COVERSTORY INDIA AT 60 - MITweb.mit.edu/psgleadership/pdf/1_required_reading... · Before I begin, may we salute the freedom fighters, the martyrs, who were executed in pre-independence

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15AUGUST - 15SEPTEMBER

60INDIAAT

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As India celebrates its sixtieth birthday, itis an honour for us to bring out thisspecial edition "India at Sixty: The PathAhead", which brings together threeimportant thought pieces by Dr. Partha S Ghosh. A global citizen witha deep sense of commitment to equitablewealth creation, Dr. Partha Ghosh, overthe last 25 years, has applied hisinnovative and strategic mind to India'sproblems, both at the macro economicand micro economic level with relentlessenthusiasm.

In view of the deep sense of commitment wecherish towards India's development, weare indeed glad to pull together Dr. ParthaGhosh's views on the future of India. Thethought pieces together provide acomprehensive set of hints on the natureof programs that Indian leaders – fromacademia, business & industry,government institutions and politicalparties – should develop in partnershipwith each other.

EPC Age is committed to play its role in theeconomic development of the nation byenabling a consensus of ideas andsymbiosis of creative thinking by briningtogether new thinking and emergingtrends on communication and media,and engineering and constructionprofessions. We hope you find thisspecial edition will stimulate forwardlooking actions within our readership.

THE EDITOR

DR. PARTHA S GHOSH

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WHOSE LIFE IS ITANYWAY?The long and short of development challenges

It is indeed a great privilege and a rare honor forme to share a few of my thoughts on nationbuilding, particularly in view of the role

technology could play in the development of India,with the assembly of the most brilliant minds of thecountry. Thank you for the opportunity.

Before I begin, may we salute the freedomfighters, the martyrs, who were executed in pre-independence India in the Hijli Jail which is locatedon the outskirts of Kharagpur, a place where thebeginning of the IIT system is rooted. May we alsosalute the three individuals who played a dynamicrole in creation of the first IIT: Prime MinisterJawaharlal Nehru, Bidhan Chandra Ray, the firstChief Minister of West Bengal, and Professor J.C.Ghosh, the prime mover behind the development ofthe IIT system.

As we all know, the IITs were created as aspecial educational initiative to draw out the besttalents of the nation to address the issues of socio-economic development from a scientific andtechnological perspective. A perspective which willcelebrate the courage of the millions of people wholost their lives for a free Indian subcontinent andwhich will take forward the vision of the foundingfathers of post independent India.

The central question we have to ask today in aspecial gathering like this is, "have the IITs been ableto play this important role in utilizing the power oftechnology as a social equalizer?" If yes, "what dowe do to sustain it?" If not, "how do we repurposethese flagship institutions so that the IITs and theproducts from the IITs could play an appropriaterole?" The answer to the first question is obvious,

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which suggests that we must find a more effectiverole for the IIT system so that technology canbecome relevant to the common person, both inIndia and in other developing regions of the world.

Before I take you through my presentation, Iwould like to share with you some of my verypersonal observations and beliefs on nation building– not with the desire to prescribe solutions, but withthe objective to provoke an honest debate:

� No country ever in history could claim successwithout achieving a fair degree of equity in itswealth creation system.� No institution can claim success until it hassuccessfully addressed the problems of the nation towhich it belongs.� No individual can claim success until his/herdeeds make a fundamental difference to the lives ofcommon people.

If we view the IITs in the above context, we havevery little to celebrate and a lot to ponder on. It isclearly a time to reflect. I hope this is indeed thefundamental purpose of such a mega conference.

When you read the essential objectives of thefirst five-year plan (when IIT Kharagpur wasestablished), and then read the objectives of thesubsequent plans, you will notice that "Removal ofPoverty" has been at the heart of all the ten plans.Yet, poverty has grown in size and the socio-economic divide between rich and poor hasincreased. In fact, as India writes its 11th Plan, 60percent of people in the commercial capital –Mumbai – live and dream in the slums, and thesuicide rate of framers is on the rise in the mostprosperous states of the nation. Therefore, before wedream, for example, of how to make Mumbai one ofthe financial centers of the world, we have to workon how the hopes and dreams of people on thesidelines can be activated, sustained, and realized.That is one of the principal issues if not the only onetoward which the range of technologies availabletoday should be directed.

In fact, since the 1950s when the population ofIndia was only 350 million, our problems have onlybecome more complex and gained in magnitude:

� Divide between rich and poor has increased.� Ecological balance has deteriorated. � Ground water levels have dropped dramatically.� Balance of trade along with budget deficit hascontinued to worsen.� Indiscipline has deepened.� Fragmentation of political/economic makeup ofthe nation has increased.

� Faith in our ancient values and philosophy hasbeen masked by Bollywood's and Hollywood'sculture of instant gratification in the name ofmodernism.� Healthcare for thee poor is nonexistent.� Primary education system is yet to be developed

It is easy to observe all of these problems aroundus; but somehow, our direction of development,particularly in the last 20 years, has not engagedIndian leadership with the real issues, while indeedthe "feel good" factor has been over celebratedbecause of a few individual, corporate, or personalachievements. The challenge now is how to use this"feel good" mood for the advantage of the other 85percent of India. It will require a Herculean effort,as the Indian subcontinent has never in the last2,000 years purpose the thinking of intellectuals andthe economic activities of the privileged in theservice of the grass roots. We have created greatmonuments, centers of excellence, even greatphilosophical documents, but none of theseachievements have been able to touch and make adifference in the livelihoods of the common person.In that sense, I hope this Pan IIT session will be ahistoric one, as it has the potential to steer ournation in a direction which is strategic for all in thesubcontinent, so that each individual becomes anactive member of a national movement, which I willterm the "Renaissance Movement."

Given this backdrop, my presentation entitled"The Long & Short of Development Challenges:Whose Life Is It Anyway?" will focus on three points:

1. Addressing the Fundamentals: Time to Choose?2. The Call for a New Paradigm: Innovation versusSpeculation?3. Ensuring a Meaningful Journey: The 5Es, the EightPrograms, and the Boston Pledge Movement.

11. Addressing the Fundamentals: Time to Choose?Before we are in a position to discuss how we mustchart our path forward, it is important to brieflyreview:

(i) What has India achieved?(ii) What assets, in turn, has it built which thenation could now leverage?(iii) What are the most fundamental issues wemust address as we move forward?

When a historian 100 years from now will takea peep at the first 60 years of post independentIndia, he/she will perhaps describe this era as a

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development, particularly as the widening of the gapbetween rich and poor is not slowing, but actuallyaccelerating. Moving forward, I will urge that in thenext 25 years, we must commit ourselves to onestrategic theme of "Becoming an Enterprising CivilSociety" so that each one of the 1.2 billion citizensof India and the 1.7 billion people residing in thesubcontinent will be empowered to play anenterprising role. In the process, as Exhibit 1 (below)indicates, we must focus on improving social equity,strengthening our income statement, and nurturing asustainable economic model.

Exhibit 2 (on the next page) illustrates the currentlandscape of India's fundamental economicchallenges, particularly when viewed from theperspective of financial governance of the nation.The combination of an increasing appetite toconsume and a continuing lag in productivity hasonly weakened the nation's income statement.During the first half of 2006, India bought goodsworth $35 billion more than it sold, and the trendhas been rapidly worsening since the early nineties.

Liberalization and globalization in the absenceof a clear country strategy (which I have been tryingto promote since the mid eighties) stimulateeconomic instincts which are short-term and enablespeedier wealth creation for those who can takeadvantage of global differentials and speculativeforces due to market inefficiencies. In the absence ofcreative incentives which shape market instincts, it issignificantly more attractive, from the free marketperspective, for example to import cheaper productsfrom China and oil and gas from hydrocarbon-richcountries, than it is to address the issues of

period of socio-economic experiments. Indeed, theadoption of the mixed economy paradigm with abias toward a socialistic planned economic modelwas an effort to address the issue of equity withoutlosing perhaps the economic dynamism that thebusiness houses could offer to the economy.

In the process, however, the protected businesshouses lost their sharpness and never developed thehabit of thinking in terms of global competitiveness.The mixed economy, instead of celebrating thepositive aspects of socialistic and capitalisticinstincts, picked up the negative aspects of each.The resulting economic system essentially sufferedfrom an unintended grid lock-corroded bycorruption and negative politics and infected by"zero sum" social values.

Fortunately, the political leadership in the mideighties began to think of a more open economy. Inthe absence of a strategic framework, however earlyliberalization initiatives created the initial economicjolts resulting in the near bankruptcy of the countryin the early nineties. The opening up of a closedsystem which served to fuel wrong economic andgovernance habits led to instant opportunistic movesby a few for quick economic gains, undermining theoverall health of the economy. Obviously, such adynamic could not be sustained for long.

