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.//