There is perhaps no nation that has as much history of
pioneering knowledge, dating back to several centuries, in eclectic sciences
and technologies as India has but has struggled so much to rediscover and
fulfil the potential in recent past (despite some significant achievements in
certain areas of industry and infrastructure). Prime Minister Narendra Modi’s
clarion call to global investors and global industries to “Make in India”
resonates well with India as a resurgent nation that believes in self-reliance
and global leadership. Modiji has also rightly laid stress on skill development
as the basis for building scale and scope in the manufacturing, research and
other areas. Though the national goal and the enabling strategic direction are
well understood, the need for an almost revolutionary transformation in the
competency paradigm is perhaps not fully understood. Successful nations on
global missions have achieved such status based on making the required
competencies a national comparative advantage.
India’s industrial development has been on fragmented lines
as is well known. It is characterized by a few big capable firms with national
competitive posture and several mid and small scale firms with regional or
sub-regional presence. The former are able to develop or access, and compete on
technology while the latter struggle to access, let alone develop and compete
on technologies. This does not mean that a firm has to be only big to be
competent; as Japan and Korea illustrate it is possible for even small and
medium companies to be technologically competent. Many times the lag of the
latter in India is attributed to scale related investments and finance; on the
other hand, the lag is due to a managerial and leadership approach that fails
to utilize all factor sets optimally. This lacuna needs to be addressed because
global leadership can come about only when competencies are pan-Industrial and
reflect a national characteristic of consistency. That India has some distance
to go on this aspect is illustrated by a just published survey on India’s
travel experience.
Unreasonable spread
Key findings of a survey by the leading travel website
TripAdvisor listing Indian airlines preferred and shunned by passengers, and
the reasons thereof, have been published in The Economic Times Magazine,
November 30-December 6, 2014, pp 10 and 11. While the study on a travel service
may apparently seem to have no nexus with the Make in India hypothesis,
relevance does exist. Clearly, all the airlines have invested in having a fleet
of modern planes, and all the associated piloting, crew, ground handling,
maintenance and ticketing infrastructure. Yet, the way the individual airlines
utilize the respective infrastructure and organization to deliver the ultimate
services is paradoxical, to say the least. The survey generated ratings on
twelve performance parameters. These are on-time performance, value for money,
in-flight entertainment, in-flight food/beverages, cabin crew,
landing/take-off, check-in, baggage delivery, cabin maintenance, seat
comfort/leg room, website, and overall experience. Given the sophisticated
nature of the airline industry, one would expect the airlines to uniformly meet
certain base metrics.
The results of the survey bring out a huge variation in
performance as perceived by travellers. For example, with reference to on-time
performance the approval ratings ranged from a measly 0.4% to a respectable
69.6%. Except two airlines (the second trailing at 16.3%), all the others had a
very low range of 0.4% to 6.3% on this factor. In fact, on each of the other
eleven parameters too, the spread has been inordinately high. In terms of
overall experience, the pecking order has been 42.0%, 37.8%, 10.6%, 5.5%, 2.0%,
1.0% and 1.0%. Even more tellingly, on safety too, the approval ratings showed
a dangerously wide range from 0.8% to 31.2%, with only 14.9% of the respondents
deeming all the airlines to be equally safe. Clearly, same or similar assets
and talent base has been resulting in radically different perceptions of
performance. If the survey brings out one factor as a common theme, it is the
lack of consistency in competence as reflected in performance delivery and user
experience.
National consistency
If a nation has to qualify as the world’s destination for any
competitive activity it must first qualify as a consistently competent for that
activity. India has been able to do that in the field of information
technology. From the established metro cities to the emerging urban regions,
aptitude and skillsets for information technology became available, making
computer coding and system architecture a nationally consistent competency. In
respect of manufacturing, however, India has been able to develop at best
certain regional clusters of competency. Notable among these are the clusters
for automobiles, auto components, steel making, shipbuilding, defence
equipment, heavy engineering, pharmaceuticals, jewels, watches, movies,
collieries and a few other sectors. On the other hand, certain industries have
been just firm-specific and not even region-specific. Modern and safe
construction industry has been more a firm-specific phenomenon than even a
regional competence. Probably, construction safety by its absence is an
unfortunate national consistency.
