Your SlideShare is downloading. ×
0
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Mega Trend: The Third Industrial Revolution in India
Upcoming SlideShare
Loading in...5
×

Thanks for flagging this SlideShare!

Oops! An error has occurred.

×
Saving this for later? Get the SlideShare app to save on your phone or tablet. Read anywhere, anytime – even offline.
Text the download link to your phone
Standard text messaging rates apply

Mega Trend: The Third Industrial Revolution in India

10,912

Published on

We find the concept of Third Industrial Revolution (TIR) as propounded by Jeremy Rifkin, Founder President of Foundation of Economic Trends, USA highly interesting and intriguing. Third Industrial …

We find the concept of Third Industrial Revolution (TIR) as propounded by Jeremy Rifkin, Founder President of Foundation of Economic Trends, USA highly interesting and intriguing. Third Industrial Revolution has been notified by the European Union and is being implemented in some of its member states.

Consequently, we at, FICCI along with Mr. Jeremy Rifkin worked together to develop a white paper based on the concept of the Third Industrial Revolution. However, while working on the report, we identified five more mega trends apart from the Third Industrial Revolution. We strongly believe these mega trends will influence India’s growth story in the coming decade. These mega trends are:

• Mega Trend 2: New Business Models in the age of Distributed Capitalism
• Mega Trend 3: Intelligent Technologies and Future of Work
• Mega Trend 4: Collaborative Education
• Mega Trend 5: The Ascendance of Civil Society
• Mega Trend 6: Continental Markets and Continental Political Unions

Published in: Business
0 Comments
2 Likes
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total Views
10,912
On Slideshare
0
From Embeds
0
Number of Embeds
3
Actions
Shares
0
Downloads
113
Comments
0
Likes
2
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
No notes for slide

Transcript

  • 1. Industry’s Voice for Policy Change Industry’s Voice for Policy Change About FICCI Established in 1927, FICCI is the largest and oldest apex business organisation in India. Its history is closely interwoven with India's struggle for independence and its subsequent emergence as one of the most rapidly growing economies globally. FICCI plays a leading role in policy debates that are at the forefront of social, economic and political change. Through its 400 professionals, FICCI is active in 53 sectors of the MEGA TRENDS OF THE EMERGING THIRD INDUSTRIAL REVOLUTION IN INDIA economy. FICCI's stand on policy issues is sought out by think tanks, governments and academia. Its publications are widely read for their in-depth research and policy prescriptions. FICCI has joint business councils with 75 countries around the world. A non-government, not-for-profit organisation, FICCI is the voice of India's business and industry. FICCI has direct membership from the private as well as public sectors, including SMEs and MNCs, and an indirect membership of over 3,00,000 companies from regional chambers of commerce. FICCI works closely with the government on policy issues, enhancing efficiency, competitiveness and expanding business opportunities for industry through a range of specialised services and global linkages. It also provides a platform for sector specific consensus building and networking. Partnerships with countries across the world carry forward our initiatives in inclusive development, which encompass health, education, livelihood, governance, skill development, etc. FICCI serves as the first port of call for Indian industry and the international business community. FICCI, Federation House, Tansen Marg, New Delhi - 110 001 Tel: 011 23487527 (D), 011 2373 8760 - 70 (Extn. 527) Fax: 011 2332 0714, 011 2372 1504 Email: youth@ficci.com Visit us at: www.megatrends2020.in A Collaborative Report by the Initiative of FICCI Young Leaders (FYL) and the Office of Jeremy Rifkin in Washington DC
  • 2. FICCI Young Leaders Team Disclaimer The information and opinions contained in this white paper have been arrived at on the basis of inputs provided by members of the FICCI Young Leaders and other thought leaders on the concept propounded by Mr Jeremy Rifkin. These are futuristic in nature and based on individual opinions. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording or any information storage and retrieval system, without prior permission in writing from the publisher. FICCI does not accept any liability for loss however arising from any use of this document or its content or otherwise arising in connection herewith. Shobha Mishra Ghosh Director FICCI Sharad Chandra Sharma Research Associate FICCI
  • 3. Industry’s Voice for Policy Change MEGA TRENDS OF THE EMERGING THIRD INDUSTRIAL REVOLUTION IN INDIA A Collaborative Report by the Initiative of FICCI Young Leaders (FYL) and the Office of Jeremy Rifkin in Washington DC Mr. Rifkin's editorial contributions to the "Mega Trends of the Emerging Third Industrial Revolution in India" have been adapted, in part, from his new book "The Third Industrial Revolution, How Lateral Power is Transforming Energy, the Economy, and the World," published by Palgrave-Macmillan.
  • 4. Acknowledgement It gives us immense pleasure to release the white paper "FICCI Mega Trends 2020" at the conference "Mega Trends 2020: Shaping India's Future" on January 17, 2012. We sincerely acknowledge the direction and guidance provided by Mr Jeremy Rifkin in undertaking this initiative. This report bears the efforts of our eminent thought leaders who have penned the individual trends- Prof. P. B. Sharma, Vice-Chancellor of Delhi Technological University, Prof. Shailendra Raj Mehta, Visiting Professor, IIM, Ahmadabad and Academic Director of Duke Corporate Education, Mr Prasanto Kumar Roy, President and Chief Editor, Cyber Media Publications, Mr Nitin Khanna, CEO, Aantrishti Human Development Solutions Pvt. Ltd., Mr Yashwant Deshmukh, Founder-Owner, YRD Media, Dr. Rajiv Kumar, Secretary General, FICCI and Mr Sanjay Dawar, MD, Management Consulting, Accenture India. We also thank Mr Vivek Mohan, MD, Abbott India Ltd., Mr Deep Kalra, Founder & CEO, Makemytrip.com and Mr Pawan Agarwal, Advisor, Higher Education, Planning Commission, Government of India, Mr T. P. Chopra, President & CEO, Bharat Light & Power, for assisting in the preparation of the report and Mr Tarun Arora, CEO, GIST. We sincerely acknowledge the excellent leadership provided by Mr Shivinder Mohan Singh, MD, Fortis Healthcare Ltd., (Chairman) and Ms Sulajja Firodia Motwani, MD, Kinetic Motor Co. Ltd (Co-chair) of FICCI Young Leaders in driving the entire effort. Last but not the least, we would also like to profusely thank Mr Soumya Kanti Ghosh, Economics & Research and several other FICCI colleagues for their key inputs in developing the White Paper. FICCI Young Leaders Team
  • 5. Contents Foreword . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 01 Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 03 1. Mega Trend I - The Third Industrial Revolution. . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 2. Mega Trend II - New Business Models in the . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 Age of Distributed Capitalism 3. Mega Trend III - Intelligent Technologies and Future of Work . . . . . . . . . . . . . . . . 89 4. Mega Trend IV - Collaborative Education . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118 5. Mega Trend V - The Ascendance of Civil Society . . . . . . . . . . . . . . . . . . . . . . . . . 169 6. Mega Trend VI - Continental Markets and Continental Political Unions . . . . . . . 199
  • 6. Foreword Federation of Indian Chambers of Commerce and Industry (FICCI) set up the FICCI Young Leaders (FYL) in 2010, with the mandate to support the FICCI transformation process towards making it more dynamic and youth oriented; while retaining its strong value systems. FICCI believes that today’s youth are tomorrow’s leaders and hence it is of utmost importance that the young demography of India is reflected effectively in the FICCI membership and in all policy deliberation platforms of FICCI. With this thought in mind, we set out to create a core group of young entrepreneurs (first, second & third generation) and professional leaders across various sectors to strategies activities that would attract young Indian business leaders to FICCI. One of the ideas that attracted FYL members was the concept of Mega Trends and their global as well as local impact. With India poised to take a leap forward, FYL members felt, it was critical to analyse the mega trends, assess the recent changes and its impact on India’s socio-economic fabric in the next decade and suggest the way forward for the transition. After numerous deliberations internally, it was decided that we would identify a global futurologist who could guide us to take this initiative forward. We found the concept of Third Industrial Revolution (TIR) propounded by Jeremy Rifkin, Founder President of Foundation of Economic Trends, USA highly interesting and intriguing, a concept that has been notified by the European Union and is being implemented in some of its member states. To our delight, Jeremy agreed to work with us on this project and together, we identified the top six trends which have been elaborated in the White Paper that in our view would impact India's growth story in the next decades. Then began the arduous task of identifying Indian thought leaders who could work with Jeremy and FICCI Young leaders to develop the White paper on each trend. Fortunately, the Indian thought leaders we identified found the concept equally interesting and meaningful and agreed to contribute to this initiative. We have witnessed the effect of disruptive change in the past when the first and second industrial revolutions led to the eclipse of India as an economic force and the rise of Europe. With its vibrant democracy and strong institutions, modern India is in a much better position to usher in change in the era of third industrial revolution, provided we prepare for the future with timely actions. FICCI as one of the leading policy change agent in India plans to facilitate the government and the industry to adapt to the change seamlessly. The “Mega Trends 2020: Shaping India’s Future” seeks to provide a platform for dissemination of the thought process of FICCI and deliberations on the way forward. We hope that the event shapes up as a meeting point of thought leaders and policy makers to prepare India for the future. We are indeed extremely thankful to Mr Jeremy Rifkin, the FYL Core Members, the Indian Thought Leaders of each Mega Trend and the FICCI Team for contributing towards this initiative. Shivinder Mohan Singh Sulajja Firodia Motwani Chairman FICCI Young Leaders Co-Chair FICCI Young Leaders 01
  • 7. Executive Summary The world is witnessing changes in almost every sphere of human activity owing to rapid technological advancement, globalization, unmanageable financial crisis, unemployment and climate change. It is becoming increasingly clear that we need to both rethink the nature of the human journey, and create a new economic narrative that can take us into a more equitable and sustainable future. India with its billion plus population has to deal with the evolving scenario for a secure and brighter future for its coming generations. The demographic dividend of India has been well documented and deliberated. However, the concern today is that if this demographic dividend is not channelized appropriately given the manpower displacement by intelligent technologies, it could well turn out to be a demographic disaster. This particularly needs a serious consideration, as India will add another 241 mn people in working age population between 2010-2030. It is with these thoughts amongst others, the FICCI Young Leaders (FYLs) came up with the idea of studying the global Mega Trends that would be impacting the growth of the Indian economy. The FYLs were fascinated by the concept of Third Industrial Revolution (TIR) by Jeremy Rifkin. Together they identified 5 other trends emerging out of the TIR Mega Trend that will impact India's economic and social development story in the next decade. This White Paper is an attempt to study the global and Indian scenario under each Mega Trend to help us derive a way forward subsequently. MEGA TREND 1 The Third Industrial Revolution By the 1980's the evidence was mounting that the fossil fuel-driven industrial revolution was peaking and that human-induced climate change was forcing a planetary crisis of untold proportions. According to Jeremy Rifkin great economic revolutions in history occur when new communication technologies converge with new energy systems. The mid-1990s have ushered in the Internet technology and renewable energies to merge and create a powerful new infrastructure for a Third Industrial Revolution (TIR) that would change the world. According to Rifkin, in the coming era, we will see micro power plants in the form of energy generation in homes/buildings connected through an "energy Internet," just like we now create and share information online. The democratization of energy will bring with it a fundamental reordering of human relationships, impacting the very way we conduct business, govern society, educate our children, and engage in civic life. For 20 years, government and industry were justifiably skeptical about the ability of soft renewable energies to provide the power needed to manage a complex, global economy. 03
  • 8. Mega Trends of the Emerging Third Industrial Revolution in India However, in 2007, the European Union endorsed the Third Industrial Revolution and now is being implemented by the various agencies within the European Union as well as in the member states. According to Rifkin the establishment of a Third Industrial Revolution infrastructure across India will lay the basis for a sustainable economy in the 21st century if we lay down the five pillars of Third Industrial Revolution. These are (1) shift to renewable energy; (2) transforming the building stock of every continent into micro-power plants to collect renewable energies on-site; (3) deploying hydrogen and other storage technologies in every building and throughout the infrastructure to store intermittent energies; (4) using Information technology to transform the electricity grid of every continent into an energysharing internet that acts just like the Internet and (5) transitioning the transport fleet to electric plug-in and fuel cell vehicles that can buy and sell electricity on a smart, continental, interactive power grid. Access to knowledge has flattened the world; major opportunities are available to anyone who can utilize the benefit of this knowledge revolution irrespective of where they are located. Entrepreneurs across the world can become global providers of off-shored services, and manufactured products at a competitive price. This has resulted in a phenomenal rise in purchasing power in rapidly developing economies including India. The new economy will usher in a new era of knowledge based collaborative education, industry relevant research and product innovation to power the growth of new age enterprises fuelled by the convergence of abundant energy and the power of communication technologies. These factors would empower the masses, and enable capabilities to provide work opportunities and quality of life with human dignity to billions of people around the globe. The White Paper written by P B Sharma makes a strong case for a paradigm shift in our strategic approach to harnessing energy and also for the preparation of the new age enterprises. MEGA TREND 2 New Business Models in the Age of Distributed Capitalism According to Rifkin, the new era will bring with it a reorganization of power relationships across every level of society. The Third Industrial Revolution is organized nodally, scales laterally, and favors distributed and collaborative business practices that work most effectively in networks. The "democratization of energy" has profound implications as we enter into the era of "Distributed Capitalism." Distributed capitalism ushers in new business models which greatly reduces capital, energy and labor costs, and increases productivity. When thousands of businesses - large companies, SMES, and cooperatives - connect with one another on shared networks, the 04
  • 9. distributed power often exceeds the power of standalone giant companies that characterized the First and Second Industrial Revolutions. In India, the revolution in Information and Communication Technologies has not only made communication cheap through near universal access to cell phones, but has also dramatically changed the ecosystem to make possible a variety of new business models. Companies are now innovating not just for the rich but also for the poor. The idea of "Fortune at the Bottom of the Pyramid" (late C K Prahlad),"Gandhian innovation", "frugal engineering" and the Indian "jugaad" are already at work. The paper on this trend by Shailendra Mehta looks at several innovative new products and services along with their associated business models in the context of India. They have been chosen to illustrate a range of distributed information and energy technologies. In all of these cases there is the notion of a "lead market" that is market with unique characteristics that is receptive to a particular kind of innovation. For example, cramped living spaces mean that Japan is receptive to miniaturization. Having a strong Green movement means that Germany is very receptive to clean energy. Similarly, India is very receptive to products that are targeted to frugal consumers. MEGATREND 3 Intelligent Technologies and the Future of Work While millions of new jobs will be created in the build-out of the five pillar Third Industrial Revolution infrastructure over the course of the next four decades, millions of jobs in other industries will be lost to intelligent technology displacement. This is already beginning to happen. In industry after industry, from factory production to banking services, companies have experienced dramatic increases in productivity, which allows them to produce more output with few workers. Nowhere is the disconnect between productivity gains and job losses greater than in manufacturing. In the single period between 1995 and 2002, more than 31 mn manufacturing jobs disappeared in the 20 largest economies, while productivity rose by 4.3% and global industrial production increased by 30%. Manufacturing jobs declined by 16%, in the same period, in the other major economies and by more than 11% in the U.S. By 2010, manufacturing workers in the U.S. were producing 38% more per hour than in 2000. While manufacturing output has remained fairly stable over the decade, employment has declined by more than 32% because it takes fewer workers to produce the same output. If the current trend continues - and its only likely to accelerate with even more smart technologies - it is estimated that global manufacturing employment will decrease from 163 mn workers to just a few mn workers by 2040, eliminating most factory jobs around the world. 05
  • 10. Mega Trends of the Emerging Third Industrial Revolution in India Intelligent technology is taking over a multitude of jobs once performed by human beings across sectors from retails, hospitals, hotels, railways, government etc. Rifkin projects that by 2050, a mature, intelligent Third Industrial Revolution infrastructure will be in place, essentially eliminating mass labor as a dominant workforce in the market economy. The second half of the 21st Century will be characterized by boutique, high-tech, professional workforces programming and monitoring intelligent technology systems. All of which begs the question of how to keep hundreds of millions of people employed as we move further into the century. In India too intelligent technologies are making major, disruptive changes to industries and sectors, and to our lives. l ICT-enabled services moved thousands of jobs out of the West into India. As technology further progresses, some of those occupations, such as customer support, and even software coding, are being increasingly automated. This could mean a million jobs will disappear in their present form. l is explosive growth in data entry jobs, created by projects such as Aadhar (UID), There drawing more people into this sector. At the same time, the progress in automated forms capture technologies and web-based self-capture (such as income-tax e-filing) could create a tipping point after which approximately half of those recently-created jobs vanish. This White Paper by Prasanto Kumar Roy attempts to identify such occupations that will be disrupted, and draw up recommendations for training and re-skilling present and future workers so that they can leverage those newer areas, and are not skill-mismatched when those opportunities arise. The danger is that if this is not done, then the displaced labor force itself could be a socio-economic impediment to further growth, with the population's buying power reduced, affecting the consumption of goods and services. Similarly, there are other areas such as agriculture and healthcare where jobs will not be displaced, but where intelligent technologies coupled with high demand and growth in the sector will create millions of new jobs, demanding newer technical competence. The paper seeks to identify what those are, to prepare future workforces to leverage them. MEGA TREND 4 Collaborative Education Preparing the workforce and citizenry for the new society will require rethinking the traditional educational model, with its emphasis on rigid instruction, memorization of facts, reductionist thinking and autonomous learning. In the new globally connected Third Industrial Revolution era, the primary mission of education is to prepare students to think and act as part of a shared biosphere. A new generation of educators is beginning to 06
  • 11. deconstruct the classroom learning processes that accompanied the First and Second Industrial Revolutions and is reconstituting the educational experience along lines designed to encourage an extended ecological self, imbued with biosphere consciousness. Interdisciplinary learning, multicultural studies, empathic scientific experimentation, and a systems approach to integrating knowledge, are among the cutting-edge teaching practices that are forcing a fundamental change in the educational process and preparing students to live in a complex, multidimensional, global society. The new distributed and collaborative approach to learning mirrors the way a younger generation learns and shares information, ideas, and experiences on the Internet in "open source" learning spaces and social media sites. Distributed and collaborative learning also prepares the workforce of the 21st Century for a Third Industrial Revolution economy that operates on the same set of principles. In India, the education system is bit of a flux in the recent times. Policy makers and educationists in India have been debating over the policy reforms for decades. This paper by Nitin Khanna tries to propose a model framework for Aligned & Collaborative Education which, at once, helps to take a comprehensive view of education as a system rather than focusing on its components in isolation. The model looks at the following three aspects which are central to any education system: A. The vision of education: here we explore the need for a clearly articulated, shared and aligned vision as fundamental to aligning disparate efforts and energies. B. The influencing factors in education: stakeholders and the forces they exert both from the demand and supply side. C. Component vectors of education. These vectors collectively define the fabric of the education system itself. Here we have looked at following component vectorsVector 1- Transformational dimensions: These are the fundamental dimensions along which education needs to produce desired and relevant resultsVector 2- Elements of Education: Five elements have been taken in the model - content and curriculums, pedagogy, evaluation and certification, delivery models, and finance models. Vector 3- Levels of Education : The three levels used in the model are early childhood education, school education and higher education. Fundamentally, the purpose of education is to prepare the generations for tomorrow, today. In that spirit, the model framework allows us to anticipate, even envision the future and then clarify the pathways to reach there. If education is to move towards achieving the ideals of expansion, equity and excellence, this framework will set the directions and provide the momentum. 07
  • 12. Mega Trends of the Emerging Third Industrial Revolution in India MEGA TREND 5 The Ascendance of Civil Society The Third Industrial Revolution rolls together the last stage of the great Industrial saga and the first stage of the emerging Collaborative Era. The civil society will play an increasingly important bridge, as an incubator of critical social capital and as a progenitor of thousands of new social enterprises and millions of new jobs, as the evolving Third Industrial Revolution metamorphosize into the collaborative age over the next half century. The civil society, where human beings create social capital, is made up of a wide range of interests - religious and cultural organizations, education, research, healthcare, social services, sports, environmental groups, recreational activity and a host of advocacy organizations, whose purpose is to create social bonds. While the civil society is often relegated to the back tier of social life and regarded as marginally important in comparison to the economy and government, it is the primary arena in which civilization unfolds. As the Third Industrial Revolution is deeply collaborative in nature, it requires a trusting and transparent relationship between people. Creating social capital in the civil society, therefore, will be critical to the success of the coming economic era. Nonprofits employ nearly 56 mn full-time equivalent workers or an average of 5.6 percent of the economically active populations in 42 counties surveyed. In the US and in many EU member states, the nonprofit sector already accounts for more than 10% of total employment. The Civil Society is likely to become as significant a source of employment as the market sector by mid-century, for the simple reason that creating social capital relies on human interactivity, whereas creating market capital increasingly relies on intelligent technology. Growing employment in the civil society will provide an increasing percentage of the consumer income in an ever more integrated and automated global economy. In India today we see the role of the government shrinking while moving towards the role of facilitator, with limited arenas for state action. The spaces being vacated by the state are being occupied by the market and large private corporations (often operating without boundaries as transnational corporations). The private sector is growing in size and clout and has much more direct impact on the lives of people than before, even in poor states. Ideas of free market and trade, which are being promoted by agencies like the WTO, are deeply impacting, influencing and altering governance and economy in all countries, including India. What exactly then is the mandate of civil society? For one, in democratic states, civil society is expected to keep watch on violations of democratic norms by the state, through citizen activism, the making and circulation of informed public opinion, a free media, and a multiplicity of social associations. Only a vibrant and watchful civil society can prevent the political elite from lapsing on its commitments and responsibilities. The recent ascendance of the civil is a "crescendo" with the possibility of recurrence in the future, in which the civil society formations will only gather momentum. India's civil society has always been 08
  • 13. intrinsic to its political and economic development. Indeed, it can be said that most changes in polity and economy have not necessarily been initiated by political parties but by civil society groups. However, the task of civil society does not end here. As in developed countries, the civil society can become a significant contributor to the economy as it develops capacities to employ more people and compliment the private and government sector in employment generation. With social capital and relationships rather than an institutional mechanism guiding the businesses of future, civil society would undoubtedly be a significant share of the country's GDP in years to come. This White Paper by Yashwant Deshmukh attempts to take us through the evolution of civil society in India, analyse successful case studies and help us understand the future implications of the re-emergence of civil society. MEGA TREND 6 Continental Markets and Continental Political Unions While the First and Second Industrial Revolutions were accompanied by national economies and nation-state governance, The Third Industrial Revolution, because it is distributed and collaborative by nature, scales laterally along contiguous landmasses, and favors continental economies and continental governing unions. Continentalization is becoming the new path to globalization. Sharing renewable energy laterally, in power, communications and transport networks that stretch across continents, like we now share information virtually in networks across the internet, is going to radically transform the political world. The new energy relationships will require governing jurisdictions that are similarly lateral and networked and that encompasses the outer limits of the TIR's geographical reach, which are the edges of continents. If not inevitable, it is at least highly likely that continental unions will become the new governing jurisdictions to regulate emerging continental markets around the world in the 21st Century. The European Union is the first continental economy and political union to begin transitioning into a Third Industrial Revolution. In North America, The North American Free Trade Agreement (NAFTA) is a precursor to a continental union. Although localities, regions, and national governments will not disappear in the coming century - they will actually be strengthened - continental unions provide an expansive political framework for overseeing integrated continental markets. Today the prospects for regional progress in Asia are bright and India is ideally positioned to help facilitate the establishment of a single integrated Asian continental market and accompanying political union. In particular, the creation of an Asian energy internet will 09
  • 14. Mega Trends of the Emerging Third Industrial Revolution in India allow hundreds of millions of people to produce their own green electricity and share surpluses with one another across the Asian continent. In this context, the Indian business community has an enormous opportunity to help shape the future of the Asian market, by spearheading the continental transition to a post-carbon Third Industrial Revolution economy. This apart, the groundwork for a green future has already started. India has immense potential in terms of renewable energy and a quick glance at the five pillars of Third Industrial Revolution reveals that India and Asia can pull the trigger which might carry us to a sustainable post-carbon era. We believe that the shift in global power from the Atlantic to the Pacific has started in right earnest with emerging and developing economies projected to have a 50% share of World GDP (on a purchasing power parity basis) by 2012 (vis-à-vis 37.5% for G7 countries). This White paper by Rajiv Kumar illustrates, how the Third Industrial Revolution will make possible this shift and create a new distributed social vision in the 21st century for Asia and how India with its abundant natural resources, burgeoning middle class and a huge rural market is well poised to take advantage of such a change. 10
  • 15. Mega Trend 1 The Third Industrial Revolution in India
  • 16. The Third Industrial Revolution in India Jeremy Rifkin Global Scenario Our industrial civilization is at a crossroads. Oil and the other fossil fuel energies that make up the industrial way of life are sunsetting, and the technologies made from and propelled by these energies are antiquated. The entire industrial infrastructure built off of fossil fuels is aging and in disrepair. The result is that unemployment is rising to dangerous levels all over the world. Governments, businesses and consumers are awash in debt and living standards are plummeting everywhere. A record one billion human beings - nearly one seventh of the human race-face hunger and starvation. Worse, climate change from fossil fuel-based industrial activity looms on the horizon. Our scientists warn that we face a potentially cataclysmic change in the temperature and chemistry of the planet, which threatens to destabilize ecosystems around the world. Scientists worry that we may be on the brink of a mass extinction of plant and animal life by the end of the century, imperiling our own species' ability to survive. It is becoming increasingly clear that we need a new economic narrative that can take us into a more equitable and sustainable future. A New Economic Vision By the 1980's the evidence was mounting that the fossil fuel-driven industrial revolution was peaking and that human-induced climate change was forcing a planetary crisis of untold proportions. For the past 30 years I have been searching for a new paradigm that could usher in a post-carbon era. In my explorations, I came to realize that the great economic revolutions in history occur when new communication technologies converge with new energy systems. New energy regimes make possible the creation of more interdependent economic activity and expanded commercial exchange as well as facilitate more dense and inclusive social relationships. The accompanying communication revolutions become the means to organize and manage the new temporal and spatial dynamics that arise from new energy systems. In the 19th century, steam-powered print technology became the communication medium to manage the coal-fired rail infrastructure and the incipient national markets of the First Industrial Revolution. In the 20th century, electronic communications-the telephone and 13
  • 17. Mega Trends of the Emerging Third Industrial Revolution in India later, radio and television-became the communication media to manage and market the oil-powered auto age and the mass consumer culture of the Second Industrial Revolution. In the mid-1990s, it dawned on me that a new convergence of communication and energy was in the offing. Internet technology and renewable energies were about to merge to create a powerful new infrastructure for a Third Industrial Revolution (TIR) that would change the world. In the coming era, hundreds of millions of people will produce their own green energy in their homes, offices, and factories and share it with each other in an "energy Internet," just like we now create and share information online. The democratization of energy will bring with it a fundamental reordering of human relationships, impacting the very way we conduct business, govern society, educate our children, and engage in civic life. For 20 years, government and industry were justifiably skeptical about the ability of soft renewable energies to provide the power needed to manage a complex, global economy. The invention of second generation grid IT has changed the economic equation, tipping the balance of power from the old, centralized fossil fuel energies to the new distributed renewable energies. We now have advanced software that allows companies and industries to connect hundreds of thousands and even millions of small desktop computers. When connected, the lateral power exceeds, by a magnitude, the computing power of the world's largest centralized, super computers. Similarly, grid IT is now being used to transform the electricity power grid in a growing number of countries. When millions of buildings collect renewable energies on site, store surplus energy in the form of hydrogen, and share electricity with millions of others across an energy internet, the resulting lateral power eclipses that which could be generated by coal, oil, gas-fired, and nuclear power plants. In 2006, I began working with the leadership of the European Parliament in drafting a Third Industrial Revolution economic development plan. Then, in May 2007, the European Parliament issued a formal written declaration endorsing the Third Industrial Revolution as the long-term economic vision and road map for the European Union. The Third Industrial Revolution is now being implemented by the various agencies within the European Commission as well as in the member states. The 5 Pillar Infrastructure of The Third Industrial Revolution The establishment of a Third Industrial Revolution infrastructure across India will lay the basis for a sustainable economy in the 21st century. However, let me add a cautionary note. Like every other communication and energy infrastructure in history, the various pillars of a Third Industrial Revolution must be laid down simultaneously or the foundation 14
  • 18. will not hold. That's because each pillar can only function in relationship to the others. The five pillars of the Third Industrial Revolution are (1) shifting to renewable energy; (2) transforming the building stock of every continent into micro-power plants to collect renewable energies on-site; (3) deploying hydrogen and other storage technologies in every building and throughout the infrastructure to store intermittent energies; (4) using Information technology to transform the electricity grid of every continent into an energysharing internet that acts just like the Internet (when millions of buildings are generating a small amount of energy locally, on-site, they can sell surplus back to the grid and share electricity with their continental neighbors); and (5) transitioning the transport fleet to electric plug-in and fuel cell vehicles that can buy and sell electricity on a smart, continental, interactive power grid. The critical need to integrate and harmonize these five pillars at every level and stage of development became clear to the European Union in the fall of 2010. A leaked European Commission document warned that the European Union would need to spend €1 trillion (US$ 1.27 trillion) between 2010 and 2020 on updating its electricity grid to accommodate an influx of renewable energy. The internal document noted that "Europe is still lacking the infrastructure to enable renewables to develop and compete on an equal footing with traditional sources." The European Union is expected to draw one-third of its electricity from green sources by 2020. This means that the power grid must be digitized and made intelligent to handle the intermittent renewable energies being fed to the grid from tens of thousands of local producers of energy. Of course, it will also be essential to quickly develop and deploy hydrogen and other storage technologies across the European Union's infrastructure when the amount of intermittent renewable energy exceeds 15 percent of the electricity generation, or much of that electricity will be lost. Similarly, it is important to incentivize the construction and real estate sectors with low interest green loans and mortgages to encourage the conversion of millions of buildings in the European Union to mini power plants that can harness renewable energies on-site and send surpluses back to the smart grid. And unless these other considerations are met, the European Union won't be able to provide enough green electricity to power electric plug-in and hydrogen fuel cell vehicles being readied for the market. If any of the five pillars fall behind the rest in their development, the others will be stymied and the infrastructure itself will be compromised. The creation of a renewable energy regime, loaded by buildings, partially stored in the form of hydrogen, distributed via an energy internet, and connected to plug-in, zero-emission transport, opens the door to a Third Industrial Revolution in India. The entire system is interactive, integrated, and seamless. When these five pillars come together, they make up an indivisible technological platform-an emergent system whose properties and functions are qualitatively different from the sum of its parts. In other words, the synergies between the pillars create a new economic paradigm that can transform India and the world. 15
  • 19. Mega Trends of the Emerging Third Industrial Revolution in India Lateral Power and the Remaking of Society The Third Industrial Revolution is the last of the great Industrial Revolutions and will lay the foundational infrastructure for an emerging collaborative age. The forty year build-out of the TIR infrastructure will create hundreds of thousands of new businesses and hundreds of millions of new jobs. Its completion will signal the end of a two-hundred-year commercial saga characterized by industrious thinking, entrepreneurial markets, and mass labor workforces and the beginning of a new era marked by collaborative behavior, social networks and boutique professional and technical workforces. In the coming half century, the conventional, centralized business operations of the First and Second Industrial Revolutions will increasingly be subsumed by the distributed business practices of the Third Industrial Revolution; and the traditional, hierarchical organization of economic and political power will give way to lateral power organized nodally across society. The very notion of lateral power seems so contradictory to how we have experienced power relations through much of history. Power, after all, has traditionally been organized pyramidically from top to bottom. Today, however, the collaborative power unleashed by the coming together of Internet technology and renewable energies, fundamentally restructures human relationships, from top to bottom to side to side, with profound implications for the future of society. The music companies didn't understand distributed power until millions of young people began sharing music online, and corporate revenues tumbled in less than a decade. Encyclopedia Britannica did not appreciate the distributed and collaborative power that made Wikipedia the leading reference source in the world. Nor did the newspapers take seriously the distributed power of the blogosphere; now many publications are either going out of business or transferring much of their activities online. The implications of people sharing distributed energy in an open commons are even more far-reaching. To appreciate how disruptive the Third Industrial Revolution is to the existing way we organize economic life, consider the profound changes that have taken place in just the past twenty years with the introduction of the Internet revolution. The democratization of information and communication has altered the very nature of global commerce and social relations as significantly as the print revolution in the early modern era. Now, imagine the impact that the democratization of energy across all of society is likely to have when managed by Internet technology. Living in Biosphere Nodes The Third Industrial Revolution alters our conception of living space. The First Industrial Revolution favored dense vertical citi es that rose upwards into the sky. The Second Industrial Revolution, by contrast, favored more decentralized suburban developments that stretched outward, in a linear fashion, to the horizon. 16
  • 20. The build-out of a massive urban and suburban infrastructure has come with a heavy environmental cost. Our buildings are devouring vast amounts of fossil-fuel energy and spewing massive volumes of carbon dioxide into the atmosphere. In the US alone, approximately 50% of total energy is consumed by buildings, which constitutes 50% of all US Greenhouse Gases. If we are to avert catastrophic climate change and the collapse of the world's ecosystems, we will need to radically transform the way we live. The Third Industrial Revolution brings with it a new vision of human habitat. In the 21st Century, urban areas and the surrounding agricultural regions are re-envisioned as local "biosphere nodes." The biosphere is the ecological zone that extends roughly forty miles from the ocean floor to the stratosphere, within which the Earth's geochemical processes interact with biological systems to maintain just the right conditions for the perpetuation of life on Earth. The complex feedback loops of the Earth's biosphere operate like an internal central nervous system, assuring the well-being of the system as a whole. Our growing awareness that the Earth's biosphere functions like an indivisible organism requires us to rethink our assumptions about the meaning of human habitats. If every human life, the species as a whole and all other life forms are entwined with one another and with the geochemistry of the planet, in a rich and complex symbiotic relationship, then we are all dependent on and responsible for the health of the whole organism. Carrying out that responsibility means living out our individual lives in our neighborhoods and communities in empathic ways, to promote the general well-being of the larger biosphere. In a sustainable green world, every region is transformed into a highly-integrated social, economic and political space embedded in a shared biosphere community. The goal is to transform each region into a "relatively" self-sufficient and sustainable ecosystem that can provide much of the basic energy, food and fiber to maintain the population. In the 21st Century, thousands of regional biospheres will be interconnected in a seamless energy, communication, and transport grid that crosses continents, allowing each biosphere node to share surpluses and make up for deficits by engaging in commerce with other regions in the matrix. From Geopolitics to Biosphere Politics The Third Industrial Revolution era will slowly transform international relations from geopolitics to biosphere politics. A new approach to political life on the planet is just beginning to emerge, based on operating principles and assumptions that are more compatible with the dynamics of a Third Industrial Revolution economic model, and the ecological constraints imposed by the Earth's biosphere. 17
  • 21. Mega Trends of the Emerging Third Industrial Revolution in India In the geopolitical world of the fossil fuel-based First and Second Industrial Revolutions, the Earth was conceived in a mechanical and utilitarian fashion. The planet was viewed as a storehouse full of useful resources ready to be appropriated for economic ends. Nation states were formed to compete with one another in the market and on the battlefield, to seize, secure, and control elite fossil fuel energies and rare earth resources. The shift in energy regimes from elite fossil fuels to distributed renewable energies will redefine the very idea of international relations more along the lines of ecological thinking. Because the renewable energies of the Third Industrial Revolution are ample, found everywhere, and easily shared, but require collective stewardship of the earth's ecosystems, there is a greater likelihood of global cooperation. In the new era, survival is less about competition than cooperation, and less about the search for autonomy than the quest for embeddedness. If the earth functions more like a living organism made up of layer upon layer of interdependent ecological relationships, then our very survival depends on mutually safeguarding the well-being of the global ecosystems of which we are all a part. The old geopolitics was accompanied by a scientific paradigm that viewed nature as objects; the new biosphere science, by contrast, views nature as relationships. The old science is characterized by detachment, expropriation, dissection, and reduction; the new science is characterized by engagement, replenishment, integration, and holism. The old science is committed to making nature productive; the new science is committed to making nature sustainable. The old science seeks power over nature; the new science seeks partnership with nature. The old science puts a premium on autonomy from nature; the new science, on re-participation with nature. The new biosphere science takes us from a colonial vision of nature as an enemy to pillage and enslave, to a new vision of nature as a community to nurture. The right to exploit, harness, and own nature in the form of property is tempered by the obligation to steward nature and treat it with dignity and respect. The utility value of nature is slowly giving way to the intrinsic value of nature. This is the deep meaning of sustainable development, and the very essence of biosphere politics. Biosphere politics facilitates a tectonic shift in the political landscape; we begin to enlarge our vision and think as global citizens in a shared biosphere. Global human rights networks, global health networks, global disaster relief networks, global germ plasm storage, global food banks, global information networks, global environmental networks, and global species protection networks, are a powerful sign of the historic shift from conventional geopolitics to fledgling biosphere politics. The Dream of Quality of Life The Third Industrial Revolution changes our sense of relationship to and responsibility for our fellow human beings. We come to see our common lot. Sharing the renewable energies 18