In response, the early nineties triggered anotherera of modernization schemes which, along with thedigitization of the global economy and the Y2Kchallenge provided India's knowledge-basedeconomy a respectful global stature. Furthermore, asthe first wave of graduates from the IITs and otheruniversities (who moved to the US and otheradvanced nations) assumed leadership positions incorporate and government organizations, theyindeed helped to put India on the global stage.

While much of all the good that has happened toIndia is not because of a master strategic plan, butbecause of the play of unintended consequencesand convergence of technologies. This dynamics hasindeed helped India: (i) overcome certain basicbarriers of socio-economic development bylegitimizing and institutionalizing the politicalprocess, (ii) strengthen the nation's balance sheet, asexhibited by the increase in the nation's foreignexchange reserves, and most importantly (iii) enablea better understanding of India's relative position vis-à-vis other nations.

We must view these developments, which haveled to India's enhanced global credibility and senseof optimism, with a positive perspective. We must,however, remain humble in addressing the issues of

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competitiveness and development of an energy andpower sector which is less dependent on importedhydrocarbons. In contrast, for example, Brazil'scommitment to an ethanol economy with a strategicperspective during the energy crises of the seventieshas indeed paid off. Today, 80 percent of Braziliancars are fueled by ethanol produced from sugarcane, and in turn, the agro sector of the nation hasbecome a model worth emulating for the advancednations.

Energy challengeAmong the nations that are rapidly developing, Indiais the only country which has a negative tradebalance as well as a negative energy balance.Countries like Brazil, China, and South Korea-letalone the developed economies like Japan,Germany, France, and Italy that are all net importersof hydrocarbon resources-enjoy a positive tradebalance (income statement) to pay for increasinghydrocarbon prices as well as bet on international

oil and gas assets on their own terms. (Exhibit 3) Particularly impressive is how China has built a

significant portfolio of international oil and gasassets in the last decade by utilizing itsmanufacturing muscle (providing it with anincreasing trade surplus). China now has a robustpipeline of multi-billion dollar oil and gas projectsin hydrocarbon-rich countries including Iran,Nigeria, and Venezuela, thereby ensuring the long-term security of the country. In contrast, perhapsbecause of how India's bureaucratic processeswork, when a portfolio of projects in Egypt waspresented to the highest level of India's energysector, for some reason, Indian Energy leadershipdid not pursue the projects. India needs to wake upand strategically engage with a global energylandscape in tune with a major push to improve itsincome statement. India's energy leadership teammust find innovative ways to utilize the nation'sown natural resources for the rapid development ofan integrated renewable energy strategy.

Power Sector ChallengeFurthermore, we must realize that even if India'saverage electricity consumption is only 20% of theper capita power consumption of an average Britishcitizen, India will need to add as much powergeneration capacity as it has installed in the last100 years. Naturally this is an extremely seriouschallenge as, with a negative income statement(continued trade deficit), India could finance such alarge-scale power solution only if it could harnesslarge-scale capital infusion from global capitalmarkets; with a poor income statement, such capitalwill be very expensive, which will make electricity

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expensive. Naturally, such expensive electricity willbe out of reach of the rural sector, unless of coursethe sector is heavily subsidized. That too is difficult,if not impossible, when the trade and budgetdeficits are serious. Accordingly, India indeed needsa more innovative strategy to drive the power sectorwith an alternative energy-power paradigm. In viewof new micro technologies in the pipeline coupledwith its programs in renewable resources, Indiaurgently requires an accelerated energy-powerstrategy which is transformational, yet practical, andwhich can attract lower-cost capital so that theultimate end users-the farmers with $2/day income-could access electric power without harboringthoughts of suicide.

Agro Sector DevelopmentWith a population density of close to 400 people/sq.km, land is very dear to India, as it is to Japan(which has a similar population density). However,the agricultural productivity of India today is onlyone-third that of Japan and half that of China.(Exhibit 4)

Furthermore, in the last five years, as India began

rallying around ideas like IT parks, biotech parks,and SEZs, its agricultural productivity has stagnated,and for certain crops it has even declined. In otherwords, in a sector which provides for the livelihoodsof 70 to 75 percent of the population, we are notonly less productive but also content with a trendwhich is unsustainable. India needs an agriculturalstrategy that ties in with its fundamental challengesas they relate to equity, exports, energy, ecology, andeducation-what I term the "5Es of Development."

Human Development IndexExhibits 5 and 6(below) show how India is positionedrelative to a few select economies along the sixvectors leading to the composite metric HumanDevelopment Index, which essentially define thequality and preparedness of the common person to bean active participant in the socio-economicdevelopment of a nation. Indeed, relative to the US,Japan, and Germany (Exhibit 5) and even to Braziland China (Exhibit 6), India has a long way to go. Inorder to move along the vectors, India will need todevelop extremely innovative strategies, distinctive toeach region of the nation, with particular focus oncultivating morality, ethics and values which couldbring out the goodness of our society.

India relative to select Emerging NationsIt is indeed a shame that a nation which has been thebirth place of many spiritual leaders ranks close to thetop relative to other nations when it comes tocorruption. The IITs, as dominant centers of learning,must begin a national movement to reduce corruption, because no nation suffering from corruption related"economic and intellectual leakage" has everaddressed the fundamental requirements of progress,namely, health and nutrition, basic hygiene, access toclean water, and education, let alone the issuesrelated to equity and energy.

RELATIVE PRODUCTIVITY AND VALUE OF LAND

INDIA RELATIVE TO G7

INDIA RELATIVE TO SELECT EMERGING NATIONS

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Moving forward, in view of the emergingchallenges (internal and external), anynation in the state of development thatIndia is now in will need to ask a

difficult question: Should the nation extend themomentum of the economic instincts of the 20thcentury and speculate on how the end of life cyclesof the existing economic and business models playout? Or should we, with a fresh mind, evolve arange of strategic responses in creating a paradigmwhich is forward looking?

For a country like India, given its rich heritageand complex socio-economic system and, mostimportantly, being at a very early stage on the pathto economic prosperity, it must evolve an economicmodel which is (i) distinctively its own, (ii) "future-in" in contrast to "past-out," and (iii) oriented towardleveraging emerging sciences and technologies(nano, bio, opto, and info, to name a few) to addressits own grass root problems.

India's Strategic AdvantageWe have to realize that a "fresh economic paradigm"could enable India to develop a strategic advantagealong three fundamental dimensions:

(1)Time Advantage: There are two types of"Time Advantage" that India enjoys which it muststrategically utilize to take a giant leap forward in itseconomic development. At the grass root level, theissues related to access to clean water, renewableenergy, and a sustainable ecosystem are soon goingto be just as serious in advanced economies as well,perhaps in the next 20 to 30 years. If India, throughpublic-private partnerships (PPPs), could developsustainable solutions to these challenges, Indianbusiness and industry will have lot to offer in thefuture global market. Furthermore, countries likeIndia which are not yet as much affected by 20th

century economic habits will find it easier todisengage from business models now than later, onlyif they have the courage to "bet on the future" withnew resolve.

(2) Diversity Advantage: The diversity ofIndia's ecosystem, faiths, landscape, and bioscapeprovides India with the advantage of dealing withthe forces of convergence better than many othernations, as long as the country evolves a deliverysystem which on the one hand is universal and onthe other has the ability to customize valuepropositions for different segments of society.Airlines in India are excellent examples of how,even on short flights, different cuisines-Western,Indian, Non-vegetarian, and vegetarian-are elegantlyserved. Could this spirit be replayed across thedifferent segments of Indian society and extended toworld markets?

(3) Wisdom Advantage: As the worldbecomes increasingly knowledge intensive, thevolatility of the economic system and businessmodels will only increase. In order to deal with suchvolatility with grace and dignity, the teachings of theVedas are of more significance now than everbefore. If the IITs and the Indian education systemcould build on the lessons from the Vedas with theirconventional curricula, India's ability to offer a moreenlightened education system to the world wouldperhaps provide the most significant strategicadvantage, similar to what the US had enjoyed allthrough the 20th century. If India can draw thebrightest of minds from all over the world toparticipate in an education system which willprepare and stimulate minds to harness the turbulentpower of the emerging knowledge explosion, Indiawill indeed be able to create a global dynamic from

INNOVATION VERSUSSPECULATION?The call for a new paradigm:

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which the rest of the world can draw inspiration.Accordingly, India's 11th Plan must base its

approach on these three fundamental strategicadvantages at the core of its planning process;indeed, if the 11th Plan could be a fundamentaldeparture from the past, with significant emphasison innovation, we could chart a new path for India,which would provide answers to difficult issues thatthe world is faced with, or will increasingly face.Anything short of that will actually get India drawnfurther into the speculation game, where theeconomically privileged will bet their resources forinstant economic gains while distancing themselvesfrom the other 80 percent whose hard toil stillmakes our fragile infrastructure work.

