Since my blog is celebrating 25 years of the 21st century this year, and since the first 25 years of this century and millennium have been mostly about some astounding innovations – and disruptions – I thought it is only appropriate that my first blog post of 2025 be on innovations.
While many of us think of the last 24 years clouded by the 2008 Financial Crisis and The Great Recession, a terrible pandemic in Covid-19 and also devastating natural disasters around the world as well as wars that are still raging, the fact is that these years have also witnessed some of the most dramatic improvements in the way we use technology and in scientific innovations that have brought huge benefits to mankind.
As it happens, 2025 is the year President Trump assumes office for the second time around and has promised sweeping changes in tariff structures and trade with the rest of the world. I have written already on why 2025 could, therefore, be a year of slowdown and how we can navigate it. In this post, I would like to focus on specific kinds of innovations that might be required for us to be able to weather the trade and supply chain storm that is coming, and at the same time plan for long-term growth in the future.
I think most of the innovations will be led by technology, both information technology and biotechnology, which are making rapid strides in these decades. However, on AI, I think the research and innovation efforts ought to be more concentrated in solving larger problems that the world faces in order to bring about more enduring and meaningful improvements in our lives and work. Too much of time, energy and money has been spent in generative AI, which I think is possibly not the best use of AI. Not only is much of it wasteful in my opinion, I think it actually poses bigger threats to humankind, not least because the developers of generative AI wish that we all cede our cognitive, intellectual and decision-making powers to machines. Autonomy in AI is a bigger danger than we realise, and this is why I urge proper and sensible regulation of it.
Instead, if AI can be harnessed to solve problems in healthcare, medicine discovery and scientific research, in clean energy solutions, in compiling, computing and analysing vast amounts of data, say, in research organisations, IT firms, financial institutions, and indeed, in the entire corporate sector, it would bring us a world of more necessary and life-improving benefits. This, while also keeping in mind that in an ideal world, AI ought to be a productivity tool for employees, not a replacement for them.
Similarly, with biotechnology, there are huge benefits it can bring to both healthcare and medicine as well as to agriculture and new methods of farming that minimize the damage from extreme weather events which I wrote about years ago as being absolutely essential for the future of this planet.
On to specific sectors of the economy, which we can never stop discussing. In 2025, perhaps manufacturing will do well to upgrade its technology to suit the more digital era as well as employ clean technology. The time has come for an overhaul of industry and the longer we wait to make the necessary investments, the more expensive it will be and the more we will lag behind the times. In fact, as I have written before, these kinds of investments by companies are perhaps the best way to use the slowdown year for becoming more modern and competitive. Of course, here again, companies ought to be mindful of the impact on labour of any new technology and minimize job losses to the extent possible, while also helping to upskill and retrain their workforce for the future.
In services, which I wrote recently could see a boost in 2025 and beyond, AI can make a huge difference. Here, the effort ought to be on improving the level of service offered to customers as well as to streamline operations. A very important area in services to focus on would be on vastly improving the level and quality of public services offered to citizens. 2025 could well be the year governments and city administration authorities such as municipal corporations employ digital technology and improve citizen-government interface at the local and state levels.
Agriculture needs massive new innovations, as I have just mentioned. These ought to minimize the damage from extreme climate and weather conditions, as well as provide for well-functioning supply chains, including cold chains. New methods of farming and more biotech solutions will have to be found.
Of course, as with all things that are step changes in technology and productivity, education and manpower training and upskilling will have to keep pace with the needs in each economy. In terms of specific requirements in India, I think that we could use 2025 to solve/resolve certain conundrums. Some of them are critical to the health of the entire economy.
- Is the Indian urban middle class really shrinking, as some senior voices in the corporate sector have shared recently? If so, this poses a real danger to economic growth, because the middle-class is the main consuming class in India. Of course, I believe that there are many middle-classes in India and it is for India’s premier think-tanks such as NCAER to research and estimate the size of the various middle-classes as they once used to do.
- The conundrum of the disappearing small car in India. Is it really a fact that there is no longer a market for compact/subcompact cars in India and what could the reasons be for its disappearance. This is not something that India should be proud of but instead innovate to resolve. Is it that prices have risen so much in recent years, that small cars have priced themselves out of the market? Should GST on small and mid-size cars be 28% as it has been all these years? I think all popular car segments, excluding luxury, ought to have GST of no more than 18%. I think car companies in India also need to rethink their pricing strategy; I notice that every new year begins with price increase announcements by most car manufacturers, and I think 2025 will be no different. This, when through the year they then offer huge discounts and benefits, eroding the value of their brands.
