An early bird misses the worm

In response to a feature on startups in The Times of India, Mar. 15, 2016: “An early bird misses the worm,” “Future is in the ‘internet of things,’” “No dearth of funds for a bright saleable idea,” “A startup strategy for traditional industries.”

“Kerala has a history of missing buses. We have this legacy of innovating things first and then losing that advantage. Perhaps the first decentralized manufacturing plant in the world was Keltron. We missed that bus, followed by the IT and biotechology buses. And now, its Startups,” said Shilen Sagunan [2], CEO of SS Consulting.

Kerala legacy is not “innovating,” but chasing novelties — a natural outcome since a significant portion of the people of Kerala are employed all over India and around the world. Constant travel to Kerala and from Kerala facilitates awareness, but not expert knowledge, of current trends. And Kerala government starts programs without sufficient understanding of the key “success factors” and “misses the buses.”

For example, the Kerala IT Mission activities are mainly construction projects with impressive labels “Technopark,” “Infopark,” “SmartCity,” etc. In reality, they are merely centralized business parks with centralized facilities, network connectivity and transportation. They provided some employment when IT adoption was in full swing. But there was hardly any attention or investment in the underlying technologies, such as semiconductor, software, networking, fabrication, assembling, packaging, or testing, to develop an ICT (information and communication technologies) industrial base. In addition, there were no changes in the education system, beyond cosmetic, leaving the state deficit in cutting-edge IT expertise.

The current craze is startups, trying to mimic the Silicon Valley, without understanding the critical success factors. Silicon Valley has world class education and research institutions conducting cutting edge research. In addition, Silicon Valley is immersed in “free enterprise” culture of the USA and “frontier mind-set” of the “wild west,” and imbued with pioneering spirit from historical developments.

Foolishness of the Kerala government technology policies may be inferred from the actions of KSIDC (Kerala State Industrial Development Corporation). KSIDC is offering seed funding of Rs 25 lakhs ($37k) to 30-odd startups (“No dearth of funds for a bright saleable idea“) and expecting technology revolution. What else can you expect from a KSIDC managed by bureaucrats who have had government jobs all their careers, and do not have any direct knowledge how free market economy operates.

Prime Minister Modi has made “Startup” an all-purpose catch-phrase (“A startup strategy for traditional industries.”) The startup paradigm developed in the Silicon Valley due to deficiencies in the banking system to provide financing for productive economic activities, especially high risk technology ventures. Kerala government wants to popularize ‘startup’ idea for traditional industries. The potential for fast-growth, followed by exit (acquisition or becoming a public listed company) is what is driving the startup model. Traditional industries do not have such potential. What is needed for traditional industries is a functioning banking system that supports productive economic activities, instead of concentrating on real estate bubbles.

“Kerala should focus more on high-end technologies like IoT. This will give a first mover advantage and that will attract more people into new technologies. Fortunately, Kerala has a good polity and have lot of other things that could support entrepreneurship. What is lacking is only focus. Perhaps the government could setup a center for excellence for IoT, and that will attract more serious outlook from the government of India,” said Purushothaman K, Senior Director at NASSCOM (” Future is in the ‘internet of things.'”)

IoT is being promoted in the USA as the “next big thing,” since the social media bubble has reached its full potential. The critical reason why IoT cannot achieve its potential at this stage is deficiencies in the current network infrastructure (cyber security and access are the main ones.)

Maybe the Kerala government will be tempted to chase after “first mover advantage” with IoT, or maybe not. Kerala government may have learned the lessons from chasing after so many trends for “first mover advantage” without sufficient preparation or understanding.

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Safe cycling: Who dares may die

In response to a report in The Times of India, “Safe cycling: Who dares may die,” Mar. 4, 2016.

Your report brings out both encouraging and discouraging information about cycling in Kochi.

Your report says, “Cycling as an exercise, for recreation or as the preferred mode of transport is going through a revival.” But, “motorists tend to have some sort of prejudice against cyclists, especially during peak hours, as we are moving at a slower pace. I have been threatened many times and motorists have tried to bump into me on purpose or blown their horns incessantly,” says Hariprashant M. G.

Another disheartening statistics is, “From the 13,167 accident cases involving two-wheelers reported in the state last year, nearly 20.77% of them had cyclists on the receiving end.”

As pointed out in an earlier post, behavior of Kochi (and Kerala) drivers leave a lot to be desired.