I believe a strategic approach will need to beurgently developed. It must be holistic and mustintegrate the 5Es of equity, education, energy,ecology, and exports (an ultimate measure ofefficiency) toward a common vision which all thepolitical parties, all the states of the nation, andSAARC in general could relate to and commit towith uncompromising dedication.

Exhibit 7(below) underscores how the issuesrelated to each of the Es will need to be addressedin a holistic fashion in synchronization with eachother. Now I will briefly share with you some s fewearly thoughts on the 5Es.

EQUITY: We will need to identify non-conventional approaches to create a socio-economicdynamic which is fundamentally bottom-up. We willneed to find ways to mobilize the lowest echelons ofour socio-economic system and draw on the lessons

of Grameen Bank in Bangladesh to empower thepowerless. We have to move away from terms like"Garibi Hatao" or "Rural Employment Scheme"which by definition suggest that favors in the form of"handouts" will come from the top. Social scientistsmust find ways to cultivate confidence in people atthe grass roots to trigger an enterprising spirit. Suchspirit should be guided toward resolving issuesrelated to nutrition, health, housing, access to cleanwater, power generation through non-conventionalroutes, and education.

Education: We must realize that the design of theeducation system in any country should be gearedto address the issues that the country is faced with.Unfortunately, because of the establishment of theBritish Empire, India's education system was set upto essentially serve the needs of the empire in Indiaand in the colonies. The post-independenceeducation system has been essentially an extensionof the earlier system, further enhanced in itssophistication by the influence of science andtechnology education in the US. In the process,India has been successful in creating one Indiawhich is extremely comfortable in the Westerneconomic setup, distant from the challenges ofsurvival of the other India (which perhaps accountsfor 75 percent of the population). In contrast theother India which is devoid of any respectableeducational infrastructure, is naturally is advantaged.

Worldwide, more progressive nations areexamining the suitability of their education system inview of (i) how the nature of the challenges facingthe planet might influence the advance of theirsocieties and civilization in general, and (ii) how theconvergence of new technologies blurring the

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boundaries between different streams of inquiry inboth science and technology might require moreresiliency in our intellectual make up. For a countrylike India, where the challenges related to ecology,energy, and equity are more acute, and where theeducation system has not been able to offer thecommon person the essentials of human dignity, itsleadership must review the nations education systemfrom the kindergarten level to the university level sothat we prepare our graduates to be passionateproblem solvers in addressing issues ofdevelopment. Such a design must be a bottom-upprocess with a holistic view of the developmentchallenges that the nation has to face.

Energy: It is clear that any emerging nation withlimited or no hydrocarbon resources and with apopulation base of more than 50 million will not beable to follow the energy model that North America,Western Europe, and Japan-the TRIAD-havefollowed over much of the 20th century. We do nothave the hydrocarbon resources nor will theenvironment allow us to load the atmosphere withmore carbon. India's per capita energy consumptionis still low. It has a strategic advantage of havingsignificantly less momentum of the energy-powermodel that was developed during the 20th century.India, and in fact the Indian subcontinent, instead ofblindly following the conventional energy model,must evolve a fundamentally different paradigmwhich satisfies five basic requirements: (i) renewablesource and less dependence on importedhydrocarbon, (ii) limited CO2 emission, (iii)distributed power generation to reduce transmissionlosses and enable faster development and easiergovernance, (iv) multiplicity of supply sources, and(v) ecological balance along all possible dimensions.An important component of India's country strategyshould be India's energy strategy. A well thought-outenergy strategy could well determine India'seconomic performance in the coming decade.

Ecology: Because of both the high populationdensity and biodiversity that India enjoys, India'ssocio-economic strategy should also be driven by itsecology strategy. Both at the central and state levels,India must adopt a new term called the "Ecoindex"which should indicate how well the nation ismanaging its natural capital. Such an index shouldbe a composite of (i) forestation, (ii) agroproductivity, (iii) surface water utilization,(iv)number of biological species, (v) conversion rate

of deserts and arid areas to green areas, (vi) declinein CO2 emission, and (vii) drop in particulatescreated by industry.

The strategy to improve upon the Ecoindexshould lead to economic processes which will drivepublic-partner cooperation. There are indeed severalinitiatives taken up by countries like Brazil, Israel,and Japan which India must learn from. In fact, ifIndia could evolve an agro-based economicrevolution to create large-scale agro complexeswhich could produce a full range of chemicals andcosmetics, fibers and foods, and pharmaceuticals andpolymers, we could trigger a process which wouldaddress the issues of energy and equity as well.

Exports: Considering the stage of economicdevelopment that India is now in, it must find waysto boost its exports three- to four-fold in the next fiveto seven years; after all, we must realize that relativecompetitiveness, in turn a positive trade balance, is ameasure of a nation's economic power. Over theyears, I have been trying to promote a strategicframework which will enable the development of aportfolio of industries which will be the locomotivesof economic development. Exhibit 8 shows how theframework helps to categorize different industriesinto four strategic quadrants, each requiring specificpolicy inputs and infrastructure supports so that themarket mechanisms can be guided toward a higher-level national purpose.

A FRAMEWORK FOR STRATEGIC GUIDANCEOF NATION'S INDUSTRIES

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It is my hope that the strategic issues related tothe 5Es and the inter-relationships between themwill be addressed with full vigor and commitment.Institutions like the IITs and the IIT alumni inparticular must find ways to reconfigure each ofthose locomotives as nano, bio, opto and infotechnologies are applied. Research in these areaswill need to be structured in such a way that Indiacan leap ahead, while ensuring that the 5Erequirements are fully satisfied.

If India could indeed get organized to launch aseries of focused initiatives which are geared towardthe 5Es, it would not only be able to create aneconomic model which retains a large percentage ofthe population in the rural sector but also lead theagro-cell-based economic movement which couldfundamentally advance new thinking as to howworld economies might be organized in the future.Exhibit 9 shows how over the last 350 years, thethree S curves of development, beginning with thesteam engine, then the internal combustion engine,and then the information technologies, drove longeras of economic development. During each era, theworld witnessed the urbanization of its population,reaching a point when cities are becoming chokepoints. Now India has an opportunity to de-urbanizeeconomic development through adistributed/decentralized economic developmentmodel where every village and every small town canbecome a center of economic excellence and thefundamental building blocks of the future economicparadigm are indeed agro based.

2. Ensuring a Meaningful JourneyForward: Agreeing on the AgendaIn view of what we have discussed thus far, the bigquestion is "What could the IITians and the IITs doto begin the new journey with a new resolve?"

Let me briefly elaborate on each of the programs:(1) Repurpose education systems (bottom-up

design):IIT alumni could put together a task force to

work with the Education Ministry to define andimplement a workable primary education systemwhich would ensure that every individual not onlyspends at least 7 to 10 years in the schooling systemin becoming an effective and enterprising citizen ofthe country but also develops confidence in a widerange of skill sets. We must think of a multi-streameducation system depending upon the aptitudes ofstudents, as they become visible in the first 3-5 yearsof schooling. The focus should be on (i) "skill" and"will" building, (ii) cultivating civic sense, and mostimportantly (iii) ensuring that everyone by the age of16 develops knowledge of India's developmentalchallenges.

In the same spirit, secondary and universityeducation should help students develop morepassion toward nation building. A significantlyhigher level of emphasis should be placed onintegrating liberal arts with science and technologyeducation so that Indian universities could cultivatemore intellectual fluency and enable resilience ofthe mind. Furthermore, IIT programs particularly

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need to be organized so that each graduate couldengage with three different tiers ofopportunities/challenges:(i) Tera-scale issues related to ecology, infrastructure,healthcare, logistics, and transportation.(ii) Conventional-scale issues with significantly moreemphasis on the design of circular rather than lineareconomic models to enable the development ofconservation-centric systems.(iii) Nano-scale issues to ensure surface propertiesof materials and biological systems are effectivelyutilized in developing cost effective solutions for amore sustainable and equitable future.

Exhibit 11 shows the nature of issues at 109 to10-9 levels that future students must address. Theuniversity education system should be accordinglydesigned to help future students engage with multi-scale issues with confidence and intellectualresilience.

