Business World | 16 June 2016 | Dr. D.V. Kapur | Opinion |
‘Make in India’ may be a great campaign to start with. But are we even in a position to make that a success? The mission cannot be fulfilled without focusing on skilled Engineers and Innovation. Our goal should be not just about ‘Make in India’ but about ‘Make in India based on Indian innovation based on Indian science and engineering’.
Engineering tops the list of professions vital for economic growth. Starting with formation of first engineering college at Roorkee in 1847, there has been a booming growth, particularly during last decade and presently 3345 engineering colleges produce about 1.5 million graduates every year. This, however, is an unsustainable rate and results in significant unemployment even among first level graduates and industry considers that not even thirty percent meet necessary skills for employment. As for academic recognition, only five IITs find place among top 100 Asian institutes and as much as twenty percent or more faculty positions have always been vacant for want of suitably qualified candidates even in IITs. Overall PhD shortage estimated at 26,000 affects seriously many colleges, not only in terms of strength, but also quality of faculty. If ‘Make in India’ is to succeed, engineering education need to be streamlined to achieve a higher level of academic standard and adequate number to fill faculty positions. We need highly skilled engineers who can design machinery and equipment to meet high requirements of international competitive pressure. Developing new designs is also influenced by latest technological concepts, materials, innovative processes, digitization and automation etc. developed by research scientists and engineers. But equipment designs put into production are developed world over by specialized design engineers within the manufacturing enterprises and not in laboratories as has been attempted with failure particularly in our defense sector.
There are other areas of contradictions, which are also a matter of concern. On one hand recognizing technical ability of our engineers, the Boeings, IBMs and GEs of the world have established in India large design development centres and our software engineers have made a mark internationally, but on the other hand many enterprises particularly in government sector have been struggling for long durations to achieve commercial viability and success in establishing globally competitive manufacture indigenously and in implementing projects with no cost overruns. What should we do? We need high quality R&D for which we need skilled engineers and environment that encourages R&D and Innovation. This has also suffered so far and desired results have not been achieved due to under investment all around including in university system in addition to focusing on organization design and management at institution level. In the absence of undeveloped venture capital industry, which can play useful, though limited role, long term government policies and financial support are important.
Financial grants by government to selected R&D oriented organisations for developing new technologies and equipment prototypes is also an established practice in developed countries. In addition to promotion, venture capital industry needs to be incentivized. Government policies and support are important but even more important are higher emphasis and larger investment in R&D all around including in university system in addition to focusing on organization design and management at institution level. If university teachers are to be motivated to do R&D they need to see it as important for their prestige and promotions. Unless we bring in meritocracy in our university system, motivation for research would be little. Promotions should be based on performance in terms of excellence in teaching and research output and not on the time spent in current grade.
R&D and Innovation by private companies has not taken off not only due to limited tax incentives but also due to not earmarking required internal resources. Large corporates including public sector firms and even their research units have taken to collaboration with Western firms to import technology but have not shown the vision or ambition to be the world’s best in a time bound manner. Dynamic and knowledgeable engineers or scientists should head these. With manpower capable of absorbing the know-how and know why of imported technology so that innovations can later be undertaken internally. Years ago when IPCL was a public sector company and was recruiting the head of its new R&D organisation, the recruitment committee was very happy to find a most eligible candidate with a Bachelor’s Degree in chemical technology and a Doctorate in economics. However he was rejected as the administrative officer pointed out that he does not have a Master’s Degree in economics as required by the advertisement! PSUs should show flexibility and imagination in recruiting R&D staff.
Only upgrading academic standard and quality of existing colleges and not creating new institutes under IIT umbrella can change the present scenario. In addition to recognizing meritocracy, Government should continuously attract bright engineering graduates with liberal scholarships and fellowships to undergo higher studies at doctorate level. This will provide tomorrow’s teachers. Our goal should be not just about ‘Make in India’ but about ‘Make in India based on Indian innovation based on Indian science and engineering’. China’s Foxconn takes away $10 as profit for every iPhone that is produced in China. Apple takes away $350 per iPhone produced! Of course, 4.5 million jobs have been created in China. Another important requirement for the success of Make-in- India campaign is implementing new capital intensive projects with no time and cost overruns. This is an extremely important area of concern for a financially healthy economy because of crippling costs of delays of the order of 15-20% per year.
Investment of USD 1 trillion targeted in 12 th five-year plan can, therefore, result in humongous cost overruns going by our past record. Once again answer lies in institution building with focus on organization design and modern management practices particularly in project management. Identifying every activity and every link in the supply chain before the project execution begins is vital for keeping within time and cost. At the same time delegation of power, authority and accountability to various levels in the organisation is critical. Freedom from political interference to managers of Public Sector Enterprises is important but management oriented engineers and other professionals do achieve desired results as we look at well performing PSUs. World Bank in an independent case study of building of NTPC commented: “Scale of the proposed facilities was well beyond anything seen in India, and that they would involve the introduction of advanced technologies new to India, made this a very risky venture that would stretch the country’s industrial and managerial resources…. Yet, despite the odds, NTPC has been an all – too-rare institutional development success, achieving virtually all that was expected of it and, in some areas, more”.
Study also added:
“NTPC has proven that public sector power utilities in India can attain international standards of efficiency and in doing so has deprived SEBs of their excuses for poor performance”. The goal of institution building, which is important for all corporates and government administered commercial entities, should be to achieve high efficiency, productivity, quality, safety and commercial viability. Role of the government as promoter of PSUs is also paramount. It should act as a progressive producer at arm’s length from normal functioning of organization. This approach will also require appreciation of management skills among people even at the top level in government. Our bureaucracy consists of bright and competent people but they lack management orientation which has affected economic development adversely. The gap can only be filled up by training them in management schools or specially designed programs initially at the time of induction and periodically by short courses later during their career.
In a recent study by KPMG 79% of respondents focused on acute shortage of skilled project managers. Since engineers, among professionals lead in numbers and in providing range of inputs both in infrastructure and manufacturing, it is imperative that they take lead in acquiring project management skills. Also enterprises in government sector must replace over 100 years old financial management model with latest concepts of commercial accounting and financial management systems. In addition to engineers and financial managers, professionals in all disciplines including HRD, marketing and information technology need to work as core team to strengthen overall management. Associations of management professionals, engineers and technologists could give a lead in this cultural transformation. Despite the canvas we have painted above, we must add that we have not lost hope and feel that our engineers will rise to required levels because they possess required talent, knowledge and drive.
Co author for this article: Kirit S Parikh is Chairman, Integrated Research and Action for Development (IRADe) and former Member, Planning Commission . – Courtesy