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Indiresan: a critique



Thanks Prem for the Indiresan speech which was quite good.

Nuggets of wisdom from Indiresan (which corroborate our approach):
================

"It [MITI, Japan] assumes that bureaucrats can out-guess entrepreneurs. We
know that is not true. It is merciless competition (with unsentimental
bloody exit) that ensures prosperity for worthwhile ideas and the
elimination of useless ones."

"Our country will march forward in technology only when our managers stop
insisting on assured returns, and prepare to gamble to lose all -- or win
the jackpot!"

Error of judgement:
==================
On the other hand there was at least one complete misunderstanding of
technological progress by Mr. Indiresan, which I thought I would
challenge since he misses out a vital point here: 

"East Asian countries operate with technologies that are available for
sale, not with innovations of their own. However, a large country like
India cannot become rich by selling TV sets and notebook computers based
on somebody else's design." 

This is not quite correct. For one, India today is SMALLER than most East
Asian countries in its total GNP, leave alone its per capita income. 
Second, the East Asian countries did not quite copy the designs from the
West. They broke these down into locally assembled parts, made them
cheaper and of better quality, and re-sold them to the USA, Japan and to
the rest of the world.  The case of Samsung's microwave ovens is world
famous for having virtually ousted the US manufacturers from the
production of microwave ovens. By "copying" these designs their engineers
learnt a lot, and then added their own brains to the process. What SE Asia
did 30 years ago is being done precisely by China since the last 20 years
and it too is getting rich at an 'alarming' rate of over 10% per year for
the last 20 years!

Clearly, a nation need not be a nation of 'inventors' to be able to get
rich and to succeed on a vast scale. To be able to invent is desirable,
but not a necessary condition.

There is this great difference between an inventor and an entrepreneur
that Mr. Indiresan missed out (though he mentioned Schumpeter and
therefore should have known better). The inventor need not always be the
entrepreneur (Edison was an exception). To be an entrepreneur (e.g., like
Henry Ford), all you need is to utilize existing technology, and to add to
it the following:  capital, management, and marketing. India had the
potential (and still has it) to have copied the products of the West in a
GRAND scale and to outsell all the Japanese and East Asian sellers.
Copying is no crime: it is a great achievement to be able to copy while
adding one's own input of management. That is the secret of economic
success. 

Give me ten thousand Indian engineers who have the freedom to buy
technology or otherwise copy everything they can lay their hands on and I
will produce an industrial powerhouse unparalleled in history. Our
theoretical scientists seem to be giving too much importance to innovation
at the expense of entrepreneurship. That is a great folly. Our first
objective has to be to earn like mad: by selling, selling and selling,
goods.  Obviously, only goods that are in demand will sell and there is
nothing better than that, initially, to copy and produce on a mass scale.
These things would even sell in India, believe me!

People keep saying that Japan copied all the time, but remember, Japan is
the number 2 economy in the world in size today, and has become so in a
mere 10 years, unlike the USA which took 200 years to become what it did.
Even this manifesto that we are writing is nothing but copied stuff from
various sources. If we can get these copied and stolen ideas to work in
India, we would have converted India into a super-power.

I am not against invention or innovation. Only against looking down upon
the East Asian nations or on Japan who are considered 'second' rate by our
super-geniuses and theoritical scientists who could not themselves produce
much innovation or wealth for India nor could promote a culture of
entreprneurship because they thought that 'copying' was intellectually
inferior. 

Sanjeev

On Sun, 10 May 1998, Premkumar S. Rallabandi wrote:

> People: Here's a wonderful thing on the net you all should read; this is
> the speech given by Prof. Indiresan at IIT Delhi recently. I am sure
> we can learn some very important things from his speech.
> 
> Go to :
> 
> http://www.glue.umd.edu/~arvindr/articles/indir.htm
> 
> More later,
> 
> Prem.
> 
>