Designing a Foundation for Indian Innovative Ecosystem

Back in 2016, Elon Musk the billionaire Tesla & SpaceX CEO announced that Tesla’s Model 3 would be built in a new fully automated factory. In the most ambitious attempt at automation, Tesla floundered with severe bottlenecks and was plagued with “production hell” recording the worst ever quarterly loss in 2017. The world witnessed an audacious failed attempt at doing away with human intervention which will catch imagination time and again and serve as a target for future innovators. Musk famously tweeted that “Excessive automation was a mistake. Humans are underrated” and set up a new assembly line – this time with lots of human workers. The key takeaway lies elsewhere and not the human element - the admission that excessive use of technology in the Model 3 all at once instead of stages resulted in production slowdown.¹ The fact that technology is clearly moving ahead with technology like Artificial Intelligence (AI) threatening to replace even human mental interventions makes completely automated manufacturing a plausible thing. Instead of all at once like how Musk tried, a future innovator who may go for it in stages and perfect each network of conveyor belts before increasing the complexity of production line will end up with a fully automated system to manufacture just about anything. The key to future therefore, doesn’t lie in manufacturing size or capacity but in innovation.

A couple of decades down the line, people may look back at the rage of Donald Trump over factories which shifted to China taking jobs away as “primitive issues”. A factory which stands and manufactures devoid of human intervention would cease to remain an election issue once the potential to employ thousands of citizens vanish. The policy makers would then shift to the kind of factories where technology is at the nascent stage and human intervention is still required. The economic power would then have shifted to nations which can develop novel technologies at high speed but adds to utilitarian value. The manufacturing of conventional products would by then be completely automated making labour less relevant. In contrast, service sectors reliance on human intervention may not subside due to its inherent nature. The primary relationship in service sector is with a person and not product and no automation can replicate the credibility of a human touchpoint. The services sector is the fastest growing sector globally adding a whopping 55.39% to India’s Gross Value Added (at current prices FY20).² While Indian IT companies are a global success story today being acclaimed for patching the Y2K bug, they are staring at obsolescence few decades down the line unless they up the technology game. In the absence of novel technology and original research, the value they add as building and maintaining platforms for giant financial firms will become negligible in due course.³

With rapid pace of technological development, a majority of jobs are going to be redundant due to automation. Between 2000 & 2010 the US lost 5.6 million manufacturing jobs 80 per cent of which was due to automation.⁴ The pace has only accelerated in 2011-2020 and is irreversible trend threatening to impact livelihood of majority of world population.

Indian society like all other society will inevitably come face-to-face with such eventualities and will change in response to technological, economic and social pressures. The societies which respond and adapt well may have the edge while society which don’t will lose out. The determinant whether societies will respond well or lose out is dependent on a nations values, policies, the leadership and the arrangement of factors which fuel the responses whether material ones like money or mindsets like prevailing human values biases and prejudices.

India is undoubtedly the most complex nation state. Being the oldest civilization there are numerous factors beyond the scope of historians ability which may have resulted in the India of today. The religious ideas, the weather, the historical events and interaction between various sub-identities of various groups of people over thousands of years have impacted the nation positively as well as negatively.

The knowledge era or the era of clash of ideas which is impending will go to the country which has the best ecosystem to formulate a hypothesis, test the same and deliver results which add value to the existing knowledge base. To be sure it’s been largely true throughout history but with one major catch- it will be the sole deciding factor. Starting from civilizations which prospered primarily due to natural resources, mankind entered agrarian economy where methods of farming, quality of soil, weather and basic equipments determined the relative prosperity of nation. The next phase saw influence of nature wane as equipments i.e. technological progress became the prime determinant which led to industrial revolution when economic power shifted to countries most efficiently arranging the factors of production to produce mass quantity at a pace unmatched by human hands. The inventions like engines and airplanes reduced the geographical advantages/disadvantages of nations in trade and a trade competition on a more equal footing began resulting in labour arbitrage. Capital naturally flowed to nations which offered cheap labour as distinguishing factor fuelling economic growth and mass employment in a scale like never before.

After computer coded era, we already have entered era where a machine can program itself and Artificial Intelligence (AI) replicates human intelligence. Just like it isn’t big deal today to communicate with another part of the world in fraction of a second, the world is moving to an era where it won’t be big deal to manufacture a product within seconds without human intervention. The world is moving towards deindustrialization where a major portion of manufacturing jobs may be redundant and be completely automated. The sectors where human presence still adds value may be relatively less impacted. The watchmen of a building may retain job despite security cameras and robots just because of reassurance a man standing guard at gate provides a community. The domain still contested which can provide a competitive edge would be novel technologies and pace at which it can be generated.