  • 22. of the earth in collaborative commons that span entire continents can't help but create a new sense of species identity. This dawning awareness of interconnectivity and biosphere embeddedness is already giving birth to a new dream of "quality of life," especially among the youth of the world. The American dream, long held as the gold standard for aspiring people everywhere, is squarely in the Enlightenment tradition, with its emphasis on the pursuit of material selfinterest, autonomy and independence. Quality of life, however, speaks to a new vision of the future - one based on collaborative interest, connectivity and interdependence. We come to realize that true freedom is not found in being unbeholden to others and an island to oneself but, rather, in deep participation with others. If freedom is the optimization of one's life, it is measured in the richness and diversity of one's experiences and the strength of one's social bonds. A life less lived is an impoverished existence. The dream of quality of life can only be experienced collectively. It is impossible to enjoy a quality of life in isolation by excluding others. Achieving a quality of life requires active participation by everyone in the life of the community and a deep sense of responsibility by every member to ensure that no one is left behind. While Enlightenment economists were convinced that happiness and "the good life" was tautological with the accumulation of personal wealth, a younger generation, at the cusp of the Third Industrial Revolution, is just as likely to believe that, while economic comfort is essential, it is not sufficient to ensure a full life, and that one's happiness is equally proportional to the accumulation of social capital. The change in thinking about the meaning of happiness is beginning to affect one of the key indices for measuring economic prosperity. The Gross Domestic product (GDP) was created in the 1930s to measure the value of the sum total of economic goods and services generated over a single year. The problem with the index is that it counts negative as well as positive economic activity. If a country invests large sums of money in armaments, builds prisons, expands police security and has to clean up polluted environments and the like, it's included in the GDP. In recent years, economists have begun to create alternative indexes for measuring economic prosperity based on quality of life indicators, rather than mere gross economic output. These new indices measure the general improvement in the well-being of society and include such things as: infant mortality and longevity of life, the availability of health coverage, the level of educational attainment, average weekly earnings, the eradication of poverty and income equality, affordability of housing, the cleanliness of the environment, biodiversity, the decrease in crime, the amount of leisure time, etc. The governments of France, the UK, the European Union, and the OECD are creating formal quality of life indexes with the expectation of relying increasingly on these new measurements to judge the overall performance of the economy. 19
  • 23. Mega Trends of the Emerging Third Industrial Revolution in India If quality of life requires a shared sense of our collective responsibility for the larger community in which we dwell, the question becomes "Where does that community end?" In the new era, our spatial and temporal orientation gravitates beyond political boundaries to encompass the larger community we all inhabit - the biosphere itself. The Leapfrog Effect The Third Industrial Revolution build-out is particularly relevant for the poorer countries in the developing world. We need to keep in mind that 40% of the human race stills lives on two dollars a day or less, in dire poverty, and the vast majority have no electricity. In India, over 400 million people are without electricity-more than one third of the population. Without access to electricity they remain "powerless," literally and figuratively. The single most important factor in raising hundreds of millions of people out of poverty in India is having reliable and affordable green electricity. All other economic development is impossible in its absence. Universal access to electricity is the indispensible starting point for improving the lives of the poorest populations of the world. Because renewable energy-solar, wind, geothermal, hydro and biomass- is widely distributed, a Third Industrial Revolution is ideally suited to take off in the developing world. Although a lack of infrastructure is often viewed as an impediment to development, what we are finding is that because many developing nations are not saddled with an aging electrical grid, they can potentially "leapfrog" into a Third Industrial Revolution. In other words, by building a new, distributed electricity system from scratch, rather than continuing to patch up an old and outworn grid, India and other emerging nations can significantly reduce the time and expense in transitioning into a new energy era. Moreover, because of the distributed nature of the Third Industrial Revolution infrastructure, risk can be more widely diffused, with localities and regions pooling resources to establish local grid networks, and then connecting with other nodes across regions. This is lateral power in practice. But in order to facilitate this transition it will be necessary to provide a favorable playing field, and that means financial aid, technology transfer, and training programs to assist emerging countries. What's going on in developing nations heralds a historic transformation as households jump from the pre-electricity era directly into the TIR age. This process represents the democratization of energy in the world's poorest communities. The Third Industrial Revolution offers the hope that India can arrive at a sustainable postcarbon era by mid-century. We have the science, the technology, and the game plan to make it happen. Now it is a question of whether India will recognize the economic possibilities that lie ahead and muster the will to get there in time. 20
  • 24. Gandhian Economics and The Third Industrial Revolution Gandhi was a keen observer of the power relations that governed the First and Second Industrial Revolutions. He watched the British industrial juggernaut swarm over the Indian subcontinent, devouring its rich natural resources, and impoverishing it's citizenry to fuel the economic engine and feed the consumer appetites of a wealthy elite and a growing middle class in Britain. Gandhi's economic views were conditioned by his experience, and those of millions of his countrymen who languished at the very bottom of a global industrial pyramid that wielded power from the top down. It is no wonder he railed against a capitalist system that organized its economic activity in a centralized manner designed to enrich the few while allowing the leftover morsels to filter down to the masses-of which the poor in the British colonies were at the very bottom of the industrial pyramid. Gandhi was equally disenchanted with the Communist experiment in the Soviet Union, which gave lip service to the principle of communal solidarity while exercising an even more rigid centralized control over the industrialization process than its capitalist foes. Although Gandhi never consciously articulated the concept that communication / energy matrixes determine the way economic power is organized and distributed in every civilization, he intuited that the industrial organization of society- be it under the aegis of a capitalist or communist regime-brought with it a set of guiding assumptions including: a fetish to accumulate wealth in the form of capital in order to centralize control over the production and distribution process; the championing of a utilitarian concept of human nature; and the pursuit of ever more material consumption as an end to itself. Gandhi countered the prevailing commercial paradigm with an economic philosophy that emphasized decentralized economic production in self sufficient local communities; the pursuit of craft labor over industrial machine labor; and the envisioning of economic life as a moral and spiritual quest rather than a strictly materialist drive. For Gandhi, the antidote for rampant economic exploitation and greed is a selfless commitment to community. Gandhi's ideal economy starts in the local village and extends outward to the world. He wrote "An ideal village is that of complete republic independence of its neighbor for its own vital wants, and yet dependant for many others in which dependence is necessity." He eschewed the notion of a pyramidically organized society in favor of what he called "oceanic circles," made up of communities of individuals embedded within broader communities that ripple out to envelop the whole of humanity. Gandhi argued that, "Independence begins at the bottom… A society must be built in which every village has to be self-sustained and capable of managing its own affairs… This does not exclude dependence on and willing help from neighbors or from the world. It will be a free and voluntary play of mutual forces… In this structure composed of innumerable villages, there will be ever widening, never ascending circles. Growth will not be a pyramid with the apex sustained by the bottom. But it will be an oceanic circle whose center will be the individual. 21
  • 25. Mega Trends of the Emerging Third Industrial Revolution in India Therefore the outermost circumference will not wield power to crush the inner circle but will give strength to all within and derive its own strength from it." Gandhi distanced himself from classical economic theory. Adam Smith's assertion that it is in the nature of each individual to pursue his or her own self interest in the marketplace and that "It is his own advantage, indeed, and not that of society, which he has in view," was an anathema to Gandhi. He believed that true "political economy at its crudest is a theory of charity and any theory that upon last analysis has not the result of increasing the happiness of mankind does not belong to the science at all." For Gandhi, happiness lies not in the amassing of individual wealth, but in living a compassionate and empathic life. He went so far as to suggest that "real happiness and contentment… consists not in the multiplication but in the deliberate and voluntary reduction of wants," so that one might be free to live a more committed life in fellowship with others. He bound his theory of happiness to one's responsibility to the planet. Nearly a half century before sustainability came into vogue, Gandhi declared that "the earth provides enough to satisfy every man's need but not enough for any man's greed." Gandhi's ideal economy bares a striking likeness to the attributes of an emerging Third Industrial Revolution. His view of self sufficient village communities joining together and rippling outward into wider oceanic circles that extend to all of humanity, mirrors the community nodes that connect in ever more distributed and collaborative networks that make up The Third Industrial Revolution economic paradigm. His concept of happiness as the optimization of one's relationships in shared communities rather than the autonomous pursuit of individual self interest in the marketplace, reflects the new dream of "quality of life" that is the hallmark of The Third Industrial Revolution era. Finally, Gandhi's belief that nature is a finite resource imbued with intrinsic value that requires stewardship rather than pillage, fits the new realization that every human being's life is ultimately judged by the impact of his or her ecological footprint on the biosphere in which we all dwell. While Gandhi espoused the idea of lateral economic power and understood that the earth's environment is itself the primordial community which supports all of life on the planet, he was forced to defend his philosophy of local economic power in an industrial era whose communication / energy matrix favored centralized top down management of commercial practices and the vertical scaling of economic activity. That left him in the untenable position of championing traditional crafts in local subsistence cultures that had kept the masses of Indian people mired in poverty and isolation over eons of history. Today, the fledgling Third Industrial Revolution communication / energy matrix and accompanying technologies and infrastructure provides a means to advance the Gandhian economic vision, while lifting hundreds of millions of Indian people out of abject poverty and into a sustainable quality of life. Gandhi's vision of the good economy, brought forward 22
  • 26. and embedded in a technologically advanced Third Industrial Revolution infrastructure, can serve as a powerful new narrative not only for India, but for emerging nations around the world in search of a just and sustainable future. Jeremy Rifkin is the best-selling author of The Third Industrial Revolution, How Lateral Power is Transforming Energy, the Economy, and the World (Palgrave-Macmillan). He is also the author of eighteen other best selling books including The Empathic Civilization, The European Dream, The Age of Access, The Hydrogen Economy¸ The Biotech Century, and The End of Work. His books have been translated into more than 35 languages. Rifkin is an advisor to the European Union and heads of state around the world. He is a senior lecturer at the Wharton School's Executive Education Program at the University of Pennsylvania and the President of the Foundation on Economic Trends in Washington, DC. 23
  • 27. Mega Trends of the Emerging Third Industrial Revolution in India The Indian Story P. B. Sharma The world of Science and Technology is witnessing an unprecedented knowledge revolution, propelled by the rapid pace of innovations sweeping across all human activity and driven by the power of mind, power of connectivity and power of networking. One of the striking advantages made possible by the internet is that today the vast body of knowledge is available to millions of people across the globe. Access to knowledge is open to all; and the opportunities created by this access are vast. Anyone can take advantage of the Knowledge Revolution. This has created opportunities for people around the world who can utilize the knowledge base and develop or transform it into new capabilities and enterprises. Wealth generation was earlier restricted to the advanced nations of the world who took advantage of their superior capabilities in the fields of science and technology which started the industrial revolution. Access to knowledge has flattened the world; major opportunities are available to anyone who can utilize the benefit of this knowledge revolution irrespective of whether they are in a developed country, a developing country of even an undeveloped country. What is required is enthusiastic people who are able to learn and adopt new technologies, access the vast body of knowledge and employ their creative genius to transform knowledge into new products, new services, and new businesses which they can market around the world. The rise of entrepreneurship in China, in the countries of South-East Asia and India is largely because of the knowledge revolution which has created immense opportunities. Entrepreneurs in these countries can become global providers of off-shored services, and manufactured products at a competitive price. This has resulted in a phenomenal rise in purchasing power in rapidly developing economies including India. The advent of IT and the penetration of internet and communication technologies into almost all activities of human endeavour have made it possible to create new businesses and new work activity resulting in the absorption of millions into the productive sectors of the economy. As a result of technological breakthroughs which enabled low-energy digital devices to power the IT revolution, the world has become a global village characterized by enhanced mobility. Mobility and Communication, the two major wheels of power on which modern society moves toward progress and development, are the prime movers for the growth of industry and enterprises. They facilitate the transaction of business at almost the speed of thought and create the necessary industry environment for meeting the challenge of a rapidly shrinking technology and innovation cycle. 24
  • 28. I. Impact of Information / Communication Technology (ICT): The ability of man to innovate and create new designs, new materials, new manufacturing systems and to collaborate at all levels from design to manufacturing, sales and service in order to create a dynamic eco-system that supports the growth of new and innovative products and services is the result of the communication and IT Revolution. The advances in information and communication technologies have created new businesses and new knowledge enterprises. In fact, it has supported the growth of almost all sectors of the economy - education, health care, agriculture, manufacturing, the services sector, knowledge services, governance and management, finance, banking and insurance, social networking. Above all, it has involved people of all ages in the creation of knowledge and its effective dissemination. The barriers of time, space and geographical locations have been broken. There is no consideration in this new knowledge age of one's age and experience. A start-up can challenge a well established enterprise; similarly a new entrant to the profession can challenge a well established professional. All it requires is the genius of creativity and innovation which today is the most important resource on earth. The integration of ICT with knowledge technologies, knowledge systems, knowledge warehouses, and internet capabilities, unleash unprecedented growth and the advancement of productive enterprises providing work opportunities to millions of people around the world. Norman R. Augustine, in envisioning the next century, has rightly opined that the new century will hold the future never thought of yet. And this is happening today with more to come. Virtual offices, virtual teams, time sharing, factory networks, Business Process Reengineering Practices in nearly all spheres can be cited as classic examples of ideas that did not exist fifteen years ago. But then, let us not lose sight of the fact that it is not just ICT alone that will create the Third Industrial Revolution tide as history suggests that the great economic transformations occur when new communication technology converges with new energy systems. New forms of communication become the medium for organizing and managing more complex civilizations made possible by the new sources of energy. The infrastructure that emerges shrinks time and space, connecting people and markets in more diverse economic relations. When those systems are put in place, economic activity advances, moving along a classic bell shaped curve that ascends, peaks, plateaus and descends in tandem with the strength of the multiplier effect established by the communications / energy dynamic. In addition, the power 25
  • 29. Mega Trends of the Emerging Third Industrial Revolution in India of innovation today is such that it pushes the product cycle upward as soon as the current product has passed its peak of acceptability, in turn creating an even higher peak of acceptability by successive innovations as shown in Figures 1 and 2. Growth Innovation Decline Maturity Growth Introduction SALES Innovation Innovation Restarts the Product Life Cycle TIME Figure 1: Innovation Restarts the Product Life Cycle Ref: http://blog.cestudios.ca/2007/07/23/restart-the-product-life-cycle/ Generalized Product Life Cycles Semiconductor Industry Sales/Profits Product Enhancement Life Cycle Extensions Profit Introduction Growth Maturity Decline Figure 2: Generalized Product Life Cycles – Semiconductor Industry Ref:http://strategymarketingplan.blogspot.com/2010_08_01_archive.html 26
  • 30. Innovation Revolution is the beginning of the innovation led industrial revolution which is shaping a new canvas of business and enterprise horizons around the globe. The important point to realize is that today it is possible to have cost effective product and process innovation because of the ease with which i2IP (Idea to Innovated Product), could be achieved by the convergence of ICT technologies, provided systems are put in place to harness the power of innovation and commercialization of the intellectual property. II. Energy Revolution on the Anvil: With the energy crisis of 1974, the need for energy efficiency, energy conservation, and the search for alternative sources of energy began both in the developed as well as developing countries. This did not, however, slow down the use of fossil fuels such as coal, oil and natural gas for generation of electricity and also the use of such fuels in industrial activity and transportation. The real pressure on the use of fossils was created by the ever tightening standards on air quality and exhaust emissions. This challenge of energy efficiency and low engine emission was, however, addressed by the improved fuel quality, efficient combustion systems and catalytic convertors for vehicles powered by internal combustion engines. The Primary Energy Consumption by Fuel in 2010 for the world and for both the advanced and the rapidly developing countries is given in Table 1. The power sector also witnessed the growth of clean coal technologies such as super critical and Integrated Gas Coal Technologies, utilization of natural gas based power plants. Increased use of hydro and nuclear power would have been an inadequate solution to meet today's needs. Figure 3 indicates the renewable energy share of Global Final Energy Consumption 2009. For a long time renewables were considered cost ineffective and the least efficient sources of energy for power generation. Wind/ solar/ biomass/ geothermal power generation 0.7% Fossil fuels 81% l Biofuels 0.6% Biomass/solar/geothermal l l hot water/heating 1.5% l Renewables 16% l 16% Hydropower 3.4 l l Traditional biomass 10% l Nuclear 2.8% Figure 3: Renewable Energy Share of Global Final Energy Consumption 2009 Source: BP, Statistical Review of World Energy, June 2011 27
  • 31. Mega Trends of the Emerging Third Industrial Revolution in India Table 1: Primary Energy Consumption by Fuel, 2010 Country Oil Natural Gas (Million (MToE) Tonnes) Coal (MToE) Nuclear Energy (MToE) Hydro electricity Renew- ables (MToE) (MToE) Total US 850.0 621.0 524.6 192.2 58.8 39.1 2285.7 Canada 102.3 84.5 23.4 20.3 82.9 3.3 316.7 France 83.4 42.2 12.1 96.9 14.3 3.4 252.4 147.6 372.7 93.8 38.5 38.1 0.1 690.9 73.7 84.5 31.2 14.1 0.8 4.9 209.1 Russian Federation United Kingdom China 428.6 98.1 1713.5 16.7 163.1 12.1 2432.2 India 155.5 55.7 277.6 5.2 25.2 5.0 524.2 Japan 201.6 85.1 123.7 66.2 19.3 5.1 500.9 Malaysia 25.3 32.2 3.4 - 2.1 ^ 62.9 Singapore 62.2 7.6 - - - - 69.8 South Korea 105.6 38.6 76.0 33.4 0.8 0.5 255.0 Total World 4028.1 2858.1 3555.8 626.2 775.6 158.6 12002.4 Note: ^ Less than 0.05. Source: BP Statistical Review, June 2011 The use of wind energy is confined largely to coastal areas, and solar energy, despite its abundance, can be utilized to a limited extent because of the technology barriers of photo-voltaic cells. However, these barriers are being overcome with major technology breakthroughs achieved through solar-wind hybrid and with the increasing feasibility of solar-hydrogen technologies. More recently renewable sources of energy have made their mark on global energy consumption. A new energy revolution is on the anvil with renewables making more business sense and with energy entrepreneurship becoming popular both in households as well as in the rural sector. Once solar becomes a viable business proposition there will be a phenomenal increase in harnessing solar energy. Even without it, a major energy revolution is in the making with the increased focus on grid as well off-grid solar photovoltaic power in the US, European Union, and also in China, India and countries in South-East Asia. III. Convergence of Communication Technology and Energy Systems: According to Rifkin, we are on the cusp of another convergence of communication technology and energy. The new economic paradigm will spawn thousands of new business opportunities and create millions of new jobs in the coming decades. In this context, we need to address the current trend of migration of the rural population to urban areas and the creation of mega cities. This trend adversely 28
  • 32. affects the agricultural system simultaneously creating population pressures on mega cities in the form of slums. A new breed of urban poor with extremely poor civic facilities are already a major concern in India. In the latest report, 25% of the India's poor live in urban areas, and 31% of the urban population is poor. For the distributed capitalism, it is critical to reverse the rural to urban migration by stimulating nonagricultural employment/entrepreneurial opportunities in the rural sector. We foresee energy entrepreneurship with the advent of the Third Industrial Revolution which will lead to creation of small and medium enterprises penetrating deep into the rural areas thereby increasing the power of rural India and engaging rural people productively within the non-agricultural economy. This will also result in increased investment in agriculture and push agricultural productivity to higher levels to justify the return of investment. The twin gains will be food security through increased agricultural productivity and the rural population enjoying a higher quality of life by being part of agro-industrial activities. The strategic shift which we propose involves policy shifts to promote small and medium enterprises in rural areas as an essential condition for the establishment of large industries near urban areas. We need to envision a future in which millions of individual players can collect, produce and store locally generated renewable energy in their homes, offices, factories, and vehicles, and share their power generation with each other across the world through an intelligent "inter-grid". In such a case, hydrogen emerges as the most powerful universal storage medium for intermittent renewable energies such as solar, wind and tidal. Hydrogen will play the role of a major carrier to cause the energy wave to sweep the globe much as digital technologies have become the most acceptable medium of storage and transmission of data, information and knowledge. In this new energy environment the focus should be on sustainable forms of energy. The focus should be on local communities generating their own energy as well as on systems which recycle and reuse the waste they create. We foresee the rise of energy entrepreneurship which will involve millions of people in the business of harnessing available renewable energies and the businesses generated through it for production and distribution. Generating energy in a form which can be utilized locally as well as plugged into the energy grid would become a major phenomenon in countries around the world. The energy environment today leans heavily in favour of conventional energy systems promoting centralized energy generation, transmission and distribution. The new environment will give rise to an energy mix both, on the basis of the source of energy, as well as a mix of sizeable decentralized and centralized energy systems. Solar shall play a major role in this new energy revolution. Migration into large metropolises were significant in 1991-2001 with the Greater Mumbai urban area drawing about 2.5 mn migrants, the Delhi urban area about 2.1 mn migrants, the Chennai urban area about 0.4 mn migrants to name the largest three urban destinations in the country. As the trend in migration to large urban 29
  • 33. Mega Trends of the Emerging Third Industrial Revolution in India agglomerations continued, the Census 2011 is likely to show a spurt in population in these places. Therefore, it is important that the migration of rural poor to create urban slums is addressed. This can only be possible by providing avenues for productive nonagricultural employment in rural areas. Energy farming, energy entrepreneurship, growth of nano & small enterprises, penetration of ICT in rural areas and accessibility to national and global knowledge networks from anywhere, irrespective of rural or urban, can make this transformation happen. Energy from waste, energy from biomass, recycling of waste water and using solar energy for water treatment & purification can be taken up in a big way both in the rural as well as urban areas. We foresee a significant reduction in migration of the rural population to metropolitan cities as one of the major benefits arising from the Third Industrial Revolution which will open up large opportunities for energy entrepreneurship, small and medium manufacturing, knowledge process outsourcing, business process outsourcing services and other utilities providing productive employment in the rural sector in addition to the agriculture sector. It is important to recognize that the typical small land holdings of Indian farmers is an impediment to productivity and purchasing power. Hence it is extremely important to create value added opportunities for the productive engagement of the workforce in rural areas other than in agriculture to increase their productivity and purchasing power. The Third Industrial Revolution will help realise the dream of mass entrepreneurship in rural areas envisioned by the father of the Indian Nation, Mahatma Gandhi Ji. At that time Gandhi Ji talked of a self-reliant rural India on the strength of cottage Industries which in the modern context would be nano, small and medium enterprises arising from the strength of the rural sector in renewable energy and its utilisation for productive work activity including modern ICT enabled and knowledge intensive enterprises beyond modernisation and mechanisation of the agriculture sector. A significant rise of the food processing industry and industries based on bio-technology is also envisioned to become a reality in the rural sector especially in that the Third Industrial Revolution promises abundant energy available to the rural sector. A Case Study: The Impact of rural energy growth on urban migration in the State of Gujarat While states across the country grapple with the problem of getting power to the rural areas, Gujarat stands tall as an exception. The success story of the 'Jyoti Gram Yojana' of Gujarat can be cited as an excellent example of the growth of rural electric power fuelling rural industrial growth, thus reversing the rural migration. The State Government's 'Jyoti Gram Yojana' (JGY) has not only ensured 100 per cent village electrification but also 24 X 7 power supply, resurrecting rural industries resulting in the reverse migration back to rural areas. 30
  • 34. At an expenditure of over US$ 200 mn, the programme successfully covered the 18,065 inhabited villages and 9,681 hamlet-suburbs in Gujarat. Rather than adopting the usual practice of providing power supply for agriculture and households from a common feeder, the scheme sought to provide power from separate feeders. About 12,621 new transformer centres and 56,599 km of new lines were laid. Implemented in a record time of 30 months, the project involved installation of specially designed transformers (SDTs) to provide round-the-clock electricity supply for domestic use to farmers living in farm houses. Compared to big players who struggle to control their transmission and distribution losses (T&D), the project achieved a tangible reduction in T&D losses by 4.88 per cent in the financial year 2005-06. The transformer failure rate was also reduced by 1.17 per cent. Post-Jyotigram, the socio-economical benefits for the rural population have been farreaching. For example, the time spent on education has increased by 90%, and the time spent on entertainment is up 88%. Income generated by rural women has increased by 18%, according to the study by Ashish Amin & Vinay Umarji, Business S ta n d a rd , A p r i l 2 0 0 8 . ( htt p : / / w w w. b u s i n e s s sta n d a rd . co m / i n d i a /storypage.php?autono=320640); there has been a 200% increase in the number of phone booths and a 300% increase in provision stores in these villages. Further, there has been increase in the number of commercial units like cyber cafes, fax and photocopying shops. Personal testimonies of the villagers have been revealing as well. Jagdish Laaniya and his wife Kanchanben of Ratanpar village, a hamlet in Bhavnagar, lived in the nearby town of Botad, where Jagdish used to work in a diamond polishing unit. After the 'Jyoti Gram Yojana' reached Ratanpar, the couple decided to return and set up their own diamond polishing machine and a lathe machine in the village. Apart from diamond polishers, people across the rural spectrum have benefitted from the scheme. Many people have returned to the villages and have set up new units, evidence of reverse migration. Rural industries like fisheries, dairy farming, flour and rice mills, and apparel stitching have been resurrected in Gujarat, says the study by Ashish Amin & Vinay Umarji. Moreover, the shelf life of medicines, dairy products and cold drinks has increased due to the availability of refrigeration. Uninterrupted power supply led to an average gain of 3-6 additional hours of work per week. Seeing the successes of the scheme, the State Government has also been talking about replication of the project in other states and developing countries. 31
  • 35. Mega Trends of the Emerging Third Industrial Revolution in India IV. Energy Entrepreneurship for the masses: The Third Industrial Revolution is envisaged to create an upsurge of rural entrepreneurship powered by the energy and communication revolution. It is an established fact that energy entrepreneurship and IT enterprises require manpower that can be trained more easily than the manpower training required for large manufacturing enterprises. The IT training revolution in India is a shining example of the achievements realized by millions of Indians by focusing on computer literacy and IT training and these form the basis for the phenomenal growth of the ICT sector in India. This IT Revolution in India was undoubtedly supported by a highly significant expansion of technical education in India that allowed the ICT industry to hire the requisite manpower from within the country and even place the trained manpower in their outsourced outfits in countries abroad. If such a Revolution was possible for the ICT sector it may also be possible for the energy sector, a sector on the threshold of taking off given that the Jawahar Solar Mission has made a significant headway for solar power development in far flung areas in the country. Figure 4: Huaxi Village in China constructing world's 15th tallest building We need to create a massive training program on energy entrepreneurship so that the trained manpower can become part of energy entrepreneurship for the masses thus supporting the significant growth of solar and other renewable energy sources to harness the enormous growth of agro-industrial activity to wipe out both hunger and poverty. Using such an approach, the under developed and deprived rural areas 32
  • 36. can be transformed like the Huaxi village in Jiangyin [Jiangsu Province] in China, which is the richest village (Figure 4) and a composite of modern metropolis and rural. We foresee a similar transformation of India's rural areas in the Third industrial revolution. V. Moving Towards Zero Waste Engineering: There is increasing recognition that the future will be an era of sustainable and “self repairing systems”. As such we need to address several crucial issues to reap the rich harvest of the convergence of ICT and energy dynamics. The first issue relates to the recycling of waste material and related environmental hazards. Millions of computers are used today to drive the ICT revolution. These computers produce tremendous amounts of silicon waste that is not easy to recycle. E-waste is already a major concern. A consumerist society, addicted to a “use and discard” culture, yet demanding affordable new and improved products adds to the waste re-cycling problem. Oil spills affect biodiversity and pollutes water, which in turn have a detrimental effect on the environment. Thus, tomorrow's engineering should first concentrate on remedies for eliminating waste and protecting the environment. The Third Industrial Revolution will have a greater emphasis on zero waste engineering and optimum use of energy and physical resources. The emphasis here will be on environmentally benign clean technologies, green manufacturing, green energy, green electronics and green management together giving rise to green enterprises and green products. VI. Low Carbon Economy – a remarkable footprint of the Third Industrial Revolution: One of the major benefits of the Third Industrial Revolution will be its capability to foster an ultra low carbon economy. This would be possible largely because of the human capability to reduce the Green House Gases, (GHG) emissions from the existing power utilities, transportation systems and manufacturing units and from the continued quest for energy conservation and the search for alternative sources of energy. While renewable energy including solar-thermal, solar-photovoltaic, solar-hydrogen, and solar power for agriculture offer significant improvement, the prospects of human imagination attempting major breakthroughs in new and smart materials, wireless electricity transmission and attempting mind-to-mind connectivity, almost along the lines of today's cloud computing, will usher a new era of agro-industrial activity in rapidly developing economies as well as in the 33
  • 37. Mega Trends of the Emerging Third Industrial Revolution in India developed nations of the world. However, bold initiatives are required from the policy makers who should come out with a declaration of both, the intent as well as action plan to achieve no less than zero dependence on fossil fuels by, say 2030, At a minimum, the policy makers should commit to achieving at least 50% share of the primary energy needs of the nation from renewable sources. A sustained focus on increasing the fleet of battery operated vehicles, hybrid vehicles and vehicles powered by clean fuel will significantly cut down the carbon foot print and pave the way for a low carbon economy. Bio-diesel, ethanol, hydrogen, hydro power, wind, geothermal and solar should be the major sustainable fuels for the low carbon economy which will be the hallmark of the Third Industrial Revolution. This requires a well thought energy strategy, given the enormous potential of renewables. The technology breakthroughs required can be enabled by inspiring and engaging scientists and technologists to work in an environment of seamless integration of science and engineering. We need to create “scientism” and enable our scientists and engineers to work together to develop major technology breakthroughs needed for the convergence of an energy and communication revolution. The Third Industrial Revolution needs to focus on effective and efficient ways to manage waste, energy conservation and zero defect engineering to ensure maximum productivity from limited resources. The Third Industrial Revolution holds a better future for the primary, secondary and tertiary sectors. The transformations which can be foreseen are: l geo-spatial positioning systems in precision farming to ensure appropriate Use of use of inputs for productive results. l Advanced technology in the field of agriculture for reducing the waste of resources such as water, and for increasing the efficiency of farms. l Contract farming, wherein people buy produce from a farmer of their acquaintance, who is monitored by intelligent systems to ensure the produce is pure and organic. l off-shoring of technology and produce gaining importance, the benefits can With be availed by the low cost manufacturing concerns. For example, Chile has diversified from copper to fruit and fisheries merely because of the Third Industrial Revolution. l to Due economies of scale, low cost producers like India and China have benefitted from the developed world's manufacturing sector off-shoring of facilities. It is indeed true that most of the manufacturing in America is outsourced to countries like China and Vietnam. The Americans focus on providing services and marketing. Their economy is service sector driven. 34
  • 38. l Readily available trained manpower has attracted foreign investors into Indian markets .This provides numerous employment opportunities to Indians, and helps raise their living standard. VII.Agriculture: From Green to Evergreen Revolution: The Third Industrial Revolution will usher in a new wave of evergreen agriculture. Pioneering work by agricultural scientists in India, and the efforts of farmers, helped achieve a breakthrough in the agriculture sector in the 1960s, popularly known as the 'Green Revolution'. In the Indian context, high agricultural production and productivity achieved in subsequent years has been the main reason for attaining food security. However, the country has not witnessed any big technological breakthroughs in agriculture since then. A food safety-net for the billion plus citizens, and growing, requires enhanced agricultural production and increased productivity in the form of a Second Green Revolution that can be better termed as an “EverGreen” revolution. Further, special attention is required for achieving higher production and productivity levels in pulses, oilseeds, fruits, and vegetables, that remained untouched by the First Green Revolution, but are essential for nutritional security. The relatively weak supply responses to price hikes in agricultural commodities, especially food articles, in the recent past brings back into focus the central question of efficient supply chain management and the need for sustained levels of growth in agriculture and allied sectors. The choice before the nation is clear: invest more in agriculture and allied sectors with the right strategies, policies, and interventions. This is also a 'necessary' condition for 'inclusive growth' and for ensuring that the benefits of growth reach a larger number of people. The growth of agriculture and allied sectors is still a critical factor in the overall performance of the Indian economy. As per the 2010-11 advance estimates released by the Central Statistics Office (CSO) on 07.02.2011, the agriculture and allied sector accounted for 14.2% of the gross domestic product (GDP), at constant 2004-05 prices. During the period 2004-05 to 2007-08, the GDP for agriculture and allied sectors had increased from US$ 11308.5 mn to US$ 13101.6 mn at constant 2004-05 prices; thereafter it stagnated at this level for two years (2008-09 to 2009-10). In 2009-10, it accounted for 14.6% of the GDP compared to 15.7% in 2008-09. The use of information technology in agriculture has reduced waste, increased work efficiency, delivering increased farm yields. Some examples are mentioned below: Use of l sensors, laser levelers help save water by about 30% and increase productivity about 20%. 35
  • 39. Mega Trends of the Emerging Third Industrial Revolution in India Use of l Green seeker in agriculture helps identify less than optimal level of a specific fertilizer and the quantity needed; grain loss monitor helps determine the amount of grain being lost. Use of l Global Positioning Systems in precision farming to ensure appropriate use of inputs for productive results. Use of l Energy Efficient Farming and Water Conservation technologies in the agriculture sector shall ensure optimal use of resources. Use of l IT for farmers for optimum marketing of their produce as also for the consumers to locate their best producers and retailers. The major focus for the Second Green Revolution in India would be on : Increasing v soil fertility and soil conversation. Water harvesting and conservation of water resources in rural areas. v Economical v and effective use of water and natural fertilizers for increased agriculture productivity. Education v and training of farmers for increasing productivity and conservation of resources. Increased v focus on use of natural fertilizers and biotech penetration for increased yields and human health. VIII. A New Paradigm for Education is needed: To usher in the Third Industrial Revolution, it is important to create a new paradigm for education. The new paradigm should focus on creating capabilities powered by innovativeness and concern for sustainability rather than merely creating informed and trained manpower. In this respect, education, innovation and excellence have to be the tripod of the new education paradigm. A major shift from education-led knowledge to knowledge-powered education, knowledge-led research and knowledge-led innovation is required. We foresee a paradigm shift in education from mere dissemination of knowledge to an integral approach of knowledge sharing, knowledge management, knowledge creation and knowledge dissemination, with a focused attention on harnessing the power of innovation and creativity of the inspired and talented students and qualified and enlightened faculty. In this changed situation, the panchamrit of academia, R&D organizations, industry, government & society will become the hallmark of the educational strategy, especially in the universities and institutions of 36
  • 40. higher learning. This will call for a renewed attention to Technology Parks, Technology Incubation and Product Innovation Centres and enabling structures for fostering student and faculty start-ups in the science and technological universities and institutions of higher learning. In fact, the universities of tomorrow will be transformed into global knowledge enterprises with the mantra “Knowledge to Prosperity” as the hallmark of the university system. This will then be a win-win situation for the knowledge creators as well as the industries. The society and the government will be greatly benefitted by such a sustained focus on creation and dissemination of knowledge and the transformation of knowledge to prosperity through strong and effective industry-academia partnerships. The universities in India and for that reason around the world have to revisit their vision and their planned activities from the point of view of shaping the universities of tomorrow into global knowledge enterprises. Summary The Third Industrial Revolution will usher in a new era of knowledge led education, industry relevant research and product innovation to power the growth of new age enterprises fuelled by the convergence of abundant energy and the power of communication technologies. The Power of Mind, the Power of Connectivity and the Power of Networking shall then create a new global order in which human excellence shall surpass human imagination, creating productive employment for humanity and thus assuring a quality of life to live with dignity and honour to justify human existence on Planet Mother Earth. That is the promise of the New Knowledge Age which will be realized with the convergence of the New Energy and Information and Communication Revolution. The Third Industrial Revolution offers a renewed hope for accelerated growth of prosperity with focus on quality, green productivity, reliability, environmental sustainability and above all, care and concern for society and human values. The Third Industrial Revolution thus promises a new industrial age in which prosperity and happiness together will be the hallmark of industrial activity compared to the unfair prosperity and unhappiness witnessed during the Second Industrial Revolution. Prof P. B. Sharma, Vice Chancellor, Delhi Technological University 37
  • 41. Mega Trends of the Emerging Third Industrial Revolution in India Acknowledgment The author gratefully acknowledges the inspiration provided by Jeremy Rifkin, the originator of the concept of the Third Industrial Revolution and the opportunity provided by Shobha Mishra Ghosh, FICCI for the development of this White Paper. Useful discussions that Rifkin had with the thought leaders of FICCI, specially with Vivek Mohan of Abbott India are also gratefully acknowledged. The support received from Meha Joshi and . Yoginder Kumar of DTU in the preparation of the White Paper is also highly appreciated and acknowledged. References Ÿ http://blog.cestudios.ca/2007/07/23/restart-the-product-life-cycle/ Ÿ http://strategymarketingplan.blogspot.com/2010_08_01_archive.html Ÿ Statistical Review of World Energy, June 2011 BP, Ÿ http://www.business-standard.com/india/storypage.php?autono=320640 Ÿ Central Statistics Office (CSO) The views expressed in this White Paper are the views of the author and need not necessarily reflect the views of the organization i.e. Delhi Technological University. 38
