Nano Mistakes and Missteps

Summary:

The Nano was much heralded and expected to take the Indian car industry by storm. However it didn’t quite pan out that way. To begin with the decision to manufacture it in West Bengal was a major catastrophe. Why anyone would locate an industry in a communist infested region begs reason. With a timely invitation from Modi’s government coupled with sheer grit and determination, the unfortunate site selection error though overcome, was just the beginning of many missteps the Nano had to contend with. The technical glitch that caused a few cars to catch fire was overcome as well. However, the biggest error in marketing the Nano was the choice of the Distribution Channel which has resulted in lack luster sales.

Related Info:

Tata bought the bleeding Jaguar-Land Rover company for $2.3 Billion. The expectation was the $2,500 Nano would revolutionize the car industry by launching the “poor man’s car”, and the $65,000 luxury brand would be a millstone around Tata’s neck.

The outcome was quite the opposite. For 2010-11 out of the consolidated net profit of Rs. 9,274 crores, just Rs. 1,812 crores came from the Indian operations of the company. The rest came from JLR and other associated companies.

Sales of UK based JLR rose 26%, while Tata Motors car volume in India grew at 23%. The Jag that costs 25-30 times more than the Nano even at base price sold nearly 53,000 cars against the Nano 70,000.

The Importance of Positioning:

Launching the Nano as a “cheap” car pretty much ruined its Brand Value. The assumption was that if it is cheap enough, then it would attract buyers who were priced out of the existing auto market. This flies in the face of the fundamental marketing principle of targeting early adopters first, then going after a broader market segment. Despite this error, there was an initial ground swell of interest where many people signed up and a lottery was held to select the initial set of buyers. In that sense the hype that accompanied the launch prior to availability did work for a short period of time. And then it fizzled out.

It is not clear what a successful positioning could have been. Clearly it is meant for the married motorcycle owner who now has a child or two. But this buyer is conservative not only with regards to price, but is also risk averse and would rather wait till “others” buy and provide feedback. The fire glitch certainly did not help.

Other positioning questions are:

-         Is it an Urban car or a Rural car?

-         Intended for teenagers?

-         A second car?

-         Self driven or driver driven?

None of the above supports the premise that providing a cheap car will result in buyers. In fact the most appropriate positioning would have been to promote it as an Auto Rickshaw replacement or a cheaper taxi, but in order to do so it would have to run on LPG and also deal with bureaucratic and administrative hurdles.

Pricing error:

It was never a Rs. 1 lakh car, with taxes and transportation added. This immediately set the perception that the 1 Lakh price is just a teaser price and that what one lands up buying will cost more.

The expectations mismatch:

The Nano was trumpeted as an engineering marvel, which it is. However, bringing it to market presents one set of challenges and marketing it successfully is another. As in any new product, the expectations are typically set high and in reality the performance falls short. Too much importance was given to the technical aspects instead of highlighting the fact that it is a “no frills’ car that transports four people safely and economically. The goal should have been to highlight its utilitarian value.

In essence, it should have been promoted as a utilitarian vehicle at and affordable price

The Channel Mistake:

The Nano was sold through the existing Tata Motors car dealerships. What happens when a person interested in a Nano shows up is that the sales person will up-sell the person and convince them that they are better off buying the car next model up. With financing the monthly outlay will not be that much more. The incentive to the dealer and the sales person is better margins and commission respectively. The net result is that the buyer either buys the next model up from Tata or goes some place else with the “upgrade” intent in mind.

A few years down the road, Bajaj will launch their competitive offering. If they do it right they will sell it through their existing motor cycle dealerships. In this case a person interested in buying a motorcycle, like a family man is a potential customer who could be motivated to buy the car instead.

This underscores the importance of the Distribution Channel, which is a major hurdle for Tata. What they have been doing recently is taking the Nano on the road and getting people to test drive it. It appears the objective is to make the sale on the road and rope the customer into the dealership to seal the deal.

Lessons Learned:

This kind of car is targeted to a new market and does not cannibalize the existing market. This is more of a commuter car and appeals to a person who will drive the car themselves.

Growing a market involves patience and the first set of buyers targeted should be early adopters. This was a new product targeted to a new market. The expectation of high volumes at low margins works if one is introducing a better, cheaper replacement to an existing established market.

The target customer is one who has out grown the motorcycle or a buyer who values the utility, safety and economics of such a car. The bulk of the sales eventually will come from the first time car buyers.

It is better to underestimate demand and start with under capacity initially so that demand out strips supply. Having a back log, gives the impression that this is a much desired commodity and worth the wait since the savings are significant.