The New Education Policy is a significant step while contending with social, economic and cultural forces which can impede development. While every society will contend with existing societal, cultural and religious forces which revel in status quo, the Indian civilization with deep regard for “gyaan” (knowledge) is well-placed. The fact that societal pressure on independent thinking and stigma of failure is more in India compared to Western economies will be a deterrent. How can India curtail its societal pressure and create a billion thinking minds and thousands of potential innovators?

The Right Balance between Questions and Answers

Right from starting to learn A, B, C, D ….. to centre’s of highest learning, the Indian education system has remarkable penchant for providing answers and structured responses without encouraging a learning driven by inquisitiveness and questions. The child who asked why A first and not D or E is a revolutionary conditioned by the system to drop his rebellious streak within a few years of the system acting on its impressionable mind. Yet, at some point the revolutionary has to be set free and the natural curiosity tapped for the greater benefit of the nation. While it is open to debate at what point a more questioning open-ended mode of learning should start, it is undisputable that a system should not discourage with its focus on grades - the kids ability to explore things for replies to their questions. Rote learning beyond a point is not just a memory contest it prohibitively deters knowledge creation by excessively focusing on knowledge consumption. A system designed to create new knowledge and fuel discovery and innovation from a young age is the need of the hour.

The New Education Policy is a step in the right direction with its division into Foundational Preparatory Middle & Secondary (5+3+3+4). With such a framework, the curriculum as well as approach to teaching can be customized to the mental development stage of a student unlike the 10+2 structure. With the 5+3+3+4 framework, an evaluation process attuned to each and every age group can be framed unlike the 10+2 approach where the next level of education merely meant a new curriculum and higher level of comprehension difficulty in tandem with mental growth. Over 85 per cent of child cumulative brain development occurs prior to age 6 and a foundational literacy and numeracy at this age would be the foundation of the nation. A National mission on Foundational Literacy and Numeracy to be setup by Ministry of Human Resource Development has a crucial role in ensuring it.⁵

The first step in generating thinking minds in huge numbers a miniscule portion of whom will form the extraordinary knowledge pool is the Preparatory (Class 3 to 5 aged 8-11) and Middle (Class 6 to 8 aged 11-14). An education system which instills inquisitiveness in an age group of 8 to 14 which can read write and count can be a life changing one for students who continue seeking answers on their own. Any scientist or thinker will testify that most empowering part of education has been basic literacy plus unlimited curiosity. For a student so passionate and literate, the rest of the formal education merely becomes a quest for certification. The formal curriculum in this period should deviate from being merely a source of information to a catalyst for thinking.

The most impactful policy changes in education which would determine the thinking and learning capacity of a nation is the target group of 8-11 and 11-14 age groups. Thus an education system feeding into young minds that atom is the smallest particle should provoke thoughts on what if atom itself is divided again. Whether or not, the young mind finds it in his curriculum, the curious mind will have taken one step ahead on his own by asking about it (which is called nuclear fission) before curriculum catches up with his curiosity. The natural quest for knowledge may continue for the rest of life making a generation of thinkers. The physical sciences which teach the chemical make-up of various elements should leave scope for enquiring mind to examine if this be true. In an era where information in internet is free at the tip of the finger, chances are that students would question. The only sensitive exception to this should be education in history which has far reaching impact on National Identity. An environment of deep rooted reverence and pride for Indian civilization is of paramount importance and sensitive due to subjective interpretations which historic events and personalities are prone to. An ideal education system while instilling a scientific temperament in mind should also instill pride and sense of belongingness to a culture in heart for a civilization to thrive.

Another important factor is to retain some aspects of rote learning intact. The over-eagerness of the prevailing wisdom to do away shouldn’t negate aspects of learning where facts need to be internalized. A complete open book examination system will dissuade students from keeping in memory important facts a citizen or an educated man should have at the back of his mind. Open book exams are harder but help in fact and description without aiding conceptual and application based questions and is an ideal mode to foster thoughts. However, a future citizen who can’t have simple stuff like chemical formula of certain elements or the contributions of important historical figuresat the back of mind would be the other extreme end which the system should avoid. A scientific genius apart from creativity and intelligence should have the basic facts in mind to aid quick thinking. A historian of future will have to memorize at least some facts in his school days to act as a foundation for his thinking. Therefore, an equal weightage to rote memory with the prevailing examination system and another open book exam towards the end of each year particularly in the age group 8 to 14 would be the best way forward. The system would have attained its purpose if it drills the basic facts of any subject into memory while also encouraging students to think on their own.

