The corporation is a great innovation

All innovations must be rooted in cultural soil. Indians respond to exemplary behaviour by elders and leaders, who set the tone at the top. Recall yatha raja thatha praja or how Shastriji first gave up wheat before asking the same of his countrymen.

Oversight of companies
All Indian companies have been overseen by the Companies Act and the listed ones, in addition, by the Securities and Exchange Board of India (Sebi). After 1956, a new Companies Act was enacted in 2013 with far-reaching changes, for example, the new Act explicitly acknowledges that the shareholder's interests are not supreme compared to other stakeholders. Over 40 years ago, well before this new Act, a clairvoyant J R D Tata in a groundbreaking move, amended the Articles of Association of Tata companies that "the company shall be mindful of social and moral responsibilities to consumers, employees, shareholders, society and local community." The Act also has innovations such as board appraisal, director evaluation and women directors.

India is strong on law-making but weak on law enforcement. The new rules apply to thousands of listed and unlisted companies but who has the resources to ensure implementation? Forget corporate governance, watch the glaring infarction of traffic signals every day in Mumbai by cabs and cars!

Evolution of the innovation
The new Act on companies was preceded by three innovations over a long time.

• Accounting: In 1458, double-entry accounting was innovated by Benedikt Kotruljevic in Dubrovnik, Croatia. His paper, displayed in the National Library of Malta, was the first recording of a great intellectual breakthrough. Several years later, Franciscan monk Luca Pacioli developed the idea further. These ideas allowed massive amounts of information to be organised into journals and then to produce summary financial statements.
   
• Limited-liability company: Stock was sold to high-net worth investors, who provided capital and had limited risk. The East India Company was established on December 31, 1600 to establish trading privileges in India. Some years later, the Virginia Company was created to establish settlements in the New World.
   
• Management: The corporation grew rapidly in the late 1800s and 1900s, leading to managementas a profession. To provide formal pedagogy management colleges were established. By the 1960s, management had become among the most prized professional qualifications, attracting thousands of bright students. The world has produced 35 million 'management graduates' over the last century.

In 1972, management arguably peaked when Peter Drucker's book displaced The New York Timesbest-seller, The Illustrated Joys of Sex, authored by a person coincidentally called Alex Comfort. In the half century since then, greed has repeatedly reared its ugly head. By the early 2000s, business leaders' excesses caused unprecedented social grief and financial disasters. Nowadays, management is perceived as lacking ethics, morals and discipline. Management and governance are sorely in need of innovation.

Governance innovation
So, how do you embed innovations in company governance? For culturally sensitive innovations, India might respond better to principles rather than rules. Increasingly anyway, companies need to prepare their accounts on principles-based standards in which a simple set of key objectives is set out with common examples as a guidance.

Indian corporate policy-makers rightly looked outwards for innovations, particularly the Anglo-American practices; for example, women on boards. Here again, Tata Sons had a woman director from 1918 right up until 1966. Contrarily and interestingly, Professor Sucheta Nadkarni, Cambridge Judge Business School, has just published her research that factors other than quotas are more important for women to join and stay on boards (The New York Times, April 8, 2015). The most effective policies, she states, are the economic power of women and the governance policies of a given corporation and not legislation requiring quotas.

Conjure the dramatic effect if the Union/state Cabinets adopted an assessment process as prescribed for corporate boards. Imagine the huge impact if the Cabinet secretary were to evaluate secretaries as director evaluation has been mandated. How elevated the moral high ground would be if Sebi and public institutions recruited a woman director on their boards. Exemplary behaviour by corporate and publicly visible leaders, more than rules and laws, is a strong cultural impetus for embedding innovation.

During my college years, Bob Dylan's song "Blowin' in the Wind" posed questions about peace, war and freedom. The song's refrain was as intangible as the wind. In the same spirit, I wonder:

How many laws must we have before lawmakers can agree?
That business managers are valuable and do deliver great social good?
The answer, my friend, is blowin' in the wind, the answer is blowin' in the wind.

