Posts Tagged ‘globalization’

Knowledge economy: Global or parochial?(2004)

Posted in Blogs (Articles) on December 1st, 2008 by Rajesh Kochhar – Be the first to comment

Prepared for ‘2004 STEPI International Symposium on Science and Technology Policy’, Seoul, 30 Nov. – 3 Dec. 2004

Knowledge economy: Global or parochial?

Rajesh Kochhar

NISTADS: National Institute of Science Technology and

Development Studies

K.S. Krishnan Marg, New Delhi 110 012

[email protected]

Abstract

We introduce the concept of “rising” and “flat” technologies. Broadly speaking, knowledge-based economy comprises rising techs of the day, dynamic upper-end flat techs and the services sector. Since it is innovation-driven, it cannot be global. This is so because innovation seeks prepared ground; it does not spring up randomly anywhere in the world. Parochiality of new economy adversely affects the world at large at both the low-skill and the high-skill end. Genuinely global economy will be one that ensures improvements in all sectors across the board.

–x–

We can classify all technologies into two categories: “Rising” and “flat”. A rising tech is one which is currently in a rapid phase of development. A flat tech on the other hand is more-or less standardized, so that any innovation in it can only be incremental, Quite obviously, today’s rising tech is tomorrow’s flat tech. Conversely a flat tech can suddenly overcome its stagnation and became rising. We can further divide flat tech into two subsets: High-skill demanding upper end; and low-skill requiring lower end. An important rising tech of the day is the ensemble of information and communication technologies (ICT) which permits high speed, low-cost storage, processing and transmission of data. Since ICT makes it possible to replace vertical integration with horizontal netwoking, it is

also a powerful tool to foster innovation in upper-end flat techs, and in the service sector. USA tends to drive its economy through rising tech of the day, parceling out manufacturing based on flat tech to lesser countries down the line. These countries in turn tend to focus on upper-end flat tech and parcel out low-skill requiring flat-tech manufacturing to countries further down the line.

It is in the conceptual framework proposed above that we now seek to analyse knowledge-based (or new) economy. There is much oversimplication associated with the term. In their on-line Enclyopedia of the New Economy, John Browning and Spencer Reiss gushingly write: “When we talk of the new economy, we’re talking about a world in which people work with their brains instead of their hands….. A world in which innovation is more important than mass production”. Nokia would differ. To prop up its bottom line it is now aiming to mass produce below-the-top mobile sets for markets in India and China. In a similar vein it has been remarked that while steel is 90% material and 10% knowledge, Windows is 95% knowledge and 5% material. True, except that, to use Windows we must have computers and peripherals all of which are 100% material.

OECD in 1996 defined knowledge-based economies as “economies which are directly based on the production, distribution and use of knowledge and information”. APEC (whose 21 members include Republic of Korea) has sought to broaden the definition. “A Knowledge-Based Economy is an economy in which the production, distribution and use of knowledge is [sic] the main driverof growth, wealth creation and employment across all industries”. “In a truly knowledge-based economy, all sectors have become knowledge-intensive, not just those called “high technology”, “Knowledge itself is not merely information written in an organization’s files, but includes culture, the way in which people interact within the organization knowledge about the contacts they use to gain information from outside, and so on”.

It is not possible to define or describe knowledge economy in a precise and an entirely self-consistent manner. May be, a clearer picture will eventually emerge from the loose use of the term in different contexts. Broadly speaking, knowledge economy is an innovation-driven economy where growth is accomplished through capital and manpower as before but by assimilation and creation of new knowledge. Rising tech and services sector belong to the new economy which can also include dynamic sectors of upper-end flat tech. An innovation takes place when a new idea (or pre-existing floating knowledge) is incorporated into the mainstream, and combined with the existing knowledge in such a manner that future developments are influenced by this incorporation. Innovation pre-requires the existence of a mainstream which additionally must have in-built be invested with instruments and institutions for suitable incorporation of a new idea.

