India has made a mark globally with its software skills. More recently, India has come into global reckoning for its manufacturing capabilities. In future, India will be the hub of infrastructure building. Consolidating the gains in services and products and making new gains in infrastructure, India will keep up its growth momentum. India’s economic growth could be upwards of 10 percent per annum in the years to come which could catapult India as the fourth largest economy in the world by 2030, after USA, Japan and China. In fact, the gap, if any, in terms of gross national product could be small within these four economies.
Indian management and global achievement
Science and technology power the economy as a chip powers the computer. Management drives the economy just as software programs the computer for performance. A unique way of Indian management has emerged over the last few decades of the independent India that is shaping the new economic revolution in India despite all the constraints that exist. The distinctive Indian management paradigm is a result of the multiple ownership and organizational formats, and the diverse organizational eco-systems that evolved over the years in India.
The Indian managerial alchemy is no longer a perception or an aspiration; it is a reality. If global scale is a metric, Indian management has proved itself with several Indian companies joining the Global 2000 Club (Forbes Asia, May 2010, Volume 6, Number 6). If global recognition is a metric, most Indian managed companies have proved themselves by exporting products and services, by becoming chosen partners and in some cases by being courted by global giants to add strength to their value chains. In fields as diverse as traditional arts and culture or modern science and technology, Indian management demonstrated a sure ability for global marksmanship.
The mix of Indian companies in the Forbes list or the Fortune list of the largest publicly traded companies of the world illustrates that it is not merely the Indian factor advantage but also a pan-industry managerial capability that helped India Inc power its way into the global club. The Indian companies in such global lists come from diverse business and industrial domains, to name a few: ACC (cement), Allahabad Bank, Axis Bank, Bank of Baroda, Bank of India, Canara Bank, Central Bank of India, Corporation Bank, HDFC Bank, ICICI Bank, IDBI Bank, Indian Bank, Indian Overseas Bank, Oriental Bank, PNB, State Bank and Syndicate Bank (banking), Bharat Electronics, Bharat Earth Movers and Bharat Heavy Electricals (equipment), Bharat Petroleum, GAIL, Hindustan Petroleum, Indian Oil, ONGC and Oil India (oil and gas), Bharti Airtel, Idea and Reliance Communications (telecommunications), DLF and HDFC (real estate), Grasim and Reliance Industries (diversified), HCL Technologies, Infosys Technologies, Tata Consultancy and Wipro (information technology), Jet Airways (airlines), Ashok Leyland, Bajaj Auto, Hero Honda, Mahindra & Mahindra and Tata Motors (automobiles), Hindalco, National Aluminium, NMDC, SAIL, Sterlite and Tata Steel (metals), ITC (FMCG), JP Industries, Larsen & Toubro and Reliance Infra (infrastructure), NHPC, NTPC, Power Finance, Power Grid, Rural Electrification, Tata Power (power), Cipla, Dr Reddy’s, Piramal, Ranbaxy and Sun Pharmaceuticals (pharmaceuticals) and United Breweries (spirits). In addition, several subsidiaries of multinationals in India, ABB, Siemens, Vodaphone, Hyundai, Unilever, Proctor & Gamble and IBM, to mention a few, have acquired statures of their own.
The high number of Indian banks in the global list illustrates the overall strength of the economy. The fact that no Indian bank failed when several global banks went into a tailspin in the global economic meltdown illustrates the financial management skills of Indian economists and banking managers. Similarly, the growing number and increasing scale of firms in growth sectors such as automobiles, telecommunications, infrastructure, oil and gas and metals illustrates the diversified managerial base. Several Indian subsidiaries of global multinationals such as Unilever, Hyundai, Proctor & Gamble have consistently provided a large Indian anchor to global operations. The ability of large Indian groups such as Tata, Bharti, and Reliance to acquire overseas firms reflects new confidence in globalization. Similarly the growth of large non-resident Indian groups such as the Hindujas and Mittals on a global scale illustrates the global entrepreneurship of Indian business groups. It is also interesting that some of the largest listed companies are government owned while several government owned corporations and departmental undertakings are unlisted but are very large, reflecting the management acumen in India that transcends public-private ownership differences.
On a different but allied plane, for over five decades, Indian academic scholors enriched the global technology and management scenario. In the US alone, more than 8000 professors are said to be making important contributions to the academic life. In the management and economics areas of reputed business schools, not limited to Harvard, Stanford, Kellogg, LBS and Wharton, Professors CK Prahalad, Sumantra Ghoshal, Marti Subrahmanyam, Bala Balachandran, Krishna Palepu, Pankaj Ghemawat, Raj Varadarajan, Nitin Nohria, Amartya Sen, Jagdish Bhagwati, Kasturi Rangan, and Jagmohan Raju made a mark as eminent exponents of management. In the global consulting firms such as McKinsey, BCG, Bain and PRTM as well, Indian management consultants have become an increasingly impactful fraternity.
In a dramatic change, even the multinational corporations known for their fiercely US or European headquarter-centric structures and talent management models are beginning to engage Indian management talent in localized corporate roles. While Indian Americans have been occupying high positions in the global headquarters, global multinational corporations in diversified fields are now choosing to build new regionalized centers of excellence and corporate divisions around Indian, and on a broader base around Asian talent. This represents a paradigm shift in the MNC way of thinking on globalization of talent. The new paradigm is that true globalization extends beyond seeking wider markets or factor inputs and focuses on building global centers of excellence around proven local talent.
What do these results and trends, at both corporate and individual professional levels, portray? While modern management no doubt has its origins in the Western schools, Indian companies and managers have developed their own indigenized management alchemy based on the specific characteristics of the Indian situation.
Indian management evolution
Indian organizations typically reflect one of the three types: the government civil organizations, including the Indian Administrative Services (IAS), the government owned public sector undertakings, including those set up to own the commanding heights of economy, some of which are listed in the stock exchanges (PSUs), and the private sector companies, most of them publicly listed in stock exchanges (PSCs). The IAS typically attracted top talent that was service oriented. The PSUs attracted talent that liked industrialization with scale and scope. PSCs attracted talent that believed in capitalistic growth despite constraints. Different ownership formats and organizational templates typically created different managerial dynamics and led to multiple managerial genres.
Five major forces silently shaped Indian management to a global top spot over the decades. The first is the coexistence of, and osmosis between, the three genres of management styles: the IAS, the PSU and the PSC styles. The second is the induction of multiple technologies and with them related management concepts, from different countries as part of the industrialization from 1947; British, European, American, Japanese and Korean, to name a few. The third is the unique Indian social psyche that adapts to imposition as much as it demands independence, and that encourages creative chaos as much as it respects rigid compliance. The fourth is the motivation to do better and match the best; starting with fierce competition from the school days. The fifth is the proliferation of engineering and management education in India, with a strong influx of engineers into management. These five forces have created a unique Indian managerial alchemy.
Capable administrators from the IAS moved through public sector to private sector to leverage their skills for unfettered growth of institutions. Public and private sector managers learnt the art of positioning corporate strategies in alignment with national needs and bureaucratic challenges. This facilitated a multi-pronged osmosis of managerial aspirations, thoughts and styles. The multiplicity of behavioral approaches was sharpened with engineered precision of a liberal managerial culture. The resultant Indian management style is a unique one that combines administrative efficiency, national passion and material pursuit.