  • 42. Mega Trend 2 New Business Models in the Age of Distributed Capitalism
  • 43. New Business Models in the Age of Distributed Capitalism Global Scenario Jeremy Rifkin Energy regimes shape the nature of civilizations-how they are organized, how the fruits of commerce and trade are distributed, how political power is exercised, and how social relations are conducted. In the twenty-first century, the locus of control over energy production and distribution is going to tilt from giant fossil fuel-based centralized energy companies to millions of small producers who will generate their own renewable energies in their dwellings and trade surpluses on a vast energy internet just like we now create our own information and share it online. The democratization of energy has profound implications for how we orchestrate the entirety of human life in the coming century. We are entering the era of distributed capitalism. To understand how the new Third Industrial Revolution (TIR) infrastructure is likely to dramatically change the distribution of economic, political, and social power in the twentyfirst century, it is helpful to step back and examine how the fossil fuel-based First and Second Industrial Revolutions reordered power relations over the course of the nineteenth and twentieth centuries. Fossil fuels-coal, oil, and natural gas-are elite energies for the simple reason that they are found only in select places. They require a significant military investment to secure their access and continual geopolitical management to assure their availability. They also require centralized, top down command and control systems and massive concentrations of capital to move them from underground to the end users. The ability to concentrate capital- the essence of modern capitalism-is critical to the effective performance of the system as a whole. The centralized energy infrastructure, in turn, sets the conditions for the rest of the economy, encouraging similar business models across every sector. The emerging Third Industrial Revolution, by contrast, is organized around distributed renewable energies that are found everywhere and are, for the most part, free-sun, wind, hydro, geothermal heat, biomass, and ocean waves and tides. These dispersed energies will be collected at millions of local sites and then bundled and shared with others over an intelligent energy internet to achieve optimum energy levels and maintain a high41
  • 44. Mega Trends of the Emerging Third Industrial Revolution in India performing, sustainable economy. The distributed nature of renewable energies necessitates collaborative rather than hierarchical command and control mechanisms. This new lateral energy regime establishes the organizational model for the countless economic activities that multiply from it. A more distributed and collaborative industrial revolution, in turn, invariably leads to a more distributed sharing of the wealth generated. Capitalism was founded on the idea that the accumulation of individual wealth could be harnessed in the form of financial capital to expropriate even more wealth by controlling the technical means by which that wealth is generated and the logistical means by which it is distributed. The fossil fuel-based industrial revolution required huge up-front costs. Coalfired steam technology was far more expensive than wood fuel or water and windmill technology. The high costs of the new energies and technologies and the specialization of tasks and skills that went with them favored centralized management and production under a single roof in what would later be called a factory system. The textile industry in England was the first to be transformed into the new model. Other cottage industries soon followed. A new class of wealthy merchants garnered sufficient financial capital to own the tools of production, which were previously owned by the craftsmen themselves. They were called capitalists. Unable to compete with the economies of scale and speed of the new factory enterprises, craftsmen lost their independence and became hired hands in the factories, and the workforce of the industrial revolution. Historian Maurice Dobb sums up the significance in the shift from craft to industrial production and from cottage industries to capitalist enterprises: "The subordination of production to capital, and the appearance of the class relationship between capitalist and the producers is, therefore, to be regarded as the critical watershed between the old mode of production and the new." In the new, distributed, and collaborative communication and energy spaces of the Third Industrial Revolution "TIR," however, the accumulation of social capital becomes as important and valuable as the accumulation of financial capital. That's because the cost of entering into networks is plummeting as communication technologies become cheaper. Today, two billion people armed with a cheap desktop computer or an Internet-accessible cell phone enjoy access to one another at the speed of light, with more distributed power at their disposal than the global TV networks. Soon, the plunging cost of renewable energy technology will provide every human being with comparable access to energy across a distributed energy internet. The extraordinary capital costs of owning giant centralized telephone, radio, and television communications technology and fossil fuel and nuclear power plants in markets is giving way to the new, distributed capitalism, in which the low entry costs in lateral networks make it possible for virtually everyone to become a potential entrepreneur and collaborator, creating and sharing information and energy in open commons. Witness twenty something young men creating Google, Facebook, and other global information networks, literally in their college dorm rooms and thousands of small businesses converting their buildings to green micro power plants and connecting with one another in regional electricity networks. 42
  • 45. As the economy becomes more distributed, favoring peer-to-peer relationships rather than autonomous exchanges, the very nature of commercial activity changes. The production of property for exchange, the very cornerstone of capitalism, becomes increasingly unprofitable in an intelligent economy where exchange costs become cheaper and cheaper, and eventually, virtually free. That process is well under way and will only accelerate in coming decades as the TIR infrastructure matures. As this happens, property exchange in markets will give way to access relationships in collaborative networks, and production for sale will be subsumed by production for shared just-in-time use. New York Times reporter Mark Levine described the new mindset with the astute observation that "sharing is to ownership what the iPod is to the eight track, what the solar panel is to the coal mine. Sharing is clean, crisp, urbane, postmodern: owning is dull, selfish, timid, backward." What I am describing is a fundamental change in the way capitalism functions that is now unfolding across the traditional manufacturing and retail sectors and reshaping how companies conduct business. In conventional, capitalist markets, profit is made at the margins of transaction costs. That is, at every step of the conversion process along the value chain the seller is marking up the cost to the buyer to realize a profit. The final price of the good or service to the end user reflects the markups. But TIR information and communication technologies dramatically shrink transaction costs across the supply chain in every industry and sector, and distributed renewable energies will soon do so as well. The new, green energy industries are improving performance and reducing costs at an ever accelerating rate. And just as the generation and distribution of information is becoming nearly free, renewable energies will also. The sun, wind, biomass, geothermal heat and hydropower are available to everyone and, like information, are never used up. When the transaction costs for engaging in the new Third Industrial Revolution communications/energy system approach zero, it is no longer possible to maintain a margin, and the very notion of profit has to be rethought. That's already happening with the communications component of the Third Industrial Revolution. The shrinking of transaction costs in the music business and publishing field with the emergence of file sharing of music, e-books, and news blogs, is wreaking havoc on these traditional industries. We can expect similar disruptive impacts as the diminishing transaction costs of green energy allow manufacturers, retailers, and service industries to produce and share goods and services in vast social networks with very little outlay of financial capital. For example, consider manufacturing. Nothing is more suggestive of the industrial way of life than highly capitalized, giant, centralized factories equipped with heavy machines and attended by blue-collar workforces, churning out mass-produced products on assembly lines. But what if millions of people could manufacture batches or even single manufactured items in their own homes or businesses, cheaper, quicker, and with the same quality control as the most advanced state-of the-art factories on earth? Just as the TIR economy allows millions of people to produce their own energy, a new digital manufacturing revolution now opens up the possibility of following suit in the production 43
  • 46. Mega Trends of the Emerging Third Industrial Revolution in India of durable goods. In the new era, everyone can potentially be their own manufacturer as well as their own power company. Welcome to the world of distributed manufacturing. The process is called 3-D printing; and although it sounds like science fiction, it is already coming online, and promises to change the entire way we think of industrial production. The process is amazing. Think about pushing the print button on your computer and sending a digital file to an inkjet printer, except, with 3-D printing, the machine runs off a three-dimensional product. Using computer aided design, software directs the 3-D printer to build successive layers of the product using powder, molten plastic, or metals to create the material scaffolding. The 3-D printer can produce multiple copies just like a photocopy machine. All sorts of goods, from jewelry to mobile phones, auto and aircraft parts, medical implants, and batteries, are being "printed out" in what is being termed "additive manufacturing," distinguishing it from the "subtractive manufacturing," which involves cutting down and pairing off materials and then attaching them together. Industry analysts forecast that millions of customers will routinely download digitally manufactured, customized products, and "print them out" at their business or residence. 3-D entrepreneurs are particularly bullish about additive manufacturing, because the process requires as little as 10 percent of the raw material expended in traditional manufacturing and uses less energy than conventional factory production, thus greatly reducing the cost. As the new technology becomes more widespread, on site, just in time, 3-D printing of customized manufactured products will increasingly reduce logistics costs, with the possibility of huge energy savings. The energy saved at every step of the digital manufacturing process, from reduction in materials used, to less energy expended in making the product, and the elimination of energy in transporting it, when applied across the global economy, adds up to a qualitative increase in energy efficiency beyond anything imaginable in the First and Second Industrial Revolutions. When the energy used in the process is renewable and also generated on site, the full impact of a lateral Third Industrial Revolution becomes strikingly apparent. In the same way that the Internet radically reduced entry costs in generating and disseminating information, giving rise to new businesses like Google and Facebook, additive manufacturing has the potential to greatly reduce the cost of producing hard goods, making entry costs sufficiently lower to encourage hundreds of thousands of mini manufacturers-Small and Medium Sized Enterprises (SMEs)-to challenge and potentially outcompete the giant manufacturing companies that were at the center of the First and Second Industrial Revolution economies. Already, a spate of new start-up companies are entering the 3-D printing market with names like Within Technologies, Digital Forming, Shape Ways, Rapid Quality Manufacturing, and Stratasys, and are determined to reinvent the very idea of manufacturing in the Third Industrial era. Manufacturing is going lateral, with immeasurable consequences for society. Some of the businesses most associated with conventional centralized market capitalism are now being challenged by the introduction of new distributed and collaborative 44
  • 47. business models. Take, for example, the car, the lynchpin of the Second Industrial Revolution. The shift into a Third Industrial Revolution economy, with its emphasis on increasing energy efficiency and reducing carbon footprint, has given rise to nonprofit carsharing networks all over the world. In America, car-sharing operations are sprouting up across the country. City Wheels in Cleveland, HourCar in Minneapolis/St. Paul, Philly Car Share, I-Go in Chicago, and City Car Share in San Francisco are among the new breed of nonprofit networked organizations providing mobility for hundreds of thousands of users. For a nominal membership fee, users join the car-sharing network and receive a smart card that gives them access to parking lots and vehicles. Users pay for the miles driven, but because most of the carsharing organizations are nonprofit organizations, the cost is less than what is charged by the major car rental companies. Many of these automobile fleets are also made of the most energy-efficient vehicles available on the market. It is estimated that each car sharing vehicle takes up to twenty cars off the road. Car sharers report that they typically reduce the miles they drive by about 44 percent. The reduction in CO2 emissions can be dramatic. Communauto, the Canadian car sharing service in Quebec, reports a 13,000-ton reduction in CO2 emissions by its 11,000 members. A study in Europe found that car sharing cut CO2 emissions by as much as 50 percent. As renewable energy and the TIR infrastructure become more widespread, car-share lots will be able to provide green electricity on site to power electric plug-in vehicles. Car-share commons are likely to become a significant alternative to the conventional model of purchasing cars in markets, especially in dense urban areas where the cost of maintaining a car that is used only infrequently makes little practical sense. The Third Industrial Revolution era is already ushering in a host of new business models, including performance contracting and shared savings agreements. The new business practices eschew simple one-off transaction based exchanges in markets, in favor of continuous peer to peer sharing in reciprocal networks. A case in point -The power and utility industry is a classic example of the conventional topdown business model that characterized commercial activity in the nineteenth and twentieth century. By scaling vertically in giant centralized operations, these business behemoths were able to control both the supply of power and the transmission of electricity to and users, creating quasi monopolies in regional markets. The distributed and collaborative nature of The Third Industrial Revolution green energies fundamentally changes the modus operandi of the power and utility industry. In the future, millions of people will transform their homes, offices and business into personal microgreen power plants, creating their own energy just as an earlier generation began creating their own information with the widespread adaption of personal computers. The utility and transmission companies will increasingly buy electricity from millions of their own customers at various times during the day and send it along to others. In the new schema, the utility and transmission companies manage the energy internet. And while the 45
  • 48. Mega Trends of the Emerging Third Industrial Revolution in India conventional Second Industrial Revolution power and utility companies made money by selling as many electrons to customers as they could unload in the traditional market, in the new model revenue is made by selling as few electrons as possible- a completely counter intuitive business practice. Utility and transmission companies will increasingly manage the energy flows embedded in their client's products, supply chains and logistics operations with the goal of increasing their thermodynamic efficiency, productivity and profit margins, by minimizing their energy use. Clients in turn, will share a percentage of their increasing revenue back with the utility companies in what are called "shared savings" agreements. Many traditional power and utility companies will likely be unable to successfully make the transition from a centralized to a distributed mode and from a transaction based business practice to an energy aggregator operating in networked commons. Already, hundreds of companies are entering the electricity arena, using their IT, engineering, and energy expertise to help manage client's energy flows and share in the savings, recasting the very nature of the energy, power and utility sector. The new era will bring with it a reorganization of power relationships across every level of society. While the fossil fuel-based First and Second Industrial Revolution scaled vertically and favored centralized, top-down organizational structures, the Third Industrial Revolution is organized nodally, scales laterally, and favors distributed and collaborative business practices that work most effectively in networks. The "democratization of energy" has profound implications for how we orchestrate human life in the coming century. We are entering the era of "Distributed Capitalism." The partial shift from markets to networks establishes a different business orientation. The adversarial relationship between sellers and buyers is replaced by a collaborative relationship between suppliers and users. Self-interest is subsumed by shared interest. Proprietary information is eclipsed by a new emphasis on openness and collective trust. The new focus on transparency over secrecy is based on the premise that adding value to the network does not depreciate one's own stock, but, rather, appreciates everyone's holdings as equal nodes in a common endeavor. In industry after industry, cross-sector networks are competing with autonomous transaction-based business models, and peer-to-peer business practices conducted in commercial commons are challenging competitive business operations in siloed markets. All of the new business models and practices that are emerging along The Third Industrial Revolution infrastructure favor lateral ventures operating in shared networks on the assumption that mutual interests, pursue collaboratively, is the best route to sustainable economic development. The Third Industrial Revolution brings with it a democratization of entrepreneurshipeveryone becomes a producer- but also requires a deep collaborative approach to sharing information and energy across both virtual and geographic spaces, making it one of the great disruptive economic revolutions in history. 46
  • 49. The India Story Shailendra Raj Mehta Introduction According to Mr. Jeremy Rifkin, “the five pillars of the Third Industrial Revolution are (1) shifting to renewable energy; (2) transforming the building stock of every continent into micro–power plants to collect renewable energies on-site; (3) deploying hydrogen and other storage technologies in every building and throughout the infrastructure to store intermittent energies; (4) using Internet technology to transform the power grid of every continent into an energy-sharing inter-grid that acts just like the Internet (when millions of buildings are generating a small amount of energy locally, on-site, they can sell surplus back to the grid and share electricity with their continental neighbors); and (5) transitioning the transport fleet to electric plug-in and fuel cell vehicles that can buy and sell electricity on a smart, continental, interactive power grid.” It would be fair to say that this transition is most in evidence in Europe and even in Europe it is the first pillar that is most in evidence. Led by Germany and some other continental nations such as Spain, a large fraction of the new energy installations have been renewable in nature. There has also been some movement in terms of the second pillar. Local storage is becoming more evident, especially through some visibility of pillar four, namely, a move towards an energy sharing Internet like grid. Pillar five, on the other hand, is very much in its nascent stage. A few electric plug-in and fuel cell vehicles are in evidence on the streets of Europe but are not evident in other places. The rest of the world has been content with hybrid vehicles, but they too are very much in the incipient stage. Pillar three, deploying hydrogen and other storage technologies in smart buildings is in its nascent stage. The situation in other developed economies, such as Japan, USA and others is nowhere near as evolved as it is in Europe. When we look at developing economies such as India we notice that these pillars are yet to become visible here. This is partly on account of the fact that each of these transformations requires a new kind of infrastructure. The developing nations are busy building conventional infrastructure and have not given much thought to building smart infrastructure of the kind required for the third Industrial Revolution. However, several themes picked up by Jeremy Rifkin in his book The Third Industrial Revolution 'How Lateral Power is Transforming Energy, the Economy and the World.' mention the name of the book are becoming quite prominent in terms of the new and innovative business models that have been put into place in recent years in India. These include an emphasis on networking and sharing. Ultimately, though, the movement towards a smart grid of locally produced renewable energy sources is inevitable. The 47
  • 50. Mega Trends of the Emerging Third Industrial Revolution in India reason is that photovoltaic cells are becoming cheaper and cheaper and ultimately they will be so inexpensive that it will be affordable to put them on any surface exposed to the sun. In this paper we will focus on innovative, low cost business models in India that have emerged in the last few decades with an emphasis on networking and sharing or otherwise benefiting from the five TIR pillars mentioned above. This will include both for profit and non-profit business models. We intend to examine how these business models have added value by changing or dramatically altering the way goods and services are delivered to the target population. We will use the concept of “business model”, a much used term that was coined in the 1940s and became very popular in the 1990s during the internet boom as new technology allowed dramatically new ways of doing business. There are thousands of scholarly papers on the subject of business model and a similar flowering in the practitioner oriented journals. Recently, the journal Long Range Planning devoted an entire issue to the subject; over twenty papers were published on this topic in a single issue alone (Economist 2010) carried a recent survey of “frugal innovation” also dubbed “Gandhian Innovation” (Prahalad and Mashelkar 2010). It spoke about jugaad or improvisation. There is also the notion of the lead market (Tiwari and Herstapp) 2011)., that is to say that each major innovation first addresses and is accepted by a market that is most ready for it. Thus, miniaturization combined with great design in electronics was first pioneered in Japan on account of the restricted domestic spaces and a long tradition of Zen influenced aesthetics. Similarly, low cost innovation is springing up in emerging economies because the lead market is there. India has been in the forefront of this trend. It is interesting to briefly compare the situation in India with the emerging situation in China. As the Economist (2010) has written: “The Chinese have made two distinctive contributions to frugal innovation. The first is the use of flexible networks-powered by guanxi or personal connections-to reduce costs and increase flexibility. Li & Fung, a Hong Kong-based company, has long been a pioneer, working closely with a network of about 12,000 companies operating in more than 40 countries. It puts together customized supply chains from its vast network of associates and keeps an eye on quality and order fulfillment. Similarly, Dachangjiang, a motorcycle-maker in China's Guangdong province, works with hundreds of parts suppliers.” And: “A second area where the Chinese excel is in “bandit” or “guerrilla” innovation, known as shanzhai. The original bandits lived in isolated villages and carried out raids on upright citizens. Today's bandits live at the margins of official society but are much in evidence: in Shanghai's People's Square you will be offered a cheap watch or phone at every step. These bandits are parasites who profit from China's weak property rights, but they are also 48
  • 51. talented innovators, quickly producing copies of high-tech gadgets that are cheap enough for migrant workers to be able to afford them but also fashionable enough for young professionals to covet them. Some of the more exotic phones are designed to look like watches or packets of cigarettes (they even have room for a few real ones) and often have striking new features, such as solar chargers, superloud speakers, telephoto lenses or ultraviolet lights that make it easier to detect forged currency. In their own way the bandits deploy as much innovation and ingenuity as their legitimate counterparts.” Elements of both of these trends are also evident in India. In India the urgency to create jobs has never been higher. While the population continues to grow, the rate of job creation has slowed to a crawl. In a widely cited study by the Chairman of the Indian Prime Minister's Economic Advisory Council states: “As against a 60 million job creation in the period 1999-2000 to 2004-05, just about a million jobs were created in 2004-05 to 2009-10” (Rangarajan, Kual, ec al 2001). Very clearly new business models coupled with widespread entrepreneurship have to lead the way in terms of job creation. The Chosen Framework Given the wide variation in the definitions and frameworks pertaining to the notion of a business model, it is necessary to agree on one reasonably comprehensive framework within which to analyze all the innovative low cost offerings in India. The framework that we shall use is the one by which includes the following four parameters - Customer Value Proposition, Profit Formula, Key Resources and Key Processes. Customer Value Proposition Target Customer Job to be Done Offering Profit Formula Revenue Model Cost Structure Margin Model Resource Velocity Key Resources People Technology Equipment Information Channels Partnerships Brand Key Processes Routines Rules and Metrics Norms 49
  • 52. Mega Trends of the Emerging Third Industrial Revolution in India Some Innovative Business Models Discussed in Business Schools Often new and innovative technology requires new and innovative business models to be successful. One of the most powerful examples of this is the case of Google. It was not until the “ad words” business model was created to sit on top of the powerful search technology that Google became viable and iconic. It may be useful to take a look at the various business models that are taught in business schools. It is important to take a look at the full sweep of such models that are commonly discussed, not because we wish to discuss them in any detail, but because looking at the full sweep of such models enables us to comprehend the full power inherent in such models. Many of the companies that we list below would not exist without these new and innovative business models that they either pioneered or used in an interesting way. The table below is taken from Johnson 2010. Type Description Affinity club MBNA Partner with membership associations and other affinity groups to offer a product exclusively to its members, exchanging royalties for access to a larger customer base. Brokerage Century 21, Orbitz Bring together and facilitate transactions between buyers and sellers, charging a fee for each successful transaction. Bundling Fast-food value meals, iPod/iTunes Make purchasing simple and more complete by packaging related products together. Cell Phone Sprint, Better Place Sell a service through multiple plans featuring a range of prices depending on varying levels of usage. Crowd sourcing Wikipedia, You Tube Outsource tasks to a broad group who contribute content for free in exchange for access to other users' content. Disintermediation Dell, WebMD Deliver directly to the customer a product or service that has traditionally gone through an intermediary. Fractionalization Time-sharing condos, Net Jets Allow users to own part of a product but enjoy many of the benefits of full ownership for a fraction of the price. Freemium Skype, Linkedin, Pandora Offer basic services for free but charge for upgraded or premium services. Leasing Xerox, Luxury cars, Machinery Link Make high-margin, high-cost products affordable by having the customer rent rather than buy them. Low-touch 50 Example Southwest, Wal-mart, Xiameter Offer low-price, low-service version of a traditionally high end offering.
  • 53. Type Example Description Negative operating cycle Amazon Generate high profits by maintaining low inventory and having the customer pay up front for a product or service to be delivered in the future. Pay-as-you-go PG&E, metered ISPs Charge the customer for metered services based on actual usage rates. Razors/ blades Gillette, personal printers Offer the higher-margin "razors" for low or no cost to make profits by selling high-volume, low-margin "blades" Reverse auction Elance.com, OnForce.com Set a ceiling price for a product or service and have participants bid the price down. Reverse razors / blades iPod/iTunes, Amazon Kindle Offer the low-margin "blades" at no or low cost to encourage sales of the higher-margin "razors". Product-to-service IBM, Hilti, Zipcar Rather than sell products outright, sell the service the product performs. Standardization Minute Clinic Provide lower cost standardized solutions to problems that once could only be addressed through high-cost customized products or services. Subscription club Magazines, Costco, Netflix Charge the customer a subscription fee to gain access to a product or service User communities Angle's List Grant members access to a network, generating revenue through membership fees and advertisements. We will look at the new and emerging Third Industrial Revolution linked models in four separate areas of the Indian economy. They are: the government sector, the social sector, Indian companies operating in India, and multinational companies operating in India. Government Sector Aakash Tablet1 To ensure that schoolchildren and college students in India have access to the newly emerging information and communication technologies, as well as to the vast amount of digital content that has now become available, the government of India has created the Aakash tablet. Priced at USD50 and running on the Android operating system it gets its internet access through connecting to a mobile phone service. This Internet access will be bought in bulk and provided to the students at low cost. This device has the potential of unleashing a collaborative educational ecosystem of unprecedented proportions. The following business model details have been gathered from Tablet 2011. 1 Inputs for this section were provided by Bhavesh Sherashiya 51
  • 54. Mega Trends of the Emerging Third Industrial Revolution in India Customer Value Proposition Target Customer: Low-cost computing device to compete with the One Laptop per l Child (OLPC); it is intended for urban college students rather than the OLPC's rural, underprivileged students l point of the Aakash Tablet is its competitive price which is The high within means of the masses l The tablet is powered by Android 2.2 and boasts of multiple touch screen and Connexant CPU with HD video and accelerated graphics Job to be done: l will be distributed on University campuses reaching over Tablet 100,000 by 2011 and several million in the following year Offering: l will end the digital divide between rich and poor Aakash l a web delivery platform that enables quality and interactive Offers knowledge over the internet Profit Formula Revenue Model l Competitive rates and value added services l with UK based DataWind Ltd and Government of India Tie ups l Government has booked 1 million tablet that could bring this project at break even l Government Initially has set 2 Million pieces distribution target plus retailers and Institutions will also contribute into this project by selling more PCs Cost Structure l is no other touch-pad tablet or computing device anywhere There near the price of the UbiSlate l Subsidized USD30 tablet will be distributed to students across India while for Institutions and retailers will have to pay around USD60 for a piece l Minimum production order of 10,00,000 will bring down the cost of computer to USD60 per piece while students will offered Government 50% subsidy and need to pay around USD30 (~1500 rupees) Margin l The exact details of the margins are not known, however as per the claims made by DataWind and Govt. of India, it is very competitive in price, and the margins are likely to be low l Government has booked 1 million tablet that could bring this project at break even Key Resources People l motivated research project team at IIT-Rajasthan and Highly DataWind Ltd will evolve required changes along with manufacturing responsibilities Technology l High Quality Web Anytime, Anywhere; Multimedia Powerhouse; movies in the palm of your hand on a 7" screen; multiple applications with Android 2.2; full sized-USB port and Micro-SD slot at very moderate costs l IIT- Rajasthan for basic research Partnerships 52 l To provide network to access the 3G-internet service Aircel-
  • 55. DtaWind l Ltd- Manufacturing at required cost l 35 percent component from South Korea, 25 percent from China, 16 percent from the US, 16 percent from India and rest from around the world l The National Mission on Education through Information and Communication Technology (NME-ICT ) plans to link 416 universities and 20,000 colleges in the country through the internet and this tablet will have direct selling base in all of those campuses to boost connectivity Channels l embedded GPRS modem and WiFi, Unlimited Mobile With an Internet at only Rs.98 (USD 2)/month, HD Quality Video and Multimedia, 150,000 Android Apps IT l this be linked up to widely available cloud computing? Could Key Processes Marketing l spread media attention is expected as it is branded as "Wide "World's cheapest Computer tablet" This technology is of great interest to rural children who may be physically far from a school and have no access to quality instructional materials. If this technology is coupled with a decentralized solar power source and subsidized internet access with perhaps free subsidized space on a cloud server, unprecedented educational energies can be unleashed while creating a large number of jobs in complementary technologies. 2 Aadhar Card The aadhar card, similarly, is a revolutionary new service, the scale of which has not been seen anywhere in the world. Through this card the government of India intends to provide marginalized and migrant populations in particular a way to establish their identity. This will be done by enrolling on a voluntary basis, all individuals above the age of ten. To enroll in the program and to get biometric identification ten fingerprints and two iris scans are included for individuals in this database. Subsequently, individuals can prove their identity by making available a small fingerprint or iris scanner to the service provider which will be checked against a centralized database. The business model to be built around it, envisages a large number of entrepreneurs who set up identity verification services that act as agents for banks, insurance companies, micro-finance institutions, sellers of durable goods, telecom service providers, and others and thereby hasten and rationalize the identity verification process. The information given below has been taken from: Aadhar 2011. 2 Inputs for this section were provided by Bhavesh Sherashiya 53
  • 56. Mega Trends of the Emerging Third Industrial Revolution in India Customer Value Proposition Target Customer: Every l resident across India Job to be done: l The UIDAI's purview will be limited to the issuance of unique identification numbers (Aadhaar) linked to a person's demographic and biometric information l The Aadhaar will only guarantee identity, not rights, benefits or entitlements Offering: l The UIDAI envisions full enrolment of the residents, with a focus on enrolling India's poor and underprivileged communities l method of authentication will also improve service delivery The UID for the poor Profit Formula Revenue Model l Profit Not for l on cost-benefit analysis Based lindividual needs to enroll only once which is free of cost Each l part of the USD 380 mn budget allocated during Annual A major Plan 2010-11 will be used for reimbursement of enrolment costs to the registrars as also to the residents Cost Structure l Expenditure of UIDAI for the years 2009-10, 2010-11, 2011-12 (up to Sep 11) stands at USD 72 mn in revenue and in addition to planned capital, expenditure stands at USD 96 mn Key Resources People l It will attract and hire world-class biometric talent. UBCC will emphasise quality over quantity and build a small group of exceptional scientists and engineers l It will closely collaborate with other technical departments, academic institutes, international experts and international bodies to assimilate and share combined knowledge. It will promote joint research, investigation and analysis at national and international academic institutes through grants and "funded research" Technology l The Aadhaar database will be stored on a central server. Enrolment of the residents will be computerised, and information exchange between Registrars and the CIDR will take place over a network Authentication of the residents will be online l The Biometric Solution Provider (BSP) will design, supply, install, configure, commission, maintain and support biometric components of the UIDAI System l Authority to partner with agencies such as central and state departments and private sector agencies, who will be 'Registrars' for the UIDAI. Registrars will process Aadhaar applications, and connect to the CIDR to duplicate resident information and receive Aadhaar. The Authority will also partner with service providers for authentication of identity 54
  • 57. ·Partnerships lwill be a national resource to other departments for CIDR implementing UIDAI compatible biometric systems l The UIDAI has empanelled a number of enrolment agencies which can be engaged by the registrars for the purposes of enrolling residents for Aadhaar l endeavours to collaborate with CSOs serving marginalised UIDAI communities in developing outreach strategies and action plans l in conjunction with State Governments and Banks UIDAI l project appointed an Awareness and Communications The UID Strategy Advisory Council (ACSAC) Channels l adoption: It will build reference architecture, prototype and Rapid conduct proof of concept to support rapid adoption of the technology for UIDAI system both during the initial development and later during operation. It will stay grounded by working closely with the operational UIDAI system personnel IT l It will build and maintain state-of-art laboratory which will become an independent research and engineering unit Key Processes Routines l The UIDAI has set up a Contact Centre for Enquiries and Grievances l to establish the National identification Authority of India has The Bill been introduced in the Rajya Sabha Rules and Norms l The UIDAI has finalized the Volunteer, Sabbatical and Internship Guidelines The Aadhar card has promising links to the Third Industrial Revolution. It can unleash an entrepreneurial ecosystem. It can also become a means whereby subsidies are eliminated and direct in cash transfers are made to the banks of the individuals on the basis of these cards. A huge amount of waste and distortion can be eliminated thereby. It can provide a range of targeted transfers and subsidies to replace the inefficient public distribution system, fuel subsidies, fertilizer subsidies, etc. But more importantly it can make available a whole variety of trust based services where authentication is a significant part of the equation. Students can log into virtual classrooms and have specific content targeted towards them. But this can also lead to permission based business models where I reveal my identity in a trusted way to selected businesses and they in turn can provide targeted benefits. Having a decentralized source of energy coupled with Aadhar type verification systems can enable a variety of locally available services and business models. 55
  • 58. Mega Trends of the Emerging Third Industrial Revolution in India Social Sector 108 Emergency Low cost but efficient emergency services are the key hallmarks of 108 Emergency. It is difficult to believe but until recently India did not have statewide emergency response teams especially for interstate highway accidents; consequently, hundreds of thousands of lives were lost every year. Now, medical and fire emergencies are handled jointly through a new 108 service in eleven states in the country. Using GPS positioning, a unique address data base, Information technology and low cost but well trained paramedical teams, not only has 108 Emergency Services maintained fast response time but also a very low cost structure. The service is completely free to the user and is financed jointly by the State and through philanthropic grants. It illustrates the efficient use of network technologies - a hallmark of the Third Industrial Revolution. The features of this service are listed below and taken from (Chakraborty and Group 2009), (Shastri 2011) and (TNN 2011): Customer Value Proposition Target Customer: All individuals experiencing medical emergencies in Andhra l Pradesh, Gujarat, Uttarakhand, Goa, Tamil Nadu, Karnataka, Assam, Meghalaya, Madhya Pradesh, Himachal Pradesh and Chhattisgarh. This includes medical, police and fire emergencies Job to be done: l an ambulance, a fire brigade or a police car as Dispatch appropriate, to the place of emergency and to guide the caller on the phone until help reaches the caller. The goal is to help the patient survive the first hour called the “golden hour” since 80% of deaths in emergency cases occur in the first hour of admission Offering, what is delivered l An ambulance with trained medical personnel dispatched immediately. Interface with the government for fire brigade and police functions. Currently the response time is 80 to 90 seconds. Will be brought down to 60 seconds. 90% of calls picked up on the first ring Offering, how it is delivered l 200 call center operators in each state direct up to 4,000 Nearly field operatives Profit Formula Revenue Model l Most hospitals are operated by the government and so are police and fire services. Interface with the government is very important. Therefore, a Public Private Parntership (PPP) is used. Capital costs and most operating costs are provided by Central and State Governments. There are no user charges! Cost Structure l cost structure in the world on account of scale. Offering Lowest services to about 400 million people. Administrative costs, direct costs of ambulances and service provider salaries are about a third each Margin Model l High Volume low margin Resource Velocity l 80,000 calls a day, directs 7,000 emergencies daily, has a Handles fleet of 2,600 ambulances, saves 110 lives a day (30,000 a year) and employs 11,000 people 56
  • 59. Key Resources People l 13,000 staff across 10 states. 3 drivers and 3 EMTs per Nearly ambulance. For every 15 ambulances one operations executive and one fleet executive is required. EMTs get Rs. 1,00,000 a year (USD 2000), and drivers get Rs. 75,000 (USD 1500) a year Technology products l based location. Have their own research institute and are GPRS developing regional, seasonal and demographic emergency profiles. Have developed ways to send information in advance to hospitals from the ambulance itself in time sensitive cases that require setup before-hand such as: snake bites, heart attacks, suicides, pregnancies, poisoning and serious accidents Equipment l PPP Information l Extensive use of word of mouth to spread the word about treatments available Channels l Developing the 108 brand which is well known in India for its association with good fortune Partnerships l NGOs Brand l Government l considered an auspicious number in India 108 is Key Processes Design l Leveraging state of the art analytics for call handling and routing Ruggedized response equipment Development l Idea conceived by the defunct Satyam Group and the initial funding provided by them Sourcing lin bulk Done Manufacturing l NA Marketing l publicity, interfacing with the government Media Hiring and Training l technicians and front line service providers Using IT lfor call handling, routing and tracking. Dedicated research Used center Rules and Metrics l Currently the response time is 80 to 90 seconds. Will be brought down to 60 seconds. 90% of calls picked up on the first ring Norms l for individuals regardless of religion, gender, caste, and Respect abilities 57
  • 60. Mega Trends of the Emerging Third Industrial Revolution in India State Launching Date Status Andhra Pradesh August 15,2005 652 ambulances covering the entire state with 100% population coverage Gujarat August 29,2007 402 ambulances throughout the state with 100%population coverage Uttarakhand May 15,2008 90 ambulances covering entire state with 100% population coverage Tamil Nadu September 15, 2008 172 ambulances covering 18 of 32 districts, and 62%of the population Rajasthan September 20, 2008 100 ambulances covering all 33 districts out of only 21%of the population-largely urban Goa September 5, 2008 18 ambulances covering 100% of the state Karnataka November 1, 2008 150 ambulances covering 17 of 29 districts and 72% of the population Assam November 6, 2008 83 ambulances covering 12 of 28 districts and 50%of the population Meghalaya February 2, 2009 15 ambulances covering 2 of 7 districts and 41% of the population Source:EMRI Documents-Annexure A-16:National Performance Report,datedFeb 17th2009, The 108 Emergency Service operates several thousand vehicles every day. It takes advantage of networked technologies as listed above. The interesting opportunity is for the 108 service to switch to an all-electric or hybrid fleet in accordance with the trends noted above in connection with the Third Industrial Revolution. Business Sector - Indian Companies One of the sectors which has seen innovative solutions and have managed to impact the lives of the people is solar lighting. Two companies which have featured here are- Tata BP Solar (JV between Tata & British Petroleum) and BPL Ltd. which have developed innovative home and street lighting solutions by tapping the energy of the Sun. They have not only taken innovative solar solutions to the masses but also built a sustainable revenue model around these offerings. Tata BP Solar Transforming Lives with Solar Solutions - Solar Home Lighting Project of Tata BP Solar in association with Gramin Bank in Uttar Pradesh 58
  • 61. Customer Value Proposition Target Customer: Job to be done: Offering Profit Formula Revenue Model 30% of l villages in the State of Uttar Pradesh are either unelectrified / were suffering from poor grid electricity. There was a latent need for at least minimum lighting needs of the villagers are catered to l Solar's work dovetails with the national objectives Tata BP Company believes in thought leadership, affordable solar solutions and win-win partnerships for all stakeholders. Tata BP Solar aims to achieve inclusive growth and energy equity l High-quality, reliable Solar Home Lighting Solutions (SHS) replacing kerosene lamps to rural folk through 'affordable' gramin bank loan scheme and providing timely after-sales l were given by gramin banks as standardized packages to Loans finance the specific solar products. This standardization and simple paper work – with SHS as the collateral - reduced transaction time and expedited the loan disbursement process. The solar users were required to pay nominal charges to a trained local youth to service and maintain their SHS. There was no subsidy element Cost Structure Model Type SHS - 1 SHS - 2 Components 40W module 2 lights Rs 15,000 (USD 300) 20% 5 yrs / 60 months EMI 5% 75W module 4 lights Rs 26,000 (USD 520) 20% 5 yrs / 60 months EMI 5% Selling price approx. Down payment Balance payment Commercial rate of interest Key Resources People l Solar – Solar lighting solutions provider Tata BP l Bank – Providing micro-financing on easy repayment Gramin installments lfoot soldiers as entrepreneurs to popularize the scheme and Local Partnerships Channels Key Processes Routines sell SHS ltrained youth to service and maintain the SHS Local l Gramin Bank decided to make the finance available for Aryavart Solar Home Lighting Systems with a slogan "Ghar Ghar Me Ujala" (Light in every house). At this juncture, Tata BP solar came up with an innovative solution to make the product affordable to the villagers with reliable after-sales services and win-win partnership l other Gramin Banks successfully adopting the scheme in Various their respective operating territories in other states of India l TechnologySilicon mono / multi crystalline solar photovoltaic technology, energy efficient lights, long life batteries l Loan melas l Awareness camps l demonstration in village fairs Product l camps Service l and recognition Reward 59
