Aping for fun and profit

Re-inventing wheels is silly enough but re-inventing square wheels is whacky beyond belief. The smart way is to take what others have figured out and improve on it. Adopting the existing smart solution is the first step to successful innovation. The great thing about the world today is that the total number of human brains is huge — 6 billion plus — and if they are normally distributed, the number of brains at the extreme high end of the distribution, though vanishingly small in percentage, is pretty large in absolute numbers. So these tons of smart innovative brains have been coming up with all sorts of ingenious wheels. All we have to do is to check them out, understand how they work, and use our own smarts to figure out how to make those wheels better. One can be too stupid to smartly ape the smart.

What brought on this line of thinking is an essay by Paul Graham titled Why Startups Condense in America. [Hat tip: Jawahar Mundlapati.] You must go and read that essay before you continue on with this post of mine. If you are rushed for time, forget coming back to this post, and just go read the essay. Thoughtfully reading it will take about 5 minutes of your time.

OK, so I assume you have now read it and are back. Just to refresh your memory, here are the main points again. Innovations occur in startups. Startups occur in clusters, such as in the Silicon Valley. Given a set of conditions, startups will happen naturally. You need:

  • A large number of smart people: So get them from whereever. Immigration helps.
  • Free the smart people from needless day to day struggle: Being a developed rich society helps.
  • Freedom to do and say what you please: Civil liberties matter. People in police states don’t take risks.
  • Have centers of excellent education: Great elite institutions foster innovation.
  • Good labor laws: If you are burdened with deadwood, you cannot move fast.
  • Distinguish between work and employment: Work, which produces something, is not the same as employment.
  • Be reasonably lean in terms of laws: The greater the number of laws restricting what you are allowed to do, the less likelihood that anyone will be able to fully comply and still have some freedom to innovate.
  • Large domestic market: You have the possibility of finding a large number of early adopters in your neighborhood.
  • Source of funding: Venture funding from people who have previoulsy successfully started up firms makes the next round of innovative startups possible.
  • Allow career change choices: Flexibility and freedom to decide what one does counts.

It is an excellent essay and is worth pondering in the context of India. Of course, it is unlikely that Indian policy makers will ever ponder those points. It is not that they are congenitally incapable of pondering a set of simple points but that their objectives are different from what our objectives are. Speaking strictly for myself, my objective is to figure out why India is not a developed country and then figure out how India can become developed. Our policy makers, to generalize a bit, don’t appear to have the same goal in mind. Their goal appears to be how to control people. It is a power and authority game. But anyhow, allow me a few minutes of speculation about India in the context of that essay.

First, India is a large country like the US. Indeed, India has more than three times as many brains as the US has. To that extent, we really don’t have the same pressing need for importing raw brains. But raw brains is not what we need. We need smart brains. Educating the hundreds of millions of our raw brains is the equivalent to immigration. As far as this dimension goes, then, the problem is known and the solution is also known.

We need higher education institutions of excellence. Freeing the education sector from the shackles of the government is one of the unavoidable steps. If we don’t do that, we can forget about excellence. Then, to feed those elite institutions, we need to have universal high school education. Again, allowing the private sector to freely enter into the business of education is a necessary step. This can be done without bumping up against any known natural laws. The only thing that prevents us from having excellent educational institutions are those deliberate self-inflicted chains of government.

Actually, in a nutshell, it is our laws which bind us to mediocrity and indeed to grinding poverty. There are labor laws that make it impossible for even medium sized companies to fire people. And not being able to fire people when necessary is tantamount to not being able to hire them when required. For this sorry scheme, we have our dear communists to thank. Communists fail to distinguish between employment and production. Bottomline: As long as our laws are socialistic, we can forget about fostering innovation.

So the question is: Can Bangalore duplicate the magic of the Silicon Valley? The conditions outlined by Paul Graham argue against such as outcome. India is too poor materially, and too handicapped institutionally (insane laws and regulations) to be able to create centers of excellent. The guiding ethos appears to be to create a society of mediocrity through bureaucratic control and overarching power. The playing field is flat but it is not level.

Yet one hopes. One prays that one is smart enough to ape the smart people who have done stuff. India is a large country and the resources can be scraped together to make the transformation happen. If I were India’s dictator, the first thing I would do is to get the government out of education. Among the hundreds of millions of brains, I am sure that there will be amazing smart innovative brains. That is our last hope.

8 thoughts on “Aping for fun and profit

  1. Guru Gulab Khatri Tuesday September 26, 2006 / 8:04 am

    Milton Friedmans recomendation to Government of India in 1955 is still available on some sites
    Here is one {link}
    A very important quote which is still valid.

