Sunday, April 24, 2011

Science, Technology, Entrepreneurship, Management, and Studentship (STEMS): The Five- Component Transformational Paradigm for India

A nation’s competitive advantage is built by its scientific and technological innovation on one hand and its managerial and entrepreneurial ethic on the other. As India aspires to become the third largest economy in the globe by 2035, the above four factors, enhanced by the new graduate stock, would need to be the key drivers of the transformation. In the past, India has been losing its brightest scientists and engineers to greener pastures abroad. With India poised to become the third largest economy in the world, this trend should logically be reversed, with more overseas citizens trying to contribute to the Indian economic transformation. More particularly, it will be the commitment of bright scientists and engineers of India to stay in India, or return to India after their post-graduation and research studies abroad, that would make India an industrial and economic superpower.

India is no longer only the world’s back-office. The country is fast moving into the arena of global manufacturing and design. In fact, smart science and frugal engineering are the new buzz words that are gaining acceptance as concepts that are typically Indian. The ability of the Indian scientists to invent new processes and discover new drug candidates at fractional time and cost has already drawn the interest of global pharmaceutical industry. The ability of the country’s engineers to design and establish projects in the shortest possible time with low investment costs and their creativity to design functional products with different value points is getting recognized globally. Scientists and engineers, therefore, have a great opportunity with the kind of transformation and expectation anchored around India.

Science and Technology

Science and technology (or engineering) are the twin pillars on which a nation’s economic progress and social development are built. All the developed nations owe their progress to the fundamental contributions of their scientists and engineers whose inventions and discoveries led to creation of new product and business lines. Science is a systematic study of the behavior of the physical world with discovery, theorization and experimentation constantly expanding the envelope of knowledge. Engineering is the domain of applying science to design, develop, build and maintain equipment, facilities and infrastructure as well as operate production systems to deliver products and services. Both science and engineering are inspired by a spirit of enquiry, a philosophy of detail and an ethic of commitment. These great disciplines teach a student to be data based and yet innovative and creative. Emphasis on quality and safety are an integral part of science and technology.

Indian science and technology have traditionally focused on followership. While several institutions in new cutting edge domains are set up and new projects of national importance taken up in India, results have been less than satisfactory due to non-fostering of a culture of innovation. The problem is accentuated by lack of funding and low compensation and incentive structures in the research field. Even institutes of national importance such as the Indian Institutes of Technology and Indian Institute of Science as well as laboratories of Council of Scientific and Industrial Research have not been able to come up with commercially viable patented new technologies. For example, according to statistics released by the World Intellectual Property Organization (WIPO), India filed in 2009 only 761 patent applications compared to China’s 7946, most of them in 16 high technology sectors. The good news, however, is that the infrastructure and talent pool for a greater intellectual thrust exists in India. The challenge is one of sparking the research interest with strategic direction, performance management and incentive development.

Entrepreneurship and management

Science and technology constitute the core of a nation but entrepreneurship and management are the catalysts for application of science and technology for human endeavor. A great nation can be built only by entrepreneurship, which creates new lines of activity, new areas of business, new enterprises and even new industries based on entrepreneurial ideas and passion. Entrepreneurship is typically based on new, innovative products and services as well as processes, improved and more efficient manufacturing or novel and creative delivery of products and services to customers. Whatever be the domain of value chain which houses entrepreneurship, innovative use of science and technology lies at the core of entrepreneurship. The wide canvas where entrepreneurship can make its mark has no limits at all. Established and new product lines as well as sunset and sunrise product lines all qualify for entrepreneurial development. More often than not, the start-up entrepreneurial effort is individual or small group driven.

Management has long been realized as the interdisciplinary and interfaculty approach that applies and utilizes all forms of capital, human, machine and financial to generate value for the firms, investors, society and the nation through products and services. The growth and value creation of successful organizations, even of entrepreneurial organizations after their initial success, is clearly attributable to good management. The decline and value erosion of failed organizations is similarly attributable to bad management. While good management is a part of successful entrepreneurship, management, in one sense, takes over where entrepreneurship leaves; from initial local success to sustainable global scale-up and from the first specialization to eventual integration or diversification. One of the important tasks and great challenges of management is finding the right blend of technical and human factors. Successful management is also one of evolving its own model, contextually relevant to the company, society and nation.