  • 62. Mega Trends of the Emerging Third Industrial Revolution in India Conclusion The results of successful implementation of the above scheme are 3-fold: 1. Economic Impact l Improving Quality of Life-Inclusive living, contribution by women who now work during daytimes and earn extra income. l Health Indicator - The rural families are spared from inhaling fumes emanated Better by kerosene lamps. l Augmenting Jobs-Extending income generating hours eg., vendors sell late into night. l Empowering through Education-Kids study under Solar lights and adults attend night schools and pursue higher learning. l Win-Tata BP's solar installations provide livelihood to technicians. Earn & l Delight Replaces Drudgery - Time women spent to carry wood and kerosene for lighting is now better utilized. l Grooming 'Green Minds'-A solar powered TV opens to the rural families a whole new world of information, education and entertainment. l Encouraging Rural Entrepreneurship - by being extended hands of Tata BP Solar, several rural businessmen are turning solar entrepreneurers and creating employment opportunities for sub-dealers and technicians l Improved Communication - Villagers can charge their cell phones and be well informed and empowered. They can now get better rates for their produce by eliminating middlemen to sell their agricultural products. 2. Social Impact l Alignment with Social Responsibility: Addressing social needs through their products and process was demonstrated by Tata BP Solar and Gramin Bank who could constructively contribute to the upliftment of villagers by tweaking their business model and product costing to give them the SHS at an affordable price. l Developing Trust Bonds: The partnership of Tata BP and AGB was sensitive to the fact that supporting the villagers in sustaining the SHS eqpt throughout its life was important, hence they closed the loop by organizing a robust maintenance service which besides keeping the units functional, helped in creating employment. l The model provides excellent opportunity for public-private-people-partnership wherein the private sector can enhance the effectiveness of developmental schemes of the government, particularly in health, education and livelihoods sectors, by providing lighting. 60
  • 63. 3. Climate Change Impact The Solar Home Lighting Solutions have reduced carbon emissions, helped conserve our natural resources and is gaining more and more support as time elapses. The above innovative business concept was winner of Ashden Award 2008 (popularly known as Green Oscars), bestowed on Aryavart Gramin Bank. Also, in Dec 2011, Tata BP Solar's entry in the IMPACT Business Award for "Innovative Models Promoting Adaptation and Climate Technologies" was announced as WINNER for the Gramin Bank - SHS business model. The Award is implemented on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ) and organized by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ). 3 BPL Ltd The need for an alternative to grid supply that came from a more reliable source was keenly felt and the concept of producing power from solar radiation via photovoltaic cells was a welcome concept; except that PV cells required a hefty initial investment into the PV panels, batteries and Invertors. With the rapidly falling prices of cPV cells, the concern has moved towards the rising and recurrent costs and environmental impact of using lead acid batteries limiting usage of solar PV to provide lighting during the nights. BPL also quickly realized that the conventional Si PV cells tend to degrade in performance drastically at higher ambient temperatures besides requiring a substantial amount of real estate which could not be used for any cultivation or gardening. It was important to also realize that there would be no maintenance of these systems until a process for its upkeep was also built into its business model in which case it was better to evaluate a technology more efficient solution. Two solutions: a 2 axis sun tracking system coupled with a concentrated solar PV modality using a new generation of triple junction Ga As. PV cells solved not only the low solar energy conversion efficiencies but also reduced the overall requirement of real estate on roof tops, produced steam for the small businesses and clinics for cook, sterilizing appliances and production of distilled water. Roof Top Solution 3 Mobile Solution Inputs for this section section were provided by BPL 61
  • 64. Mega Trends of the Emerging Third Industrial Revolution in India With the rising cost of power storage, typically used are lead acid batteries which pose a concern of its high degree of toxicity and potentially contaminating ground water to very dangerous levels, BPL decided looked at possibly harvesting wind energy in a hybrid Solar PV - Wind configuration for areas that experience a fair amount of wind during the year, such as along coast lines, mountainous terrain and in open areas of fields with a twin Savonius- Darrieus vertical windmill configuration that also required much lower rooftop space and produced much less noise that the conventional horizontal windmills. These combination packages could address off grid needs from a few KWp suitable for an individual home or to 30 KWp to serve the needs of a shared community. Customer Value Proposition Target Customer: Between 3 - 30 KWp Hybrid Renewable Energy Power source l for Individual domestic dwellings, Micro and Small Businesses, SOHO, Schools, Primary Healthcare Centers, Community Centers, Mobile power systems Job to be done: l Planning, simulation, installation, maintenance contract on either project sale or in a BOT mode Offering: l A combined Heat and Power Concentrated PV system coupled with a vertical wind turbine Profit Formula Revenue Model l Revenue is either through the outright sale and installation of the capital equipment and maintenance contract or leased Key Resources People l Technology partners - non Indian l Manufacturing Capability BPLs l pan India distribution network BPLs l Concentrated PV - Ga As Triple junction cells; 500x suns concentrator; thermal fluid exchanger; 2 axis sun tracking system Technology l wind turbine Savonius Darrieus design 300W to 3KW Vertical Channels l Dedicated distribution network BPLs Key Processes Presales : Overall systems design and installation and power generation simulation Routines l Maintenance Contracts Annual l Production Monitoring on the Cloud Energy l In future - a Carbon Credit Card 62
  • 65. Forus Healthcare4 Forus Healthcare uses low cost innovation and network technologies, characteristic of the Third Industrial Revolution, to solve a major Indian problem - the large number of blind people who have what may be called "avoidable blindness" on account of a neglect of cataracts, glaucoma, refraction problems, corneal problems and diabetic retinas. Forus has created a "a single, portable, intelligent, noninvasive, eye prescreening device" that tests for all five of these conditions and if any anomalies are found connects the patient to a doctor via telemedicine. They have plans to market the technology in Latin America and elsewhere. The information below is taken from Forus 2011 and Friedman 2011. Customer Value Proposition Target Customer: Low-cost Healthcare solutions for emerging countries l Job to be done: l doctor to patient ratio coupled with illiteracy, lack of rural The low reach and scalability can make this problem much more complex. Technology can be one of the solutions to this complex and severe problem Offering l Developed affordable technology solutions that can easily be used by a minimally trained technician thereby making health service accessible and scalable Profit Formula Revenue Model l Competitive rates and Provides value added services l Pre-screening at low cost, integrated with remote Patients: diagnosis and other models can help a patient get screened for a problem right at his doorstep in a remote Indian village l Government: A lot of money is spent by Governments around the world for Blindness eradication. This product will be a great value enabler Key Resources People l Ophthalmic Doctors will spend their time only on needy Doctors: patients. Telemedicine connectivity will help doctors offer remote diagnosis for a rural patient from the comforts of a hospital l Innovation led technology enterprise managed by very experienced professionals Technology l - An intelligent pre-screening Ophthalmology device 3nethra l - A single, portable, intelligent, non-invasive, non-mydriatic 3nethra eye pre-screening device that can detect the above 5 major ailments 4 Inputs for this section were provided by Bhavesh Sherashiya 63
  • 66. Mega Trends of the Emerging Third Industrial Revolution in India Partnerships l IIT Kharagpur Forus is proud to be associated with Department of Chemical Engineering, and School of Medical Science and Technology, Indian Institute of Technology, Khargpur for research and development in the area of Dialysis Membrane l is collaborating with Centre for Electronics Design and Forus Technology, Indian Institute of Science, Bangalore for research and development of electronics used in its products l believes in re-using the expertise already developed and Forus mastered elsewhere; they associate with Focal Optical Systems; Optics Research and Development Partner; and Hical Technologies Pvt. Ltd. - manufacturing partner Channels l Ecosystem completed by connecting primary care centres to secondary or tertiary care centres through telemedicine for remote diagnosis Key Processes Routines l Doctors-Hospitals-Patients Ophthalmic Doctors will spend their time only on needy patients. Telemedicine connectivity will help doctors offer remote diagnosis for a rural patient from the comforts of a hospital Screening in rural areas will help hospitals identify patients at early stages thereby increasing inflow of "needy patients". This will not only be a business proposition but also a great social cause Hospitals can also serve their "outreach" market better Pre-screening at low cost, integrated with remote diagnosis and other models can help a patient get screened for a problem right at his doorstep in a remote Indian village The Forus model is the natural evolution of the telemedicine model which dramatically reduces travel costs. With decentralization of energy sources coupled with the Internet the Forus model can evolve further to provide an additional layer of rural healthcare services in the remotest areas of the country. 5 Ekgaon Using cloud computing, Ekgaon (which means one village in Hindi) supplies customized farming recommendations based on local weather, crop and soil conditions using text and voice, delivered to the most basic and cheap cellphones that dot the rural countryside. A farmer can get exact recommendations for planting, watering fertilizers and pesticides. The service costs around Rs. 250 (USD 5) a year - less than a rupee (2 cents) a day. The description below is based on Ekgaon 2011 and Friedman 2011. 5 64 Inputs for this section were provided by Bhavesh Sherashiya
  • 67. Customer Value Proposition Target Customer: l Focusing on affordable and appropriate solutions, ekgaon designs and develops technologies and information systems to meet the needs of developing communities Job to be done: lto use and develop free and open source software conforming Seek to open standards whenever possible Offering: l strives to provide farmers and tradesmen basic services and Ekgaon tools which they need to contribute their knowledge to the modern world Profit Formula Revenue Model l Not-for-profit l also does significant commercial work, and is able to implement Ekgaon full-scale enterprise-level solutions for any kind of client l has 12,000 farmer subscribers (USD5 for a year). The plan is to Ekgaon grow to 15 million in five years Key Resources People l believer in the ideals of community and collaboration Strong Partnerships l partners with any institution, company or individual that shares Ekgaon their ideal of a healthier and more equitable world l host of technologies in the field of Information and It offers communication technologies (ICTs) Technology l a range of technology solutions to enable financial inclusion for It offers banks. Our technologies allow door-step delivery of banking and other financial services l a mobile information services framework for rural areas in the CAM is developing world Channels l Mahakalasm project aims to implement a complete and modular Management and Information System (MIS) for village-based savings and lending groups Key Processes The Ekgaon model uses information technology in an essential way. It may be interesting to think about extending this model to take advantage of decentralized energy systems that will become available as the Third Industrial Revolution unfolds. Perhaps embedded field sensors in agricultural farms, linked to their own dedicated solar energy sources can provide even more customized information and controls. 6 Mahindra Reva An innovative Indian Company founded to create an all electric car, it has now been sold to the Indian automotive company Mahindra and Mahindra. The diminutive Reva is India's best selling car and exemplifies the Third Industrial Revolution ethos of transportation based on clean, renewable energy. 6 Inputs for this section were provided by Bhavesh Sherashiya 65
  • 68. Mega Trends of the Emerging Third Industrial Revolution in India Customer Value Proposition Target Customer: Every l environment friendly individual Job to be done: committed to mitigating climate change by producing non-polluting l alternatives to conventional cars Every l REVA NXR and NXG built at the new plant will be 'Born Green', possessing one of the lowest 'dust to dirt' (a term denoting a vehicle's entire lifecycle) carbon footprints of any car in mass production Offering: l Mahindra Reva has one of the largest deployed fleets of electric Today, cars in the global market and accumulated data from more than 100 million km of user experience l The new REVA models will have futuristic features of keyless entry, REVive emergency charge enabled remotely to address range anxiety in customers, climate control seats, solar roof charging etc indicating a paradigm shift in technology and design architecture from the current model l The REVA is the most economical urban personal transport. Only cycling and walking are cheaper Profit Formula Revenue Model l Maini invested USD50mn in production for Reva but saw limited Initially returns due to high cost of manufacturing l Reva received an additional investment of USD20 million from In 2006 Draper Fisher Jurveston and Global Environment Fund (GEF) l Mahindra & Mahindra bought a 55.2% controlling stake in Reva Cost Structure Tax benefits Depreciation: Self employed professionals, business enterprises and corporate establishments can avail 80% depreciation on the Reva ( compared to 15% on conventional cars) resulting in a tax savings of over Rs 100,000.00 in the first year Subsidies: The Central Government, through the Ministry of New and Renewable Energy (MNRE), provides a subsidy of 20% on ex-factory price or USD 2000, whichever is less, amounting to USD 1500-1860. Government of NCT - Delhi provides a 15% subsidy on purchase of the car in New Delhi l The subsidy has brought down the price of REVA by about USD 1500. A non-AC version, which was earlier priced at USD 7800, is now available for USD 6,400, while the price for an AC version is USD 7400, compared to USD 9000 earlier Key Resources People Mahindra Reva has 300 employees and is headquartered at the l Bommasandra Industrial Area in Bangalore, India REVA l Electric Car Company, a joint venture between the Maini Group of Bangalore and AEV LLC of USA and M&M, India 66
  • 69. l technology unique to Reva, will act like an invisible reserve fuel REVive tanks and address 'range anxiety’ Technology l EV technology to the next step to create better energy management faster charging, and advanced telematics l Gradually introduce a Reva electric car in all Mahindra outlets. Their plan is to have 50 outlets by end of this year and go up to 100 showrooms by the end of next year Channels l problem when Reva was a stand alone company. Now having Was a been acquired, it uses the Mahindra and Mahindra network Key Processes The Reva is one of the most interesting Third Industrial Revolution Technologies to come out of India. The challenge will be to build a support infrastructure around it. Will this be a recharging infrastructure as it is now, or will it be an infrastructure based around batteries that can be removed and swapped at "filling stations" as in China? (Bradsher 2011) Only time will tell. Tata Nano7 Tata Nano is the low cost innovation that everyone has heard about - it is known as the car that costs less than a laptop. The key is a unique mix of technologies and processes that have made it possible. Customer Value Proposition Target Customer: Targeted at lower income group with family, first-time buyers of car l and motorcycle owners in Tier II and Tier III cities l tag of USD 2000 affordable to two wheeler segment (80% of the Price vehicles sold in India are two wheelers, which are priced between USD 1000-USD 1500), who wants low cost car that can carry their families and provide comfort / road safety l middle class urban and rural customers who would otherwise Lower not have been able to own a car including working women, college students, scooter and bike users l customers who are too proud to ride a bus, too poor to buy a Indian car and hence primarily use a self-owned two wheeler for their commuting needs l In developed nations such as US and Europe, target a variety of customers such as students (with low disposable incomes wanting to buy a new car), middle class families looking to buy a second car as a cheap/fuel efficient alternative for short commutes 7 Inputs for this section were provided by Anil Gupta, MukeshChauhan, Rajesh J., Rohit Jain, Sameer Jain, Anshul Khindri 67
  • 70. Mega Trends of the Emerging Third Industrial Revolution in India Job to be done: lthe promised USD 2000 price. Meet l Environment friendly, low carbon footprint l a safe and affordable all weather mode of transport for families Deliver that use scooters as the primary mode of transport l Produce a very low cost car for the Indian lower middle class l an altogether new market segment and make Tata Nano an Create obvious choice for this segment l entrepreneurial opportunities across India Create l Development of not just a car but a platform - scalable for exports to US and Europe l Address 2-wheeler induced traffic congestion, increase road-safety and replace 2-wheelers (10 million sold in India in 2010 @ average price of USD 1300) with a 4-wheeler at no significant additional cost Offering: (what is delivered) l car delivered in 3 models meeting all the basic requirements Nano l is a safe, affordable, stylish, performing car that will serve the Nano transportation needs of the target customer base l cheap/affordable, environmentally friendly car A very l affordable, spacious alternative to 2-wheelers A safe, Offering: (how it is delivered) lfinance and spot delivery Easy l 4 wheeler, 5 seater, 4 gear car l Low maintenance cost ( INR 99/month offered by Tata motors) l Compliance with Indian auto industry standards l reach of distribution network and trust of TATA brand Wide l made available through easily accessible outlets with Nano appropriate finance plans suitable for the target market l can be booked on the Internet The car l is designed as 'Kits' that snap together like Legos; the car is The car ttransported to various cities and assembled at local workshops; this strategy saves transportation costs by increasing the number of vehicles that fit into a shipping container Profit Formula Revenue Model lfaceted cost innovation Multi l Low sale price, made up by volumes l target market is price conscious, the pricing options available to As the TATA are limited and the contribution to bottomline is low compared to other cars in the market. The business model adopted for Nano is to generate revenues from volume sales and reduce costs through economies of scale l target of manufacturing 250,000 cars per year by 2012, the With a Nano car will be far from profitable in the near future l expected contribution to Tata Motor's consolidated revenues Nano's 2% 68
  • 71. l Tata Motors hopes to make profits from slightly up-market versions, which with AC etc. sell for USD 3000-4000 and its export model "Nano Europa" which may retail for as much as Rs. 4,40,000 (USD 8800) l at higher volume, USD 2000 X 250,000 units Profit l Cheapest Car in the World (USD 2000) Cost Structure l No frills l engine led to removal of some normal features such as power Lighter steering l on basic functionality removing non necessary features. Focus l Low use of steel for fuel efficiency l design and easy assembly of components, that leads to low Modular transportation cost l low cost materials in production Use of l was designed with a target price (USD 2000 ) in mind. TATA The car achieved this goal by instituting "target costing", wherein the target costs for each component of the car was decided and various options were researched to ensure that the component is developed within the defined target cost l chose the place to set up the factory based on the subsidies and TATA other concessions from the local government (roughly USD 160 mn). The vendors are located in the TATA factory premises and this helped reduce inventory and transportation costs. The existing dealer network of TATA passenger cars are being used as the primary channel of distribution, hence no additional costs are incurred on dealer network setup l Raw materials constitute 80% of total car cost l Labor and administrative costs constitute 10% of total car costs l pricing model - customers pay variable transportation charge Variable depending on the purchase location l variable costs through a reverse cost structure Reduce First, the final price was set. Then, aggregate material cost was determined. From the aggregate material cost, individual component cost was apportioned. Tata Motors worked with its suppliers/vendors to produce the component within the stipulated price. Reduce Fixed costs through government subsidies to achieve break even sooner; for example, the land lease for Nano was obtained at a modest Rs 1,260 per acre (USD 25.2) per month. Tata's procured a soft loan of USD 40 mn for 20 years at interest rate of 1% per annum. Concessional tariff of electricity at Rs 3 per Kwh (USD 0.06 per Kwh) was obtained for the Nano plant. In all, a recent press report claims that the amount of subsidy works out to USD 1200 per car, which is as high as 50% of its retail selling price 69
  • 72. Mega Trends of the Emerging Third Industrial Revolution in India Margin Model l driven business through Blue Ocean Strategy. Volume l Low margins but high quantities l margin from the sale of single unit is low, the margins are As the obtained through volume sales. The target customer base, who can afford to spend USD 2000 for a car is large and hence the high volume sales is possible. In addition, the pricing model ensures that margins from the high-end variants are high l project will recover its investment costs of USD 400 mn when it Nano sells 40,000 cars l This break-even is estimated to happen in 6-8 years l The project will become profitable only when the Sadanand plant achieves its full capacity of 500,000 cars per year l Multi-Dimensional Cost Innovation -Low cost through redesigned engine and simplified package, no-frills, streamlined supplier base (only 60), 85% outsourcing of components and assembly and government subsidies l A volume driven, absolute margin based value proposition in a newly created segment with no-near competition Resource Velocity l vendor partners co-located in vicinity of mother plant Fewer l existing Tata Motors dealer networks Use of l Vendors were asked to collocate in TATA factory premises and this helped TATA to institute a Just-in-Time (JIT) delivery of components This reduced inventory costs and improved inventory turnover rates Key Resources People l A motivated team of 500 backed by experienced professionals l Tata's vision and drive with the technical skills of his team Ratan l product design demanded going beyond the traditional mind As the set and conventional work systems, the project management responsibility was assigned to a young team. Ratan Tata, himself spent a lot of time with the team providing guidance and inspiration throughout the development of Nano. This top management support provided the confidence and motivated the people to work towards a near impossible target l dependence on both in-house and supplier provided talent. Heavy lteam who can design the product from scratch within budget and R&D time frame as per the dream of the chairman Technology Products l sophisticated car A sleek, l course of design of Nano, TATA researched many options of In the various components to achieve the targeted cost price of each of the components. This resulted in more than 32 patents. This presents a significant entry barrier to a new entrant trying to replicate Nano model of development 70
  • 73. l Approximately 60 patents filed for Tata Nano alone l at 5500 rpm, 624 cc engine with 4+1 manual transmission, 35 BHP rear wheel drive Equipment l All basic features of a car are available. Channels l A strong network of alliance partners l dealership network across country Strong l The existing distribution channel of passenger cars was used to distribute the cars. Initially application form for booking was distributed through certain nationalised banks to ensure that the target customer group can make the bookings lDistribution Channel Own Partnerships l All vendors involved in the process from beginning and dealership involved post production with company support l Partnerships played a major role in the success of Nano. In addition, the suppliers were assigned the task of meeting the targeted price for each component and their success helped TATA to meet its goal of producing a car for USD 2000. The success of Nano is the success of supply chain that TATA had built l Tata Motors leveraged established suppliers such as Bosch which supplied important components such as the entire engine management system-Suppliers were integral to the design and development process from day one. Nearly everything is sourced locally; Nano had 97% local content from the first day one. Even Bosch used its design centers in Bangalore since centers in Germany cater to high-end expensive designs l Panasonic, Kinetic Engineering, Gujarat Government, Bosch, Texspin, Tata steel were involved as suppliers l A strong collective effort of Alliance Partners and suppliers, Tata Johnson, Tata Taco, MRF, Kinetic, Bosch Brand l most trusted brand name in India TATA l stands for good quality and reliability. This brand image helped Brand to reduce the initial marketing costs for Nano l Leverage the Tata brand enhanced by recent acquisitions - Jaguar, Land Rover and Corus l The TATA brand is known for taking up the cause of the common man. Nano coming from Tata was widely considered to be a plausible solution for India's traffic safety, and social upliftment Key Processes Design l Creative use of IT, carefully integrated with social institutions l on modular design and design simplicity Focus l New design developed with tremendous effort leffort of designers and developers Joint 71
  • 74. Mega Trends of the Emerging Third Industrial Revolution in India l This process presented the biggest challenge in the development of Nano. Often the design considerations were conflicting, for e.g. low price while ensuring the safety of the passengers, fully operational car while reducing the number of components and so on. A young team of managers and many cross-functional teams were assigned to complete the design. The design phase also involved identification of the right material for building each component (plastic or steel, welded) so as to meet the targeted cost price of each of the component. Each of the suppliers was part of design phase so that the knowledge transfer from design to production is seamless l Open distribution innovation, Modular Design (both in products and processes). Tata Motors devised a unique 'modular manufacturing design' for the vehicle, making it possible to distribute it in complete knock down (CKD) kits to be assembled and serviced by local assembly hubs and entrepreneurs closer to consumers. Tata Motors allowed customers and others on the edge to modify Nano in accordance with their needs; bringing customers back to the design loop. Tata Motors adopted what some analysts are calling "Gandhian engineering principles" - extreme frugality with a willingness to challenge conventional wisdom lair inlet, rear engine position, rear wheel drive, custom built airSide conditioner l Redefined production processes with component suppliers playing a more active role. Majority of the parts assembly performed at suppliers to cut down time and cost l Reduced complexity of parts l Components were divided into proprietary designs and Tata Motors design. Proprietary designs were sourced from established suppliers whereas Tata Motors' designs were developed through close partnerships with local suppliers. Tata Motors opted for more standardization and fewer business partners to focus on greater operational efficiency. Tata Motors emphasized the use of innovative design and manufacturing processes to balance optimal quality and price Manufacturing l existing plants until new plant becomes operational Use of l adopted JIT to minimize the inventory costs. The assembly line TATA was set up which could produce a Nano every 53 seconds l locations at Sanand, Gujarat , Pantnagar Plant Marketing l Intensive marketing in semi urban centers l Extensive professional campaign l The initial spend on advertisement and marketing was very minimal. As newspapers were following the Nano story, Nano got a lot of free PR. With the limited advertising budget, TATA used online medium extensively to advertise Nano. In addition, Nano merchandise as well as online games was introduced as part of the promotion campaign. 72
  • 75. l Tata Nano has its own website; no other Tata Motors product has its own website. Aggressive leverage of existing third-party, often noncommercial, institutions in rural India to more effectively reach target customers l Positioned as a lowest cost entry level car, IT Price Rs.100,000 l Creative use of information technology, carefully integrated with social institutions, to encourage use and deliver even greater value lsolutions (part of Tata motors) ERP Rules and Metrics l Providing an affordable car without compromise on quality llease at favorable terms, soft loan at 1% p.a. ,concessional tariff Land of electricity, VAT waiver, subsidized rate of water and stamp duty and other infrastructure facilities l Adherence to Indian emission standards and euro nos Clearly the Tata Nano has innovated on dimensions of the automotive business model. The really interesting question is whether it can incorporate electric or hybrid technologies in the Nano. Euro V emission compliant Nano was unveiled at the Geneva Auto show in 2009 (TNN 2011). Will there be a version of the car that is all electric -perhaps a marriage of Reva and Nano? It is a very interesting thought. 8 Chotukool ChotuKool is a compact and portable cooling solution targeted at consumers in rural India. It is a device that is predicated on an efficient use of energy. In fact it functions very much like a local energy device that functions even when the power supply is erratic - very much in line with the Third Industrial Revolution. The description below is based on (Chotukool 2011) , (Kumar 2009), (Bellman 2009). Customer Value Proposition Target Customer: l Low income and primarily rural l Portability oriented, both rural and urban Job to be done: l Refrigeration to store vegetables, milk, soft-drinks, etc l size and simple to use Small l Withstand power outages l Portable l Low cost Offering: (what is delivered) l Refrigeration: 30 liters, 20 degree cooler than ambient temperature. l size: About 1.5 feet tall and 2 feet wide. Small 8 Inputs for this section were were provided by Nilesh Gohil. 73
  • 76. Mega Trends of the Emerging Third Industrial Revolution in India l to use: Top loading; One vertical separation. Simple l Withstand power outages: High-end insulation to keep things cool for 2-3 hours during power cut. l Portable: Hand-held design; starting 7.2 kgs. l Low cost: At Rs. 3,250 (USD 65), it is almost 35% less than the cheapest category of refrigerators available in the market. Low power usage. Offering: (how it is delivered) l size. Small l High-end insulation. l top loading design. Simple l Can work on battery or inverter. l power usage. Lower l Reduced number of parts (20 instead of 200 that go into regular refrigerator). Profit Formula Revenue Model l sales: Price: Rs. 3,250 (USD 65) (30 liters) * Volume: 42 Product million = Rs. 136.5 billion (USD 2.73 bn). l service. Product Cost Structure l Unavailable in public domain. Margin Model l Unavailable in public domain. Resource Velocity l Unavailable in public domain. Key Resources People l Workshop with Clayton M. Christensen. l Collaboration with Boyce. l refrigerator market expertise. Indian Technology Products l No compressor. l Reduced number of parts. Equipment l Unavailable in public domain. Information l Customer education via micro-entrepreneurs (primarily village girls). l Chota Demo Centers in target town/village. Godrej Channels l Chota Demo Centers. Godrej l Commission of Rs. 150 (USD 3) per product sold; something that the company claims will reduce the distribution and marketing costs by 40%. Partnerships l Partnering with NGOs, self-help groups and micro-finance institutions. Brand l ChotaKool: 'nano' refrigerator. l Separate brand from Godrej. 74
  • 77. Key Processes Design l to use top loading design. Simple l20 parts as opposed to 200 Only Sourcing l Co-create with inputs from few target customers. Marketing l Micro-entrepreneurs. l Chota Demo Centers. Godrej Hiring and Training l Micro-entrepreneurs trained and nurtured to establish their own Godrej Chota Demo Centers. IT l Unavailable in public domain. Norms l Unavailable in public domain. The really interesting challenge is to find a way to integrate a dedicated solar energy collection and storage source with the low power requirements of Chotukool. This would be very much in keeping with the ethos of the Third Industrial Revolution. Microfinance Microfinance was pioneered in Bangladesh but really took off in India. It exemplifies the cooperative nature of the Third Industrial Revolution in that lending is to groups and not to individuals. It involves turning the traditional business model of banking on its head in other ways as well. The bank comes to you rather than you going to the bank. The Microfinance institution lends you a small sum of money for a productive purpose (say buying a buffalo, to sell the milk, etc.) and then collects the money from you every day. It lends to women rather than men. The description below is based on (Yunus, Moingeon et al. 2010): Customer Value Proposition Target Customer: Self-employed women's groups l Job to be done l a loan for self-employment and income generating activities Provide such as cattle rearing, sewing, paan shop etc… Offering, what is delivered l loan usually USD 10 to USD 600 delivered to the woman at A small her place of residence and repayment is collected daily daily from the group as a whole. Offering, how it is delivered l loan officer travels by bicycle and interacts with the women's A field group both to disburse payments and complete the paper work and also to collect the payments. Thus the microfinance institution travels to the person and not vice versa 75
  • 78. Mega Trends of the Emerging Third Industrial Revolution in India Profit Formula Revenue Model l money from banks at 7-11% and lend to borrowers at 20-30%. Borrow Cost Structure l Use high school graduates as loan officers and graduates as office managers who keep track of multiple loan officers in the field and enter data once they come back to home base Margin Model lVolume low margin High Resource Velocity l the funds to make new loans once the old ones have been Rotate repaid Key Resources People l Hire high school graduate and college graduates from tier III towns and rural areas and train and equip them to interact with their peers in small towns and in villages Technology products l software tracking programs developed in house to take care of Simple loan management Equipment l Minimal Information l Develop detailed profiles of borrowers Channels Partnerships l Become channels to sell value added services such as bank accounts, Brand l Develop a brand and a repuation insurance policies, FMCG goods and various services Key Processes Design l loan origination paperwork Simple Development lof the methods pioneered by Grameen Bank in Bangladesh. Most Sourcing l NA Manufacturing l NA Marketing l publicity, word of mouth Media Hiring and Training l local graduates Using IT l for loan tracking Used Rules and Metrics l NA Norms l NA The really interesting extension of the Microfinance business model is likely to come when the productive activity that it finances constitutes elements of the decentralized power grid. If these entrepreneurs build out services linked to solar powered cellphone charging stations (which are in great demand on account of the ubiquity of cellphones) and other decentralized technologies then the possibilities become infinite. 76
  • 79. Global Delivery Model9 The Global Delivery Model pioneered by three Indian IT firms - TCS, Infosys and Wipro exemplifies the fruits of global telecommunication networks and cost arbitrage (Athreye 2005). These firms and their imitators have leveraged high quality but lower wage skilled engineering talent coming out of the large number of engineering colleges in India along with fast and reliable telecommunication links that became possible with the Telecom and Internet revolutions. These firms developed very significant capabilities in the areas of project management, hiring, training, estimation, quality control, risk management and talent deployment. Customer Value Proposition Target Customer: Organizations operating from high cost geographies l l Customers in geographies with 5-6 hrs time zone difference to India l customer a preference to choose a sourcing strategy best Gives suited to most important business considerations, e.g., cost optimization, cultural alignment, proximity of location, language capabilities or risk mitigation Job to be done: l Executing projects (Consulting/IT/BPO etc) using a team that is distributed globally l Software development and maintenance l and local touch-points for organizations operating in a highly Global complex, integrated, competitive and globalized business environment l with low-cost, non-core functions ownership and technology Starting services to value based business services with localized services & touch points l end-to-end IT and business service delivery and leveraging Provide IT vendors' strong marketplace experience and broad customer base Offering: (what is delivered) l Consulting Services l Software Services l Products development l number of low cost skilled workers working in one time zone, Large and few team members working in another time zone and coordinating the work with customers l Reliable, scalable and cost-effective delivery of services and solutions l Assurance of the highest quality of service regardless of the mix of services, technologies and locations Offering: (how it is delivered) l to resources of varying costs ensuring delivery of services at Access optimal cost 9 Inputs for this section were provided by George Paul, Anurag Goel, Sameer Jain and Anil Gupta. 77
  • 80. Mega Trends of the Emerging Third Industrial Revolution in India l delivery model having ability to work round the clock for its A global customers thus providing huge increase in capacity l presence ensuring an understanding of the local language / A global culture l delivery model providing a certain degree of 'risk-proofing' for A global a customer from natural disasters example flooding, earthquake or political unrest ensuring that work did not get delayed for the client. l drivers and frameworks - Process, Quality, Tools, Knowledge Various Management, Program Management, Risk Mitigation l Software development and maintenance services l Lowering of Total Cost of Ownership (TCO) IT by managing different service streams such as consulting, IT services, IT infrastructure services, etc. with the help of a unified delivery framework Profit Formula Revenue Model land Material - Revenue per employee per hour (i.e. price x Time employee) l Price - Revenue per project Fixed l Revenue based on unit of work (Unit based pricing) land material, Fixed Price, Usage based Time Cost Structure l Low fixed cost - Fixed costs are primarily the initial facility set up cost l part of the costs is employee salary costs which is variable. (i.e. Large recruit employees based on forecasts, and maintain a minimum bench strength) l50% of the cost for salaries of employees and remaining for Over marketing and support functions. Keeping major share of team in India does bring down the cost Margin Model lMargins - Typically project margins are around 20% to 23% High l are higher for offshore resources and hence GDM companies Margins tries to increase the offshore : onsite ratio l Low margin on time and material engagement while higher margin on fixed price work. Higher margin at work being carried in India rather than at client location l off-shored operations including leveraging other LCC like Heavily Mexico, China, Vietnam, etc delivering 30% net margins to Indian IT companies l off shored operations, according to touch point requirements of Highly customer, ensure low end operations from low wage countries which results in high profit margins. The typical margins are 30%. Resource Velocity l based on the size of the project/delivery timelines etc Will be l skilled people and train new hires rapidly Rotate l cheap but technically skilled labor force at comparatively lower Exploit rates (vis-à-vis international competition and other geographies). Customer cost savings of as much at 85% through Indian global delivery model 78
  • 81. l the sun support ensures high engagement with client Follow l cheap skilled workforce in services delivery from different Mix of locations ensures overall lower cost to company Key Resources People l Employees with strong analytical, technical and communication skills from premier institutions across the country limportant part of business model Most l skilled engineers with keen understanding of latest Highly technologies, software development processes and business functions l effective and scalable talent management: recruiting, staffing, Highly training and retention Technology Products l Expertise in commonly used products and technologies l Multi-continental and interconnected global development center network (local, regional, global model) to allow for better risk management and follow-the-sun coverage l of the art telecommunications network State l collaboration tools Global Equipment l equipment Facility l IT - Software/Hardware equipment l Communication equipment including video conferencing equipment, projects, tele presence etc l hardware and softwares, most of the work would be carried Minimal out using customer equipment Channels l Onshore/near shore sales teams supported by Indian delivery and research teams Partnerships l Alliances with key Consulting and Product vendors (Example Microsoft, Apple, Oracle, Sun Microsystems) l Software products vendors l non-core services to productized offerings especially in banking From and telecom industries Brand l at foreign exchanges, Listing well established brands l been able to established unique brand through large strategic Have engagements and global acquisitions Key Processes Design l The GDM vendor typically acts as an end to end development source including design, prototyping, implementation, manufacturing, pilot deployment and certification l The GDM vendor typically has extensive in-house software and hardware capabilities and network covering the major networking technologies to support our development and testing needs 79
  • 82. Mega Trends of the Emerging Third Industrial Revolution in India l The GDM vendor typically has provides guidance for complex certification and regulatory compliance l executed by the GDM vendor are usually executed in much Projects lesser time than it would take for the customer to recruit, hire and train resources l doesn't need to add physical resources to support development Client projects leading to low capital outlay. GDM organization typically delivers services from the fully equipped, dedicated development facilities and the capital is free for other important uses l can scale projects up and down as needs dictate with flexibility Clients much greater than that possible with an in-house development staff. As the demands of the market grow, clients can adjust the amount of development resources at its disposal. This gives the client the flexibility to both respond to rapidly changing conditions as well as maintain fiscal control l can focus on core competencies and not bother with the Client complicated product development l Differentiation through process excellence, learning and development investments, quality certifications l Integrated world class processes l Centralized learning and development centers - emphasis on self development Sourcing l Capability to deliver through metrics driven engagements l Continuous evolution through value chain movement and expansion to new geographies l of knowledge, acquired via working on different engagements Sharing l internal process control Strong l Development of center of excellence in process and technology domains supporting global delivery teams Marketing l Dedicated hunting and framing teams in different geographies and domains Hiring and Training l class training facilities World l resources being the key input to the delivery, focus on hiring Human fresh talents from colleges l new hires and managing/upgrading the knowledge of existing Training employees is very important l hiring practices with close integration with education institutes Strong l Engagement at all levels in client organization l Centralized tools for monitoring customer satisfaction Rules and Metrics l Typically CMM level certified organization. Products and project will be governed by SLAs Frameworks Knowledge Management 80 l Continuous process/framework development and refinement l knowledge assimilation and dissemination portals Internal
  • 83. The Global Delivery model and its related Business Process Outsourcing Model have drawn in a dramatically large pool of skilled labor and deployed them effectively. With the Third Industrial Revolution it may be possible to use some of these same skills to help manage global energy networks. Using the same distributed energy sources, the really interesting frontier to explore would be the use of skilled labor in rural areas that would telecommute. Currently this is not feasible since the energy infrastructure required to support it is not there. If this is remedied through the third industrial revolution several interesting possibilities open up. E-Choupal E-choupal connects farmers to markets using information technology. It allows farmers to engage in price discovery on a timely and pan-India basis. The model still uses traditional intermediaries to help with logistics and financing but removes a major hurdle in their pricing power - access to superior information. This is an activity in the 'for profit' sector undertaken by the Indian multinational ITC whose traditional business, tobacco, gave them an intimate understanding of farmers in India. This model is very much in consonance with the Third Industrial Revolution in terms of being based on superior information and on distributed communication networks. Customer Value Proposition Target Customer: 'E-Choupal' leverages Information Technology to virtually cluster all l the value chain participants, delivering the same benefits as vertical integration does in mature agricultural economies like the USA. Job to be done: l Bypassing mandis from the procurement process by directly connecting with farmers. Transforming the procurement channel to a distribution channel building a services platform Offering: l use of the physical transmission capabilities of current Makes intermediaries - aggregation, logistics, counter-party risk and bridge financing -while disinter mediating them from the chain of information flow and market signals l Agricultural community access ready information in their local language on the weather & market prices, disseminate knowledge on scientific farm practices & risk management, facilitate the sale of farm inputs (now with embedded knowledge) and purchase farm produce from the farmers' doorsteps (decision making is now informationbased) l 'E-Choupal' services today reach out to over 4 million farmers growing a range of crops - soyabean, coffee, wheat, rice, pulses, shrimp - in over 40,000 villages through 6500 kiosks across ten states l Bringing transparency and ease to farmers, both as suppliers of agri- products and as customers of ITC's value-added products/services 81