One can hark back to the VW Bug, which was a bare bones car with the transmission and engine being the two major assemblies that formed the motion system. It was positioned as “the people’s” car and named appropriately. It found popularity amongst the youth. Ultimately, if one wants to repeat this phenomenon in today’s context, the VW Bug serves as an example to build upon.

State of the Indian Railways

The Indian Railways by its sheer size and number of passengers and goods transported is probably one of the best managed and run railways in the world and probably the cheapest. The Indian Railways looses money on passenger traffic and makes money on Goods Transportation. The ensuing result is that travel is cheapest on Indian Railways.

For instance an auto ride of a few kilometres to the station is way more than a long haul Sleeper Class train ticket. Long distance bus ticket prices too are significantly higher than a train ticket for the same distance. This is due to the heavily subsidized passenger fares and running trains carrying passengers at a loss.

The Indian Railways is the Blood Line of the country and rather than continuing to provide services at throw away prices the emphasis ought to be how to improve this Blood Line to fast forward the progress of the nation.

The railways can serve a major role in leveraging the “Demographic Dividend” by providing jobs for the youth that are entering the workforce. By increasing the surplus it generates, it can plough it back as well as borrow more to improve the infrastructure, upgrading services, enabling trains to travel at 160 Km/h (100m/h), double tracking high traffic segments like the Konkan Railway and Mangaluru-Bengaluru etc.

The subsidized ticket prices, results in crumbling infrastructure and subjecting the contract labourers who work on track maintenance to deplorable living conditions. We gloss over their plight. In essence the subsidized rail fares are being supported on the backs of these hard working people. This is an aspect of our socialistic thinking!

Socialism should ensure everyone is served from the very poor to the very rich. And that each segment pays a different price. One gets the basic minimum at a minimal cost and one gets more by paying more.

Daily travel for work is a necessity, whereas all other travel is discretionary. To increase capacity in suburban trains used by commuters, it is suggested that compartments be reconfigured to accommodate more standing and less seating. Currently, one sees a mad rush at each station to secure seating. Providing fewer seats will increase capacity and do away this scrambling.

The goal of serving the less fortunate members of society for long distance travel can be met by applying the following principle. The basic “General” minimalist service is offered for very little. For a little more, one pays a little more. For a lot more, one pays a lot more. Premium Services are offered at a Premium Price. In this way the General Category and Sleeper Class (to some extent) can be subsidized by the ensuing service categories that offer more and cost more.

The situation on the Ground:

The Railway Staff are doing an excellent job of keeping trains running and paying attention to safety. The dedication and performance of the Railway Staff is a great asset to the Indian Railways and the Nation. However, due to lack of resources, namely finances; they are unable to perform many duties pertaining to maintenance and repair of the infrastructure. Furthermore many trains appear unwashed and require a new coat of paint. The following is a pictorial report on the state of the railways.

The Working and Living Conditions of Hard Working Railroad Crews:

(Take note of the children near rhe workers)

The above is a video of a hard working rail maintenance crew. The work generates a lot of dust and they don’t use masks to prevent breathing dust. They start work at 7:30 AM and work without a break until they finish the agreed upon number of slats. Since there is no child care facility for their little children, they are brought to work and the children too are exposed to the dusty environment. The workers live in tents, which in itself is not bad. But they live under deplorable conditions with no sanitation and decent facilities for water and cooking.

The subsidy of rail travel, takes away funds that could be used to provide better facilities for these hard working crews, who work under extreme conditions. In essence the brunt of the subsidy is borne on the backs of these people. Is this justice? Providing benefits to one class of people results in the exploitation of another class!

The work is hard and essential to the operation of the railways.  It is critical and mandatory. What is missing is improving the Quality of Lives of these dedicated hard working men and women.

Articles 42, 43 and 46 (see below) of the Indian Constitution stipulate specific responsibilities on the State. By farming out work to contractors the Railways circumvent these responsibilities on a technicality. Either the Railways should provide the necessary facilities to ensure a “humane” Quality of Life for these workers, or the contractor should be paid to provide the same. That is the spirit of Socialism on which the Indian Constitution is founded on.

The General Class or Unreserved Seating:

The above pictures were taken in a General Class Compartment. As you can see, people are using it as a Sleeper Class compartment. This is the Class of Service that serves the poor and it is understandable if it is subsidized. As mentioned earlier, long distance travel is discretionary and that means it need not be provided at throw away prices.

