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INDIAN MANUFACTURING INDUSTRY Indian Manufacturing - Why the glass is half-full?

Sep 24, 2020

The manufacturing world has evolved considerably since the industrial revolution. The notable amount of changes has come in due to countries identifying and bridging the gap between education (universities) and industries. This Cover Story explains how the institutes can take an example from IISC, an educational institute that aims at offering world-class education to train future leaders in science and technology and by applying science and technology breakthroughs for India’s wealth creation and social welfare, to create innovator and entrepreneurs and enable an effective interface between students and Indian manufacturing SMEs to solve complex problems. And how with the right ecosystem to scale up such endeavours, India can re-emerge as a manufacturing superpower, especially by bringing its skills in Information Technology (IT) and its spirit of frugal innovation to the table. - Amaresh Chakrabarti, Senior Professor and Chairman, Centre for Product Design & Manufacturing, Indian Institute of Science (IISc)

The evolution of the manufacturing landscape, across the globe, in the past two decades, can be viewed from three key angles – business, societal and technological. From the societal angle, many emerging economies have witnessed a sharp rise in their GDPs, per capita incomes and people aspirations. From the business angle, manufacturing has re-emerged into the forefront, which was not the case at the turn of this century. The IT industry was paying much better at that time. Moreover, the ‘blue-collar’ aspect of manufacturing kept quality engineering talent largely away. Finally, we have the trend of connectedness of not just people but things through technology. With the rise of Industry 4.0, manufacturing is again regaining its place as the centrepiece of economic activity.

The first decade of this century was all about the continuance of an astounding surge of China as the ‘factory of the world’. Over the past decade, other economies, particularly those in South-East Asia, have come up as China gradually lost its cost competitiveness. While that is relevant to an extent, I would like to mention a caveat. Whenever we compare a large country with a small country, we have to be careful. It’s easier for smaller countries to either become much poorer or much richer very quickly, which is not true of large economies.

Good progress, just not good enough

If one looks at India’s per capita income, it stayed at about US $500 per capita for about 1000 years and then went up. Interestingly, during most of that millennium, the world’s per capita income was much lower. Subsequently, the world’s per capita income has gone up, at least in some of its parts; but India more or less stayed at the same level – through the industrial revolution to the colonial era and even post-independence till the onset of the 1991 reforms.

However, in the last 30 years, India’s per capita income has also gone up quite exponentially. So, on the whole, the economy in India has done well lately. By and large, when we started, two-third of the GDP was in the rural economy, while one-third was in everything else taken together. But in this period, manufacturing and services have grown quite substantially and the percentage of the rural economy has gone down. So, clearly, manufacturing has done better than it did before and soon after independence. Has it done as well as some of the bright and shiny tiger economies or the dragon economy or so on? The answer is no. There are many factors there, which could be best explained by an economist. As a technologist, my take is that we haven’t actually paid enough attention to encouraging manufacturing as an area of endeavour across the board. It is not just about cutting costs; it is about creating aspirations in the manufacturer and meeting the evolving aspirations of the Indian consumers and the world at large. For example, if one compares SMEs in India with those in South Korea and Germany, there are interesting similarities and differences. The similarity is that they both account for a large share of employment.

But the difference is that if one looks at the Mittelstand in Germany or the South Korean SME sector, many of them are MNCs. One example of that is the pencil-making company Staedtler. On the whole, SMEs in these countries account for a far more significant share of the GDP compared to that contributed by the Indian MSMEs.

Now, why is that happening? One reason is that Indian MSMEs have very limited aspirations. There are many countries where India can become an export-oriented economy and MSMEs can play a substantial role. Secondly, support for technology and innovation is poor across the board for manufacturing and in particular for the MSMEs. So, three areas need to be strengthened – we have to figure out how to make MSMEs more export-oriented, innovative and technology savvy.

Not all MSMEs are likely to be interested or be able to think beyond tomorrow. So, at IISc, we pick forward-looking MSMEs and have handholding projects with them, wherein we can co-innovate on problems specific to their space. For example, our students have handheld a traditional composites-making SME sto make it a smart-composites making company.

Leap from concept to execution

So, we train our students to be innovator entrepreneurs and engage some of them with the MSMEs to innovate together. The problem owner and the solution provider are working together and creating not only a ‘patentable’ but also a ‘translatable’ product. The MSME is getting trained in how to innovate in a systematic and structured manner. That actually gives a very interesting model, to try out not just in IISc but also to scale up in other places.

If one looks at the history of design, there are five broad stages of evolution when it comes to designers. Way back, a designer was actually a craftsperson – locksmith, goldsmith, ironsmith, etc. When the first industrial revolution came, manufacturing started moving to machines, which led to the rise of designers of the industrial era, who could work by taking into account this new way of manufacturing.

Jobs became more specialised over time; we have engineering designers who would look at technological aspects and industrial designer who would cater to non-technology aspects – usability, aesthetics, semantics, etc. The concept of industrial designers evolved further to give rise to industrial design engineers, roughly around the 1980s. This set of professionals can look holistically at both technology and non-technology aspects of a product system. Places like Stanford in the USA and Delft in the Netherlands championed the concept of industrial design engineering.

Many of the design schools, such as Stanford, have actually further transformed themselves now, more in the line of training innovator entrepreneurs rather than the earlier versions of the designers. Of course, all of the above types of designers have a place in the economy and society and different design schools have been championing the training of these different types of designers.

