Archive for the ‘Vision 2020’ Category

SWOT MATRIX of INDIA: Analysis of Indian Social- Economic- Political- Technological conditions.

January 31, 2007

Dear Friends,  

There are few questions about our complex & unique system of India. How we can change our system thinking? How we can make a synergetic triangle: Industry-GOI- Institution for co creation of knowledgeable resources for evolution of innovations. 

Root Causes – Why Plans are not execute at the bottom? Constrains – Where are missing link?

Strategy & tactics – What is the action plans? Methods-how these actions plans execute for achieving the end Goal.

Kindly download one page colored framework of SWOT MATRIX of INDIA. URL: syenrgetic-trinangle-industry-government-instituion.docsyenrgetic-trinangle-industry-government-instituion.doc  

SW0T   ANALYSIS:

                  Industry-GOVERNMENT -institution

 STRENGTHS 

  • Highly educated , skilled ,young, capable & dynamic  human resources
  • English speaking & analytical students
  • World class business-social-spiritual –political leader, Professor, scientist, Manager-Doctor-Engineer-Civil servants etc
  • Very rich in  Natural & Living resources
  • Biodiversity & Traditional knowledge base
  • Diversity vs. Ideas-Innovation-Integration
  • Powerful spiritual strength (yoga-Ayurvada-Healing-therapy services)
  • Geographical location (whole markets are shifting toward Asian nations)
  • India Strategic position at various platforms
  • Big democracy, Big market & free media
  • Range of emerging professional champions
  • IT & Software superpower

WEAKNESSES: 

  • Lack of trained & skill work force  
  • Small supply of specialize professional
  • Lack of spirits of entrepreneurship, patriotisms and leadership skill
  • Lack of effective & execution framework
  • Lack of Indian management models
  • Lack of transparency-Trust-Responsibility
  • Lack of learning habits & Team work spirit
  • Fear of sharing knowledge & taking risk
  • Thinking win-lose   lose-win   look-outside
  • Slow absorption of Innovation & change
  • Lack of Indian management models
  • Absence of greater technology impetus
  • Unawareness: Quality-Standardization
  • Lack of Emotional-Spiritual development
  • Rush of getting high marks not Development
  • Blindly respect anything taught by elders

THREATS (Internal & external): 

  • A feeling of unstable government
  • Self centered political leadership
  • Slow & Dysfunctional judiciary and corrupt law enforcers
  • Regulation, protection and restriction
  • Mechanistic -stable-Layered-complex system
  • Corruption, Ignorance & Complacency
  • High competitive & marketing forces
  • To patent Indian intellectual property by outsider (unawareness about own research)
  • Fast change Internet-information technology& new Inventions-Technology-Innovations
  • Diversity vs. Imbalance- clashes
  • Regional-Religion-caste-culture conflicts
  • Migration of all branch to software job
  • Job seeking mind sets, not job creator
  • Unnecessary social pressure on students
  • Excessive rich & powerful mindsets

 OPPORTUNITIES 

  • Big potential market in education Sector & emerging new market Segment in services (create it)   
  • General Agreement of trade on Services
  • Research & Development capability
  • Generate intellectual property
  • Resource Building capacity
  • Competition- cost – Quality service

  • Collaboration : win-win thinking
  • Hybrid solution–balancing & blending
  • Tourism, health sector, food processing
  • Rural economy development & social transformation ( PURA model )
  • Need  modernization of infrastructure , Library and laboratory
  • Internet institute network & e-Library
  • Councilors and student advisors

Key:
India has lots of weakness but this is a space of thinking (new Ideas or new perceptions), understand it as a space of opportunities and transform into strength.  

Note: Please send your suggestions, experiences & questions for improvement of this SWOT MATRIX of India. 