The Crumbling Infrastructure:

The above pictures are just one instance of crumbling infrastructure. There will be continued deterioration if the railways do not generate the funds to maintain and repair.

Safety Barriers:

The above is an instance of a road running beside the tracks with a partial barrier. Even where there is a barrier, it is crumbling in places and sections are missing. Furthermore, in this particular location, the Railway Quarters are across the road where there is no barrier. This poses real danger to little children who may wander across the road to the railway track.

Great Offering with no facilities:

The above is an excellent service provided by the railways that many truckers utilize. However, the entire train has no cafeteria or sanitation facility. All it would take is to place a portable structure on one of the carriages that could be contracted out to a caterer to provide meals, snacks. And it could include toilet facility for the drivers and the helpers as well.

Intermediate Stations Quota:

A number of intermediate station quotas go unfilled resulting in empty berths. It is suggested that the intermediate station quotas be held till 24 hrs before the train departs the originating station so that those reservations can be released to the General Quota.

The Didi Legacy:

She exclaimed how can the prices be increased for the Sleeper Class! Instead of acting like a communist she ought to have functioned more like a Chairperson of a Corporation that is a vital arterial transportation network of the country. 

Her demand was legitimate provided it is specific to the pricing for General category only (not Sleeper) and that the price of General category be kept as low as possible. Furthermore, holding it constant can only be sustained for a specific period and cannot be made permanent. A stipulation can be made that it will be revised once in two or three years, so that people know what is in store and it would avoid the need for confrontation.

Message to Railway Ministers:

At the very least passenger services should be at break even which generates Capital to invest in areas mentioned above. The focus ought to be how to make it possible. The following are a few suggestions.

The purchasing power of the people is different in different parts of the country. People travelling in West Bengal and in the BIMARU States don’t have the same purchasing power of people living in the Konkan coast, Southern and Northern India. By pegging the price of tickets to accommodate the poorest of the poor, services to the people who can afford to pay is given at a throw away price. The solution is to charge different per Km prices for different segments of the tracks.

We have a growing Middle Class that can afford AC2 and AC3 service resulting in Demand exceeding Supply. The emphasis going forward is to introduce new trains with a better rate of return. Reconfiguring rakes to seat more people. One possibility is to have chair cars for overnight journeys instead of so many Sleeper rakes. Provide seating only on the sides of commuter trains to allow for more standing room.

The poor are not suffering due to unavailability of railway services on existing lines. It is the Middle Class that is being short changed due to inadequate availability. It is time that Railways provide services to this segment that is willing and able to pay higher fares.

In doing so, Passenger Services could be transformed to generate profit. This can be ploughed back to improving the passenger services and/or better pay for the railway employees.

All PSUs need to be weaned off the Indian Government’s Breast Milk. This is the financial viability criteria that must be met by all PSUs. Furthermore, PSUs must generate enough profit to plough back into their respective operations along with the ability to take out loans and service them. Most PSUs with the exception of the railways and a few others must augment the government’s tax revenue base, just as the private sector is expected to do. The Railways and a few others have an additional responsibility of catering to the weaker segments of society that has to be addressed with the financial viability criteria in mind. In that respect it is understandable that the railways function as a non-profit enterprise. i.e the profits are used to subsidize services for poor to some extent.

Recommendations on re-branding classes of service:

The Railways does an outstanding job in addressing demand-supply elasticity to a certain degree, by having different categories of trains with travel on Passenger Trains being the cheapest and with higher pricing for other services such as Mail, Super Fast, Express, Rajdhani etc. Along with different categories of service within these trains such as General or Unreserved, Reserved Seating, Sleeper, AC Chair, AC-3 Tier, AC-2 Tier, First Class etc. multiple price points are offered. But the offerings are skewed towards the lower price categories with the demand for AC services far exceeding supply.

Indira Gandhi did away with III Class saying it portrayed a bad image. The ensuing Make Over resulted in the existing categories. It is suggested that we revisit the current categories and consider the following:

General: This is the subsidized category that is unreserved seating. See Picture 1 for how some people utilize this service.

Economy Chair: This would be comparable to an ordinary bus with reserved seating. Each train that has a General Category should have this category as well.

Economy Sleeper: This would be the existing Sleeper Class and with the intent to increase the number of passengers a train can carry, it is suggested that a few of these Sleeper Class bogies be replaced with Economy seating.

AC Chair: This would be comparable to the AC Volvo and priced competitively to AC Bus transportation. New trains with this class of service should be introduced for the Middle Class.

AC 2 Tier and 3 Tier:  This would remain the same.

