Digital Republic:India's RIse to IT Power

I first learnt about Dr Mathai Joseph (MJ) some 7 or 8 years ago. An article he had written on the nature of innovation in the IT industry popped up during an internet search. From what I remember of this article, he had argued that innovation in the software services industry was application and customer-oriented and therefore not like conventional R & D. At that time MJ was the director of the Tata Research Design and Development Centre (TRDDC) at Pune and I could sense from the article that he had more than the average IT company manager's insight into the dynamics of innovation.

 So, when Sanjiva Prasad, a good friend and distinguished professor of computer science at IIT Delhi, recently introduced me to MJ and suggested that he send me a copy of his new book, I was quite excited. Particularly by the title: Digital Republic: India's Rise to IT Power. At the same time I also wondered what fresh insights he had to offer - after all, the success of the Indian software industry (and its limitations as well) have been studied from every imaginable angle.

Once the book arrived, a part of the mystery was solved. "History and Memoir" is the second sub-title of the book, at the bottom of the cover, just above the author's name. MJ got into computer science somewhat by accident, it appears, after he completed his MSc in Physics in Bombay and entered a newly-founded programme at Cardiff. The enthusiasm of the faculty there rubbed off on him, and by the time he finished this Masters course, he wanted to learn more. He was admitted to a PhD programme at Cambridge where he worked with some giants in the then fledgling field.

I found the section where he describes how his supervisor allowed him to find his own feet and interests, and yet guided him gently to enhance the rigour of his work a wonderful lesson in socialization into the research process. This section also brings out how the pioneers of computer science and engineering strove to shape their discipline into a more scientific one. This would be useful reading for any research-inclined computer scientist even today.

TIFR and Warwick

After completing his PhD, MJ moved back to India to work at TIFR. MJ harbours mixed feelings of this period - pride from some significant achievements, but also rancour from the refusal of the "pure" scientists at TIFR to give computer science its due. This dissatisfaction ultimately led MJ to seek greener pastures at Warwick University. He clearly enjoyed his time there even though he now had to teach large classes and contend with the university bureaucracy. I didn't, however, get a sense of what was distinctive about Warwick - in engineering and management it is known for its strong application orientation and corporate relationships but I couldn't make out whether this held true for computer science.

TRDDC

After a decade at Warwick, MJ returned to India to head the TRDDC which was being seen as an important R&D backbone of TCS. Over the years, several prominent Indian researchers have made TRDDC their home - EC Subbarao, doyen of Indian materials science is one, Keshav Nori, a prominent computer scientist is another. MJ's account suggests that his role was to bring more focus to its activities, and in particular to align it with the business of TCS. He also enhanced the research depth. But I was hoping to learn more from this book about what TRDDC really does, and what it should be doing in the future. I was disappointed by a lack of in-depth discussion of this.

In fact this leads to my major grouse about this book. It’s long on charming memories of MJ's life, but short on details related to the book's title. MJ is a good raconteur and I can see that his interest in poetry and literature right from his college days have had a positive impact on his ability to tell a good story. But his observations on the IT industry in India provide few fresh insights. India's failure to understand the true potential of computers; restrictive policies on imports; and waking up late to the importance of software - all of these have been documented extensively and well elsewhere.

An Open Appeal to Dr. Mathai Joseph

I really hope that MJ puts his powerful mind and pen to address what should be done to enhance research and development in computer science and information technology across academia, industry and government in India. With his unique set of experience at TIFR, Warwick and TRDDC/TCS, I can't think of anyone more qualified to do so.

MNC Innovation in India revisited: New Challenges & Opportunities

The state of innovation at multinational (captive) centres in India resembles a kaleidoscope with multiple hues and colours, and a degree of flux as their fortunes wax and wane with changes in their parents’ strategies and performance.

Is “Emerging Market” excitement waning?

Much of the excitement about innovation for emerging markets that was visible a year or two ago appears to have been tempered by the challenges posed by the global economic environment. Market and investment challenges overshadow the technical ones. India’s failure to fulfill its growth and market potential threatens to cast a shadow on the growth plans of these captive centres. They now face the possibility of being restricted to their traditional roles of maintenance, testing and back office support, and even that may be at risk as our cost advantages erode and productivity levels fail to take off.