Some of the above are practical hypotheses that are built upon the proven and highly visible successes of the Indian industrial scenario. The author had personal experiences with several such leaders. Stalwarts such as V Krishnamurthy, a PSU technocrat and SVS Raghavan, an IAS bureaucrat built Bharat Heavy Electricals as a leader in power equipment. Again, V Krishnamurthy and later RC Bhargava and Jagdish Khattar, both IAS professionals built Maruti Suzuki as an automobile firm of global repute, even outshining the Japanese parent in certain aspects. S Soundararajan who turned around a sick Garden Reach and TS Kannan who repositioned NSIDC were other IAS professionals. Government-owned insurance giant, Life Insurance Corporation of India had leaders like R Narayanan who built huge strengths in the institution. The list of Indian leaders who built PSU and PSC behemoths and ran departmental undertakings with great vision and success is indeed large.
India’s private sector benefitted from the leadership of several enterprising visionaries. N Vaghul and KV Kamath who built ICICI Bank into a first class private sector bank, Deepak Parekh who built HDFC as a role model in housing finance, Dhirubhai Ambani who built India’s new generation conglomerate, the Reliance Group, JRD Tata and Ratan Tata who revved up and reshaped the Tata group, S Moolgaokar who made Tata Motors (then Telco) the first visible sign of indigenous technological capability, RJ Shahaney and R Seshasayee who unlocked value of a slow-grown British subsidiary, Ashok Leyland, Rahul Bajaj who provided an Indian techno-marketing paradigm in two-wheeler industry with Bajaj Auto, Subir Raha who globalized ONGC, Kurien who made Amul the largest milk cooperative in the world, Anand Mahindra who transformed Mahindra & Mahindra, a tractor and Jeep company into a diversified group, Kishore Biyani who built a hugely successful Indian model of retail business, Pantaloons and Big Bazaar, NS Narayana Murthy and Azim Premzi who built India’s famous global IT companies, Infosys and Wipro respectively, Anji Reddy who demonstrated to the world a new Indian pharmaceutical paradigm, Pratap Reddy who built a world-class hospitals network and K Raghavendra Rao who became a rare-in-class first generation entrepreneur in global pharmaceuticals business reflect the myriad hues of the uniquely Indian management paradigm. There are also several brilliant scientists, technologists and strategists who provided the core competencies for Indian firms and supported the leaders in their global visions; like V Sumatran who helped Tata Motors realize the first indigenous small car dream, leading the multi-faceted Indica passenger car design team, and RS Prasad who helped Anji Reddy and K Raghavendra Rao realize their global generics dreams, building world-class pharmaceutical research and manufacturing infrastructure with first-to-file capabilities. Each of the leaders mentioned above, and not mentioned above brought a uniquely Indian perspective as to how from highly modest and severely resource constrained beginnings world-class corporations could be built in India, irrespective of the ownership.
(Author’s note: In fact, this blog feels humble that it is too inadequate to accommodate the list of top leaders of the IAS, PSU and PSC streams which is so large, running into thousands. Omissions, therefore, are inevitable but are certainly neither intentional nor reflective of any priority.)
The Indian management alchemy
What do these several named, and unnamed, Indian managerial stalwarts have in common? They have, in fact, a lot in common, even if they pursued diverse business and operational models. First, as leaders all of them sought to grow their companies as the best-in-class companies. Second, they believed in Indian talent and indigenization, even if they had to rely on certain imported technologies from time to time. Third, they possessed exceptional personal and professional attributes combining intellect, grasp, memory, speed, passion and accuracy for unique managerial delivery. Fourth, they combined leadership with mentorship, building successive generations of leaders to keep up growth momentum. Fifth, they believed in empowerment of people and teams to drive into new growth horizons. Sixth, they combined global aspiration with Indian patriotism. As a result, each of the leaders could establish or grow companies which held, and continue to hold, Indian flag high.
If the above are the common characteristics of Indian leaders, what then are the common features of Indian management that helped the firms make a global mark? First, Indian management is not deterred by resource constraints. Dreaming big despite a small resource base brings out the best stretch in Indian firms, from strategic innovation to operational excellence. Second, Indian management is sensitive to national imperatives. As a result, Indian firms built unique business models on twin pillars of catering to domestic consumption and generating export revenues. Third, Indian management is a multi-tasking paradigm with low respect for robotic sequencing of events and high passion for simultaneous pursuit of activities. This helps Indian firms cut down development cycles and time to market. Fourth, Indian management looks for delivery leaders rather than deliberative teams. As a result, Indian companies have fairly simple organizational structures that have as little clutter as possible and as many single point responsibilities as can be reasonable. Fifth, Indian management is reflective of the Indian society in terms of frugality and conservation. This naturally induces Indian engineers to come up with functional and utilitarian plant designs that are cost-competitive. Sixth, Indian management is conscious of the need to build and retain reputation. This motivates employees to work on the safe side to meet future quality and regulatory requirements. Seventh, Indian management is impatient, functioning almost from thought to action, skirting elaborate planning rituals. This helps Indian firms beat the competition on speed of delivery, even on a global scale. Eighth, Indian management protects jobs as much as it can. Indian organizations typically stay together in bad times retaining the flexibility to take off when good times return. Ninth, Indian management focuses on organizational and career growth as a base motivator. This provides leaders with multiple avenues for talent management. Tenth, Indian management is intrinsically entrepreneurial and opportunistic. As a result, Indian firms are quick to capitalize on market opportunities. Evidently, some of the above characteristics have contradictory potentialities; the success of Indian management lies in its ability to harmonize the multifarious tendencies for synergy.
Probably, not all aspects of Indian management are flawless. Things possibly could be even better with stronger internal and external collaboration, clearer communication and negotiation, broader application of analytics, stronger grassroots leadership, closer alignment of aspirations and resources, greater openness to indigenous consolidation, higher belief in innovation, lower emphasis on followership, and so on. Several top rung companies not only hire the best talent from leading institutes but also have elaborate in-house leadership development programs to address the residual concerns. The forecast tripling of top-notch engineering and management institutes in India such as the Indian Institutes of Technology and the Indian Institutes of Management in the next few years would provide further reinforcement to the Indian talent pool. As Indian management globalizes and absorbs some of the finer nuances of competitive global management, and appreciates the need for innovation, scale and scope to stay on top globally, the fundamental strengths of “value with vision” and “speed with passion” that uniquely characterize Indian management would be reinforced to an even greater extent.
Posted by Dr CB Rao on May 31, 2010
Sunday, May 30, 2010
Sunday, May 9, 2010
From Start-up to Maturity: Indian Entrepreneurial Challenge
Indian psyche is unique in that it follows an icon as much as it chooses independence. Indian corporate saga is an equally unique amalgam of followership and independence. The growth of Indian enterprise is founded on an entrepreneurial rush into an activity that is opened up. The evolution of industrial structure in India is based on a continuous expansion in the number of firms in the fray rather than a structural consolidation at any point of time. The Indian corporate sector therefore faces a challenge as firms struggle to transform themselves from start-up stage to maturity state, some passing successfully through a growth phase, and some failing to. The challenge if left unaddressed could affect entrepreneurial development, and eventually the competitiveness of the Indian corporate sector.