(2) Realign IIT curriculum so that it can switch fromextension of 19th century sciences to 21st centuryproblem solving. Given the credibility that the IITshave earned and the stage of development that theIITs are in at present, the education system shouldbe fundamentally renewed from "Science LedEngineering" to "Solutions Required Engineering."Centers of innovative excellence should berepurposed as integrators of conventionalengineering and scientific disciplines. For example,the Centers could be organized around Ecological

Engineering, Energy Engineering, Transportation andLogistics Engineering, Healthcare Engineering, WaterManagement Engineering, Conservation andRecycling Engineering, Media and CommunicationsEngineering, Life Sciences Engineering, and IdealismEngineering. In order to ensure effective use ofcurrent scientific knowledge, each of thesedisciplines needs to be developed along threescales, as discussed earlier.

(3) Draw up an alternative 11th Plan which isstrategic, not operational. In order to take all thediscussions forward in a meaningful fashion, the PanIIT Mumbai organizers should build another taskforce to work with the Planning Commission to drawup an alternative vision and strategic plan for thecountry. This effort will spell out a portfolio ofstrategic moves, and address thechallenges/opportunities we have discussed in thisconference. Furthermore the process must buildconsensus across political parties on theimplementation requirements, and draw variousdomestic and international agencies committed tothe success of the programs, particularly the oneswhich are oriented toward grass root development.

(4) Begin the bottom-up movement: The BostonPledge story. In the North American BengaliConference (in 2001), at a full day seminar entitled"The Renaissance Seminar" in Boston, a groupconcerned about the grass root development

CHALLENGE OF 21ST EDUCATION

challenges of India gave birth to The BostonPledge (TBP). Its mission is to "Incubate PublicServices to Empower the Powerless." In that spirit,we began a series of entrepreneurship workshopswith the help of the Bengal National Chambers ofCommerce and Industry (BNCCI) for the grassroots in Bengal. Later, other organizations such asAdams International, TechnoIndia, and IPSO, andmore recently IIT Kanpur and IIT Kharagpur havecome forward to help the process of developingthis initiative.

Each workshop has three components: Aninspirational part to essentially arouse confidencein the minds of the participants, an educationalpart to make participants understand the basics ofdeveloping a business, and a trigger part toencourage participants to write a business plan (asper a guideline) so that they can each take part inthe business contest. The first of these contestsreceived close to 75 business plans, all of whichwere extremely doable and required investmentsfrom Rs. 200,000 to

Rs. 1,000,000. Above all, they wereinnovative, environment friendly, and focused onconservation and efficiency. Perhaps all of themdeserved the awards; the top ten received Rs.50,000 to Rs. 30,000. We termed the contest theEntrepreneurship Springboard Program (ESP) 50KAward.

Building on the initial experience, we are nowexpanding this experiment nationwide. The IITKanpur experiment has been further enriched byencouraging each IIT student participating in theworkshop to team up with a local grass root levelentrepreneur to qualify for the business plancontest. It is our hope that through this process,we will able to connect the IIT minds with thegrass root issues of the nation and, in the process,unleash the power of bottom-up "out-of-the-box"entrepreneurship. We are now in the process ofexpanding and enriching this program with theother IITs. IIT Kharagpur and IIT Madras have bothoffered to move forward with our program. Exhibit12 lays out the essential process TBP follows inenabling bottom-up enterprising.If TBP could raisethe resources and the IITs and the othersuniversities could offer their infrastructure andstudents to this cause, we will be able to createthe new model of development which inconjunction with the Grameen bank could createa model of development from which the rest ofthe world will draw inspiration. It

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is our desire that every engineering and technologyuniversity participate in this experiment to create themuch needed bottom-up economic buoyancy.

(5) Work on the Sixth E = Ethics India must launch an all out effort to begin what Iwill term an "ethics movement." It may beworthwhile to create a high powered "Ministry ofEthics" which can, in concert with media, theMinistry of Education, law enforcement agenciesand industry associations, develop multipleinnovative programs to promote the importance ofhonesty and integrity at different levels of India'scomplex socio-economic structure. India would bewell served to adopt a metric termed the "EthicsIndex" which the ministry could use to report howwell different organizations-public and private-andstate governments are meeting the ethical standardsalong predefined dimensions.

As I close, it is my strong conviction that if, inthe next ten years, we could organize all thedifferent programs we have discussed today, and ifIndia does not get too much drawn into the 19thand 20th century economic and business models, itcould well lead a paradigm shift which the worldwould welcome. This shift, as shown in the Exhibit13, will help nations and societies to make astrategic shift from a linear economic model whichis "extraction-to-consumption" centric to a circulareconomic model which is "enrichment-to-conservation" centric.

India must not lose this strategic opportunity toprovide a very positive and integrative leadership tothe world, particularly given that the fundamentalrequirements for such thoughts are engrained in theancient Vedic scriptures. I do believe that we havethe skills, but do we have the will? The time is rightNOW. l

THE BOSTON PLEDGE EXPERIMENT

THE VISION OF A NEW GLOBAL ECONOMIC PARADIGM: THE ESSENTIALS

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BRANDING INDIA'S FEEDSTOCK AND

POWER OPTIONSIt is not too difficult to sense that the economic

development model that has evolved in the last500 years, particularly following the first Industrial

revolution powered by the steam engine and thenthe second Industrial revolution driven by theinternal combustion engine, is not onlyunsustainable, it is a clear recipe of bringing to anend all that humankind has learnt and achieved inthe last 50,000 years (Exhibit 1). Yet India with apopulation of 1.1 billion people, perhaps absorbedwith short term crises and successes, in a blindfolded fashion is getting itself increasingly drawninto the western economic model, which couldsoon create major socio economic and ecologicalhiccups, derail the development journey everyIndian aspires to run.

A QUESTION OF SUSTAINABILITY

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It is important to realize that India's energystrategy will not work in isolation. If the nation'sleadership is serious in addressing energy issues, itmust take a holistic approach with significantly morecreative and strategic view of India's agriculturalbase. However the changes brought on by 15 yearsof economic reforms focused perhaps only a fewmyopic economic parameters leading to a host ofunintended consequences. For example wellintentioned reforms to draw global investments andtechnologies on Indian economic landscape and tostimulate unconstrained consumerism without a fulland strategic perspective of the bio, eco, bio, hydro,geo spheres have opened up seventy to seventy fivepercent India, largely the Indian farmers to globalcompetition and given them access to expensive andpromising biotechnology; but the process thatevolved did not necessarily open the way to higherprices, bank loans, irrigation or insurance againstpests and rain, energy & power solutions that theycan afford to be competitive.

Furthermore, as multinational companies makedeep inroads in rural India with costly, geneticallymodified seeds, bringing new opportunities to thefarming community, they expose the farmers to newrisks as their debts mount up. About a year ago itwas saddening to read in the newspapers that in thiscentral Indian cotton-growing area, known asVidarbha, the unofficial death toll from suicides in a14-month period was close to 1000. India'seconomy may be soaring, but agriculture and energyremain its Achilles' heel, the source of livelihood forhundreds of millions of people but a fraction of thenation's total economy and a symbol of its abidingdifficulties. In what some see as an ominous trend,food production, once India's great pride, has failedto keep pace with the nation's population growth inthe last decade, and the basic base that could havedriven the development of bio based energy sectorin turn perhaps unconsciously, has been weakened.

Time has come when we need to be on onehand practical and on the other handtransformational. Instead of having conferences on"India as the Next Super Power", or "How to makeMumbai the Global Financial hub", leadershipmindsets should think of developing energy andpower models which will not only enlighten thelives of seventy percent of India with innovative ecofriendly power options but also provide the basicrequirements of water, nutrition, health, education,and access to economic opportunities; such astrategic approach must not hurt but enrich thenature, not hurt but help our trade balance, not

increase but decrease the divide between the richand poor, not enclose its citizens to mega malls butenable them shop in micro bazaars in open, clean,and efficient environments where simplicity andfreshness rules. We have to move away fromconcepts of mega hubs toward networkedcommunities which are small, humane, and retainthe local culture and heritage, yet celebrate theglobal technological developments in tandem withgreening of our economic activities In the processIndia could well conceive, develop and marketenergy nd power solutions and related Hardwareand soft ware which are unique, have global appeal.Such value propositions which are first of the kind,India could brand as "Conceived or Made in India".

Indian leadership Government and Industry alikemust realize that Globalization is notwesternization; modernization is not motorizationor "mallization". We have to seize the opportunitypresented by the emerging crisis caused by thecurrent extractive relationship humans have withnature which is heating (global warming) up theglobal economic machine, by evolving a modelwhich is truly authentic in its character, on onehand builds on our Vedic philosophy of harmonywith nature and know thyself, and on the otherhand forward looking to utilize the power of natureto serve the development requirements of India'sand world's grass roots. While enriching theessentials of nature itself, such a new model couldonly be developed if we think of energy and powerwith a holistic perspective, if we view ecologicalprocesses with higher level of reverence.