Indian Centres are no Longer Immune to Global Ups and Downs

At one time, Indian centres were immune to the layoffs and downsizing of their parent companies. That’s no longer true as is evident from the downsizing of General Motors’ R&D centre in Bangalore, the shrinking of Motorola’s R&D presence (particularly striking because Motorola was one of the early pioneers of offshoring software R&D) and Dow Chemicals’ reversal of its decision to set up a large R&D facility at Pune. When NetApp recently announced a global downsizing thanks to a dip in corporate profits, their India development centre saw a loss of jobs as well.

A Tough Time Ahead?

MNC R&D subsidiaries in India may have a tough time ahead. The cost advantage of Indian R&D manpower has considerably declined over time. At senior levels, employees expect to be paid at levels comparable to those in the parent; at the entry level the earlier 4 or 5x benefit is now done to around 2 or 2.5x. Many companies believe that labour productivity is lower in India, and that’s not surprising given the infrastructural constraints that employees have to overcome in getting to office and back! Attrition continues to further dilute productivity though the slowdown in the industry should have a sobering effect. And, as one senior MNC R&D executive told me recently, “Indian engineers today are not daunted by any challenge, but they have a sense of entitlement that prevents them from giving their best.”

But Opportunity as well…

However, there is opportunity as well. For one, the nature of R&D in some industries is changing. In telecom for example, the success of Apple and Google has brought into question the traditional paradigm of standards-driven or operator-directed innovation. Instead, innovation is becoming more consumer-driven and increasingly resembles the challenges faced by the consumer durables industry with some elements of Fast Moving Consumer Goods (FMCG) thrown in as well. Google’s acquisition of the mobile handset business of Motorola (Motorola Mobility) exemplifies this changing trend.

New Innovation Approaches: The Case of Ericsson

Even highly “engineering-driven” companies such as Ericsson are feeling compelled to embrace a user-driven innovation approach. I recently had the opportunity to hear Gabriel Broner, Global Head of Innovation at Ericsson talk about his company’s new approach to innovation under the umbrella of their Innova innovation programme. Their innovation approach is based on a framework from the iconic design firm, Ideo: Inspiration, Ideation, and Action. The starting point is identification of unarticulated customer needs using a design thinking approach. Action is focused on rapid experimentation. A specially trained Innova Squad uses the design thinking methodology to solve problems as well as diffuse the process through the organization.

 

The innovation contest as a part of Innova is in its 3rd year. Good ideas get $500 card + 1 week of time to be developed further. Strong proofs of concept can get VC-style funding including 3-9 months’ time off to work on the project.

Experimentation is a major focus including “testing without building” the entire equipment. Focus is on value for customers – e.g. one customer said, “we understand that the network will go down on occasion, but more important is how quickly can you get it up and running again?”

Some employee-driven innovations have made big contributions like using a graphics card to speed up hardware simulation and a software solution developed for customers to avoid a costly hardware upgrade for LTE.

One of the challenges of the innovation program is obtaining a greater degree of strategic alignment. One way this is being achieved is by challenges thrown from the top - one such challenge got a very good solution from the India team that has been recognized.

During Broner’s recent visit to Bangalore, Ericsson had organized a design thinking workshop and an opportunity for teams to pitch their ideas with the possibility of on-the-spot funding. Innovation expenditure is currently at 0.5 to 1% of budget. Broner made an interesting comment during his interaction with Ericsson Bangalore employees: “We can’t afford something like the Google 20% rule – where will the RoI come from?”

Conclusion

It’s now upto the Indian employees of Ericsson and other leading MNCs to take advantage of such opportunities that come their way.

From a personal perspective, its good to see companies launching elaborate innovation programmes with a lot of emphasis on participation, user-oriented thinking and experimentation. These are some of the core ideas we have emphasized in 8 Steps to Innovation.

 

Making Change Work: Is the Delhi University style Top Down change model the right approach to transform Indian Higher Education?

In recent years, I have been increasingly intrigued by the challenges of change, particularly in our higher education system. Almost everyone agrees it’s broken, the disagreement is only on the extent of damage, and how it can be fixed. Given the polarized views and entrenched interests, most policy-makers and administrators prefer to ignore the mess and just soldier on. But, when they do try to do something, they adopt a change model of top down change with little discussion and debate that seems quite contrary to what contemporary management theory endorses as the ideal way to bring about change. This suggests that either their efforts will fail, or these protagonists of change have found a new model of change that works in our context.