The Indian industrial evolution
The Indian industrial start-up model, as elsewhere, was fuelled by entrepreneurial energy. Even when India was under foreign occupation, in the 1800s and the early 1900s, Indian industrial start-ups were established by the Tatas and Birlas, with their enterprises becoming large industrial groups over the years. Post-independence, successive government policies enabled and encouraged establishment of scores of cottage and small scale enterprises in India. Some of these served larger firms as suppliers and vendors of materials and components while several other start-ups sought a direct go-to-market strategy, with varying degrees of success.
An introverted India, even post-independence in 1947, rarely encouraged free entry and exit, expansion of scale and induction of technology in its industrial and economic policies. As a result, companies stagnated and became less competitive, relative to global trends. At the same time, licensing regulations inhibited global corporations from entering into or expanding in India. On a helpful side, process patent policies (as in some other countries) ensured freedom for domestic companies to reverse-engineer global products for Indian markets. The Indian automobile and pharmaceutical industries became, for example, the epitome of low-scale, domestic-oriented direct to market fragmented industrial structures of the 1960s and 1970s.
There emerged a new Indian entrepreneurial wave from the 1970s (Ambani founded Reliance, for example). Technology induction and assimilation blazed new paths from the 1980s (Indo-Japanese automobile collaborations such as Maruti-Suzuki). Entrepreneurs and corporations were rid of controls, and certain industries started becoming global leaders in certain sectors from the 1990s (TCS and Infosys, in Information Technology). Increasing confidence in Indian competencies and policies from the 2000s and post-patent harmonization assurances led to great global interest in India with a better awareness of the competitiveness of Indian enterprise. Simultaneously, Indian industrial groups and larger Indian companies became globally aggressive, entering overseas markets (directly and through partnerships), acquiring overseas units and marquee brands.
The Indian start-up model
From a protected, regulated domestic regime, the industrial paradigm in India evolved into a liberalized, competitive globalized regime in the 2000s. The models that helped Indian start-ups to enter and stay fixed in scale and scope are becoming less tenable. The Indian start-ups are today verily at cross roads, with choices between smug stagnation and tough transformation. Yet, the continued proliferation of owner-managed companies and small scale enterprises with dated technologies indicates that a new start-up model is yet to emerge.
The Indian start-up model is highly domestic market oriented and self-reliance inspired. While start-up firms would not be averse to being suppliers to larger firms, especially in sectors such as engineering and automobile, the overwhelming preference seems to be on direct go-to-market strategies. This enables firms have a quick market-oriented entry in any industrial segment but also limits the ability of entrepreneurs to create stable, growth or niche models that could be more vibrant technologically and commercially in the long term.
The missing dimensions in the Indian start-up scenario relate to inadequate access to technology, insufficient financial resources and overwhelming reluctance to consolidate. The first two factors dictate the pace with which a start-up in India is able to navigate to, and through, the growth phase while the last factor dictates the ability of a start-up firm to stay on course in the growth phase or navigate the maturity phase. Typically, a start-up in India would have the capability to move from a USD 1 million to USD 100 million annual sales but lack the capability to move beyond without dedicated efforts to manage the three dimensions of technology, finance and ownership.
An examination of the Western and Japanese models of start-up could provide guidance for new development models relevant for Indian start-ups.
The Western and Japanese start-up models
The Western and Japanese start-up models are typically based on pioneering pieces of technology or market creation. While it may be tempting to relate this to the fact that all modern technologies emanated in the West (largely USA or Europe) or in Japan it is the start-up intent that made the difference. Entrepreneurs with truly ground-breaking products in the West or in Japan or Korea went on to make their start-ups into mega global enterprises. However, there are certain typical nuances of technology-led start-up development that are different.
Not all techno-entrepreneurs in the West were or are keen to build their start-up enterprises into mega enterprises. Entrepreneurs in the West see creation of commercial value (for themselves) more important than either reaching the market or expanding the scale of the enterprise. Entrepreneurs see technology as a concept to be commercially proved at their hands rather than converted into commercial saleable products in their hands. Entrepreneurs benefit from an equity environment that provides multiple-series funding. Finally, entrepreneurs are willing to monetize their technologies and firms to generate surpluses for new endeavors. Ownership and management are treated as very important in the start-up phase but are considered expendable for leading into the growth and maturity phases.
The techno-entrepreneurs in Japan are different. They tend to innovate for larger industrial firms or trading groups and in the process help create multi-level business arrangements. The start-ups set up by the techno-entrepreneurs typically grow with the larger firms and groups, and become global enterprises in their own right. The entrepreneurs are typically attached to their technologies and family presence but are also able to evolve to the higher levels due to the synergistic relationships. Typically, the larger firms in Japan respect the origins and independence of the smaller suppliers and desist from the Western temptation of acquiring promising technologies and firms. Instead, the accent is on letting the smaller start-ups grow into mature, innovative enterprises.
A hybrid model for Indian start-ups
Given the constraints the Indian start-ups face in accessing technology, finance and markets, and the attachment of the entrepreneurs to continued ownership of the firms they founded, a hybrid model is relevant for Indian start-ups. Assuming that a base level of promoter and external funding is arranged, typically, start-ups fall into one of the three categories: those that make better use of available technology, those that make their operations more competitive and those that access certain market segments more creatively. Needless to say, firms which achieve a virtuous combination of technological innovation, operational efficiency and market penetration would be in a position to drive into a growth phase on their own. The hybrid model would be relevant to start-ups having competencies in one of the three dimensions.
Firms which are technologically innovative need to aim at achieving the earliest proof of concept, following which they should be prepared to license or sell the technology to larger firms which can take the product to the market. This phenomenon is widely prevalent in the West, especially in technology and biopharmaceutical fields, and needs to be adapted to the Indian situation. Firms which have pieces of market would do well by either taking in products from other start-ups or providing market access to larger firms. Firms which are operationally efficient must focus on gaining market access in partnership with larger firms having Indian and global market presence. This could enable a longer independent functioning to such firms, enabling growth journey on their own.
The hybrid model for Indian start-ups thus envisages growth through inorganic relationships across fragments of value chain rather than through organic end-to-end value chain. Many Indian start-ups in India have evolved into mid-sized firms through such relationships. Still some decisions have to be customized: for example, the scale and scope of such relationships, whether such relationships would need to be limited period relationships or permanent relationships, and whether the end game is surplus generation through value monetization and exit as per the Western model or lifetime domain commitment.
Founder-Manager transformational issues
Part of the evolutionary response would emerge from how the founders of the Indian start-ups manage the entry, growth and maturity phases of an enterprise. Entrepreneurial firms tend to be typically founder managed. Investors gain confidence with the founder being in total control of the enterprise while the employees get inspired by the leadership of their founder. As enterprises move into growth phases, investors need to let go of their control on the founders, and the founders need to let go of the control on their enterprises. As an enterprise becomes larger it needs to organize itself into organizational and business units that can be driven by independent managers to generate greater value.
While no professional manager can bring the passion and feel of a founder-leader to an enterprise, start-ups need to find ways and means of institutionalizing the entrepreneurial passion and feel through diversified professionalization. Indian start-ups which moved into the big league have done so not only on the basis of technology-efficiency-market grid but also due to organizational development. Serial entrepreneurship could well help Indian entrepreneurs to continue to feel their passion with newer enterprises while helping their earlier enterprises move on their own steam.
