Roundup 2014

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Writing suffered in the second half of 2014. This has been an overriding concern. But at its cost I could give a start to my teaching career. It gives me a mild kick every time I think of myself as a high school teacher. Teaching sociology and economics to high school kids for the past six months has been a very satisfying experience. I now teach three days a week in an alternative school. The students I teach will appear for their senior secondary exam – NIOS board of India and the British IGCSE A Levels.

As a rookie teacher I have had a good deal of adventure trying to introduce specialized subjects (sociology & economics) to learners who have chosen to study these right in the high school. While it presents a big canvas to experiment and design interesting lesson plans with the students, it is also a fair deal of responsibility to do it well, so that the learning experience doesn’t leave them bored, disinterested or harassed and which might have a bearing on their choice of subjects when they reach university. We have been on metro rides in the city doing unstructured observations, gone around modern art gallery exhibitions, conducted small consumption surveys and similar such exercises which helps in connecting with daily life unfolding of the social and the economic realms. With them, I am watching the world in a slightly different way than I am used to as an adult.

I started the sociology introductory class by a reading of two unusual thinkers – M N Srinivas (Introduction chapter from his book The Remembered Village) and Margaret Mead’s fieldnotes from the Samoan Islands. In retrospect, they appear a decent choice because launching off from written works in sociology, the students could associate keen (and structured) observation of things and people around them a key aspect of sociology. I could see them applying this in their written assignments. The other thing which is remarkable about teaching sociology and economics at high school level is that at this level the students are not prisoners of theories. Neither are they writing to please the reader. They write what occurs to them. This I strongly feel is the first step towards original thinking. During my grad program, I could see many students slapping theories left and right into their essays and thesis. Often, it felt as though they have nothing to say, report or talk about from their field research if one restricts them to say it without aligning or locating themselves within an existing theory. What I see in written works of the high school kids is pure observation and their own subjective response, which is a good start in social sciences. Theories and awareness about various thinkers and their ideas can now follow.

Besides teaching, work in our company has been growing at a tremendous pace. In consulting, as I write this, we are finishing two project assessments and another small research in behaviour change in hygiene practices. These assignments are driving the realization further – of the necessity of high quality and relevant research in development sector. A handful of companies do this as outsourced contract research. Much of it is still done by academics who are a fair distance away from realizing that their research work lacks touch with ground situation – where information/insights that can be applied  to improve development projects/programs (how they are conceptualized, implemented and monitored) is of critical importance. The ivory towers exist. And so does irrelevant research which guzzle in research grants which are already so limited in this country.

My partners and I hope to do more assignments where we can help improve the outcome of projects that our clients are doing. In the instruments and lab infrastructure business we continue to push our efforts to build a strong homegrown company which is committed to relevant and applied research in lifescience and healthcare industry. With the new government at the center, the government funded labs in the country are likely to enter a spate of new projects fueled by increased funding. This might make them receptive to small companies like ours, which often get crowded out by the big dealers and MNCs with Indian operations.

And finally, last year was good for running too. The first marathon of 2015 happens next month and I hope to keep the pace.

Meanwhile, for my comrades I share this Why I Yate New Year’s Day opinion of Antonio Gramsci which packs in a good punch and undeniably worthy of thought –

Every morn­ing, when I wake again under the pall of the sky, I feel that for me it is New Year’s day. (…)

That’s why I hate New Year’s. I want every morn­ing to be a new year’s for me. Every day I want to reckon with myself, and every day I want to renew myself. No day set aside for rest. I choose my pauses myself, when I feel drunk with the inten­sity of life and I want to plunge into ani­mal­ity to draw from it new vigour.

No spir­i­tual time-serving. I would like every hour of my life to be new, though con­nected to the ones that have passed. No day of cel­e­bra­tion with its manda­tory col­lec­tive rhythms, to share with all the strangers I don’t care about. Because our grand­fa­thers’ grand­fa­thers, and so on, cel­e­brated, we too should feel the urge to cel­e­brate. That is nauseating

The long breaks from blogging, I realize, can leave so much unsaid and un-reflected. I hope to keep pace here too. The number of stories have only increased after joining a school.  