In November 1730, Thomas Godfrey, a “poor glazier” from Philadelphia, invented a navigational instrument, a reflecting quadrant, which was used in voyages to Jamaica and to Newfoundland. The next year, in May 1731, the invention was independently made in England by John Hadley. America at the time did not need a sea-faring instrument; accordingly, Godfrey’s invention remained a dead end. In contrast, Hadley’s invention, independent or not, which soon evolved into a sextant, was immediately adopted by all European nations engaged in the hugely profitable maritime activity. Even if Godfrey had been recognized as the inventor of the sextant, it would have been a personal honour; all fruits of his invention would still have gone to Europe. In the closing years of the 18th century, the Indian princely state of Mysore kept British-led forces at bay for some time, using rocketry. Although this caused temporary setback to the British (and permanent psychological damage to the future Duke of Wellington), they benefited from the experience in the long run. Several Indian rocket cases were sent to Britain for analysis. Empirical rocketry from India was incorporated into the mainstream of science, providing the British with military advantage in their pursuits elsewhere, as for example in their wars against the French and Americans.

Human beings are naturally endowed with intellect and imagination. In what channels individual creativity finds expression is determined by cultural factors. It is a defining attribute of industrial societies that they value ideas pertaining to production of ‘wealth. Otherwise, historically more effort has been expended in devising ways and means of appropriating wealth generated by others (through feudalism, stealth, cunning, crime) than in creating it oneself. I once received in Delhi what was meant to be a five-rupee coin. It was in fact made by illegally soldering two half-rupee coins together. The economics of the exercise is very attractive. Maternal cost a rupee; add a quarter for soldering. Product sells at 300% profit. Obviously, we do not have such innovations in mind when we talk of new economy! In the present-day complex and hurried world, new ideas relevant for economic growth can emerge at a fast pace only in a social system that has a vibrant culture of industrial and intellectual activity, which directs individual creatives into productive channels, displays ability to recognize new ideas when they appear; and has the courage to experiment with them. In other words, innovation seeks prepared ground; it cannot spring up randomly anywhere in the world.

Parochiality of new economy is adversely affecting rest of the world at both, low-skill and high-skill, ends. There was a time when a country’s economy tended to be complete in some respects. USA was not only making aeroplanes but also toys and jeans. Now, manual activity is being outsourced wholesale. Technological innovations are not possible in non-tech and very low-tech activities, which can be made competitive only by extraneous means, Chinese manufacturers are competing with one another in depressing wages to be able to offer best rates to WalMart. Adidas has been guilty of using child labour, forced overtime and sexual harassment in getting its sportswear made in Indonesia. India’s position on the world BPO and software map may be exaggerated, but there can be no doubt about India’s preeminence as a destination for such hazardous tasks as ship breaking and dismemberment of discarded computers and mobile phones.

Globalization is encouraging imitation behaviour. Of all its aspects the one that has appealed the most to Indian middle class is access to consumption at international levels. In no way can these levels be supported by India’s agricultural and flat tech economy. Consequently most young well-trained professionals are willingly taking up low-caliber work for international companies, at positions much below their skills and expertise would warrant and at ridiculously low dollar wages which still translate into pretty packets in local currency. Providing peripheral and even core support to rising techs elsewhere and in services sector is creating a brain sink in low-wage countries. A rising tech area quickly divides itself into more and more promising sub-areas leading to further division of labour and increased returns. Ideally, work in rising tech should trigger innovation in flat tech. In reality, high returns on rising tech coupled with its glamour tend to de-innovate and deglamourize flat tech areas to the detriment of a vast section of the world population. A knowledged-based economy is global only to the extent that the catchment area for its human resource requirement as well as the market for it has expanded. A truly global economy will be one that ensures improvement in all sectors across the board.

(I thank Pradosh Nath and Parthasarathi Banejree for helpful conversations.)//

 

Traditional Knowledge and Intellectual Property Rights(2004)

Posted in Blogs (Articles) on December 1st, 2008 by Rajesh Kochhar – Be the first to comment

Presented at Second International Law Conference organized by Indian Society of International

Law, New Delhi, 15 Nov. 2004.

Traditional Knowledge and Intellectual Property Rights : A

historical perspective

Rajesh Kochhar

NISTADS: National Institute of Science Technology and

Development Studies

K.S. Krishnan Marg, New Delhi 110 012

 

Indian nationalist leadership of the late 19th century was in a confused

state of mind. It could not decide whether it should challenge the colonial

empire’s might and incur its wrath or appeal to its sense of noblesse oblige and

ask for small favours. Mahatma Gandhi resolved the dilemma by squarely

placing the west on the defensive on ethical grounds and for all times to come.

(In fact, Mohandas Gandhi became Mahatma Gandhi precisely when he

accomplished this.) Third world countries find themselves in a similar pre-

Gandhian dilemma on the important question of intellectual property rights

associated with traditional knowledge (TK) of which they are the repositories.