Vision of Energy & PowerSolutions: Require Supply andDemand side perspectivesSince its discovery, fire has supplied much of theenergy which has helped humans since ancienttimes. Wood was a prehistoric fuel. Today the use offossil fuels such as petroleum, natural gas and coalin power plants supplies the vast majority (close toeighty percent) of the world's electricity today.While eighty percent of the world is yet to benefitfrom the economic model that has evolved in thelast 200 years, the model itself has becomeunsustainable. Neither we have unlimited supply offossil fuel, and nor could earth's atmosphereaccommodate 65 billion tons per year of Carbon,which the current model if pursed will end upthrowing into the atmosphere by 2050.

Moving forward, India with rising economicconfidence, if indeed engages with the future with a

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After all much of our thinking on production andlogistics were shaped when energy was cheap andwe were less conscious of the environmental effectsof the emissions. In addition digital connectivityprovide us ways to work with each other longdistance, run small batches, manufacture asefficiently in small scales, enabling new ways wecould learn and earn, design, deploy and deliver,trade and transact, share and care.

3. Development of equipments lighting devices,air conditioners, heating equipment, transportationsystems which take advantage of latest materials,info, opto , bio and nano technologies so that theyoperate closer to thermodynamic efficiencies. As theExhibit show (Exhibit 2) shows with achievableefficiency improvement targets the world could savealmost 100 Quadrillion Btu/year energy.

If we could indeed instill such a vision for thedemand side of the energy equation within themanufacturing, transportation services, constructionand as a result in the household sectors, the worldand India will be able to significantly reduce itsenergy requirements. As a result degrees of freedomin making feedstock choices could be significantlyincrease and India could well have for differenteconomic segments of the global population have

full view of nation's challenges ahead, could put thenation in the driver's seat to pursue affordable andefficient energy solutions that will benefit all Indians,improve India's energy security, reduce the debtburden on Indian farmers by increasing theirincome, and help clean its environment or keep itsenvironment clean, depending upon where one is.

Accordingly the Energy and Power Vision thatshould emerge must constitute several fundamentaldictums:

Demand side Vision:Using power & energy intelligently & efficiently1. Socio-economic structures including design ofliving, work, and market spaces, must putfundamental emphasis on energy and ecologybalance towards smart sustainable systems

2. Logistics of materials, people, even energyresources and power should be optimized first, asopposed to production or storage processes.Distributed energy and power models with smallproduction centers need to be considered. Economicsystems which are based on short distancemovements with small scale production centerscould lead to more innovative models which couldalso be more humane let alone energy efficient.

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intelligent energy and power solutions. Dependingupon the content of intelligence and degree ofresiliency if the energy and power solution s fordifferent price points different global brands couldbe developed, all targeted to increase energyefficiencies of different applications and reducedependency on hydrocarbons.

Supply Side Vision:Developing sustainable resourcesholistically4. At the core of hydrocarbon vision must residethree fundamental aspirations: Energy Independencetowards stronger geopolitical stature of the nation,Security of short term supply though strategicinvestments in international hydrocarbon resourcesto combat volatility of Oil & Gas prices,consolidated approach in the management ofHydrocarbon infrastructure with emphasis onconservation not consumption of limited HCreserves we have within Indian geological structures,on shore and off shore

5. Operational efficiency of power plants andtransmission must be fully optimized enablingsignificant savings in capital investments could whilereducing India's hydrocarbon requirement

6. Full commitment to use of primary energyresources hydropower, solar power, wind power,and biomass, supported by nuclear power for baseload so that fifty percent of energy supply for thehousehold and services sector are non fossil ornuclear fuel based by 2050, leading to distributedcarbon free, radiation free energy power solutions by2100 for the overall economic system.

India at the threshold of economic take offdeserves an energy vision and policy that creates acleaner and stronger India that reduces ourdependence on foreign oil and also creates new jobsfor Indian workers in rural areas, improve valueadded opportunities for Indian farmers. By creatingand/or clearing the pathways to innovation, investingin our farmers and rural infrastructure, and providingIndian consumers with broader, more responsibleand smart choices, the vision that emerges willprovide India the tools to move forward, toward realenergy security and sustainable path of developmentfor the 21st century, which other nations could drawinspiration from.

In this spirit India must take advantage of itsprimary energy resources wind, water, sunshine, andthe resulting biosphere, not succumb to secondarysources that too imported from regions who

themselves are going through political & socialturmoils and soul searching processes looking foranswers to questions such as "What Beyond Oil?"When it comes to feed stock options, India needs tobe strategic and innovative as opposed to justfollowing the catch up model which has alreadycome to the end of its life cycle. Particularly givenIndia's relatively limited engagement with the 19thcentury and 20th century economic models, there isan opportunity to create a new path which othernations could follow, and will have long sustainedlife cycle for the benefit of our planet.

Short Term tactical moves inabsence of long term strategy ismeaningless, and if not cripplingIn order to realize this vision India will need toevolve a long tern strategy first, outlining how it willreach a vision of 2100 and 2050, and then decidehow India must connect today's requirements withthe long-term requirements. Failing to do so, thenation will get increasingly drawn into this viciouscycle of "consumption centric quick solution" modelwhich is crippling if not suicidal, and in the processIndia will not have the tools to break loose from themomentum of the past, even when its leadership isawakened by the crisis.

Any nation's ability to address its energy andpower supply issues will be determined by itscapacity to think truly long term with a wide anglelens; as energy infrastructures cannot be developedovernight, India like Japan, China and several Eastand South East Asian nations must feel comfortableto commit to multi decade programs while ensuringthat the free market along with governmentinitiatives today no way constraints or limits what itmight require to do 15 to 20 years down the road.Furthermore such a process will need to keep inmind the different scenarios of energy andecological politics, technological and tradedynamics that might develop long term, in turninfluence the nation's energy choices.

In design of the long-term strategy India mustrealize its strategic advantage in the Power andEnergy sector vis-à-vis the other countries and thendecide how to offset the strategic disadvantages to itsfavor. The advantages due to (i) biodiversity, (ii) long-shore line (iii) solar intensity (Joules/sq meter), (iv)the natural river systems, (v) relatively lower intensityof manufacturing in the overall economy, whencoupled with the advances in biotechnologies andgenetic engineering , energy storage systems, fuel

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cells, micro turbines, propeller and bladetechnologies indeed provide India with a wide arrayof choices. A thorough ecological and energybalance of all these possibilities indeed couldprovide us a picture of at what time zones whatextent of the nation's energy requirements could bemet through bio fuels, solar energy and wind powerroutes. For India with high population density, it isparticularly important that the country develops apoint of view on a distributed energy & powermodel so that it does not end up following theurbanization model of the G7 countries; instead bymaking the rural sector drive the development of theenergy solutions of the future India must ensure thatreverse migration to villages is facilitated, as eachvillage is reengineered as a center of excellence oflocal resources and skill sets.

Brazil's commitment to move towards ethanolfollowing the first the oil shock in the early seventiesfor example is an excellent model which India couldhave also followed. Brazil today is the largestproducer of ethanol as fuel, and even advancednations like the US are drawing on the Brazilianmodel. Since the early seventies, flexible fuel carswere popularized throughout the country. It isestimated that in 2007, ninety percent of the new carssold would be flex-fuel cars. Flex-fuel cars can bebought from major manufacturers in Brazil or oldervehicles can be adapted to run on ethanol mixes bychanging the engine's compression ratio etc.

While India could have followed the samemodel, now it could expand on the Brazilian model

to include full range of sources based on bio mass.Ethanol can be produced from many sources such assugar cane, corn, switch grass, sunflower, barley,plant stocks and other biodegradable sources. Indiamust realize that nation is the second largestproducer of sugar cane but efforts to include ethanolin their gasoline mix is only minimal of five percent.

Furthermore for India with large bio diversity,bio fuels should not be limited only to ethanol, butbutanol, biogas, bio diesel (Palm Oil, Jatropha), etcare other options that should be taken intoconsideration. India will need to develop anaggressive and innovative incentives for farmers andagricultural institutes so that farmers could worktoward increase productivity of sugarcane, corn,switch grass, etc for use of bio fuels, withoutdisturbing the food chain. In fact to resolve India 'slong-term energy issues India must work towardsimproving India's land productivity so that increasedpercentage of land could be diverted toward biofuels. Good news; Jatropha and Castor seed grow insemi arid land which could be utilized to resolvesome India's supply issues. In fact in several parts ofGujarat, Castor seed output per unit area of land ishighest in the world which it must build on todevelop bio fuel/bio power. Similarly to promotesolar and wind power which are weather dependentIndia will need to promote systems engineeringcapabilities so that different technologies includingintelligent storage technologies/fuel cells togethercould provide power solutions in an integratedfashion in different regions of the nation (Exhibit 3).

