Rising’ and ‘flat’ technologies: Facets of innovation(2004)

Discussion Meeting on

‘Rising’ and ‘flat’ technologies: Facets of innovation

NISTADS, Pusa Gate, New Delhi 21 February 2004

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Welcome address

Rajesh Kochhar

Director NISTADS

You would have noticed that the epithets ‘rising’ and ‘flat’ have been put in

inverted commas. Let me begin by defining them. A rising technology is one which is

currently in a rapid phase of development. A flat technology is one that has more or

less been standardized and therefore admits of only incremental improvements. Of

course, a rising technology in course of time will become flat. Reverse flow is also

possible. Television sets using cathode ray tube constitute a flat technology; but TVs

using light emitting diodes are now a rapidly developing field. (Flat TVs are a rising

technology.)

USA tends to drive its economy through rising technologies of the day, parcelling

out manufacturing based on flat technologies to lesser countries. These countries in

turn tend to keep the upper end of the flat tech to themselves and pass on the lower end

down the line. From USA to Japan to Malaysia and China illustrates this sequence.

There are two problems with the term innovation. First, it is an umbrella term

covering a wide variety of phenomena. Invention of World Wide Web is an innovation;

Amul’s selling a pizza at 20 rupees, or the free gift of a plastic bucket with a kilogramme

of detergent powder, is also an innovation. We need to distinguish between innovations

of different orders (or coin more precise terms). Secondly, we tend to glamorize some

types of innovations and over-celebrate success and that too selectively ( Sabeer

Bhatia’s hotmail, but not fellow Asian Jerry Yang’s Yahoo..). History of ideas honours

those who thought of it first. History of economics tells us that they were not necessarily

the ones who made commercial success of it. Windows is not the first operating system

nor Google the first search engine. Both have chequered prehistory. Interestingly

pioneering search engines of the early 1990s carried names such as Archie, Veronica,

and Jughead; they were developed by young university students just past the comicsreading

stage.

The whole world, India included, is being overwhelmed by developments in

information technology. Personally speaking, I am rather happy with the politicized

backlash in USA against outsourcing. There are a number of reasons for this. First, my

sympathies lie with those Americans who are losing their jobs. It is noteworthy that in

the past when manufacturing jobs were exported, manufacturing companies themselves

closed down. But now outsourcing is adding to the profitability of the companies. What

use is economic prosperity if it robs the citizens of their sense of worthiness? Secondly,

the backlash should make India sit up and prepare to flight it out to protect its turf. So

far India’s success in IT has come in spite of India. Time has come for India to defend

its advantage. Finally, and more basically, US protectionism should trigger a debate on

the ethics, philosophy and ideology of globalization. Till date, enforcement of

globalization seems to have been its own legitimation. Globalization should have a

global perspective.

 

India is encouraged to aim at a bigger and bigger piece of the world IT cake.

India’s destiny however does not lie in doing petty jobbery on the periphery of IT. India’s

destiny lies in becoming world’s hub for manufacture of goods based on the high-skill

end of flat technologies. In the high-skill area India at present holds a distinct

advantage over China.

Catchment area for IT enabled services is restricted essentially to second generation

learners. There is a vast number of Indians who though literate and capable

are not comfortable with English. Their skills and talents need to be employed. Even if

the whole worlds’ economy were driven by knowledge, people will still need to eat food,

wear clothes and shoes, drive cars and fall sick. In a few years’ time information and

communication technologies will themselves become flat. Future belongs to those who

integrate ICT into their public life, governance and economy.

During the past half a century or more India has perfected the art of shoddiness

in industrial and agricultural production. Globalization has rendered this shoddiness

untenable. Either Indian manufacturing should upgrade and become globally

competitive. Or, it should collapse and cease. There are indications that both these

phenomena are already at work. (Of the 500 companies, top 100 have increased their

sales and profits, while the bottom 100 have gone into red.)

 

To become the high-skill manufacturing hub, India should encourage innovation

of lower orders which is unglamourous but profitable. Pfizer has raked in huge profits

from its invention of the Viagra molecule. But if a company were to corner world market

in the lowly aspirin, it will become a blue chip company. If Scotland could persuade the

whole world to drink Scotch whisky, it will be the richest country in the world. Its all

innovative engines will then probably be focused on bottling.

 

How do we learn a language? We first understand a sentence in its entirety.

Next, we break it into parts (known in grammar as parsing) and reassemble these parts

to recover the sentence. We then take these parts and combine them differently to

create new sentences. We can even coin new words and simplify rules of grammar.

To do creative writing, one must know the grammar and have the vocabulary. You

cannot simply teach a person the alphabet and ask him to go ahead and compose a

poem.

 

Innovation is possible only in an atmosphere of extant activity. We have already

remarked on the prehistories of Windows and Google. Similarly, one must have a

culture of manufacturing, even reverse engineering, to be able to move up the value

ladder. (Japan, South Korea, Taiwan and India’s own pharmaceutical and automobile

sectors are examples of this). There is need to appreciate that individuals are not

innovative; systems are. All human beings are instinctively creative. It is not sufficient

for a social system to have in its midst manifestly creative people. The system must

also be mentally and materially in a position to encourage, recognize and most

importantly benefit from individual inventiveness as well as floating knowledge.

 

So far we have dealt with what we may call healthy innovation. We must also take note

of some unhealthy trends.I was once given what was supposed to be a five-rupee coin.

It was in fact two half-rupee coins welded together. Economics of the exercise is

interesting. Inputs cost one rupee: add another 25 paise for welding. The product sells

for five rupees , giving the innovator a profit of as much as 300 %.Profit margins may

be tempting but methods employed are not acceptable. category of unhealthy

innovation. There are othe , more serious , examples from across the world. Chinese

manufacturing units are competing among themselves to bag contracts from companies

like Wal-Mart. Competitiveness is achieved by paying exploitatively low wages and

hiring child labour. Many multi-national companies have been indulging in practices in

their units in poor countries which they dare not attempt in their own.//

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