Premium  Class: Suggest First Class be renamed to Premium Class.

Luxury Class: This would be the Palace on Wheels.

Super Saver: The Garib Rath is a misnomer and an insult to the people travelling on it. Most of the AC Tier 3 are Middle Class people. Convert the whole train to AC Chair and use the AC 3 Tier bogies to new trains at a better price.

Essence of Articles 42, 43, 46 of the Indian Constitution:

Article 42 provides for just and humane conditions of work and for maternity relief.

Article 43 calls upon the state to secure to all its workers – work, wages and conditions of work ensuring a decent standard of life and full employment of leisure, social and cultural opportunities.

Article 46 stipulates that the state shall take special care of the economic and educational interests of the weaker sections of the society in particular of the Scheduled Castes and Scheduled Tribes and protect them from all forms of exploitation.

Update:

Got this from a post by a friend. This is Jugaad at its best. Hats off to whoever came up with this idea.  Only in India!

Mission India

"Inclusive Growth" is the new Mantra which calls for the Economic Uplift of the masses Below the Poverty Line (BPL). At the "nano-economic" level it translates to a sustainable income for families and individuals of employable age. This means that these folks are either self employed or have jobs that provide them with the requisite sustainable income. (See Note 1). 


India can be broadly partitioned into Urban and Rural Areas, each significantly different, requiring different solutions. Taken in its entirety the situation appears complex. However, the solution to complex problems is to break it down successively to arrive at a set of priorities that can be individually tackled to bring about a comprehensive solution.


At the heart of the problem is the inability of the agricultural sector to absorb the excess labour force resulting in abject rural poverty. This also leads to migration to Urban areas which are already bursting at the seams, resulting in the rural poor moving laterally to become urban poor living in squalid conditions.


The most pragmatic solution is a primary focus on Jobs, Food Security, Education, and Quality of Life. Every development and decision should be targeted towards one or more of these priorities.


Focus on Jobs, Jobs and More Jobs:
Besides providing all the necessary attributes that allow the Private Sector to proceed at an accelerated pace (Energy, Infrastructure, Investment Friendliness, Land Reform - with attention to fairness towards owners of land whose land is acquired and to environmental norms etc.) Two things ought to be kept in mind:

1. Easier to facilitate the relocation of people to Job Opportunities, than to move Job Opportunities to the people. This would help in siphoning off the excess labour that is lacking opportunities in Rural India.
2. Better to locate these Job Opportunities in proximity to an existing railway line or extend the railway line to where the new Job Opportunities will be. (Indian Railways is the fourth largest railway network in the world.)

To facilitate the migration of people to these Job Opportunities, the criteria applied should be simply:

• A person/family, regardless of their income potential should be able to rent a flat,a room or a bed when relocating. 
• All the amenities (shopping, recreation, schools, places of worship) desired by the highly skilled personnel that comprise the Middle Income Group (MIG) and the low/medium skilled personnel that comprise of the Lower Income Group (LIG) should be provided.

The above ought to be the recipe for all SEZs (Special Economic Zones - See Note 2), that includes an "Economic Engine" that provides the primary opportunities around which a number of secondary opportunities are generated. It does not matter if the "Economic Engine" is a nearby Metro, provided efficient public transportation links are incorporated into the plan.

Focus on Food Security:

Farming today is an entrepreneurial endeavor. Marginal farmers are at great risk and does not provide a sustainable income. The focus should be on making the productive farmers more productive and provide the farmers at risk an exit opportunity by way of a job. This means removing the barriers that exist in the acquisition of agricultural land and allowing farm consolidation. The focus should be on ensuring agricultural land land remains agricultural land rather than who owns the land and how much they own. What India needs is a Food Security Strategy that includes improving farm output, food processing and agro-industry. See Note 3.


Education:
The Quality of Education can be improved significantly by the use of modern technology. Students can obtain access to Good Teachers and Quality education through "Distant Learning" programs. 

Focus on Quality of Life:
This encompasses many areas from housing, health, education to security, defense and environment. However,the "in our face" issue is the plight of the people at the "Bottom of the Pyramid", who represent a largest segment of India’s population. This segment continues to be treated as “Invisibles”, in that their existence is ignored, and they are neglected.   They exist, but have been intellectualized into non-existence.  The solution is not a hand out to this segment.  What this segment needs is affordable solutions that they can pay for. It is no longer conscionable or moral to marginalize and neglect the needs of this segment. 