#Susanta Lahiri, a co-creator of element 117, awarded #Hevesy Medal

ward for his contributions to heavy ion induced radioisotope production, tracer packet technique, converter targets, and green chemistry.

Professor Susanta Lahiri, Chemical Sciences Division, Saha Institute of Nuclear Physics, Kolkata, received the Hevesy Medal Award 2015, on April 12 at the Tenth International Conference on Methods and Applications of Radio-analytical Chemistry for his outstanding contributions to heavy ion induced radioisotope production, tracer packet technique, converter targets, and green chemistry.

The other person to also win the award this year is Professor Kattesh V. Katti of the Cedntre for Radiological Research, University of Missouri, Columia.

This premier international award named after George de HEVESY, the 1943- Chemistry Nobel Laureate, for his work on the use of isotopes as tracers in the study of chemical processes, is given to “an individual in recognition of excellence through outstanding, sustained career achievements in the fields of pure as well as applied nuclear and radiochemistry, in particular applications to nuclear analytical chemistry."

Prof. Lahiri, also a professor at Homi Bhabha National Institute, published nearly 180 papers in peer-reviewed journals such as Physical Review. He is a co-creator of super heavy element 117 (The Hindu, May 7, 2014)

In its tribute to Prof. Lahiri, the April 2015 issue of the CERN COURIER, an international journal of high-energy physics wrote: “Lahiri is recognised for a rich career during which he has developed and maintained active international collaborations with leading physics and chemistry institutes, including CERN, notably for the development of high-power targets in the EURISOL Design Study and the LIEBE test project at ISOLDE, and in research on radiopharmaceuticals and superheavy elements.”

According to Dr. K.L. Ramakumar, Director, Radiochemistry and Isotope Group, BARC, Prof. Lahiri’s association with research activities in radio-analytical chemistry has profound significance in terms of realising no-carrier added separation of high specific activity radiotracers for clinical applications.

“The single-minded dedication and unwavering self-belief borne out of sustained years of continuous research in the frontier areas of nuclear and radiochemistry contributed to his prowess and standing in the subject,” Ramakumar added.

But how and why did Lahiri take radio-analytical chemistry as his chosen field?

“I had a passion for nuclear science when I was studying for my MSc. and when I was selected in SINP for pursuing PhD degree. I met a wonderful supervisor, Prof. N.R. Das [and] that took me here,” he responded to this writer’s e-mail query.

Lahiri and his team made nano particles of gold by a low-cost technique that requires the least amount of chemicals. It is truly a green chemistry project.

In the process, they used minuscule amount of radioactivity which triggers radiolysis, which like a chain reaction, expands the radiolysis, and ultimately nano particles are formed.

Alchemists dreamt to convert lead cheaply into gold. Modern-day alchemists like Lahiri used multi-million- dollar-particle accelerators to produce trace amounts of mercury, thallium, lead, bismuth and polonium as carrier-free radio-nuclides by irradiating gold targets with certain lithium and carbon ions.

Lahiri and his co workers produced a “tracer packet” containing carrier-free radiotracers of manganese, copper, zinc gadolinium, germanium, arsenic and selenium for further studies of essential micro nutrient elements by irradiating thick cobalt foils in accelerators with specific isotopes oxygen, lithium and carbon ions.

Prof. Lahiri pointed out that except one study (which was carried out in CERN under our leadership) all others were done in India using the accelerator facilities at BARC-TIFR Pelletron and Variable Energy Cyclotron Centre.

#Emissions from biomass burning cross the #Himalayas

The organic acids present in the aerosols serve as a unique fingerprint in identifying the source of pollution.

Contrary to the general assumption that the southern slopes of the Himalayas act as a barrier and effectively block the transportation of pollutants from India and other parts of South Asia, a study published a couple of days ago in the Nature Group journal Scientific Reports finds sound evidence to prove otherwise.

Aerosols have been found to rise and cross the entire range of the Himalayas. So much so that studies conducted in the northern slope of the Himalayas at an elevation of 4,276 metres above MSL could find markers distinctive of pollution arising from India and other regions of South Asia.