There should be a comprehensive plan to make Kochi bicycle-friendly. Copying some of the things they have done in bicycle-friendly Amsterdam would be a good idea.

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‘Make in India’ tagline is better

In response to an op-ed in The Times of India, “Create in India may be a better bet: What will the fate of Make in India be once robots take over manufacturing?” (Mar. 12, 2016) recommending to change the tagline “Make in India” to “Create in India.”

I don’t think changing the tagline is a good idea. In an economy there are two types of activities: creative (productive) and distributive: “The Financialization of the Economy.” Economic problems in the US are mainly due to excessive share of distributive (financial) activities at the expense of productive activities.

Economists using mathematical and linguistic gymnastics created mass confusion (“Resource page: Financialization and economy“) and succeeded in decimating manufacturing base in the USA and in the U.K. (“Do Trade Agreements Kill Jobs?“.) India should avoid such mistakes and learn from the successes of Japan, China and South Korea.

Until the “Startrek Replicator” [2] technology is invented, manufacturing need to be a critical part of any economy. With current economic institutions and financial systems, activities in the “creative economy” is not a substitute for manufacturing.

Make in India” implies making real goods, hence describes economic priorities better than “Create in India.” This not to discourage creativity, but emphasize the need for a strong manufacturing base.

To be viable, every modern economy requires manufacturing with and without robots.

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Corruption, over-staffing and political interference

The Times of India reports, “Ventilator economics,” “Behind the rut: ‘Corruption, over-staffing and interference’” (Mar. 3, 2016) are informative and educational.

The report says, Kerala State Beverages Corporation Ltd., the government agency selling alcohol to people, is the most profit-generating government company in the state. It made Rs. 220.59 crore ($33m) net gain in FY 15 nearly one third of the total profit of SLPEs (state-level public sector enterprises.) Kerala Financial Corporation is the third most profit-generating enterprise of the government, with a financial gain of Rs. 68.81 crore ($10.3m), which is roughly one tenth of the total profit of state public companies.”

The report also points out the reasons for the pathetic state of government-run enterprises. “Corruption, over-staffing, and growing interference of political parties are the reasons behind growing losses of public sector companies.”

It seems the Kerala government industrial policy appears to be operate the government enterprises to promote inefficiency, financial loss and patronage. And provide overpriced alcohol to get people drunk, so that they don’t notice the mismanagement, misdeeds and ineptitude [2, 3, 4] of the Kerala government.

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For 15 yrs, Kochi corp has been taking you for an audit ride

The Times of India report, “For 15 yrs, corp has been taking you for an audit ride,” (Mar. 3, 2016) is astounding!

The report says, “Showing an absolute lack of transparency or accountability for public money, the civic body (Kochi Corporation) has failed to submit proper revenue and expenditure statements for audit since 2000.”

Curiously, Kochi [2, 3, 4] corporation “authorities” gives one of the reasons as “official apathy.” The report adds, “Corporation authorities blamed the delay on technical reasons and official apathy.”

Further, an official of the Kochi audit committee said, ” We used to report the Corp.’s failure to submit financial statements to the local fund account committee, headed by MLAs [2], and to the state government. It is up to the committee and the government to take action against the local body.”

Lack of financial reporting and audit for 15 years means Kochi Corporation has, in effect, no governance. Based on the report:

  • Kochi Corporation has no financial controls to evaluate organization performance,
  • Fund Account Committee members, including the MLAs, are in dereliction of duty, and
  • Kerala government has no oversight capability.

The troubling fact is that this is unlikely to be an isolated case. The question to ask is,

How many other Kerala government entities (corporations, municipalities, panchayats, companies) are also failing to provide regular financial reporting and audits?

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Rs741-crore ($110m) German loan deal to be signed by mid-march

In reponse to a report in The Times of India, “Rs741-crore ($110m) German loan deal to be signed by mid-march,” [2, 3, 4] Mar. 8, 2016.

The report about the German loan for the water transport [2, 3, 4] illustrates the problem with development projects in Kerala.

There is lot attention and effort made for getting the initial finance. But hardly any attention to operations and follow-on issues, leading to stranded investment and financial loss. For example,

  • How operating expenses will be covered? Can the service be operated profitably?
  • Who will perform maintenance, repair and overhaul?
  • Who will provide the necessary training for the new systems?
  • Running the boats efficiently will require many support systems. Anyone paying attention about them?
  • There is already an organization operating ferry services. Why create a new entity because some new boats are being purchases?

