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Saturday 18 July 2015

Innovation , a distant dream ?

Writing in today's ( July 19 , 2015 ) Business Standard , Arindam Majumder provides following interesting facts about patents :

> No of patents filed last year

* Whole World..................... 214,500

* USA................................ 61,492

* Japan.............................. 42,459

* China............................... 25,539

* India............................... 1,349

> Only one Indian entity features on the list of the top 10 recipients of Indian

patents

> Collectively , the IITs filed 342 patents

That article also quotes Mr Narayan Murthy , expressing his anguish at the lack of innovations coming out of our IITs and Research Labs

True , but while lamenting this poor state of affairs , we should also examine what causes this poor state

Here are my guesses :

> PATENT - FILING TIME

Whereas , it takes months to get a patent approved in Developing Countries , it takes years in India ( see my old blog below )

> PATENT- FILING COST

In India , it costs lakhs of rupees ( fees of Patent Attorney ) . Abroad , it takes lakhs of dollars

> PATENT PROTECTION COST

It costs a fortune ( whether in India or Abroad ) , to protect your patent in a court of law . Often , more than the monetary benefit derived from it !

And with never-ending appeals , it takes years to settle the matter

For Indian Innovators , fighting a patent litigation in Foreign Courts , is an impossible task

> PATENT REGIME

India's Patent Laws are considered " weak " , especially , in case of Pharma / Chemical patents , in respect of " Product Patent " vs " Process Patent "

There is also a provision whereby , Government of India can force a Foreign Patent holder to " license " it compulsorily , to an Indian applicant who wants to exploit that patent ( of course , on reasonable licensing fees ! )

> PATENT BENEFITS

Abroad , when a scientist working in a Educational Institute or a Research Lab , invents something for which ,even if a patent gets applied for in the name of that Institute , he too gets a percentage of future royalties , when that patent gets licensed for commercial exploitation

I don't think , Indian Inventors , benefit in this way . That takes away the incentive

> PATENT PRESTIGE

If the inventing scientist's name does not figure on the patent and gets replaced by the name of his boss , innovations will remain buried !

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{ Old blog dated : 26 Feb , 2012 }

Want a Patent ? Be patient !

Newspaper Pravasi ( 26 Feb 2012 ) gives following interesting – but far more distressing – info about working of India’s Patent Office in Mumbai :

Ø No of patent applications pending ………………………………… 100,000

Ø Which will take to clear ………………………………………………….. 3 years

Ø No of requests being examined / year ………………………….. 12,000

Ø Additional Patent Examiners being trained …………………….. 250

Ø Which will help clear no of applications / year ………………… 40,000

Ø New requests being received / year ………………………………… 25,000 +

Ø Annual growth-rate of requests ……………………………………… .. 20 %

I would not be surprised if Indian scientists working in foreign labs are filing more patent applications abroad than the Indian scientists working in Indian labs !

Innovation will get a huge boost if Patents can be granted – or even rejected – in 6 months !

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hemen parekh

19 July , 2015

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Friday 17 July 2015

Make in India is Skill-ing India

A couple of days back , PM Shri Narendra Modiji launched this scheme

Some 20 odd Central Government Ministries / Departments are engaged in this effort

Many State Governments are joining forces to impart Skills Training to millions of Indian Youth

As to the number of youth planned to be trained , following figures are reported :

> 400 million by 2022

> Creation of a pool of 500 million skilled youth by 2022

> Exportable surplus of 40/50 million skilled youths

Major burden for this Herculean effort will be borne by some 11,500 ITIs ( Industrial Training Institutes ) , with a combined intake capacity of 1.6 million students per year ( most have 2 / 3 year courses )

An intake of barely 140 students per ITI per year !

But Skill India program is talking of imparting skills to some 60 million youth every year , for the next 7 years !

That would require some 4,40,000 ITIs , altogether !

Now , assuming that setting up a full-fledged ITI , would require an investment of Rs 1 Crore , we are talking of a fund of Rs 4.4 lakh*crores !

Governments ( Central + States ) don't have that kind of money

Nor will banks lend that kind of money to anyone to set up an ITI , without assurance of adequate returns ! Banks are already bleeding with NPAs amounting to Rs 4 lakh*crores and begging the Central Government for re-capitalization !

There are two sources from where this kind of money can come from

These are :

> 100 % FDI in ITIs

> Black Money Channelizing in ITIs

To encourage Black Money to flow into this most productive and beneficial use , we must come out with an Amnesty Scheme for such investments thru

SPVs.

And , whether the investment came through 100 % FDI or thru Amnesty Scheme , the income from operating an ITI , should be made tax-free for 20 years

Nothing short of an " Out of Box " thinking will help !