The suggested organizational model is based on the unique Indian psyche that complies as much as it commands; that follows as much as it leads; and that is as much professional as it is entrepreneurial. Compensating any limitations it has, the Indian employee base is driven by a deep sense of loyalty and frugality that can be leveraged by placing capable people in commanding positions. The success of large Indian private and public sector corporations is related to the diversified ownership model that is extended to individual organizational units of an enterprise.
Science and finance for start-up transformation
Start-ups need access to science and technology. Indian entrepreneurs are adept at adapting technology, enhancing efficiency and perching their firms on market niches. They are, however, diffident in taking science and technology from Indian research laboratories. For example, there are over 40 specialized laboratories under the umbrella of the Council for Scientific and Industrial Research (CSIR) as one of the largest publicly funded research network in the world. In addition, institutes of higher learning such as Indian Institutes of Technology and Indian Institute of Science have cutting edge researchers. These competencies can be leveraged to establish new drivers of growth through win-win commercial arrangements. Indian start-ups can place a just small proportion of the risk on using and developing indigenous science and technology to secure cost-effective business development. There is a great potential for Indian science and technology that is waiting to be captured.
Western and Japanese angel investors and private equity funds can achieve substantial returns by considering multi-phase investments in Indian start-ups that could transform themselves into future growth engines by utilizing India specific science and technology. There is tremendous potential that is untapped in social and industrial infrastructure, as well as rural and urban development. A comparative inventory of small enterprises in US, Europe and Japan with those existing in India will indicate the enormous possibilities.
Central and State Governments in India have traditionally supported start-ups by policy measures. Newer and more creative measures are required. Encouragement of single person companies, creation of financial exchanges exclusively for start-ups, channeling of a certain proportion of CSIR research effort for small enterprises, creation of start-up finance divisions in all banks and financial institutions, exemption of small enterprise promotion and management from complex legal hurdles and encouragement of mentoring of start-ups by working executives, all of these supported by governmental policies, could add up to a great entrepreneurial start-up movement in India.
Posted by Dr CB Rao on May 9, 2010
The Indian industrial evolution
The Indian industrial start-up model, as elsewhere, was fuelled by entrepreneurial energy. Even when India was under foreign occupation, in the 1800s and the early 1900s, Indian industrial start-ups were established by the Tatas and Birlas, with their enterprises becoming large industrial groups over the years. Post-independence, successive government policies enabled and encouraged establishment of scores of cottage and small scale enterprises in India. Some of these served larger firms as suppliers and vendors of materials and components while several other start-ups sought a direct go-to-market strategy, with varying degrees of success.
An introverted India, even post-independence in 1947, rarely encouraged free entry and exit, expansion of scale and induction of technology in its industrial and economic policies. As a result, companies stagnated and became less competitive, relative to global trends. At the same time, licensing regulations inhibited global corporations from entering into or expanding in India. On a helpful side, process patent policies (as in some other countries) ensured freedom for domestic companies to reverse-engineer global products for Indian markets. The Indian automobile and pharmaceutical industries became, for example, the epitome of low-scale, domestic-oriented direct to market fragmented industrial structures of the 1960s and 1970s.
There emerged a new Indian entrepreneurial wave from the 1970s (Ambani founded Reliance, for example). Technology induction and assimilation blazed new paths from the 1980s (Indo-Japanese automobile collaborations such as Maruti-Suzuki). Entrepreneurs and corporations were rid of controls, and certain industries started becoming global leaders in certain sectors from the 1990s (TCS and Infosys, in Information Technology). Increasing confidence in Indian competencies and policies from the 2000s and post-patent harmonization assurances led to great global interest in India with a better awareness of the competitiveness of Indian enterprise. Simultaneously, Indian industrial groups and larger Indian companies became globally aggressive, entering overseas markets (directly and through partnerships), acquiring overseas units and marquee brands.
The Indian start-up model
From a protected, regulated domestic regime, the industrial paradigm in India evolved into a liberalized, competitive globalized regime in the 2000s. The models that helped Indian start-ups to enter and stay fixed in scale and scope are becoming less tenable. The Indian start-ups are today verily at cross roads, with choices between smug stagnation and tough transformation. Yet, the continued proliferation of owner-managed companies and small scale enterprises with dated technologies indicates that a new start-up model is yet to emerge.
The Indian start-up model is highly domestic market oriented and self-reliance inspired. While start-up firms would not be averse to being suppliers to larger firms, especially in sectors such as engineering and automobile, the overwhelming preference seems to be on direct go-to-market strategies. This enables firms have a quick market-oriented entry in any industrial segment but also limits the ability of entrepreneurs to create stable, growth or niche models that could be more vibrant technologically and commercially in the long term.
The missing dimensions in the Indian start-up scenario relate to inadequate access to technology, insufficient financial resources and overwhelming reluctance to consolidate. The first two factors dictate the pace with which a start-up in India is able to navigate to, and through, the growth phase while the last factor dictates the ability of a start-up firm to stay on course in the growth phase or navigate the maturity phase. Typically, a start-up in India would have the capability to move from a USD 1 million to USD 100 million annual sales but lack the capability to move beyond without dedicated efforts to manage the three dimensions of technology, finance and ownership.
An examination of the Western and Japanese models of start-up could provide guidance for new development models relevant for Indian start-ups.
The Western and Japanese start-up models
The Western and Japanese start-up models are typically based on pioneering pieces of technology or market creation. While it may be tempting to relate this to the fact that all modern technologies emanated in the West (largely USA or Europe) or in Japan it is the start-up intent that made the difference. Entrepreneurs with truly ground-breaking products in the West or in Japan or Korea went on to make their start-ups into mega global enterprises. However, there are certain typical nuances of technology-led start-up development that are different.
Not all techno-entrepreneurs in the West were or are keen to build their start-up enterprises into mega enterprises. Entrepreneurs in the West see creation of commercial value (for themselves) more important than either reaching the market or expanding the scale of the enterprise. Entrepreneurs see technology as a concept to be commercially proved at their hands rather than converted into commercial saleable products in their hands. Entrepreneurs benefit from an equity environment that provides multiple-series funding. Finally, entrepreneurs are willing to monetize their technologies and firms to generate surpluses for new endeavors. Ownership and management are treated as very important in the start-up phase but are considered expendable for leading into the growth and maturity phases.
The techno-entrepreneurs in Japan are different. They tend to innovate for larger industrial firms or trading groups and in the process help create multi-level business arrangements. The start-ups set up by the techno-entrepreneurs typically grow with the larger firms and groups, and become global enterprises in their own right. The entrepreneurs are typically attached to their technologies and family presence but are also able to evolve to the higher levels due to the synergistic relationships. Typically, the larger firms in Japan respect the origins and independence of the smaller suppliers and desist from the Western temptation of acquiring promising technologies and firms. Instead, the accent is on letting the smaller start-ups grow into mature, innovative enterprises.
A hybrid model for Indian start-ups
Given the constraints the Indian start-ups face in accessing technology, finance and markets, and the attachment of the entrepreneurs to continued ownership of the firms they founded, a hybrid model is relevant for Indian start-ups. Assuming that a base level of promoter and external funding is arranged, typically, start-ups fall into one of the three categories: those that make better use of available technology, those that make their operations more competitive and those that access certain market segments more creatively. Needless to say, firms which achieve a virtuous combination of technological innovation, operational efficiency and market penetration would be in a position to drive into a growth phase on their own. The hybrid model would be relevant to start-ups having competencies in one of the three dimensions.
