Indian innovation and entrepreneurship suffer because they rely too much on the Silicon Valley model without the Valley’s infrastructure and ethos
N.R. Narayana Murthy, in his characteristic honesty, asked a pertinent question recently. Had it been a couple of decades ago, I would have been one of the graduating students listening to him at the Indian Institute of Science (IISc), my alma mater. To paraphrase him: “Why has there been no earth-shaking invention or technology from India over the last 60 years?”
This is made more intriguing by the fact that Indian students, in general, and those at the Indian Institutes of Technology and IISc, in particular, are as bright, if not brighter than, the students at any top university in the US. Murthy’s claim is that we have lost the “magic of the 60s” and we have to recreate it.
I dare say that I know something about the magic of the 1960s—although second-hand—as I wrote in the acknowledgements section of my recent book, Nimble. In that section, I acknowledged my due to my father-in-law, S. Nagarajan, one of the sharpest literary minds, not only in India, but also across the world. After completing his doctoral work in English in a record time of less than two years at Harvard University in 1961—the first Indian to do so—he boarded a Pan Am flight to India a few hours after his PhD defence.
To what was he returning? He came to what was then a not-so-famous university called Poona University. It did not at that time even have a department of English. He and a peon cleaned and dusted the office allocated to the new department, and carried in desks for the staff. Over almost two decades, he polished that department to make it one of the finest in the country. I asked him many years later why he returned to India when with his Harvard degree, the best universities across America would have welcomed him. His answer: “There was magic in the air in India then.”
Over time, however, even for the idealistic Nagarajan, the magic faded. For those of us who caught some glimpses of the magic as we worked on exciting new subjects like artificial intelligence in the late 1980s, it had become a dull glow. For today’s youth, the magic does not have even the sheen of patina-covered brass. So, while there has been a defensive reactionary furore over Murthy’s question, I personally feel that more than being just a critique, his question calls for a search: How can we recreate the magic of the 1960s?
Since Murthy mentioned invention, I will focus my discussion on innovation in India. Many persons reacted angrily to Murthy’s comment, arguing that he was not taking into account innovations such as the Tata Nano, the Mangalyaan space programme, or the numerous frugal innovations that Indian organizations have made.
Others indicated that Murthy was being too IT-centric, and was not taking into account the kind and variety of process innovation being achieved in several industries, for instance, the advances that Indian pharmaceutical companies have made in the generic drug-creation process. There is a definitional bias in Murthy’s question, which I will come to shortly. But that apart, the question calls for some serious soul-searching.
Too much Valley Kool-Aid
One of the solutions that Murthy proposed was this: “There must be free flow of ideas between our intellectuals and foreign scholars.” This is precisely where Murthy’s bias in defining innovation comes from—and this is precisely where the problem for Indian innovation lies.
The free flow of ideas between Indian faculty, researchers and inventors on the one side, and their counterparts in the West on the other is not a problematic issue really. The problem is that the flow of ideas is one-directional. Ideas from the West are absorbed and spouted in India as if they were divine truth, but there is absolutely no flow of ideas from Indian scholars to the West.
Companies—including Infosys—would rather follow Harvard professor Clayton Christensen’s model of disruptive innovation than Indian Institute of Management, Ahmedabad professor Anil Gupta’s “honeybee model of innovation” that may be better suited to India. Would the late C.K. Prahalad’s “bottom of the pyramid” model have been as successfully accepted if he had not been a Harvard-trained professor at the University of Michigan’s Ross School?
I studied physics at Bangalore University where I did two courses on astronomy, and then went to IISc. But I never was taught about Meghnad Saha, the brilliant physicist whose theory of thermal ionization set the course for later astrophysicists. Saha’s work is considered as seminal as Niels Bohr’s, but how many of us have heard of Saha, who struggled in an ill-equipped lab in Allahabad University in the 1930s?
As London Business School professor Nirmalya Kumarpoints out in his book Brand Breakout, research in marketing has for quite some time recognized that apart from brand recognition, there is a powerful influence that affects sales—something called country of origin (COO). It matters tremendously to the prospective buyer where the product has been manufactured because the buyer’s perception of the country of the product’s origin dictates whether the purchase will happen or not.