Channelizing Inquisitive Minds into Innovators

While primary education sets the tone, higher education is where serious thinkers develop into experts and the fruits of system are harvested. If schooling was to condition the mind to enquire, higher education is about reaping the benefits out of intellectual process. While schooling was about numbers i.e. piquing interest in ideas among the masses of kids, higher education should filter out the few million (or thousand) promising minds to take to next level. At present the education system merely filters the best memories and comprehension ability and not the well-rounded minds. Knowledge consumption should steadily transform into knowledge creation. An education system which neutralizes the risks of failure provides an outlet and rewards the advanced stages of thinking in each domain whether technology chemistry or biology will go a long way in nation building. A parallel to All India Ranking (AIR) named All India Research Excellence (AIRE) in various courses without disturbing the status quo will act as a rallying point for innovative thinkers to aim at.

The IITs and IIMs in India have come to symbolize prestige in India today which can be readily exploited to further research. The IITs select less than 1 per cent of the students who apply. Even with adjusting for limitations or flaws in criteria of selections, IITs still manage to attract a chunk of exceptional students. However its own ranking in world university ranking is not even in Top 100 due to a range of factors including factors like poor international student ratios. The selectivity of IITs has led to an unintended consequence that international students eligible for IIT also stand a chance in MIT, Stanford, etc. and choose the latter.⁶ A selectivity standard which IITs maintained ensures we have the talent pool to work on which is potentially world class but underutilized or not placed in the right ecosystem.

Infosys co-founder Narayan Murthy in his convocation address at MIT (ranked No.1 in QS list) remarked that western Universities have contributed heavily to transformation of the world. Compared to the western universities, Indian counterparts can’t boast of any “earth shaking” innovation.⁷ The IITs need to be evaluated on the basis of research output and not on the insane cut off and selectivity although retaining it is still a good idea. A parallel certification for IITians alone which incentivizes research and carries more prestige should be introduced without major changes in existing set-up. The Government of India should announce Indian Institute of Technology Research Ranking (IITRR) exclusively for students in IITs so that these exceptional minds during the course of study have something tangible to target which clearly should be radical and impactful. The students whether from IIT-Bombay or IIT-Kharagpur will for IITRR status be conducting research, creating pilot projects and submitting papers which will be evaluated on the criteria of impact. The students who are IITians at any point in their life even after successful pass out should be able to submit their work to IITRR committee and compete with their impactful research or pilot project. The IITRR committee comprising foremost scientists in various domains will evaluate these research papers and choose to deny or confirm the IITRR status to an individual which will rank above regular IIT degree thus creating an elite class above the regular elite IITians.

An IIT student who missed entry into higher ranked IIT Bombay or Madras and had to settle for IIT Jodhpur or IIT Mandi will then have an incentive to rank above regular IITian from IIT-B or IIT-M simply by researching and securing IITRR towering above regular degrees. The students of top ranked IIT-Bombay, IIT-Delhi and IIT-Madras will face the prospect of an IIT-Patna student beat them at any point in life by entering the IITRR and making their perceived higher status irrelevant. An individualistic healthy competition among the brightest mind will go a long way in IIT administration scrambling to ensure maximum IITRRs are from their Institute automatically incentivizing efficient and research focused ecosystem. By shifting the goal post of status symbol from standards of selection of students admitted to the quality of research the pass out students submitted, the system will change. Some IITs which had much higher ranking may fall off the charts while some IITs from Tier-II and Tier-III cities may gain. The open IITRR model which will last through lifetime will ensure IITians who gained professional work experience can also contribute to their domain later in life and convert their regular IIT-Bombay academic status (for example) to IITRR status. What if an IITian pass-out of 2010 today already has an idea which he is toying with for a decade but has limited incentive to convert it into tangible outcomes? A similar methodology in IIMs will not only unleash a limited creative destruction without shaking status quo considerably, but also pave way for Indian innovation. The optimal innovation ecosystem is one which is conducive to both spontaneous thoughts and informal exchanges which result in natural serendipity in a platform where ideation, design thinking and rapid prototyping are possible.