Local meteorological conditions and regional atmospheric flow process have been the two major factors enabling the pollutants to cross over, notes Zhiyuan Cong, the first author of the paper from the Institute of Tibetan Research, Chinese Academy of Sciences, Beijing.

The culprit

The organic acids present in the aerosols serve as a unique fingerprint in identifying the source of pollution. In this case, the dicarboxylic acids served as a fingerprint.

Though dicarboxylic acids can be produced by biomass burning, vehicular exhausts and cooking (primary source), as well as atmospheric photooxidation (secondary source), the researchers were able to pinpoint the source as biomass burning.

Levoglucosan is a specific marker of biomass burning — it is “produced through the pyrolysis of cellulose during the combustion process,” Dr. Cong notes. Another unique marker of biomass burning is the water-soluble potassium. Both the markers showed strong positive correlation with dicarboxylic acids thereby confirming biomass burning as the source of pollution.

Though the pollutants were found to reach the northern slopes of the Himalayas during all the seasons — pre-monsoon, monsoon, post-monsoon and winter seasons — the amount of aerosol found peaked during pre-monsoon. This, according to them, is one more indicator of biomass burning as the source.

Agricultural burning and forest fires along the southern Himalayan foothills and the Indo-Gangetic Plain reach a high during the pre-monsoon period. That probably is the reason why the amount of biomass burning marker found peaked during the pre-monsoon time.

Dr. Cong attributes the local topographic relief of the Himalayas as playing an important role in allowing the pollutants to cross the mountains and reach the northern slopes.

The up-valley wind during daytime, being maximum in the afternoon, helps in pushing the pollutants to higher altitude. On the northern slopes, a down-valley wind is prevalent during the same time. The combination of the up-valley wind in the southern slopes and down-valley wind in the northern slopes allows the accumulation of aerosol on the glacier surfaces.

“Acting as efficient channels of south-to-north air flow, the mountain valleys could allow the air pollutants to easily penetrate throughout the Himalayas,” the authors write.

“Regardless of where the pollutants come from, the study has provided compelling evidence that they are due to biomass burning. We must step up the global effort to drastically cut down biomass burning as much as we can,” Veerabhadran Ramanathan, an atmospheric scientist at the Scripps Institution of Oceanography in La Jolla, California, who is unconnected with the study, told Nature.

The key is technology, not money

If self-reliance in defence is the stated goal, FDI is no solution. India must apply the same tools it did so successfully in space and nuclear science to acquire and develop military technology.

India’s notorious dependence on imported military hardware and the near moribund state of large parts of its public sector defence industry represent a full-blown crisis crying for a solution. India is the world’s largest arms importer and, with at least two decades of not replacing or upgrading obsolescent equipment through either purchases or indigenous manufacture, is on course now to spend around $30 billion in the next few years, and $200 billion in the medium term. For some years now, from the Atal Bihari Vajpayee-led National Democratic Alliance government in 2001 onwards, the government has been veering towards increased foreign direct investment (FDI) in defence manufacturing as a solution to the defence crisis.

The present Bharatiya Janata Party government, despite its rallying ‘Make in India’ cry, has furtherincreased the FDI limit in defence, with 49 per cent now permitted under the automatic route, 75 per cent where technology transfer is involved, and up to 100 per cent in cases involving significant new technology. While some Indian companies are wary of the entry of foreign players, most favour opening up the sector with an eye to the potentially lucrative business opportunities they see opening up.

For and against FDI

The arguments in favour of FDI in defence are familiar. First, public sector companies in defence, Research and Development and allied industries have consistently failed to meet the requirements of the armed forces, especially given the global revolution in military technology. Second, the superior management culture of the private sector will ensure better adherence to budgets and timelines. Third, the country is compelled into repeated imports without any technology transfer (despite contractual obligations) because the military is always urgently in need of the technology. Therefore, the argument goes, encouraging foreign companies to invest in Indian defence and set up industries here will mean that money will be spent within the country, generating jobs and bringing in new know-how, with the possibility of exports.

