Modi's Make in India is a gas balloon waiting to burst

To make our manufacturing tick, the PM has to give top priority to comprehensive education reforms for preparing a competent workforce.

 |  7-minute read |   17-05-2015
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After a high-decibel launch of his Make in India (MII) campaign in last September, Narendra Modi, true to his reputation as one of the most marketing savvy politicians, has been personally wooing investors in different parts of the world.

To make his ministers contribute to the campaign with specific plans, after the launch he summoned all his senior cabinet colleagues and secretaries to a workshop and gave them their individual homework. In the mean time an official website was launched for providing the global investors basic information on the identified 25 key sectors in which the government felt India had the potential to become a world leader.

Typical to Modi's style, before launching such a massive campaign the citizenry was hardly provided with any information about the background research done by his government to understand the rationale behind this initiative.

It is interesting to compare this with the British government's approach. They came up with a fairly comprehensive report in 2013 on "The Future of Manufacturing". The report can now greatly assist the government in drafting and implementing a sound action plan for reviving the manufacturing industry in the UK.

Looking at the MII initiative one might wonder - and certainly not without any basis - if the whole initiative was launched on the basis of Modi's mere gut-feel (what can be described using management jargon as HIPPO syndrome - Highest Paid Person's Opinion syndrome).

It should be a matter of grave concern if a major policy decision to transform the Indian manufacturing was taken without careful analysis of the existing reality. But, if this is happening at a time when globally the entire manufacturing sector is undergoing a tectonic shift, then a disaster is just waiting to happen.

The technology and management literature, popular press and the social media are abuzz with information on exponentially growing brain-melting innovations that are now continuously disrupting the economy and businesses in every possible area.

In their 2014 bestseller, The Second Machine Age, Massachusetts Institute of Technology's Erik Brynjolfsson and Andrew McAfee have captured quite comprehensively the nature of these innovations. The new technologies are radically transforming the way we produce, consume, educate and run organisations. Comparing the current wave of innovations with the disruptive innovations of the past centuries that triggered the industrial revolution, Brynjolfsson and McAfee explain the qualitative differences between the nature and intensity of these two waves.

The Industrial Revolution was triggered by our ability to provide physical power to machines using steam and electric power. The machines were thus able to assist humans to do things on a scale far beyond the imagination of the civilisation before those innovations.

But today, the machines have got mental power. They are able to perform quite intricate cognitive tasks, such as pattern recognition and complex communication that were earlier reserved exclusively for humans. For example, machines can now select an appropriate music after assessing a person's mood, replace a nurse to take care of patients in a hospital or win a most difficult quiz contests against the reining champions.

These things are happening because of sustained exponential improvement in computing, ability to generate extraordinarily large amounts of digitised information and recombinant innovation (when innovations in different areas get combined to generate massive number of new innovations creating new products and industries).

Driverless cars, 3D printing of human body parts, robots replacing a TV newsreader or voice recognition and synchronous translation in multiple languages, etc are good examples providing indication of the things that are to come. We are just at the beginning of this exciting process.

The technological innovations and the ensuing digitisation-of-everything are rendering the age-old differentiation between manufacturing and service quite meaningless. It is no longer production per se, but creating a product in digital form and developing capabilities to offer services and solutions to supplement the product (known as servitisation) have acquired critical importance. From drones to wearables (watch, goggles, shoes, etc), every product has to be now servitised. Getting a physical product in this new world will be considered as a very insignificant and non-value-adding part of the whole production process.

For example, using a 3D printer anyone can now print a product, like taking a printout from an ordinary printer. We are today surrounded by millions of digital products that are being continuously created by skilled digital workers.

These products can be consumed at anytime either as physical or soft products by just connecting an appropriate device to the network. In this networked - and often, factory-less - production system where everything is getting digitised, Modi government's attempt to become one of the top five manufacturing nations by investing in mega infrastructure projects is nothing but sheer madness.

There is no doubt that India needs to improve its infrastructure for improving the quality of life of its population majority of whom still lives in sub-human conditions.

But, this does not mean that people's lives will automatically improve if massive investments are made to create corridors connecting industrial clusters. There is a very high risk of creating huge non-productive assets and worse, these assets will be created often by grabbing poor farmers' land wherever and whenever such land is not offered voluntarily.

On its MII website, the government has declared its target of achieving 12-14 per cent annual growth in manufacturing in the medium term. To be able to achieve this in a digital economy, we need a very different - digitally capable - workforce.

There is no information given on the site or in any other document how the government is going to create such a workforce. India's demographic "advantage", which the government is bragging about on its website, actually consists of a huge army of fully or functionally illiterate people.

This population is of very little use for today's innovation-driven economy. If the situation doesn't improve immediately then very soon we may see jobs migrating to the developed or better educated nations from the Indian towns and cities.

If Modi wants to make our manufacturing tick and create 100 million additional jobs by 2022, by when digitisation of manufacturing and consumption will reach much deeper level, he has to give top priority to comprehensive education reforms for preparing a competent workforce.

Our organisations and skills are not keeping pace with the changing technologies. Millions of Indians are already left far behind the digital divide and the numbers are only going to grow if urgent measures are not taken. The increasing gap in the US between wage levels of workers with college education and simple high school pass outs can give us a good idea what to expect if the present situation is allowed to continue.

To meet the challenges head on, while improving the teaching-learning system in the existing schools, we need to experiment with new types of institutions and governance models. It seems Modi's HRD minister does not have any clue about her role in the present job nor does she understand what kind of human resources India needs to make her boss' MII dream come true. To be fair, many of her other colleagues are not doing a great job either.

Recently, the energy minister boastfully informed the media that NITI Aayog had set up a group to look at our energy security plan for next 100 years! The Aayog certainly deserves a bravery award for attempting to prepare such a long-term energy plan when for most ordinary mortals it is difficult to even visualise what is in store after a decade.

The information on the MII website under Oil & Gas and Renewable Energy section is an example of government's linear thinking which helps to make projections for another 100 years.

It is also quite telling that in a 24x7 world, which India itself contributed to a large extent to create through its booming BPO industry, is now asking potential investors to contact the MII office strictly between 9am to 4pm from Monday to Friday! We apparently want to leapfrog into the digital world by selling old wine in old bottles!

India's digital divide will soon push the country out of the knowledge-era manufacturing process. But we can still make our demographics work to our benefit, though saddled with a huge lowly skilled population, thanks to the mind-boggling rate of innovations of new, jaw-dropping technologies.

These technologies do provide an opportunity to quickly educate the left-behind population. As Brynjolfsson and McAfee mention, "Given the plethora of new technologies and techniques that are now being explored, it's a certainty that some of them-in fact, we think many of them - will be significant improvements over current approaches to teaching and learning".

Time is fast running out for the Modi government. It must launch a realistic reform programme for the manufacturing sector that has to be implemented by a digitally competent India. Twitting alone certainly cannot make Make in India fly.

Writer

Abhijit Bhattacharya Abhijit Bhattacharya @b_abhijit

Trying to create entrepreneurs capable of solving unknown problems of tomorrow using technologies that are yet to be invented.

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