to be a 'knowledge society'.

So what are the lessons learnt from the global experiences of the innovation process, and what are the imperatives that we can derive from those learnings that would assist us in moving more rapidly down the innovation highway? I'd like to consider just three lessons, and three imperatives:

Lesson one: A democratic society and a market-driven economy are clear pre-conditions for the institutionalisation of a culture of innovation. An unruly democracy like ours is often labelled 'chaotic', but we could credibly postulate that chaos is a better instigator of creativity than heavy-handed authoritarianism, which promotes conformity and abhors individualism.

Supporting this contention is the fact that the rate of innovation in India has accelerated since liberalisation, and that we have caught up with China in this sphere, despite our late start in the reforms process.

Lesson two: Societies that discourage the fear of failure, and celebrate innovators and their efforts, usually exhibit a high rate of innovation, and hence a high rate of patent filings.

If the planet is to survive, India must become the world's laboratory where innovative solutions are developed to combat communalism, poverty, urban chaos and environmental degradation

Lesson three: Successful and innovative countries have invested, whether intentionally or fortuitously, in what I would loosely term the infrastructure for innovation. This 'infrastructure' includes physical elements such as communications and connectivity, but more important, a regulatory environment that enforces a strong IPR regime, encourages copious sources of venture capital, and facilitates speedy corporate establishment and transformation.

What imperatives, then, ought to be derived from such lessons, both for Indian companies and for the governance of the country?

1. It is clear that given our relatively late start in economic liberalisation, we will take a while to catch up in the innovation race, as reflected by patent filings. However, the recognition that there is a correlation between market reforms and the innovation process should be one more weapon in the armoury of liberalisers in the government against those who would retard the reforms process. For Indian companies, there is a clue here that there is no real benefit living in a democratic society if the internal structure of a corporation is autocratic. To unleash the latent creativity of its people, an organisation must break barriers that inhibit free expression. In addition, companies need to promote an internal market economy that encourages and appropriately rewards innovation and enterprise.

2. Failure is not enjoyable for anyone, nor should it be, but neither need it be so stigmatised, especially if it is the by-product of entrepreneurship. Research shows that out of 3,000 new ideas submitted for industrial development, about 125 fructify into small projects, of which just nine will result in significant development, four into major development, 1.7 are launched, and only one will succeed! So, failure is inevitable. The great risk is that applying stigma to failure makes potential entrepreneurs risk averse, and we lose out on their possible success. We should avoid forgiving scamsters, but we must admire honest serial entrepreneurs who always get up after a fall, and we must, without fail, celebrate innovators, be they pure scientists or entrepreneurs. Award functions for Bollywood are now a dime a dozen due to their commercial broadcast potential, but we need to find a way to promote many, many more award ceremonies for those non-celebrity innovators whose work dramatically improves the quality of our lives.

In President Kalam, we have a true champion of innovation and its devotees, but the CEO of every company needs to emulate his cheerleading. Like him, every corporate leader needs to set stretch goals that test the limits of our potential. Ironically, we stretch ourselves very little for a nation that invented the science of stretching-yoga!

3. We need to move swiftly to install our own infrastructure for innovation. The broadband revolution that is underway will sort out connectivity issues and enable the creation of a widely-available base level of knowledge and information, apart from disseminating knowhow on IPR matters. But the crying need is for more plentiful and widely-available venture capital, particularly for small innovations attempted by rural entrepreneurs. What we need is some sort of micro-venture capital system, akin to the famed micro-credit system popularised by the Grameen Bank. Finally, if we do want an environment in which serial entrepreneurs and innovators thrive, then we must foster a system that de-bottlenecks the establishment of new companies and that permits the speedy dissolution of legitimately failing enterprises. Serial innovators do not last long with millstones around their necks.

These imperatives cannot become inevitabilities without strong willpower and execution. So will Indian innovation become yet another victim of the age-old story of poor implementation and poor infrastucture? Perhaps, but I do not believe we will let this happen.

A Chinese economist once told me that the needs of China's population were so great that China was "condemned to growth".

In India, we face enormous problems that are faced by most developing countries. If the planet is to survive, then India must become the world's laboratory where innovative solutions are developed to combat communalism, poverty, urban chaos and environmental degradation.

India, therefore, is condemned to creativity.