“ All the liberalised provisions since 2001 have led to a meagre inflow of only $4.8 billion, in an overall FDI inflow of around $334 billion.”

In my opinion, none of these arguments address the specific and unique needs of the defence sector in India. Whatever else these measures might achieve, they will not help accomplish what must surely be the main goal, namely to build self-reliance in advanced military technology and reduce India’s debilitating dependence on foreign suppliers in the area of national security.

The FDI inflow itself tells a tale. All the liberalised provisions since 2001 have led to a meagre inflow of only $4.8 billion, in an overall FDI inflow of around $334 billion. It may be argued that it is too early to judge, but there are actually good reasons why defence companies do not and will not find FDI in another country attractive, and why there are few such examples across the world.

FDI means a long-term presence in India, and good returns on investment are possible only if repeat orders or contracts for newer models are assured. But, unlike cars or white goods, that will not always happen in military equipment. There may be gaps of many years or even decades between orders. For instance, India bought the Mirage 2000 in the 1980s and has clinched the Rafale deal this year, both from Dassault of France. In France itself, however, Dassault is reasonably assured of continuous business from regular domestic and European orders, as well as from staggered exports. Foreign subsidiaries or substantial FDI will, thus, always put pressure on India for repeat orders. Would dependence on a Lockheed Martin (India) or a Bharat Boeing be really very different from dependence on the U.S. principals?

Yes, more of India’s money will be spent in India rather than in other countries. But the Defence Procurement Policy anyway mandates 30 per cent offsets (50 per cent in high-value contracts). In other words, the supplier must spend 30 per cent of the contracted value within India through local manufacture and services. On the other hand, even if manufacture were by an Indian subsidiary, some specialised technology or components will always need to be imported. As is the case in car manufacture by Korean or Japanese subsidiaries in India, where numerous models that sell in smaller volumes are only assembled in India with imported components. FDI may, therefore, not be so different from offsets in terms of local manufacture, jobs, or money spent.

Where is the technology?

It is often simplistically assumed, unfortunately by policymakers too, that FDI will bring in technology. Nothing could be farther from the truth. All foreign defence majors have protested continually against offsets, and have pressured India into diluting offset requirements one way or another. While they might cite logistical or other issues, the real anxiety is about sharing and losing control over technology, especially if the offset partner in India is a public company whose bargaining power would be greater than that of a private sector junior partner. The delay over finalising the Rafale deal was reportedly over disputes about the role of Hindustan Aeronautics Ltd.

“ It is often simplistically assumed, unfortunately by policymakers too, that FDI will bring in technology.”

India’s confidence in FDI draws a facile equation between foreign investment, local manufacturing and technology inflow. The key, however, is not money but technology. Technology transfer is elusive. It requires not just a clause in a contract, but in the recipient taking determined measures to ensure acquisition and absorption of technology. India has been singularly poor at that, some conspiracy theorists say, deliberately so. Further, domestic manufacturing has not in itself enabled it either. India has a long history of licensed manufacture of defence hardware, from the heydays of the self-reliance credo, the import substitution drives, and the famous “be Indian, buy Indian” slogan. In aircraft, for example, the famous Gnat fighter, the MiG series, the Jaguar, and various French helicopters were made here. In each case, the degree of indigenisation kept rising, sometimes reaching 90 per cent by value, but critical components or materials continued to be imported. India never achieved the stated goal of acquiring the capability to make the next upgrade or new model on its own. True indigenisation cannot happen just through local manufacture, India has to make it happen, but has not yet done so.

The present offsets policy is similarly not being used purposefully to acquire technology. Offsets are viewed in financial terms — money spent locally and jobs created. Instead, offset projects should be studied strategically — Indian scientists and companies acquiring the capability to independently develop and manufacture sophisticated military hardware. To rephrase, the goal should be ‘Made by India’, not merely ‘Make in India’. This is true for all technology, but crucial in defence. India has done it in space and nuclear technology. Why not in defence?