Converting Innovation into Economic Growth

It logically proceeds that a generation of independent thinkers and innovators would require an ecosystem to channelize the innovation into economic activities, scale the promising and sustainable ones and aid economic growth. Seven out of the eight biggest firms in the world comprising tech giants like Alphabet, Apple, Amazon, Facebook, Microsoft, Alibaba and Tencent are companies previously backed by Venture capital fund before public listing. The reason can be attributed to economics and opportunities. An Indian in a remote hinterland who may have a better algorithm to search the web than Google founders around 1999 would likely be unable to access the investor community like Larry Page and Sergey Brin did. Even in USA, the startup funding ecosystem is heavily biased to a few select groups where venture capital firms have disproportionate role in financing innovations by startups. The top 5% investors account for 50% of capital raised.

The corporate board membership of top firms in USA primarily comprises just three regions namely San Francisco Bay area, Greater New York and Greater Boston. While a third of VC firm board comprise of just two business schools – Harvard and Stanford, 3/4th of partners with at least one board seat attended IVY league university, Caltech, MIT or Stanford.⁸ Given the extreme concentration of influential investors, it may not seem like a tall order to get the ecosystem working towards fuelling Indian innovation. However, the quality of innovation and a series of such innovations would determine if a similar ecosystem sprouts in the country. Investments tend to follow the economic trajectory and an India with a bigger share of global economy may over time attract proportionate investments. The Indian ecosystem rich in path breaking innovation along with growing economic size will act as a magnet if India gets its innovators right.

A sum total of an education system delivering a large number of thinking minds from early childhood complimented by a small number of higher education institutes where a select few mature as experts and an ecosystem to harness the best ideas into viable economic model will design an innovation ecosystem that can compete in the knowledge economy. The age-old risk aversion and social pressures which favours the status quo in a conservative society like India will still have its sphere of limited influence. Innovators will continue to think of new ways to make life simpler and completely automated manufacturing which Elon Musk envisaged may not be distant dream. Whether or not India ushers in a fully automated era, technology will continue to evolve and make automation inevitable.

In 1930, John Maynard Keynes predicted that automation would actually free people from having to work at all. While it seems like a possibility in context of all physical work profiles and most mental repetitive works, some jobs requiring non-routine mental work may last till eternity. Predicting the political ramifications and division of resources in a world where many are not required to earn their living is difficult still. The spoils of the resources will go to the nation which has better technology to harness limited resources. Keynes further notes the wealth which British investments in Golden Hind yielded.⁹ Unlike the utopian world where nobody works and everyone live happily ever after, the competition for innovation is likely going to be as confrontational as the era of industrial revolution or the manufacturing age.

In the ancient Indian Mimamsa Shashtra, there is a concept called “Apurva” i.e. a principle which was not told before. Even though Mimamsa Shastra emphasized the Vedas heavily, it is only with Apurva that a discourse or writing becomes complete.¹⁰ The ancient Indian science which stood way ahead of its times did so only by original innovative thought to add value into every discourse in the form of Apurva. Designing a robust Indian innovation ecosystem is the only bet for India to reposition itself as Golden Hind amidst unpredictable course of technology and subsequent shift of economic power.

Endnotes

1. https://www.newsbytesapp.com/timeline/business/20372/96139/elon-musk-admits-humans-are-underrated [3]
2. https://www.news18.com/news/buzz/charting-a-new-path-to-make-indias-services-sector-self-reliant-2790217.html [4]
3. https://www.economist.com/business/2020/07/23/indian-it-consultancies-struggle-against-technological-obsolescence [5]
4. https://www.gq.com/story/automation-is-coming [6]
5. https://www.mhrd.gov.in/sites/upload_files/mhrd/files/NEP_Final_English_0.pdf [7] National Education Policy MHRD 2020
6. https://economictimes.indiatimes.com/industry/services/education/why-india-lags-as-a-study-destination/articleshow/70504221.cms?from=mdr [8]
7. https://www.dailyo.in/variety/iit-rankings-qs-world-university-mit-liberal-arts-colleges-iim-scientific-discoveries/story/1/18503.html [9]
8. https://www.aeaweb.org/articles?id=10.1257/jep.34.3.237 [10] Josh Lerner &Ramana Nanda 2020https://www.marketwatch.com/story/innovation-is-too-important-to-be-left-to-investors-alone-11597270660
9. http://www.econ.yale.edu/smith/econ116a/keynes1.pdf [11] Yale Keynes John Maynard Economic possibilities for our grandchildren.
10. https://swarajyamag.com/culture/if-you-think-that-the-shastras-prohibit-innovation-you-are-wrong [12]

(The paper is the author’s individual scholastic articulation. The author certifies that the article/paper is original in content, unpublished and it has not been submitted for publication/web upload elsewhere, and that the facts and figures quoted are duly referenced, as needed, and are believed to be correct). (The paper does not necessarily represent the organisational stance... More >>