If this suggestion is implemented , I see following consequences :

> FDI INFLOW IN SERVICE SECTOR

There will be a huge inflow of FDI from Foreign Investors , who , today

earn 2 % from their bank deposits . Their investment in an Indian ITI ,

can earn them , may be , 10 % - and tax-free !

> UPGRADING OF TECHNOLOGY

Instead of finding ( in our present ITIs ) , a 20 year old lathe , we will

see most modern machines / technologies in these new ITIs

This will tremendously raise the Skill Level of graduating students - the

kind of skills which will enable students to find jobs abroad

> JOB CREATION

We should , simultaneously amend the Apprentice Act - 1951

Under the amended Act , every factory will be required to take fresh

Apprentices in the ratio of 1 : 3 ( one trainee for three permanent

employees , in each trade ) , instead of current prescribed ratio of 1:7

This will create a huge demand for ITI trained students

> COST REDUCTION

Since ITI trained apprentices are paid a stipend ( generally 20 % of the

wages paid to regular / permanent / skilled workers ) , this will sharply

reduce the manpower costs of manufacturing units

This will lead to India becoming a " Low Cost Economy " and increase the

competitiveness of our products , in the international markets , thereby

boosting our exports ( currently , a meager 1.7 % of World Trade ! )

This is the major reason why Foxcon ( Taiwan ) wants to put up 10

factories in India , at an investment of $ 20 billion

> ADVANTAGE , MSME

Under amended Apprentice Act , permit MSME to retain ITI trained skilled

workers , on a stipend-basis , for 4 years ( instead of current 2 years )

This lowering of wages will make MSME very competitive in their cost.

In turn , this will encourage large organized factories to outsource /

sub-contract more components to MSME , instead of manufacturing

in-house

This will result in a robust " Supply Chain Eco-System "

It is such an Eco-System in China , which compels Apple to have 331

Component-Suppliers in China as against ONE supplier from India !

> PRODUCT QUALITY

Product quality depends upon quality of skilled manpower coming out of

ITIs

When lakhs of ITIs are competing with one another for attracting

students , each will try to raise the quality of its training

When such highly trained students enter work force , quality of " Make

in India " products , is bound to rise

> PERCENTAGE OF SKILLED WORKERS

Of the total work force , percentage of skilled workers in India today , is

meager 3.5 % , as against 96 % in South Korea !

If my suggestion gets implemented , we should be able to raise this

figure to at least 50 % in next 10 years !

> DEMAND FOR TEACHERS

There will be a huge surge in demand for Highly Skilled persons to act as

teachers / trainers in 4.4 lakh ITIs

> SELF EMPLOYMENT

MUDRA bank will provide loans to ITI trained skilled workers to set up

themselves as local area Carpenters / Electricians / Plumbers / Welders /

Masons / Repairers etc

Thousands of ITI trained workers will tend to become Self Employed

You will be justified in asking :

" How do we know that your suggestion will transform India's Unskilled

Youth into a Demographic Dividend ? "

All I can say is :

" Luck happens when preparedness meets opportunity . If we prepare

ourselves , opportunity will arrive , sooner than later "

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hemen parekh

18 July 2015

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Tuesday 14 July 2015

Defining E - Commerce

A report in Hindustan Times ( 15 July 2015 ) talks about a series of

meetings expected to be held today between Commerce Minister and

different stake-holders , to define " e-Commerce "

I am reminded of the story of the 7 blind men , each trying to describe an

elephant by touching different limbs of the animal

It was obvious they could not arrive at a commonly agreed upon description,

since their perceptions differed

Before trying to define " e-Commerce " , we must first define " Commerce "

In pre-historic times , persons produced whatever they needed to survive

Then they learned to " barter " things produced by each other

The only concepts were , " need " and " surplus "

That lead to introduction of a concept called " Value " , which manifested itself in the form of a stick , a weapon , a goat or a piece of animal skin , till it became , some sort of coin

When barter gave way to an exchange of some goods ( or service ) , for its perceived " Value " ( as measured in coins ) , it became " Commerce "

So , we can conclude that :

" E - Commerce " is nothing more than " Commerce " , where such exchange of values , take place electronically , as opposed to physically . It still remains Commerce , even when perceptions differ

Hence , regulations / controls / taxation etc that govern E-Commerce should , essentially remain the same as in case of Commerce

Ditto for FDI in e-Commerce

Mere elimination of an intermediary ( Distributor / Wholesaler / Dealer / Agent / Stockist etc ) , from the " Supply Chain " , itself cannot be the determining criteria

A few years back , when General Motors , tried to sell its cars to end-customers , directly from its own web site , thousands of its Brick-and-Mortar dealers protested and even threatened General Motors

GM had to back-out against the vested interests !

But when Michael Dell started manufacturing computers in his garage , he took orders on his telephone and later , on his own web site.