FDI in defence is an incorrect answer to wrong questions, a false solution to problems not posed properly. If self-reliance can be achieved in the strategic fields of space and nuclear technology, through dogged pursuit and by creating institutions of excellence with political support, there is no reason why it cannot be done in the equally strategic area of military hardware. India even has a Minister of State for Defence Production but nobody seems to know what the office is meant to do.

No self-respecting nation of India’s size and technological capability can or should accept dependence on foreign manufacturers for defence requirements, whether directly through imports or indirectly through FDI. This is not just about national prestige but a matter of vital national interest.

First smart city builds in Gujarat

India’s push to accommodate a booming urban population and attract investment rests in large part with dozens of “smart” cities like the one being built on the dusty banks of the Sabarmati river in western India.

So far, it boasts modern underground infrastructure, two office blocks and not much else.

The plan, however, is for a meticulously planned metropolis complete with gleaming towers, drinking water on tap, automated waste collection and a dedicated power supply – luxuries to many Indians.

With an urban population set to rise by more than 400 million people to 814 million by 2050, India faces the kind of mass urbanisation only seen before in China, and many of its biggest cities are already bursting at the seams.

Ahead of his election last May, Prime Minister Narendra Modi promised 100 so-called smart cities by 2022 to help meet the rush.

At a cost of about $1 trillion, according to estimates from consultants KPMG, the plan is also crucial to Modi’s ambition of attracting investment while providing jobs for the million or more Indians who join the workforce every month.

His grand scheme, still a nebulous concept involving quality communications and infrastructure, is beginning to take shape outside Gandhinagar, capital of the state of Gujarat, with the first “smart” city the government hopes will provide a model for India’s urban future.

“Most (Indian) cities have not been planned in an integrated way,” said Jagan Shah, director of the National Institute of Urban Affairs which is helping the government set guidelines for the new developments.

Among the challenges to getting new cities built or existing cities transformed is the lack of experts who can make such huge projects work and attracting private finance.

“To get the private sector in, there is a lot of risk mitigation that needs to happen because nobody wants a risky proposition,” he told Reuters, stressing the need for detailed planning.

To build smart cities, India allocated 60 billion rupees ($962 million) in its annual federal budget for the financial year starting April 1, even as it spent just a fraction of last year’s allocation of 70.6 billion rupees, said Shah.

OLD CITIES OR NEW?

Gujarat International Finance Tec-City (GIFT), as the smart city is called, will double up as a financial hub, with tax and other breaks to lure banks, brokerages and other businesses.

Developed in partnership with IL&FS Engineering and Construction, it aims to compete with India’s own financial capital of Mumbai as well as overseas rivals like Dubai and Singapore.

Pressure on India’s existing urban centres is already intense, with cities like Mumbai gridlocked by traffic and hampered by poor infrastructure and a lack of amenities like parks and effective public transport.

Yet some experts believe that building new cities may not be the answer to India’s swelling urban population.

“To address India’s urbanisation challenge we have to start looking at our existing cities,” said Shirish Sankhe, director at consultant McKinsey and Company, India.

He added that new cities would be only a small part of the solution relative to brownfield projects.

India has built planned cities in the past, including Chandigarh, designed by French architect Le Corbusier, and Gandhinagar itself. But the scale of its current push is unprecedented.

A bird’s eye view from atop one of the two office buildings on the 886-acre GIFT site, a venture which began when Modi was chief minister of Gujarat, shows little sign yet of the 9 billion rupees spent on the first phase.

But the sandy plain hides infrastructure including an underground tunnel for utilities, a first in India.

WHAT MAKES A CITY “SMART”?

The government has yet to decide what exactly will make a city “smart”, but the programme is expected to include building new centres as well as adapting existing ones.

A detailed definition with guidelines is due soon, said the National Institute of Urban Affairs’ Shah.

Existing cities like Dholera and Surat in Gujarat, and Visakhapatnam in the east, have already begun work to transform into smart cities with help from companies such as Microsoft Corp, IBM Corp and Cisco Systems.

