India Forward; India Ready

India, Wednesday, April 29, 2020. It is Day 15 of the 19-day second tranche of India’s COVID-19 lockdown. The national lockdown has been a one-size-fits-all solution. Such a lockdown was the appropriate response to a nationally significant threat. Moreover, India has not been the only country that locked down its people in their homes. India has not been the only country that shut down its economy in order to save the people. Everyone was part of the herd.

People need to work with one another to create economic value. People need to interact with one another to exchange economic value. But when people work with one another physically and interact with one another physically, they could spread SARS-CoV-2. They could catch the virus. So, people had to be kept away physically from one another. Hence, the physical economy was shut down.

The physical economy

The physical economy was shut down so that people could be kept away from one another physically. What this shows is that the economy is the principal reason for people to interact physically with other people. The economy is the principal reason for people to work physically along with other people.

It could be direct. Consider the factory shop floor. It could be semi-direct. Consider the restaurant. It could be indirect. Consider the commuting and the commuter in a metropolitan train.

Dimming of the digital

The proliferation of digital means could have served both people and the economy immensely and infinitely. The two purposes are (1) working with one another and (2) interacting with one another. But the digital means are not a substitute for the physical means. There has been too much hype and hope.

The fact is digital has dazzle without traction and delight without weight. That is why the economies of the world are in serious decline and despair. The economies of the world will not be in serious disrepair if digital could bring all manner of people together. Digital is not a substitute for physical. Digital is good for zero-mass and zero-volume transfers of data, images, voice and videos.

Digital offers a clue

Physical has weaknesses. That is why we shut the economy down. Digital has weaknesses. That is why the global economy is in disrepair and despair.

Physical has unrivalled and unprecedented strengths. It works with non-zero mass and volume. It is heavy weight and heavy duty. Digital has unrivalled and unprecedented strengths. It works with zero mass and zero volume.

Can we bring the strengths together? Can we build adaptive and contextually apt systems for business and government? Yes, is the answer.

Atomise, localise, robotise

Towards this, I had made a three-part proposition. There are three mantras. India will atomise. India will localise. India will robotise.

Atomisation requires the creation of small value-creation and value-delivery teams. Small, self-propelled businesses and work teams will enable people to sense their environment better. Everyone has more skin in the game, therefore. Their engagement with their tasks, the risks and the opportunities is organic and dynamic.

Atomisation is similar to miniaturisation. Atomisation of businesses and organisations will improve effectiveness, response to opportunities, and quicker response to viruses, downsides and threats. It is easier to incentivise and evaluate the performance of atomised teams. It is easier to protect atomised teams from the virus.

Localisation is the result of atomisation. It is possible for us to site and place small, full-fledged, fully-empowered business and governance teams in India’s 700 and more districts. Governance reach and business reach will rise when atomised small teams work with the local citizenry and customers.

Where atomisation and localisation are not possible, there is a need for massive operations. Robotisation would step in. The massive manufacturing tasks in the big factories will be done by robots. The massed-up, information-processing tasks in the big technology clusters will be done by intelligent remote-controlled devices. Manufacturing, inventory handling in warehouses and information-processing will be aided by internet-enabled devices.

Robotics is interdisciplinary. It combines programmed automation with programmable automation. It combines programmable automation with responsive automation. It can handle mass with ease, flexibility and repetitive accuracy.

India has little baggage

India is ready. India’s society is ready. India’s economy is ready. We do not have to go back to the past that we left behind when the lockdown began. We can go forward. We can lift the lockdown. We can open up.

We can create livelihoods that did not exist in the past. We will create new incomes. We will build new hospitals. We will build new manufacturing sites, service modules and customer-service systems that are virus-unfriendly and virus-repellent.

It is wholly possible for India to leave behind a whole lot of its past social and economic structures and move on to a new plane. India should seek to be a healthier, abler and richer society. India will be a healthier, abler and richer society.

Towards this, India’s political, administrative and business leaders will harness engineering, microeconomics and governance to forge and shape a new future that is compatible with what we are and what we have. The truth is we will forge and shape a new future from what we do not have: a big baggage from the past. We have no baggage. We have no legacy to hold us back.