  • 84. Mega Trends of the Emerging Third Industrial Revolution in India Profit Formula Revenue Model l the farmers benefit through enhanced farm productivity and While higher farm gate prices, ITC benefits from the lower net cost of procurement( despite offering better prices to the farmer) having eliminated costs in the supply chain that do not add value l In 2005-06, ITC generated USD 23 million selling chemicals and fertilisers l coupling its core offering of "terrain expertise" (which was initially Next, built through the commodity procurement chain) with "domain expertise" of its network partners, e-Choupal is able to offer new products/services to its village customers l than its wide reach, the e-Choupal model has led to 4-7 per cent Other reduction in the true cost of contract for different buyers in the commodities business. For ITC, there has been a 40 per cent reduction in transaction costs of procurement l this channel throughputs more than USD 400 mn in sales for From ITC and its partner companies Cost Structure l Charging for access to the platform helps ITC recover substantial costs of infrastructure and operations Key Resources The eChoupal infrastructure consists of: People l with Internet access in the house of a trained farmer, called a A kiosk Sanchalak. This kiosk is within walking distance of target farmers l A warehousing hub managed by the former middleman, called a Samyojak. This is within a tractor-driveable distance of target farmers. (The former middlemen were given a role to avoid resistance to the project. They joined because they could see that their traditional business was in jeopardy.) Technology l A collaborative network of companies orchestrated by ITC with a pan- India presence l alternatives for inadequate infrasturcure being tried out like Several Power back-up through batteries charged by Solar panels, upgrading BSNL exchanges with RNS kits, installation of VSAT equipment, Mobile Choupals, local caching of static content on website to stream in the dynamic content more efficiently, 24x7 helpdesk etc Channels l e-Choupal was originally a channel innovation that was able to extend its reach through a VSATbased IT network Partnerships l Currently, there are 160 partners from domains as diverse as seeds, consumer products, finance, insurance and employment who sell their products to rural consumers through e-Choupal's channel Key Processes Routines l Enabling Process: Leveraging the established credibility of the sanchalaks to play a specific role in building up the original e-Choupal channel lprocess: Setting up a wide IT and logistics infrastructure even in Core remote places 82
  • 85. The really interesting possibilities are in the arena where an e-Choupal kiosk is created further inland in smaller and smaller rural areas using distributed energy sources. Could an Ekgaon like model be combined with e-Choupal to create an even more dense and distributed network? Business Sector - MNCs Project Shakti Project Shakti is a low cost distribution network by Hindustan Unilever, the Indian arm of the global giant. It is a way for the large corporation to penetrate to the smallest villages with a population of less than 2000. In keeping with the values of the Third Industrial Revolution it collaborates with self-help groups and has a strong CSR mission. The details below are from Rangan and Rajan 2005 and Xavier, Raja et al. 2007. Customer Value Proposition Target Customer: Rural l India with market potential to grow l Shakti targeted the very small villages (Population <2,000) Project l Initiative that combines social responsibility, sustainability, and business strategy Job to be done: l The business objective is to extend our direct reach into untapped markets and the social objective is to provide sustainable livelihood opportunities for underprivileged rural women l It collaborated with the rural self-help groups in order to educate rural women and make them a part of the company's marketing network as direct-to-home distributors l objective was to create livelihood opportunities for Project underprivileged rural women Offering: l average, a Shakti entrepreneur earns INR 700 - 1000 a month, On an l it provides livelihood enhancing opportunities to about 45,000 Today, women in 15 Indian states and provides access to quality products across 100,000+ villages and over 3 million households every month l be described as a sales and distribution initiative that delivers It can growth; a communication initiative that builds brands; a microenterprise initiative that creates livelihoods; and a social initiative that improves the standard of life in rural India by providing quality products Profit Formula Revenue Model l A typical Shakti distributor sells products worth Rs 10,000-15,000 (around USD250) a month, which provides an income of Rs 7001,000 (around USD25) a month on a sustainable basis 83
  • 86. Mega Trends of the Emerging Third Industrial Revolution in India l distributors now account for 15% of the company's sales in Shakti rural India l business model for rural men called "Shaktimaan" make them A new earn 10 percent of their total sales in a month l By 2005 the SHGs had mobilized USD 300 mn had mobilized as corpus. The rural women organised themselves into `thrift and credit' groups with a saving of Re.1 a day which created a fund of more than USD 160 mn l Typically, each of the SHGs saves Re 1 per day or Rs 30 per months. A group with 15 members and a saving of Rs 30 per head, would save Rs 450 per month or Rs 5,400 in a year. The member can borrow from the group's kitty (typically, the interest rates are 2-2.5 per cent). At the end of the year, the group-if the repayments within the group is 95 % and the attendance by members is 75 %-- can take a matching loan from regional rural banks, who are refinanced by NABARD. Cost Structure l Shakti broke even in 2004 Project Key Resources People l To improve business skills of the SHGs women, extensive training programmes are being held l Followed by Pioneering work carried out by Grameen Bank of Bangladesh, Project Shakti Partnered with the SHGs (Self-Help Groups) by offering them opportunities for business Partnership l Hindustan Lever has also tied up with partners such as Tata Consultancy Services, India's largest software firm, which is actively involved with the iShakti portal, and ICICI, a financial services institution that is involved with providing micro-credit loans l Entrepreneur: This is a sales and distributive initiative which Shakti recruites village women as sales persons called Shakti Amma and trains them to communicate and sell HUL products in villages l Vani: This is a social awareness program where rural women Shakti work as 'Vanis' and communicate with the village people by delivering lectures on health, hygiene and education Channels l This is a community portal launched in November 2004, first in IShakti: Andhra Pradesh. It has set up interactive kiosks in villages with internet-linked computers which provide all forms of information to village people. Villagers register as users and surf the internet Technology l To further expand its reach to far off rural areas, HUL recently brought in its new 'Shaktimaan model' where the village men work as distributors of HUL products. They head out on their bicycles, provided by the company, in order to sell the subsidized HUL products to nearby villages. They earn 10 percent of their total sales in a month. As of 2011 there are about 10,000 men signed up for the system Key Processes Routines l To improve business skills of the SHGs women, extensive training programmes are being held l of their training programme, all HUL management trainees As part spend about 4 weeks on Project Shakti in rural areas with NGOs or SHGs 84
  • 87. Here again, the possibilities of combining distributed energy sources, will allow for a much wider set of iShakti kiosks. Conclusion As has been widely recognized, India has become a hub for low cost innovations. In this paper we have highlighted a few of these innovations, product as well as process innovations, that are or have the potential to be aligned with the fundamental trends of the Third Industrial Revolution as articulated by Jeremy Rifkin. We are witnessing these innovations in four key sectors - the government, the social sector, the Indian business sector and the multinational business sector. Out of the total number business models that we have looked at, only three are directly addressing the key Third Industrial Revolution Pillar towards distributed energy sources the Reva electric car, now acquired by Mahindra and Mahindra, TATA BP Solar and BPL Ltd. The other business models have the potential to interface with the trends of the Third Industrial Revolution in interesting ways: by enabling the innovation to extend its reach (Aakash tablet, Forus Healthcare, Ekgaon, e-Choupal), by complementing it (108 Emergency Services, Tata Nano, Chotukool ) or by providing a direct source of business opportunity that could be exploited by the business model (Aadhar card, Microfinance, Global Delivery Model, Project Shakti). It will be interesting to see how these trends play out in the future. Prof Shailendra Raj Mehta, Visiting Professor, IIM, Ahemedabad and Academic Director of Duke Corporate Education 85
  • 88. Mega Trends of the Emerging Third Industrial Revolution in India Acknowledgement This paper has been written with key inputs from several students of Shailendra Raj Mehta's class entitled – The Management of New and Small Firms at IIM-Ahmedabad. Additional inputs have been provided by Bhavesh Sherashiya. Research assistance has been provided by Bijendra Nambiar and Sujatha Jaiprakash. The contributors to the individual sections have been identified by name. Specials thanks to A Vijaysimha (BPL Ltd.) & Rita Roy Choudhary (FICCI) for providing key inputs. References Aadhar, C. (2011). "http://uidai.gov.in/." Athreye, S. S. (2005). "The Indian software industry and its evolving service capability." Industrial and Corporate Change 14(3): 393. Bellman, E. (2009). "Indian Firms Shift Focus to the Poor." Wall Street Journal(21 October ). Bradsher, K. (2011). "In China, Power in a Nascent Electric Car Industry." New York Times(27 December). Chakraborty, G. and E. S. Group (2009). Study of Emergency Response Service - EMRI Model, National Health Systems Resource Center, Ministry of Health and Family Welfare, Government of India. Chotukool (2011). "http://www.chotukool.in/." Economist (2010). First Break all the Rules: The Charms of Frugal Innovation. Economist. London. 15 April 2010. Ekgaon (2011). "www.ekgaon.com." Forus (2011). "http://forushealth.com/forus/." Friedman, T. (2011). "India's Innovation Stimulus." New York Times(5 November 2011). Ghaziani, A. and M. J. Ventresca (2005). Keywords and cultural change: Frame analysis of business model public talk, 1975-2000, Springer. Johnson, M. W. (2010). Seizing the white space: Business model innovation for growth and renewal, Harvard Business School Press. Johnson, M. W., C. M. Christensen, et al. (2008). "Reinventing your business model." Harvard Business Review 86(12): 57-68. 86
  • 89. Kumar, A. (2009). "Godrej's Nano: Chotukool." Business Standard: 30 December. Prahalad, C. and R. Mashelkar (2010). "Innovation's Holy Grail." Harvard Business Review 88(7/8): 132-141. Rangan, V. K. and R. Rajan (2005). "Unilever in India: Hindustan Lever's Project Shakti-Marketing FMCG to the Rural Consumer." Harvard Business Case-Product(9-505): 056. Rangarajan, C., P. I. Kaul, et al. (2001). "Where is the Missing Labour Force?" Economic and Political Weekly XLVI, no. 39(24 September): 68-72. Shastri, P. (2011). "Four years on: EMRI 108 saves a life every 14 minutes in the state." Times of India(29 August). Tablet, A. (2011) "http://aakashtablet.org." Tiwari, R. and C. Herstatt (2011). Role of lead market factors in globalization of innovation: Emerging evidence from India & its implications. Proceedings of IEEE International Technology Management Conference (IEEE-ITMC), June 27-30, 2011, San José (USA). IEEE. TNN (2011). "108 emergency services have improved: GVK-EMRI." Times of India(9 April). TNN (2011). "Tatas Begin Export of Nano Car." Times of India(10 May 2011). Xavier, M., J. Raja, et al. (2007). "Impact of Entrepreneurship Development through Corporate Interventions: An Assessment of the Case of HLL's Project Shakti." Advances in International Management 20: 135-149. Yunus, M., B. Moingeon, et al. (2010). "Building Social Business Models: Lessons from the Grameen Experience." Long Range Planning 43(2-3): 308-325. 87
  • 90. Mega Trend 3 Intelligent Technologies and the Future of Work
  • 91. Intelligent Technologies and the Future of Work Global Scenario Jeremy Rifkin While millions of new jobs will be created in the build-out of the five pillar Third Industrial Revolution infrastructure over the course of the next four decades, millions of jobs in other industries will be lost to intelligent technology displacement. This is already beginning to happen. Today almost all sectors of the economy are replacing mass labor with boutique, high-tech workforces and increasingly sophisticated and agile smart technology systems. This raises the question of what happens to the millions of mass wage earners of the industrial age as the world careens past the infrastructure stage of the Third Industrial Revolution to the fully distributed collaborative era. In a sense, rethinking work this time would be more akin to the great upheaval that ensued when millions of serfs were released from their indenture in a feudal system and forced to become free agents and wage earners in a market economy. In industry after industry, from factory production to financial services, companies have experienced dramatic increases in productivity, which allows them to produce more output with few workers. Nowhere is the disconnect between productivity gains and job losses greater than in the manufacturing sector. In the single period between 1995 and 2002, more than 31 million manufacturing jobs disappeared in the 20 largest economies, while productivity rose by 4.3% and global industrial production increased by 30%. The reality is that manufacturers can produce more goods with fewer workers. Even China eliminated 15 million factory jobs during the time period, or 15% of its entire workforce, while dramatically increasing output with the introduction of new automated smart technologies. Manufacturing jobs declined by 16%, in the same period, in the other major economies and by more than 11% in the U.S. By 2010, manufacturing workers in the U.S. were producing 38% more per hour than in 2000. While manufacturing output has remained fairly stable over the decade, employment has declined by more than 32% because it takes fewer workers to produce the same output. If the current trend continues - and it is only likely to accelerate with even more efficient technology displacement - it is estimated that global manufacturing employment will decrease from 163 million workers to just a few million workers by 2040, eliminating most factory jobs around the world. 91
  • 92. Mega Trends of the Emerging Third Industrial Revolution in India White collar and service industries are experiencing similar dramatic gains in productivity and shedding record numbers of workers in the process. Secretaries, file clerks, bookkeepers, telephone operators and bank tellers are among the scores of traditional white collar jobs that have become virtually extinct with the introduction of intelligent technology. The retail sector is in the midst of the same shift. Automatic checkout lines have replaced cashiers and automated shipping departments have replaced the need for human labor in the back room. Similarly, the travel industry is increasingly employing voice recognition technology which can converse with customers in real time and book travel and hotel accommodations without any need of human intervention. Even hospitals are making the transition to intelligent technology, with robots performing routine tasks ranging from simple surgeries and medical diagnostics to cleaning and maintenance. Intelligent technology is taking over a multitude of jobs once performed by human beings, from operating light rail systems and automated weapons systems to buying and selling stocks on the stock exchange. A new generation of robots will soon be coming online that have the mobility of humans, are equipped with emotional and cognitive skills and have the ability to reflect and respond to human queries and directions with increasing agility and resourcefulness. By 2050, a mature, intelligent Third Industrial Revolution infrastructure will be in place, essentially eliminating mass labor as a dominant workforce in the market economy. The second half of the 21st Century will be characterized by boutique, high-tech, professional workforces programming and monitoring intelligent technology systems. The conundrum is that if productivity advances brought on by the application of intelligent technologies, robotics and automation continue to push more and more workers to marginal employment or unemployment lines around the world, the diminishing purchasing power is likely to stifle further economic growth. In other words, if smart technology replaces workers, leaving people without income, who is going to buy all the products and services being produced? All of which begs the question of how to keep hundreds of millions of people employed as we move further into the century. 92
  • 93. The Indian Story Prasanto K Roy Introduction Technology is an inseparable part of twenty-first-century life; technological progress is a dominant driving force of the world's economic growth. Technology advancements will create specialized employment opportunities in every sector. At the same time, major disruptive technology advances will make redundant thousands of legacy jobs and occupations. The impact of such a loss of jobs could be dramatic, changing the entire structure of the Indian economy. The pace of such change is probably the highest in the technology industry itself themselves. The impact of such a loss of technology jobs could be dramatic, sending ripple effects across the Indian economy, rather than being confined to the technology industries alone. Preparing for these changes requires identifying occupations that are potentially threatened, as well as the new areas of employment opportunities that are emerging. Studying and recommending possible interventions aimed at preparing both employer and employee for such changes is important. We need to especially look at the education of our future generations, as also the training/re-skilling of the present workforce. A simple, present-day, low-level example: Thousands of people are employed in the data-entry of forms in India as they are across the world. In India, such forms include income-tax returns, banking, credit card and mobilephone connection applications, mutual fund applications, and so on. With an increasing shift to web-based capture as part of end-user self-service,hundreds of thousands of data entry jobs are becoming redundant. India's new income-tax e-filing system is an example. The system encourages taxpayers to file their returns online, making it quick, painless and free. The system also encourages "channel partners" to offer value-added services around the self-capture of income-tax forms, for those taxpayers who require help and support. This change is happening even faster in the West, which has implications for the functions off-shored to India. 93
  • 94. Mega Trends of the Emerging Third Industrial Revolution in India Hence thousands of people involved in manual data entry would need to be re-skilled, or they would be abruptly out of a job. Similarly, youngsters graduating and planning on such work, based on prior success stories of their seniors, would need to be guided to alternative careers and training. Background: Why ICT Why will the loss of ICT jobs have such a dramatic effect on the economy as a whole? The IT/ITeS sector alone employs over 2.5 million skilled people. The telecom sector employs over twice that number, and it is projected to employ 2.8 million directly and 7 million indirectly by the end of 2012. (For details on the ICT industry revenues, see Annexure 2--ICT India: The Data.) Hence direct employment by Indian ICT is about 5% of India's population, and its direct contribution to India's gross domestic product (GDP) is about 8%. ICT revenues added up to 10% of India's $1.5 trillion GDP in 2011. However, two-thirds of the IT revenues of $96 billion are from exports, and about one-third of this portion is "onsite services", billed and collected offshore for services delivered on-site and offshore; from India's perspective, this is excluded from the definition of GDP. The ICT sector is also ahead in both its own use of ICT for business functions including HR, payroll, taxation, etc, and also in its compliance with income-tax laws, driven substantially by MNCs (both Indian-registered, such as TCS and Infosys, and foreign-registered, such as HP and IBM) which strictly comply with tax and corporate laws. The ICT sector is thus significantly higher than other sectors in: l (per-capita) contribution to the GDP individual l (salary) earnings individual l consumption of goods and services individual l income tax contributed personal l per-capita corporate income tax l additional employment of security, drivers, etc l personal/individual secondary employment e.g. maids, drivers, etc l contribution to the secondary, dependent economy in the area (e.g. creches, individual malls, doctors, etc) by double-income couples 94
  • 95. Even more significant, ICT directly or indirectly impacts most of the other industries that contribute the balance 92% of the GDP. Studies [Nasscom, CyberMedia] have shown that an outsourcing services industry that has $1 bn in revenues has a further impact of at least the same level in revenues of downstream industries in the given geographical area; for example, in Gurgaon outsourced transportation, catering, security and housekeeping, employ many people. This also applies to local consumption (goods and services consumed by individual employees). Entire cities have come up rapidly in areas of high ICT industry development, Gurgaon and Bangalore being two examples. The ICT industry has strategic value for India's economy that is far in excess of its 10% contribution to the GDP. The loss of jobs in ICT will have a ripple effect across the economy. Intelligent Technologies - Impact on IT-ITeS Occupations A large number of jobs and occupations across multiple sectors are candidates for automation, either as replacement of or supplement to the human worker, in the latter case, dramatically improving productivity. In all these areas, unless very high growth in output, supported by market demand, absorbs the reduced need for labor, the number of jobs available will decline dramatically. There will also be new opportunities related to the Third Industrial Revolution, and in parallel with the shifting domains driving services. India's technology and BPO industries have traditionally been driven by global demand in financial services, with two-thirds of the industry catering to that sector five years ago. However, over the past five years, there has been a major shift driven by demand for telecom, healthcare, engineering services, and other areas. The big shift ahead will be toward energy domains. The roll-out of intelligent continental grids geared to handle millions of distributed renewable-energy power sources will require an ICT infrastructure backed by expertise, technology, research and IP, and especially support services that will far outstrip the demand from financial services. This is a major opportunity for India's technology services and BPO outsourcing industries. Call Center Agents (BPO Voice Processes) Of the 2.5 million IT workers in India, about 10-15% are employed in "voice processes" in the BPO industries; they answer customer service calls or tech support calls (inbound voice) or make sales or service calls (outbound voice). This function is being increasingly replaced by automation. About 40% of call-minutes globally are now being handled by automated systems. So far, the rapid growth in support numbers, measured either as 95
  • 96. Mega Trends of the Emerging Third Industrial Revolution in India callers handled, or call-minutes, has absorbed the automation impact, but that will level off in the next two years. Within the next three years, when technology moves further forward and a projected 70% of calls can be handled through automation 30% human intervention may still be required; in that case we are looking at a possible displacement of 200,000 voice-based jobs. Impact of Automation Support calls have been part-automated, through the old and mature technology of IVRintegrated voice response ("Press 1 for credit cards, 2 for banking accounts" etc) for the past three decades. In the past decade, automation has been gradually enhanced by the still-emerging, though gradually maturing, technology of voice recognition ("If you want cricket scores, please say CRICKET."). There is extensive work on voice recognition and "AI" techniques. Automation is extremely attractive to enterprise customers of outsourcing services in the West, for it eases their dependence on inconsistent labor in remote countries answering phone calls in foreign accents. Action Required l Awareness creation amongst the BPO industry and the Government about the future trends for better business and developmental planning. This will also help the educational and vocational institutes to realign their training courses ahead of time, rather than be reactive. l Re-skilling and shift in domain expertise of call-center agents. l Identification and leveraging emerging opportunities to enable the BPO industry to manage the change in technology. The current, gradual migration of voice-based jobs elsewhere, e.g. Philippines, is a blessing in disguise, allowing India's industry time to prepare. However, this automation disruption will then occur elsewhere, in those countries where these jobs are migrating. One of the challenges in this area is the extreme, narrow domain specialization of these voice-based functions, aggravated by the tightly scripted responses, which does not really allow a build-up of domain knowledge of the call center agent. Training and re-skilling should aim to widen that learning, so that at least the operational domain (for example, credit card processing) is learnt as a pre-requisite for the job. 96
  • 97. Opportunities The development of automation is inevitable here, and there is enormous product development, R&D, testing and marketing opportunities within automated customer support. Such development and continuous enhancement will require not just software/technology skills but high domain expertise, knowledge of customer relations, people-handling and caller psychology, besides continuous, ongoing enhancement, expertise and development. Data Entry and the Capture of Billions of forms There is an enormous and growing market for data entry and capture of forms, for telecom (phone connections), banking and financial services, income-tax filings, school admissions, job applications/resume screenings, mutual fund applications, retail offers and schemes, etc. A conservative estimate of at least two billion forms a year requires, at 15 minutes per form (8-hour shifts), over 62 million man-days, or 200,000 man-years, to enter. Because of the complexity and size of most forms, this estimate of 200,000 people employed is very low. In addition, at least another similar number is employed in the services outsourcing businesses and there are several dozen other areas that capture data in forms. This data capture need gets periodic boosts from regulatory updates. For instance, the Indian government's "KYC" (know-your-customer) mandates to telecom and financial services companies has required the re-capture of ID and supporting information for over 1 billion customers across the sectors, over the past two years. And then there are special projects such as India's UID (Universal ID) project, which intends to allocate a billion IDs to Indians over the next couple of years. There is also India election ID card, which captures millions of forms each year. And finally there is the duplication of citizen information across multiple government agencies. There is no clear data on employment in this "unorganized" sector, but rough deductions from the above numbers suggest at least a million people are employed full-time in data entry, a number that is growing-for now. Displacement by Intelligent Technology ltoward self-capture of forms: income-tax self-filing online, passport and PAN card Shift self-service applications, self-applications for credit-cards and other services; selfservice forms in job sites l Shift toward database sharing, one-view-of-customer integration within financial services companies. For instance, a banking customer being offered a credit card does not need to re-enter his information with "customer one view" implemented within that banking company. 97
  • 98. Mega Trends of the Emerging Third Industrial Revolution in India OCR l(optical character recognition) of forms India's l UID project to reduce duplication of data capture across multiple agencies Technology for updation of customer/employee information across multiple systems. l With automated multi-system updates built into software, a much larger number of such tasks can be handled by one person. At present, the increasing automation and online self-service in data capture is offset by the explosive growth in data entry needs due to projects like UID. The likely direction is further growth of data entry jobs to 1.5 million or beyond, drawing more and more people into this occupation, and then a rapid fall that leaves a half to one million people without work. Action required This is a particularly dangerous area because of the visible, ostensible growth, low entry barriers, potential complacence about future prospects and lack of other domain skills acquired on the job. There is a strong need for awareness, communication, and counseling. Unlike with BPO jobs, addressing this at the training level will not help, as data entry does not require significant training. However, awareness about automation can be instilled at the primary and secondary education level. There is also a need to re-skill a million data entry persons to orient them for other vocations. There is a need to identify and leverage the automation opportunities, as well as the people best qualified to help leverage them. However, these people will not come from the datacapture pool, as domain on-ground expertise will be required. The biggest challenge here will be that unlike the BPO industry, there is no single industry that is "responsible" for this sector and its jobs. Hence the government or governmentsupported bodies such as NSDC-the National Skill Development Corporation will have to play a major role here. Industry bodies could also play a role here as an HR pool development activity. Opportunities There are many opportunities here for software products and services companies. This area is considered a low hanging fruit for automation; the automation technologies and areas include: OCR lproducts and services: especially with support for Indian languages Web-based self-capture products and services l 98
  • 99. De-duplication l and other database technologies to leverage "one view of customer" across multiple financial services applications, government departments, etc: both products and services. Printing: the Shift to Digital Conventional printing technologies are labor-intensive and employ large numbers of people. A mid-size printing press employs several hundred people, and typically also has trade unions on the shop floor. A series of technology changes have displaced functions over the years. Late 1970 and 1980s: photo-typsetting and offset printing replaced letterpress and the l manual labor required in assembly Late 1980s and early 1990s: desktop publishing replaced phototypesetting and manual l layout of galley proofs etc At present, hundreds of thousands of people are still employed in the presses, attending to offset machines, feeding paper, cleaning plates, exposing, developing and installing offset plates, and then gathering pages, binding magazines and books, etc. Manual labor is especially used in "special ads" Displacement by Automation The biggest shift in printing is from analog offset printing to variable digital printing, which allows personalized, customized printing with zero physical or manual intervention except on the software. This is supported by automatic binding, gathering and sorting. Built in high-speed address-label printing through variable data digital printing eliminates the need for manual labeling. This set of technological changes is slowly eliminating labor for press support and maintenance, paper and ink handling, gathering and sorting, labeling, etc, while requiring newer skills. The more rapid changes, however, have been in parts of the traditional offset printing process. Technological advances in recent times have already displaced specific functions. The advent of CTP (computer-to-plate) technology has eliminated the need for traditional film separations which were then exposed to offset plates, with careful registration of the four color (CMYK) plates by skilled labor. It has also done away with the need for several preprinting quality-control checks by skilled labor, as well as semi-skilled assistants who would manage the transfer from design to press end to end (now, pages are placed directly into online placeholders in the press's web-based system). Bills, traditionally printing on pre-printed stationery with mono digital printers, and then manually sorted and addressed, have already moved to high-speed integrated digital printing presses which print the entire bill, including fixed and variable data, color and black printing, custom advertisements, address label, etc, postage franking, folding and 99
  • 100. Mega Trends of the Emerging Third Industrial Revolution in India envelope stuffing...and output a ready-to-mail, postal-sorted bill. This improves productivity in bill printing approximately tenfold, reducing that many jobs per million bills printed. Variable-data bill printing is also an area which will see two sharp directions in the growth curve: upward, as its now, driven by high growth in billed services and customers; and downward, by 2013-14, driven by the shift to emailed or web-accessible electronic bills, which is a huge cost-saving for companies. Action required The immediate need is the re-training/re-skilling of existing skilled labor to make them reemployable for digital printing and support services; unskilled or low-skill labor must be deployed to other functions or other industries. Printing-related vocational courses need to be updated to orient them for a digital printing future. Challenges: major gaps between existing HR skills, and those required by digital and computer-based systems. Opportunities Digital printing needs a new set of skills, especially software skills, as well as design and layout knowledge; as also maintenance and repair of digital print systems. These are higher-paying jobs than traditional printing shop floor jobs, but are also at a much higherlevel, and often more white-collar than blue-collar jobs. There are major opportunities for entrepreneurs to fill in the demand for digital printing, to offer printing services that are now filled by traditional printers. This is also a threat to traditional printers, as well as an opportunity for them to step into digital printing services. There is a universe of opportunities for the supply of products and services supporting variable-data digital printing, for bills and statements and the like and for digital printing services for bills where these have not moved to the new systems, such as electricity and water bills in many states of India. 100
  • 101. Intelligent Technologies- Impact on Key Industries Textile and Apparel Sector Let us take a look at another very highly labor intensive industry in India -textiles and apparel. The country ranks among the top five exporters of textiles (#3) and apparel (#5) in the world. Textiles however, is an area where automation is reducing the role played by cheap skilled labor, established by the fact that the EU and USA are at #2 and #4 respectively, in the global exporters list. Textiles contribute 14% to India's industrial production, 4% to GDP, and 13.5% to export earnings; and provide direct employment to 35 million people, growing at 8-9%. Of this, clothing, which contributes 45% in terms of revenues, is labor-intensive and traditionally a major job creator; an investment of Rs 100,000 creates over 6 jobs. With the current low to moderate penetration of automation in apparel (as distinct from textile manufacturing), there is still high growth of jobs. This is changing, with the shift from small cottage-industry tailor-shops to large -scale apparel factories. This export-intensive industry is also under severe global competition from China, where a mix of large-scale production processes, automation and low wages has dropped apparel prices dramatically. Apparel has seen major production growth in recent years. Once reserved for India's smallscale industry, this sector was de-reserved in 2003, and further boosted by the end of quotas in global markets (2005), and the explosion in organized retail in India. In 2012, it's expected to create 5.64 million additional jobs (2.83 mn semi-skilled and 1.13 mn unskilled). These projected numbers could be significantly different in reality--due to the rise of large factories, and semi-automation of some of the processes. One reason for the continued labor-intensive nature of the industry is that some of the functions, such as cutting, are expensive to automate except on a very large scale. Automated cutting equipment is expensive. However, other functions have seen major productivity enhancements. Powered, semi-automated sewing machines are big productivity enhancers, especially with special attachments and extensions. Their penetration has increased sharply following the availability of cheap equipment from China as well as (secondhand) from defunct EU factories. The even bigger factor is that the processes in an industrial-scale production unit contribute to major productivity gains (three-fold gains are common). From a small cottage industry shop floor where a tailor will make three shirts a day, the "tailor" in a large factory could make 15 shirts a day. Hence as we see a shift from small-scale industry to large factories, dramatic gains in productivity means a drop in labor employed even with 101
  • 102. Mega Trends of the Emerging Third Industrial Revolution in India increasing output. This is aggravated as the larger factories put more pressure on smallscale units. There is also increasing, though reluctant, adoption of IT (such as for ERP, supply chain, CRM, etc), almost inevitably driven by buyers (e.g. Wal-Mart) who mandate IT processes for order fulfillment etc. Impact of Automation and IT Systems A survey carried out by ICRIER in 2008-2009 for man-machine ratio in the labor-intensive apparel sector shows that in a large majority of firms it is declining, which shows that growth in machinery usage outweighs growth in employment generation. Most companies surveyed showed a decline in the man-machine ratio. It is important to understand the implication for employment generation when the manmachine ratio declines. The study asserts that unless machinery usage is increased, there will be no employment generation in firms because to be in production, firms must upgrade technology to enhance quality and volume. They require more machines and technology, to generate more employment. Most Indian apparel firms are small-scale, and way behind the curve in terms of global production technology. Closing this gap usually means upgrading machines. About 70 percent of the surveyed firms have adopted newer machines in the last five years. Many of those surveyed felt that the modern technology is labor displacing, as one needs workers with different skills for the modern machines. Hence in Indian apparel, unskilled workers are regularly replaced by skilled workers. Action required Re-skilling the labor force is critical in this sector. Moreover, counseling and re-orienting SSI (small-scale industry) entrepreneurs to encourage them to adopt technology and modern processes will help grow the sector. There are enormous opportunities for consulting services to SSI entrepreneurs, for shop-floor product manufacturing, sales and service, training of labor forces, etc. Leather Industry India's leather industry is export-oriented with more than 50% of its $ 7.5 bn output (201011) shipped overseas. It is labor-intensive, providing livelihood to 2.5 mn people - women constitute 30% of the workforce. The industry has grown at about 6% annually over the last five years, and contributes about 3% of leather import trade worldwide. Easy access to raw materials, labor intensity and the inherent small-scale, scattered nature of the industry all provide a strong base for the sector to grow and prosper in India. 102
  • 103. Impact of Technology Advances The leather manufacturing units across the country have been upgrading their technology, purchasing newer machines for cutting, molding, and other parts of the production process. These machines allow better production quantities, with consistent quality. An Indian Council for Research on International Economic Relations (ICRIER) Survey carried out in 2008-09 indicates that the man-to-machine ratio for surveyed firms was either declining, or increasing, or experiencing no change depending upon the sub-sectors studied. For leather goods, there was an increase in man-machine ratio, while leather footwear saw no significant change. Only leather garments saw a decline in the ratio, with modern machines assisting workers in designing, cutting and stitching garments. In the first two sectors, leather goods and footwear, there was growth in machinery, but it was outpaced or matched by demand-driven production growth and hence by employment growth. In other words, despite productivity increases driven by machines, employment continued to grow because of increased production. Gems & Jewelry The gems and jewelry industry employed an estimated 3.2 to 3.4 mn people directly in 2008-09. India is in fact the world's largest manufacturing center for cut and polished diamonds, contributing 60% of the world's supply by value and 85% by volume. Eleven out of every 12 diamonds set in jewelry worldwide are processed in India, according to India's Gem & Jewellery Export Promotion Council (GJEPC). India exported cut and polished diamonds worth US $18.24 billion in FY 2010, according to GJEPC data. The availability of low-cost skilled labor is one of the main factors behind India's dominance of this sector. It costs US$10 per carat in India to polish and cut diamonds, against China's US$17 and South Africa's US$40 to US$60. The large, skilled manpower pool, especially in Surat, Gujarat, is a major hub of the industry. Impact of Automation Indian artisans and entrepreneurs pioneered the manual cutting and polishing of small diamonds. In recent years, however, there has been significant adoption of new technology and sustained investment in equipment for modernization of cutting and polishing techniques. There has also been increased availability of rough diamonds, together with strong financial backing from the Indian banking industry. Today, Indian craftsmen are skilled at cutting all shapes and sizes of stones, from 0.001 carat to over 10 carats, and even at faceting colored diamonds. India offers by far the widest , the most diverse range of gems and jewelry--plain, diamond-studded or colored-stonestudded-suited for every market in the world. 103
  • 104. Mega Trends of the Emerging Third Industrial Revolution in India The high growth in this sector could not have happened without modern technology, which has replaced the need for human intervention in deciding how best to cut the rough stones and thereby extract the most value from every diamond. Today's machinery, much of it developed in Israel, automatically maps out the best cuts. However, the skilled labor in Surat and elsewhere is not only low cost but also flexible enough to adopt the new technology. An ICRIER survey in 2008-2009 found a wide contrast in the man-machine ratio between the diamond and gold jewelry segments. "The diamond industry has been adopting sophisticated machines (often laser-based) in each step of cutting and polishing. The newer and more advanced machines also need skilled workers to operate them, generating more employment and also increasing workforce efficiency. Diamond firms in Surat use global technology, and most of this has not been labor-displacing," says the ICRIER study. For gold jewelry, machine usage was almost zero as India still specializes in hand-made jewelry, crafted by workers using simple tools. The jewelry sector also thrives on domestic demand, and not just exports. Jewelry in India is bought primarily as an investment, rather than for adornment as fashion accessories. India has varied buying patterns and craft skill requirements across the country in the four zones. Diverse jewelry products require highly skilled labor for the final output. High-end jewelry is always handcrafted for its uniqueness, and considered a luxury item; the demand for customized jewelry items continues to grow. Thus, technology along with skilled labor will only enhance the production process, as demand continues to rise. Diamond manufacturing in India, on the other hand, entails a great deal of involvement by the family driving the business. The process requires extensive market intelligence and understanding of changing consumer trends. It is vital that subsequent generations are steeped in the skills and traditions on which the business has been built and operated. The entire workforce, from skilled artisans to managers to promoters, is the most important resource in this industry. India has retained its edge in the diamond cutting and polishing business over the past few decades because of deep-rooted production skills and skilled labor that are hard to replicate. Overall, the National Skill Development Council (NSDC) expects an incremental 4.6 mn human resource requirement till 2022 for the industry after accounting for losses due to automation and increased use of CAD/CAM (Computer Aided Design/Computer Aided Manufacturing) including 1.15 mn people for gemstones and related categories. 104