Instead on the emphasis on ownership, the focus ought to be on affordable rentals, with ownership being the desired end goal. The emphasis ought to be in making it economically viable to provide housing solutions to the "Bottom of the Pyramid". This includes "owner friendly" rental laws and providing the requisite "Living Wages" that enable these wage earners to rent reasonable accommodation. See Note 4.

Note 1: The term "Living Wage" and "Minimum Wage" can be used to debate what translates to a sustainable income. Minimum wage is usually an amount defined legally for a country, whereas Living Wage defines what is required for an individual or family for a specific geographic area.


Note 2: Special Economic Zones (SEZs)


Note 3: What is India's Agricultural Policy?


Note 4: Alleviating Visual Poverty

The Times are a Changin...

"Parliament is Supreme", scream the Politicians, Pseudo-Intellectuals and the cocktail crowd. That is granted. But "Parliamentarians are Not". It is clear that these "Parliamentarians" have done a poor job regarding corruption and have misused the "power" vested in them. Our "Parliamentarians" are drunken with power and are hell bent on resisting the "political flogging" meted out to them by Team Anna.


One of the major criticisms of Team Anna’s Satyagraha is that it was undemocratic and extra-parliamentary in approach and that Civil Society does not represent the majority opinion of the citizens of Bharat. Times have changed and people who prescribe to this opinion are ostriches with their head buried in the sands of time. 

With the advent of modern communications technology a broader base of citizens distributed Nationally are able to participate and voice their opinions on issues of National importance. An elected politician represents just his or her constituency, whereas the issue raised by Team Anna energized people across the country, who showed their support by their presence and participation in support of Team Anna’s Satyagraha. Their sheer numbers probably exceeded the votes garnered by many Members of Parliament, to get themselves elected. 

Anna said it best indicating that the people of the country are the owners and that the elected Members of Parliament and Bureaucrat’s job is to serve the owners. There is no argument that the politicians and bureaucrats have failed the owners when it comes to curbing corruption. 

In the absence of a process for a National Referendum, Team Anna has effectively utilized the process of Satyagraha on which the very foundation of our country was established as demonstrated by the Father of our Nation, Mahatma Gandhi. This is the beginning of a trend and heralds a change in the role of the politician in the Democracy of the Future. 

On a local level, politicians will continue to champion the causes of their constituents. On a National level or for that matter at the State and City level, more and more issues will be thrown open to citizens to vote upon and decide. The politician’s role in this aspect will be to ensure that the referendum does not discriminate between a particular community based on their religion, affiliation or gender. 

In the absence of such a process, Team Anna has taken the first step and demonstrated effectively how a National Referendum can be “demanded” in a non-procedural manner.

Currently, the demands have only been accepted for consideration. They still have to be formulated into a Bill and it has to be voted upon by Parliament. In the Democracy of the future, the parliamentary vote would be eliminated, by the issue voted upon by the citizens. While we may claim that “Parliament is Supreme”, let it be noted that Parliament is accountable to the citizens of the country and that the citizens of the country collectively, supersede the “Supremacy of Parliament”.

This process has been implemented in smaller democracies and the time has come for the world’s largest democracy; Bharat and the world’s richest democracy; the US, to pay heed to the issue of National Referendum and institutionalize a process by which it can be done. In the US many State and City level issues are voted upon as Ballot Measures, by the citizens. So for the ostriches whose heads are buried in the sands of time, this is an indication, that a time may come when certain issues may be decided directly by the citizens of the Country, State or City, with the Parliament being a shared body of power as opposed to the sole body of power.

Get Real Mr. Murthy

The claim that IIT graduates are not up to snuff, that coaching classes is one of the reasons responsible for this situation could well be the outcome of the statement being framed incorrectly. An alternate claim could well be that the IT industry does not provide interesting opportunities to attract IIT graduates.

Kudos to the IT Industry:

The IT Industry comprising of notable companies such as Infosys, TCS, WIPRO and others, has put India on the map as a leader in World Class software solutions and BPO service providers. The IT Industry has been so successful that the term “Banglored” is being used to describe jobs in the developed world that are being outsourced. Even President Obama, (who moves his head from side to side as he speaks), talks of jobs that he wants in Buffalo, (while he looks in one direction), instead of evaporating to Bengaluru (while he looks in the other direction). The people involved in the IT Industry are doing a yeoman’s job and something that has brought our Nation a tremendous amount of pride, employs a lot of individuals both directly and indirectly and brings in much needed foreign exchange.