Firms which are technologically innovative need to aim at achieving the earliest proof of concept, following which they should be prepared to license or sell the technology to larger firms which can take the product to the market. This phenomenon is widely prevalent in the West, especially in technology and biopharmaceutical fields, and needs to be adapted to the Indian situation. Firms which have pieces of market would do well by either taking in products from other start-ups or providing market access to larger firms. Firms which are operationally efficient must focus on gaining market access in partnership with larger firms having Indian and global market presence. This could enable a longer independent functioning to such firms, enabling growth journey on their own.
The hybrid model for Indian start-ups thus envisages growth through inorganic relationships across fragments of value chain rather than through organic end-to-end value chain. Many Indian start-ups in India have evolved into mid-sized firms through such relationships. Still some decisions have to be customized: for example, the scale and scope of such relationships, whether such relationships would need to be limited period relationships or permanent relationships, and whether the end game is surplus generation through value monetization and exit as per the Western model or lifetime domain commitment.
Founder-Manager transformational issues
Part of the evolutionary response would emerge from how the founders of the Indian start-ups manage the entry, growth and maturity phases of an enterprise. Entrepreneurial firms tend to be typically founder managed. Investors gain confidence with the founder being in total control of the enterprise while the employees get inspired by the leadership of their founder. As enterprises move into growth phases, investors need to let go of their control on the founders, and the founders need to let go of the control on their enterprises. As an enterprise becomes larger it needs to organize itself into organizational and business units that can be driven by independent managers to generate greater value.
While no professional manager can bring the passion and feel of a founder-leader to an enterprise, start-ups need to find ways and means of institutionalizing the entrepreneurial passion and feel through diversified professionalization. Indian start-ups which moved into the big league have done so not only on the basis of technology-efficiency-market grid but also due to organizational development. Serial entrepreneurship could well help Indian entrepreneurs to continue to feel their passion with newer enterprises while helping their earlier enterprises move on their own steam.
The suggested organizational model is based on the unique Indian psyche that complies as much as it commands; that follows as much as it leads; and that is as much professional as it is entrepreneurial. Compensating any limitations it has, the Indian employee base is driven by a deep sense of loyalty and frugality that can be leveraged by placing capable people in commanding positions. The success of large Indian private and public sector corporations is related to the diversified ownership model that is extended to individual organizational units of an enterprise.
Science and finance for start-up transformation
Start-ups need access to science and technology. Indian entrepreneurs are adept at adapting technology, enhancing efficiency and perching their firms on market niches. They are, however, diffident in taking science and technology from Indian research laboratories. For example, there are over 40 specialized laboratories under the umbrella of the Council for Scientific and Industrial Research (CSIR) as one of the largest publicly funded research network in the world. In addition, institutes of higher learning such as Indian Institutes of Technology and Indian Institute of Science have cutting edge researchers. These competencies can be leveraged to establish new drivers of growth through win-win commercial arrangements. Indian start-ups can place a just small proportion of the risk on using and developing indigenous science and technology to secure cost-effective business development. There is a great potential for Indian science and technology that is waiting to be captured.
Western and Japanese angel investors and private equity funds can achieve substantial returns by considering multi-phase investments in Indian start-ups that could transform themselves into future growth engines by utilizing India specific science and technology. There is tremendous potential that is untapped in social and industrial infrastructure, as well as rural and urban development. A comparative inventory of small enterprises in US, Europe and Japan with those existing in India will indicate the enormous possibilities.
Central and State Governments in India have traditionally supported start-ups by policy measures. Newer and more creative measures are required. Encouragement of single person companies, creation of financial exchanges exclusively for start-ups, channeling of a certain proportion of CSIR research effort for small enterprises, creation of start-up finance divisions in all banks and financial institutions, exemption of small enterprise promotion and management from complex legal hurdles and encouragement of mentoring of start-ups by working executives, all of these supported by governmental policies, could add up to a great entrepreneurial start-up movement in India.
Posted by Dr CB Rao on May 9, 2010
Sunday, May 2, 2010
From Planet to Person: The Third Wave of Technology
The history of mankind and industrialization helps us to understand how technology has, over the years, impacted human life, of course overwhelmingly in a positive manner. The first wave of technological revolutions comprised electricity, telephony, printing, radio transmission, transportation, imaging and curative medicine, as well as sadly nuclear detonation, to name a few. The second wave of technological revolutions comprised computerization, television, internet, cellular telephony, software and diagnostic and surgical medicine, again to name a few.
If the first wave was supported by mechanical and electro-magnetic devices, the second wave was primed by electronic devices and the ubiquitous chip. In the first wave, devices were designed to perform as per laws of science. In the second wave, devices were instructed to perform as per human needs. If the first wave of technology was characterized by fundamental enablement, the second wave was characterized by transformational enhancement. How will the third wave of technology be different from the previous ones? What will support the third wave and how will it be characterized?
The third wave of technology would in all probability be a combination of the first two waves. It will be both fundamental and transformational simultaneously. The devices – mechanical, electro-mechanical and electronic – will be all there, made more powerful and friendly by more versatile and more capable embedded hardware and software. The devices will incorporate hitherto unchartered laws of science and will feature software that mimics human need fulfillment to a greater degree. Combining the two waves, the third wave of technology will probably rewrite human and industrial paradigms, covering both the planet and person in a holistic sense.
Food security
Topping the agenda would be technological levers for ensuring global food security. With land being increasingly utilized for industrialization and urbanization, especially in emerging countries, the need to use technology for ensuring affordable food for all is a major imperative. The unpredictability and harshness of climate change accentuates the need for better technology markers for agriculture. As opposed to the second wave which sought to propagate factory style farming, the third wave would address the need for sustainable agriculture.
According to United Nations, by 2025 the global population would cross 8 billion. Of this 6.7 billion (84 percent) would live in the less developed or emerging countries. A vast proportion of this population currently lives without even one square meal a day. The need to ensure food security to this huge population would be the most impactful technological challenge. The advanced sections of the global society would simultaneously need to reassess and moderate its approach towards dietary habits, including the dependence on meat consumption. Several studies have pointed out the adverse impact of current approaches on global farming and climate warming on one hand and the direct adverse linkages with animal ethics and human health on the other (reference, Eating Animals by Jonathan Safran Foer, The End of Overeating: Taking Control of our Insatiable Appetite by David A Kessler, and An Edible History of Humanity by Tom Standage, FT Bookshop).
Drought-tolerant seeds, perennial grains, non-toxic fertilizers, titrated plant nutrition, weather-timed sowing, sensor-driven irrigation, clinically validated GM foods, meat-mimicking vegetarian food options, drip irrigation, soil fertility strategies, no-loss harvesting, nutrition-driven grain processing, multiple crop patterns, recyclable agriculture and customized farm equipment could combine to trigger huge spikes in farm productivity with sustainability. Biotechnology, nanotechnology and information technology should drive new technological innovations in agriculture. An emerging country such as India can take the lead by establishing a string of Institutes for agricultural technology on the lines of the famous Indian Institutes of Technology.