INNOVATIVE UNIFICATION OF DIFFERENT ENERGY CONVERSION TECHNOLOGIES TO EVOLVE APORTFOLIO OF BRANDED SOLUTIONS

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As the long-term strategy is defined India'sshort strategy should focus on bridging the currentto midterm (next ten years) energy requirementsvis-à-vis the long term programs.

1. Efficiency Improvement of all energyconversion devise across the board: Creativelydesigned incentives and penalties similar tocarbon trading should be promoted to developenergy efficient household, commercial, industrialequipments (e.g. Lighting devices, air conditionersetc) and transportation systems

2. Transition to new energy environment:Innovative tax incentives coupled withGovernment funding should encourage newhousing complexes, SEZs, and villages with outpower to use alternative energy resources even ifthe fully loaded cost per unit electricity is higherthan the hydrocarbon based models.

3. Acquisition of International Hydrocarbonresources: Instead of aggressively auctioning outIndia's limited strategic resources, India shouldaggressively partner with second tier oil and gasrich Governments to organize developmentinitiatives that could provide India preferentialaccess to unorthodox resources. For example highlevel strategic relationship with Egyptiangovernment could be established through aconsortia of Oil and Gas companies for thedevelopment of Egypt's Oil and Gas resources inWestern Deserts, Damietta (North of Alexandria),and Upper Nile (Southern Egypt). Geologicalstudies show that several regions in Africa HCreserves could be significant, where India buildingon the Egyptian platform could take strategicpositions with exclusive give and takerelationships.

4. Conservation of Nation's Hydrocarbonresources: India should limit access to its ownlimited resources so that such resources could beonly deployed during critical situations forexample triggered sudden interruptions ininternational supply resources likely hoods ofwhich will only increase given the recent trends interrorism, geopolitical moves some oil and gasrich nations might take to express their positionson international issues

5. Smart use of India's coals reserves: India'scoal reserves are significant. Led by Coal Indiaand different research Institutes including the IITsshould be encourages to develop clean coaltechnologies so that full range of technologiesincluding Fisher Tropsch process are promoted fordifferent regions for different scale of applications,

so that a disturbed energy model could bepromoted such that energy utilized to move coaland losses for power transmission are minimized.New coal based power generation systems shouldbe so designed when bio mass/bio fuels becomecompetitive long term, some of the elementaltechnologies of the coal infrastructure could beutilized for the new paradigm

6. Energy Education: In order to build a totalawareness across the nation and to inspire newtechnologies for both demand side efficiency gainsand/or alternative ways to convert clean sources ofpower, from primary school to IITs acomprehensive stream of energy and ecologyeducation programs should be developed,integrating chemistry, physics, life sciencestowards the nation's energy mission

It is important to realize that success of shortterm programs will influence the success of thelong-term program. Accordingly the six programsproposed above must ensure that they are in fullharmony for the long term and each one of themwill only help not hurt the development of thelong term strategic programs.

Multilevel Multi Prongedapproach with coordination andholistic framework need to belaunchedMoving forward, not only in India but world wide,we will need to fundamentally reprogram ourthinking to create a cleaner, greener and strongereconomic system by undertaking a series oforganizational changes in the Central and StateGovernment and deploying a set legislative actionswhich will enable the bridging between short andthe long term requirements, while facilitatingdevelopment of an integrated approach.Accordingly India's leadership at the PrimeMinister/Cabinet level will need to immediatelyundertake a fact based summit meeting to adoptseveral policy level reforms:

The essential requirements:1. Like the Knowledge Commission India

should consider to establish an EnergyCommission which will be responsible to developand short and long term strategy of India frommultiple perspectives as outlined above

2. Reorganize the Ministries in such a fashionthat better coordination is enabled between Oil &Gas, Coal, Nuclear sectors and renewable energyresources on the supply side, and energy

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efficiency related gains on the demand side3. Consolidate the State owned Oil and Gas

companies into two companies (upstream anddownstream) which will be responsible tooptimize the overall Hydrocarbon strategy of thenation in tandem with international markets andglobal competition

4. Given the strategic significance of theenergy sector for the overall socio-economicdevelopment of the nation, the role of the freemarket should be limited and guided towardcertain goals the nation has to meet in this sector.It will be erroneous to expect that the invisiblehand of Adam Smith will be able to address thecomplex issues related to India's economicdevelopment and energy challenge

5. Develop and design building codes forcommercial, industrial, household which areenergy efficient; such codes should be backed upby tax incentive and penalties vis-à-visbenchmarks of power consumption per capitagrowth trajectory the nation should work towards.

Similar legislations should be developed for thetransportation and logistics sector so that the freemarket resources could be guided toward energyefficiency, and in general reward energy efficientbehavior.

Overall, India must develop an energyframework (Exhibit 4) which will enable integrativethinking at the policy level while enablingconservation and facilitating multiple routes toenergy & power solutions. The future possibilitiesif pursued with a strategic mindset could indeedopen up India toward new industries which areemployment intensive, will promote developmentof small towns and villages as centers ofexcellence, and could well create the newdistributed power and energy solutions model forthe benefit for the entire planet. In turn Indiancompanies could develop a range of brandedsolutions as systems integrators and/or brandspecific Hardware or software in creating the neweconomic system which are energy efficient andecologically friendly. ●

INDIA'S LIKELY ENERGY FRAMEWORK

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WHAT IS THE VALUE OF YOUR

SIGNATURE?Discover your organization's hidden potential

Over the past two decades, I have had theprivilege to directly interface with theleaderships of more than 200 Indian

companies - from the ones which are in the multi-billion dollar league, to the ones whose annualrevenues are just about $10 million. Whiledifferent companies, large or small, single or multibusiness have taken different routes in adjusting tothe various stages of liberalization andglobalization India has gone through, majority ofthem appear to have developed a very high degreeof confidence in their resolve to become globalplayers. A few organizations have done extremelywell to adjust to the new fundamentals, whilemany others remain positive in their resolve totransform into forward looking entities. I view thisnew spirit to modernize with lot of enthusiasm, as Ifirmly believe the "can do spirit" itself, is perhapsthe most valuable asset the Indian companies havedeveloped in the past decade.

Now, how much we can leverage this asset willdepend how far the vision of the leadership ofcompanies could stretch and with what level ofcommitment and confidence, humility and agility,Indian corporates could stimulate and sustain thedevelopment process with a global perspective.Indeed the companies, particularly the ones above$100 million in revenues have an historicopportunity to cease the moment, to emerge as trueglobal players with their own brands. They are smallenough to be supple and resilient, and big enoughto meet the requirements of critical mass.

It is my strong conviction and hope that theBoard Room of those companies who are willing to(i) engage with the fundamental shifts in the globalmarket place

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(ii) face the short-comings in their managementpractices and thinking habits with candor, and (iii) uncover the basic competitive strengths hiddenin the grass roots and heritage of India, could welldefine the "Next era Multinationals with the Nextera Brands", as Japan did in the sixties througheighties, South Korea in the eighties throughnineties and China/Taiwan more recently, in specific sectors.

Of course, it will not just happen, it will requirefundamental change in mind-set and change ofgears, as far as their operations andorganizations/management processes are concerned.While the process of transformation the Indiancompanies have gone through in the last 20 yearswas absolutely essential and was significant, wemust however remember it only qualified the Indianindustry to play the qualification rounds, let aloneplay the quarter finals, semifinals and the final.

Moving forward, to play the global leaguesindustry will require, - innovation of valuepropositions which are distinctive, bold experimentswhich are global in scope, and commitment toevolving creative market mechanisms which willone hand enable nation building to on the otherhand facilitate engagement with the consumers'aspirations in multiple nations.

This thought piece essentially discusses (i) Whatwill be the nature of the global competition (ii) Whatwill it take to secure the global trust in the newdynamics? (iii) How must the next stages ofdevelopment unfold, in building world class brandsin un-covering the hidden potential of IndianIndustry?

1. The changing character ofglobal competition:With increasing intensity of knowledge in the globaleconomy (Exhibit 1), it is clear that those companies,irrespective of where their headquarters are locatedwho secure 'knowledge advantage', will be thefuture winners. Securing "Knowledge advantage" isby definition a dynamic process, which will requireboardrooms to shift from "entitlement' orientedthinking habit to "enlightenment" driven explorationprocess.