Delhi University’s Big Change

Delhi University’s change of its undergraduate curriculum from a 3-year discipline-based curriculum to a 4-year integrative curriculum is the big change currently catching the headlines. It’s drawn flak from the left (Jayati Ghosh in The Hindu), the centre (Pratap Bhanu Mehta in The Indian Express), and the right (Swapan Dasgupta in The Times of India). Criticism is about the content of the change as well as the process that Delhi University (DU) Vice Chancellor Dinesh Singh has followed to push this initiative through. And, the failure to refine the content is related to the change process followed.

From what I have read in the newspapers, it appears that the VC has got the new curriculum approved using his emergency powers, convening meetings at short notice, discussing items not previously on the agenda, basically circumventing the processes laid down in the relevant statutes. The news reports suggest that this was done to avoid confronting opposition from the Delhi University Teachers’ Association (DUTA) or individual faculty. The university administration’s response has been to paint the DUTA as an interest group determined to protect its own interests rather than the good of the university or its students.

But, in the process, the university shut its ears to legitimate criticism as well. The new design seeks to combine vocational and academic streams, something that few countries try to do. It has ambiguous integrative courses which may be well beyond the teaching ability of the average Delhi University lecturer. The syllabi have yet to be fleshed out though the new academic year is just a few months away. And most colleges lack the faculty strength to make the new curriculum work.

The DU leadership seems to have been emboldened by the support it has received from the MHRD. MoS Shashi Tharoor has made approving noises about how a 4-year curriculum will make it easier for DU students to go abroad for higher studies. Only, I wonder what proportion of DU graduates pursues such a track, and whether a policy should be crafted with such a small group of students in mind.

Theory of Change Management

Contemporary change management takes a view that the kind of top-down change process described above will not work except in an emergency or crisis situation. Instead, change has to be accepted by those involved in making it happen both rationally and emotionally. For example, the “Switch” framework developed by Dan and Chip Heath draws an analogy between change and what they call the elephant-rider problem. While our rational side (represented by the rider) may recognize the need for a change, the emotional side (represented by the elephant) tends to pursue behavior that we are habitually accustomed to.

The Heaths suggest that solving the elephant-rider problem involves what they call “directing the rider,” “motivating the elephant,” and “shaping the path.” These are providing clarity regarding direction and goals, appealing to the emotional side, and inducing behaviours which are consistent with the change desired. I don’t see much evidence of these dimensions in what has appeared in the public domain on the DU curriculum change.

Will Top Down Change Work in a Democratic Polity?

I really wonder whether such top down change will work in our milieu. Remember that the new curriculum is not an abstract concept. It will not get transferred into practice unless the flesh and blood of the DU teachers is firmly behind it. If the new curriculum lacks faculty support, how will it take root?

But, there is clearly a middle class “professional” constituency that believes in such change. It believes that change is critical irrespective of the content and process of the change, and that holds interest groups responsible for the bad press that the DU change process has received. I posted the link to Jayati Ghosh’s article on LinkedIn and FB, and here are some of the responses I received from professionals in my network.

• From a senior HR professional who has taught at one of the IIMs: “…on the point No Substantive discussion and preparation is there for making change........that is acceptable.......but given Indian context .it is better to force change and let things align itself over a period of time. ....."

• From a Marketing & Communication expert: “One can have issues with lack of public debate and hasty implementation but there is nothing wrong intrinsically in an approach that widens the choice of courses and offers a menu of core and elective credits leading to different degrees. Also, a new system will hopefully rattle the faculty a bit -- the number of lecturers who have abdicated teaching in favor of canned PPTs and seminars today is a shame."

• Only one person responded more cautiously: "Corporate world is anyway lamenting the employ-ability of the students for years now. Any change brought into the design of bachelor programs which create uncertainty for the recruiter is not a place where reckless pace is required."

Is this then the new model of change – “it is better to force change and let things align itself over a period of time”? Will this work? Only time will tell. 

Where does India Stand on Innovation?

How does India stack up on innovation compared to other countries? Are we getting more innovative over time? These are questions I have been grappling with since I started studying innovation more than two decades ago.

In recent times, the growing importance of innovation to economic growth and prosperity has induced many efforts to measure innovation at the national level. In my book From Jugaad to Innovation: The Challenge for India (Utpreraka Foundation, 2010) [FJ2SI], I cited studies like the UNCTAD Innovation Capability Index, Georgia Tech’s High Tech Indicators and the Economist Intelligence Unit’s Innovation Study to show that India is a laggard as far as innovation performance is concerned.