Energy security
Energy is the fuel of growth; unfortunately, however, it is also the greatest contributor for loss of natural resources, increase of carbon emissions, and worsening of climate change. From around 500 quadrillion BTU in 2010, the world energy consumption is forecast to increase to 532 quadrillion BTU in 2015 and 678 quadrillion BTU in 2030, representing an increase of 44 percent. China and India, the emerging economic powers, are the two largest consumers of energy. Their share in world energy consumption which was 10 percent in 1990 has increased to 20 percent currently and is forecast to increase to 30 percent by 2030. While advanced nations may be accusative of this trend, the growing share of China and India, as the world’s largest people base (around 40 percent of global population), is an inevitable and logical corollary of their emergence as global hubs of research and manufacture as well as outsourcing.
Currently, oil, coal and natural gas together contribute to around 80 percent of total energy generation. The first challenge for technology is to increase the inter se share of natural gas within these three fuel sources and to make coal a super-clean source of energy. The second challenge is to make energy generation from renewable sources of energy, wind, ocean, solar and geo-thermal, intrinsically economically viable, weaning them away from government subsidies and incentives, and making them contribute a larger share to total energy generation. The third challenge is to make nuclear energy multi-atomic element and super-safe with terror, and accident proofing. The fourth challenge is to shift hydro-energy generation from stored river water dams to naturally flowing waterfalls, releasing river water to uses that are more critical, such as irrigation and domestic and industrial uses. The combined impact of the technology redefinition in energy sector should be to make oil, coal and natural gas (as a group), all renewable sources as a group, and nuclear sources contribute equally to energy generation, at around 33 percent each.
How would China and India, and their technologists cope with the challenges of the required tectonic shift in energy consumption and generation? Massive replacement of dated generating equipment, optimization of energy distribution and upgrades of machinery in user industries are the low hanging fruits which will serve to lower the cost of energy generation and consumption. It is, however, in establishing new infrastructure for renewable energy generation that technology needs to provide a new definition. Given that India is a hot, tropical, windy country with an enormously long coast line it is possible to make India a hub of renewable energy. Technologists, industrialists and bureaucrats need to collaborate to establish solar energy and wind energy cities across the length and breadth of the country, and ocean energy plants all along the coastal line. It is a technology challenge that could redefine the scale, scope and competitiveness of India’s economic and industrial growth in future for India.
Expanded convergence
The second wave of technology was characterized by a new principle of multi-function delivery, aptly called convergence. Devices began to be designed to perform more than one function; and in some cases the distinction between the primary function and the secondary functions got diffused. Cellular phone is a classic case that overrode the primary function of long distance speech communication with secondary functions such as camera, music player, organizer, multi-channel messaging, GPS navigation and social networking. Thousands of software applications have served to convert the mobile phone into a powerful daily aid and a virtual pocket computer.
In the third wave, the principle of convergence will test new frontiers even in mobile telephony, expanding to cover more functions, some of which could not be linked previously even in concept. Current email messages could be replaced by voice and video mail messages, making mobile phone interactions virtually face to face human interactions. From today’s finger touch banking the mobile phone could morph into tomorrow’s portfolio manager, making program-guided transactions. A hand held mobile phone could in future become a virtual health companion by diagnosing body health parameters real time through new sensor technologies.
Convergence could take multiple forms. As a hypothetical but potentially feasible proposition future televisions could come with video capture potential while set-top boxes could have reverse transmission capability enabling aspiring citizens participate in reality shows of the studios direct from their homes. Direct-to-home television transmission could also become direct-to-studio transmission. New power generation equipment could be designed to work equally effectively with all kinds of feedstock, from coal to oil, or from hydro to solar. Applications of convergence could be as many as human ingenuity could dream; the third wave of technology could make them possible.
Diversified concurrence
The automobile industry made a major contribution in the second wave by conceptualizing and implementing concurrent engineering. By involving all the domains of an automobile value chain, from market research and product development, through facility planning and manufacturing, to supply chain and marketing, the Japanese automobile industry created a paradigm that brought new products on time to market , with targeted quality and cost profiles. The third wave of convergence, which involves designs without walls, requires concurrence across businesses which were traditionally built around mono-function products.
Hitherto, convergence has been technology driven. Innovative technologists utilized adjacent usage spaces to develop design-driven products with multi-market segment capabilities. The third wave would require different business segments, and perhaps even different companies, to collaborate and define new product possibilities. For example, laptop makers and projection device makers could collaborate to develop a laptop which could also project the presentations. Flower vase makers could collaborate with organic farmers to develop readymade vases with green plants for homes. Food processing firms could collaborate with pharmaceutical firms to develop immune boosting functional foods. Possibilities could be many.
Concurrence may not be natural and collaborative either due to competitive business compulsions or due to an inability of firms to balance mutual contributions and rewards. Concurrence would have to be achieved in such conditions through creation of requisite technical capabilities, licensing arrangements or downright acquisitions. Organic or inorganic, an ability to combine multiple technologies to develop multi-functional products will be the new dimension of competitiveness. Google’s acquisition of YouTube was an example; so is HP’s acquisition of Palm. Valero’s acquisitive move into ethanol production and ExxonMobil’s multi-million dollar bet on in-house research into algae and synthetic genome technologies reflect the opposite, but equally relevant, approaches to merge businesses without borders.
Efficiency in form factor
A new found focus on form factor has been at the core of the new wave of miniaturization and the emergence of convergence devices. The third wave of technology, however, has to look beyond miniaturization to exploit the full potential of form factor, and to conserve resources. The fundamental premise for the third wave technologists is that at least 50 percent of any device is a wasted, non-usable or non-used space, partly due to the technological limitations and partly due to user habits. Take, for example, a television in which the back of the panel is a completely wasted space. It is possible to design televisions with back-to-back twin panels if only users are willing to use televisions as central pieces of entertainment rather than as corner pieces!
Laptops, notebooks, net-books and computer display screens are yet another device group that reflect an enormous waste of space. At a very simple level, with more robust display screens, the effective display screen size within the total screen can be increased from the current 85 percent to 95 percent. In addition, with the advent of touch screen technologies, there is no reason why both the internal sides of a laptop cannot be fully utilized to achieve total display or partitioned display; for example, the top of the opened laptop for typing in of information and the bottom for simultaneous browsing of the Internet. The front of a notebook can also feature an optional screen for two co-workers to simultaneously see, discuss and edit. Electronic readers and mobile phones can be released from the constraints of passive space design to active space design, with some ingenuity.
Form factor efficiency need not be confined only to electronic devices. Industrial machinery, farm equipment, automobiles and home interiors, to quote a few, could benefit from new dimensions in form factor efficiency. Machining centers were a great advancement in multi-machining of components, especially complex automobile parts such as cylinder head and cylinder block. Typically, the part to be machined is kept in the centre of the machining centre. The idle exterior of the machining centre can also be designed to perform other machining activities such as planning and shaping or to perform certain surface measurements. Farm equipment constitute yet another example of how the total surface area can be differentially designed and shaped to meet different soil conditions and tilling requirements. Automobiles can be designed for example to offer seat configurations that can be modified to suit the occupiers’ body profiles and driving preferences. Home interiors offer enormous potential for space-optimized and convergence-oriented designs.