There is more to IT:

IT activity can be broadly categorized as Architecture, Construction and Services. The Indian IT industry for the most part is involved in “construction” activity that extends the customers existing computing environment and services. The former involves “pounding the keyboard”, and the latter involves providing technical support, maintenance etc., answering the phone, and/or doing some administrative work. Star IIT graduates look for opportunities that go beyond these activities, let alone answering the phone during night owl hours!

Where the Opportunity is, Graduates will go:

Consequently graduates gravitate to where the opportunity and remuneration is, be it the Financial or FMCG sectors. Yes, they follow the money. Furthermore, there are attractive opportunities at companies such as Intel, GE, Microsoft, etc. Graduates interested in software development would rather work for high tech companies involved in developing innovative products rather than IT companies involved in “construction” activities. The fact of the matter is that industry comes to IIT and clamor for IIT graduates. Many have multiple job offers. Some are disappointed with the compensation extended and do look for alternatives. And yes there maybe some slackers.

In search of the ideal IT candidate:

The issue of competency in English was raised. Technical skills and competency are orthogonal. One could be very competent technically in Hindi or their regional language. Obviously, English competency is important in the IT industry that is involved in what is commonly referred to as “body shopping”. And yes the IT companies eagerly look for technically competent individuals, fluent in English who would be happy and content “pounding the keyboard” that they i.e. the IT company can “body shop”. Infosys is an excellent company and it does well by hiring graduates that augment its success from regional colleges. An IIT graduate who scores the JEE, and graduates from this elite institute, probably aspires to something more than being recruited and bunched with second and third rung college grads.

In Summary:

It appears Mr. Murthy’s statement was based on anecdotal experience and not grounded on facts. Maybe, just maybe, the IITs are the wrong place to look for the ideal IT employee.

The Great R&D Debate

“There is hardly any worthwhile research from our IITs” says Jairam Ramesh. True. R&D in an academic context, means developing a new capability that has not been done elsewhere or being among the first few to demonstrate it.

Look at MIT, Princeton, Cornell, and Caltec etc. people say. They want the IITs to be in that league. This is indeed a truly laudable ambition. Is this realistic? Does India have the capital, resources and infrastructure they have? Is India wishing a champagne lifestyle on a beer budget?

Here is a reality Check.

India is playing catch up even in commercial areas by importing “Packaged Technology” for Mobile phones, Automobiles, Internet connectivity and even FMCG (Fast Moving Consumer Goods). Even the Tata Nano, an excellent engineering feat in its own right, has an imported engine design. Indians are conservative lot, risk averse and afraid to fail. Besides it is easier and faster time to money to buy working solutions rather than develop indigenously. The upside, India doesn’t have a “Not Invented Here” attitude.

Look at the once ubiquitous coin box. It was a magnificent and Herculean effort that brought phone connectivity to the remotest parts of India. What about a follow on to this? Technology changed, mobile phones appeared. Even the poorest of the poor have Mobile phones. India did not progress fast enough. Despite its phenomenal success, this telecommunication effort appears to be a “one trick pony”.

There are outstanding examples in Defense and Aero-Space. However, most of these accomplishments are replication of what has already been accomplished by US and Russia. The first moon probes were launched successfully in 1966. Russia was first with the US four months behind. India caught up with Chandrayaan I achieving what was accomplished over forty years before. At least here India is catching up.

The notable exception is Atomic Energy. India in some areas is at the forefront of nuclear technology. And yet Nuclear Power Plants are being imported. India’s first Test Fast Breeder Reactor which is based on a French Design at Kalpakam, Tamil Nadu attained criticality (i.e. success) in 1985. The follow on commercial prototype is yet to go into production more than 20 years later. India does not move fast enough.

Look at China! They are replicating what Japan did. Copy and sell cheaper. They have even copied the ubiquitous three wheeler auto rickshaw that plies Indian streets and roads. Why is India lagging in this arena?

Yes R&D is important, there is no argument. But the IITs and for that matter India needs to be prudent and place bets intelligently. Go for small successes and build upon them. Given the circumstances this is a long and arduous road that has to be taken.

This hue and cry about lack of research at IIT is an indication of a herd with Science and Technology blinders, wanting to vie with the Joneses with hollow drums that only make a lot of noise.

This may be heresy, in the short run; it is more efficient to facilitate the best minds going to where the research is being undertaken rather than waiting for research to come to the best minds. This is a fact, this is happening. People can moan, groan and lament. This is reality. Let it not be fought. India has more excellent minds than opportunity. Let these minds flourish elsewhere rather than rot in India. Indians have migrated to the West and the world has benefited by their efforts. This is working for India. India’s investment is in human resources and in developing great minds. It has paid rich dividends and has worked so far.