As I noted in FJ2SI, each of these studies emphasized a different set of variables. The UNCTAD approach was based on human capabilities, and therefore focused on human development indicators. The Georgia Tech approach used high tech exports as a proxy for innovation sophistication. And the EIU used patents as its primary measure.

A few years ago, INSEAD and the World Intellectual Property Organisation (WIPO) launched a joint effort to develop a more comprehensive innovation index. In a short time, this index has gained credibility with policy-makers. The latest report of this Global Innovation Index (GII) came out last June.

India’s Position

India ranked in the middle of GII 2012 with a rank of 64 out of 141 countries. India’s rank remained virtually unchanged from 2011 to 2012. Apart from the GII itself, the GII methodology involves the computation of three other indices – an innovation output index, an innovation input index, and an innovation efficiency index. India was ranked 40, 96, and 2 respectively on these three measures in 2012.

The innovation input index rests on five pillars: institutions, human capital and research, infrastructure, market sophistication, and business sophistication. The innovation output index consists of knowledge and technology outputs and creative outputs. The innovation efficiency index is based on the ratio of innovation output to innovation input.

To get a clearer sense of where India stands, it is useful to compare India with China, as I did in FJ2SI. China does much better on the GII with a 2012 rank of 34. It was ranked 19, 55 and 1 respectively on innovation output, input, and efficiency.

China outclassed India on 3 of the 5 input pillars – human capital & research, infrastructure, and business sophistication - with a rank difference of 40-50 places. I am not surprised by the huge gap on the first two, but I am certainly intrigued by the huge difference in business sophistication (I’ll come back to this shortly). China was marginally ahead of India on the other two input parameters – institutions and market sophistication.

On the output side, China ranked 5 globally on knowledge and technology outputs while India came in at #47. The only measure on which India did better than China was on the output measure of creative outputs.

Digging Deeper

Looking at the raw scores that underlie the ranks, I found a few interesting contrasts:

• China does much better than India on institutional factors like ease of resolving insolvency and ease of paying taxes;

• The biggest differences between India and China are on the education-related indices of reading skills (a real shocker – India scores 4.41 against 100 for China; but the ASER reports have been showing this for years), and pupil-teacher ratio;

• China’s score on Gross expenditure on R&D is twice that of India;

• China’s score on ISO 14001 environmental certificates is about 7 times that of India (I need to dig into the significance of this number, but I guess the trend is clear enough);

• China’s higher score on business sophistication comes from the proportion of firms offering formal training to their employees (16% for India vs. 85% for China), R&D performed by businesses (34% for India vs. 72% for China), and high-tech imports (this is, I suppose, more reflective of China’s position in high technology manufacturing vis-à-vis India);

India’s bright spots (vis-à-vis China) are:

• Press freedom (not a surprise!);

• Efficiency of energy use;

• Ease of getting credit, and ease of protecting investors;

• Services exports (again, hardly a surprise)

What Needs to be done

The GII underlines something we already know - India’s biggest failure as an independent nation is in the arena of literacy and basic education. No other country with which we compare ourselves has such a poor record on this basic pre-requisite of a modern country. While government initiatives like the Sarva Shiksha Abhiyan and the Right to Education Act have belatedly acknowledged this failure, I don’t see a sense of urgency in addressing this problem. This has serious implications not only for innovation but for the very existence and progress of India itself.

While we often rationalize Indian firms not embracing an R&D culture by arguing that perhaps it’s not a business imperative, the fact that Indian firms are laggards on environmental certification as well as training suggests that we are simply not investing enough in the long term future of our enterprises. This is a sobering thought as we contemplate the future of Indian business and the Indian economy, and should be an important subject for reflection by India’s leading industry associations.

Some Concluding Remarks on Innovation Indices

One problem with innovation indices such as the GII is apparent from the above observations: they are constructed on the base of very generic parameters. The variables that are used to measure the GII (like the ease of setting up a business or the ease of paying taxes) seem no different from those used to measure competitiveness or the business environment. At the same time, the GII omits relevant measures such as the level of protection for intellectual property in a particular country.