Regenerative engineering
Technology has, so far, made life easier for the human being with the advances in science, engineering, information processing and medicine. Devices and equipment are continually upgraded to newer levels of efficiency and new devices and equipment are also continuously developed to offer new applications. Creation of robots and humanoids has been the crowning glory of this technological achievement. The next wave of technology could create robots which replicate human beings with thought processes and movements which are as close to those of human beings as possible. The third wave could see two different dimensions of medical technology.
The first is a chip-empowered human being. If a chip can power a computer or a device to the highest realms of performance, it would be equally feasible in future for a chip to power a handicapped person to overcome his or her handicaps. Physically challenged special persons can look forward to previously unforeseen contributions from third wave of technology. Technologists, physicians and surgeons, however, need to collaborate to establish connectivity between the human chip and neural networks of the human brain. Just as a pacemaker did wonders to cardiac performance, the new human chip would be the future brain maker, duly supported by a slew of bio-medical parts.
The second is creation of human organs through regenerative medicine. Stem cells are showing enormous promise to rebuild human capabilities, whether of weakened heart muscles or re-growing lost organs. While immortality is certainly antithetical to rules of life, enhanced span of life and improved quality of life are certainly possible through regenerative medicine. Technology would need to create appropriate environmentally conditioned laboratory suites and new generation equipment for cellular and molecular analysis. Aseptic cryogenic, genetic and incubating equipment with enhanced bioengineering capabilities are required for scientists to explore new vistas in regenerative medicine .
Summary
The world is in the throes of several challenges posed by depletion of resources, global warming, and increasingly volatile economic and social conditions. Technology has made life meaningful in the past bringing previously inconceivable things into the realms of life; there is no reason why technology would not usher in yet another transformation for a society that is being increasingly pressured not only by technology itself but also by the way technology is deployed.
The new third wave of technology will express itself in four essential dimensions. The first will be in terms of ensuring food and energy security for the planet, through new infrastructural technologies. The second will be in terms of growing businesses without borders through new convergence products and concurrence businesses. The third will be in terms of greater utilization of form factor design for each device and equipment to be spatially and functionally more utilitarian. The fourth will be in terms of integrating technological and human capabilities to regenerate and reinforce human capabilities.
The world would be a far better and rejuvenating place to live for the human race if the third wave of technology pans out as presented herein.
Posted by Dr CB Rao on May 2, 2010
If the first wave was supported by mechanical and electro-magnetic devices, the second wave was primed by electronic devices and the ubiquitous chip. In the first wave, devices were designed to perform as per laws of science. In the second wave, devices were instructed to perform as per human needs. If the first wave of technology was characterized by fundamental enablement, the second wave was characterized by transformational enhancement. How will the third wave of technology be different from the previous ones? What will support the third wave and how will it be characterized?
The third wave of technology would in all probability be a combination of the first two waves. It will be both fundamental and transformational simultaneously. The devices – mechanical, electro-mechanical and electronic – will be all there, made more powerful and friendly by more versatile and more capable embedded hardware and software. The devices will incorporate hitherto unchartered laws of science and will feature software that mimics human need fulfillment to a greater degree. Combining the two waves, the third wave of technology will probably rewrite human and industrial paradigms, covering both the planet and person in a holistic sense.
Food security
Topping the agenda would be technological levers for ensuring global food security. With land being increasingly utilized for industrialization and urbanization, especially in emerging countries, the need to use technology for ensuring affordable food for all is a major imperative. The unpredictability and harshness of climate change accentuates the need for better technology markers for agriculture. As opposed to the second wave which sought to propagate factory style farming, the third wave would address the need for sustainable agriculture.
According to United Nations, by 2025 the global population would cross 8 billion. Of this 6.7 billion (84 percent) would live in the less developed or emerging countries. A vast proportion of this population currently lives without even one square meal a day. The need to ensure food security to this huge population would be the most impactful technological challenge. The advanced sections of the global society would simultaneously need to reassess and moderate its approach towards dietary habits, including the dependence on meat consumption. Several studies have pointed out the adverse impact of current approaches on global farming and climate warming on one hand and the direct adverse linkages with animal ethics and human health on the other (reference, Eating Animals by Jonathan Safran Foer, The End of Overeating: Taking Control of our Insatiable Appetite by David A Kessler, and An Edible History of Humanity by Tom Standage, FT Bookshop).
Drought-tolerant seeds, perennial grains, non-toxic fertilizers, titrated plant nutrition, weather-timed sowing, sensor-driven irrigation, clinically validated GM foods, meat-mimicking vegetarian food options, drip irrigation, soil fertility strategies, no-loss harvesting, nutrition-driven grain processing, multiple crop patterns, recyclable agriculture and customized farm equipment could combine to trigger huge spikes in farm productivity with sustainability. Biotechnology, nanotechnology and information technology should drive new technological innovations in agriculture. An emerging country such as India can take the lead by establishing a string of Institutes for agricultural technology on the lines of the famous Indian Institutes of Technology.
Energy security
Energy is the fuel of growth; unfortunately, however, it is also the greatest contributor for loss of natural resources, increase of carbon emissions, and worsening of climate change. From around 500 quadrillion BTU in 2010, the world energy consumption is forecast to increase to 532 quadrillion BTU in 2015 and 678 quadrillion BTU in 2030, representing an increase of 44 percent. China and India, the emerging economic powers, are the two largest consumers of energy. Their share in world energy consumption which was 10 percent in 1990 has increased to 20 percent currently and is forecast to increase to 30 percent by 2030. While advanced nations may be accusative of this trend, the growing share of China and India, as the world’s largest people base (around 40 percent of global population), is an inevitable and logical corollary of their emergence as global hubs of research and manufacture as well as outsourcing.
Currently, oil, coal and natural gas together contribute to around 80 percent of total energy generation. The first challenge for technology is to increase the inter se share of natural gas within these three fuel sources and to make coal a super-clean source of energy. The second challenge is to make energy generation from renewable sources of energy, wind, ocean, solar and geo-thermal, intrinsically economically viable, weaning them away from government subsidies and incentives, and making them contribute a larger share to total energy generation. The third challenge is to make nuclear energy multi-atomic element and super-safe with terror, and accident proofing. The fourth challenge is to shift hydro-energy generation from stored river water dams to naturally flowing waterfalls, releasing river water to uses that are more critical, such as irrigation and domestic and industrial uses. The combined impact of the technology redefinition in energy sector should be to make oil, coal and natural gas (as a group), all renewable sources as a group, and nuclear sources contribute equally to energy generation, at around 33 percent each.
How would China and India, and their technologists cope with the challenges of the required tectonic shift in energy consumption and generation? Massive replacement of dated generating equipment, optimization of energy distribution and upgrades of machinery in user industries are the low hanging fruits which will serve to lower the cost of energy generation and consumption. It is, however, in establishing new infrastructure for renewable energy generation that technology needs to provide a new definition. Given that India is a hot, tropical, windy country with an enormously long coast line it is possible to make India a hub of renewable energy. Technologists, industrialists and bureaucrats need to collaborate to establish solar energy and wind energy cities across the length and breadth of the country, and ocean energy plants all along the coastal line. It is a technology challenge that could redefine the scale, scope and competitiveness of India’s economic and industrial growth in future for India.