India’s opportunities and challenges

India has tremendous strengths with its vast pool of scientists and technologists, and a fast developing managerial and entrepreneurial base ought to have been a major industrial and economic power by now. However, economic and industrial policies of post-independence India, close to a very long period of 45 years between 1947 and 1992, followed a socialistic pattern. Most decisions to create capacity, whether in education or industry, were limited by resource availability rather than revenue generation and by demand control rather than market expansion. While a great measure of self-reliance, economic independence and scientific and technological maturity was achieved as a result, India lagged behind in economic and innovation indices. The initial stirrings became evident from the 1980s when Indian industrialists began to become externally oriented and from the 1990s when the government embarked upon economic liberalization. The economic growth rate has in the past few years doubled to an average of 9 percent per annum, from the previous historical long term, multi-decade average of 4.5 percent.

While there has been a quantitative expansion of capacities in India, post-liberalization, with a flood of new products and services, from automobiles to aircraft and from flat panel televisions to cellular phones, most of it is consumption driven. The internal processors and operating systems of most products and the smarter of the new products in totality are still based on imports from more advanced nations. The Indian automobile industry may have absorbed the imported product technologies and manufacturing processes but most of the sophisticated equipment from machining centers to robotic welders as well as sophisticated equipment are still imported. The Indian pharmaceutical industry could be the largest exporter of medicines to the most advanced countries but the laboratory and manufacturing equipment are of imported pedigree in such lines. India excels in software but has not yet produced a search engine or social network. Science, technology, entrepreneurship and management have to share equal responsibility for the current state of sub-optimization of India’s potential.

Back to basics, a leap into future

India’s IT and manufacturing outsourcing consumption would sustain a consumption driven market expansion and entry of several new products which are indigenously manufactured, assembled through completely knocked down (CKD) and semi knocked (SKD) route or even as imported completely built units (CBU). However, India as the world’s third largest economy cannot afford to rest with a linear scale-up of current capabilities and approaches. There is a need for transformational shift. This shift must have two approaches. The first relates to a focus on fundamentals in science and technology and the second relates to a qualitative boost to the Indian managerial and entrepreneurial capabilities.

Scientists and technologists of India need to direct a portion of their intellectual efforts to drive fundamental innovations. One model could be to differentiate between organizations dedicated to fundamental innovation and those focused on followership or application of innovation. This is best accomplished in certain industries such as pharmaceuticals and in research space. Most other industries, however, require co-development of fundamental innovation and applied innovation. For example, it would be impractical for an architectural firm to design only green and novel buildings or for an automobile firm to manufacture only electric cars. Commencing fundamental innovations in niche areas and mass customizing them is a challenge for scientists, technologists, managers and entrepreneurs.

Any level of science and technology planning cannot be actualized without matching resources. There could be three ways to support this endeavor, one through wholly public investments, second through wholly private investments and the third through public-private partnerships. The aggregate investment on fundamental research should be at least 10 percent of gross domestic product, whether coming through public, private or joint methodologies. As one is aware, innovation-led companies devote 15 to 20 percent of their turnover to research and development as a whole. Governments and industry associations need to chalk out a strategic plan for fundamental research as guidance for the industry and governments.

Similarly, there must be a focus on the fundamentals of robust management and creative entrepreneurship. Indian management has of late been gaining international recognition for its end-to-end conceptualization, risk-integrated decision making, creative multitasking, and speedy execution. The model, however, needs to be more deepened and broad-based to cover every enterprise and agency. Management institutions would need to take the lead by dedicating at least one semester of the typical two year management courses to Indian management. It is time that Indian management is translated from an abstract approach realized by only a few to a tangible construct accessible to all.