Ajay Singh Niranjan ( ajay_uor@yahoo.com)

Advertisements

Deeshaa – Transforming Rural India

January 29, 2007

Rural Infrastructure and Services Commons

RISC Schematic Presentation

The problem of the economic development of large underdeveloped economies present unique challenges that require innovative solutions. In an age of increasing specialization, there is a critical need for integration to supplement the specialization. Economies are complex, nonlinear systems and just as they cannot be adequately described by partitioning them into subsystems and analyzing them piecemeal, so also their problems cannot be addressed by partial interventions. This is because the subsystems of complex non-linear systems interact strongly with one another, and even the most carefully thought through partial solution often fails to achieve its intended goal.

The aim of RISC is to address the problems of one such complex nonlinear system — the rural Indian economy — and to outline a solution that addresses the problem of economic growth comprehensively by accomplishing a set of interlinked transitions to a more efficient equilibrium. Economic development is multi-faceted — demographic, technological, social, political, military, institutional, informational, ideological, and so on. Given binding resource constraints, the optimal solution requires the power of ideas for it to be feasible.

The RISC Paradigm

The economic development of India’s 600 million strong rural population presents formidable challenges and also great opportunities. An institutional innovation called RISC — Rural Infrastructural & Services Commons — is presented that has the potential for achieving the multi-faceted goals of sustainable economic development.

Fundamentally, the specific market failure that RISC addresses is that of coordination failure. RISC is designed to coordinate the activities of a host of entities—commercial, governmental, NGOs. It synchronizes investment decisions so as to reduce risk. It essentially acts as a catalyst that starts off a virtuous cycle of introducing efficient modern technology to improve productivity that increases incomes and thus the ability of users to pay for the services, and so on. It creates a mechanism that reduces transaction costs and therefore improves the functions of markets.

Revolutions in the information and communications technologies (ICT) have the potential to remove the barriers to information asymmetries that were impeding the working of markets that are critical for economic growth. The forces of globalization have created opportunities for the integration of rural populations in a larger marketplace than was ever available to them before.

Economic development is both the cause and consequence of urbanization. RISC achieves the urbanization of the rural population without requiring the massive and unsustainable rural-urban migration. It brings urbanization to the rural population by making available to them the full set of services and amenities that are normally available only in urban locations. It works within the constraints of limited resources by concentrating them in specific locations to obtain economies of scale, scope, and agglomeration. It helps lift the population out of a development trap by making available to them the benefits of technological advances and the increased access to global markets that globalization promises.

RISC follows the logical trend of moving away from vertically integrated institutions to one of horizontal segmentation and specialization. Thus, conceptually and operationally, a RISC has two levels: the lower one is the infrastructure level (henceforth, the I-level) which consists of power, broadband telecommunications, and the physical plant (building, water, air-conditioning, sanitation, security); and above that the user services level (henceforth, the S-level) which consists of all services that are relevant to rural economic activity such as market making, financial intermediation, education and library, health, social services, governmental services, and so on.

The I-level provides a reliable, standardized, competitively-priced infrastructure platform. This is achieved by the coordinated and cooperative actions of firms that specialize in the component activities. Co-located on the S-level are all kinds of firms that provide user services. The presence of the I-level reduces their costs and therefore the prices that the users face. Economies of scope and agglomeration are obtained by the presence of the variety of different service providers.

Given that rural populations are very poor, it is reasonable to expect that the aggregate demand of a single village for any single service will be very low. However, the aggregate demand for, say, a 100 villages for a single service could be significant. Aggregating the demand for many different kinds of services of the same 100 villages would translate into lot of services. These services would require infrastructural inputs which can be commercially and sustainably supplied. The total rural population of India can be covered by about 6,000 RISCs each servicing the needs of 100,000 people. The economies of scale are obtained by implementing a few thousand RISCs. Access to a RISC for any rural person is only a ‘bicycle commute’ away.

RISC is not an attempt at social engineering through centralized planning. Neither is it another model of Internet kiosk or telecenter. It aims to solve a problem by appealing to the profit motives of all participants, be they private sector, NGOs, or the public sector. The good that will surely come out of it can only be attributed to Adam Smith’s invisible hand.