  • 105. Action required l Training, re-skilling of diamond polishers, in handling the sophisticated tools and devices for appraising and processing diamonds l Facilitating gold and silver jewelry craftsmen to transfer their high level of traditional craft to the next generation l Education of the next generation in associated areas: industrial diamonds and tools, design of automation tools jewelry manufacturing, l Exploration of next-generation applications for future advanced use of diamonds as synthetic diamonds become more commonplace Opportunities India is set to continue its growth as a manufacturing center. According to a KPMG analysis, India will have a 49.3% share of the world diamond roughs for processing in value terms in 2015; China will have a 21.3% share; Russia 7.1%; South Africa 5.5%; Israel 4.7%; and the US 1.4%. The design of automation and processing tools, systems and technologies as well as consultancy in deployment and use of automation tools are some of the additional opportunities that can be explored in the next few decades. Agriculture The agriculture sector plays a major role in the Indian economy, with more than 60 per cent of the population directly or indirectly dependent on it. To meet future demand and to ensure the nutritional security of the rising population, several innovations and technologies are being infused at every stage of the "farm to fork" chain. One mega-trend being witnessed is the use of information and technology in various parts of the value chain. The agriculture sector is at the threshold of realizing incredible benefits from ICT applications. For instance, the next generation of seed innovations, which will be necessary to double yields by 2030, will depend on how effectively data can be collected and analyzed to make decisions for the R&D pipeline and farm. Such efforts to plug information gaps are being made worldwide in every related field of agriculture be it biotechnology, mechanization, food safety, multi-scale sensing, market information, weather forecasting, etc. Impact of ICT The application of ICT in Indian agriculture is all the more important as there are huge information gaps between the supply and demand sides. The entire agriculture value chain from "farm to fork" is in dire need of information at every 105
  • 106. Mega Trends of the Emerging Third Industrial Revolution in India stage: prices, weather, market, post-harvest technology, etc. To cope with such challenges, new models with a focus on improving agriculture via technology transfer are emerging. As a result, information "generation" as well as information "dissemination" has become a core component of the agriculture strategy of the country. The private sector is playing a key role in filling knowledge gaps, through various ICT models in agriculture (Table 1). Some successful private-sector efforts in extending ICT services to Indian farmers reflects their increasing acceptance of ICT. Table 1 - ICT Models for Agriculture in India Type of initiative Company Key features Information services Agriwatch, Commodity India, Reuters Market Light Provide data on prices, commodities, weather information Private and cooperative sector transaction related initiatives ITC e choupal, EID Parry's Kendra corner, NDDB, Tata Kisan (Tata chemicals), Mahindra Shublabh services, National Spot Exchange Limited Knowledge dissemination and training , procurement ERP Knowledge networks ISAP, Harit Gyan (part of Jaiprakash Industries ) Problem-solving, advisory services, technical information services Rural connectivity and allied services Drishtee, N lounge Technology back-end, services in collaboration with other categories Multiple rural services education, Gyandoot (NGO) Agricultural, rural health, e-governance ICT intervention in agriculture has focused upon connecting the farmer to the market and thus could alter the role of intermediaries in the chain, however, the scale and diversity of Indian agriculture makes it a perfect laboratory to examine innovations in information technology. This is more so given the extensive land mass and population of the country. While the role of intermediaries would be reduced in the long run, there is already a new class of agri-extension professionals who would help in rolling out the ICT chain. In the present context, Indian agriculture is more supply driven and hence, results in situations of market glut. Limited market options, especially due to prevailing archaic APMC regulations force farmers into distress sales. This scenario could be completely reversed if the future price information captured from commodity exchanges could be relayed to farmers and aid them in decisions related to crop planting/sowing. While ICT has made inroads in the form of electronic trading platforms, spot exchanges and mobile telephony, the benefits are still to be seen in the entire value chain. A robust eplatform with minimal intermediary interests can change the face of our villages, and achieve food security at the same time. Given the complexities involved in terms of diversity of educational status and terrain, models that work in Indian conditions could be easily replicated in most parts of the world. 106
  • 107. Action required To achieve the above we need skilling and re-skilling programs accessible to the rural population, through the application of ICT and online education systems. This will enable farmers and others to take advantage of the widening ICT reach in agriculture. Government agencies should help in the mapping of new and existing skills scientifically. In summary, this is a sector where employment could be significantly enhanced and driven up the value chain, by the appropriate use of technology, supported by education. Opportunities l Plant Genetics (bio-informatics) l Agriculture knowledge dissemination l agriculture (efficient utilization of inputs) Precision l information Market l Food safety l Warehousing and Logistics l Farm machinery l Food processing l forecasting and dissemination Weather l support systems Decision l intelligence Market l Public distribution system l water management Soil and l and sorting Grading l Packaging l Cold chains Healthcare In manufacturing, the Third Industrial Revolution is driving a shift away from blue-collar workforces churning out products en masse on assembly lines. Similar trends and forces will alter our service sectors, and especially the healthcare sector. 107
  • 108. Mega Trends of the Emerging Third Industrial Revolution in India With the advent of smart technologies and internet-enabled communication, healthcare delivery will change drastically in the days to come. New-age technologies and applications of e-health encompassing tele-medicine and mobile health raise hopes of taking healthcare services to the remotest and the most underprivileged sections of society that have been untouched by physical infrastructure in the past decades. The global market for e-health services is estimated at about $1.25 trillion. Outsourcing contributed $24 bn in 2008 and provided employment to a fifth of a million people in 2008. Most of this was medical transcription, telepathology and telediagnostic services. More services are being added to the list, as technology figures out ways to eliminate the need for physical on-site presence. The service pipeline has now extended from customer interaction centers to medical transcription, allied services like financial and accounting services, billing, claims processing and geographic information systems. Also, e-health transactions are now progressing to synchronized forms (two way real-time interactions between business-customer/business-business) from the asynchronized forms earlier. The Indian market for e-health has also grown considerably. Employment in activities providing health services via ICT increased from 30,551 in 2000 to 242,500 in 2005, and revenues from such activities rose from US $264 million to US $4 billion during the same period. India exports around $200 million worth of e-health services, providing employment to 25,000 persons. Impact of ICT Infrastructure and Smart Technologies Mobile penetration has also opened a host of emerging opportunities. The Polio awareness campaign in India which has been supported by mobile operators is a very good example of how awareness can help eradicate a dreaded disease like polio. SMS messages are sent out to millions of people for awareness, medicine reminder services, remote consultation and monitoring. A disposable micro-fluidic chip linked to mobile phones can even offer diagnostic services like blood sampling, which when combined with remote consultation, can be an instrument for major transformation. Similarly, portable medical technology innovations, such as Philips laptop-sized portable ultrasound machine, can change the shape of healthcare. Current impediments in e-health growth in India, such as broadband penetration, bandwidth and legal issues are not insurmountable, and can be dealt with through pragmatic government intervention. 108
  • 109. Biosense Technologies has developed a finger probe (ToucHb) that can provide information on hemoglobin content in circulating blood almost instantaneously and non-invasively. It does not require any special skill to operate, so the doorstep health worker (ASHA) gets an objective result to help take an important therapeutic decision. There are no recurrent costs (needles, use of special lancets, micro-cuvettes, blotting paper etc.) other than the batteries that can be recharged (for over 100 tests on a charge). “No Touch Breast Scan”, developed by the University of Drexel, is a non invasive breast cancer screening technology using infrared thermo grams to evaluate early-stage breast cancers. The device is portable, simple and integrated. Positioning this technology against mammography as a solution for screening of breast cancer in rural areas improves the ability to screen women on a very large scale. Computerization of Mother and Child Tracking system (e MAMTA) – A Case Study The Government of India's nascent programme to curb maternal and infant mortality, emamta, aims to improve current services related to maternal and infant illnesses. The program will use an online tracking system to monitor the health of pregnant females and infants with instantaneous capabilities to document adverse health events. Gujarat will probably be the first state to implement e-Mamta. The state government has provided a computer with internet connectivity to each of its Primary Health Centres (PHC1). The local health worker (ASHA) will gather information about the residents in her designated area and identify the target population of pregnant females and infants. This information is then conveyed to the local PHC, enabling the data to be entered and stored in the online tracking system. These pregnant women are then tracked and followed for the outcomes mentioned below. Once a week, usually Wednesdays, (the so-called "Mamta Divas,") pregnant females and mothers with infants come to the health center for their weekly health check. This program is novel in its approach to reduce MMR/IMR as it uses technology and broadband connectivity to organize for detailed organization and rapid dissemination of healthcare information. It has tremendous potential to revolutionize the healthcare of pregnant women and children residing in impoverished settings, in a cost-effective manner. 1 A PHC is a referral unit for six sub-centers. 109
  • 110. Mega Trends of the Emerging Third Industrial Revolution in India Further technology advancements will also create new professions. In addition to traditional doctors and nurses, developing economies need skilled technicians who are well-versed in managing and supporting new medical tools and devices. Beyond doctors and nurses, India needs to map the need for skilled manpower for paramedics, technicians and assistants. The rapid growth of the healthcare industry and particularly the e-health and tele-medicine areas will require such HR training on a large scale. Anticipating this, the FICCI Health Services Committee has created a Task Force to focus on identifying areas of skill shortages and skill gaps, and suggesting academic and training programs and related curricula based on the competencies required by the industry. Conclusion The Government of India maintains a list of Modular Employer Skills (MES) Courses approved by the National Council for Vocational Training. Sector Skill Councils are being set up to take forward the National Vocational Education Qualification Framework to create National Occupational Standards (NOS), which will be industry-endorsed. FICCI is involved actively in setting up several sector skill councils. The use of ICT will be a critical component to implement the NOS and reach out to the masses. Cyber Media has initiated a research study in collaboration with researchers in the universities of Maryland and Richmond (Annexure- 1) to validate a model that identifies the occupations in technology and BPO industry that are susceptible to displacement by intelligent technologies, i.e. which are likely to be replaced partly or totally by such technologies, starting with the ICT sectors. FICCI will consider compiling such a list of standard occupations in other sectors, to support Indian industry and government. It is clear that the strategic value of ICT is high for the Indian economy, well beyond the 8% of GDP that is its direct contribution. The shift from a semi-skilled workforce to a more sophisticated workforce equipped with smart technology systems will lead to shrinking employment in specific sectors. The distributed and collaborative nature of the coming tide also means that business models will be more community-centric, and civil society will become a significant employer. 110
  • 111. The models that might emerge are still unclear. But relationships, rather than institutional mechanisms, might guide service delivery. A new generation of people with the internet at their disposal from their infancy could develop new open source platforms for seamless delivery, rather than look at engaging with the formal sector. This would be guided by the quest for and the need to contribute to the community to optimize the value of the group as a whole, as well as its individual members. Industry associations, through their close connections with the changing dynamics of various sectors, are critical and could act as change agents to adapt to the future. Yet the task now would not just be lobbying for incentives and favorable policies, but to facilitate the coming change seamlessly. We have witnessed the effect of disruptive change in the past when the first industrial revolution led to the eclipse of India and the rise of Europe. With its vibrant democracy and strong institutions, the new India is in a much better position to usher in change this time, and could regain its past glory if people at the helm are able to act swiftly and purposefully. FICCI with its old traditions and value systems and new focus would definitely play a significant role. Prasanto Kumar Roy, President and Chief Editor Cyber Media Publications 111
  • 112. Mega Trends of the Emerging Third Industrial Revolution in India Acknowledgement This paper would not have been possible without critical inputs provided by FICCI and my friend Deep Kalra (MakeMy Trip). Deep and I would specially like to thank Shobha Mishra Ghosh and her colleague Sidharth Sonawat for significant contributions. FICCI also thanks its team leads-Sarika Gulyani (IT-Telecom), S Baskar Reddy (Agriculture) and Chetan Bijesure (Manufacturing) for their support. References: “Labour l Intensity & Employment Potential of Indian Manufacturing” by ICRIER submitted to NMCC Department of Industrial Policy and Promotion, Government of India l Human l Resource and Skill Requirements in the Gems & Jewellery Sector (2022)National skill Development Council “Draft l National Policy on Information Technology” Department of Information Technology, Government of India, October 2011 “Prospects l for Telemedicine Trade between India and the UK ”, by Roopa Purushothanam Gem & l Jewellery Export Promotion Council Reports Ministry l of Textiles Data Inputs l by FICCI Agriculture Committee Excerpts l from FICCI HEAL 2011 Conference FICCI Health and Agriculture Research l 112
  • 113. Appendices Annexure - 1 Research Project The Future of Work: The Impact of Automation CyberMedia has initiated a joint study with Professor Sunil Mithas, of the University of Maryland's Robert H Smith School of Business, and his co-author Prof Jonathan Whitaker at the University of Richmond, to develop a model for analysis of occupations based on their likelihood of displacement by intelligent technologies. Earlier, Professors Mithas and Whitaker studied US occupations that were most likely to get "geographically disaggregated" (outsourced and offshored) [Mithas and Whitaker 2007]. Their 2007 study and research paper established that information-intensive occupations that fulfilled specific criteria - they were codifiable, standardizable, modularizable; required physical presence; did not require much customer contact - were the most susceptible to outsourcing and offshoring. The 2012 study, being initiated as an extension of the FICCI FYL Megatrends 2020 project Future of Work sub-committee - will test the intuitive premise that such occupations are also strong candidates for automation. Research Objective The purpose of this research is to develop a deeper understanding of the sequence in which occupations are first outsourced and offshored and then automated. The researchers will develop a generalizable framework that can be used to map the evolution of occupational shifts and attendant needs for skills and competencies in an economy. While prior research already establishes a model to identify occupations susceptible to outsourcing/offshoring, the new premise--that such jobs are also most amenable to automation--will be tested by this proposed research. If the premise is found to be valid, this would establish a sequence for occupations that fit the model: Onsite Outsourced offshore Automated Summary of Prior Research Which service occupations are the most susceptible to global disaggregation? What are the factors and mechanisms that make service occupations amenable to global disaggregation? The 2007 research study by Sunil Mithas (Maryland) and Jonathan Whitaker (Richmond), published in their paper "Is the World Flat or Spiky: Information Intensity, Skills, and Global Service Disaggregation", addresses these questions. Mithas and Whitaker argue that high information intensity makes an occupation more amenable for disaggregation because the activities in such occupations can be codified, standardized, and modularized. They also empirically validate their theoretical model 113
  • 114. Mega Trends of the Emerging Third Industrial Revolution in India using data on more than 300 service occupations in the US. Findings indicate that at the mean level of skill, the information intensity of an occupation is positively associated with the disaggregation potential of that occupation, and the effect of information intensity on disaggregation potential is mediated by the modularizability of an occupation. They also study the patterns in U.S. employment and salary growth from 2000 to 2004. Contrary to popular perception, they do not find any adverse effect in terms of employment growth or salary growth for high-information-intensity occupations at the mean level of skill. Overall, the results imply that firms and managers need to consider the modularizability of occupations as they reallocate global resources to pursue cost and innovation opportunities. For individual workers, the results highlight the importance of continuous investments in human capital and skill acquisition because high-informationintensity and high-skill occupations appear to be relatively less vulnerable to global disaggregation. Table 2 shows representative types of occupations based on information intensity and physical presence need of occupations. Table 2. Selected Representative Occupations at Each Level of Information Intensity and Physical Presence Need 3 Construction manager Physical therapist Executive secretary College professor Registered nurse Air traffic controller Legislator 27 85 Office clerk Retail salesperson Real estate broker Mechanical engineer 3 38 10 Word processor Accountant Computer programmer Data entry keyer 0 2 92 1 2 Mail carrier Janitor Waiter Home health aid 75 Need for Physical Presence 2 3 1 Information Intensity Notes: The number in the lower-right-hand corner of each cell represents the number of occupations in the data set that feature each combination of information intensity and the need for physical presence. The total number of occupations is 332. The table does not include occupations that Apte and Mason (1995) classified as "all other" or occupations that were not included in the 1999 SOC codes. 114
  • 115. Methodology and Data Needs We intend to collect data through interviews and questionnaire from IT and BPO companies in India on IT- and BPO-related occupations to understand the likely trends in jobs, wages and skill needs of these occupations. We will begin with a list of occupations derived from the Occupational Employment Survey in the US (see Table 2.2) and modify and expand the list based on the Indian context and recent industry developments. Table 2.2. Occupational Employment Survey (OES) Codes for IT Related Occupations in the United States OES Code OES Occupation 11-3021.00 Computer and Information Systems Managers 15-1021.00 Computer Programmers 15-1031.00 Computer Software Engineers, Applications 15-1032.00 Computer Software Engineers, Systems Software 15-1041.00 Computer Support Specialists 15-1051.00 Computer Systems Analysts 15-1061.00 Database Administrators 15-1071.00 Network and Computer Systems Administrators 15-1071.01 Computer Security Specialists 15-1081.00 Network Systems and Data Communications Analysts 15-1099.99 Computer Specialists, All Other 17-2061.00 Computer Hardware Engineers 43-9011.00 Computer Operators 43-9021.00 Data Entry Keyers Notes: The Bureau of Labor Statistics (BLS) is in process of developing the following new OES codes: 15-1011.00 (Computer and Information Scientists, Research), 15-1099.01 (Software Quality Assurance Engineers and Testers), 15-1099.02 (Computer Systems Engineers/Architects), 15-1099.03 (Network Designers), 15-1099.04 (Web Developers), 15-1099.05 (Web Administrators). Deliverables It is expected that this research will result in academic publications and white papers to inform research, policies and managerial interventions to prepare Indian IT and BPO industry leaders for anticipated changes in the global economy. Reference: Mithas, S., and Whitaker, J. "Is the World Flat or Spiky? Information Intensity, Skills and Global Service Disaggregation," Information Systems Research (18:3) 2007, pp 237-259. 115
  • 116. Mega Trends of the Emerging Third Industrial Revolution in India Annexure - 2 Indian ICT Revenues Revenues $bn Growth FY11 FY '10-11 FY '09-10 USD INR IT/BPO exports 63.9 52.6 21% 17% IT/BPO domestic 32.2 25.5 26% 23% 1 96.1 78.1 23% 19% IT total Telecom equipment 25.6 28.8 -11% 0.9% Telecom services 36.2 33.5 8% 15% 61.8 62.3 -1% -4.8% 13.5 11.3 19% 15% 144.4 129.1 12% 9% 1,538.0 1,390.0 10.6% 6% 9.4% 9.3% 45.63 47.60 Telecom total 2 [Less] Overlaps 3 ICT total India's GDP ICT % of GDP 4 USD 1 = INR (average) Source: CyberMedia Publications: Dataquest Top 20 2011 (IT); Voice&Data V&D100 2011 (Telecom) 1. The Indian IT industry, totaling $96 bn in 2010-11, is about two-thirds exports, mainly services (both IT and BPO). 2. The telecom industry is mostly domestic, broken up into equipment and services. 3. Some components are included both in IT and in telecom: such as telecom software development and support (mostly export-oriented) . These areas of overlap have been listed as "Overlaps" and removed from the ICT total, to eliminate double-counting. 4. Important: ICT as % of GDP is an indicative figure, as a rough comparison. The correct statement would be: Indian ICT is the equivalent of 9.4% of India's GDP. This is not the same as saying that ICT contributes 9.4% to India's GDP. The reason for that is about 20% to 25% of the IT services exports is on-site and therefore billed and delivered abroad. This portion should be removed from GDP by definition. (e.g. We have included the total revenues of Infosys and TCS, while actually we should remove the component billed offshore/onsite, when computing GDP). Adjusting for this factor, ICT becomes approximately 8.3% to 8.6% of GDP (the exact portion of IT exports revenues that is billed abroad is not known). Note 1: The Indian Rupee (INR) fell 4% on average in FY 2010-11 compared with the year before, resulting in significant difference in growth figures in INR and in USD. Both USD and INR growth has been shown. Note 2: There are some differences between Dataquest/CyberMedia data and Nasscom data. Nasscom estimates the IT industry in FY 2010-11 at $88 bn, vs $96 bn (Dataquest, CyberMedia), and the Nasscom estimate for domestic revenues is 29 bn (Dataquest: $32 bn). The main reason is differences in tracking and inclusions. For example, Dataquest includes in IT: digital cameras, smartphones (not basic or feature-phones) and other IT components such as flash memory cards, while Nasscom does not count these areas under "IT". Source: Dataquest Top 20, July 2011 ; Voice&Data V&100, June and July 2011. 116
  • 117. Mega Trend 4 Collaborative Education
  • 118. Collaborative Education Global Scenario Jeremy Rifkin Preparing the workforce and citizenry for the new society will require rethinking the traditional educational model, with its emphasis on rigid instruction, memorization of facts, reductionist thinking and autonomous learning. In the new globally connected Third Industrial Revolution era, the primary mission of education is to prepare students to think and act as part of a shared biosphere. In schools all over the world, teachers are instructing students, from the earliest ages, that they are an intimate part of the workings of the biosphere and that every activity they engage in -the food they eat, the clothes they wear, the car their family drives, the electricity they use - leaves an ecological footprint that affects the well-being of other human beings and other creatures on earth. A new generation of educators is beginning to deconstruct the classroom learning processes that accompanied the First and Second Industrial Revolutions and is reconstituting the educational experience along lines designed to encourage an extended ecological self, imbued with biosphere consciousness. The dominant top-down approach to teaching, the aim of which is to create a competitive, autonomous being, is beginning to give away to a "distributed and collaborative" educational experience with an eye to instilling a sense of the shared nature of knowledge. Intelligence, in the new way of thinking, is not something one inherits or a resource one accumulates but, rather, a shared experience distributed among people. New lateral learning environments, including virtual global classrooms and service learning in the community, break through the conventional classroom walls, making education a more expansive and inclusive experience. Peer-to-peer learning compliments the traditional, authoritarian model of teaching, by emphasizing students' responsibility to also learn from and teach each other in structured cohort groups. Interdisciplinary learning, multicultural studies, empathic scientific experimentation, and a systems approach to integrating knowledge, are among the cutting-edge teaching practices that are forcing a fundamental change in the educational process and preparing students to live in a complex, multidimensional, global society. The new distributed and collaborative approach to learning mirrors the way a younger generation learns and shares information, ideas, and experiences on the Internet in "open source" learning spaces and social media sites. Distributed and collaborative learning also prepares the workforce of the 21st Century for a Third Industrial Revolution economy that operates on the same set of principles. 119
  • 119. Mega Trends of the Emerging Third Industrial Revolution in India The India Story Nitin P Khanna The purpose of education is to anticipate the future and prepare the generations for it, today. However, in a scenario where the future may not be a mere extrapolation of the past, there is a strong need for the education itself to be fundamentally transformed. The focus of this paper, therefore, is to evolve a preliminary model framework to examine how our education system can be transformed to align itself to the emergent global paradigms… Introduction: The World Order Changeth! Werner Heisenberg, the renowned quantum physicist remarked on his famous discovery, the Uncertainty Principle in 1927: "The more precisely the POSITION is determined, the less precisely The MOMENTUM is known" The discovery not only gave birth to Quantum Mechanics, but also had far reaching philosophical implications. It suggested that, at some quantum level, there is no such thing as objectivity because who sees and how he sees alters the picture. The seer, the seeing and the seen therefore, as per Heisenberg, lost their distinctions and fused into each other, an idea which the Zen Buddhists, the Taoists or the Advait Vedantists may each claim as their own! In any case, more importantly to our context, it perhaps heralded a beginning of the end of the 'Age of Enlightenment' (total objectivism, rationalism and reason) in Western thought and academics. Some 80 years after Heisenberg made his discovery, the full implications of the Uncertainty Principle are becoming increasingly evident in the physical, political and social spaces. A very simple yet startling interpretation could be that the more steadfastly we hold on to past established positions, the more confused and unsure we will be about future journeys. Isaac Asimov, famous science fiction writer, appropriately said "The only constant is change, continuing change, inevitable change that is the dominant factor in society today. No sensible decision can be made any longer without taking into account not only the world as it is, but the world as it will be." The world has witnessed more change, both in terms of quantum and speed, in the last twenty years than, perhaps, in any corresponding period in the history of mankind. 120
  • 120. The advent of the Internet combined with a convergence of various communication technologies has fundamentally transformed the way we think, live, work and play. It would seem that with the lines blurring between reality and imagination, body and mind, science and humanities, thought and action, the economy and the environment, individual and society, government and people, the rules of the game are changing and what we are witnessing is a watershed moment in human development. And this is just the beginning. More is happening at the level of technology and human consciousness. External manifestations of this change are to be witnessed everywhere. Ever larger numbers of people across conventional divides of age, sex, color, ethnicity, etc. are coming together and rejecting the prevailing social, economic, political and moral order. Global developments in the USA, Europe, the Middle East, Thailand and even India are testimony to this. The same pattern reflects itself at a micro level in the breakup of family systems and other conventional communities to be replaced by social networks and cyber kinships. At the same time the tumultuous events of the past 10 years and pressing global issues such as global warming, poverty, terrorism, economic meltdowns and political crises are gaining space in the human consciousness. All these problems are inter-related and systemic where causes and solutions are not possible within artificial and narrow boundaries. For example, terrorism may have roots in poverty which could be a function of certain global trade practices. Similarly, industrial practices in one part of the world can cause climatic changes which can cause floods and famines and destroy traditional ways of life in another part of the world. Our repeated inability to find lasting solutions to these problems underscores the need for a new world order. We are living in a time of great paradoxes; opportunities are being counterbalanced with threats. To negotiate our thoughts and actions we require to question the assumptions of the past; to avail of the possibilities the future holds it is imperative that we disengage and release ourselves from the clutches of our past. We require a systems (holistic or interdependent) thinking rather than a reductionist thinking which has been the hallmark of the Enlightenment era and underscores all our education and conditioning. The purpose of education in spirit is to anticipate the future and prepare the generations for it, today. It is the chief goal of education to transform human thought and action, and align it with the reality of the future. It is in this sense that education is both driven by the demands of society and, in turn, powerfully drives the successes of the future. It is systemically interconnected with other paradigms and can neither be clearly analyzed nor planned in isolation without an understanding of the universe surrounding it. 121
  • 121. Mega Trends of the Emerging Third Industrial Revolution in India New Paradigms History suggests that the great economic transformations occur when new communication technology converges with new energy systems. Looking around us, it is quite evident that a new convergence of communication and energy is taking place. The Internet revolution and renewable energies are about to merge to create a powerful new infrastructure for a Third Industrial Revolution (TIR), which is changing the world. The TIR outlines five pillars, which will support the new infrastructure of the future and transform human experience in all its dimensions. These pillars are: l Renewable and green energies like solar, hydro, wind, geothermal and biomass that can be generated locally in homes, offices, and factories. l Transforming the building stock of every continent into micro-power plants to collect renewable energies on-site. l Deploying hydrogen and other storage technologies in every building to store these intermittent energies. l Internet technology to transform the power grid in every continent into an Using energy internet, allowing millions of buildings and other sites to generate their own green energy, and sell their surplus electricity to the inter-grid and share it with their neighbors. l Transforming the transport fleet to electric plug-in and fuel cell vehicles that can buy and sell electricity on the go on a smart, continental, interactive power grid. It is easy to see that each of these pillars is related to the others, is futuristic and will prove to be completely transformative. It has been suggested that the integration and harmonization of these 5 pillars at every level and stage of development, would no doubt have dramatic consequences for the economy and society. The TIR and its 5 pillars are essentially a journey into the future, a journey that marks a complete departure from the past. At any rate, our industrial civilization is currently at a point of inflection. The way we view our resources, the possibilities emerging from new technological and energy developments, and the requirements of the future can all be seen as a new interconnected system or a future reality we have the chance to build. At the same time, a new pattern of human consciousness reflected both in the ascendance of civil society, as well as in the increasing success of people-oriented (in contrast to objective-oriented) practices in business and industry is emerging. The ideas that emerged as a combination of the intellectual thinking of the age of enlightenment and the industrial age are not always relevant to the problems of today. The age of enlightenment, which called for reason as the primary tool for reform and hinged on reductionist, linear and convergent approaches, does not seem to be rendering viable solutions to today's realities. Concurrently the TIR is transforming fundamentals of our environment and surroundings. 122
  • 122. What will be the broad TIR implications of these changes for people, societies and organizations? What about changes in human and social dimensions which must ensue in line with the above implications? Below are some of the foreseeable trends: l is power in our world and the countries and people who control the supply of Energy energy (petroleum, other fossil fuels) have immense power. The fact that people, organizations and societies will become more and more energy (green, renewable) self-reliant will lead to a democratization of power with a major impact on economic and geo-political equations. l Combined with the above, free, open, lateral, accessible and real-time communications across the internet will hit at the other fundamental of 'information is power'. Everyone will be more empowered and equal, challenging social hierarchies and class divides as we know them. l will travel less for work and more for leisure and fun. They will choose to live People close to nature as there will be less need for everyone to rush to cities causing huge demographic shifts and a more even spread of economic activities. l People will feel more and more connected to the environment around them and become conscious of their close, inter-dependent relationships. Conspicuous consumption will give way to value creation even as pursuits and businesses related to entertainment, arts and spirituality will grow. This has fundamental implications on how we think about education, our objectives and how we seek to achieve them. However, our investment in the past is overwhelming and we are somewhat hindered by the fact that the entire industrial infrastructure created on the back of fossil fuels delivered major successes in the last hundred years. Ironically, this makes it difficult for us to recognize the new paradigm and act accordingly. To change what failed is easy but to change what succeeded is extremely difficult. The government of India, as is the case with several other countries, is still not thinking strategically about using these renewable energies. In a sign of hope, recently, there was a suggestion that the Reserve Bank of India (RBI) should create a separate window for financing renewable energy projects. Specifically the suggestion was made that because large funds were required from banks and financial institutions to achieve the right energy mix to meet the ever growing energy needs of the country, RBI should create a separate window to finance solar and other renewable energy projects. However, concrete action based on this suggestion is yet to take place. Whatever we eventually resolve, the fact remains that we can either pay heed to the TIR proposals and embrace the future with all its exciting possibilities, or we can turn our backs, hold on to the past and face the consequences. The choice, if there should be one, is entirely ours to make. Education will play a significant role as the enable for this transition. 123
  • 123. Mega Trends of the Emerging Third Industrial Revolution in India Context Before we dwell on the future of education, given the changing paradigms as discussed above and the role of education as an enabler, let us briefly review the state of education in India over the years. Ancient Indian Education System India has a long history and tradition of organized learning from school education in 'Gurukuls' to higher education centers starting from ancient times. In the past, only students belonging to the Brahmin and Kshatriya communities were taught in Gurukuls. With the advent of Buddhism and Jainism, however, access to education developed a more secular and democratic component. The first millennium and the few centuries preceding it saw the flourishing of higher education at Nalanda, Takshila, Ujjain, & Vikramshila Universities. Art, Architecture, Painting, Logic, Grammar, Philosophy, Astronomy, Mathematics, Literature, Buddhism, Hinduism, Arthashastra (Economics & Politics), Law, and Medicine were among the subjects taught. According to ancient Indian traditions, teachers were the most revered people in society and the 'guru' was worshipped only next to God. 'Vidya Sa Vimuktaye' (education gives freedom) and 'Vidya Dadhati Vinayam' (education begets humility) are integral ideas in India's value system. Furthermore, examples abound of the depth of epistemological and dialectic work in India. The fine distinctions between 'gyan, vigyan and agyan' (knowledge, science and ignorance) or between 'tark, vitark and kutark' (argument, counter argument and bad argument) which have been laid down in amazing detail provide clear instructions on dialogue and discourse as well as the classification of knowledge itself based on philosophical, social, ethical and practical considerations. These and other core ideas were reflected in the Indian education system until the 18th century and elements of it have endured to this day. Some of the key features of the Gurukul system are strikingly in line with the latest post modern thoughts in education worldwide. Some of these features are: A. The focus of education was holistic; it covered spiritual, ethical, social and vocational needs. B. There were no fixed syllabi and education was customized to every student's needs and interests. 124
  • 124. C. The role of the teacher was that of a guide and mentor. The teacher shared a very personal and emotional bond with each of his students. This bond set the context in which transfer of learning took place. D. Teaching was organized around experiential learning, practice and enquiry and was not passively instructional. E. The life of a student was well integrated with the community and the education addressed itself to local questions and problems. For example, Ramayana narrates the incident where Ram fought and defeated 'rakshasas' while he was still a student at his guru's ashram, when the local community of hermits complained. F. Progress of each student was closely monitored by the teacher who provided specific feedback and developmental support. However, there were no formal examinations or certification. The Islamic invasions of India added another dimension to education with the introduction of Matkabas (primary education) and Madrasas (high school). By the time the British established their rule, India's education system, much like its society, had developed a multi-faceted network. Education In British India: Macaulay's Minute and the Colonial Hangover The current system of education, with its western style and content, was introduced and funded by the British in the 19th century, following recommendations by Macaulay in 1835, popularly known as Macaulay's Minute on Indian Education. Traditional structures were not recognized by the British Government thereafter and have been on the decline ever since. Scholarly debate continues to focus on the impact of the British education model which came at the cost of indigenous models. Macaulay's historic 'vision' was implemented by the British and remains a basic element of our education system even though independence has been achieved and the British have departed. Many thinkers have commented on education in India in the backdrop of colonial rule. Swami Vivekananda, Shri Aurobindo, Tagore and even Mahatma Gandhi developed ideas of education as a tool to uplift society and build a common consciousness. They sought to return to Indian traditions in different ways and amalgamate concepts from both Western and Eastern streams of thought to build effective systems of learning and education. 125
  • 125. Mega Trends of the Emerging Third Industrial Revolution in India Indian Education System after 1947: India's Education system in the post independence era went through various milestones, a few of which are listed below. This is not intended to be an exhaustive list but is intended to provide a context to our modern system by tracing the general trend of development. Dr. Radhakrishnan Report, 1949 http://education.nic.in/cd50years/n/75/7Y/757Y0101.htm This proposed a distinction between facts (nature), events (society) and values (spirit), which in turn would be the subject matter of the sciences, social sciences and humanities respectively. This model of disciplinary compartmentalization has been a basic tenet of senior secondary and higher education in India. In some ways, it has been no mean achievement on the part of Cultural Studies in India to have negotiated and attempted integration across this division. Kothari Commission Report (KCR), 1964-66 http://www.education.nic.in/cd50years/g/W/16/0W160401.htm The KCR stated the need for a drastic reconstruction of education and made recommendations along the following lines: Internal v transformation Qualitative improvement v Expansion of educational facilities v The Policy Resolution, following the submission of the report, was adopted in 1968, at the time when the economic crisis arising out of the capitalist path of development was finding sharp political expression. The Education Policy Resolution of 1968 in fact was not representative of the overall recommendations of the Kothari Commission. The government selected the following six recommendations of the Commission and intensive efforts were made to implement them. Use of vregional language as medium of instruction at the university stage. Non-formal education. v Education for the people i.e., Elementary and Adult Education. v The Common School System. v 10+2+3 v Pattern. Teacher's v salaries. 126
  • 126. In retrospect, the real impact of these policies was much larger than was originally anticipated in 1968, the reasons for which are outside the scope of this paper. In 1986, a revised education policy - The New Education Policy - was ushered in and with it came the focus on vocational education, and the recommendation to develop autonomous colleges and do away with the affiliation system. Current and Emergent Situation India has seen rapid economic growth in the last two decades. However, as many would argue, India is starkly divided between the haves and have nots. The middle and upper middle classes with their new economic freedoms and modern western worldview are more aligned to and subsumed in the pot-purée of globalization. At the same time, the bulk of the population remains excluded from the benefits of rapid economic growth. Consequently, the country continues to experience extreme poverty, marginalization, hunger and deprivation much of which is to be found in rural areas, among tribal people, in dalit and Muslim neighborhoods. New forms of social exclusion, urban poverty, environmental degradation, conflict and violence have also emerged in the past decade. Broadly, there are two emerging and simultaneous trends: 1. The socio-cultural idiom in India is shifting from caste and religion to issues of development and equity. People clamor for a minimum quality of life and a basic level of opportunities. This could be the reason why India has not witnessed communal flare-ups even after events as serious as the 26/11 Mumbai terror attacks or the Ram Janmabhumi-Babri Masjid judgments. Most agitations have been about developmental and inclusive growth issues, such as land acquisition, the building of nuclear plants or other environmental threats which are expected to displace people and endanger their way of life. Even the Naxal question, many would argue, is essentially a developmental question. 2. Over the last decade and especially after the economic crisis of 2008, markets, jobs and enterprises are shifting to the east, opening huge opportunities for India to leverage its 'demographic dividend'. India's businessmen and industrialists are beginning to recognize that the economic equations are changing, exclusion is not tenable and that fortunes can be made by targeting the 'bottom of the pyramid, a philosophy well propounded by C. K. Prahalad. The realization is sinking in that growth may well be symbiotic to aligning the rural poor with the economic process both as a contributor (skilled work-force) and as a consumer. Inclusive growth, hence, is no longer a nice ringing ideal but an imperative for sustainable growth. It is also being widely acknowledged that inclusive growth needs inclusive education and that India's education generally has not been inclusive. It follows firm 127
  • 127. Mega Trends of the Emerging Third Industrial Revolution in India structures and rigid qualifications which exclude rather than include. India's education system is exclusive because: l it expects people to come to it rather than reaching out to them where ever they are geographically, socially, demographically - which is a discriminatory factor in a country like ours; l of endorsing a man's capabilities and contributing to his success and growth, instead it acts as a label or an entry ticket to where he can and cannot reach in his life. It's a modern day caste system not much different from the age old scourge in its suffocating rigidity; l self serving snobbery it assumes that education = intelligence = creating in its 'value', an utterly questionable notion since idiots, incompetents, bigots and charlatans are found, perhaps, equally on both sides of the educational divide! Given the emergent context and rapidly changing realities as discussed in previous sections, it is felt that all this needs to change. Recent developments, such as the Right to Education Act & Sarva Shiksha Abhiyan (the free and compulsory education to all kids between 6-14 years of age has finally been legislated in the Right To Education (RTE) Act, 2009 and is being implemented through its flagship program Sarva Shiksha Abhiyan); the National Skills Development Mission (which promotes skill development through large, quality, for-profit vocational institutions through a public-private partnership model) ; and various initiatives in higher education have sought to increase the impact and effectiveness of education as a whole. At the same time, India has seen the entry of the private sector in education at all levels of education. Government policy has adopted various approaches to regulate, limit and at times encourage their involvement. It is expected that the enhanced investment on education (public and private) will lead to wider penetration, increased enrolment and better quality. All in all, the current situation on education in India can be described as quite challenging with multi-layered, scattered or even confused and disjointed conversations abounding in terms of: n affordability and quality Access, n Objectives, stakeholders and influencing factors n Content, pedagogy, methodology n Delivery and evaluation n Implementation and effectiveness 128
