Junk Jugaad, Innovate India
July 24, 2020
The goal of Make in India or Atmanirbhar Bharat can be concretized only on the foundation of products of world quality manufactured in India. For this India needs an innovative culture, mind set, and eco-system. Alas, it is sorely lacking.What prevails is the acceptance of jugaad – patchwork – technology. Better late than never, however. India needs to identify limited key sunrise sectors – artificial intelligence, blockchain, electric mobility, high value pharma etc. – in which it should attempt to leapfrog at global level so as to become a hub of creative destruction (to borrow a phrase from Schumpeter) and catapult in the category of developed nations. We should be able to research, develop, prototype, manufacture, and deliver world class products to cater to entire globe including the vastly untapped domestic economy. The Indian entrepreneur must get size and scale for this.
Alas, Indian govt. remains under ambitions and feeble hearted. To take one instance, the govt. is trying to move rapidly on Artificial Intelligence (AI) front. Both start ups and established corporate are seeking to develop AI solution, in areas spanning from agriculture to armaments. Old economy entities are deploying the technology to improve product and processes for better delivery and satisfaction to end users. Having said that, however, the focus is on AI applications of incremented value addition kind, not on fundamental research. Even in that, the work pertains to improving existing solutions, and innovations already available with tech giants. The race for leadership in the field is between the US, China and EU. All of them have systematically planned to dominate the global AI scene, spending huge dollars on one hand and setting up the appropriate eco system on other. Indian govt. needs to think big and take a long term view.
Models of successful innovators from China and West would be instructive here. Chinese companies first adopted Silicon Valleys’ technologies for Chinese consumption initially and then attempted to improve upon it. The Chinese routinely monitor which apps world over are successful, then duplicate them, and finally improve upon them. Silicon Valley itself works like that. Zoom, for example is an evolution and work in progress from WebEx, Skype, and Blue Jean. Most technically advanced companies first try to copy (steal …) an innovation and if that does not work, then they buy. However, real success lies in what Schumpeter calls creative destruction. Apple cannabalises its own technology by repeatedly coming out with better version. An iPad replaces its own laptop. Be warned, however. We are not suggesting intellectual properly theft itself which would lead to retaliation and legal action. Chinese companies are adept at it. Huawei is being accused of stealing from Cisco, Nokia …. That is why they are facing backlash worldwide.
Then Chinese blocked Google, Twitter, Netflix and many more, while-putting obstacles in the path of companies like uber so as to grow its own tech giants. Alibaba, Baidu, DJI, WeChat, and more raced ahead. Huawei is a real giant in 5G. Protectionism created a fertile grand for local start ups to avoid foreign might, while the state provided them all enablers. Silicon Valley moghuls themselves are monopolies which gain an unfair competitive advantage by throwing money around. Copy or buy, is the mantra. India has been negligent both in providing support for meaningful innovation and establishing effective data protection policies. Taking advantage of it, the Western and Chinese innovators have explanted the Indian market to the hilt.
The Indian govt. has to minimize obsessive restrictions and provide enabling conducive environment to Indian companies; these should be encouraged and supported to become behemoths like Reliance Jio, Hero Motors and Bajajhave been able to hold on in an intensely competitive sector because they have significantly invested in R&D. When you don’t invest, say, as in case of domestic cell phone market, the foreign marauders attack and take over. In 2015, Indian companies had 30 percent market share of domestic smart phone market; in 2019, less than 10 percent. Meanwhile the Chinese companies dominated the entire value chain, from basic technology to market channels.
In India a vicious circle exists. Higher R&D needs higher sales, but higher sales would require enhanced R&D. We must break it by establishing collaboration between industry and academia, as in the West and even China. Indian companies that cannot invest enough in R&D can internalize – recognize, assimilate, activate and marketize – the technology developed by academic and research scientists in various institutions. Of course internal R&Dwould still remain relevant. Collaborative research projects can be set up both for nascent and well understood technologies for possibility of coming out with incremental and disruptive outcomes. What is needed is building up of seamless lab to market capability. A government can perform four roles, planning, producing, facilitating and controlling. In order that we are able to substitute imports and become globally competitive we need to understand certain ground realities. First, companies produce, the govt. should ideally only provide enabling environment and let companies attain size and scale. Second, don’t scorn at monopolies – only they have the resources and muscle – like Reliance Jio,since they are the norms (Google, Amazon, Apple). A company initially attains monopoly domestically and then it takes size advantage globally. Chinese govt’s support for Huawei, Alibaba and many more is illustrative. Third, the govt. should facilitate global entry of large domestic players by providing all kind of support - incentives, lobbying – abroad. That is how rest of the world has been doing business. And, finally, realize, that the Indian companies can become part of global supply chain only on the basis of needs of the buyer, and not on government prompting. In brief, govt. including at India, is not a creator but it can be a facilitator.
A strong edifice needs a solid foundation. This is where the most trouble lies. While Indian higher education has been constantly registering improvement in QS global rankings, two questions still hound us. First, while India initiated steps in technical education at same time as did Japan and China, the latter have paced much ahead. Quality of investment, administration, and the intellectual climate – all have to share the blame. The pursuit of pseudo-scientific theories about Indian knowledge (even in nuclear physics, and plastic surgery) can hardly provide stimulus to real innovations. Second, 7 Chinese universities figure among the top 50. India’s IIT, Bombay stands at 172th position! Why? Partly this is because of lack of free flow of information. There exists a constrained universe of quality academic research on one hand and large incentive for brain drain on the other. India has a score of 0.32 (out of a maximum of 1) on Index of Academic Freedom. If India wishes to meet military might of China or beat China in global vending, then first it needs to rival it is R&D where it lags China by miles. India comes nowhere near Beijing in supply of globally competitive talent in areas of future import like AI, Internet of things, etc. To move ahead, India needs stepping up investment in education. But the telling fact is that whereas the tertiary grossenrolment ratio (GER) is over 50 percent for China, for India it is merely 28 percent; a decade back it was 20+ for both. Not only GER, the learning levels need to improve significantly. Sobering fact s that these are dismally poor; nearly half the students in class V can read only class II text (in 2011); while only a third enrolled in class III could read a word in 2010, which fell to one in five in 2018.
Rhetorical shibboleths about innovative India have only created a chimera! Time to get real.
(The author is Associate Professor, PGDAV COLLEGE, UNIVERSITY OF DELHI)