To illustrate, Kumar reports an interesting experiment: when a group of car company executives were asked to choose between buying a Volkswagen car made in Germany and buying the same Volkswagen car made in Mexico, they invariably preferred to buy the German-made car. With India’s image firmly established in the West as a poverty-stricken, rape-ravaged, corruption-cursed country, we can correctly guess how well ideas and products from Indian soil will be accepted in the West.
However, on the other hand, perhaps because of our colonial history, we Indians suffer from the same COO bias—we worship ideas from the West. I am not writing to push a nationalist sentiment—our preference for foreign ideas and products is a straightforward fact that experiments like Kumar’s COO experiment proves.
In fact, the understanding that innovation has to be disruptive and product-centric is in itself a West-created myopia that Indians have wholly consumed and reproduce. Such a definition does not entertain the thousands of micro innovations that keep a company like Toyota at the forefront of innovation, or consider the myriad process-improvements Indian companies make.
Indian entrepreneurship—and I use the word in its generic sense to include faculty members in university labs who struggle with research problems—suffers from a case of having drunk too much of what I call Valley Kool-Aid. From the businesses we seek to create through the methodologies we use to decide whether to fund them to the entrepreneurial mindsets that we cultivate—all of it is modelled around the Silicon Valley. Simply put, we are high on Valley Kool-Aid.
Unfortunately, we have no Valley
On the other hand, however, we do not provide the budding entrepreneur or innovator the ecosystem, the resources or the infrastructure that Silicon Valley provides its potential entrepreneurs. Here are some reasons why we have no Valley.
• The educational system
Our educational system is steeped in training implementers, not thinkers. Like the colonial education system that was established to create millions of lower-division and upper-division clerks for the colonial enterprise, every year Indian institutions churn out millions of engineers who know how to solve problems that are given to them—like the ones that appear in the mid-term and final in-class closed-book exams that are used to evaluate them.
But innovation is about finding problems that need to be solved. Our best-trained students do not know how to recognize problems; they do not know how to structure them. So as entrepreneurs, they do the best they can—they take a problem that has already been structured in the Valley and tweak the solution this way or that, maybe modifying it a bit to adapt to Indian circumstances. Essentially then, they replicate Valley businesses; they do not create new ones. They replicate Amazon and tweak the service a bit; they copy eBay, but focus on a niche; and so on.
Educational institutions either are too lazy to change, or they love the old archaic colonial system. In one institution, where I taught a course on entrepreneurship, I had to write a note to the administration to justify why I was making students present business plans to a group of CEOs instead of holding a final written examination. The dean proudly claimed he belonged to the old school that believed that examinations would test the student’s grasp of the matter. Examinations to judge entrepreneurial skills? Seriously? But that’s the way it is.
• A risk-averse ecosystem
Innovation thrives in a culture that is willing to take risks. For various reasons, however, in India there is a significant lack of appetite for risk. I can point to at least four huge killers of the risk-appetite in India: Indian families and culture, educational institutions, the funding environment and the legal system.
• Indian families and educational institutions
In a culture where parents are closely involved in their children’s education, and more often than not fund the education through their life earnings, there is naturally an expectation to choose the path of safest return on investment.
This safe position used to be a government job in newly independent India, but today it is a software job in a multinational company. Students who want to be entrepreneurs cite the likes of Elon Musk and Mark Zuckerberg as role models, but Musk and Zuckerberg took risks that are unimaginable in an Indian family: Zuckerberg left Harvard without a degree; Musk dropped out of the PhD programme in physics at Stanford in two days.
Can you imagine an Indian family agreeing to such a decision? So the Indian cultural system with its financial pressures creates risk-conservative individuals. And the educational system—with its lethargy to move from successful rote-and-repeat models to more risky models that foster innovative and creative minds—dampens whatever little risk-appetite is left in the student.