If new projects are incorporated into existing organizations — instead of ignoring them until the next crisis — it will help provide for ongoing organization renewal, avoiding organization decline and failure.

“Rather than a transportation project, it will be one which would redefine infrastructure facilities in the islands and and places surrounding the city. The development would enhance the standard of life and livelihood facilities of the people in areas which come under the project. The better connectivity to the city will also improve the lives of residents in these areas,” the official said.

How can running some boats bring about all these benefits? If, indeed, it is so revolutionary why was it not done before?

Based on the report, the Integrated Water Transport is another half-baked plan to generate publicly, without planning for necessary follow-on steps. (The report on the same page, “New master plan proposed to save Brahmapuram” [2, 3, 4, 5] provides an example of a half-baked waste treatment plant started with lot of fanfare without sufficient planning, and not providing any of the promised benefits after completion. The plight of the fertilizer factory, FACT, and Smart City [2, 3, 4, 5] are two other examples.)

In the Silicon Valley, getting venture funding is considered a success, and over 90% of the venture-funded companies proceed on to failure. Kerala government considers getting a loan for a project as an achievement. Due to lack of comprehensive planning and effective execution most of the projects fail to take off, fail to deliver promised benefits or become zombies.

For things to actually improve, Kerala government and its agencies need to stop publicity-generating, finance-focused mode of operation, adopt comprehensive project planning methods, and develop operation expertise and capabilities.

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A bitter pill for sick fertilizer giant

In response to a report in The Times of India, “A bitter pill for sick fertilizer giant,” Mar. 6, 2016.

The handling of the Fertilizer and Chemicals Travancore Ltd. (FACT) illustrates the Kerala government’s lack of basic understanding how finance need to be used for an industrial enterprise.

The whole hoopla was focused on getting a loan to keep the operations going. With the current loan, the can has been kicked down the road. There was not even a whiff of discussion about the reasons why things reached such a pathetic state.

“The loan is not a viable option, but we didn’t have an alternative. Currently, the company doesn’t have even the working capital and hence this loan is of critical help,” said K Radhakrishan, general secretary, FACT Officers’ Federation.

The only way an industrial enterprise can operate is if it can generate a surplus from its operations after covering its expenses and costs. Depending on government patronage, by virtue of being a government owned enterprise, can only go so far — especially when the Kerala government itself is running chronic budget deficits of Greek proportions.

All the discussions and news have centered on the loan, as if finances will solve the management and operating deficiencies. There has been no discussion about underlying causes and solutions to the problems to run the factory efficiently. Clearly, the operating expenses for FACT are greater than its revenue. So the drama will be repeated again sometime in the future.

The related report, “Cabinet clearance for FACT to sell 170 acres to BPCL,” [2] points to the bureaucratic fiefdom run by the Kerala government. Why should the state government cabinet of ministers have to make any operating decision about FACT? It demonstrates the utter lack of autonomy for FACT management.

If Kerala government enterprises are to be viable and successful they need autonomy, and necessary management skills and operations expertise. Without these minimum requirements, all the news-making about loans and finances are a smoke screen to cover-up widespread ineptitude in the Kerala government, its enterprises and agencies.

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9 KMRL staff ‘sacked’ by collector

In response to a report in The Times of India, “9 KMRL staff ‘sacked’ by collector,” Mar. 2, 2016.

The report says, “Nine officials deployed by KMRL (Kochi Metro Rail Ltd.) were working at the land acquisition office in collectorate. Of late, they have been leaking information and even title deeds signed between private parties and revenue department for the project. They gave documents to outsiders, creating headache for authorities.”

The actions by the Ernakulam [2, 3, 4, 5] district collector, M G Rajamanickam, appears autocratic. The KMRL staff duty is to the public, and not avoid “creating headache for authorities.”

The land acquisition documents are public property because it relates to land to be used for public purposes. They may be kept confidential while negotiations regarding the acquisitions are in progress. But once final decisions are made, people have a right to know the details of the acquisitions made on their behalf.

In colonial times the collector may have been the final administrative decision maker for the district. We are now in the 21st century democratic India, and colonial norms do not apply. The land is acquired for use by the KMRL. So the KMRL staff is in a better position to make decisions about issues related to the land.