The foundational idea upon which the proposed solution stands is that of the emergence of complex adaptive behavior from the interaction of agents following simple rules within a sufficiently rich environment. The solution provides a balance between the forces of cooperation and competition, between standardization and specialization, between private and public action, between generalization and particularization, between globalization and localization, between unity and diversity. It is an idea that is at once both blindingly obvious and fleetingly elusive.



Are you interested :Write to us for more information on RISC.

Download the concept paper on RISC.

Join the Deeshaa Community —  /www.deeshaa.org/

Education First – Making INDIA a Knowledge Economy

January 28, 2007

It is necessary to first understand the entire “Matrix” in education. Even after 59 years of Independence, the following situation remains as far as the Human Capital Development of our country is concerned:-

  1. Drop-out rate in schools from KG to 10+2 is (including those who never attended school) 90% to 94%.  
  2. China has about 1.80 million schools, while we have in India about 1.20 million schools!
  3. The “Governance” in Government run schools is very low. In many cases teachers are absent (15% to 60% absenteeism) from schools in rural and urban schools of India and are paid full wages and perks in spite of this! Studies have shown that even the poorest of the poor rather send their children to un-aided schools where fees have to be paid and not to government run free schools. The quality of schooling of such unaided schools is higher than Government schools although the salary of Government teachers is two to three times higher than the teachers of the un-aided schools.See articles and solutions on governance at www.wakeupcall.org
  4. The existing Indian definition of Literacy (if you can write your name you are literate) needs to be amended to International Standards. This criteria is used in the census for determining the literacy rate.
  5. As per the Ministry of HRD the present illiteracy is ONLY 37% or 430 million people, while as per UNICEF and UNDP it is nearly 60% or 650 million people. China has a Literacy rate of about 93%.
  6. The first step of making India a knowledge economy is literacy and needs to be given A1 priority.
  7. The total amount spent on education is about Rs. 91,000 crores per year. 15% by the Central Govt. and 85% by the State Governments The Education Cess will collect another Rs. 7000 crores per year. This is about 3.3% of GDP. The MHRD has calculated that another Rs. 40,000 crores per year would be required only for additional requirements for Primary Education!
  8. We estimate that another Rs. 100,000 crores are required per year just to have reasonable quality of Primary and Secondary education, up to Class 10th., which is where the Central and State Governments should concentrate for the next 10 to 20 years, or till we have at least 95% Literacy and at least 80% of the population who are completing the High School stage or Class 10th.
  9. As per our estimates the total expenditure for education is nearly 8% of GDP, about 3.3% from Government and about 4.7% from private participation. This includes funding of unaided schools and colleges + bribes and capitation fees + payment for students studying abroad + tuition classes +coaching classes +private I.T. & Software training institutes. Most of this private funding is confined to urban areas where only 30% stay.
  10. About 7% to 8% of the youth who finish the 10+2 stage (pre-university) enter the17, 960 colleges of India. 70% of all graduates are B.A. or Arts graduates. Is this relevant today? Most of these so called graduates are not-employable.
  11. Of all new employment taking place nearly 60% are self employed. About New Employment – 1% is with government, 2% with the private ‘organized sector’ and 97% with the ‘unorganized sector’.
  12. Presently there is little connect between education and employment generation & quality of Life
  13. The employers associations, chambers of commerce and other business organizations are fragmented. There is no “National Common Minimum Program” for “education and training of manpower” in India. In most developed and developing countries the Chambers of Commerce (who represent the employers and business) Lead from the front.
  14. About 26 million people are added every year to the existing education system, which is like adding another Australia + Hong Kong + Singapore & UAE per year!
  15. Presently both the Central Government as well as the State Governments are running in Financial Deficits, of about 9% to 11% of GDP, so the question of additional financing for education will strain not only the existing budgets but also put pressure on other sectors, where funds are being presently allocated.
  16. “Licence Raj” runs all Higher & Technical Education in India. Let us Bench-Mark with USA, Germany and Japan, the three largest economies of the World account for nearly 50% of the world’s GDP.  Do their governments exert similar controls as we have in India? Can we learn from them? There is fierce competition between the institutions in these countries for excellence!
  17. China has about 900 Universities, while we in India have 362 Universities. USA has 3600 and Japan has 4000!
  18. In India, the fees of the courses, pay-scales to the teachers, appointment of the head of the Institution and the syllabus, are decided by the 58 or more Central and State-Government Boards of Education. Will this create innovation, excellence  and world class students?
  19. The Coaching Business is getting bigger than the Education Business, entrance examinations for the IIT’s, IIM’s and a few prestigious  management schools attract about 600,000 applications (who spend nearly Rs.2.00 lac each for pre-coaching, amounting to Rs.12,000 crores per year, for 6000 seats. These institutions spend hardly Rs.800 to Rs.1,100 crores per year, as their teaching budgets!
  20. While 75% to 85% the youth of the developed and developing world learn a skill or competence or trade between the ages of 14 to 35, by Vocational Education & training, in India it is hardly covers 3% to 4% of the population!
  21. India has about 5000 ITI’s (Ministry of Labour) and about 5000 Vocational schools (Ministry of HRD), while China has about 500,000 senior secondary vocational schools!
  22. India has 300 million able bodied unemployed between the ages of 18 to 50, but they have no skill sets and therefore not employable! Employers in India are facing a huge shortage of skilled manpower. Wages and salaries in India, of skilled manpower are going up too fast. India will not be able to take advantage of the demographic profile of its population, if the youth do not receive relevant and quality Education & Training.
  23. We have not seen any co-ordination between the Ministry of Labour and the Ministry of HRD as far as VET planning on a National level, is concerned
  24. We in India have NOT still appreciated the fact that, world wide, Education is 5 times or 500% bigger than I.T. or software!
  25. India can become an Educational Hub for the world and earn US$ 100 billion per year, after 10 to 20 years! We need to start now, but remove “Licence Raj” first, as was done for business in 1991! India has 7,700 foreign students while Australia has 383,000 foreign students!
  26. Because of the “Licence Raj” in Higher and Technical Education, it is estimated that nearly 70,000 to 90,000 students leave India every year for studying abroad. At any given time these 320,000 students cost the country a foreign exchange out flow of nearly US$9.6 billion per year or nearly Rs. 45,000 crores per year, enough to build 40 IIM’s or 20 IIT’s per year. Nearly 1,20,00 students leave India every year for foreign studies.
  27. The present problem of reservation will not solve the needs and aspirations of the youth. India needs a larger number of educational Institutions, seats and higher quality in the area of Higher & Technical education. Rationing, quotas and reservation can never address the actual situation. The Central and State governments are strapped for funds even for Primary and Secondary education. The solution lies in complete decontrol of all forms of Higher & Technical education; the same way as business was delicensed in1991!
  28. Since 1947 we have tried reservation and controls in the allocation of steel, cement, colour TV’s, airline tickets, cars, scooters, etc and have failed. Only increase of supply and decontrol has finally solved these issues.