In an effort to use “objective measures,” these indices appear to be measuring phenomena that are somewhat removed from innovation per se. Instead, the simple OECD model that I adapted for use in FJ2SI seems much more relevant to measuring the environment for innovation, and the resultant innovation output. 

Indian Companies Should Embrace Open Innovation

In a recent article in The Hindu Businessline, I argued that Indian companies can enhance their innovation output by being more open to collaboration with other organizations. Open innovation is one of the approaches we emphasized for companies to enhance their batting average in 8 Steps to Innovation.

Is Poor Engineering Design Capability at the Root of India's Problems with Technological Innovation?

I recently read a hard-hitting article titled “40 Years of Innovation” written by Harshwardhan Gupta, a Mumbai-based engineer designer (many thanks to Professor S Rajeev for sending me this article). The crux of Mr. Gupta’s argument is that India has failed to build engineering design capabilities, and, as a result failed to embrace technological innovation since “technological innovation and engineering design go hand-in-hand.” He goes on to argue that we are becoming more backward technologically, and have lost out on this count to practically every other significant country one might think of.

There is a good degree of commonality between what I wrote in From Jugaad to Systematic Innovation, and what Mr. Gupta argues in his article. But there are a number of new points as well in Mr Gupta’s article, and I would like to highlight these and comment on them.

Engineering Design Capabilities in India – Improving or Declining?

Mr. Gupta makes the contentious point that more engineering design happened in India pre-liberalization than after – even if it was based on imitation – because of the import controls that were in place at that time. The outcome of this activity was old-fashioned and over-designed, but good machines. There is probably some truth in this assertion, but it’s difficult to quantify. There were certainly pockets of engineering design capability in that era – my father’s own antenna company was a good example of that. Using locally-based engineering and design skills and the policy support provided by the import substitution policies of the government, he and his colleagues built a whole range of antenna designs that enabled all local requirements of antennas in the UHF and VHF bands to be met. Some other companies across sectors and ownership did develop their own products – I can think of BHEL, Thermax and HHV (that I wrote about in an earlier blog post) as examples – but I wonder whether we really have less engineering design capabilities today. The counter-evidence is the engineering design skills that we provide to the world through companies like QuEST and TCS.

Has CAD hindered rather than helped Engineering Design Capabilities?

A second interesting point Mr. Gupta makes is about how the advent of CAD may have actually weakened our engineering design capabilities. He attributes this effect to a false belief that the possession of CAD skills means that you have machine design skills. This is certainly an intriguing notion. It appears to be true in at least one domain – engineering education. When I joined IIT Kanpur as a student in 1981, I remember our senior batch talking enthusiastically about an engineering design course that they had done in their first year. I also heard about how tough the final year Mechanical Engineering projects could be, and how if students failed to make a working prototype they stood a good chance of failing in their projects. Well, the new core curriculum introduced from our batch onwards did away with the introductory engineering design course; and by the time our batch graduated, the requirement of a working prototype had been removed from the Mechanical Engineering curriculum (a disclosure: I was not in ME, but learnt this from my friends in that discipline). While at that time the reduction of emphasis on design in engineering education was attributed to problems in the institute workshops, by a few years later most engineering design had shifted to simulation and CAD. Few engineering colleges in India today require their students to get their hands dirty. [Interestingly, Mr. Gupta, a graduate of IIT Bombay, mentions that he designed his first machine as a student in 1975. Few contemporary IIT graduates will be able to claim that accomplishment!]

Machine Design & Commercialization of Innovation

Mr. Gupta underlines the importance of machines in commercializing innovation. He has an important point there. Ironically, Indian policy-makers recognized the importance of the machine goods industry way back in the 1950s. Companies like HEC and HMT were set up to provide a strong base in the capital goods industry. However, both HEC and HMT were not able to upgrade their engineering capabilities fast enough over time, and they lost out comprehensively once machines made the shift to CNC platforms.

Attitude towards Automation

Mr. Gupta criticizes the widely prevalent notion that automation is evil, and argues that only automation can provide products at the economic price points that will serve the needs of our people. He points out that mass produced products from China are rapidly pushing out locally produced products because we have not embraced automation effectively. I am quite sympathetic to this argument.

In India, there has been a lot of discussion and debate on frugal innovation. If you go back in history, the most successful frugal innovations were the result of mass production, whether you look at the textile industry of the British industrial revolution or the automation of the automobile assembly line by Henry Ford that democratized the motor car. In contrast, by failing to embrace mass production in the textile industry, we undermined the competitiveness of what was once a very successful industry in India.