    In any economy, the major source of productive power is not machinery , equipment, buildings and other physical capital; it is the productive capacity of the human beings who compose the society. Yet what we call investment refers only to expenditures on physical capital; expenditures that improve the productive capacity of human beings are generally left entirely out of account.

    Good Eg of this includes Post WWII germany,
    Here is a country partitioned with its industries destroyed, top folks were flicked by US/USSR as well as many volunatarily
    moved, yet it made an impressive recovery.

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  2. shiv Tuesday September 26, 2006 / 2:52 pm

    The purpose of government is to reduce strife and keep the population under some form of control. This may sound draconian but is actually essential to prevent anarcy. How this control is achieved is essentially the metric through which we judge the modus operandi of any political system. The article was nice however one must look at first priniciples to understand the efficacy. Innovation is central to human ‘development’ as a society, unfortunately the article sort of proves that innovation can only flourish in a capital intensive, consumption driven society. In today’s context of rapid enviromnental degradation and exploding human populations (fed on industrially grown food) this mantra is probably not very sustainable. There has to be a less wasteful way. Silicon valley innovation relies on redundant capital expenditure to achieve ‘commercial goals’. This is not a good idea given our current position.

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  3. Guru Gulab Khatri Tuesday September 26, 2006 / 7:04 pm

    Explain ‘redundant capital expenditure’ ?
    Should there be only 1 investment in search engine and no other search engines be allowed to get funding?

    Also whats wrong with industrially grown food?
    Even organic farming is using benifits from industrial model, ie larger farms soil sensors, as well as harvest equipment.

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  4. Guru Gulab Khatri Tuesday September 26, 2006 / 7:46 pm

    Shiv
    I on 2nd look I disagree with you on all the points you make

    The purpose of government is to reduce strife and keep the population under some form of control. This may sound draconian but is actually essential to prevent anarcy. How this control is achieved is essentially the metric through which we judge the modus operandi of any political system.

    Well I would say that the purpose of the government is to allow its citizens to lead a fulfilling life(as they as an individual see fit), yet at the same time do provide them security. This is the balancing act
    for most government.

    Innovation is central to human ‘development’ as a society, unfortunately the article sort of proves that innovation can only flourish in a capital intensive, consumption driven society. In today’s context of rapid enviromnental degradation and exploding human populations (fed on industrially grown food) this mantra is probably not very sustainable. There has to be a less wasteful way. Silicon valley innovation relies on redundant capital expenditure to achieve ‘commercial goals’. This is not a good idea given our current position.

    Innovation without consumption is innovation in what?
    Innovations that lead to product and services being consumed are the only way to reward innovator.
    Some can try to make innovative sculpture made of shit, but if no one is buying he just got his hand dirty in shit.
    Alternatively if some one makes innovations in sewage disposal, colonoscopy, fecal analysis, for medical purpose, etc he has a better chance of being rewarded for playing with shit.

    The only thing wrong with the article was its assumption innovation happens in Silicon Valley. It is being oversold.
    Outside HW and web like technologies several centers exists. in certain fields eg signal processing and wireless communication almost all innovation happened outside the valley.
    DSP in particular was almost an east coast phenomena.
    Mechanical innovations rarely come out of the valley, same can be said about materials.

    I don’t see what human population growth has to do with silicon valley.
    If any thing the number of singles and childless couples is usually higher in technical centers silicon valley included.
    The bulk of population growth in the world is not coming from industrial countries….
    It is in industrial economies where people on average marry later and have fewer kids.

    First you seem to suggest that there is something wrong with India taking any approach, which requires considering ‘commercial goals’.
    I have mentioned capital and industrial production techniques in my last post.

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  5. Amit Kulkarni Wednesday September 27, 2006 / 9:29 am

    What has Silicon Valley actually created which is tangible after a few decades, leave alone a year, when their creations: hardware and software are bad mouthed by their own creators to enable selling their current creations?

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  6. Guru Gulab Khatri Wednesday September 27, 2006 / 7:31 pm

    Amit,
    I wouldnt put Silicon Valley down,
    nor would i pump it up to be a larger than what it is.
    They have created a lot that is tangible.
    eg Routers(cisco having invented that market space), microprocessor(intel,zilog etc have been there since the 70’s)
    But the bulk of them had been in the digital electronics, SW stuff.
    However outside of that say wireless where San Diego is strong….or signal processing where pockets of excellence exist in rest of US.
    And lets not forget that all innovation is not EE/SW stuff.

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