Should they individually nit pick or should they collectively take a principled stand.

The latter option , desirable as it is , is difficult to exercise , the more so because

the concept of noblesse oblige seems to have disappeared from international

affairs.

The term third world was coined in 1952 by the French demographer

Alfred Sauvy to denote the economically underdeveloped countries. The First

and the seond worlds were then described as an afterthought.Capitalist,

industrialized countries constituted the first world, whereas the Soviet communist

block represented the second world. The coinage was inspired by the

expression third estate which denoted the commoners of France before and

during the French revolution as opposed to the priests (first estate) and nobles

(second estate). With the collapse of the Soviet Union, the second world has

disappeared, even though the term third world continues to retain its original

meaning.

We would like to define the three worlds in a connected and physically

meaningful way , using the industrial revolution as a marker, with the third world

retaining its original composition. In this new scheme, the third world comprises

countries whose societies have essentially remained untouched by the industrial

revolution. The second world consists of (west European and other) countries

which have been transformed through industrial revolution, industrialization or by

association, but have retained some memories and sensitivities from the preindustrial

times. The first world comprises a solitary country, USA, which is a

social product of post-industrialization era, representing a total break from earlier

times. The second world has been influenced by intra-European responses and

colonialist experience, while the first world has been fashioned entirely by its

conscious and subconscious reaction to the Europe it left behind.

When the world was Euro-centric, it was easy to define what was new. If

Europe did not know of it, it did not exist before. In 1738 William Champion was

granted a patent in his capacity as “the first European to produce metallic zinc”,

even though the process was known to have been brought from east Asia (It

originated 2000 years age in Aravalli Hills, Rajasthan, India.) However 100 years

previously, in 1608, when Hans Lipperhey applied for a patent on telescope, he

was turned down “on the ground that it is evident that several others have

knowledge of the invention”. By the same logic, in today’s decentralized world if

knowledge is available anywhere, it should not be possible to patent it.

Just as the first, physico-chemical, industrial revolution went hand in hand

with European colonial expansion, the second, biotechnological, revolution is

being attended on by globalization. The industrial revolution was an entirely selfcontained

European exercise, though it was facilitated by the subjugation of thirdworld

countries. (If zinc metallurgy had not been imported from Asia, it would

have been invented afresh.) But the on-going biotechnological revolution needs

the third world. It is the third world’s traditional knowledge in civilizationally vital

areas of food and health care that is being molecularized for incorporation into

the broad-stream of modern science. This would have been a laudable exercise

were it not for the retreat of the state and the weakening of internationalism. No

body would have minded enrichment of science if some firms were not getting

enriched in the process.

 

Third world countries are inherently incapable of protecting their TK. They

have become aware of its value because of the scientific advancement in the

west. Most TK of the world is undocumented. Even in countries like India where

it was partially committed to paper under colonial auspices, what is now the

written word was not self-contained. It was meant as an aid to a living oral

tradition. In any case, ancient documents were not prepared to withstand the

scrutiny of a modern-day patent attorney. Nations can be expected to plead their

case in a court that is above all of them. A country cannot expect to win a case

in the domestic court of another country according to the law laid down by the

latter. (In the period following the celebrated cancellation of a turmeric patent on

India,s objection more than 200 patents have been granted on turmeric, some to

Indian organizations themselves. None has been challenged : most are

unchallengeable as US laws stand.)

 

Patent laws in Europe followed by USA were enacted to deal with

mechanical contraptions and to protect and further localized interests.

Globalization has changed the rules of the game; and molecularization the game

itself. Novelty needs a new definition and a new sensitivity. If traditional

knowledge provides the initial clue, mere use of sophisticated instrumentation to

“unlock” the chemical secrets of plants should not constitute an inventive step.

TK should be viewed as a global heritage, to be protected by the world as a

whole. The burden of protecting TK should not fall on the emaciated shoulders of

its third-world repositories. If any organization exploits it commercially, it should

pay a royalty into a global fund meant for the welfare of the world’s poor.