  • 128. As we go further, we will attempt to look at education in a holistic manner, taking into consideration all these elements and providing a considered view of the current position and future direction of what is being deemed as a paradigm shift in Indian education. It is clear that there has been no dearth of deep, original and India relevant thought on education. But before we move into the future, we must raise some inconvenient questions in self-scrutiny. We have seen that there has been no dearth of ideas and intention on education front. Yet, the results over the last 64 years have been less than satisfactory. Why was that? What have we learnt now and what will we do differently henceforth to expect different results in the future? Perhaps, some answers could be found, inter alia, in the areas of a lack of powerful and unifying vision, conservative and risk-averse decision making, indifferent monitoring and a general lack of accountability during implementation. We might need to be simultaneously courageous and vigilant going forward… Our intention is to underline and explore our opportunity to convert our uniqueness into an advantage so that we can leapfrog over better developed international education systems, not merely follow in their trajectory. 129
  • 129. Mega Trends of the Emerging Third Industrial Revolution in India Future of Education: Model and Framework Education as a system The purpose of education is to prepare the generations for the future; therefore, education and our approach to it needs to be radically different from what it has been in the past. The approaches, models and structures of education must ensure fundamental transformations in people, societies and organizations so that they are more aligned to the new world and ready to face its challenges. Ac ad em ic To achieve that goal, education must undergo a transformation. Since education is a multidimensional issue rooted in our fast changing socio-economic context, its transformation would require a system thinking approach rather than a simple reductionist approach, which has been generally used so far. A model framework has been proposed as a tool to explore education and consider how it may be transformed in the future. Priv ates Higher Education y lic Po vt Go Ed S upp li ers s& ent Par o il S Civ y ciet School Eucation (Prl+Sec) or Lab kets Mar Early Childhood Education (ECE) Academic Stu den ts Students Labor Markets Govt Policy Parents & Civil Society Visi on?? Private Ed Suppliers VISIO N Education Model The model looks at the following three aspects which are central to any education system: A. The vision or central purpose of education B. The influencing factors in education: stakeholders and the forces they exert C. Component vectors of education 130
  • 130. A. The Vision Or Central Purpose Of Education Education must have a purpose; otherwise it is all learning. And learning is something every human being possesses, whether educated or not. In fact, we are in many ways nothing but the sum and substance of our learning. By and large, all behavior is learnt behavior and all action is a conditioned response. Education, on the other hand, is a structured mechanism to facilitate learning for a purpose. It must provide an opportunity to examine learnt dysfunctional behaviors and inculcate the ability to discard them, and at the same time, should encourage the possibility of developing new productive behaviors. It must enhance our ability and resourcefulness to see and consider alternative possibilities and responses rather than operating in a linear, automatic and reactionary mode. That being so, what is or should be the purpose of education in India today? Are current approaches and thinking on education clear on that purpose and are the efforts and actions aligned to it? If not, education will serve some purpose but not the one we desire. There is a lot of talk about equality, empowerment, inclusion, quality of education, etc. They are no doubt laudable ideals but in real terms, they are no more than statements of desire or ambition at best. They are not precise, are prone to multiple interpretations and so are incapable of aligning and directing a cohesive nationwide effort. Alternatively, there is the goal of taking the gross enrolment ratio (GER) from X% to Y%. The question is that even if GER becomes Y%, what will it guarantee by itself? We have to ask ourselves about the vision for education in the next 20 years. It is not the purpose or scope of this paper to articulate that vision but we must raise following points here: 1. A vision for education at the national level which is inspiring, precise, measurable and understandable by everyone must be articulated. 2. The vision must point out clearly what would happen once it is achieved. The outcome must be worthwhile for people to deploy their energies into the vision. For example, how exactly will the achievement of this vision impact one or more of the areas which concern people: v Mitigating corruption v alleviation through better distribution of wealth Poverty vsecurity for our people from internal and external threats, natural Better disasters and diseases v Equal opportunities and social justice for masses 131
  • 131. Mega Trends of the Emerging Third Industrial Revolution in India 3. It is one thing to say what the country wants to achieve by educating its people. But it is equally important to ask what the people are going to get out of educating themselves because otherwise, they will neither engage with the process nor deploy their energies in it. If more and more people find it increasingly difficult to eke out a respectable living or to even keep the body and soul together even as wealth gets concentrated in a few hands, disenchantment with and rejection of education will ensue. 4. Hence, a clear and powerful vision would neither be a slogan nor a statistic. It would be a precise and simple statement of intent, which is measurable and can be accounted for, expressed in terms of benefits to the people. It will outline the possibility of creation, contribution and transformation. It is interesting to note that Macaulay created a simple and powerful vision in 1835 AD which, when implemented with commitment, continued to define us as people even after independence. It is time that the ghost of Macaulay is finally buried after more than 175 years, but for that, we need a more powerful and inspiring vision to replace it… B. Influencing Factors In Education: Stakeholders And The Forces They Exert Within the structure of this paper, we will look at the roles and influences of following main stakeholders in the education systemOn demand side: v Students v and civil society (a very broad term with multiple layers within) Parents v and labor markets Industry On supply side: v Academia v Government policy & support v & aided (NGO) support Private It is easy to note that traditionally, in Indian education system, the supply side far outweighed the demand side. But with economic growth in the last couple of decades combined with the growth of the internet and other communication and information technologies, the demand side is now asserting itself with an unprecedented vigor and urgency. Students are opting for their preferred courses across geographical boundaries, parents and civil society want a better return on their investment from education and industry is crying for better trained and more productive human resources. 132
  • 132. What are the current expectations of these stakeholders? What kind of forces and influences do they exert on the system individually and collectively? Are they all cognizant of and aligned to a central unifying vision or intention? Many of the current debates and polarizations in Indian education can be traced to the above shareholders, their relative positions and influences. Is the economic agenda, pushed by self-interest of the industry and translating into the need to develop vocational and employability skills, usurping the space and resources for social and environmental education? Debates relating to education addressing the issues of community engagement, social service, ethics and inclusive development far too often exemplify the above forces working with hidden agendas and at cross purposes. We will discuss the interplay of these forces with examples in the following sections as we develop the model and use it to analyze the overall educational landscape. C. Component Vectors of Education The model uses three vectors to explore the subject of educationVector 1 : Transformational Dimensions Given that the purpose of education is to prepare today's generations for the future, education must ensure fundamental transformations in people, societies and organizational systems so that they are more aligned to the new world and ready to face its challenges. We have taken into account the following three dimensions across which these transformations are sought and combine to form the 'what' of education. The three transformational dimensions are: a. Personal Competencies The universe of abilities, skills and knowledge a person holds as an individual have been categorized under personal competencies. Personal competency is an umbrella term to describe this collection of attributes within the scope limited to a personal or individual level. They can be examined and evaluated and is unique for each individual. The interplay of the following three sub-dimensions aid a comprehensive view of personal competencies. v Learning: The two basic processes of learning can be divided as identification and association. While identification may be an event that can happen in a moment, association is a process that takes time. For example, a toddler may identify a fan in an instant but may subsequently take some time to associate the electric switch to the movement of the fan which results in cool air. It also 133
  • 133. Mega Trends of the Emerging Third Industrial Revolution in India creates holistic meanings for us and defines how we relate to the world around us. Learning through these two steps becomes a process of acquisition of competencies. v Knowledge: Knowledge is defined as the content that is to be acquired by an individual through the process of learning. Knowledge is dependent on internal (personal inclinations) and external (environmental) factors. Therefore, it is intrinsically context -dependent and requires a thorough examination of factors influencing it. As recent epistemological studies suggest, knowledge is neither objective nor can it be objectified. Knowledge develops as shared meanings, which are dynamic and are co-created within social groups or a web of relationships. v Skills: Skills can be understood as a combination of tools (cognitive, social and emotional) or 'thinking' and 'feeling' skills that help us 'process'. Skills are about translating knowledge into actions to produce desired results. In relation to context, skills too will have to be constantly updated through continuous feedback from the surrounding social and environmental systems in order to remain relevant to their role. b. Social and Ecological Sensitivities Social and ecological sensitivities transcend from a personal level to an inter-linked perspective. The following sub-dimensions may be considered within this dimension. v Behavior: Behavior can be understood to mean actions and interactions in response to external or internal factors. In their most fundamental form they can be seen as a function of rewards and punishments. In the sense that they are, by definition, interlinked to external factors, behaviors define the building block of how we interact with our environment and adapt our actions in tune with the system. v Attitudes are settled ways of thinking or feeling that guide, and in turn Attitude: are reflected, by our behavior. These are the objectives or principles along which we choose to align our actions and set the tone for our interaction with our system. v Extending from the literal definition of the word 'value', this term relates Values: to the importance placed on something. A collection of values builds the basic framework within which we act and tend to be similar for a set of individuals within society. It is in that sense connected to society rather than to an individual and is the primary step to building a ‘collective consciousness’. Values initiate behaviors which, when rewarded, get reinforced as attitudes. 134
  • 134. c. Systemic Responsibilities TRANSFORMATION DIMENSIONS Systemic Responsibility refers to the individual as a part of a larger system with inter-related elements forming a holistic system. The following sub-dimensions are considered within this dimension: v Structure: Structure refers to the creation of 'systems', where any environment or set of inter-related factors come into play within certain rules and boundary conditions. These could be social, organizational or governmental structures. Personal Competencies Social & Ecological Sensitivities Systemic Responsibility v Orientation: Orientation refers to contextualizing oneself within a system or structure. This involves understanding one's role, personal competencies and the structure of the system itself. v Consciousness: Consciousness is the degree and nature of our connectedness to the system of which we are a part. Combining the structure and orientation, one develops a consciousness, which determines the manner in which we create and contribute to the success or failure of the system as a whole. As a person grows in age, education should bring about a gradual expansion from developing personal competencies to enhancing social and ecological sensitivities to shouldering bigger systemic responsibilities. The figure on the right reflects the interrelationship of various dimensions of education. Further, table 1 outlines the nature of transformation itself within each of the dimension. 135
  • 135. Mega Trends of the Emerging Third Industrial Revolution in India Table 1: Source: With permission of Nitin P Khanna (unpublished work) (Sub)Dimensions Learning Knowledge Skills Behaviors Attitudes Values Social / Organizational Structures Orientation Consciousness Existing Scenarios o In Silos o Disjointed o Localized o Objectified o Broadcasted o Hoarded o Individual development o Personal gratification o Self-centered o Indifferent o Aggressive o Competitive o Rights o Rampant commercial exploitation o If something good, more is better o Confirm & comply o I, me, mine o Trust deficit o Vertical o Permanent (more or less) o Rigid o Power wielding mechanisms o One-upmanship o Power & privileges o Zeal to 'accrue' o Fearful & insular o Individualistic o Myopic o Exclusive New World Demands o Multi-disciplinary o Cumulative o Associative o Shared meanings o Co-created o Open source o Collaborative o Environmental o Empathetic o Equality o Assertive o Non-competing, win-win o Duty o Responsible consumption o … not necessarily o Creation & Innovation o Contribution o Peaceful co-existence o Lateral o Mission driven o Flexible o Cooperative and interdependent o Leadership o Freedom o Responsibility o Community o Biospheric o Expansive o Inclusive o Vasudhaiv Kutumbakam! Vector 2 : Elements of Education Here we look at the constituent aspects of the education system itself i.e. the 'how' of education. ELEMENTS OF EDUCATION a) Content & Curriculum: The substance and material, as well as the organization and classification of the same make up the content and curriculum. They make up the sum and substance of 'what to teach'. b) Pedagogy: The processes, methodology or technologies involved in everything related to 'how to teach' which is central to creating education systems or simply enabling education. 136 Content & Curriculum Pedagogy Evaluation & Certification Delivery Models Finance Models
  • 136. c) Evaluation and Certification: Evaluation and Certification comprises a formalized process to assess the qualitative and quantitative progress within education. It involves both observation and interpretation and must be seen within the context of the larger requirements (vision) of the education system. d) Delivery Models: Delivery models are all the possible routes and vehicles which address the issue of 'how to make education reach' the intended recipients (schools, colleges, distance learning programs, web based courses). They include a variety of platforms and processes that utilize existing resources and know-how to implement specific or generalized elements of education. e) Finance Models: Education requires money, even if it is an investment promising handsome future returns. There is no 'free' education and someone always pays for it. The question is who - the state or business and industry or society or the individual himself. Consequently, a variety of finance models are available. Perhaps, a judicious mix of all these models need to be explored even as new models need to be developed to support the transformations discussed in the previous section and to meet the challenges of education in the future. Vector 3 : Levels of Education Through this vector we introduce various levels of education in an attempt to factor in the 'for whom' of education. We have explored three levels in this papera) Early Childhood Education (ECE): This corresponds to the early stage development of the child and covers pre-schooling and a slight overlap into the kindergarten stage of formal schooling. The mind at this stage is open and receptive. This is the stage where exploration, experimentation and a genuine curiosity need to be encouraged because values are often formed and personality shaped at this stage. The elements of education should be so designed at this stage that the seeds of human transformation can easily take root and grow effortlessly later. If we ignore this stage and try to focus on reforms at later stages, it may well be too late by then. b) School Education: This covers most of the formal school education. This stage is about developing personal competencies depending on the interest and aptitude of the students, and identifying ones role within the society and environment. This is the stage where knowledge is acquired and skills should be inculcated through rigor, support and practice. The focus here should be on environmental consciousness, service, group-work and contribution to society. c) Higher Education: This level focuses on post secondary education. The focus of education at this stage must be to sharpen skills so that they can best play their chosen roles in society. The focus here has to be on community engagement, collaborative problem solving and developing new and better ways for innovation. 137
  • 137. Mega Trends of the Emerging Third Industrial Revolution in India The figure below depicts how a cross mapping of the first two vectors - transformational dimensions and elements of education translate into the three integrated and evolving levels of education. Higher Education School Education Early Childhood Education (ECS) The demands of education at all these levels in future are discussed in detail in the next section D. Aligned & Collaborative Education Model for India Till now, we have discussed the various aspects of our proposed model in an independent and yet, somewhat, relational manner. We now put all these aspects together in one complete model and framework. While the parameters remain the same, a holistic view has been adopted in order to view the system in its entirety. It is important to note that a comprehensive 360-degree approach is required and hence, in looking at this model Aligned & Collaborative Education Model framework and using it to analyze the current education system, we have tried to use a Higher 'systems' or holistic approach Education involving breaking down of artificial, and often irrelevant, School boundaries that are at the core Education of our current education paradigm. Early Childhood Education (ECS) The transformation has been mapped through the prism of this new system below: Academia Students Govt Policy & Support Parents & Civil Society Private & Aided (NGO) Support SUPPLY SIDE 138 Industry & Labor Markets VISION DEMAND SIDE
  • 138. 2. Stakeholders (influencing forces) 3. Component Vectors of Education System Ac ad em Priv ates &A Sup ided ( N plie rs GO G & ce oli tP ov ort pp Su ) iety Soc ivil &C s ent Par 1. Vision ia The model above depicts a unified complete picture of education as discussed in this paper. It ties up the various aspects of education, as discussed above in a dynamic whole:- ry & ts e ust Ind Mark r abo L v Transformational Dimensions v Elements v Levels Stu den ts Visi on?? It is the interplay of these in a dynamic equilibrium - as the larger social, environmental, economic and geo-political milieu keeps changing - that creates an efficient, adaptable and stable education system. The above figure, therefore, depicts a balanced, aligned and efficient system - an ideal state which is seldom attainable but always to be consciously and collectively strived for. Examining the above framework more closely, we see: v needs to take cognizance of the shifts taking place in the environment (social, The vision technological, etc.). However it is imperative that all the influencing stakeholders be aligned towards the same vision in order for the 3 vectors of education represented to be in balance. v If these forces are absent, misaligned or work at cross purposes without co-ordination, the entire system will naturally be turned into disarray and we are left with an inefficient, unbalanced and fragmented system. This seems to be the current situation with the education scenario in India and perhaps with much of the world. Further, depending on the interplay of 'parts' of the 'whole' framework, we can analyze different areas and aspects of the education system and also seek direction. We examine two sample scenarios to understand the framework and its application. The same framework will then be used in subsequent sections to discuss various new initiatives and cases in our attempt to recommend some practical workable ideas for the future. Scenario 1: In the case of Early Childhood Education, a number of pre-schools have been cropping up especially in urban areas. These are progressive in terms of their education elements and dimensions discussed above. However, when seen through the framework, we find that only two of the six stakeholders are active: (a) private support and (b) parents and civil society. Other vital factors like government policy & support, industry and academia are 139
  • 139. Mega Trends of the Emerging Third Industrial Revolution in India virtually non-existent. Therefore, the system is partially skewed. While it can even be called successful in terms of individual business models, it remains a localized, price-quality, niche system that is barely, if at all, a contributing element to India's education as a whole. Scenario 2: In the case of higher education institutes like the some of our most prestigious engineering colleges, which have been at the centre of debate during recent times, one can use the framework to identify the issues. While these institutes can be said to be doing reasonably well in the personal competence criteria, their effectiveness in the realm of building social and ecological sensitivities and systemic responsibility is arguably deficient. Moreover, the influencing factors, though all present, are not working towards a common vision. While academia is working towards providing high standards of technical education and is being backed by government policy, industry involves itself in a prime capacity as a recruiter for non-technical expertise such as consulting or investment banking. Students and parents also often seek it out solely for the purposes of prestige' and post graduation salary packages. Hence, one can see, through even a simple empirical analysis that: v The stakeholders are working at cross-purposes, though they are all involved. This weakens the potential of the institution and makes them localized in effectiveness. v The brightest young minds in the country are honing their skills at a personal level but are often failing to deliver on social, ecological or systemic responsibilities. Many of them leave for better options abroad and few who remain in the country work in areas where they can actually use and contribute with their advanced engineering skills; IT is perhaps, the only notable exception. Hence, looking at the model, even at a macro level one can now appreciate the importance of the entire education system being consistently directed towards a thought out vision. Instead of reactionary, partial or 'quick fix' solutions one needs to examine all aspects as part of this dynamic whole. For instance, one can very well imagine the consequences of technical vocational training to flourish in absence of an ethical understanding regarding the responsible use of technology. Alternatively, one cannot be expected to imbibe complex and deep-rooted ethical values and societal sensibilities while only the 'economically' beneficial employable skills are valued and rewarded in society. In further sections, we assume the underlying framework presented here to analyze various emergent cases as well as future possibilities through case studies. 140
  • 140. Some new workable Ideas for the future: Case Studies We have so far examined the need to transform education in the light of the changing global paradigms. We have also briefly reviewed the history and journey of education in India in its broadest sense. We then developed and proposed a model to look at education as an aligned and collaborative system. In the past two decades, the philosophy and the basic nature of the education system in India is changing gradually. This change is happening through diverse initiatives by the private sector, NGOs and the government alike. In this section, we will discuss innovation taking place at the three levels of the existing education system through the prism of the model earlier discussed. I Early Childhood Education (ECE) As discussed earlier, this corresponds to the early stage development of the child and covers pre-schooling and a slight overlap into the kindergarten stage of formal schooling. The mind at this stage is open and receptive. This is the stage when exploration, experimentation and a genuine curiosity needs to be encouraged. Values are often formed and personality shaped at this stage. The elements of education should be so designed at this stage that the seeds of human transformation can easily take root and grow effortlessly later. If we ignore this stage and try to focus on reforms at later stages, it may well be too late. But for that to happen, all the stakeholders and influencing forces must come together and work towards this common agenda. However, a close examination of the current scenario at this stage reveals: v hardly any thought, vision or strategy directed at this level. There is v Government policy is silent in terms of directions. v It is perhaps too early for the industry to be interested from'employability' and 'skills' point of view. v too elementary for any serious academic work to be directed at this level. It is also v themselves are inconsequential in the equation. Students 141
  • 141. Mega Trends of the Emerging Third Industrial Revolution in India In most v of India, little is happening at this level barring some sporadic NGO led initiatives. On the v other hand, in a very small urban niche, we have some private players maximizing on the opportunity of exploiting the anxiety of parents. One can v conclude: The content and pedagogy is not standardized. l The offering is meant to appeal to the emotional faculties of the parents, who are l nothing but customers in a shrewd marketing sense. The selling point of these play-schools is often their track record in ensuring that the l child gets into the prestigious school when the time comes. The delivery l models involved are almost exclusively local, stand alone, expensive 'boutique' play schools providing upper-class, exclusivist grounding to the children. Funding at this level is largely private or through aid to NGOs. Government spending l is largely absent here. We are missing a huge opportunity by ignoring this level of education. This is the time when human values, morals and ethics can be introduced in simple ways and will have maximum chance of taking root. Most of the research in the area of ECE, and also conventional wisdom, suggest that this is the base of making a person a good human being. This is where content comes in. What is taught in the classroom will be an imprimatur on the mind of a student. Fortunately, we already have a mammoth inventory of material, largely lying unused, which is standardized, and culturally aligned; it is extremely powerful. And that material is our stories - Amar Chitra Kathas, Jataka Tales, Panchatantra, Tenali Rama and the Akbar-Birbal stories. What makes these stories so universally relevant and appealing? Life instructions - moral, ethical, social, even spiritual - so laced with entertainment, that they go straight to the hearts and minds of the receivers, without ever seeming like a labored sermon or even a teaching to remember by rote. In this overall scenario, some well meaning and effective efforts are being made by some players which can become a model for a future strategy and course of actions. Case Study 1: Akshara's Balwadi Programme The mission of Akshara Foundation, a Bangalore-based Public Charitable Trust, is to ensure that every child goes to school and receives a decent education. Established in 2000, Akshara Foundation has a range of programmes that provide multiple solutions for universalizing elementary education. 142
  • 142. In early 2000, Akshara set up its preschool (Balwadi) programme in Bangalore. The focus was on children from underprivileged, under-served communities, and the goal was universal enrollment to primary schools. Most children from underprivileged backgrounds go to the Government-run pre-school centers called Anganwadis. Akshara started its engagement with the Anganwadis in 2005. Akshara now works with all 1752 Anganwadis in Bangalore, impacting around 40,000 children. Approach: Akshara believes that the first six years are crucial for children because that is when their young minds develop and they acquire the skills that will see them through life. It is therefore essential that every child be provided with the opportunity of early stimulation and growth. Elements of Education l and curriculum Content o The teaching learning material (TLM) for the programme was developed using the help of preschool Subject Matter Experts (SME's). The TLM was finalized in consultation with the Government. o The kits include the following material: play materials, charts, language/numerical skills, creative work. o The content, curriculum and TLM are peer reviewed to ensure its quality. Metrics are mainly qualitative and based on documented feedback from peers and subject matter experts (SMEs), feedback from teachers who manage anganwadis and independent balwadis, and reactions from children. l Pedagogy o A typical Akshara balwadi runs for three hours a day in the house of an Akshara volunteer. Every balwadi admits 15-20 children on an average. o Children are taught the basics of language, which may be Kannada or Urdu depending on the locality. The volunteer teaches children rhymes, alphabets, numbers, colours, shapes, the names of animals, fruits, vegetables and familiar objects in their environment. o Activities are conducted for eye and hand coordination, such as colouring, threading patterns on a board, and arranging puzzles. Some outdoor and indoor games are played in a manner conducive to making learning fun, with emphasis on the overall development of the child. 143
  • 143. Mega Trends of the Emerging Third Industrial Revolution in India l Evaluation o Assessments are an essential part of tracking the effectiveness of the initiative and it is done in a non-intrusive manner. o Each assessment covers aspects of child development, such as motor skills; cognitive skills; social and emotional skills; language skills. Assessment formats have been designed and the progress of every child is measured; reports are aggregated and distributed. o Performance benchmarks are established by centre, by area, and by project; each report is compared to district averages and made available to the public. o Children are assessed on 7 sets of competencies (using 56 indicators) viz, General Awareness, Gross Motor Development, Fine Motor Development, Language Development, Intellectual Development, Social and Emotional Development; and Pre-academic Skills Delivery l o The preschool education provided in Anganwadis is similar to Akshar balwadis. Collaboration between the two would be beneficial to the children of both the anganwadi and akshara balwadi. o Akshara balwadis train volunteers, providing them with teaching learning materials (TLM) and making their centres sustainable through parental fee support. The volunteers who run them are educational entrepreneurs, or "edupreneurs". o The main purpose of this model is to transfer the ownership of this programme to the community and make every parent aware of the importance of preschool. o Balwadis were established and run by volunteers from within the community. This ensured the involvement of the community and commitment of the volunteer. o Akshara supplies a teaching-learning kit to all the anganwadis and trains the anganwadi workers in using the teaching-learning material Finance l o The Akshara Balwadi programme receives funding from Dell YouthConnect and avails of resources provided by the Government-Anganwadi collaboration. o Small sums are accepted as fees. 144
  • 144. Scope and Challenges Akshara's Balwadi program has several stakeholders - industry (Dell's CSR arm), and parents and civil society, government (tie-up with Anganwadis). To ensure that the community felt a sense of ownership in this program which would also ensure its sustainability, Akshara developed a franchise model for Balwadis where young "edupreneurs" were identified to run Balwadi units independent of Akshara. Akshara monitors the quality of teaching and supervises creation of the curriculum; the "edupreneurs" charge children fees in order to make their efforts sustainable. The ownership of nearly 30% of Akshara's Balwadis by 2010 has been transferred to the community. Even with basic level material as TLM, hands on training of volunteers have yielded appreciable results. Balwadis are doing a commendable job of providing an alternative to high cost urban schools. If more research and sophisticated teaching, training and evaluation systems can be put in place, the impact could be widened. II School Education Case Study 2: Mirambika: Mirambika, Reasearch Centre for Integral Education and Human Values is based on the philosophy of Sri Aurobindo and The Mother. It is situated at the Sri Aurobindo Ashram campus in New Delhi. since its inception, Mirambika has adopted a different approach towards learning. At present, it has classes for children between the ages of 4 to 15. Mirambika is considered a free progress school and is innovative in virtually all respects. Mirambika aims to be flexible, collaborative, personalized and experiential at its core. Approach: The teaching philosophy is based on the view that each individual comes into life with an evolutionary purpose and corresponding potential: education means drawing out this potential. The process of learning happens in three stages: information, assimilation and utilization. Children learn best through experiences and their environment 145
  • 145. Mega Trends of the Emerging Third Industrial Revolution in India Elements of Education Content and Curriculum: l o Mirambika has a multi-level learning system, i.e. children within a group may perform at different levels in different subjects and teaching is done specifically at their individual level (prospectus). o The school has no fixed curricula or syllabus. However, for each group, goals in terms of qualities, mental faculties and skills to be developed during the course of one year are decided and delineated into quarterly targets. o Within this broad framework the child is provided varied learning experiences by working on projects, which are inter-disciplinary in nature. Pedagogy : l o There are no graded classrooms in Mirambika. Children are grouped according to their age and each group has a name given to it. There is overlap of ages in all groups. o Specific subject training (in traditional disciplines- Language, Math, etc) takes place roughly thrice a week. o Students learn by involving themselves in projects and clubs (Films, drama, model making, experimenting, art, craft, music, sports etc). Evaluation: l o No tests or exams are conducted at any stage in any group (class) in Mirambika. o The teacher makes the child's profile covering all areas of learning (mental, physical, vital and psychic). o The progress is measured against the child's own record and not with others in the group. It is descriptive, non-judgmental and discussed individually with each parent. o In higher groups children also undergo self-evaluation and peer evaluation. Delivery Model l o Student-teacher ratio is approximately 3:1. Mirambika has a Teacher Training Wing on its premises, which conducts ongoing training for its teachers-inservice as well as pre-service. o Subjects are integrated with projects and activities. Children collect information, experiment, have group discussions, go on field trips, engage in quiz competitions, put up exhibitions and hold debates on topics. 146
  • 146. Transformational Dimensions In keeping with the philosophy of the institution, learning is seen as a continuous and comprehensive process. Few representative points are given below, but in true sense all elements of the school experience are blended to represent and work towards its vision. l While 'training' is imparted three times a week, personal competence is also developed through project work. Here students are able to learn, gain knowledge and develop skills and values in an active manner. l and play is collaborative, flexible and non competitive in nature. All work l Teachers are not seen as a harsh authoritative figure and principles of equality and mutual respect are built. l Classrooms or areas of work for older groups have tables and chairs arranged in a circular fashion, which facilitates discussion in the group. l The school building is designed with open spaces, water and greenery, to reflect the philosophy of being close to nature and the environment. l Children and teachers participate in activities such as cleaning the premises every morning and at meal times children serve food; everyone, including teachers and the principal line up for their food and later clean their respective plates. Scope and Challenges Mirambika reflects innovative and consistent implementation across elements, dimensions and levels of education (up to the secondary level). All stakeholders - private suppliers (the school, ashram and research centre), students and parents and civil society - are represented, in a limited fashion. However, the absence of larger academia and government policy support weakens and restricts the impact and leads to a few challenges. Though extremely successful with satisfied students and parents, the school is an isolated entity and may be hard to replicate. Parents are concerned that this 'alternative' education may isolate their children and set them back when they do eventually join the 'regular' system. Further scaling up such a system to serve more students requires large investments in infrastructure, faculty and continuous research, if one has to maintain the quality and nature of the entire experience. Case Study3: Eklavya Eklavya is a non-profit, non-government organisation that develops and field-tests innovative educational programmes and trains people to implement these programmes. It functions through a network of education resource centres located in Madhya Pradesh. 147
  • 147. Mega Trends of the Emerging Third Industrial Revolution in India Eklavya's most notable work has been in the Hoshangabad district and is known as Hoshangabad Science Teaching Program ( HSTP). Approach: Eklavya looks at innovation holistically, which means that reforms in classroom practices are accompanied by reforms in examination systems, teacher training methods and the way schools are managed. It also means that learning spaces are extended beyond the school into the community. Elements of Education l Content and Curriculum: o Eklavya developed innovative curriculum in all subjects for all stages of schooling through a participatory process involving subject experts, teachers, students and volunteers interested in improving school education. o They developed and published various publications (books, textbooks and magazines) as culmination of their research o Eklavya ran programs across disciplines (social science, sciences, and mathematics) as well as on issues of social concerns, such as sexual health and education. o They also conducted programs across secondary and primary levels. The curriculum took into account current thoughts and theories on various aspects of education: child development, language learning, mathematical abilities, etc. o It also took into account the socio-economic conditions and cultural traditions of the learners, the local environment and the physical and administrative conditions of schools. l Pedagogy: o Eklavya's efforts included the establishment of (Chakmak) clubs. These clubs, ran entirely by local students and village youth, served as out-of-school meeting points for students to pursue creative activities and projects and develop their leadership qualities. o The children themselves began organising activities that the Eklavya field centres had been conducting earlier in villages, such as bal-melas, creative workshops, study groups, libraries, etc. Eklavya's approach to curriculum design across vectors and levels involved a student centric approach. 148
  • 148. o The very name of the organization 'Eklavya' seeks to represent learning through determination (a shift from teaching as the primary focus of education). This has been reflected in the various methodologies and mediums of instruction advocated and implemented by them. l Delivery Model o Eklavya worked through schools, teacher training, curriculum development and community to create a holistic system of education delivery. o Eklavya looked to evolve systems for macro-level implementation of microlevel educational experiments and act as a catalyst at the state, district, block and school levels to make the mainstream education system more receptive to innovations. l Funding : o One of Eklavya's main features lie in its adoption of Public-Private Partnership (PPP) model. The Madhya Pradesh education department played a special role in this nascent effort by giving administrative backing and academic freedom to experiment with books, kit, curricula, teacher training and examinations. o This freedom allowed the HSTP (Hoshangabad Science Teaching programme) to address innovation and quality improvement in science education as an integrated whole, focusing on all aspects of school functioning to facilitate innovative teaching. o This unique instance of a state government accepting the role of a voluntary agency in changing school education within its own framework was a landmark in education in the country, enabling the HSTP to evolve as a model for innovative quality improvement in the mainstream education system on a macro scale. Transformational Dimensions l Through their holistic and experiential / environmental approach to education innovation, Eklavya has gone beyond education as 'transfer of information' to deliver on values and higher order thinking skills. l It evolved learner-centred teaching methodologies that foster problem-solving skills in children and encourage them to ask questions about their natural and social environment. l By involving students and community in their activities (such as chakmak), they also imparted social, ecological and systemic sensibilities; 149
  • 149. Mega Trends of the Emerging Third Industrial Revolution in India Scope and Challenges Eklavya has been successful within its limited scope in creating innovation and impact in a holistic manner along all the education vectors discussed previously. By involving practically all stakeholders discussed in the framework, they have in a sense been able to maximize this impact. The Hoshangabad Science Teaching programme (HSTP), during its existence till 2002 covered over a thousand schools and was regarded as an innovative approach to the teaching of science. The official reason for the closure of this first and most durable non-State initiative in education in 2002 was an external evaluation that its results at the Standard X level were not adequate. However, it triggered questions about the nature of state and non-state engagement in the provision of education. It is argued that while the state did provide lots of freedom and autonomy when the program was just a small 'experiment', it found it difficult to do so as the program grew. The focus on the difficulty of 'scaling up' as a serious stumbling block for non-state providers and the inability of the state to acknowledge the academic innovations introduced in the area of curriculum and pedagogy indicates that the engagements between state and non-state providers have been restricted due to the low regard in which non-state providers are often held. The difficulty faced by Eklavya in working with the state is not unique and many non-state providers have chosen to work outside the state sector. This is a classical example of the consequences of two critical stakeholders working against each other. III Higher Education Case Study 4: DAYALBAGH Dayalbagh is an innovative and comprehensive educational institute, situated on the outskirts of Agra. It comprises various colleges, prominent among them being Dayalbagh Engineering College. It provides a high degree of personalized education and supports the advancement and dissemination of knowledge through teaching, research and scholarly activities. Approach: The institute's innovative educational system derives from its mission objective: "to evolve a complete man". In accordance with these ideals, Dayalbagh Engineering Institute (DEI) focuses on a comprehensive, integrated and inter-disciplinary education scheme, which affords 150
  • 150. the students an opportunity to get a first rate, broad-based education. D.E.I. believes in preparing its students for the service of mankind with devotion and dedication. Philosophy The philosophy of DEI's outreach programme which represents a major social service initiative of the University embodies the following broad based objectives: l To provide need-based education: enhancing the employability of persons who are educated but not finding employment or who have lost employment; and also enhancing the employability of uneducated/undereducated youth. l To target geographically remote and backward areas with vocational training programmes. l education on a non-profit basis. To offer l To remain aligned with the National Programme for upliftment of underprivileged and backward societies and the empowerment of women. l To inculcate Indian culture and values in youth through specialized programmes to metropolitan areas in India and abroad. Content and Curriculum: l Dayalbagh institute with its multi-disciplinary initiative and creative work approach, explicitly focuses on the basic values of humanism, secularism and democracy. For instance, students are exposed to the principles of all the major religions of the world l Institute prepares its students for the increasingly techno-oriented society of tomorrow without uprooting them from their agricultural moorings. Pedagogy: l The Institute has introduced a scheme of innovative and comprehensive education at university and non-university in both general and technical education levels. l This aims at excellence but not at the cost of the relevance. It seeks to inculcate dignity of labour, encourages initiative and creative work, adopts a multidisciplinary approach, which prepares students for the increasingly tech-oriented society of tomorrow without uprooting them from their agricultural moorings, l the last two years the various units of Dayalbagh Educational Institute have During introduced an intensive vocational training and work-experience programme for students. 151