If INDIA has to become a Knowledge Economy we need to do the following:

  1. Aim for 95% to 100% Literacy in the next 10 years
  2. Decontrol and involve the management of all primary schools to the local bodies such as Panchayats, Village Groups, Municipalities and local Citizen Groups. Allow the community to manage.
  3. Consider the use and issue of “Education Coupons” for school children, so that they can choose the schools of their choice and funding from the government, which would have been dispersed for the funding of Government run schools in rural and urban India, should be paid out. See www.ccsindia.org
  4. Scrap “Licence Raj” in Higher & Technical Education, after and including class 11th, to allow innovation, creativity and excellence in Education. See www.epsfi.org
  5. Ensure that 80% to 90% of the population in the age group of 14 years to 50 years goes in for some sort of relevant Vocational Education & Training. See www.wakeupcall.org
  6. Allow starting of Enterprise Skills Education, ESD, from Class 5th to the 12th. This will teach the youth about how the real world works. Only 100 hours per year required. Nearly 60% of the workforce in India is self-employed. See www.deispune.org
  7. Start Prevocational classes from Class 8th. Have Vocational Counsellors in all Higher Seconadary Schools. Upgrade all Higher Seconadry Schools for Vocational Education & Training.
  8. Have a dynamic interaction between all stake holders, Academia-Industry-Business-R&D-Chambers of Commerce-Student bodies-Parents organizations-Civil society and NGO’s. Chambers of Commerce, who represents the employers and business, must lead from the front.
  9. Allow private finance and participation in all sectors of education, till we reach the goals as mentioned under item 8 in section one above.
  10. Allow tax breaks and incentives for private and NRI funding, for the next 20 years or till we achieve bench marks as mentioned under item 8 in section one above.