Means and purpose

Students that do not know much about oxygen satisfy themselves and their teachers by asserting that oxygen is a colourless, tasteless and odourless gas. Stating the obvious is not sufficient. There is much more to oxygen.

Similarly, economists and business advisers that are not familiar with the totality of the economy have raised a loud alarm. The airlines industry would be grounded. Hotels will remain empty. Taxi aggregators would be dismembered. Here again, stating the obvious is not sufficient. There is much more to the economy than these.

Moreover, the people of India have no obligation to keep the airlines, the hotels and the taxi aggregators in business. The airlines, the hotels and the taxi aggregators are the means to serve a bigger purpose. The airlines, the hotels and the taxi aggregators are not the purpose.

India’s value core

Most of India’s rural, semi-rural, semi-urban and urban households earn their livelihoods in small circles that surround their homes. They accomplish big things from within circles of diameters of less than 4 kilometres. They did not need the lockdown. They would have managed their activities without the lockdown.

Empirical data on livelihoods and incomes show that most of them are self-employed. They work all by themselves. They work in small teams of twos, threes and fours. The grocery or kirana shops are examples. They accomplish big things by forming small teams and working with flexible operating systems. They have low fixed costs. 

In a blunt and unpolished way I could say that industrialisation has not touched them. I could say that technology too has not touched them. And, therefore we are fortunate. There is so much to do.

The five value components

CreaSakti has developed a simple five-component model pertinent to economic value.

Value seeding: this is the first stage of the value chain. It is a prerequisite, but by itself does not produce a marketable value or surplus. It includes, for example, setting up a nursery before replanting in the bigger field. It includes the periodic preparation prior to manufacturing inputs for the primary sector. This is the beginning of the operating cycle.

Value creation: this is the second stage of the value chain. Value is created by the owners and by the self-employed. It involves own capital, own effort and own supervision. It is wholly from within.

Value addition: this is the third stage of the value chain. External resources enter the process to sustain and amplify the marketable value of the output of the enterprise. First, value is added through the application of human labour from outside. Consider the millions of migrant workers. They belong to the value addition stage of the value chain. India would be poorer without the migrant workers. Second, value is added through the consumption of materials to generate goods and services of marketable value.

Value harvesting: this is the fourth stage of the value chain. The owners, the entrepreneurs and the self-employed extract the valuable reward. The goods and services of marketable value are ready to reach and/or serve the consumers in both the hinterland and in the urban locales.

Value distribution: this is the fifth and final stage of the value chain. The owners, the entrepreneurs and the self-employed realise the marketable value of their efforts through sale and through provision of services. This is the end of the operating cycle. Cash inflows from the marketed output are distributed to the owners, service providers, lending banks and government. Any remainder is used to fund the value seeding. A new cycle begins.  

Almost all – but not all – of the five components of the value chain of households occur within small circles. These households do not travel far to complete the operating and economic cycles. They complete their operating and economic cycles within circles of diameter, say, less than 8 kilometres.

An explosion of local hubs

Promoting and protecting households and their livelihoods within small circles and squares is more effective and easier than protecting them in an entire district. Atomisation enables better provision of resources. Atomisation enables better reach of governance and public policy instruments.

India needs to bid goodbye to massive and unmanageable systems. Atomisation enables better supervision. Small squares are easy on the mind. Big areas boggle the mind. Small squares can be better protected from any virus. It is difficult to protect a big town from a virus.

India’s districts flourish when a significant part of the value seeding, value creation and value addition occur within tight value networks sited in close geographic proximity. A very large geographic part of India is involved in high-value localised economic activities. The village pradhans and the village panchayats know how to support and manage these value chains.

India will have to build smaller economic systems across a range of value chains and output. India should soon begin to take resources back to the small locales. Building self-reliant and self-sufficient local economies will enable India to shrug off the temporary decline forced by SARS-CoV-2.  

Flawed focus

We have not paid attention to how 1.09 billion Indians earn their livelihoods. They are involved in value seeding, value creation and value addition in tight value networks sited in close geographic proximity to their homes. We have unwittingly shut these down while we were overwhelmed by SARS-CoV-2.