The Beautiful Fabric – Govt & Businesses

Anil Agarwal of Vedanta Resources Plc (Image: The Hindu Businessline)

Anil Agarwal of Vedanta Resources Plc (Image: The Hindu Businessline)

With waters getting polluted, small and big fishes are affected equally. Perhaps in proportion to their size. It appears quite similar in business as well, where a stifling, unsupportive and corrupt operating environment of a country affects its own potential as well the businesses operating in that country. Last week I wrote of how we could improve our chances as a small Indian company in Sri Lanka if we can also find a supportive Indian government. I spent the entire morning reading this interesting and refreshingly candid interview with Vedanta’s Anil Agarwal. He notes that “the structure of our public sector is a beautiful fabric. We must have 250 to 300 huge private sectors.” What follows next is in my opinion a very progressive view which is also not so common among Indian business leaders. He says,

Government may divest, but why divest to the industrialists? It can divest 51% in the market and let the shareholder drive the company. We have intellectual CEOs. They will come in as CEO, take quarter or 1% in stock options, and will make it a world-class company and these 250 companies have the potential.

During our undergraduate years, a bunch of us frequently discussed his audacious business moves, his company’s acquisitions (and 13 of them in 10 years!) and his rise from a scrap merchant to a formidable natural resources mining and processing giant. Ambition at this scale is our generation’s weak point. In this generation we see safer dreams. These dreams are laden with dotcom gentleness and a certainty that they can always manage a good ‘valuation’ at the end of 2-3 years even when the company would not even produce an ounce worth of real value. The targets are always about getting ‘covered’ by the magazines and leading websites. Without scorn, I find that this has moved the new breed of entrepreneurs in India away from raising some hardcore, value creating businesses which have the potential of reinforcing core sectors of the economy without which the service led growth can do practically nothing. Several of these well performing managers, engineers and professionals occupying the Indian and global boardrooms were kids of parents who worked in several public sector enterprises in the numerous nondescript towns of the country – Bhilai, Raipur, Rourkela, Durgapur, Ranchi, Vizag, Salem… the list is endless. Yet what we now see is that right from the parents to the working kids themselves loathing public sector as a career option. They have their reasons in place. And this is not unidirectional. The problem is on both the fronts.

Anil Agarwal to us at the company has made a lot of sense. This is of course to those who have cared to listen to him beyond the usual allegation of Vendanta’s apparently exploitative business moves which many dub as criminal neglect of indigenous people’s rights in states like Odisha. The other side of the coin are these views, which should be noticed with equal keenness as those reports which vilify mining and natural resources extraction. On this he adds,

I am against illegal mining but the legitimate businesses have to go on. As far as iron ore is concerned, I really felt bad when Goa mining was banned and with what happened in Karnataka. The Supreme Court gave the order six months back but we are still going from table to table. The entire economy of the area and 7,000-8,000 people are just sitting idle and waiting for the mine to open.

The collapse of mining towns like Bellary are well documented by several magazines and activists groups, but with an intention of it being a trophy article for the respective magazine. What is ignored is that the situation is as observed because mining is a legitimate enterprise and that businesses must be extended proactive support in terms of clearances and licenses from the government. Agarwal’s thoughts on working with the government are pretty much the same that have driven us at our company in the past five years i.e. align oneself according to what the government wants and keep giving suggestions as you go along doing your business. In our work we have followed it. We have picked up contracts with state governments, followed them through and tried improving their processes wherever we got an opportunity. This we find is a constructive approach than going out in a direction which refuses to acknowledge the reality of the presence and role of governments. That is naivete.

The larger observation that is being driven here is about seeing government not as those sitting across the table with sanctioning powers to bring upon. As Agarwal says and we reasoned earlier, “we have to sit on the same side of the table.” What follows is also the reason I have often cited for why there isn’t any difference between a “business” and a “social enterprise” and that businesses are social anyway. Agarwal puts it assertively,

It is very important because we (business) create the value, we crate the revenue, we pay huge taxes, and we create employment on a large scale. It is important that we all sit together.

So, just as it is for the big fish, so it is for the smaller, that, we are in the same waters. What affects us, is also echoed by one of the largest Indian corporation. That for us is an affirmation.

 

Sri Lanka, India & Small Businesses

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This has been a busy week with fieldwork, travel and working on our business. Last evening I caught up an aidworker friend, who is taking a break from the regular string of assignments by doing something different – consulting on projects which are easy in their pace and aren’t quite critical as the ones he has been working on in troubled geographies like horn of Africa and South Asia. The conversation led to some insights into the civil situation in countries that he has worked in and incidentally they are those in which we plan to expand our scientific instruments business. Businesses and aidwork have a lot in common we find. With this, Sri Lanka was back in our discussion, which made me realize that it has been over two months since I traveled to this country and over a year for my friend @praveenasridhar. So, we had three different points back in time to talk about this country, with the aidworker amongst us having seen some serious action as we worked in Jaffna during and at the end of the war against LTTE. The three of us seemed to agree on the fact that it is essentially a military rule in the country and could get more stifling as the country goes ahead. The military pervades all the sectors of their economy.