                                                 Source : i watch – Transforming India

Kindly contact me forcomplete information & details of  i watch-Transfomring India book.

Ajay Singh Niranjan ( ajay_uor@yahoo.com)

i watch www.wakeupcall.org Education 1st

551, 2nd Floor , Mukherji Nagar, Delhi -110009

Turning India Vision 2020 into reality – role of technology financing

January 28, 2007

Dr. Abdul Kalam speaks, writes and works having a live vision at the back of his mind “Be India a Developed Nation“. The action plan to realise this blue print of mind into reality must have on the top of its itinerary ‘the technology’. Grooming ‘technology’ from seed upto a fruit bearing tree is an art, science and a specialised enterprise in itself.

Like in other businesses, finance is an important element here too. However, the key to success lies in assessing where, when and how to facilitate entry for money in the process of technological project realization. The author has a wide exposure to the whole tree of ‘technological growth process’ in various capacities – a grass root scientist, technocrat, industrial consultant and writer. It is with this backdrop that he enumerates the basic ingredients involved in making a technology idea grow into a full business, by ensuring the entry of financial sources at pre-assessed stages.

A vision is a picture of what is possible or what is desired in a longer-term future. It could be of one individual in origin or it could be a collective in its conception. The Technology Vision 2020 was a massive national exercise implemented by Technology Information, Forecasting and Assessment Council (TIFAC) during the years 1994 and 1995 and was released to the nation through a form of 25 documents on 2nd August, 1996 by the then Prime Minister. It resulted due to the tireless efforts of 500 persons with inputs from about 5000 persons from different fields of India.

A brief presentation of the findings of vision exercise along with several other linked factors such as the concept of developed India, economic issues, social issues and also certain implementational issues, have been brought out in a book “India 2020″ by Dr. APJ Abdul Kalam along with the author.

Further elaboration starting with the vision and also dealing with several aspects of important interconnected policies and procedures as well as the processes of science and technology and human dimensions, have been brought out by the author in a book ‘Empowering Indians’ (revised reprint 2002 with a foreward by Dr. APJ Abdul Kalam).

These two books contain substantive information about the details of the vision and also the various possibilities of implementation. The book referred to in Ref.2 has also described some of the projects in which TIFAC is involved in attempting to realise the vision into action as a major demonstrative exercise.

Much more can be seen in the TIFAC website: http://www.tifac.org.in , which is continually updated. Several other parameters such as technology capabilities, organisational capabilities, project management market research, etc. are also important in realising the vision. Therefore this paper briefly addresses the role of technology financing.

bull.jpg (5174 bytes) Technology idea to business: The essential steps

Often many persons including scientists and technologists tend to believe that a scientific or technological idea if pursued with sufficient funding and support, would automatically result in a commercial operation. Many also tend to think that basic research to technology to commerce is a straight forward linear process given enough time and money.

In actual life, science and technology are distinct elements though interwined. Technology and technological skills and knowledge are not automatic input-output derivatives of basic scientific research. These are discussed in some detail in Ref.2 citing a number of quotes and references from scholars. In actual practice, technology is complex and tacit (i.e. embodied in persons and organisations).