The challenge of survival: Accordingly anyorganization today in order to create "Knowledgeadvantage" has to focus on three forces:Globalization, Digitization, and Innovation

1. Globalization: With markets open 24/7,connected through high speed networks for acompany to be competitive it has to be able to (i) access the best resources, (ii) serve micro niches across the world to gaintransient scale advantage, and (iii) secure knowledge from where ever the latestthoughts are being inspired from. While today manyrealize the need to meet these extremerequirements, Japanese companies even in thesixties developed this global surveillance andlearning capability, which in spite of their language

INCREASING WEIGHTLESSNESS OFTHE KNOWLEDGE ECONOMY

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3. Innovation: Enhanced connectivity andglobalization has made the third force innovationeven more intense. For companies to survive theacceleration of value innovation, it is no longerenough to have a once in three year new productlaunching event, organizations are being continuallydrawn into competitive games in which success isdetermined by how speedily new ideas are broughtinto market place, and how trust with customer isbuilt or enhanced around the hard or soft attributesof value proposition. Although two decades ago GMhad tremendous brand and scale advantage overToyota, today Toyota enjoys more trust from theconsumers because of the connectivity it has builtwith auto markets world-wide around innovation-those little attributes in the car, in the show roomsand customer service centers which together make abig difference in the hearts and minds of the buyerand the user.

Indeed competition today is in a continuous stateof "dynamic disequilibrium" – characterized bycomplexity of multiple relationships and intensity ofknowledge – both online and offline.

Facing complexity of relationshipsand intensity of knowledge:Why brand matters?In this new world of "dynamic disequilibrium"securing and sustaining competitive power inharnessing the forces of globalization, digitizationand innovation will increasingly depend upon howorganizations manage a three sets of Portfolios: (i)Portfolio of skills to ensure that you have the mostcompetitive skill sets in areas your organizationspecializes in, (ii) a Portfolio ofrelationships/alliances to ensure your skill gaps arecomplimented by partners from consultants,investment bankers to technology providers, (iii)Portfolio of connectivities with customers ensuringthat the architecture of touch points with consumersenables you to dynamically learn from and servecustomers experience space, - pre purchase to postpurchase of your value proposition. Lexus in a shortperiod of less than twenty years has developed theidentity as the benchmark of "AutomotiveExcellence" is because how it managed all theseportfolio sets to create an "evolution envelope"which consumers look forward to relate with.

Accordingly in architecting competitive portfolioscorporate identity/brand management perhaps willbe the most critical requirement in the 21st century.An organization's ability to connect with resourceproviders, talents/skills, channel and technology

disadvantage has become the an important trait intheir DNAs. This fundamental organizationalcapacity has enabled the Japanese in a very shortperiod create more than six dozen brands; fromzippers (YKK )to bicycle gears (Shimano GearSystems), from sporting goods (Mizuno) toentertainment (Sony, Panasonic, Kenwood, anddozen others), let alone the success stories in thefour and two wheeler sectors (from Accord to Camrythrough Lexus and several dozens in between). Inthe same sprit we have seen the rise of multiplebrands from South Koreans, Taiwan and morerecently China.

Today, the force of globalization is evenstronger. It is now important for every organizationto realize that it is no longer enough to be globallyalert and have a wish list of what its leadershipwant to do to become global, but how to make theprocess of surveillance and learning vis-à-visresources, niches, skills and partners competitive isthe real challenge. Companies will need toexamine how competitive are their globalknowledge processes even in order to protect theirdomestic markets, as in an era open markets, yourown back yard could be an attractive niche forsome player somewhere who has a morecompetitive and sharper knowledge processes. Inother words, even to survive in your own back yardyou have to have a global mindset and a wideangle lens which could pick up weak signals fromany corner of the world.

2. Digitization: The convergence of 4Cs –Communication(high speed wireless), Computation(distributed intelligence), Commerce ( transactionanywhere) and Content (real-time knowledgecreation) – has, in fact, created the potential toincrease the speed of surveillance and learningprocesses, and those companies who haveharnessed this power innovatively have indeedsurged ahead. The rise of Amazon.com, Dell, eBay,in the nineties, and dramatic surge of Google in thelast five years are a few of several such successstories. Digitization of business has fundamentallytransformed the value definition, value creation,value delivery further making globalization onlynatural. Once you are on the net, your reach andpromise are global and you have to be sensitive toyour diverse audience. When well thought through,digitization enables the qualifying rounds to bespeedier, the value of victory significant, and onthe other hand downside of carelessness is difficultto recover from, if not lethal.

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partners worldwide are critical in buildingcompetitive advantage, which is obviouslydetermined by the corporate identity it enjoys; inturn its effectiveness in building connectivity with itscustomers is determined. As a result in theknowledge era identity building pathway have threedynamic processes at work each reinforcing theother (Exhibit 2).

If the process works it will have exponentialeffect on corporate performance, if on the other sideit does not work it could hurt a company's identityvery quickly. Companies in the advancedeconomies are struggling to make adjustment to thenew environment. Only a few have succeeded tobreakaway from the 20th Century "command-control" decision making habits and monolithicmindsets to fluid working arrangements betweenmultiple centers of competencies, leading to what Iterm "adaptive networks" built around the dynamicsof trust and identity. It is in this context we have toexamine how Indian companies should prepare inbuilding their presence in the global market.

2. Securing global trust in the newdynamics In the past two decades enhanced exposure toglobal competition, proliferation of consumerbands and increased intensity of technology invalue propositions have helped companies in Indiato come to terms with what it takes to succeed inthe borderless world which is becoming

increasingly consumer centric , innovation driven,and volatile. Indian companies which havedemonstrated the capability to adjust to the forcesof liberalization must now build on the momentumto rise to the challenges of adjusting to theemerging competitive rules.

Indian industry's state ofreadiness?What is encouraging, is that in the last two decadesin the two-most knowledge intensive industries -Software and Bio-Pharmaceutical sectors, severalIndian companies from TCS, Infosys to Ranbaxy, Dr. Reddy's have earned respectable stature on theglobal stage and have successfully positionedthemselves as mainstream and/or center stageplayers. Furthermore in the Automotive and Teasectors recently companies like, Tata Motors, Bajaj,Tata Tea to name a few have begun to build globalpresence though innovative approaches which aredefinitely steps in the right direction. Also in theupstream companies like Ispat Group, Jindal Steel,Reliance, ONGC, Tata Chemicals and several othersare developing international assets and globaloutposts which all together provide Indian Industry,if not "Made in India", a wide platform to build fromin building global presence.

At the same time the first wave of Indianprofessionals who immigrated overseas in the latesixties/early seventies and even later, many are nowin positions to shape/influence the strategies and

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policies of Fortune 100 Companies. These twodevelopments, - "successes from India out", and"success of Indians outside" today provide India astature which if strategically harnessed could providethe nation much needed boost in the geo-economicand geo-political positions of the nation.

However, lack luster performance of itsmerchandise exports, continuous failure of Indiancompanies to meet quality and timelinesscommitments, or not being able to qualify onproductivity/sourcing programs of buyers overseasvis-à-vis China, Thailand, Vietnam, Eastern Europeanand Latin American countries and even Bangladesh,are major barriers for Indian corporate Sector tobuild mass scale global presence.

Only way Indian Corporates could come out ofthis paradox is by committing themselves to emergeworldwide as aspiring multinational companies withtheir fundamental competitive advantage rooted inIndia's inherent strengths, and in the trust of globalconsumers. Companies have to develop a newcapability of fusing India's strengths in the design ofvalue proposition, so that the basic products whichutilize India grass root skills, be they be inhandicrafts or horticulture, automotive componentsor active pharma ingredients, reflect the nation'sknowledge advantage.

In short, a knowledge layer could drive thedifferentiators of value of a product, particularly as

increased emphasis is placed on differentiating avalue proposition along the life cycle experience ofthe user. Exhibit 3 provides a concept of how thenew approach has to be visualized.

Why branding is even moresignificant for Indian Industry?In order to secure knowledge led competitive gainsIndian Companies must realize that they have toevolve organizational properties which will attractthe best people to serve those principles. While thisis a generic requirement for any company any wherein the world, for Indian companies aspiring to buildglobal presence it is particularly important, as theyduring the initial building stage will not be able tocompete for people vis-à-vis more endowedmultinationals from the TRIAD on the basis offinancial rewards alone. Even if they choose to doso, there will always be another company whocould win the auctioning process of skills.

In addition in a country whose per capitaincome is still below seventy percent of thecountries, exorbitant financial rewards formanagements of Indian companies could only serveto increase the gap between the poor and the rich,and the cost advantage that Indian companies couldpotentially create by utilizing low cost labor couldeasily be off set by high cost management. So we

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need to develop innovative answers to a very basicquestion, - how could Indian companies attract thebest talents and access best partners to serveattractive customer niches with non financialrewards? Consequently, the significance of buildingthe "trust factor = distinctive identity/brand" equationwhich challenges well established multinationalswill be even more important for Indian companies.