- Age-old and chronic unemployment problem, which seems to have worsened especially for the youth of India. CMIE’s unemployment rate for India on a 30-day moving average basis was 7.7% on January 2, 2025. Time to think of better educational programmes that make people fit for jobs across industries, and also better training and upskilling programmes by the corporate sector for employees. Better linkages between academia and industry will certainly help, as I have been writing for a while.
- Solving the perennial problem of foodgrain and other agricultural produce going waste. India needs to seriously invest in proper food storage warehouses and cold chains and better management of the entire farm-to-fork supply chain.
- Indian technology companies moving up the value chain with their capabilities and product offerings and becoming more competitive in the international market. I think it’s time our Indian IT companies started thinking in terms of building their brands in a differentiated way.
- Other knowledge economy areas where India seems to have a competitive advantage such as pharmaceuticals making bigger strides in research and medicine discovery, not merely in manufacture.
- Exploring engineering services in design and consulting as a new area of innovation and investment, given all the IITs and other premier engineering institutes we have across the country. I think this has the potential to grow into a huge industry in the coming decades, considering the various types of new technology being employed today and in the future. We ought to be able to compete effectively with companies from the west, as well as those from Japan and South Korea.
- Can 2025 be the year when Indian luxury goods finally come into their own and find markets not just in India, but overseas as well? I had written about the potential of leveraging our rich and varied crafts and artisanal traditions and skills in India to build our own kind of luxury industry, benefitting Indian designers and companies as well as millions of artisans and craftspeople who deserve to be better remunerated for their prized skills. Even if the US market is closed to us because of higher tariffs, Indian luxury will do exceedingly well in Europe, Middle-East, Japan, China and elsewhere, and especially in luxury dominated economies such as France and Italy. For example, The Harvard Business School Study on India @ 100 mentions textiles as an industry where India can build a competitive advantage. From a time when the Indian textile industry was legendary and valued, to its demise in the 1970s and 1980s, to their revival now, it would be another way to restore our competitiveness and a fitting tribute to all those who have ever worked in the industry.
Many of these areas or ideas for innovation require initiative and investments from companies and they also require specific policy measures to be announced by governments. For example, the health of our automobile industry depends not merely on car companies, but on regulation, taxation and other policies as well as the right incentives to promote growth. Similarly, as I wrote recently, our telecom and civil aviation industries are facing huge bottlenecks and need to be revived.
Finally, I must write on how my industry of advertising and brand communications can overcome the economic slowdown this year and also innovate for the future. I have been writing that our industry faces an existential crisis, and if we don’t take remedial measures quickly, we are likely to be extinct soon! I mentioned the news around the big merger of Omnicom Group and IPG in a recent blog post of mine, and while it might help the merged entity save costs and keep their heads above water in the near term, it doesn’t actually solve the problem the industry is in.
I would urge all large and well-established advertising agencies to rethink their business model. As I have already written, it is time for creative agencies to start focusing much more strongly on strategy, especially brand strategy, and be remunerated separately for it, besides the creative work. Leaders in advertising agencies need to add value to the agency’s product which is strategy + creative and must demonstrate strategic skills on brands that client organisations need. In this regard, especially important is brand-building, how individual product brands add value to, and help build, the corporate brand – an area that I have been focusing on in my work on brands that I share regularly on my blog.
I don’t wish to repeat myself, but as I have also written before, advertising and brand communications agencies can spur innovations at client organisations, including with ideas on new markets and customer segments and new product ideas. And we ought to be helping them create valuable intellectual property in the form of intangible brand assets. These are all ways of helping client organisations grow their businesses through brands.
By all means innovate and employ technology, but please let’s not get carried away or blindsided by all the generative AI hype that the industry is awestruck by at the moment. Move up the value chain and think upstream, while also delivering quality work that client organisations expect from us. The entire industry needs to come together and resolve these issues and agree on a path forward, especially on the business model and the remuneration system. Most of all, it’s time to create a new future for the industry that good university graduates and freshly minted MBAs will want to work for, once again.
Let 2025 be the year we all put our minds to innovation, strategy, ideas and new ways forward for businesses and economies to grow. Let us begin by imagining what kind of progress we wish to see in the world in the next 25 years of this century and take it forward from there.
Peripatetic Perch 