In fact, at the core of the industrial revolution (which was the trigger for modern industrial growth) was automation.

Jugaad, IPR

I was delighted to see Mr. Gupta’s reference to our pride in Jugaadbazi as misplaced vanity. And, his view that complaints about lack of IP protection are just a cover-up for inadequate engineering skills.

Failure to Scale-up

Mr. Gupta’s other observation that I found thought-provoking was that we as a national are collectively incapable of scaling-up betterments but that we scale up bad things extremely fast and efficiently. He doesn’t provide an explanation for this, though he does point out that we as a nation seem to be subject to a naïve optimism that things will get better even when there is no objective reason to believe that this will be the case. He believes that we can’t solve problems unless we first recognize them as such.  My friend and co-author, Vinay Dabholkar, on the other hand usually argues that it’s better to focus on bright spots. I wonder who’s right. 

Why does India struggle to develop its own complex high technology products like fighter aircraft?

Dr Raghuram Rajan, Chief Economic Adviser to the MoF, GoI, was the chief guest at the IIMB convocation this year. I had the privilege of meeting him briefly before the convocation started. We talked about jugaad, Indian industry's innovation capabilities, and which companies stand out on the innovation dimension.

 

 

One question that Dr. Rajan asked was something that I have thought about often: why do we struggle in our large projects that involve the development of complex products like tanks or fighter aircraft? And why are we able to do relatively better in areas like space and missiles? While I gave an immediate response to his questions, these are important enough questions to merit a more elaborate response.

1. Overly-exacting Specifications

The starting challenge for creating defence products from India is the product specifications. One common criticism of our armed forces is that their specs are usually a combination of the best performance on each parameter offered by different vendors. Often, a product with such a combination of characteristics is either unavailable anywhere, or if it exists, is exorbitantly expensive.

There seems to be some truth in this criticism. Consider this example: according to press reports, in the now "under the scanner" Westland deal, there was only one helicopter globally available that met the specs set by the Indian Air Force. Much of the current debate is about who "diluted" the specs to "allow" the Westland chopper to be considered!

2. Lack of Clarity regarding what Local Development means

Designing a product locally does not mean that all components and sub-assemblies have to be made locally. In fact, one of the key decisions to be made is what will be done locally and what will be sourced from elsewhere.

Take the example of Embraer, the Brazilian aircraft company. Embraer retains ownership of design and system integration, but collaborates with other companies as diverse as Hitachi and GE for important sub-systems. Yet, Embraer aircraft are still regarded as Brazilian planes! Their big supplier partners share some of the investment and development risk with Embraer.

Contrast this with the development of the LCA. Much is made of the fact that India has not been able to develop its own engine for the LCA. But most aircraft companies don't design or make engines themselves!  

Most defence products require higher grade components with "MIL" certification. For many components, it’s cheaper to import from existing suppliers than design and manufacture them in India to MIL standards.

A related issue is the definition of the objective of the development project itself. Whenever I have spoken to people involved with the LCA project, they have proudly drawn attention to the number of new technological capabilities ranging from composite materials to advanced avionics that were developed in India as a result of the project. So, even though the LCA itself may not have been inducted into the Air Force so far, India has undoubtedly gained from the LCA project. Of course, this is limited consolation as the country has not got the aircraft we needed for the defence of the country!

3. Lack of Technological competence in Advanced Technologies

Complex products require advanced competence in diverse areas. Often, India does not have companies or institutions that have the required level of competence in each of these areas. Even when available, such skills may be relatively shallow and limited in scope. When the skills exist in the academic or research institutions, they may not be application-oriented.

 

 

LCA project head Dr Kota Harinarayana gave some interesting insights into this challenge when I spoke to him some years ago. When the LCA project started in the mid-1980s, we faced serious handicaps in composite materials, avionics and a host of other technologies. Dr. Kota Harinarayana who headed the Aeronautical Development Agency (ADA) that was created for the LCA project realized that it would not be possible to create all the needed expertise within ADA or HAL. He therefore visited all the leading engineering schools in the country, made an assessment of the expertise available, and created a large collaborative platform to rope in this expertise. Very soon he realized that these individual faculty members lacked either the managerial expertise or the interest to manage complex research projects. So, ADA had to work with the professors to break down the problems into more manageable pieces, each of which could be tackled as a Ph.D. or M. Tech. project. ADA funded the creation of physical infrastructure wherever necessary and did the overall programme management and coordination. So, there is a great deal of managerial effort that has to go into working with academic research partners who might have the required technical expertise.

