China and India

I heard a fascinating talk by Prof. Leslie Young of the Chinese University in Hong Kong, organised by CapitalIdeasOnline.com. Prof. Young talked about how a mix of history, geopolitics, spiritual framework, institutional structure, impact of neighbouring states and overseas (non-resident) Chinese have made China the economic powerhouse that it is today. He also compared China to India using the same parameters. My question to him was that given these factors, is it possible for India to catch-up with China? His short answer: No. [The transcript should be put up online sometime soon.]

Listening to him what became very clear is that a lot of thought seemed to have gone into the way Chinese built out their structures and policies, in a very practical way. Indians on the other hand have been focused more on theory. This is what can be seen today. “India has an intellectual advantage, but a practical disadvantage”, he said. That helps us in software but hinders us elsewhere.

A few of his recommendations for India from the Chinese experiences:
– Attract NRI investment in zones cleared of bureaucracy
– Offer bureaucracy high rewards for improvements in efficiency and productivity.
– Convert state agencies into profit centres and then spin them off into companies
– Keep capital account closed but make foreign investment attractive and simple. [The reason for this is interesting: preventing capital outflow, as China has done, ensures that the money siphoned away does not make its way out of the country – as is what happened in Russia – but gets reinvested within the country.]

The underlying message: it is possible to transform a country. China’s homogenity made it easier and India cannot replicate the same ideas because of its diversity. But it should be possible. I think the Indian government should get him to advise us on what we need to do.

On a separate note, there is an article in the recent Economist on China’s economy.

Intel’s Cellphone Chip

Brace for further innovation in the wireless world, especially in terms of data usage. WSJ reports on Intel’s new chip, codenamed Manitoba.

Intel’s multiyear, $30 billion campaign to acquire communications expertise and turn manufacturing technology into a competitive weapon. By squeezing multiple functions on to individual chips, Intel is betting that it can make up for its rivals’ head start in the wireless world. Manitoba, formally called PXA800F, combines functions that normally require at least three different chips, including a microprocessor, flash memory and so-called baseband capability for managing wireless features.

Ron Smith, the senior vice president spearheading Intel’s cellphone crusade, predicts that the integrated chip and its successors will inspire smaller, cheaper handsets that can do tricks like playing MP3 music files and game software at the same time.

An enhanced phone made with the $35 Manitoba chip should cost $100 to $200, one-third to one-half the price of some comparable phones on the market, says Dennis Sheehan, an Intel marketing director.

Intel faces competition from existing players Texas Instruments and Qualcomm.

Bluetie’s Small Business Services

It was the title and the byline of this Forbes story which caught my attention. “David Versus Microsoft…A 23-year-old founder who’s turning away calls from venture capitalists for his software firm? No, this isn’t a time warp.”

The story was about David Koretz’s Bluetie.

Bluetie provides applications such as e-mail, scheduling, instant messaging and contact management to small businesses. Firms with, say, ten employees can get all these tools delivered over the Web for $10 to $20 per user per month.

The young entrepreneur is breaking all the rules: that you can’t compete against Microsoft, that no one wants to rent software over the Web, that no one of sound mind would start a software firm in Rochester. BlueTie’s revenue was just $1 million in 2002, but Koretz expects $7 million this year and $26 million by 2004. If he can meet his expectations and continue to grow, he might indeed become a competitive threat to Microsoft in the small-business market.

Typically, small companies either use free e-mail from Yahoo or Hotmail, or buy an expensive server-based product–usually Microsoft Exchange–designed for larger companies. Microsoft sells most of the e-mail systems for the estimated 1 million server-hardware packages sold annually to small and medium-size companies. According to a study by the Radicati Group, average total cost of ownership for Exchange is $24 per user per month in the first year. The initial investment in hardware and services for a small business can be as much as $40,000.

Koretz aims to sell to small businesses that find Exchange overpowered or overpriced for their purposes.

Its something we should have done. We’ve been in the messaging business for 5+ years, but have not expanded much beyond the Indian market. Should do so. SMEs are a key focus segment for many of our ideas, and messaging is the most fundamental need.