And most certainly, entrepreneurship needs a major boost to support the transformation of the Indian industry and economy. Entrepreneurship could occur at any level and at any age. While young graduates are often encouraged to become entrepreneurs rather than job seekers the whole employment and retirement system should have flexibility and fluidity to encourage entrepreneurship at any point of time in one’s career, including post-retirement. For example, working managers and leaders could be encouraged to take up parts of industrial value chain as entrepreneurial ventures. Corporate entities need to establish entrepreneurship endowment funds and corpuses to support such entrepreneurial forays. Yet another mode could be to offer additional retirement funds to high performance executives linked solely to their commitment to set up entrepreneurial firms.

From ‘STEM’ to ‘STEMS’

Clearly, Science, Technology, Entrepreneurship and Management (STEM) model is the basic foundation of a nation’s economic and industrial progress. India, however, has as its forte a fifth dimension as it seeks to be transformative over the next 25 years. This relates to India’s very young demographic profile (30 percent of population aged below 15 years) and the vast educational infrastructure that could be quantitatively and qualitatively expanded. While the early Indian governments laid the foundations of a highly capacity regulated higher educational system, entry of private sector into the engineering and science college system in the 1980s has revolutionized the education scenario in terms of quantitative easing.

India has presently a uniquely large educational base out of Tier 1 and Tier 2 cities, which needs to be upgraded and diversified into rural satellite centers. In spite of a relatively low overall literacy score at primary level (which itself needs further improvement from the current 74 percent), India has one of the largest talent pools in the world, which needs to be leveraged more fully. India has, for example, more than 2.3 million graduates passing out every year, of which more than 700,000 are science and mathematics graduates, 750,000 are post-graduates, and 800,000 are engineers. India with its vast network of over 400 universities, 14000 colleges and 1500 research institutions has contributed to the development of the second largest pool of scientists and engineers (of over 60 million) in the world.

As students are taught to become scientists, engineers and managers, the right experiential learning structures and inputs on creativity, innovation, management and entrepreneurship would build capabilities and confidence in them to take up entrepreneurship. If even 10% of the scientists and engineers graduating each year in India choose to become entrepreneurs with unique ideas in the chosen field, the student force would be really transforming India. This is not to say that entrepreneurship is the only route to fulfillment of a larger purpose in life. The key here is being entrepreneurial. Whatever the avocation chosen by a student, whether as a laboratory scientist, shop floor engineer, product developer, information technologist or even a business analyst, the focus should be on being entrepreneurial in thinking and execution.

For student entrepreneurship to succeed, research and manufacturing establishments as well as businesses must be more open to accepting and trusting students as interns and providing them with challenging projects of long duration rather than paper studies of short duration. The highly successful model of medical internship must be made mandatory in engineering education as well, with industries required to take on board students as co-workers with or understudies to scientists, technologists and managers. This will strengthen the ability of students to cope with real world industrial complexities. When this happens, STEMS, the science, technology, entrepreneurship, management and studentship framework, would be a well balanced five component transformative model for India.

STEMS as a collaborative paradigm

Today’s globalized world is highly competitive. India, despite the global attention and adulation it is receiving, has some way to go to attain the super economic power status. The good news is that a fast growing market and a highly youthful society are geared to make the transformation happen. India needs to innovate for its own new products and services, besides constantly enhancing the value of all current products and services. India should lead the world in upholding quality, protecting safety, reducing costs and eliminating waste. At the same time, once in few years Indian industry and business may have to reinvent themselves with completely new way of doing things to achieve new levels in global competitiveness.

Such a transformative journey cannot happen by the individual efforts of scientists, technologists, managers or entrepreneurs. India needs to move towards an ideal national system of mutually collaborative science, technology, entrepreneurship and management, each of them progressing with vertical and horizontal linkages, all the way from student days. For example, in a collaborative framework innovations in material sciences lead to better engineering of components, better designs of equipment and tooling lead to better components from designs, managers plan the component changes as part of model makeovers strategically and entrepreneurs lead such transformative inflexions in science, technology and management on a continuous basis. From the current diffused and random resort to science, technology, entrepreneurship and management, a more holistic and integrated emphasis on the five component model of building a great new student educational system on science, technology, entrepreneurship and management is well merited for India in its transformative journey as an economic superpower.

Posted by Dr CB Rao on April 24, 2011

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