Even if there are disagreements, the democratic approach to resolving differences is through dialogue, discussions and negotiations — and not “my way or the highway” approach, which seems to be the district collector’s approach.

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Training the teachers

In response to a feature in The Times of India, Feb. 24, 2016: “Training the teachers,” “Emphasis on teacher quality need of the hour.”

You have identified many critical problems with education in Kerala in your feature. Clearly, “lack of quality of teachers is the main problem affecting higher education in Kerala.”

While it is a valid issue, there is a bigger problem with education in Kerala. Kerala education is ‘teaching-focused.’ Instead, education need to become ‘learning-oriented.’

With today’s exploding information and knowledge, no teacher can possibly keep up with all relevant information in a field, no matter how talented she or he may be. So the only solution is to change the system to be learning oriented.

In addition, teaching focused system in Kerala destroys independent thinking and promotes conformity, limiting the quality of workforce available in the state.

Since we are way past the Gurukula [2, 3] system of education, better teacher remuneration is critical for improving teacher quality. Structural changes in the current education system are necessary for achieving this goal. Both state and central governments must give up control of education beyond minimum necessary administrative support.

There are two primary purposes for education:

  1. Acquiring necessary skills and knowledge required to be active in a modern economy, and
  2. Attain intellectual pleasure by gaining knowledge and by creating knowledge through research and inventions.

The education system need to be structured clearly to match these two goals, but without limiting student’s ability to choose from either streams. There should be no restrictions on students from learning subjects of their choice. Another important change required is facilities for “lifelong learning” [2, 3, 4, 5] It is foolish to expect knowledge gained in schools and colleges will be sufficient for a job or career when there is so much new information, technologies and changes created everyday.

Regional and national skilled workforce needs should set the priorities for the education system. Implementing such a system will avoid the current situation in which graduates do not have skills or knowledge needed for jobs.

In addition, partnerships between industry and education institutions need to be established to implement continuous feedback systems for defining education goals. Such partnerships can be tremendously helpful for creating course-ware, training, skill development materials and methodologies. Teachers should be encouraged to take initiative in these partnerships, and provision must be made for teacher compensation — partially addressing the teacher remuneration issue.

Fortunately, availability of technology makes “learning oriented” education feasible on a large scale, thanks to the internet.

I developed a learning methodology, “Learning by Blogging (LBB),” used in the blogs at: blogs.strategygroup.net. Reading information has a retention rate of less than 20%. With increasing use of internet and other digital technologies, average attention span is now eight seconds. By blogging, you are messing with the content and analyzing it from different perspectives, enhancing retention and comprehension by making it an active learning process, increasing comprehension over 75%.

The LBB system can be modified and adapted for classroom, training, community, business and other learning needs.

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Efforts on to standardize Ayurveda

In response to a feature in The Times of India: “Efforts on to standardize ayurveda,” “Medicinal plant cultivation: Change in approach needed,” “Not enough facilities to ensure quality of medicines,” Feb. 22, 2016.

Achieving full potential of Ayurveda [2, 3, 4] medicines require a much broader approach than what is currently in use. Trying to fit Ayurveda into the existing framework used by modern medicine is less than optimum. The organizing principle for modern medicine is “treatment of diseases.” With gross simplification, modern medical model for pharmacology consists of:

  • diagnosing, identifying symptoms and causes of diseases,
  • identifying, discovering substances and compounds that can alleviate the symptoms, and
  • treatments for symptomatic cure.

In contrast, the organizing principle in Ayurveda is “normal health.” And the fundamental idea is to assist the body to return to normal health using naturally occurring substances. Hence, the benefits achievable using Ayurveda system with a disease-oriented model, will be less than its full potential. Better results are possible with a personalized, helath-oriented framework.

In modern pharmacology, once the active ingredients are identified and dosages determined, standardization and quality assurance are straight forward.

But dependence on natural substances by Ayurveda inherently makes standardization and quality assurance methods used in modern pharmacology a misfit, due to natural variations in the substances used. A personalized health/wellness centered framework is better suited for Ayurveda. Developing such a health-centered framework is necessary to help achieve the full potential for Ayurveda.

Over dependence on traditions may not always by helpful. In addition, incorporating current medical knowledge, biochemistry, theories of human physiology and clinical practices can help enhance Ayurveda’s effectiveness.

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