The philosophy of 'make do' that Indians thrive on will be disastrous if the country wants to be recognised globally for its products and services, writes Mihir S Sharma in his new book, Restart: The Last Chance For The Indian Economy
Branding an emerging economy is never easy. 'Made in China', for example, is not considered to be a guarantor of quality. The Chinese, for a decade, have been selling us things that we grit our teeth and buy because it is cheap, not because we want to. Today, even when they are beginning to make mobile phones, for example, that can match anything made in Korea or the West, they have a massive trust deficit to make up, even in a country that is silly enough to be proud of jugaad.
Once a country's brand percolates into peoples' skulls, it stays there. In 2013, one pretty popular Hindi-film hit song even was titled 'Pyaar China ka maal hai' - 'Love is made in China'. That's was not, as you can imagine, a compliment. The lyrics went on: 'In love, there's no guarantee; there's no warranty; there's not even a formal bill.' Ouch.
The rebranding exercise takes ages, but it eventually happens. In the 1950s and 1960s, 'Made in Japan' meant, in the West, 'cheap and tacky'. Perhaps, 'Made in China' is going through the same ascension. But 'Made in India'? Don't hold your breath. Not while we're proud of putting quality last.
'Jugaad' is a curse. No, I am not being too harsh. Think for yourself: what else is that pernicious, disgusting wordjugaad? Once it was a mark of pride, demonstrating that in a tough, socialist society with very little on offer we nevertheless managed, we made do. We held things together with cello-tape and paan stains and prayer, and we kept them working.
But what is jugaad, really? Today? It's contentment. It's self-satisfaction and self-praise when what you have produced is clearly substandard. Are you a car company? Make cars considered unsafe in any other country in the world, free-ride on government diesel subsidies, and try to make money through selling official spare parts at outrageous prices when your useless cars collapse after they meet their first monsoon pothole. Do not focus on quality; do not try to open up the markets abroad for the smaller cars, the ones with greater endurance, the ones cheaper to run, that you know you can make.
Having viciously attacked car companies all this while, let me now quote a guy who runs one. (This is to pretend I am being fair.) Here's Anand Mahindra, who runs one of the few car companies that has done well of late, on what ails his sector: 'Jugaad does imply a positive 'can-do' attitude, but unfortunately, also involves a 'make-do' approach. It can, hence, lead to compromises on quality and rarely involves cutting edge or breakthrough technology.'
The problem with Indian companies, according to the Japanese academic Shoji Shiba, who has spent difficult decades trying to save this country's factories, is that they think manufacturing is just the act of production. Nobody is interested in quality, and few in innovation: "Very few companies at the top of the pyramid have some R&D, and build their own products," he told Business Todaymagazine. (Even "on the operations side, efficiency and productivity is not enough. Happiness of the workers is also important.") But the problem is that innovation is not something that we believe is needed in order to improve a product; innovation is jugaad, merely a process that reduces the cost to produce it.
One understands the need for jugaad, if you are a small entrepreneur in a small village, with no capital and no institutional support and no electricity and no roads and a caste system that oppresses you. You come up with solutions that are shaped by your constraints. This is a valuable skill.
But it is ridiculous to suppose only Indians have it. It happens everywhere. Come on! Is there something that is, perhaps, 'expensive innovation'? Is it meaningful to talk of 'wasteful innovation? Then what on earth are we talking about when we talk about frugal innovation? An innovation is only a usable innovation if it reduces costs. 'Frugal innovation' is like 'alternative medicine'; if it works, it's just 'medicine'. Or 'innovation'.
So what is our real uniqueness when it comes to jugaad? The same things that set us apart as a country: our hideous mess of regulations and prohibitions; and our absence of infrastructure; and our sensitivity to cost. In other words, Indian jugaad is about cutting corners. We can even take this attitude with us, I fear, to countries that have rules that people follow, and which have infrastructure they value. People who grew up in communist East Germany, recent behavioural research into Berliners' values discovered, cheat more and with less compunction. Indian innovation, which grew up in a resource-poor, trust-deficient, regulation-heavy environment, is as unable to leave behind its past. Until it does, it will remain low-cost, corner-cutting, making do.
Jugaad is a terrible, terrible thing to be proud of. Let us hope that the rest of the world has a terrible memory and doesn't remember what it means. Because, after all, at some point, we have to start selling them things. We have to ensure that 'Made in India' isn't a joke; but it will be, if people look at the things we make and say: Ha, I wonder exactly how many corners they cut to make this.
But what is jugaad, really? Today? It's contentment. It's self-satisfaction and self-praise when what you have produced is clearly substandard. Are you a car company? Make cars considered unsafe in any other country in the world, free-ride on government diesel subsidies, and try to make money through selling official spare parts at outrageous prices when your useless cars collapse after they meet their first monsoon pothole. Do not focus on quality; do not try to open up the markets abroad for the smaller cars, the ones with greater endurance, the ones cheaper to run, that you know you can make.