There are many different strands of technology in a single product or service. Therefore, having an excellence in one technological element alone does not assure a commercial product, let alone a commercial success. Based on the experiences of TIFAC and also of Technology Development Board (TDB), Prof. VS Ramamurthy, Secretary, Department of Science and Technology, Government of India often emphasises in a number of meetings and speeches that while financing is an important component, technology development does not take place merely by stepping up finance.

There are many other prior activities which need to be done if technology development can mature into a good business activity. It is precisely in this area where TIFAC has done considerable amount of work during the past 14 years. In the subsequent paragraphs the author will try to compress a few important issues relating to converting of technological ideas into business operations.

In actual life, science and technology are distinct elements though intertwined. Technology and technological skills and knowledge are not automatic input-output derivatives of basic scientific research

Let us refer to Fig.1. The x-axis of the Figure is time. The quantity of time will depend upon the product or service under consideration. For a completely new area time at the right hand end i.e., the time for “produce and supply to market”, could even be 7 years. In a number of cases in industry it would be of the order of ½ – 3 years for incremental innovations.

In fact, a good business strategy should be to have a number of technologically induced innovative products with different cycle times for realisation, so that in the overall, the technology development (which requires financing) will be continuously giving financial outputs through delivery to market, thus not becoming a drain on the overall to the company. This may be called “technology development diversification strategy”.

techfin1.jpg (43841 bytes)
Fig 1

If a company does not have even a plan of having a few innovations in the existing product line or otherwise every 2 to 3 years, it is very unlikely the company can be successful in a present day competitive business world. It is necessary for a company or an entrepreneuer to look ahead in time as to what would be the status a few years from now. This looking ahead will help in initiating actions right now. This is where the role of technology financing starts.

Having identified a few product or service segments for the coming few years, the question (before the company or entrepreneur) comes as to what we will do now. How do we reaslise the desired change in the existing product line or process or even in terms of introducing new products/services. Often this process of looking ahead and deciding action for today, is an iterative process.

A technological idea or a business idea could give some idea as to what a future product can be. Then cycling back whether one should have different options, one would modify the product idea or service idea and finally arrive at a few target end results from a time equal to plus x years (i.e. in the near term future).

Having done this the technology development or business development starts. That is where the problem also starts. Invariably for such items which are innovative at the given point of time (in the present) there will be a relatively high degree of business and market uncertainty as well as product and technical uncertainties and perceived technology risks.

If these are very low at given point of time (in the present) there will be a relatively high degree of business and market uncertainty as well as product and technical uncertainties and perceived technology risks. If these are very low at given point of time (now) that means the product and services are already well established in market and therefore there is no great innovation involved. Actions relating to such products will be mainly issues like cutting costs or by trying some other business strategies. In such cases normally the competitor will also be doing the same and one cannot sustain long with such non-innovative actions.

Therefore, those who want to have a good business for the future where his or her company will have a specific commanding role or a powerful role or atleast a role in which the company fortunes are not fluctuating too fast then the company has to learn to take up just now in the present new activities where there are some higher business and market uncertainties and which are likely to become desired products or services a few years from now.

Often in India since business groups and technology development groups even within the same company tend to work differently in separate compartments each one worries only of his own part. If the technology is from an external institution to the company or the entrepreneur, then such “separatist” perceptions are often worse.

Normally technology generators do not think of all the options available for a business company or an entrepreneur and try to push their own specialisations; this is but natural. Similarly the business person or entrepreneur looks at only the investment aspects, markets and returns. But as explained above, for a futuristic product even with small changes at a future time of two to three years from now, it is necessary to study the technological aspects and the business aspects connected with these changes right now and take action. This zone is close to the origin of the Fig.1.

In the figure, technology, product and service uncertaintly is in the upper part of the y axis and business and market part of the uncertainty is to be in the lower part of the y axis. The correct management strategy should be to look at both parts of the curves (i.e. upper and lower) together.