4. Inadequate Number & Frequency of Experimentation and Testing cycles

While complex products are today largely designed on the computer (the Boeing 777, for example, was designed predominantly based on simulation through CAD/CAE), some amount of physical prototyping and testing is always required. Rapid testing, using low cost mock-ups and prototypes, wherever possible, is critical to completing the project quickly. But, design of complex systems in India is undermined by inadequate resources for experimentation and testing. This results in overly long development cycles.

I don't have hard evidence, but I am sure the CAG's notion of wasted and infructuous expenditure also hampers adequate experimentation. In 8 Steps to Innovation, we wrote about “failure fallacy” - the purpose of experimentation is testing assumptions and learning, not success and failure! Given our administrative rules and audit procedures (the infamous “Infructuous expenditure” that is the subject of criticism of successive CAG reports!), it appears that our system can easily fall prey to this failure fallacy.

5. Design/Development & Production Gap

After independence, India adopted the Soviet model of separation of design and development from production. As a result, we have a huge network of government owned and operated research and development laboratories and facilities, and a separate network of production units/factories (like the ordnance factories in the case of defence).

The separation between R&D and manufacturing has worked to our disadvantage in multiple sectors. Take the case of telecom, where the Centre for Development of Telematics (CDOT) set up in the 1980s created contemporary digital exchanges that were well suited to the hot and dusty conditions of India and the then prevalent high number of “Busy Hour Calling Attempts.” But as I documented in From Jugaad to Systematic Innovation: The Challenge for India, the separation of the technology provider from the manufacturers (a set of licensees who themselves had limited technological capabilities) meant that CDOT was one step removed from the marketplace and that the licensees never invested in creating their own technological capabilities. As a result, over time, the CDOT technology failed to keep pace with the needs of the market and lost out to products imported from global telecom giants.

The separation of R&D from production is particularly detrimental to the commercialization of new technologically-intensive products. The designers tend to be relatively insensitive to concerns of manufacturability or support, and hence the product can prove difficult to manufacture in large volumes, or at a reasonable cost. The manufacturers have inadequate understanding of the know-how and know-why, and in the process of trying to make manufacturing easier or more streamlined make changes in the product or process that make it deviate from the required specifications.

Commercialization of complex technologies needs close working between R&D, engineering and production, and this becomes more difficult if this involves crossing organizational boundaries. There are major challenges even within the same organization – the success of Samsung in the memory chip industry, for example, is often attributed to the co-location of these three functions as this makes communication and problem-solving much easier.

6. Lack of Tacit Knowledge

Besides, successful productionization or commercialization of products involves the generation and retention of a large amount of tacit knowledge. I am reminded of an experience that was narrated to me by the Chairman of Samtel Color, Mr. Satish Kaura, many years ago. Samtel entered the Colour Picture Tube market in the early 1980s when colour TV was first introduced to India. Samtel sourced its technology from a leading Japanese company. However, they struggled to achieve the same level of productivity of CPTs as the company from whom they sourced the technology. However, a leading Korean company was able to master the technology from the same source. Ironically, Samtel had to hire consultants who were ex-employees of the same Korean company in order to get the tacit knowledge of how to improve the yield of the production line!

Successful product companies build huge internal repositories (both informal and formal) of such tacit knowledge. It is this knowledge that helps them avoid repeating the same mistakes or being able to move ahead rapidly when a project gets stuck. Building this knowledge requires going through multiple product development cycles and finding ways of capturing and building on such knowledge from one project to another. But, if one project takes 30 years, you have a problem! In complex product development like aircraft design, we have not gone through a complete project cycle even once. That is a major disadvantage we face.

Why have we done better in the Space Programme?

My hunch is that we have done better in the space programme because that is a vertically integrated programme, has much clearer strategic objectives, is managed more effectively, and because its not a volume-oriented programme – you don’t have to move to serial production, so many of the productionization and commercialization problems don’t exist.

What needs to be done to improve our ability to build complex engineered products?

This is a big question in itself and I will leave it to a future post!