Colombo appears busy late in the evening which is unlike pre-war days

Colombo appears busy late in the evening which is unlike pre-war days

A new found assertiveness (perhaps military regimes are always so) and a trend of being vocal about its position on larger issues which have implications in the international arena can be seen. The Chief of UNHCR’s visit and the British Prime Minister’s visit during the recently concluded CHOGM are two instances. India’s Subramaniam Swamy, a senior BJP leader was in Colombo participating in a defense seminar organized by the Sri Lankan army apart from UNHCR’s visit during the time I hung around on the streets of Colombo and counting the number of heavy duty cranes dotting the city’s skyline from the Galle Face road to the port. Both these visits made headlines in the daily newspapers and for reasons which the Sri Lankan government is sure very edgy about. The country has apparently moved on except those whose family members have disappeared, killed and who turned refugees in those years of the war. The senior politician from India spoke of India’s stand on the Sri Lankan tamils – that they should expect no support from India and that the expression of concern in Tamil Nadu for their cause was a ‘knee jerk’ reaction by the local political parties. This was interesting because it came just a day ahead of India’s offer of building two submarines for Sri Lanka in its Goa shipyard. These are in addition to the two warships given to Sri Lanka in 2007.

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Eight weeks later, we hear the Indian PM announcing that he will not attend the CHOGM. This speaks volumes about the messed up situation back home in India when bilateral relations with Sri Lanka are concerned. The ruling UPA government chooses not to attend CHOGM in Sri Lanka (no reasons given, as far as I know) and a prominent leader of opposition party on a visit to the country says India has moved on and supports the Sri Lankan government. This is quite frustrating as this flip-flop has affected business between the two countries.

After the war, the country is booming with economic activity especially large infrastructure projects. Almost all of them have gone to the other big neighbour of India. In addition to this the perception of Indian businessmen in Sri Lanka is that of opportunistic men with little business ethics to show. In the post-war Sri Lanka there are good chances that rule of law and economic growth will pick up and the country might even race ahead in measures like FDI, exports and revenues earned through the major port project in Colombo. Elsewhere, the Indian automobiles company Mahindra and Mahindra launched several of its models in the Sri Lankan market today. They are bullish on the market here. Observing the general business environment and markets here has been a very interesting experience. Colombo’s skyline is a busy sight. Construction cranes working in all directions, Chinese workers, a massive theatre still being given finishing touches, a busy management and finance faculty at the University of Colombo and with the massive port cranes shadowing from the western end, the economy seems to be picking up traction.

All of these could generate tremendous business opportunities for small companies like ours. Indian diplomacy as well as the government is to be blamed for not making good use of this opportunity. The strong and forceful voice of the regional parties from Tamil Nadu is a major impediment to the process. This is not to argue that we must turn blind to the human rights abuses that have happened in the war. But hasn’t India dealt (and traded) with nations proven to have engaged in human rights abuses earlier? What of the business with Myanmar? India has perhaps the strangest ways in its diplomacy. And as we try venturing into newer geographies this ambiguity and strange behaviour on the international front is being felt stronger.

So, going ahead small companies like ours would benefit immensely if the diplomacy and bilateral relations between the two countries are not arbitrary. The game is different for large companies as they have the resources and size to get in without much requirement of facilitation from their home governmnents. Bilateral relations should definitely have a long term view than looking at smaller and politically inconsequential events like CHOGM. This wasn’t so crucial politically for India but nevertheless could have sent a very positive message (of India being a responsible, valuable partner in the group and available as a support for smaller countries) had the PM attended it. The other aspect is that of using its size and power responsibly. A similar arbitrariness is prevalent in India – Bangladesh relationship as well. It is about time that Indian diplomacy starts working for its small and medium enterprises than printing those blue catalogs and organizing boring expos on business opportunities in the subcontinent.