Trade and commerce is freer in this interconnected world where past walls have crumbled. The West has technology to sell; India should be in a position to buy. As long as India is in a position to buy, it can afford to be in this position.

The take away here is that India should continue to acquire technology and pursue import substitution. At the same time aggressively produce goods and services that the West will want to buy. To date the biggest successful export from India is Human Resources; both Brain and Brawn. Somewhere in the distant future, the laudable goal of being abreast in R&D with the world will become a reality.

Prescription for IIT:

India has a lot of catching up to do and it has to be done at an accelerated pace. India also needs to be active in new emerging areas to be in the lead. The IITs can play an important role in both these endevours by:

• Leveraging significant scientific discoveries that are proven in the lab
• Determine its relevance to Indian environment and needs
• Evaluate the feasibility of developing the technology to make the discovery commercially viable or meet a specific purpose.
• Acquire the licensing if applicable and build upon it.
•  License the outcome to generate a revenue stream

Becoming a resource to Industry is another area of importance. Graduating students and alumni are the best resources to establish links with industry. Programs should be launched to make it attractive for industry to engage with IIT on joint projects. Faculty should be encouraged to spend a portion of their time in industry and be allowed to retain part of the earnings resulting from their personal engagement.

Jai Hind!

Mission IIT

IIT is frequently in the cross hairs of controversy. Recently the first salvo was fired by Jairam Ramesh, who claimed that the faculty at IIT is not world class¹ and that they are excellent because of the quality of the students. This was followed by Narayan Murthy’s claim that IIT graduates are not up to snuff and that coaching classes was one of the reasons responsible for this situation². Anand Kumar, who founded Super 30, countered that the coaching classes are geared to crack the JEE³. Representatives of the faculty weighed in with observations of their own and echoed Murthy⁴.

The biggest asset the IITs have created is Intellectual Capital. This has benefited the Nation and the World. Brand IIT is internationally acclaimed. Looking ahead Mission IIT is to increase this asset with the right mindset that serves India’s National Interest both nationally and internationally. 

A desire expressed by many is that the IITs should rank among the world’s best universities, in the same league as MIT, the Ivy League, and Stanford etc. The closest IIT comes to is MIT. The MIT curriculum includes Anthropology, Economics, and Political Science etc. The Ivy Universities have broader and more diverse majors. Therein lies a clue! Expecting the IITs in its current Avatar, to rise and rank among these Universities is like asking a Leopard to change its spots.

The issue that surfaces occasionally is that the IITs should serve India’s National Interest. This is cast as an Excellence Vs Relevance debate. Excellence is a given. The debate centers on Relevance. The Govt. of India is a major stakeholder by way of its investment in the IITs.  That makes the citizens of India major shareholders. The IITs must serve the National Agenda of Inclusive Growth and bridging the Urban-Rural Divide. In that respect, achieving World Class should be an outcome, not a goal. The goal ought to be to establish an Iconic category of Excellence with respect to serving the National Agenda. This could very well result in the IITs becoming a role model for other institutions across the world to follow.

Performance to Date:

The output of the IIT i.e. the “Product” comprises of the Graduates, Post Graduates, Relevant Research and Industry Engagements. The Nation has benefited from the accomplishments of the B.Tech students and the role the faculty has played in shaping the minds and capabilities of these students. The institution has produced numerous PhD, M.Tech and MSc graduates. Their contribution to the Nation is either unrecognized and at present not as significant as the contribution of the B.Tech graduates.

No one could have foretold the fact that the Nation (the US and the World) benefited from the combined efforts of graduates (both from IITs and other colleges) who migrated to the US, who together with graduates working in India brought about the Software Revolution as well as other technological advances. The much maligned and lamented Brain Drain morphed into Brain Gain.

As far as Research and Industry engagements is concerned? “There is hardly any worthwhile research from out IITs” says Ramesh.

However, past performance does not guarantee future results and there is general agreement that changes are required to generate the appropriate output for the future.

Mr. Murthy’s claim in the absence of valid data is conjecture. However, it could very well portend a trend that may be real. An important first step is to do a detailed analysis of the opportunities graduates are pursuing and feedback on their performance from Industry.

Focus on Technology:

Technology is a phase in a product life cycle between a Scientific Discovery being demonstrated in the lab and the discovery being part of some capability/utility that is reproduced reliably using Engineering methodology. That is to say Science is involved in discovering “something”. Technology is involved in demonstrating that this “something” can be reproduced and provides the platform for the Engineering phase which is involved in this “something” being part of a solution that has some broad or narrow utility.