As a result, the wannabe entrepreneurs who graduate from Indian colleges and universities can only think of micro-tweaks of business models that have been successful in the Valley. How can we expect a Google, Facebook or a Teslafrom them? Thus Murthy’s comment that the successful Indian business model is based on re-engineered imitation, not innovation.
• The start-up funding environment
An important player that could have changed the risk-picture has also failed in India. I speak here of the venture capital industry that funds entrepreneurship. Mahesh Murthy of Seedfund, a Bengaluru-based early investor, wrote a very articulate piece, titled Is Venture Capital Killing India’s Startups?
As Murthy says, the problem begins with the US-centric 8+2 or 10+2 investment model, which expects that investors in a venture capital fund can expect a return on their funds in 8-10 years (with a grace of two years). This means that the fund has to find start-ups to fund, nurture them, help them grow and get them to an initial public offering (IPO) stage in this short time frame.
The history of successful Indian start-ups—Naukri.com,MakeMyTrip.com or Justdial.com—shows that it takes much longer to get to IPO status. Justdial took upwards of 16 years to come to IPO, for instance.
The venture capital fund, under pressure to satisfy its investors in a short time frame, tries to make the company do something else after a few years so that it can sell the start-up to someone else. Alternatively, it prematurely sells off the start-up, when a few more years would have helped it cross the tipping point and become something big. But the third method that venture capitalists (VCs) use is quite abhorrent ethically.
Murthy says it best: “And the third, even more nefariously, is the circle jerk. A bunch of funds of roughly the same size all look at their portfolios around year 5—see a bunch of unexitable businesses and then proceed to give each others’ companies an up-round (A gives a 3x up-round to B’s investee, B gives a 3x to C’s company, and C in turn returns the favour to A’s investee.)
“Net result? The LPs (limited partners, or investors) of A, B and C each think they’re doing very well indeed. But the start-ups and their founders are now left with new masters, a higher and even more indefensible valuation and disaster is merely postponed and potentially amplified for the poor folks being led by investors in this dance,” he adds.
And of course, finally, if none of these methods works, the venture capital fund uses the kill the start-up method, which simply closes down the company.
The government despite all its fanfare is useless as an investor—under government regulation, banks require loads of deterring documentation, and offer paltry loans. Worse, if an entrepreneur has started a company with his or her own funds, government policies ask the entrepreneur to show profits for the previous three years. Being an innovative start-up in this environment is a miracle. For the intrepid Indian entrepreneur, it’s hope in Pandora’s box.
• The Indian legal system
From a VC’s perspective, the legal system in India is a huge deterrent to funding start-ups. On paper, Indian laws are as welcoming and supportive of risk-taking funding as anywhere else in the world. But when it comes to enforcement, we all know the effectiveness of the Indian legal system. Suppose a VC takes a risk and invests in a start-up, and after a couple of years finds that the founders were unscrupulous—not only did they put their hands in the till, but they emptied it. What recourse does the VC have but the Indian courts? And we are all familiar with decades-long litigations and appeals. So, which venture capital fund would want to take such a risk with its investors’ money?
So what does this mean for Indian innovation? For India to emerge as a successful innovation hub and for Indian innovation to impact the world in the way that Narayana Murthy suggests, we need to look beyond the Silicon Valley model of innovation.
Does that mean the Valley model is wrong? No. At worst, it means the Valley model is inappropriate for India, and at best, it means that the Valley model is not sufficient. Let me be clear: This article is not a nationalist diatribe calling for a home-bred-only model on innovation. This article is about looking for ways to recreate the magic of the 1960s, and if that search means looking inward into India also for innovation models, we should not hesitate to do that.
Most importantly, I believe that the Indian entrepreneur needs freedom, which means, he or she must have the freedom to construct and choose from a set of entrepreneurial and innovation models—both from the West and India, and if necessary, from elsewhere. Restriction of business models to geographic regions or definitional paradigms or innovation ideologies is anathema to progress.
Like the Upanishads say, “Let good thoughts come to us from all sides.” That is true freedom—intellectually, entrepreneurially.