On a sharper note just one way that Indian missions abroad could have helped (no, those FICCIs and CIIs are not for the smaller fishes like us. They are too busy abroad for their patrons than helping smaller companies in a proactive manner) is – when we got into the country looking for opportunities to do business, a small information booklet on business in Sri Lanka and current trade including a directory of companies in the country could have been very helpful. Next, they could back us up with introductions and meeting facilitation with Sri Lankan businesses. Whereas, the fact is that one needs to make a great effort in getting in touch with Indian officials in that country for whatever reason that one might want to.

“Transformative” Use: Authors Guild vs Google

googlebooks

For those who have followed theAuthors Guild vs Google Inc case (which has been on for over 8 years now) would know that the court has ruled in favour of Google’s book-scanning venture, ruling against the charge that this will deprive authors of their income from their books.

The District Court judge used a rather interesting term to define the reason for this verdict. He says, Google’s move in scanning the books (over 20 million of them is Google’s target) amounts to a “transformative” use of the knowledge generated by authors in the form of these books. This I find is a progressive interpretation of a company’s venture with no direct commercial use specified. Google’s lawyers have been categorical in specifying that scanning of books and making them available on the internet (not complete books but snippets) does not “directly” add to their revenue. Besides this curious use, it is worthwhile to know about the emergent understanding in the judiciary that technological advances can create situations in which the choices to be made may not be clear and no simpler answers to them exist. In cases such as this, then what matters is the perception and understanding of implications of ventures and how it would also set a precedent for similar cases to follow.

I had a slightly different point to make about Authors Guild. First, which age are you guys living in? Second, did it even make sense to spend all those millions on litigation, preserving your imagined status quo? If not google books, the pirates on those zillion p2p sites are anyway uploading a world of books and making it available for readers across the world. So either way this is bound to happen – that books will get digitized, they will be available for a larger set of users across the world and technology will always prove disruptive for older order. But not all is bad about it. Authors Guild finds it problematic to acknowledge that increasing availability of snippets of books online is turning favourable for its authors, by providing visibility. And a genuinely interested reader is sure converted into a customer if the book is worth his interest. Isn’t this the way it happens in bookstores across the world. And why do the authors then undertake a book tour (frenetic and breathless) if they aren’t interested in reaching out to newer readers? This is being done and in a much economical way by making the books available online.

Besides the fact that the general perception of this book-scanning company is that of being evil in their intent, not everything that they do is evil. And as far as this venture is concerned, I am a satisfied user who has discovered new books, accessed old out of print, hard to access books as well as gone ahead and bought some by using Google Books.

Bottomline is that technology has been disruptive for a wide range of businesses. Some emerge in the face of newer technologies and some become obsolete immediately. Such an environment calls for a renewed ability to see that fighting the pace of invention and development of technologies will be wasteful. Instead, thinking about how to stay relevant in the new technology environment and to prepare for it, appears a more workable strategy.

In our company, we have risen through and established our development sector consulting practice by locating ourselves in the direction of the change that technology is effecting in functioning of organizations and their processes. And hawking old ideas in the changing business and technology environments ain’t a wise thing to do.

A Parasitic Dependence

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Aakar Patel’s column in Mint Lounge this morning is about why everything is not the government’s fault. It is a reasonable argument, which perhaps could be a bit comforting for those looking for some positive press for the UPA government. He goes on to list five reasons for why he thinks that the high growth phase of India was temporary and would end. He also adds these as reasons for why India would remain poor and developing for a long time. It is quite damning but hits the nail right on. I am sure he would have his sources and people to draw his insights from. Among the five reasons, the following is an unusual one –

A parasitic dependence on the outside for technology. This is a product. The cause is a cultural lack of scientific curiosity and a disinterest in invention , and on basic science and applied science. India’s creative contribution to the world is insignificant and can be dismissed. We are a net importer of ideas and of quality.

This connects to our work and my partners would sure agree on the above reason. A few weeks back we started a new company in life sciences which hopes to set up a large instruments and consumables distribution business across the Asian countries. We aim to be cost effective suppliers of technology as well a range of necessary laboratory consumables like reagents, media, test kits etc to university labs, hospitals, research centers. This is a conventional business which is fairly well developed and companies make money on the margins and commissions earned in dealing instruments manufactured by US, British, German or Japanese companies in the Asian countries. There is a reason we got into this business, in spite of beginning with product development when my partners and I were fresh out of college. Our product design attempt with microscopes and thermocycler died last year with us realizing that there is no more money that we can pour into product prototyping. We thought we would be able to design, prototype and release a completely Indian thermocycler (called a PCR in life sciences) which would be cheaper and would be affordable for Indian research and academic establishments. It is this failed attempt that I want to connect with Aakar Patel’s reason of our “parasitic dependence on the outside for technology” and very little support within the country – by industry or by the government to even promote efforts in this space.