If technology funding is done for a future product, without considering the lower half of the figure, even though in the time axis over a few years the technical uncertainties will come down, business uncertainty may not have come down because market and other issues have not been factored in the technology development. And, vice versa, if only a business strategy is done with marketing and other aspects without considering technological aspects on the assumption that the technology generator can be approached a few years from now after the market development and business development steps are ready, then we may be surprised to know that technological availability is poor or uncertainties are high. Then again, the lost time cannot be easily regained. Therefore, the correct management strategy is to grapple with technological uncertainties and technological risks as well as business and market uncertainties at the same time well in advance of the time in which we anticipate results to flow.

 In other words, in the figure the left side of the funnel has to be dealt with pushing all the stake holders together inside the broad end of the funnel, so to say, figuratively thus making them a collective group to weigh technology options, to look at business aspects, etc. These functions are done by TIFAC in generating a number of well-researched reports in technology areas, as technology linked business opportunities.

techfin.jpg (24657 bytes)

Some of the reports are at a relatively macro/meso level as in the case of the Technology Vision 2020 reports and most of TIFAC reports are at meso / micro level (i.e. close to action levels) as in the Techno-Market Survey reports of the TIFAC. When issues are discussed to generate such reports, even the very process of the generation of the report creates a cohesion for further forward movement into the funnel without imbalance between the technology and business aspects. These reports are available in the public domain from TIFAC and industries can use them effectively for themselves to enter into funnel and later pursue specific projects. Many of them are already doing it. It is important for entrepreneurs and business managers to do such knowledge based preparations before they go for financing of technologies.

The technology financing is not a mere exercise in calculating the returns of investment or giving money as per procedures and formats but is more complex

Again while embarking on specific projects, one has to start looking at various technical elements including intellectual property rights (IPR) and other aspects even while formulating the projects. This process will help to a great deal in reducing uncertainties and help making a forward effective movement into the funnel of uncertainty. Then, when the decision is taken to launch a project (by the entrepreneur or a company), further details can be worked out.

Often TIFAC not only helps in entering the early part of the funnel before the launch of the project through its reports but also helps the potential entrepreneur who applies for the Home Grown Technologies (HGT) Program of TIFAC or Missions such as Sugar Technology Mission, Advanced Composites Mission, etc. or a number of vision 2020 projects which range from agriculture, agro processing, health sector, textile machinery, road transport sector and several other thrust areas like energy, etc. (see for details in Ref.3). Even while these projects are formulated by the entrepreneur or company and sent to TIFAC, through further assessment, evaluation and the interactive process. TIFAC helps in narrowing many uncertainties by scoping the project.

 In fact, agencies which have funds will be able to do this well because often the potential customer would not like to spend a lot of intellectual and other managerial efforts in scoping when there is severe uncertainty about funding. That is why, the author believes the real role of a technology funder starts at a time before the line shown in the fig.1 as “launch of the project”.

But actual funding takes place after several of these evaluations and interactions. During this process the company or entrepreneur writes down the business plan and also goes through draft agreement for part funding which spells out roles of various stakeholders.

NRDC is one major facilitator in technology financing; while it can enter in any part of funnel of Fig.1, often it is better done in the middle of funnel when uncertainities are not too high

After the agreement is signed and the part fund flow begins, the role of the funder specially in the case of TIFAC changes into a different mode. Even though all the while TIFAC is a partner with the entrepreneurs and the technology generators coming up for a specific project, however, when TIFAC has funded, it assumes a special role of working closely and brings in the best experts as Project Monitoring Teams without conflict of interest with the entrepreneur and/or the company. Based on the TIFAC experience, many of the persons who have received technology finance from TIFAC have said that the role of the project monitoring group is that of counselling rather than monitoring.

It should be pointed here that there is no omnibus monitoring committee for TIFAC funded projects. Each project has a special monitoring group depending upon the expertise required and often bringing people with industrial experience and also those who can deal with end users and market segments. When these partners go further and further down the funnel from the left hand broad side of the funnel towards the narrower part in the right side, the uncertainties come down. In this process or pilot plant operations based on technological/business idea takes place, so that a stage is set for a much larger commercial operation. At this stage the companies can access Technology Development Board (TDB) or in some cases even the banks when risks have come down considerably.