Beyond GIFT, greenfield projects are likely to face hurdles including land acquisition rights and lengthy approval processes, as well as finding the right location.

GIFT has the advantage of being flanked by a river on one side and a national highway on the other, and also sits between Gujarat’s political capital of Gandhinagar and its business hub of Ahmedabad, with a large international airport.

The key, experts say, is time.

“Physical masterplanning takes time. Complexity is built into this. And my sense is it is probably going to take longer than what most people think,” said McKinsey’s Sankhe.

You need to know about Net neutrality

It is the principle that all traffic on the Internet must be treated equally by Internet service providers. Those advocating Net neutrality believe all bits of data are equal, and, therefore, should not be discriminated on the basis of content, site or user. This has largely been the default mode since Internet started.

NET NEUTRALITY

Net neutrality is a principle that says Internet Service Providers (ISPs) should treat all traffic and content on their networks equally.

How does net neutrality affect you?

The internet is now a level-playing field. Anybody can start up a website, stream music or use social media with the same amount of data that they have purchased with a particular ISP. But in the absence of neutrality, your ISP might favour certain websites over others for which you might have to pay extra. Website A might load at a faster speed than Website B because your ISP has a deal with Website A that Website B cannot afford. It’s like your electricity company charging you extra for using the washing machine, television and microwave oven above and beyond what you are already paying.

Why now?

Late last month, TRAI released a draft consultation paper seeking views from the industry and the general public on the need for regulations for over-the-top (OTT) players such as Whatsapp, Skype, Viber etc, security concerns and net neutrality. The objective of this consultation paper, the regulator said, was to analyse the implications of the growth of OTTs and consider whether or not changes were required in the current regulatory framework.

 What is an OTT?

OTT or over-the-top refers to applications and services which are accessible over the internet and ride on operators’ networks offering internet access services. The best known examples of OTT are Skype, Viber, WhatsApp, e-commerce sites, Ola, Facebook messenger.

India slips in Global Networked #Readiness Index

India has slipped six places to rank 89th on a global Networked Readiness Index, showing a "widespread" weakness in its potential to leverage information and communications technologies for social and economic gains.

While Singapore has replaced Finland on the top of the 143-nation list, prepared by World Economic Forum (WEF), it has called for improvement in India's business and innovation environment, infrastructure and skills availability.

However, India has been ranked on the top globally on a sub-index for competition and affordability.

Overall, India was ranked 83rd last year, and even better at 68th position in 2013.

WEF said India's weakness is widespread, falling in the bottom half of seven of the 10 pillars of the index.

"Major areas that need improvement, according to our analysis, are the country’s business and innovation environment (115th out of 143), infrastructure (115th) and skill availability (102nd).

"The scope for ICT to bring major improvement to the country's overall economic and social development is, therefore, very high," WEF said, while lauding India for a vibrant telephony and Internet market, which has given it top position in terms of competition and affordability.

In the top 10, Singapore is followed by Finland, Sweden, the Netherlands, Norway, Switzerland, the US, the UK, Luxembourg and Japan, which has climbed an impressive six places year-on-year to 10th position.

WEF said the developing and emerging economies are failing to exploit the potential of information and communications technologies (ICT) to drive social and economic transformation and catch up with more advanced nations.

The index also suggests that the gap between the best and worst performing economies is widening. Those in the top 10 per cent have seen twice the level of improvement since 2012 than those in the bottom 10 per cent.

"This demonstrates the scale of the challenge facing developing and emerging nations as they seek to develop the infrastructure, institutions and skills needed to reap the full benefits of ICTs, as only 39 per cent of the global population enjoys access to the Internet despite the fact that more than half now owns a mobile phone," WEF said.

It also said that the progress by the larger emerging markets towards networked readiness has been largely disappointing. The Russian Federation is the highest-placed BRICS nation, climbing nine places in 2015 to 41st.

It is joined in the top half of the ranking by China, which remains at 62. All other members of the group have declined, with South Africa coming next (75th, down five), followed by Brazil (84th, down 15) and India (89th, down six).