Baba Prasad, president and CEO of Vivékin Group, is a leading thinker in the area of management strategy and innovation.
Facebook launch dating service, takes on Tinder and Bumble
Under the new feature, users will be able to create a separate “dating” profile not visible to their network of friends, with potential matches recommended based on dating preferences, points in common and mutual acquaintances.
Facebook chief Mark Zuckerberg on Tuesday announced the world’s largest social network will soon include a new dating feature — while vowing to make privacy protection its top priority in the wake of the Cambridge Analytica scandal.
Zuckerberg unveiled the plans as he addressed Facebook’s annual F8 developers conference in San Jose, California — emphasizing that the focus would be on helping people find long-term partners.
“This is going to be for building real, long-term relationships, not just hookups,” Zuckerberg said in presenting the new feature, noting that one in three marriages in the United States start online — and that some 200 million Facebook users identify as being single.
Under the new feature, users will be able to create a separate “dating” profile not visible to their network of friends, with potential matches recommended based on dating preferences, points in common and mutual acquaintances.
It will be free of charge, in line with Facebook’s core offering. The announcement sent shares in the online dating giant Match.com tumbling, finishing the formal trading day down 22 percent.
The 33-year-old CEO also said the dating offer was built from the ground up with privacy and safety in mind, as he underscored the firm’s commitment to boosting privacy protections.
Facebook’s closely-watched developer conference comes as the giant faces intense global scrutiny over the mass harvesting of personal data by Cambridge Analytica, a British political consultancy that worked for Donald Trump’s 2016 election campaign.
Facebook has admitted up to 87 million users may have had their data hijacked in the scandal, which saw Zuckerberg grilled at length by the US Congress last month. “We need to make sure that never happens again,” Zuckerberg told the audience, lightening the talk by sharing that friends made on online streaming video watch party at the social network of his hours testifying before Congress.
In a related move, Facebook announced an upcoming feature called “Clear History” that will allow users to see which apps and websites send the network information, delete the data from their account, and prevent Facebook from storing it.
The social network has already moved to limit the amount of data it shares with third-party applications and plans further steps to prevent a repeat of the Cambridge Analytica debacle, Zuckerberg said.
Facebook is also reviewing applications overall as well as auditing those that accessed large amounts of data to make sure access isn’t abused, he said.
“Security isn’t a problem than you ever fully solve,” Zuckerberg said, outlining the slew of efforts by Facebook to battle election interference, misinformation, spam among other challenges.
“This is an arms race; we are going to be working to stay ahead of our adversaries forever.”
Zuckerberg’s blend of humor, humility, confidence and determination in a keynote presentation seemed to resonate with the gathering of developers, who credited Facebook with taking responsibility for problems and working on fixing them.
“I respect that they came out with it and didn’t do a cover-up,” said Malik Gillins of Movez, a startup behind an app crafted to streamline social event planning.
CCS Insight analyst Geoff Blaber was among analysts who felt Zuckerberg struck a successful balance between addressing the data privacy scandal and keeping outside developers focused on building apps to enhance the social network.
“Defiant message from Zuckerberg at #F8,” Blaber wrote on Twitter. “Feels like the first time they’ve been on the front foot in this saga.”
Facebook separately announced that its popular Messenger app would soon be able to translate missives in real time, deploying artificial intelligence to enable text conversations between people using different languages.
The feature will launch in the United States with English and Spanish translations of conversations in the Marketplace section of Facebook, and will be extended to general Messenger use in coming weeks, the service said in a blog post.
Facebook joins internet giants Amazon, Google and Microsoft in offering artificial-intelligence based translation features — most prominently Google’s Pixel ear buds which promise real-time translation across dozens of languages.
Plans were also revealed to simplify the Messenger app, which critics contend has gotten clunky, and add group voice and video calls to Facebook’s other messaging service WhatsApp.
The slew of announcements at the developer-centric “F8” conference also included the arrival of a stand-alone Oculus Go headset to widen support for virtual reality by supporting social experiences such as watch parties.