Back in our university, I remember that we had just about 4 thermocyclers for an entire lot of about 300 students all wanting to run their experiments on those four machines. By the end of an undergraduate degree you could go happy at least with the fact that you saw the machine, you touched it and were lucky enough to run an experiment on it by you own! The germ for our startup lies in those days when we saw the ridiculousness of the situation. And we thought we could develop one – completely Indian and affordable machine to run these tests. Several experiments and five years later we are nowhere close to it and have in fact abandoned the plan for a few years until the company has surplus cash to invest in setting up a good lab and hire some smart graduates and engineers to work with us on this.

Why did we fail in developing a completely Indian thermocycler? May be that it takes more than five years to work this out or may be weren’t smart enough to know much about it. But let us ask, why did we abandon the idea and instead joined the band of instrument dealers who only know to import machines and goad our scientists, researchers and others into buying it?

It was abandoned because of the same “cultural lack of scientific curiosity and a disinterest in invention” that Patel talks about. There were little government funds to come by, to fund an idea, a startup like ours. The “innovation fund” five years back was a joke that the “technology business incubators” played on behalf of the departments of science and technology, biotechnology and the myriad other institutions who funnel money budgeted for science and technology in the country. Entrepreneurs must have a good ability to pander the heads of institutions and should have stellar academic performance in addition to a mighty deal of patience to do the paperwork which leads to your startup idea featuring somewhere visibly in the galaxy of applications that are sent to these departments. We didn’t have that!

This note is not written with a sense of my colleagues and I being victims of the Indian system, but to look back into our startup experience and place this reason of India’s lack of scientific curiosity and dependence on outside for technology in that context. Ours is a small example of how the country is grossly undervaluing and in fact dis-incentivizing product development in critical spaces as life sciences.

We are now on plan B, where we generate surplus from a distribution business and then channel that money into new product development. And sure enough, we will be importing technology, make money in selling it locally and further add to the parasitic dependence.

So, in the wake of that list of reasons, here are my reasons to believe that in spite of a dismal innovation support and funding scene, India has good chances of breaking out of this rut and develop some kickass products –

  1. The Indian entrepreneurs – they come in many colours now. And from many different social classes. They defy the once bitten, twice shy adage. For them it is once bitten, twice smitten – with ideas, creating businesses and experimenting. Just last evening I saw this guy – an HBS grad who has started a chain of chai outlets in the city, intensely studying his outlet in the evening rush hour at a prominent location in Bangalore. In an India of pre-2000 it would have been “with a Harvard business degree all you could think of is opening a tea stall?” But today, it is a serious business, respectable business, perfectly in line with that heavy business degree and big money invested in it by a leading VC firm from the US. In our work, we have come across some fantastic work done by Indian companies like – Xcyton Diagnostics which is on to some exciting research.
  2. Service innovation – this is the route that we have taken. Our company now survives on offering data analysis and research services and carry the surplus into product development. And a couple of companies have already tried this route to developing indigenous products.
  3. The reach and power of capital – for all those furious takes and theories on how capitalism is evil and how it is out to sell the world, it still rules. Private sector is and will pave a path for India to break through some of these serious problems in sectors like education, research and technology development. I do not see it within the government’s ability to even sense what is on with its entrepreneurs and what do they need! The insular bureaucracy has seldom known to have responded to industry’s demands on time neither do the nebulous government agencies have any clue about how could it help startups like ours to even take a shot at these serious issues that impair the country’s growth. Private capital is what fuels philanthropy, which is another “lack” that Patel points to. It is private capital which is experimenting with private universities in India today (I attend a graduate program in one of those). It is the private capital again which is shaping several major bills tabled in the parliament – from water resources framework to land acquisition. As the Companies Act 2013 comes into force, the government is again eagerly looking forward to the huge stash that it will collect as corporate contribution under corporate social responsibility (CSR).

The numerousness and the interconnected nature of the problems in this country makes it difficult to confine oneself to a single issue. So, the bottomline is India wouldn’t shine just on a Rs 100 crore ad campaign. It will shine with its teachers, its entrepreneurs and its industry. And that is where many such 100 crores need to be directed. This could be a simple enough start!