When the Paris Convention on Industrial Property internationalized patent

laws in 1883, they had been in existence for 400 years. Today we must frame

global IPR laws for situations for which there is no precedent. These laws should

not be petty. They should be enshrined in a framework that is universal by being

ethical. In 1738 what is now USA was earnestly appealing to England to grant

recognition to Thomas Godfrey, the first ever inventor of sextant. Haughtily,

London refused. USA has come a long way since. Now that USA has emerged

as the solitary world power, its laws should also evolve. It must set an example

for rest of the world by amending its own antiquated and parochial patent laws to

truly reflect the spirit of a global world.

———–

Science policy in India in the globalization era (2007)

Posted in Blogs (Articles) on November 29th, 2008 by Rajesh Kochhar – Be the first to comment

Lecture  delivered at Centre for Public Policy, IIM Bangalore, 29 August 2007 

The term science policy does not command immediate recognition the way  foreign policy and economic policy do. This is because the  public perception of science in India  has been fashioned by  the  Nehruvian era of innocence and idealism. In  the  years immediately following  independence, science ( along with technology and education) was seen as  the primary tool of  nation building, which in turn was recognized as the chief goal of the state.  In foreign  and economic affairs there were conflicting ideologies at work and a considered decision had to be taken on the nation’s line of action. But science was  taken to be benign in all its peace-time manifestations, and the course of science action obvious. 

The days of uni-dimensionality of science are over. Globalization has been made possible  by recent advances in information and communication technology. Science has become an important factor in economics, trade and diplomacy. There are no localized events any more. One country’s misfortune or mis-step can be another country’s opportunity (tsunami, SARS, bird-flu). Divisions can have far-reaching political and economic consequences, and yet they must be  taken quickly, calling for a high level of preparedness. Demise of internationalism ,  and abdication  of responsibility by the state in the name of globalization  accompanied by the rise of the lobbyist increase the risk of wrong action, over-reaction or, more often, plain  inaction. 

Ironically , while the role of science in the world as  a whole has increased, science and science education have  lost ground in India. About 60% of Indian GDP now comes from the service sector which is science-less. The much-flaunted IT sector grossly under-employs people creating man-power shortage in all other sectors. Service economy is essentially a servile economy. The country  has prematurely got into celebrating what is no more than the wage state in the international work-place, feeding apprehensions  that it may never reach the royalty stage. 

Be it  the predictability of an earthquake; chances of return of  tsunami; grounding of an  air-bus, probability of bird-flu mutating into human flu; export of heavy-metal rich Ayurvedic preparations; human resource needs of sun-rise sectors ( IT, auto-component , pharmaceutical ),education and the  state science; ecological ,environmental  and employment issues;  or  the  impact of globalization on  Indian agriculture,  there is need to formulate a science-related public policy so that firm  and quick decisions  can be taken which will stand the test of time.

Whenever  the term economic policy or foreign policy is mentioned, it is greeted with instant recognition. But the term science policy more often than not draws a blank. The reason probably is this. In foreign and economic affairs, conflicting ideologies are known to be at work. Therefore it is recognized that different options be weighed and a  considered decision reached on the actual line of action.

The  public perception of science in India  has been fashioned by  the  Nehruvian era of innocence and idealism. Science (along with technology and education) was seen as the  primary tool  for nation-building which in turn was recognized as the chief goal of the state. In the years  immediately after independence it was  implicitly believed that all peace-time manifestations of science  must necessarily  be benevolent. Science itself was the policy; there was no need for  a science policy!

 The age of  romance with science is long over. Science is no longer uni-dimensional. When I was in NISTADS, I was often asked at semi-social gatherings what my Institute did. “We are researching into science policy” was invariably countered with  “ What’s science policy?”. Mind you, the question came not from a fashionable socialite, but a professional or an informed layperson. By trial and error I hit upon a short satisfactory answer , mentioning some of the  problems we were interested in. Pesticides in cold drinks; pollution in rivers; falling water table, etc. This seemed to satisfy the questioner, So quite obviously, environmental degradation caused by excessive use of technology has become part of common consciousness. This is a rather obvious and global science aspect of policy. There are others which are less obvious and  far more complex, because they are related to  nation’s economy and trade.