With this in mind, the Excellence Vs Relevant issue would be to focus Excellence in Technology with Relevance being a target.

Expectations:

The expectation of the IITs is that it provides excellent technologists, technologists with business acumen, technologists with managerial and leadership skills, Innovators and Entrepreneurs. The goal is to contribute to the Technological Intellectual Capital of India. The country needs more individuals who will provide thought leadership and become change agents, the likes of Nandan Nilekani, Naraya Murthy, Jairam Ramesh and Arvind Kejriwal.

Graduates are expected to possess attributes critical to be successful in today’s environment, such as excellent presentation and inter-personal communication skills, be well versed in group dynamics, have the practical skills required to solve real world problems that go beyond just the theoretical realm. This underscores the importance of multi-dimensional skills and creative thinking.

With the above in mind, the following recommendations are made:

Recommendation #1:

Tune and refine the JEE. Improve it to filter in the best technical mind set. Maybe add sections that test analogies and logical thinking. A focus on English is a red herring. The JEE could be translated into regional languages and that would still work. Coaching will always be focused on cracking the Test in whatever Avatar it takes. 

Recommendation #2:

Expand the curriculum to include new majors in other areas like MIT – Economics, Political Science, Social Science etc. Set up separate JEEs to filter in students with excellent multi-dimensional skills. Use the real estate of the IITs effectively to build new departments. Make English proficiency an important criterion for these majors. New coaching classes will emerge. 

Recommendation #3:

The students enter as rough gems. The professors play an important role in shaping and polishing them. The rigor of the academic program acclimatizes students to deal with and perform under stress. The theoretical knowledge is the fabric for procedural thinking that provides the framework of solving real world problems. But that is not all. Ask any successful IIT graduate and they will assert that hostel life and experience gained outside of academics played a major role in their careers and lives. Each year assign a sizable number of the inter-disciplinary freshmen to a select set of hostels and let them be together till they graduate. Each year a different set of hostels can be selected.  Hostel 8 had the max number of IITB-75 graduates, which has emerged as the most successful batch of all IIT’s thus far. Hostel life fosters bonding and camaraderie that lasts for life and is stronger between batch mates and less so between different batches. If this sounds like Social Engineering, it is. Empirical evidence supports it. Extra-curricular activities are important and should be allowed to foster. This by far is probably the most important aspect of IITs. A healthy mix of academics and extra-curricular activities are key in shaping these precious stones into polished gems. The environment is analogous to that of a Petri Dish. Put the right mix of minds together, allow them to grow and progress. The results will be outstanding

Recommendation #4:

Rural India is trailing and it will take many years to catch up to assimilate advanced technologies that are prevalent in developed countries. What IIT can do for Rural India is an enigma at this time. However, making a six month rural residency requirement for all students of government aided institutes (not just IITs) will go a long way in bridging the "mind set" gap, between Urban and Rural India. In the initial stages the focus would be to build the infrastructure (toilets, living, and dining quarters). With comfortable living conditions this would be a wonderful experience for students of all disciplines to converge from all over the country. It will promote national integration and another level of bonding. As part of this exercise, graduates should be instilled in the notion of Nation Building.  IITians, collectively can play a major force in improving the Quality of Life for all segments of society, both Urban and Rural.  

Concluding Thoughts:

Globalization is nothing new. It has existed for centuries. What has changed is the velocity at which capital, goods, manufacturing and services move across international borders. India is playing “catch up” and currently importing “packaged” technology for applications such as, mobile telephones, internet connectivity and even automobiles. The IITs have to play a significant role in fostering Innovation and Entrepreneurship. Competing in the Global environment; to lead India to be a contender in the World Economy, requires people who have Quantitative and Qualitative expertise. The IITs are one of the institutions that have to play a major role to address this challenge as well.

References:

1. Jairam on IIT faculty:

http://www.ndtv.com/article/india/iit-iim-faculty-not-world-class-jairam-ramesh-107764

2. Murthy on IIT:

http://timesofindia.indiatimes.com/tech/careers/education/NR-Narayana-Murthy-Quality-of-students-deteriorating-IITs/articleshow/10217630.cms

3. Ananth Kumar’s response:

http://timesofindia.indiatimes.com/india/IIT-exam-panel-behind-poor-student-quality-Super-30-founder/articleshow/10241241.cms

4. IIT faculty echo Murthy:

http://timesofindia.indiatimes.com/india/IIT-heads-echo-Narayana-Murthy-on-dipping-quality/articleshow/10296730.cms