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Re: Indiresan: a critique



Hi Puneet:

Two things:

a) Structure to this discussion: I'm afraid, there is none, and no one has
proposed one yet... So we are "hitting" on topics at random, as and when
something comes by. I'm trying, to the extent possible, to sift these
ideas and to add them to the appropriate place in the manifesto/ etc.
Maybe you can "take over" an area of your choice and propose specific
additions/ policies to the document.

b) I could not quite see where we are in disagreement. I have not
disparaged innovation. I am always saying that we must reach at least a
25% level of college-educated Indians (as in the USA) [and tens of
thousands of more Ph.D.s than we have today], rather than being content
with 60% literacy.  The entire growth of the West has been fuelled by
technology, and so we must go for greater and greater innvovation (we
discussed IPRs some time ago, as a means to promote innovation).

My disagreement with Mr. Indirisen was on a very specific point which you
have also agreed with me on ["Sure like China we can mass produce many
products that can provice the initial push ..."]. Maybe when one looks at
his audience (IIT engineers) his view is somewhat acceptable. But it is
essentially and historically wrong, and we must see it as that.

One of my papers in the MA exam in 1986 was on Japanese economic history. 
Japan was almost entirely a "copycat" for about 85 years, from 1870-1955.
Its economy was driven by getting access to technology (primarily through
its students who were sent abroad to study and then came back) from the
USA and exporting cheap versions of goods demanded in the western
economies. Only after 1955 do we see the seeds of original work in Japan,
when things like the Sony walkman, etc., started coming out.  Similarly,
Korea and Taiwan have been essentially "copying" for the past 35 years. 

(By the way, I am subsuming minor innovation under "copying.") 

I again refer to the Samsung example of the microwave oven and their
getting all microwave ovens from all over the world, breaking them down
(since nobody would give them the secret to the main component), and
experimenting locally till after two years and thousands of experiments
later, they were able to replicate a microwave oven. The rest is history,
of how they outsted GE from the production of microwave ovens.

India does not need to reinvent the wheel (TV/ computer memory, etc.). It
simply needs to get down to the task, initially (and that might be a few
decades), of using its own engineers to pirate the world's technology
(without violating IPRs), and to produce goods of equally good or higher
quality which can be sold in the world markets. 

Actually, we are in a much better position than Korea was in. Our best
engineers (at least some of them) are sitting in the heart of these
companies abroad. If we can create the right economic environment then
these people will come back to India, create that "old" technology (you
don't have to produce at the cutting edge in many sectors, just cheaper
and of better quality), maybe improve it a bit or two, and outsell all
other East Asian or other Tigers. We are talking of a huge market here
(not computer software, on which I agree it will take time to compete):
white goods, components, labor-intensive goods of all types, etc. 

One of the primary reasons why the East Asian economies collapsed last
fall, was the continuous "stealing" away of their share of this "copycat"
market by China. We can do that to China, if we want, and do it in a
faster and better way.

The other task, of building original research capabilities, has to go on 
simultaneously. However, let me pose a fundamental question to you to be
answered:

What has to come first: plain wealth or research? When the poor in our
slums and villages are screaming for our rocket scientists to show them a
way out of poverty, when the politicians mind is almost completely
exercised with the issues of managing our basic problems, how do you
propose to build such universities as Harvard or Stanford. The economy is
so poor that there is great resistace to fund research. 

Further, the best brains who could have done research for India find it in
their **economic** self-interest to abandon India as soon as they get
their IIT degrees (by the way, most of the people on this list are IIT or
other engineers and most of you have abandoned India - at least
temporarily, during your working careers - and perhaps rightly so).

Finally, given our pathetic struggles for power (which Prof. Indiresan
also mentioned) within the existing research institutions, which dedicated
researcher would like to continue in this field, anyway?

Like I said, we are talking about ** doing ** something. I think that we
cannot, in this situation, expect great innovation in India, for quite
some time to come. What we can do, is to produce wealth. That is the first
prioririty, anyway.

I think therefore that instead only of educating our engineers to fit the
American system, we have to bring the American economic system of
competition to India, and let loose our engineers from all over the world,
into India, to use the resources of India, to produce the goods that the
world will finally ** buy ** from us.  

I am therefore nowhere disagreeing with you: just re-prioritizing. Wealth
first (through entrepreneurship); innovation later.