 Some years ago, Chinese deputy science minister visited our Institute for discussions. A few days previously, Business Standard had published an essay where the author argued that just as China had emerged as the manufacturing hub, India should become the services hub. I wrote a  short rejoinder disputing this prescription. I argued that China  is the hub for low-skill requiring manufacture. India should become the centre for high-skilled upper-end manufacture. I gave a copy of this letter to the Chinese minister who read it , frowned and took my permission to keep it. Then he made a significant remark. China knows that it cannot compete with the West on technologies of today. Therefore it is making money from techs of yesterday and investing in the high techs of the future. China is capable of planning for a hundred years or even longer. In the same spirit during an official visit to China, I was asked to spend some time with a researcher who had been deputed to make projections for the Chinese traditional medicine exports, which are currently worth about its 12 billion dollars. ( China will lose this market overnight if US decides to classify traditional medicine as medicine instead of food supplement.) In contrast,  India as a nation is incapable of afraid of keeping a long-term focus, and is scared of  decision making or advance  planning  for fear of failure.

 There is a basic difference in the approach of India and of China towards the West. China seems to be telling the West : “ This is a beautiful house you are occupying. Get out because I want to live here. India seems to be saying : “ This is a lovely house you are living in. Please permit me to stay in the out-house.

 In most countries,  public policy is expected to be arrived at  following wide-spread and thorough discussions and consultations. Once  formulated it is  strictly adhered to, like an architect’s approved plan is while constructing a house. The term policy or policy document carries tremendous sanctity. It took me quite some time to put across the point ( in Japan and South Korea) that an Indian policy document should not be read with a legal eye. It always remains fluid,           permitting lobbying, negotiations, improvements, improvisations, and retreat. Even when a policy has been  enunciated ,it can only indicate the broad  direction in which developments are expected to take place. One should look up an Indian  policy document for intention rather than promise, supplement it with  insights  and information from other sources, and test it against the actual happenings. 

The context was a report issued by the National Manufacturing Competitiveness Council (NMCC) .It was too general to be of any use, except for the statistical figures it  quoted. It is a well-known fact that auto components and pharma are the top priority areas in  Indian manufacturing  today, except that  you will not learn this from this particular official document.

We must of course distinguish between industrial policy and science policy. More specifically , what is science policy?

 Science policy 

Science policy can be understood to cover two areas : Policy as related to the pursuit of science itself (covering issues such as funding of basic research, education policy); and public policy issues  with a scientific aspect ( climate change, environment, bio-fuels, GM foods, bio-ethics, disaster management, skill development). These two areas are not  mutually exclusive. State support for education and scientific research itself is part of public policy. But it is often  convenient to distinguish between (i) science policy where science is the output and  (ii) science policy where  science is an input. 

The subject of science policy is very vast. After some general remarks, I would like to dwell on those aspects which are  largely ungoogleable, being based on first-hand experience (e.g. economic nationalism by the side door; perceptions of long-range Chinese policy; software triumphalism). 

Globalization has been made possible by recent rapid developments in information and communication technology (ICT). Thanks to globalization, markets have become globally competitive; entirely new businesses have opened up; and , most importantly, time scales of change have become extremely short. Countries can no longer conduct their politics, economics and trade in isolation. There are no local events any more. One country’s mis-step or misfortune can be another country’s opportunity. 

When tsunami hit Indonesia, tourists  shifted to  the Indian west coast. Similarly, bird flu in east Asia pushed up Indian poultry exports. For similar reasons, China  initially tried to suppress reports of SARS incidence. The world may or may  not have become a global village, but it certainly has become a global hospital. 

Economic nationalism by the side door 

An important  aspect of globalization does not seem to have received much attention. Globalization may be thriving, but economic nationalism is not dead. It is in hiding and waiting to sneak in  through  the side door marked environmental and health considerations. ( This is not to say that these considerations are not valid.) Countries are ready to ban import of poultry , beef or other food items on the slightest suspicion. Growing concern about  China’s booming exports is being accompanied by stricter examination of  Chinese toys, textiles, tooth-pastes  for toxicity. Backlash is developing in the western markets against Chinese goods. China is facing up to the  challenge. But, can India profit from the situation while the going is good? 

Current high economic growth in India has been made possible by technological developments elsewhere. It is a worrisome irony that while science and technology are  today playing a far greater role in trade, economics, diplomacy and international relations than ever before, science and science education have sharply declined in India. This is because globalization has transformed the character of Indian economy. About 60% of Indian GDP now comes from the service sector which is intrinsically science-less. Since Indian economy does not seem to require science any more, science is in decline. This is dangerous. Coping with new developments ( bird flue, GM) is not easy even for better equipped countries .It will be impossible for a scientifically  semi-literate country. 