So, with that spirit, we wanted to create job creators rather than job seekers, and we have been rather lucky in that. About 20% of our students are now creating their own companies. That’s a very substantial percentage if one looks at the typical percentage of students from an institution adopting entrepreneurship as their first option. One cannot feed so many people by simply depending on the current set of companies. The ecosystem has to expand.

For example, one of our ex-students, Mona Sharma is the design head of a Bengaluru-based start-up that makes Bempu – a wristband for babies. This wristband continuously measures the temperature of the baby for potential hypothermia, which can be life-threatening. It is a condition when the temperature goes down by too much. The product is a smart, continuous temperature sensor that alarms the caregiver when needed.

Another one of our students, Nitin Gupta (along with his classmate Nikhil Meshram and Vinay Reddy), innovated on how to improve the efficiency of harvesting cotton from the fields. Nitin then started a company called Sickle Innovations to market this as a product. They have been expanding the product portfolio for picking other crops like mangoes and apples. They brought in IoT and some of the cutting-edge imaging technology and married these with their picking solution. In essence, their product is perched on a kind of stick that goes up and first allows the operator to look at the fruit. With the camera up there, the user can see whether the fruit is ripe or not. Based on that, the user decides whether to cut it and he cuts it with a cutter that gives a clean cut. Then, it doesn’t fall directly on the ground, but there is a nice path through which it is gently brought down so that the quality of the fruit does not get spoiled. The Ministry of Agriculture has given them the National Entrepreneurship Award for being the most innovative agritech company in the country. Now they have started collaborating with Israel and are going global.

So, even for highly cost-effective designs, one needs to have advanced technologies. So, what we are trying to preach here is that we should design advanced and affordable products and solutions. Only if one is advanced, these products and solutions have a chance to be highly affordable.

Uniquely Indian innovative spirit

The crux of it is the philosophy that we want to propagate. Consider the case of Britain in the 18th century. At the time, India was the leader in manufacturing for a number of sectors – steel making, shipbuilding, textiles and jewellery, to state a few. Britain learnt from India, made these far more scalable with the help of the ensuing industrial revolution and became market leaders.

Consider the case of Germany, which was in tatters when the second World War ended. As they collected themselves, the Germans realised that they needed to substantially improve their manufacturing, since nobody wanted to buy German-made products. And they looked at the leader at that time i.e. Britain. The Germans learnt from what Britain had to offer and added their thoughts to come up with the concept of Fraunhofer institutes. The added element was to bridge the gap between the university and the industry. Further down about the turn of the century, the British realised, very interestingly, that their manufacturing needed to improve substantially and they should learn from, among others, the Germans. It’s interesting as to how history flips itself.

They looked at what the best of the day was doing and decided that they needed to add innovation to this equation of university connecting to industry. So, they created centres of excellence called Catapults about a decade ago. These are helping the manufacturing economy significantly in the UK and surrounding areas. So, the time has come for us to look at the best of today and learn from them. Further, we need to bring in a few elements of our own to that.

The second is that one should infuse the component of entrepreneurship, not just innovation. It’s not just coming up with an idea that can change the world but taking that idea to the world. Third, we must not shy away from the latest technology, including Information Technology (IT), to achieve our goals. India is serving the whole world as its IT backend. Almost any piece of software one sees as a major product today had the hand of Indians in its development. This is a major resource – the software expertise – and our innovations must try to leverage this. Developing smart solutions, for instance, should be a target in our innovation and entrepreneurship roadmap. Fourth, because of the way that we have been, our philosophy also has been geared to use as little as possible – to not overuse, not overspend, not boast about one’s richness & knowledge & so on. There is a sense of understatement in our way of living, which gives us a sense of frugality that is unmatched. And that sense must come in our innovation, so we can be far more economical than anybody else.

Let me emphasise that I am not talking about ‘jugaad’ at all. To me, jugaad is a symptom that there is an opportunity and a problem that is not being addressed. As a consequence, the people facing the problem have to make do with whatever they have and put it all together to create a semblance of a solution. As Rishikesha Krishnan says, we must move from jugaad to systematic innovation, because only then can we have products and systems that are of consistent quality, robust, reliable, replicable, etc.

We must not compromise on the quality or all the things that an aspirational society would like to have. But this needs to be done with the minimum possible use of resources. And that is the true definition of frugality, which India can bring to the table most effectively through its products. I am confident that it is possible, but one IISc cannot scale it up. We must all do it together.

Reproduced with permission from India Business & Trade (ibt.tpci.in), an initiative of Trade Promotion Council of India

Image Gallery

  • The ‘blue-collar’ aspect of manufacturing kept quality engineering talent largely away but with the rise of Industry 4.0, manufacturing is again regaining its place as the centrepiece of economic activity

  • Jobs became more specialised over time; we have engineering designers who would look at technological aspects and industrial designer who would cater to non-technology aspects – usability, aesthetics, semantics, etc

  • One should infuse the component of entrepreneurship, not just innovation. It’s not just coming up with an idea that can change the world but taking that idea to the world.

  • Amaresh Chakrabarti

    Senior Professor and Chairman

    Centre for Product Design & Manufacturing

    Indian Institute of Science (IISc)

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