Expanded convergence
The second wave of technology was characterized by a new principle of multi-function delivery, aptly called convergence. Devices began to be designed to perform more than one function; and in some cases the distinction between the primary function and the secondary functions got diffused. Cellular phone is a classic case that overrode the primary function of long distance speech communication with secondary functions such as camera, music player, organizer, multi-channel messaging, GPS navigation and social networking. Thousands of software applications have served to convert the mobile phone into a powerful daily aid and a virtual pocket computer.
In the third wave, the principle of convergence will test new frontiers even in mobile telephony, expanding to cover more functions, some of which could not be linked previously even in concept. Current email messages could be replaced by voice and video mail messages, making mobile phone interactions virtually face to face human interactions. From today’s finger touch banking the mobile phone could morph into tomorrow’s portfolio manager, making program-guided transactions. A hand held mobile phone could in future become a virtual health companion by diagnosing body health parameters real time through new sensor technologies.
Convergence could take multiple forms. As a hypothetical but potentially feasible proposition future televisions could come with video capture potential while set-top boxes could have reverse transmission capability enabling aspiring citizens participate in reality shows of the studios direct from their homes. Direct-to-home television transmission could also become direct-to-studio transmission. New power generation equipment could be designed to work equally effectively with all kinds of feedstock, from coal to oil, or from hydro to solar. Applications of convergence could be as many as human ingenuity could dream; the third wave of technology could make them possible.
Diversified concurrence
The automobile industry made a major contribution in the second wave by conceptualizing and implementing concurrent engineering. By involving all the domains of an automobile value chain, from market research and product development, through facility planning and manufacturing, to supply chain and marketing, the Japanese automobile industry created a paradigm that brought new products on time to market , with targeted quality and cost profiles. The third wave of convergence, which involves designs without walls, requires concurrence across businesses which were traditionally built around mono-function products.
Hitherto, convergence has been technology driven. Innovative technologists utilized adjacent usage spaces to develop design-driven products with multi-market segment capabilities. The third wave would require different business segments, and perhaps even different companies, to collaborate and define new product possibilities. For example, laptop makers and projection device makers could collaborate to develop a laptop which could also project the presentations. Flower vase makers could collaborate with organic farmers to develop readymade vases with green plants for homes. Food processing firms could collaborate with pharmaceutical firms to develop immune boosting functional foods. Possibilities could be many.
Concurrence may not be natural and collaborative either due to competitive business compulsions or due to an inability of firms to balance mutual contributions and rewards. Concurrence would have to be achieved in such conditions through creation of requisite technical capabilities, licensing arrangements or downright acquisitions. Organic or inorganic, an ability to combine multiple technologies to develop multi-functional products will be the new dimension of competitiveness. Google’s acquisition of YouTube was an example; so is HP’s acquisition of Palm. Valero’s acquisitive move into ethanol production and ExxonMobil’s multi-million dollar bet on in-house research into algae and synthetic genome technologies reflect the opposite, but equally relevant, approaches to merge businesses without borders.
Efficiency in form factor
A new found focus on form factor has been at the core of the new wave of miniaturization and the emergence of convergence devices. The third wave of technology, however, has to look beyond miniaturization to exploit the full potential of form factor, and to conserve resources. The fundamental premise for the third wave technologists is that at least 50 percent of any device is a wasted, non-usable or non-used space, partly due to the technological limitations and partly due to user habits. Take, for example, a television in which the back of the panel is a completely wasted space. It is possible to design televisions with back-to-back twin panels if only users are willing to use televisions as central pieces of entertainment rather than as corner pieces!
Laptops, notebooks, net-books and computer display screens are yet another device group that reflect an enormous waste of space. At a very simple level, with more robust display screens, the effective display screen size within the total screen can be increased from the current 85 percent to 95 percent. In addition, with the advent of touch screen technologies, there is no reason why both the internal sides of a laptop cannot be fully utilized to achieve total display or partitioned display; for example, the top of the opened laptop for typing in of information and the bottom for simultaneous browsing of the Internet. The front of a notebook can also feature an optional screen for two co-workers to simultaneously see, discuss and edit. Electronic readers and mobile phones can be released from the constraints of passive space design to active space design, with some ingenuity.
Form factor efficiency need not be confined only to electronic devices. Industrial machinery, farm equipment, automobiles and home interiors, to quote a few, could benefit from new dimensions in form factor efficiency. Machining centers were a great advancement in multi-machining of components, especially complex automobile parts such as cylinder head and cylinder block. Typically, the part to be machined is kept in the centre of the machining centre. The idle exterior of the machining centre can also be designed to perform other machining activities such as planning and shaping or to perform certain surface measurements. Farm equipment constitute yet another example of how the total surface area can be differentially designed and shaped to meet different soil conditions and tilling requirements. Automobiles can be designed for example to offer seat configurations that can be modified to suit the occupiers’ body profiles and driving preferences. Home interiors offer enormous potential for space-optimized and convergence-oriented designs.
Regenerative engineering
Technology has, so far, made life easier for the human being with the advances in science, engineering, information processing and medicine. Devices and equipment are continually upgraded to newer levels of efficiency and new devices and equipment are also continuously developed to offer new applications. Creation of robots and humanoids has been the crowning glory of this technological achievement. The next wave of technology could create robots which replicate human beings with thought processes and movements which are as close to those of human beings as possible. The third wave could see two different dimensions of medical technology.
The first is a chip-empowered human being. If a chip can power a computer or a device to the highest realms of performance, it would be equally feasible in future for a chip to power a handicapped person to overcome his or her handicaps. Physically challenged special persons can look forward to previously unforeseen contributions from third wave of technology. Technologists, physicians and surgeons, however, need to collaborate to establish connectivity between the human chip and neural networks of the human brain. Just as a pacemaker did wonders to cardiac performance, the new human chip would be the future brain maker, duly supported by a slew of bio-medical parts.
The second is creation of human organs through regenerative medicine. Stem cells are showing enormous promise to rebuild human capabilities, whether of weakened heart muscles or re-growing lost organs. While immortality is certainly antithetical to rules of life, enhanced span of life and improved quality of life are certainly possible through regenerative medicine. Technology would need to create appropriate environmentally conditioned laboratory suites and new generation equipment for cellular and molecular analysis. Aseptic cryogenic, genetic and incubating equipment with enhanced bioengineering capabilities are required for scientists to explore new vistas in regenerative medicine .
Summary
The world is in the throes of several challenges posed by depletion of resources, global warming, and increasingly volatile economic and social conditions. Technology has made life meaningful in the past bringing previously inconceivable things into the realms of life; there is no reason why technology would not usher in yet another transformation for a society that is being increasingly pressured not only by technology itself but also by the way technology is deployed.
The new third wave of technology will express itself in four essential dimensions. The first will be in terms of ensuring food and energy security for the planet, through new infrastructural technologies. The second will be in terms of growing businesses without borders through new convergence products and concurrence businesses. The third will be in terms of greater utilization of form factor design for each device and equipment to be spatially and functionally more utilitarian. The fourth will be in terms of integrating technological and human capabilities to regenerate and reinforce human capabilities.
The world would be a far better and rejuvenating place to live for the human race if the third wave of technology pans out as presented herein.
Posted by Dr CB Rao on May 2, 2010
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