A few years ago when there was an accident involving an airbus, India, in a knee-jerk reaction,  grounded  all  its airbuses for a long time , suffering huge losses in the process. This happened because India did not have the confidence to undertake evaluation of  even a standard technology. But today there are developments on the scientific and technological frontiers, whichare intrinsically  difficult to assess. 

 

Bird flu 

Bird flu is a case in point. As is known, domestic poultry can be infected with bird flu virus, which  gets transferred to human beings who come into very close contact with poultry as in Vietnam , China , etc.. So far , the virus  has not mutated to be able to  transfer from humans to humans. At the same time, wild fowl are known to receive infection from domestic fowl and die. How do you respond to  news of infection in poultry or the death of a wild turkey? Most countries play safe by  over-reacting , although it is not possible  to say at what stage the reaction crosses the threshold.  Many people would argue that the dangers of bird flu are being exaggerated  because vaccines have been prepared. The demise of altruistic  international agencies has made the task of technology assessment very difficult and uncertain.

 

GM crops 

Genetic modification of crops is probably the most significant development in agriculture since the domestication of wheat and barley 9000 years ago. The response it has elicited  the world over is diverse indeed. It has been a rather easy matter for Europe to take a stand against GM foods because agriculture is not an important part of its economy. US always the boldest is going ahead with it. Australia, which is a big exporter of food grains, is cautiously making a distinction between commercial crops, like Bt cotton 9permitted) and GM foods (taboo).China alone is capable of experimenting  unmindful of consequences. 

India seems  to be caught in the cross fire within the country. When green revolution was ushered in , international and national  agencies were involved in a big way. Mexican wheat and Manila rice were developed by world bodies. The new varieties  were adapted   to local conditions by the state agricultural universities, and as the next step  in the chain the government acted as a bridge between agricultural scientists and the farmers. 

But in the case of genetically modified crops, international agencies are totally absent and the state  has  far lesser role and credibility as regulator, advisor or facilitator.  GM technologies are being developed by multi-national companies with low credibility. There is nobody to adapt these technologies to suit local conditions; educate the farmers on their use; and closely monitor the developments. There are hardly any reliable monitoring agencies. The space vacated by the retreat of the state has been occupied by NGOs which often overstate their case. On top of this there is a tussle between  the GM and pesticide lobbies. 

An executive decision , or in case of India a decision by the higher judiciary, can be meaningful only if  it is backed by  a broad agreement among experts. If  the expert opinions  show a 180 degree spread, the executive decision can go in any direction. Only if  the available expertise defines  a narrow cone , can one expect  the ensuing policy to be broadly in the right direction. State universities , which have the necessary freedom and disinterestedness , must examine the issues rigorously  and publish their findings so that policies can be based on firm inputs. 

Notwithstanding high growth rates in new economy, India’s political stability and well-being still depend on the health of agricultural sector .The most worrisome part of Indian economy is that agricultural growth has been stagnant for a long period. Although agriculture’s share in GDP has drastically come down , to 20%,  as much as 60% of work force still depends on it. As is well-known, agriculture affects other sectors as well. Over-use of agrochemicals and overdrawal of water have posed serious environmental and economic problems. Even without GM, there is scope for increased food production. There is need to revive investment and research in agriculture.

 Basic science still needed

Bhuj earthquake 

Grounding in fundamentals of science is essential for responding to natural disasters and the public perception thereof. After the Bhuj earthquake, there was a claim by an individual that he had predicted it and conveyed his prediction to the government.. Since the claim was placed before the parliament , the government was asked to explain. I was informally consulted by the then science state minister whose responsibility it was to answer science questions. My reasoning was simple. Even if an individual makes a prediction , the government cannot act on it , because  it is only after the event that its truthfulness or otherwise  can be ascertained. Government can act only if scientists as a body make a prediction. Science at its current levels is unable to predict earthquakes.

 

Tsunami

The recent tsunami also raised many questions. There was a phone call from a TV channel reporter . As you know the media gives you the minimum information from its side and wants you to say something. Can another tsunami come? I gave him a class room lecture explaining that an earth quake is always followed by others with increasingly less intensity, and therefore   a tsunami cannot be followed by another equally devastating one. It is only then that he revealed that the people had been officially asked to  move away because of the incoming ( second ) tsunami. Whenever there is an earthquake,  the media adds to the panic by highlighting the news of the  ones that follow as if they are as unexpected as the first one was. 

