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Bus. Std: Its time to wave Indias digital hand

April 8th, 2004 · No Comments

My latest column in Business Standard:

Bookshops are temples for the mind. When I travel, I make it a point to visit the best bookstores that the city has to offer. Even in the Internet world, there is no greater pleasure than to serendipitiously find a book that answers many questions that the mind has been pondering on.

It was in one such temple in San Francisco that I came across a book entitled The Digital Hand: How Computers Changed the Work of American Manufacturing, Transportation, and Retail Industries. At that time, I was thinking about how to modernise India rapidly could we possibly learn from what the developed countries like the US have gone through, and accelerate the process in India.

The title of the book immediately appealed to me. Early, rapid and near-universal adoption of computers have long been one of the reasons for the technological lead of the US. So, to come across a book which traced the history of diffusion of one of the most important inventions of all-time was like discovering a hidden treasure.

The author, James Cortada, worked at IBM for three decades and had a ringside view of the computerisation of US industry. In the book, he focuses on how computing transformed the American economy in the second half of the last century.

The Digital Hand is a reference to Adam Smith’s invisible hand – the self-interest that guides the most efficient use of resources in a nation’s economy, with public welfare coming as a by-product. The computers is the modern-day digital equivalent an all-pervasive force that drives efficiencies in economies.

Why look at the past in a field that changes rapidly as information technology? Writes Cortada: Understanding historic patterns of adoption of digital technology gives us insight into how specific industries did, and continue to, operate because they are prisoners of existing applications and processes and, in most instances, of long-standing practices and attitudes. In other words, a study of the past can help us unravel the future.

This can be especially important in the Indian context as we seek to build our digital infrastructure. What the US did over fifty years, India needs to do in five. Every industry in India needs to absorb technology and rethink its processes if India has to accelerate on the fast-track of development.

The US corporations adopted new inventions sequentially mainframe, mini and personal computers, networks, wireless technologies and most recently, broadband networks. The American workers had time to adjust to each phase of technological innovation. Also, different industries computerised at different points of time.

In contrast, Indian industry has to focus on all-round and simultaneous adoption of new technologies in computing and communications. In the past, it has, by and large, been slow to deploy the new technologies hobbled in part by the high cost of technology and low cost of labour. This needs to change if India has to develop. India’s industrial units have to become globally competitive, so they can achieve the scale to produce cost-effectively for the domestic market. What we have to think is how, in the context of these digital innovations, can we live and work differently. India has the opportunity to leapfrog.

Consider radio frequency identification (RFID). RFID systems consist of smart tags and reader devices. The tags send out radio frequency signals, which can be picked up in a short range by readers. Unlike bar codes which can carry very limited information, smart tags can store and broadcast object-specific information, giving each item its own unique identify and history.

Think of RFIDs as the next wave in communications: we first had people talking to people (through language and publications), then we had people interacting with computers (through the Internet, HTML and HTTP), now we are seeing applications talk to other applications (through Web Services). The next leap will be objects talking to other objects.

RFID is just starting to get adopted in the US. Wal-mart has mandated its suppliers to use RFID by the end of this year. Imagine if Indian retail chains and stores do the same in India. This will have multiple implications: it will position Indian manufacturers as Wal-mart ready, it will make Indian supply chains efficient very quickly, and it will give the Indian software companies competing globally a domestic market to build their strengths in what is a rapidly emerging area.

The equivalent of RFID can be found across industries. Whether it is WiFi or WiMax wireless broadband networks, open-source software, mobility-aware applications or RSS-enabled content, new technologies abound in all sectors. India has the ability to lead and set the standards, rather than be a followed and a footnote on the pages of business and technology history books. The Indian economic miracle needs to move away from its dependency on the hand of God each monsoon. It’s time to wave our Digital Hand.

Tags: Bus. Std. (ICE World) Column

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