3. Architecting world class brandsin un-covering the hiddenpotential In view of the possibilities and the challenges aheadand the initial forays Indian companies have madeon the global stage, organizations must now raisethe brand management process to the board roomlevel as the most important driver of anorganization's vitality which leadership ofcompanies must pay close attention to. We have tokeep in mind brand management is not aboutrunning a seductive advertising campaign (whichperhaps is necessary but definitely not sufficient); itinvolves building the character of the company insynch with leadership's vision, which is alive both,in the universe within and the universe outside ofthe organization.

A Five Step Iterative process:Exhibit 4 lays out the essential steps leaderships ofcompanies should consider undertaking in securingglobal presence, and in the process uncover thehidden potential of their organizations as reveredmultinationals. In the world of broadband, securinga robust Brand identity to emerge as a 21st centurymultinational could be achieved quite rapidly onlywhen the process is managed in a scientific,strategic and supple fashion.

Below I have outlined the significance of each ofthe steps and how will they need to be managed inan objective, innovative and forwarding lookingfashion:

STEP 1: How is your Organization perceivedtoday? Most organizations that I have interfaced within assisting them build and realize their strategicvision had strong misconceptions on what theybelieved in terms of how their organizations arebeing perceived by the outside world and the peoplewithin. In many cases the boards underestimatedtheir organizations latent potential and most oftenover estimated their competitive positioning and/ortheir customers' connectivity with their products.

Accordingly before you think of how to build

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your company's identity or character as a globalforce, you must figure out how you are beingperceived in an objective fashion. Some may sayperceptions are different from how we reallyfunction, but we must realize it is the perceptionswhich drive the reality of your performance. Afterall "beauty is indeed in the eyes of the beholder".Such an exercise must include understanding (i)What are customer and stake holders desiredattributes in your organization, (ii) How doesperceptions / awareness of your company andcompetitor brands compare today? (iii) How yourand you company performs vis-à-vis the perceptions,and (iv)how all the stake holders customers topartners , form mangers to front liners rank the"holistic stature" of your company vis-à-vis yourcompetitors in the chosen playing fields?

A solid base lining exercise when doneobjectively and scientifically with 360 degreesperspective, provides a boardroom indeed a greatunderstanding of the organization perceivedcharacter which you want to build on in securing aglobal stature.

STEP 2: Know thy self: This perhaps the mostdifficult step in the process. It essentially involvesinternal soul searching to determine the cultural andskill traits which enabled the company arrive atwhere it is today. Through a series of leadershipworkshops conducted by an outside expert you gothrough the discovery process to essentially identifywhat is the true DNA of the company. Theexecutives who participate in the workshops shouldnot be ashamed to uncover traits of the companywhich they may not be proud of. What I have foundextremely exciting in the conduct of such exercises,is that often such process uncover the hidden valueswhich are the true differentiators but neverarticulated and/or discussed in managementmeetings. Given many India corporates in the recentpast have gone through radical changes to adjust tothe forces of open market, such an exercise couldindeed now open up new vistas of organizationswhich could be significant value.

STEP 3: Designing the "Value-code": This step isthe heart of the process. Now that you know howyour are perceived and you know the fundamentaltraits which define your true DNA, during this stepyou develop a sequence of traits which influence anorganizations fundamental behavioral propertieswhich will shape the future character of yourorganization in light of the vision of yourorganization. The exercise must define the

behavioral codes all across the business system ofthe company from Technology, through Logistics,Sales & Marketing to after sells -Service, so thattogether they create an experience and environmentwhich your advertisement campaign must supportleading up to a full fledged brand campaign. Thisstep if done in a scientific fashion taking intoaccount hard and soft factors of the organizationcould enable Indian corporates developorganizational properties which are truly unique andempowering. As you will note brand buildingessentially involve corporate character building,advertisement programs and promises you make inthe media must only follow, - so that whatever youpromise on a product label or the bill board/ TVscreen indeed is experienced by your audience,both internal and external in every interface. In shortthe design of the value code guides the process ofexpression of organizations essential DNA traits inrealizing its vision.

STEP 4: Mobilizing the genetic codes: Once thevalue code is defined in sufficient detail, during thisstep an organization must define how each of itsinterfaces with the external world and intra-faceswithin the organization must change so that the newcharacter become truly visible The architecture ofthe behavioral processes must define the brandarchitecture of the company. In other words inaddition to promotional programs Brand Strategyessentially defines a comprehensive "touch points"strategy, which must be in full synch with the overallstrategy of the company.

STEP 5: Navigating through the mind of theaudience: Like accountants audit corporatereporting, it is important the a company has anobjective audit process in place to continuallymonitor how the interfaces are reflecting the desiredcharacter of the company vis-à-vis variousstakeholders and as a result how the perception ofyour company and its products are getting mappedin the mind of the audience. Depending upon theprogress a brand campaign has made, you shouldconsider organizing small events, interactiveexperiments with your target audiences what I call"Brand stimulants" which are truly innovative toactivate specific product or organizational attributes,in turn enliven the touch points.

In view of the above discussion, thosecompanies who are confident of the valuepropositions they want to roll out, (because of indepth market research and channel strategy), mustwork toward evolving a theme around which they

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want to be known for. Using the five step process,for example for consumer products the concept of"double badging" could be developed with retailerssuch as Wal-mart, K-Mart, Sears, CVS, so that boththe Indian brands and the partners' brands togetherdefine the identity of the value propositions. In thisfashion, Indian brands will get known, earn the trust,there by providing more degrees of freedom for "goto market" of future value propositions.

On the other hand if the value proposition is notclear, organizations could serve the OEMs, preferablywith non exclusive arrangements build trust with thedownstream companies and earn its reputation asgood-suppliers. E.g. Taiwan Semi-conductor, Galanzin microwave ovens in mainland China, and thengradually examine how to develop brand like strategy,by ensuring for example "manufactured by "becomepart of the product brand. Companies who aresuppliers of components or are in B2B businesses,the five step process must explore how Shimanoprovider of Gear Systems for Bicycles branded as"Powered by SGS" enhance the value of bicyclesmanufactured by the Italians or Chinese, as does YKKzippers for jeans, "Intel inside" for lap tops and PCsfor microprocessors, create value for your customers

Towards a National Campaign : "Let ThousandFlowers Bloom" In order to play this new role in apractical and cost effective fashion, India as a nationand then within each target sector, it must enabletwo way interactivity with the target audience. Acomprehensive Brand strategy "Manufactured inIndia" supported by three specific initiatives to makemeaning of the desired identity real and active:1. Define a strategic approach to promote the Madein India as a reliable identity by ensuring allproducts exported from India meet basic standardsof quality, reliability and timeliness; Indiangovernment with Industry associations like CII,Assocham, FICCI must team up to begin a nationwide movement.2. Integrate Indian professionals abroad in brand andorganization building efforts so that knowledge

assets available outside could be fused withknowledge assets inside in innovative ways to createprofessional interfaces with global markets3. Launch a national surveillance mechanism whichwill ensure what companies advertise as theirpromise are indeed delivered in a consistent andreliable fashion. For example a national associationof media professionals could play this audit roleboth to protect and enhance the codes of ethics ofthe profession but more importantly act as a guidinglight which will ensure promise and perceptionsmatch In view of the above discussion, it is myhope that leadership of Indian corporate sector withthe Indian Government will evolve a strategy fordeveloping multinationals and building globalbrands in the target market segments. Only whenthousand different names earn the trust of the globalmarket place, will India as whole earn the trust itdeserves. Today, China's credibility has been wellestablished from almost from nothing only 25 yearsago. India with lead in knowledge intensiveindustries could speed up the process of credibilitybuilding through fundamental emphasis on beinggenuine. It is indeed an opportune time to build onthe experiments of change management in the lastdecade, to fix the fundamentals with bigger andbolder vision and in the process build strategicpositions in the markets with value propositions andbrand programs which take full advantage of India'sunique strengths.

Once the basic doctrine of a multinationalorganization is established with a revered identity,the new inspirational mechanisms must becultivated to develop slate of products which are notmere extensions of product ideas imported formabroad; let new value propositions be developed toaddress unsolved problems with talents world wide.In multiple sectors for ecological, environmentalreasons the world is looking for new solutions to theold industries such as energy, water andtransportation, in which India could well be the wellbe the fountainhead of the new solutions. ●

Documents

COVERSTORY INDIA AT 60 - MITweb.mit.edu/psgleadership/pdf/1_required_reading... · Before I begin, may we salute the freedom fighters, the martyrs, who were executed in pre-independence