Instagram will allow users share info from apps like Spotify
In 2012, Facebook announced Open Graph, a feature that automatically posted songs you’re listening to, stories you’re reading and other activity, directly to your Facebook feed.
Instagram is getting a new feature that’s straight out of Facebook’s past.
The photo-sharing app, owned by Facebook Inc., will let people post information from apps directly to their Instagram Stories, which last for 24 hours. For example, while listening to a song on Spotify, someone would be able to tell their Instagram friends what title or album it is. People will also be able to directly share action shots from their GoPro apps.
In 2012, Facebook announced Open Graph, a feature that automatically posted songs you’re listening to, stories you’re reading and other activity, directly to your Facebook feed. Users didn’t love the forced transparency, and Facebook stopped pushing it a couple of years later. Now the company is taking a different tack with one crucial difference — letting users pick when they post, instead of having it happen automatically.
Historically, Instagram hasn’t let users share much from the outside world. Hyperlinks don’t even work, except in profiles. That was a conscious choice from the company’s founders, who wanted to make sure that everything posted on the app was a reflection of what a user created, not what they curated from others. It helped Instagram avoid some of Facebook’s problems, like viral fake news.
Stories is a part of the app where Instagram is, increasingly and intentionally, breaking its own rules. Within Stories, Instagram already allows sharing of news stories, for example. And now, with direct-sharing from applications, people won’t have to screenshot their Spotify playlists in order to post them.
Chief Executive Officer Mark Zuckerberg says that Stories — a feature invented by Facebook’s smaller competitor, Snap — will be an increasingly important part of the company’s future. So far, Stories are the most popular on Instagram and WhatsApp, Facebook’s chat app.
Facebook Messenger can do real-time translation now
Facebook Messenger already has an artificial intelligence capability called “M” that enhances the service, but applying it to translations is something new.
Facebook on Tuesday gave its popular Messenger app the ability to translate missives in real time, deploying artificial intelligence to enable text conversations between people using different languages.
Messenger has become a tool for businesses to connect with customers, and the ability to converse with customers in a variety of languages could help bump up advertising.
“The ability to speak with anyone without any language barrier is something we are really excited about,” Messenger chief David Marcus said as Facebook kicked off its annual developers conference here.
Buyers and sellers in Marketplace at Messenger will be able to communicate across languages, according to Marcus. The feature will launch with English and Spanish translations of Marketplace conversations in the US and will be extended to general Messenger use in coming weeks, the service said in a blog post.
Additional languages and countries are to be gradually added. Messenger already has an artificial intelligence capability called “M” that enhances the service, but applying it to translations is something new.
Other companies also are using artificial intelligence to break language barriers. Amazon employs it in a translation feature in its leading platform for hosting content or services in the internet cloud, while Microsoft uses it for translations in its Skype messaging service.
Google last year hit the market with Pixel ear buds capable of real-time translation of conversations in dozens of languages. Pixel Buds were quickly branded an internet-Age version of the alien “Babel Fish” depicted in famed science fiction work “The Hitchhiker’s Guide to the Galaxy.”
In the literature, inserting a Babel Fish in an ear enabled a person to understand anything spoken in any language. Pixel Buds work wirelessly with second-generation Pixel smartphones to handle real-time translations. Meanwhile, Netherlands-based startup Travis was at the Consumer Electronics Show gadget extravaganza early this year with a small device capable of translating conversations between people speaking different languages in real time.
“Technology connects us as far as we are accessible to each other, but those true connections aren’t going to happen until we all understand and are understood by each other,” US Travis representative Robb Selander told AFP while demonstrating the device, which taps into online computing power.
Messenger boasts some 1.3 billion monthly users, who engage in about eight billion conversations a month.The experience is further enhanced by some 300,000 apps developed for the service. “The platform is really thriving now,” Marcus said.
A Messenger feature also unveiled at the developers conference allows companies to send “bubbles” that can be clicked on to trigger augmented reality experiences through smartphone cameras. For example, Messenger users could check out a version of the newest Nike sneaker; see what a Kia might look like outside their home; or virtually try on Sephora makeup.
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