Sanjeev


On Mon, 11 May 1998, Puneet Singh wrote:

> Sanjeev,
> 
> I personally disagree on your stance on this. Maybe there is some
> misunderstanding between what prof Inderesan is saying and what you
> and I are interpreting. If what you are saying is that we
> go ahead and "copy" any idea, technology and mass produce to make it 
> cheap (like the East asian countries you mentioned): that is not what
> Japan did to reach a number 2 economy. Infact from all I know on
> technology sectors, Japan has taken some extremely innovative measures
> to get where it is today. And in an economy that is growing global
> every day we can either be a back end flow or take a lead and get a
> surge, a lead that will boost growth. Sure like China we can mass produce
> many products that can provide the intial push (which I believe we
> should) but even China is moving towards innovative work itself
> these days (they have semiconductor fabs that cost over $1 billion
> and a lot of supporting technology). 
> 
> As a simple example, in our much touted "sowftware" growth in the last
> 5 years, all that India has provided is solution to tedious manual
> tasks like solving the Y2K problem etc bringing in peanuts in foreign
> investment compared to what can happen if a true software company like
> Infosys (which unfortunately also does a lot of "support") work on 
> problems that can target a much larger market. If you or I think that we
> can reinvent all that already exist in the current US technology
> or copy them violating all patent infringements then we are definetly
> not taking the path of least resistance, infact an impossibilty. Even today
> the US industry is fuled by innovation at all levels: industry, univs.
> Infact what Prof Indersen says in the article is how important it is
> to approximate and reach a working solution than look for exact answers.
> To think. We need to take lead in some fields so that we can trade
> them off for what the west already has. Trust me none of these companies
> will divulge anything that they can sell to India, and India can buy
> only if it can sell something in return (or devalue currency till we
> ship out gold)! Unless ofcourse we start cheating (like in the pharmacuetical
> industry) and keep ourselves insulated from the rest of the global
> market.
> 
> Working at Intel, or when I look at Microsoft, Oracle or any of the
> high tech companies in the silicon valley I can see more than ever
> how innovation can boost economy (much of US economy today is fueled
> through this). And expectation from this sector is so high that profits
> of $1.3 billion last quarter was not enough to keep Intel stock holders
> happy (it fell from $2 billion previous quarter)! I personally met
> Sabeer Bhatia over the weekend, a graduate from Stanford who started
> Hotmail (recently acquired by Microsoft for ~$50 million). The company
> grew from an idea in 1995 to where it is today. And thats just another
> example. The future of any economy is based on innovation. Japan and US
> are in constant race to be a step ahead and capture the market. Sure Coca
> Cola still sells just based on a brand name (patented product) but
> whats making things cheaper for them to manufacture is technology thats
> a lot more than soft drinks. A healthy technology spins off in great ways.
> The word technology itself says it all.
> 
> 
> If you look beyond providing free opportunities and ask who or how 
> industrialization occurs, it is through innovation and execution.
> Ofcourse not everyone plays the same role and any economy needs people
> doing different services to fill in the spaces, but the audience that
> prof Indersen is addressing to is students from institutions that are
> supposed to provide that lead. I, being a gradute from IITK know exactly
> what he is addressing to when he talks of so many of us becoming
> management or civil servants when what we are trained for is totally
> different application skill set. 90+% of innovators in the silicon valley
> are graduates from MIT, Stanford etc. Andy Grove, CEO Intel, is a PhD so are
> Gordon Moore and Criag Barret. So is Suhas Patil, CEO founder Cirrus Logic
> .... Not that one needs a PhD, or every one can make it to that degree
> of success, but people like them are responsible for where the US economy is 
> today. Research and learning in science has lead to technology and growth.
> And from what I've seen in grad school there is tremendous more to come.
> Sure India might catch up with the current US in 20-30 years but US
> would have moved far ahead by then and you and me will worry and complain
> why we as Indians cant do it. All Prof Indersen is saying is to 
> experiment & find the right and most workable solution to every problem.
> To take new challanges, atleast some capable folks should.
> 
> Anyways, I have spoken enough. Gotto get back to work. BTW, to the
> group I would request more efficiency and structure. I, like many I'm
> sure, find it difficult to keep track of everything (not all of us are
> writing a book:)! I guess I will be happy to contribute to any techy
> related discussions.
> 
> Puneet
> 
> > 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.
> > > 
> > > 
> > 
> > 
> > 
> > 
> 
> 
>