Having viciously attacked car companies all this while, let me now quote a guy who runs one. (This is to pretend I am being fair.) Here's Anand Mahindra, who runs one of the few car companies that has done well of late, on what ails his sector: 'Jugaad does imply a positive 'can-do' attitude, but unfortunately, also involves a 'make-do' approach. It can, hence, lead to compromises on quality and rarely involves cutting edge or breakthrough technology.'
The problem with Indian companies, according to the Japanese academic Shoji Shiba, who has spent difficult decades trying to save this country's factories, is that they think manufacturing is just the act of production. Nobody is interested in quality, and few in innovation: "Very few companies at the top of the pyramid have some R&D, and build their own products," he told Business Todaymagazine. (Even "on the operations side, efficiency and productivity is not enough. Happiness of the workers is also important.") But the problem is that innovation is not something that we believe is needed in order to improve a product; innovation is jugaad, merely a process that reduces the cost to produce it.
One understands the need for jugaad, if you are a small entrepreneur in a small village, with no capital and no institutional support and no electricity and no roads and a caste system that oppresses you. You come up with solutions that are shaped by your constraints. This is a valuable skill.
But it is ridiculous to suppose only Indians have it. It happens everywhere. Come on! Is there something that is, perhaps, 'expensive innovation'? Is it meaningful to talk of 'wasteful innovation? Then what on earth are we talking about when we talk about frugal innovation? An innovation is only a usable innovation if it reduces costs. 'Frugal innovation' is like 'alternative medicine'; if it works, it's just 'medicine'. Or 'innovation'.
So what is our real uniqueness when it comes to jugaad? The same things that set us apart as a country: our hideous mess of regulations and prohibitions; and our absence of infrastructure; and our sensitivity to cost. In other words, Indian jugaad is about cutting corners. We can even take this attitude with us, I fear, to countries that have rules that people follow, and which have infrastructure they value. People who grew up in communist East Germany, recent behavioural research into Berliners' values discovered, cheat more and with less compunction. Indian innovation, which grew up in a resource-poor, trust-deficient, regulation-heavy environment, is as unable to leave behind its past. Until it does, it will remain low-cost, corner-cutting, making do.
Jugaad is a terrible, terrible thing to be proud of. Let us hope that the rest of the world has a terrible memory and doesn't remember what it means. Because, after all, at some point, we have to start selling them things. We have to ensure that 'Made in India' isn't a joke; but it will be, if people look at the things we make and say: Ha, I wonder exactly how many corners they cut to make this.
| EXISTING LABOUR LAWS ENCOURAGE LAWLESSNESS |
| 'Labour law reform' is what we keep hearing about; labour law reform is the biggest way in which the state intrudes upon factories, keeps them small and relatively unproductive. It has to go. If you run a factory, you should be able to take on extra workers when you get a big order, while telling them it's just temporary. Actually, that can happen today, too; contract workers are everywhere in certain industries. But it's both illegal and unfair. It's illegal because the Supreme Court has said that you can't have contract workers in your 'core business' under current law. Everyone has the option to do so nevertheless - but at the cost of being harassed by the cops and the inspectors. In other words, we have effortlessly found the worst of both worlds. And it's unfair because you then have 'permanent' workers and workers on contract working the same assembly line, doing the same job, but with one of them being paid five times the other. It takes a lot of energy to ignore unfairness. Unless unfairness is somehow sanctified by irrational belief, whether religious or ideological, it is dangerous. People can't come face to face with it every day and be unchanged. The kind of unfairness produced by India's labour law is particularly pernicious. There is no reason that a contract worker can give to himself to rationalize why he is struggling and his colleague is not. There is no explanation that his foreman can give him that is satisfactory. The foreman usually knows this. And, perhaps consequently the foreman is as often as not brutal and arbitrary when dealing with the contract worker - almost as if to make up for the fact that the permanent worker is un-fire-able. It is pretty obvious how the tension inherent in these relations can escalate into confrontation, or explode into violence. So, restrictive labour law creates unfairness, and it induces violence. |
Branding an emerging economy is never easy. 'Made in China', for example, is not considered to be a guarantor of quality. The Chinese, for a decade, have been selling us things that we grit our teeth and buy because it is cheap, not because we want to. Today, even when they are beginning to make mobile phones, for example, that can match anything made in Korea or the West, they have a massive trust deficit to make up, even in a country that is silly enough to be proud of jugaad.
Once a country's brand percolates into peoples' skulls, it stays there. In 2013, one pretty popular Hindi-film hit song even was titled 'Pyaar China ka maal hai' - 'Love is made in China'. That's was not, as you can imagine, a compliment. The lyrics went on: 'In love, there's no guarantee; there's no warranty; there's not even a formal bill.' Ouch.
The rebranding exercise takes ages, but it eventually happens. In the 1950s and 1960s, 'Made in Japan' meant, in the West, 'cheap and tacky'. Perhaps, 'Made in China' is going through the same ascension. But 'Made in India'? Don't hold your breath. Not while we're proud of putting quality last.
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