Nano Publishing

Dan Gillmor discusses Nick Denton’s ventures into niche blogs (Gawker, Gizmodo and more to come): “What both have in common — and what upcoming sites will share — is their demographic aim. Denton is looking upscale, in niches that are too small to aim a magazine, much less an urban newspaper. Smart…I suspect these kinds of sites will bedevil traditional media organizations. They won’t lure all the readers or advertisers away, but they could be among the many new alternatives that carve away some of the most coveted readers and advertisers.”

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Swarm Intelligence

I have been quite fascinated about emergent systems, where the whole is much greater than the sum of the parts. Rafe Needleman writes about how one company is making a business out of it.

Technology, recently, has learned from the ants, creating a new kind of computer that’s useless by itself but formidable in a swarm.

Dust Inc. designs small computers it calls motes, and uses them as platforms to collect data with a variety of sensors. Currently, a single mote is a little bigger than a 9-volt battery…The motes use very low-power CPUs and a super-small open-source operating system called TinyOS. The operating life of a battery-powered mote can be several years.

The motes have radios in them to communicate their sensor readings. This is where things get really interesting. The low-power radios attached to these low-power computers don’t have enough range to continuously broadcast back to a central base station. Instead, they wake up once in a while, at predetermined times, and blast their data to a nearby mote, which then collects and retransmits that data to another nearby mote, and so on, until finally the data reaches a central collection node or recording computer. The motes set up this bucket-brigade communication automatically. If the location of a few of the motes is known, the rest can be scattered pretty much randomly and the network will still be able to tell where each individual mote is, even though most individual motes will have no inherent data on their own positions.

This is what’s known as a self-organizing sensor network, and it’s a powerful idea. One obvious application is military: Air-drop a bunch of vibration sensors into the Iraqi desert and they can report vehicle and personnel movement. A similar technique could be used to gather data on seismic activity or monitor highway traffic.

Quite fascinating. A book by Michael Crichton (Prey) recently speculated on the mix of nanotech and artificial life.

TECH TALK: The Rs 5,000 PC Ecosystem: SMEs (Part 2)

The key area where SMEs need assistance is in the appropriate use of technology. Big companies have the McKinseys and Andersens to help them. SMEs have only themselves and their ilk. They need help at multiple levels:

  • Design of Business Processes: SMEs need templates and libraries of business process maps and best practices from where they can select the appropriate ones and perhaps customise them if necessary. What is needed is the equivalent of a Visual Biz-ic (a la Visual Basic) for specifying and re-using business process descriptions. The increasing use of business process standards being specified by associations like RosettaNet can be especially useful for SMEs.
  • Consulting and Training: This is where the engineering colleges, their faculty and students can play a role. Once the Rs 5,000 PCs (5KPCs) are there in SMEs, they will need engineers to implement solutions and train their staff in the right use of computing. On the other hand, engineering college students are looking for the right kind of projects and the faculty is seeking to complement their teaching with consulting assignments. The combination can help SMEs leverage technology better.
  • Connecting with other SMEs: The SME communities are still quite splintered, mostly connected only through trade associations. Online is a great way for them to connect up, complemented by periodic local (physical world) gatherings. Think of the online version as a Slashdot for SMEs. They can share their ideas and experiences, and suggest solutions to challenges being faced by others. In doing so, they build a shared knowledge base in an emergent manner where the whole is much greater than the individual parts. This could later be extended into creating an online marketplace, based on bartering products and services.
  • Using their website more aggressively: SMEs need to use the Web for marketing and promotion more aggressively. The corporate website should have plenty of information and be updated regularly. This can be complemented with a weblog, written by the CEO. The blog can become a hub and sounding board for new ideas, and get other individuals and organisations to connect up with the SME. (I have started to see this happen through my weblog.)

    At present, many of the SMEs in India (and perhaps other emerging markets) use PCs for three purposes: email, accounting and documentation. This is because PCs are on the desks of only a few people, primarily because of their costs. SMEs can, in fact, use this lack of legacy to their advantage they have little worry for older software which needs to be maintained.

    The 5KPC has the ability to completely change the perception of a PC, making it as important as a desk and chair for the staff. The PC has to be combined with a freedom and change in culture, which may be harder to accomplish. The connected computer is a window to the outside world. Employees are now free to use email and the web and there is potential for some misuse. But over time, the SMEs will discover that their people and their ideas can become their greatest strengths. This is their passport to growth and business success.

    Next Week: Telecentres and Homes

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