The media, the colleges, the universities and the big companies did not do enough to open our minds to how India earns its livelihood. We have been inadvertently devoting massive resources to massed-up and super-sized systems. And then we took out human capital out of the small and highly valuable local value chains.

A flawed logic has been behind that massing up. We thought we would lower fixed costs because of the bigger scale. The irony is that these massed-up facilities are now wholly virus-friendly. The fixed costs will rise further.

It is unsurprising that Tata Consultancy Services (TCS) – India’s biggest multinational information technology service company – has made a declaration. At least 75 percent of its 400,000 employees will work from home from now on. The TCS declaration came a day after I had written this article’s prelude on April 27, 2020.

April 27, 2020

https://www.dhirubhai.net/pulse/atomise-localise-robotise-gopalan-ramachandran/

Robots are our friends

More than 130 million households earn their livelihoods in small circles that surround their homes. They accomplish big things from within circles of diameters of less than 4 kilometres.

But not everything that India needs will be part of these small, proficient and sharp value chains. India will need massive manufacturing and services organisations. They are inevitable. We should become world leaders in using robotics for such massive manufacturing and services organisations.

Robots create new jobs. Robots create new opportunities for multidisciplinary skills and teams. Robots create new opportunities for designers and modular activators. These numbers will be big for a society that has yet to reap the benefits of the industrial revolution.

There is a strong fear that robots displace human effort. My assertion is that robots will not displace human effort. Robots will do what humans cannot do or will not want to do. India needs to spark a robotics revolution. Now is the time.

Recall that I had written that that industrialisation has not touched millions of Indians. Technology too has not touched them. Therefore we are fortunate.

India’s industrial revolution was run by the British and for the British. India’s information-technology revolution has been run by Indians but primarily for customers outside India.

India’s green revolution was run by India for India. India’s white revolution was run by India for India. But the green and white revolutions have been urban-facing. They have not necessarily made rural and agrarian India prosperous or healthy.

Rural, agrarian dreariness

India has been a developing economy for long – very long. Our per capita gross domestic product (GDP) is small. Why? More than 40 percent of the households derive their income and purchasing power from agriculture and allied activities. However, agriculture and allied activities contribute merely 15.87 percent to aggregate GDP. Too many households are engaged in agriculture and allied activities.

When more than 40 percent of the households earn merely 15.87 percent of the aggregate GDP, the opportunity to raise their earnings to at least 40 percent of the aggregate GDP becomes obvious.

Hitherto, the small incomes of the agrarian households have placed a lid on the output of the manufacturing and services economy. There has been a lid in the districts. There has been a lid at the aggregate level. Without a large, diffuse consumptive market, both manufacturing and services have been commensurately small.

This explains why India has very few hospital beds per 1,000 people. This explains why the penetration of new manufacturing technologies in India is low. This explains why the usage of modern instrumentation, monitoring and transportation technologies in India is low.

Dispersion and diffusion

Massing-up has seen its best days. India’s rural and agrarian locales have yet to see their good days. This is the situation that we need to understand and then work on to accomplish two objectives. First, shrug off the COVID-19 economic decline stoically. Second, build a new economy when we do not have much of an old economy to protect.

CreaSakti was IndiaGrow until May 2019. IndiaGrow had submitted a component-by-component and a district-by-district plan to the Prime Minister’s Office on June 6, 2017 and September 27, 2017. This plan had the objective of building a new economy in India’s rural and semi-urban locales where none existed. There is no change in our objective. In the main, the plan is based on atomisation and localisation. Robotisation was absent in 2017 because the SARS-Cov-2 virus was, perhaps, absent.

Our component-by-component and district-by-district plan will enable millions of households to work with one another to create economic value. They will interact with one another to exchange economic value. They will work in small locales. They will work in small teams. They will be better protected from SARS-CoV-2 and other viruses. They will have more hospitals, more manufacturing, more learning centres and an explosion of livelihood-supporting services. There will be a dispersion and diffusion of health, ability and prosperity.