Thus a crucial role of agencies like TIFAC in technology financing is to give options of ideas at an early stage through its reports and other interactions) and allow the potential companies and technology tenerators to enter the left side (broad side) of funnel in a synchronised manner and then be able to launch specific projects and work along till the uncertainties are brought down to minimum. So the technology financing is not a mere exercise in calculating the returns of investment or giving money as per procedures and formats but is more complex.

bull.jpg (5174 bytes) Technology financing sources: where and when they enter

This section describes information about various sources of financing available to an Indian company or entrepreneur and also the elements of criteria used by them.

We have described about TIFAC. It normally funds part on a soft loan basis. The projects can be a few tens of lakhs to several crores of rupees.

NRDC is one major facilitator in technology financing. While it can enter in any part of the funnel of Fig.1, often it is better done in the middle of funnel when uncertainties are not too high. NRDC can help the entrepreneur to gain some competitive time to launch commercial projects in addition to finding financing sources. NRDC would, of course, be looking at its own income as well. Projects can be a few tens of lakhs to several crores of rupees. NRDC helps in exports as well. It also helps in IPR aspects.

When uncertainties come down, and there is a greater promise of large commercial operations, go to TDB. It is better to have projects in the range of a few tens of crores of rupees. Again it is soft loan, part funding.

PATSER of DSIR is another source. Again it is better to target PATSER when you are in the middle level of the funnel. It is a part grant with royalty clauses.

There is another interesting scheme called TePP (Technopreneur Promotion Programme) jointly operated by PATSER and HGT of TIFAC. It is a small funding from several thousands to a few lakhs of rupees. Helps small individual innovators, mostly in the broad side of the funnel. Once their ideas show promise, they can try to go for PATSER or HGT.

SIDBI is another source but often in the right side (narrow side) of the funnel. It is a loan.

The author would advise entrepreneurs and companies to go for loan (soft or otherwise) rather than simple grants as it will train them to be sustainable, a feature very much needed in the competitive world.

There are also a few private sector venture capitalists and banks which are ready to fund projects. Often they are at the stage of right side of the funnel. They may be in IT and BT (Biotech) areas only. In future they may enter other areas. Other Government departments are trying to emulate TIFAC, PATSER, etc. One should look out for these.

techfin2.jpg (40209 bytes)

Since this is a changing scene, be in touch with websites like that of TIFAC which give information about financing sources and technology sources.

                                                                      Author : Dr. Y. S. Rajan

Readers are also welcome to contact the author in e-mail: edtifac@mantramail.com & edtifac@indiatimes.com who would use the TIFAC network to assist you.

On the whole technology financing in India is fast entering a phase where industry and entrepreneurs are respected. About 85% projects funded by TIFAC, TDB and PATSER are for industry – big, small and medium. Take advantage of them, enter into development well ahead of time. Be not afraid of the broad end of uncertainties as “the early bird catches the worms”.

bull.jpg (5174 bytes) Acknowledgement

The author thanks Dr. V Siddhartha, Chairman, TIFAC-HGT Apex Board for giving material from International Society of Air Breathing Engines from which the author has adapted and further developed Fig.1

bull.jpg (5174 bytes) REFERENCES

1. Dr. APJ Abdul Kalam with Y.S. Rajan: “India 2020 : A Vision for the new Millennium”, Viking-Penguin, New Delhi (1998), (reviewed in Invention Intelligence, May-June 1999).

2. Y.S. Rajan, “Empowering Indians : with economic, business and technology strengths for the twenty-first century”, Har Anand Publications, New Delhi – Revised reprint with foreword by Dr. APJ Abdul Kalam, April/2002 (A review of the book appeared in Invention Intelligence, March-April, 2002).

3. Technology Information, Forecasting and Assessment Council (TIFAC) websites : www.tifac.org.in , www.indianpatents.org.in , www.missionreach.org.in

                                                      Source :www.tifac.org.in