There was much discussion on how to deal with tsunamis. A particular stupid and greedy suggestion was to build a wall along the cost. Incidentally , the definition of earthquake according to Geological Survey of India, continuing from the colonial times, recognizes only earthquakes that occur on the mainland , but  not on the sea floor. It is noteworthy that there is no term for tsunami in any Indian language. This tells us that  tsunamis were  so infrequent that they never became a part of living memory. The next tsunami to hit the Indian east coast may not appear for two centuries. Also, we already have a nature-given warning system . The nearest tsunami can originate on the east coast is at the distance of Andaman – Nicobar, from where the waves will need about two hours to reach the shore. Unlike the cyclone, the  tsunami waves remain tied to the ocean. By keeping the coast clear will minimize the damage.

 

Electricity from Himalayan rivers 

My purpose here has been to drive home the point that a basic understanding of natural phenomena is  very essential. Another example deals with engineering exercises that can lead to man-made disasters. Himalayan rivers are eminently suitable for hydro-power generation. Yet at Nathpa-Jhakri  on Satluj in Himachal and Baglihar on Chenab  in Kashmir , there have been serious technical problems leading to shut-downs  and great financial loss.  As is well-known, the  Himalayas are kutcha mountains and its rivers carry lot of silt. It appears that  while designing the power station, the silt carried by the river has been grossly under-estimated. More generally , when we talk of such grandiose plans as linking of rivers, we tend to view them as water pipes and not  dynamic though fragile eco-systems. 

Skill requirements in service sector and its impact on others 

When the West criticizes India’s nuclear or missile programme , we feel happy. Similarly when the West praises India’s so-called IT prowess , why don’t we  become suspicious that there must be a catch somewhere? As a substitute for hard-core long-term thinking, we indulge in tokenism and triumphalism. India’s share in the world IT market is about 2%.It is too small to make India a hub. In contrast, India’s share in dismantling electronic waste   and  in breaking ships is about 30% each. Properly speaking India is a hub for dealing  with obsolete computers than the current ones.

 Indian software and BPO sector is expected to earn $41 bn in 2007-08.This figure may appear to be large , but is not when placed in context. In the same period India expects to receive $30 bn as private remittances from Indians living/working abroad ( about two thirds of this comes from the Gulf and USA).In 2005 China earned  from US about $60bn from export of low-tech sports goods, toys and the like. Indian IT sector ( with more I than T)is characterized by gross under-employment. It is acting as a brain sink, causing severe problems for all other sectors including manufacturing  and government science. 

Even within software-driven sector, there is an acute shortage of skilled labour, restricting growth , pushing up costs and preventing move up the value ladder. Software companies  seem to be more interested in collaborating with the government in  acquiring real estate than in training people.

 

Difference in perception:GE in US and in India/China

 R & D centres 

I have downloaded a paper by an American academic, entitled “Globalization and its impact on science , technology and education: A macro analysis”. It  lauds “reformation, restructuring and re-definition of existing technological networks” brought about by globalization. “GE’s worldwide R&D system best personifies this new alignment-along with its major global R&D  center in Niskayuna, New York (near Albany), GE now has active R&D centers in Shanghai, Bangalore, Munich, and St. Petersburg, Russia.”

 This may well be true. It however needs to be driven home that in Indian R&D  centres of foreign companies, there is more D than R. Also , all the patents are owned by the parent company , even if the authors of the patents are Indians. If these centres were in the West, the Indians employed would be getting much higher salaries, and bringing home most of the savings. 

You do not become rich from wages; you become rich from royalties. Of course, training under foreign auspices is a necessary prerequisite, but if we start celebrating the wage- stage, we will never reach the royalty stage.

 

GE business model 

Let us  return to the business model of GE. In 1990 General Electric  Medical Systems (GEMS) set up an ultrasound machine  production unit in Bangalore in collaboration with WIPRO.  GE’s medical division operates at three levels. Its units in US are meant to produce “leadership products” for advanced university hospitals, while Japan provides machines  for big and small hospitals  in Europe and Japan.  India  and China are  the hub for “low-cost segment, mainly aimed at the mega-markets in Asia.” There can be no doubt that the ultrasound industry in India ( and China) is being driven by abortion economy.

 When economies were isolated, it was easy to define national interest and devise ways to protect and advance it. National interest is still important under globalization, although it is easy to lose focus. S & T issues are more important than ever before and require clearer and sharper thinking as a prelude to quick and decisive action.//