He never appointed any dealers . This model became a roaring success and heralded the beginning of E-Commerce era ( read , " Direct from Dell " )

Under present guidelines , I suppose , India would allow Dell to set up a wholly-owned , local manufacturing facility , with 100 % FDI

Now , if Dell starts selling those India-made computers , directly to end-consumers , from its own web site , would not that be E-Commerce ?

An e-Commerce with 100 % FDI ?

And what about 100 % FDI by FoxConn ( Taiwan ) , wanting to set up 10 factories in India , to manufacture electronics goods , not only for Foreign giants like Apple / Samsung etc but also for local brands such as Micromax ?

Shall we insist that FoxConn cannot deliver such goods directly to Indian consumers , based on orders received on , not only web sites of Amazon / e-Bay but also on local web sites of Flipkart / SnapDeal etc ?

It is unfortunate that we , in India , always look-up to the discoveries / inventions taking place in the West ( - and in Japan / South Korea etc )

Had we encouraged Prof Jhunjhunwala ( IIT - Madras ) , we could be today , delivering internet thru common electric outlet in every home , at speeds of 100 mb ! That would have Digitized India , 5 years ago !

When ISRO sent MOM ( Mars Orbiting Mission ) , it did not call it a " Space Ship "

As long as the concept of " Ship " defines our thought processes , we will continue to " Sail in a Sea " - never to traverse the " Space " !

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hemen parekh

15 July , 2015

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Saturday 11 July 2015

FDI in India Post ?

As on 31-08-2009 , India Post had 1,55,015 post offices , making it the largest postal network in the World

Almost 90 % of these were in rural areas , each serving 7175 persons on average , totaling 111.2 Crores Indian citizens ! Entire population of India !

Till about a few years back , India Post delivered millions of letters and a few lakh parcels every day , to citizens living in farthest corners of India

And of course , millions of rural citizens also depended upon its Money Order delivery

But then came along private Courier Companies , bent upon obsolescing India Post !

So , head-honchos of India Post asked themselves :

" What business are we in ? "

Answer came :

" We are NOT into business of delivering postal articles / money-orders .

We are into a business of ' Delivery '

Period ! "

Central Government ( the Owner ) agreed

Today , India Post has redefined its " Mission " as :

" To provide mail parcel , money transfer , banking , insurance and retail services with speed and reliability "

India Post web site goes on to write :

" If your Organization is interested to use the India Post network for the sale of your products and services , India Post can help your business grow through ' Retail Post ' "

I believe RBI is on the verge of enabling India Post to become a " Payment Bank

That has got established banks worried !

And wanting to avoid establishing their own delivery networks costing billions of dollars , Amazons / e-Bays / Alibabas / FlipKarts / SnapDeals of the World , want to leverage India Post's network for ' delivering ' products

That will make them " B2C " retailing e-Com ventures, - riding piggyback on India Post !

If in doubt , consider this :

In the past 12 months , India Post's revenue , delivering parcels to end-consumers like you and me , from e-Com ventures mentioned above , has gone up by a whopping 37 % !

CAIT ( Confederation of All India Traders ) , must have taken notice of this , " New Kid on the Block " , called India Post !

As I wrote yesterday , competition is cropping up from most unexpected quarters !

And if Greek Government is open to privatizing its postal network , who knows DIPP may soon recommend FDI in India Post - to add to the Central Government kitty , may be Rs 1,00,000 Crores !

Days of Central Government protecting every kind of business / industry are over . Above all , businesses in which Government , itself operates today

War of International Trade ( where India's share is a meager 1.7 % of World Exports ) , cannot be won by leaning on Government crutches !

It is time, Indian business / industries learn to stand-up to the World on their own legs !

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hemen parekh

12 July, 2015

hcp@RecruitGuru.com

B2BmessageBlaster

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Friday 10 July 2015

FDI in Retail ?

These days , a lot of heated debate is going on re FDI in " Retail "

There are many camps , viz:

> Brick-and-Mortar Retail traders

> E-Com Retail Traders

> Wholesalers

> FDI Investors / Overseas Manufacturers

> Single Brand vs Multi-Brand Formats

> Payment Gateways

> Central / State Governments

> Tax Authorities

> Bankers ...........etc

As far as I can see , the entire debate is centered around " Retailing of Physical Goods "

But how long before " Retailing of Services " too , enters the equation ?

Or does anyone think that to be a far-fetched idea ?

Just wait for 2018 to arrive !

Some 40 years back , marketing guru Ted Levitt wrote a seminal essay , aptly titled :

" Marketing Myopia "

The central observation Levitt made was :

" Why do companies fail to ask : Ultimately what business are we in ? "

Among many example that he gave was the case of American Railroad companies

They believed themselves to be in " Railroad Business " - and failed to see that they were , really into the business of " Transporting People " !