National or regional consistency has, to-date, been a
resultant of top down initiatives. The establishment of heavy engineering and
steel companies in public sector and the other noted companies in public/private
sectors has created a pull factor for the generation of competencies in the
1950s and 1960s. Initial training by overseas collaborators followed by
indigenisation of skills has helped development of regional clusters. As India
looks at a new wave of Make in India none of the previous strategies would be
good enough for the task ahead. Consistent competency development has to be a
simultaneous nation-wide effort. It is not impossible. The new waves of the
Indian Institutes of Technology (IITs), Indian Institutes of Information
Technology (IIITs) and the Indian Institutes of Management (IIMs) that have
been so successfully set up in tier 2 cities and in the far flung regions of
the nation indicate that Indian population is always game for creating new
centres of excellence, whatever be the domain.
Make in Education
An effective Make in India initiative can happen not in
India’s industries or firms but only through India’s schools and colleges. The
Indian educational system needs uniformity of high standards, encouragement of
creativity, openness of evaluation and continuous bridging of theory and
application. In the current India, quality is heavily tiered in terms of
classes of schools and colleges. While some differentiation across institutions
is inevitable even in advanced nations (like between Ivy League and other
institutions), the kinds of differentials that are allowed to perpetuate
between different boards of education, different types of public and private
educational institutions and institutes of national importance and several
other tiers in India are so huge, and in many cases so discriminatory, that a
uniform quality of education on a pan-India basis has been elusive. The
educational system is in urgent need of reforms ground-up in terms of building
national competencies.
As this would inevitably take time, there is an urgent need
for some top-down reforms too. One way would be to dedicate the final semesters
of each course to finishing courses which align the students to the industries
of their choice rather than to desultory project assignments in which the
randomly matched firms and students have no shared interest. The finishing courses would comprise generic
toolkit such as communication, collaboration, project management and networking
skills and specific industry specific toolkit such as advanced computer
languages in respect of information technology industry, international
regulatory compliance in respect of pharmaceutical industry, mechatronics in
respect of machine tool industry, genetics and epigenetics for biotechnology
industry, and so on. The finishing courses should be nationally standardised
and should be of such rigor that student of any institution should be on par or
above the best of global educational standards. Availability of such skill
optimization would make India a natural destination for Make in India
realization.
Together we succeed
While India has many industry associations, almost all of
them have agendas related to policy reforms. Macro-economic factors remain their
paramount engagement. Skill upgradation is seen to be the task and
responsibility, or even a unique competitive advantage, of each individual
firm. Many firms are reluctant to open themselves to the pathways and success
factors that determine competitiveness through intra-industry collaborative
dialogue. Let us take the example of upgrading rail infrastructure to a level
of bullet train network. This would require most modern track making and coach
making technologies. If the existing railway wagon firms such as Integral Coach
Factory, BEML, Kalindee Rail, Texmaco, Stone India and Titagarh Wagons (and 12
others) do not upgrade their capabilities together there is little chance of
Make in India being successful in this sector.
Similar logic would apply to indigenous manufacture of new generation
telecommunication gear, defence equipment or power plants.
The national psychology must change from one of exulting over
the indigenously benchmarked relative superiority of the leading firms to one
of demanding absolute superiority of global standards. When there are reports
of certain indigenous cars failing safety tests or certain products lagging
packaging requirements, the industries as a whole must collaborate to develop
and validate templates that meet global customer standards. Even granted that some of such global
concerns tend to be subterfuge for non-tariff barriers, there is merit in
industry-wide analysis of causes and development of solutions. Higher level of
skills when pursued by individual firms may make individual firms competitive
relative to other Indian firms but industry-wide actions make the entire
industry competitive relative to global firms. This transformation would
influence global industries as a whole to move into India as their preferred
manufacturing destination. Consistency of competence across the industries as a
national comparative advantage is key to the success of Make in India
revolution.
Posted by Dr CB Rao on November 30, 2014
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