So , along came the " Car Companies " and the " Air Lines Companies " which made " Railroad Companies " obsolete !

Now , 40 years later , are " Car Companies " and the " Air Lines Companies " asking themselves : What business are we in ?

If the correct answer is : We are in the business of enabling people to meet and talk to other people :

then they would shift to Video-Conferencing / Holographic Projection business !

Or , if another answer is :

We are in the business of enabling a person sitting in hot Sahara desert to " Experience " the cool climate of Europe thru " Virtual Reality " ,

then they should be shifting to manufacture of future versions of Google Glass !

Levitt added :

" If you don't make yourself obsolete , then someone else will "

And more and more , it is happening that , that someone is NOT even anyone from your current competitors !

Have physical goods retailers , considered that soon , retailing itself might become obsolete ?

And if that happens , the question of FDI in retailing too will disappear !

A unknown guy sitting in a small cubicle in Estonia , will deliver to my grand daughter, sitting in Mumbai , any physical consumer product , through the 3D printer , sitting on her kitchen platform !

Or a Start-Up belonging to a bunch of 24+ something IIT guys would set up :

" 3D Printing Kiosks " ( like the PCOs of a few years ago ) ,

in 1000 cities / towns of India , to deliver at your doorstep ( obviously using Drones ! ) , any Foreign Brand product , at a moment's notice !

And a Central Government committed to Digital India , may even give them Rs 100 crores , by way of Venture Capital !

For the quarreling parties of FDI , it is time to ask of themselves :

How can we stop being made irrelevant ?

How do we re-invent ourselves ?

How do we stop becoming obsolete ?

How do we co-operate / collaborate to re-write the " Rules of the Retail Game " for the rest of the World ?

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hemen parekh
11 July , 2015
hcp@RecruitGuru.com
B2BmessageBlaster

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Thursday 9 July 2015

One Rank , N-One Pension ( ORNP )

Yesterday , Bombay Municipal Corporation workers pulled down a thatched roof over the cart of a roadside hawker Ramji , selling tea / biscuits / vada-pav , on a footpath outside my house

Background :

> Footpath is for pedestrians to walk on ; not for Ramji to sell tea !

> Ramji did not have a " Hawking License "

> As of today , some 30,000 + hawkers are " licensed " to hawk

> Under pressure from High Courts , BMC is in the process of taking a

" Census " of all hawkers in Mumbai , in order to legalize another

90,000 hawkers , to be accommodated in specified hawking zones

> It is my belief that Mumbai has over 300,000 hawkers now and that

this figure is growing by 10,000 every year

> Citizens of most residential localities do not want " Hawking Zones "

in their localities !

> But almost all citizens continue to patronize nearby hawkers , whether

licensed or not and whether in prescribed " Hawking Zones " or not !

> Hawkers need to ply their trade where people live - and therefore need

to live where people live - not 20 Km away !

> Illegal / Un-licensed hawkers are the main source of " Hafta " for the

local policemen

> So that demolished shed , will come up once again tomorrow morning !

> Most hawkers in any given locality are under the " protection " of local

Corporators , who give " advance notice " of impending demolition !

> If India as a whole , needs to create 12 million jobs every year , then

most likely , Mumbai , with its population of 16 million people , needs to

create at least 300,000 jobs per year !

> But " Manufacturing Establishments " are leaving Mumbai , since it has

become a " High Wage Island " , rendering products manufactured here

un-competitive . Hence no blue collar jobs in Mumbai anymore !

> As far as " Service Sector " is concerned , it is fast giving up its " Across

the Counter " service nature and morphing into internet / mobile app

based " New E-Com Economy " , needing few new hires !

> Apparently , the only " Economic Sector " that is creating new jobs and is

" Self Renewing " is that of the " Self Employed " hawkers in Mumbai !

I suppose it is the same story , in all metros

It is also the economic sector which needs no more than a few thousands

of Rupees to create one job , as against a requirement of Rs 5 lakhs in

MSME sector and Rs 5 Crores in large organized sector !

> And , retired hawkers do not ask for any pension , despite having one

rank , for their entire working lives !

I foresee a not too distant day , when all footpaths everywhere , are taken over by the hawkers ( where these are not already taken over , that is ! )

For providing livelihood to a section of society ( viz: hawkers ) , another section of the society ( viz: pedestrians ) will need to put up with some

inconvenience !

Unless some people ( who have jobs / incomes ) want their convenience to

take precedence over the livelihood of Ramji and don't care that his 2 children starve to death !

In any case , in India , every single day , some 4,383 children ( under age of 5 ) die of starvation . Another 2 , won't change the " Statistics " much !

But , if the already employed have a better solution , let them propose it !

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hemen parekh

10 July 2015

hcp@RecruitGuru.com

B2BmessageBlaster

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