  • 151. Mega Trends of the Emerging Third Industrial Revolution in India Scheme l on Comprehensive Education for a job-oriented integrated curriculum at the first degree level has been pending consideration by the University Grants Commission and the Central and State Education Departments. Evaluation: The syllabus of each subject is divided into a convenient number of courses (with l distinct course names depending on topic) spread over the various semesters. Grasp l and knowledge of the subject is evaluated by various means continuously and periodically thereby putting lesser burden on the student as compared to evaluation by one examination at the end of the session. The mode of evaluation is also varied, depending on the nature of the subjects and l topics. Each component of evaluation is assigned a certain weightage towards the computation of over-all performance in each course. Scope and Challenges Vision 2011 envisages that a major spin-off of Dayalbagh Education Institutions' effort to move into the top 20 institutions in India will be its recognition at international fronts for its excellence in instruction and research, within its special social, moral, and spiritual framework. While elements such as pedagogy and evaluation may not be at the cutting edge of research, Dayalbagh, driven by its principles of 'all round development', has sought with success to build a balance within existing frameworks. A key feature is their conscious attempt to integrate new with old, technology with culture, etc. A holistic view of education and the belief that education is more than knowledge dissemination means that even within existing platforms and methodologies, Dayalbagh has been able to build dimensions of learning in social, ecological and systemic responsibility. However, working within the larger framework perhaps imposes restrictions on what may be accomplished. Support from policy makers and industry is essential to scale up and further improve impact by enabling more progressive platforms, methodologies and technologies. Case Study 5: Samarth Bharat Abhiyan Samarth Bharat Abhiyan, started by the University of Pune, is a comprehensive rural development program launched to direct 'youth power' towards constructive social engagement in rural areas. Built within and as an extension of the National Service Scheme (NSS), under the Abhiyan, all colleges have adopted one village each in their vicinity for allround socio-economic development. In all, around 500 villages have been adopted. 152
  • 152. Samarth Bharath Abhiyan provides a very interesting model for observation and below are listed some salient features across curriculum, pedagogy, funding and other elements of education. l A 15 point program has been drawn which covers, inter-alia primary education, tree plantation, water management, sanitation facilities, communal harmony and the like. l A unique and innovative soft-skills program for personality development of the students has also been initiated wherein students from rural areas, socially disadvantaged groups and economically poor strata of society are chosen for an intensive fifteen-day training program where outside experts are invited to impart training in conversational English, interview techniques. group discussion and overall personality development. l Scholarship of Rs. One crore (US$ 2,00,000) is provided to girl students at the under- graduate and post-graduate levels. Under the scheme, scholarship of Rs. 5,000/- are awarded to 2,000 girl students per year. A special feature of this scheme is that 30 per cent of the total amount has been specially reserved for daughters of devadasis, prostitutes and women affected with HIV. l Yet another socially relevant program is the senior citizen centre. The center has been catering to the needs of the large and growing body of senior citizens. The center engages senior citizens in five different activities: one-day workshop on health and personal financial management; three month certificate programs of their choice (e.g. Indian History, Culture, Philosophy, Religion and the like); a special Ph.D. Program for senior citizens with relaxed entry norms; teaching public at large under Adult and Continuing Education Program, and working as volunteers in the Samarth Bharat Abhiyan. l Information Technology enabled Services (ITES) program launched in collaboration with CISCO offers several vocational courses for Entrepreneurial and Technician Development, especially for high school drop-outs. l wake of the recent terrorist attack on Mumbai, the University is in the process In the of establishing a Centre for Internal Security aimed at creating a Think Tank, training all college students in Disaster Management and creating awareness among the public at large. 153
  • 153. Mega Trends of the Emerging Third Industrial Revolution in India Scope and Challenges Under the Samarth Bharat Abhiyan, all colleges under the varsity adopted one village each in their vicinity for all-round socio-economic development. By including socio-economic development in one comprehensive system, Samarth Bharat Abhiyan has extended the multi-disciplinary and holistic view advocated throughout this paper to a larger, ever relevant, level. In all, 500 villages were adopted and a 15-point-programme for development, including primary education, tree plantation, water management, sanitation facilities and communal harmony, were taken up. This 'movement' involves more than half a million students and teachers, and senior citizen volunteers who are working throughout the year in the chosen village with the locals and the government machinery, seeking help from NGOs active in the relevant field. The goal is to bring about a complete transformation. It is evident that academia, students, government, NGO's and industry have contributed to the success of this program. It is interesting to note that students of the NSS at the University of Pune develop their skills and social responsibility, and at the same time the villages adopted benefit from the work being done for their social development. In spirit, Samarth Bharath Abhiyan captures large elements of the attitude and approach to systems thinking in the 21st century. However, there are infrastructure, research and technology limitations that can impede such initiative. It is important that we seek not just to replicate successful models but to improve what is successful. 154
  • 154. Some Futuristic Ideas: Elements of Education In this section, we look at some broad futuristic ideas which may define the future of education in India. These are possible, even likely scenarios if we consider our unique needs and general trends in global and national space. While direct examples may not be available for some of these ideas there may be some definite early-stage, innovative efforts. Wherever possible, such examples and cases are discussed. The backdrop of this section is the transformation mapped in table 1. These transformations, once interpreted in the five elements of education, throw some major challenges which need to be addressed: v multiple languages in India and poor penetration of English in the rural and Issues of semi-urban heartland. v Geographical reach of quality education, given the numbers and dispersion. v of teachers at every level. Shortage v Affordability of education. v Improving community engagement and ensuring the relevance of education to the immediate society. v social and developmental orientation - equity, communal harmony, gender Building equality, ethics, etc. - through education. v Developing vocational and employability skills as nature of work and economic activity transforms itself in the future. v Encouraging a larger biospheric consciousness where people will live and work along with and close to natural environments. In the following discussions, we propose possible ways and scenarios in the five levels of education through which some of these challenges may be addressed 1. Content and Curriculum Content: Over the past ten years, Wikipedia has more information on its content pages than all that the encyclopedias and libraries of the world could manage in the last 100 years. The reason is that it is not managed by any one gatekeeping governmental or institutional entity. It is an open system where a large part of humanity shares and contributes information freely. No entity, institution or government can beat the power of people when they come out together to partner and play. 155
  • 155. Mega Trends of the Emerging Third Industrial Revolution in India We envisage that the days of monopoly over content are over. We envisage a technoenabled content super-highway - a huge resource center having content on all conceivable topics - with the following features: v An overwhelming proportion of the content will be for general educational purposes and will be available at no cost (assuming 100% broad band internet penetration). v an open source structure where anyone can contribute his or her own 'special' It will be content. This can be paid content for a period of three years post which will become free. v Thus, people can freely buy, sell or share content on the highway. v the content will be multi-lingual to be relevant to more and more people even Most of when they are not 'English literate'. It will be thus, also more relatable and useful. v Most content will be visual and will be 'contextualized' through realistic story driven film based communication. Film based content goes extremely well with our traditional story based learning models (pedagogical strength) and with the way we receive information. It ensures that the student is engaged, the learning lasts and the instruction is teacher-neutral. v The content will be interactive, collaborative and participatory. v be It will used by formal students at every level, for informal self education, by teachers, tutors, researchers or anyone. v The content highway will be managed by an independent body (non-governmental and not a formal academic institutional body) whose function will be to maintain the platform, play the administrator role and monitor the quality of the content strictly based on consumer response. The following three innovations can set the example and pave the way for the future. v Khan Academy on You Tube is a great example of democratization of content. Starting with school level math tutorials, its footprint now covers all subject areas across levels. However, Khan Academy tutorials, though well received and appreciated, are designed more for the English speaking western student, well oriented to receive left brain, structured inputs which are not applicable in the general Indian context. In India, the biggest impediments to achieving our goals of access, equity and quality in education are shortage of quality teachers, poor quality of content and multiple languages. Recognizing these problems, two efforts of varied scale are worth sharing. v Educomp Smart Class has developed innovative audio-visual content for school education which can be delivered uniformly by leveraging the latest web, broadband and network technologies. 156
  • 156. Aantrishti Human Development Solutions, an Indian start-up in education and training, v has developed an innovative Film Based Training Methodology which is a systematic research based approach which translates any required subject matter into a learnercentric, multi-lingual, modular and film based content which can reach people in their own language in a highly relatable and entertaining manner. The power and connect of this design reduces over-dependence on the quality of teachers; the fact that it can be put on any digital platform (web, cloud, etc.) enhances its reach tremendously. This is an Indian innovation suitable for the needs of the country in conventional fields as well as vocational and employability skills context. Curriculum As discussed earlier, the two basic processes of learning are identification and association. While identification may be an event and can happen in a moment, association is a process that takes time. It also creates holistic meanings for us and defines how we relate to the world around us. Curriculums and syllabi should reflect this. The nodal education bodies of the future - universities and school boards - will break down the convenient but artificial boundaries of 'subjects' and 'disciplines' and will decide topics, subjects and syllabi. However; Students v will have the freedom to mix subjects and create courses and programs for themselves. Degrees and diplomas will be awarded on the basis of the total number of credits rather than a fixed curriculum which is force-fitted. Cross-over v courses between humanities and natural sciences will be encouraged as they give a balanced and holistic perspective when taken together. Since most of the current and future problems will be multi-dimensional, such courses will nourish necessary skills and cultivate thinking processes required to solve them. Physical v attendance in the class will not be necessary. Since all the content is available on the web, students will attend classes only when they feel that the teacher can add value. Students v will, however, be liable to complete all assignments, dissertations, practicals, projects or any other course requirements. The universities and boards will only certify participation, engagement and satisfactory v completion of the requirement of the course, not the proficiency attained. It would v be the primary job of the universities to continuously develop new content and programs in new areas, such as sustainable technologies, environmental economics, etc. 157
  • 157. Mega Trends of the Emerging Third Industrial Revolution in India 2. Pedagogy A lot of pedagogy currently being taught in our B.Ed and M.Ed programs is about structuring the content and designing session plans. Technically, it may be argued that a B.Ed program is a well developed program for teaching which emphasizes the psychology, behaviour and every single aspect of learning, but there is no agency to check whether teachers apply the teaching methodologies in a classroom. Further, the program approach is teacher-centric rather than learner-centric. It is interesting to note that today a PhD in Physics is considered qualified to teach Physics at the university level. However, a degree implies knowledge of the subject matter; it does not ensure the ability to instruct in a classroom. Teaching is much more than a passive, one way transfer of information. What would be the role of a teacher if all information and content were available and freely accessible on the content highway? Would they not lose their relevance? Pedagogy or the science of 'how to teach' (as against what to teach) will undergo a complete transformation even as the definition of teacher and teaching will change fundamentally. Teachers v will not have to give information or teach concepts; that will be done by content modules. Teachers v will essentially guide in problem-solving, supervise lab work, provide guidance in projects, etc. Essentially, v wherever applicable, the teacher's role will be to guide, fuel enquiry, challenge assumptions and push the boundaries of thought. In a way, his job will be to facilitate a process of discovery. The teacher will have an individual, learner-centric approach and he will have personal v relationships with his students. Instructions v will be multi-disciplinary, non-linear and in local languages in addition to English. Proficiency in English will be encouraged but will not become a stumbling block to an individual's growth. Currently, l a lot of students are choosing to write their exams and expect the instruction material in local languages even at the Higher Education level. In most l organizations, including MNCs, the day to day business conversations are rarely or intermittently conducted in English. The medium of communication is colloquial Hinglish (or Tamilish or Bengalish). Even lin customer interfacing situations, what the customer wants is knowledge, empathetic listening, confident demeanor and a clear expression. What language is 158
  • 158. used maybe quite irrelevant so long as it is a language the customer can understand. For example, a Tamilian senior management professional who might be from IIT and a Harvard graduate and working for a global MNC in Chennai may not mind a conversation with a lifestyle brand store salesman in Tamil. l English is necessary to connect us to the world outside and to the future, our While own languages are equally important to connect us with each other, with our environment and our rich cultural heritage. v If teachers do not deliver on the above principles, they will not have any students because attendance will not be compulsory and content will be available on the web. Bad teachers will be automatically weeded out of the system. v Teacher training infrastructure and focus will change from content centric to learner centric. The entire point of education will be for the student to receive what he deems fit from education, not what the teacher prescribes. v Many subject areas may not need teachers and will be effective on the strength of the content design alone. v Teachers will be highly trained in pedagogies and technology and the training will be continuous throughout their careers. They will also be sufficiently well paid so that the best talent is attracted to the profession. Technology Defining Pedagogy & Transforming Classrooms Latest developments in web and other networking technologies are strongly impacting and paving ways for lateral learning environments, including virtual global classrooms and service learning in the community, making education a more expansive and inclusive experience. Peer-to-peer learning compliments the traditional, authoritarian model of teaching, by emphasizing students' responsibility to also learn from and teach each other in structured cohort groups. The following technologies will need to be used to greater effects in the future to enhance the reach and scope of the new collaborative education: v Advanced, robust hosting and retrieval systems, including cloud technologies to host the content. v Advanced affordable tablets and other low cost hardware devices which will connect each student to a shared, multi-cultural, web based learning environment. v Total broadband connectivity penetration and advanced interactive communication technologies. v Devices to support multi-format, multi-lingual, interactive content, real time translators, voice recognition and interactive 3D communications. These technologies will break all barriers of language, geographies and teachers. 159
  • 159. Mega Trends of the Emerging Third Industrial Revolution in India The Aakash tablet, available for less than Rs 2500/- is a great example of how technology can be leveraged to further the cause of education. Similarly, the National Knowledge Commission (NKC) is on the way to create 1500 40 GB bandwidth nodes across the country to connect higher education and research resources at the cost of around US $ 5 Bn. NKCs recommendations on distance education focus on creating a national ICT infrastructure, improving regulatory structures, developing web based common open resources, establishing a credit bank and providing a national testing service. To supplement this, NKC also recommends that the production of quality content and leveraging global open educational resources, needs to be focused on in a comprehensive manner. We can well imagine a scenario in the near future where, beside the above, 4G mobile applications will allow us to download Educational & Training Content on virtually any subject area, on demand much like we download videos and music on our smart phones today. For instance, people may learn basic customer handling skills through downloading a 'curriculum' of five 'mobisodes' of 5 minutes each from the net. 3. Evaluation & Certification There will be a separate authority to assess and certify proficiency, which will be independent of the content space as well as the university, colleges, or any other delivery platform. The authority, through various tests and tools will assess and certify proficiencies as well as skills. All the college and university students will be assessed and certified by this body. Also, this will open many possibilities for non-regular students. For instance, a 35 year old person at a remote location can choose to enhance his education. He may go to the content highway, select modules and configure a course for himself fulfilling some given credit conditions. Or he could choose a guided self-study on the content highway where he could connect with a coach or an expert in that area. After completing the requirements of the course he could take a test and get himself certified. This certification will be the same as what a regular university student will obtain and there will be no way to know the difference. 4. Delivery Models To ensure penetration, reach and scale throughout communities, many other models will come into play, in addition to conventional school, vocational and higher education models: 160
  • 160. a) With all the content on the web and independent certification, small schools with very few students and teachers will emerge in remote areas. The quality of instruction will be guaranteed by good content and resources while the teacher will provide guidance. These will be like small gurukuls where students will get customized inputs and personal attention. The infrastructure requirements of these schools and operating expenses will be extremely nominal. b) Distance learning programs in general will become far more powerful and popular. c) Communities will post content on their local problems. Groups of students can collaborate and offer solutions which can become part of their action learning projects. Communities will then certify students on the value and practicability of their solutions. This would be excellent training in community engagement and collaborative problem solving. d) Television will be used widely to teach some basic common interest mass level programs. A good example here could be the many adaptations of the original Chinese 'Barefoot Doctors' concept, whether it is the barefoot midwives of Self Employed Women's Association (SEWA) or barefoot teachers of Tilonia in Rajasthan. It is not hard to imagine how easily and effectively these 'barefoot' models can be scaled up given advanced technologies and standardized, film based, multi-lingual content available on the web as discussed in previous sections. 5. Finance Models The new initiatives will require new funding strategies to encourage fledgling steps into new unchartered territory. Let us illustrate this with an example. Suppose there are two projects which are vying for funds today. The first one is an innovation in carburetor technology which will reduce petrol consumption by 10% and the other is a new wind mill design. Chances are that the first project will get the funding. The context in which risks and returns are evaluated is important. Currently, risks and returns are both evaluated mainly in financial terms and in the context of existing markets. Eventually, risks and returns will be assessed on financial, environmental as well as social terms and in the context of future markets. Fundamentally, any future smart initiative in any of the above areas needs to start with a realization that the eventual goal is to support and encourage a multi-dimensional transition as per table 1. The complete design, therefore, needs to be viewed from that perspective. 161
  • 161. Mega Trends of the Emerging Third Industrial Revolution in India Role of Government & Others… Creating a collaborative, participative, integrated and inclusive education system, which is a matter of great urgency in India, will require different stake holders to recognize and play their roles effectively. Some of these roles and expectations become almost self-evident in light of the above discussions; some of the recommendations are given below: 1. Role of Government: v Involve representatives from all stakeholder groups and jointly develop a clear vision for education reforms. It would be worth mentioning that every government document on education starts with some kind of 'vision statement'. However, the moot point is that if we were to ask twenty people who are actively involved in education, at random about the vision, we will, perhaps, get twenty different answers. This is because the vision is neither shared nor owned and therefore serves no purpose. The government would do well to create a vision which is democratically created, clearly articulated and widely shared so that all actions and efforts can be directed towards that. v policies and guidelines which: Evolve l a level playing field for all stakeholders at every level. As we have seen, it Provide is important that a skew in this might allow for local successes but would generally imbalance the system. l social and environment imperatives in education and ensure that the Support balance is not tilted by economic considerations alone. For instance, building employability is critical but so is developing a sense of service and contribution, and inculcating an empathetic nature and biospheric consciousness among our students. l Encourage technological developments in education at all levels. Because many of the new ideas in which technology is adapted for the purposes of education require investments, government must develop a mechanism to provide easy access to funds. This might require a departure from a highly conservative, control oriented mindset to a more trusting, risk-taking and empowering mindset. l in Invest educational infrastructure of all types - technological infrastructure, physical infrastructure like schools and soft infrastructure like developing new generation content and training the teachers. 162
  • 162. l Run lots of pilots before launching national initiatives. Involve all the stakeholders in the pilots. This will reduce financial risk and allow for smooth implementation later. l that both knowledge and skills are given equal focus in the development Ensure of a child at every level of education. The dissociation of knowledge and skills which is present in India today is not only an artificial dissociation but will also be untenable in the future. 2. Role of Industry: l Recognize and empathize with the role and expectations of other stakeholders, such as civil society and various social groups. The competitive and aggressive strategies of the past which pursued narrow interests must now give way to collaborative approaches focused on the common good. l Invest in larger education initiatives without expectations of immediate returns. Perhaps, the CSR funds from across the spectrum can be much better utilized for this purpose. The Azim Premji Foundation is a good case in point here. l long term business investments into education. Many MNC consumer goods Make and insurance companies gave themselves a gestation period of ten years or more when they entered the Indian market because they believed in India's potential. Now we need to show our belief in education by not looking at quick returns and five year exits. l support and participate in rural education models. Invest, l Provide encouragement and resources through student scholarships and chairs in educational institutes. Historically, we in India do not have a good record on these accounts as compared to many other developed countries. These activities should not be viewed through the eye of profitability or returns. 3. Role of Academicians: l Recognize that their role is to create knowledge and educate students in the best possible manner to satisfy the expectations of other stakeholders, especially students and industry. The mindset needs to change from merely dispensing knowledge to creating results and impact through education. l Teaching values such as service, environmental sensitivity, creative inquisitiveness, free expression and participative working rather than only focusing on grades and exams. The recent continuous and comprehensive 163
  • 163. Mega Trends of the Emerging Third Industrial Revolution in India evaluation (CCE) directives to schools are a step in this direction but it is still early days in the journey for teachers and students. l Teaching should happen close to nature and should engage with the local communities to draw from their wisdom and contribute towards solution of their problems. 4. Role of Civil Society: l plays a very critical role in driving behaviors through its own code of reward Society and punishments. l society Civil should reward ethical conduct, social contribution, community engagement and environmental sensitivity in day to day living in our homes, communities and institutions. l Additionally, civil society must also stop celebrating and reinforcing aggressive competing behaviors, excessive need for personal acquisitions and irresponsible and wasteful consumption. Nitin Khanna, CEO, Aantrishti Human Development Solutions Pvt Ltd 164
  • 164. Acknowledgement The author acknowledges research assistance provided by Gaurav Jogi Pathania and Medha Narayanan. Critical inputs and valuable advice was continuously provided by Pawan Agarwal, Advisor (Higher Education), Planning Commission, Government of India, Tarun Arora, CEO, GIST and Shobha Mishra Ghosh, Director FICCI. References: Agrawal, A., Clarck C. Gibson, 1999. Enchantment and Disenchantment: The Role of Community l in Natural Resource Conservation. World Development, 27(4), 629-649. Agarwal, Pawan (2006) Higher Education in India: Need for Change, (Working Paper no.180) l Indian Council for Research on International Economic Relations. Apte, l Bal. (2005, 10 Sept.). The Soul Goes Out of Education, The Pioneer: New Delhi. Bawden, R. (2008) "The Educative Purpose of Higher Education for Human and Social l Development in the Context of Globalisation" GUNI (eds.) Higher Education in the World 3 Basingstoke: Palgrave Macmillan. Borpujari U. (2007, Nov.). Education: The Last Frontier for Profit--Money Over Merit? The l Unesco Courier. http://www.unesco.org/courier/2000_11/uk/doss33.htm. Dewey, l J. (1916). Democracy and Education: an Introduction to Educational Philosophy New York: Macmillan Company. Dhar, lAnoop (2006). Cultural Studies as labor of negotiation in Higher Education, Dutz, l Mark A. (2007). (ed.) Unleashing India's Innovation: Towards Sustainable and Inclusive Growth, The World Bank: Washington DC. pp. 25-30. Guha, l A.S. (2010, Jnue 28). Towards an Educated India: Challenges for Vocational Courses, Education- Think Different: The Free Press Journal, Mumbai. 165
  • 165. Mega Trends of the Emerging Third Industrial Revolution in India Ghosh, l Sunanda. (2009). Education in Emerging Indian Society: Issues and Challenges, PHI Leaming Pvt. Ltd.: New Delhi. ISBN-97881-203-3793-0. Hattangadi, Vidya (2010) Towards an Educated India: Making Learning Curriculum Effective, l Education- Think Different: The Free Press Journal, Mumbai. July 26. Janakiraman, Pallavi. (2010, July 12). Towards and Educated India: Using Education to Bridge l Skills-Education Gap, Education- Think Different: The Free Press Journal, Mumbai. Kumar, l Krishan.(1989). Social Character of Learning. New Delhi: Sage. Roy, Kaveri (2010) Utilizing the Vacation, Education- Think Different: The Free Press Journal, l Mumbai. April 19. http://www.highereduforum.org/hef2.pdf Samantaray, Sudhir K. and Sahu, Gopal (2008) Ethical Issues and Challenges in Social Sciences l Research in India. Singh, l Abhinav and Puroit Bharathi.(2011, Winter). Ethical Issues in Higher Education and Scientific Research: Erosion of Academic Integrity, Academic Leadership: The Online Journal, Vol. 9 (1). Tandon, l R. (2008) "Civil Engagement in Higher Education and Its Role in Human and Social Development" GUNI Higher Education in the World 3. Basingstoke Palgrave Macmillan. Taylor, l Peter (2008) "Higher Education Curricula for Human and Social Development" In GUNI (ed.) Higher Education in the World 3 Basingstoke: Palgrave Macmillan. pp. 89-99. Tilak, l J.G.B. (2006). Education-a Saga of Spectacular Achievements and Conspicuous Failures, India, Social Development Report. p. 36. Journals: Centre l for Educational Research and Innovation (2008) Higher Education to 2030: Demography, Vol. 1, OECD. Higher l Education & Employment - Understanding the Intermingled Social and Economic Dimensions in Contexts of Tribals, Indian Journal of Millennium Development (An International Journal), Vol. 4, No. 1, March 2009. Higher l Education Reforms in India- Have We Effectively Addressed Equity and Quality?, OSED, Working Paper No.- 3/8, November, 2008. An Exploration of Private Sector Financing of Higher Education in the Philippines and Its Policy l Implications for India, Journal of Faculty of Educational Sciences, Ankara Üniversitesi, volume 40, Issue 2, 2007. Economics of Privatization - An Introspection of Indian Higher Education, Indian Development l Review : An International Journal of Development Economics, Volume 5, No. 2, 2007. Private l Higher Education in the Philippines and Lessons for India , CDRS, Working Paper No.-2, June, 2006. Human l Capital and the Economic Benefits of Education- Understanding the Investment Arguments, OSED, Working Paper No.- 1/06, March, 2006. 166
  • 166. An Insight into the Higher Education System of the Philippines :Changing Paradigms and the l Private Sector, The Economic Challenger, July,2005. Higher l Education and Employment Status of Women in Gujarat, OSED, Working Paper 01/2004. Higher l Education and Self Employment- An Intrinsic Reflection, The Economic Challenger, FebApril 2002. The Ethics in Management, Ethical Issues in Management(ed.) Commonwealth Publishers, New l Delhi, 2002. Human l Values: A Holistic Approach, Ethical Issues in Management(ed.), Commonwealth Publishers, New Delhi, 2002. Financing of Education - Some Theoretical Issues, Privatisation of Education (ed.), Mangaldeep l Publications, Jaipur, 1999. Opinion l and Attitude about Privatisation of Education, Higher Education (ed.), Common Wealth Publications, New Delhi, 2000. Public l Institutions, Private Institutions and Monopolistic Competition - Higher education Analysis, Higher Education (ed.), Common Wealth Publications, New Delhi, 2000. Globalisation and Privatisation - Some Theoretical Issues, Economic Development (ed.), Anmol l Publications, New Delhi, 1998. Websites: http://education.nic.in/ l Ministry of Human Resource Development "Guidelines of Jan Sikshan Sansthan" available l online at National Literacy Mission http://www.nlm.nic.in/ National l Knowledge Commission http://knowledgecommission.gov.in/ National l Literacy Mission http://www.nlm.nic.in/ India lStudy Centre http://www.indiastudycenter.com/ http://www.timeshighereducation.co.uk/world-university-rankings/2010-2011/top-200.html l http://economictimes.indiatimes.com/news/economy/agriculture/india-needs-to-focus-onl agriculture-research-programmes-for-increase-in-productivity-ugc-chairman-vedprakash/articleshow/10126714.cms http://articles.timesofindia.indiatimes.com/2011-09-20/ahmedabad/30179701_1_regionall languages-entrance-tests-raghuveer-chaudhary http l : / / w w w. a d i t ya b i r l a . c o m /s o c i a l _ p ro j e c t s /o ve r v i e w. h t m " http://www.vrionline.org.uk/ijrs/Oct2009/community%20networks%20%20the%20case%20 study%20of%20gmcl.pdf htt l p : / / w w w. c h a t h a m h o u s e . o r g / s i t e s / d e f a u l t / f i l e s / p u b l i c / R e s e a r c h / Asia/bpindiaeducation.pdf 167
  • 167. Mega Trends of the Emerging Third Industrial Revolution in India http://www.amity.edu/aie/ l http://www.highereduforum.org/ l www.tiss.edu. l www.jnu.ac.in l www.uni-mysore.ac.in/ l http://www.ethicscenter.uci.edu/ l http://www.ethics.harvard.edu/the-center/history l http://blog.sangamindia.org/ l http://www.greaterkashmir.com/news/2011/Sep/19/malik-for-coordinated-efforts-tol promote-kashmiri-language-44.asp www.teachforindia.org/theory-of-change.php l http://www.hole-in-the-wall.com/" l http://institutionalperformance.typepad.com/institutional_performance/affordability_of_ac cess/ http://www.graymatterscap.com/affordable-private-school-initiative l 168
  • 168. Mega Trend 5 The Ascendance of Civil Society
  • 169. The Ascendance of Civil Society Global Scenario Jeremy Rifkin The Third Industrial Revolution rolls together the last stage of the great Industrial saga and the first stage of the emerging Collaborative Era. It represents an interregnum between two periods of economic history — the first characterized by industrious behavior and the second by collaborative behavior. If the industrial era emphasized the values of discipline and hard work, the top- down flow of authority, the importance of financial capital, the workings of the marketplace and private property relations, the collaborative era is more about deep play, peer-to-peer interactivity, social capital, participation in open commons and access to global networks. The metamorphosis from an industrial to a collaborative revolution represents one of the great turning points in economic history. The civil society will play an increasingly important role as an incubator of critical social capital and as a progenitor of thousands of new social enterprises and millions of new jobs, as the evolving Third Industrial Revolution morphs into the collaborative age over the next half century. The civil society, where human beings create social capital, is made up of a wide range of interests — religious and cultural organizations, education, research, healthcare, social services, sports, environmental groups, recreational activity and a host of advocacy organization, whose purpose is to create social bonds. While the civil society is often relegated to the back tier of social life and regarded as marginally important in comparison to the economy and government, it is the primary arena in which civilization unfolds. There are no examples in history where a people first set up markets and governments, then later created a culture. Rather, markets and governments are extensions of culture because culture is where we create the social narratives that bind us together as a people, allowing us to empathize with one another as an extended fictional family. By sharing a common heritage, we come to think of ourselves as a community and accumulate the social trust, without which markets and governments would be impossible to establish and maintain. In short, the civil society is where we generate “social capital.” 171
  • 170. Mega Trends of the Emerging Third Industrial Revolution in India Because the Third Industrial Revolution is deeply collaborative in nature, it requires a trusting and transparent relationship between people. Creating social capital in the civil society, therefore, will be critical to the success of the coming economic era. A younger Internet generation weaned on social media, is amassing an unprecedented accumulation of social capital, much of which is finding its way into the social entrepreneurial movement sweeping the globe. Social entrepreneurs are streaming out of universities all over the world and creating new businesses that bridge the “for profit” and “not for profit” sectors — hybrid enterprises that will likely become more commonplace in the years to come. Being both entrepreneurial and cooperative is no longer considered a contradiction. But, rather, it is a prescription for reordering economic, social, and political life in the 21st Century. The civil society, then, is a powerful social force. It also accounts for a growing percentage of the GDP, especially in the more developed nations — averaging more than 5% of the GDP in the US, Canada, France, Japan and Australia. The civil society is also a major employer. Although millions of people volunteer their talents, resources, time and skills in civil society organizations (CSOs), millions of others work as paid employees in CSOs. In some nations, it is the fastest growing employment sector. Nonprofits employ nearly 56 million full-time equivalent workers or an average of 5.6 percent of the economically active populations in 42 counties surveyed. In the US and in many EU member states, the nonprofit sector already accounts for more than 10% of total employment. The Civil Society is likely to become as significant a source of employment as the market sector by mid-century, for the simple reason that creating social capital relies on human interactivity, whereas creating market capital increasingly relies on intelligent technology. Growing employment in the civil society will provide an increasing percentage of the consumer income necessary to purchase goods and services in an ever more intelligent and automated global economy. 172
  • 171. The Indian Story Yashwant Deshmukh The Present Context and Dynamism of Civil Society In India Independence had come to India like a kind of revolution. Now there were many revolutions within that revolution… All over India scores of particularities that had been frozen by foreign rule or by poverty or lack of opportunity or abjectness had begun to flow again. — VS Naipaul/ India: A Million Mutinies Now Written by the Nobel Laureate nearly a quarter century ago, does his description still sound valid for the times we are living in? Has India gone back to the repression from which it fought to gain its freedom, and this time from its own political system and not a foreign power? Opinions will vary. But that we are living in trying times needs no explaining. On one hand, while the fruits of market liberalisation were being hailed on the macroeconomic parameters and India is indeed shining in certain pockets, little has been achieved at the micro level. Disparity between the haves and the have-nots has increased. A select few – the influential, the business class and to an extent the middle class have been able to leverage the opportunities. As a result, beyond the fringes of the megacities, even within the boundaries of the socalled developed states, disparities have gained phenomenal proportions. Social parameters have not matched the economic performance. India's human development indicators (HDI) are a clear example that many smaller nations have done better in social development including health, primary education and gender equality, than India has. On the other hand, institutional corruption has made headlines. Gone are the days when a Rs. 60-crore scandal would shake the nation. Now, corruption involves hundreds of billions of rupees. It would be pointless to make a quantitative summary of the corruption scandals of the new century as the figures are there for anyone to peruse. The qualitative questions thrown are more severe, especially because much of the economic advantages seem to be waning. Where is the nation heading? How are its masses getting ready to face these challenging times? Will the growth finally be as inclusive as the industry wants it to be? In answering these questions it is imperative that the larger masses exert themselves on the system. This entity is often referred to as the “civil society”. In 2011, the term civil society earned prominence as Anna Hazare's anti-corruption movement gained tremendous support from India's vocal middle classes. This movement, which is not spearheaded by any political party, has also raised some fundamental questions on the way democracy functions. 173
  • 172. Mega Trends of the Emerging Third Industrial Revolution in India If Members of the elected Parliament represent the civil society, then why should there be a need to create a parallel force to make the system work? Has democracy as it was conceived failed to perform? Hazare's movement has essentially sought the enactment of a law that would create an ombudsman and fully independent corruption watchdog to investigate, prosecute and punish corrupt public servants of all hues and levels. This has been termed the “Jan Lokpal Bill”, or the Public Ombudsman Bill. Parliamentarians had discussed such a bill for decades but to no avail. At the time of the writing of this chapter, the UPA (United Progressive Alliance) government was unsuccessfully trying to launch a highly controversial Lokpal Bill through Parliament. Hazare said the government's bill is too “weak” in countering the extra-legal process that has spread to even the most basic level of governance. The protests by Hazare and thousands of Indians forced a wider discussion in Parliament on the proposed legislation thus stalling the government's version of the Bill for the time being. The movement has brought the incumbent government to a situation of policy paralysis over the last year because most of its time is being spent in coming up with strategies to quell and dissipate the people's movement. The policy paralysis is adversely affecting even the markets, with hesitancy on the government's part to implement much-needed and hard-hitting reforms for the economy. A case in point is the deadlock over FDI in multibrand retail where politics prevailed over policy reforms and the government's ambition of allowing 51% FDI in multi-brand retail and 100% in single brand was placed on the back burner. It could be argued that such public mistrust of an elected government is more a vacillating and momentary effervescence than a sustainable emotion. Yet, the same has shown ample potential to create mass upheavals, even if ad hoc, against the ruling establishment. This comes at a time when India's economic achievements and potential are widely hailed, and the nation is seen as a future “growth engine”. Therefore, its people should ideally be more “aspirational” and “willing” to participate in activities, professing a faith in a system that has since 2008 absorbed the shocks of global recession better than most other countries. Whether this victory of a people's movement is momentary or yields a long-term result is yet to be seen. But this system has brought into limelight the non-partisan formations or “civil society”, and has connected a politically non-aligned modern urban generation to the political process. In our study we examine this phenomenon of the ascendance of the civil society, its genesis and relevance in future political and economic machination of a nation, and how it is poised to play a far greater role in world affairs. Within the limitations of our finding, we surmise the following points. This recent ascendance of the civil society is not an isolated phenomenon but has come about after a long period in which self-serving political machinations have alienated the people from the government. Nor is it sudden; it is rather a “crescendo” with the possibility 174
  • 173. of recurrence in the future, in which the civil society formations will only gather momentum and increasingly flex their muscle. India's civil society has always been intrinsic to its political and economic development. Indeed, it can be said that most changes in polity and economy have not necessarily been initiated by political parties but by civil society groups. Historically, most political parties initially emerged out of civil society groups. The Congress party, which was established in 1885 as the Indian National Congress and played a stellar role in the Indian freedom struggle, is the greatest example of this phenomenon. The Congress was formed with a nudge from India's then British rulers as a way of including (national) Indian representation in policy-making. But soon the Congress became a sociopolitical formation championing the cause of Indian self-rule under the leadership of Mahatma Gandhi. His avowed goal, which shaped the Congress at the time, was not to create a political party but a political system. However, in due course, the Congress became a party under India's first Prime Minister, Jawaharlal Nehru, who used its dominant position to both lead and shape a multi-party polity. It was subsequently felt that all “wants” or “needs” in the society require their political formations. Hence, the political parties got pre-eminence over social formations, and political parties quickly proliferated even if only nominally representing different social groups in the system. The only group that remained non-partisan as a group was industry, which preferred to “lobby” whichever political formations took power, to press for business-friendly policies. As for the middle classes, they became increasingly alienated from political machination and learned to adapt to a “system” that didn't change with the changes in government. However, “corruption” and the political failure to include the larger masses in formulation of policy centralised production geographically and wealth socially. The middle class was also relatively untouched by the business and industry group which, after independence, focussed mainly on collaborating with the government to gain licenses and permits so they could start or expand various business initiatives in tune with the gaping gap in infrastructural needs of the economy at the time. This led to the creation of a huge geographic and socio-economic divide, triggering the growth of NGOs. The NGOs helped in disseminating policy benefits to the economically challenged groups and in many cases helped in establishing sustainable production and economic processes on the ground in several parts of the country. Although corruption seeped into this sector, it paved the way for the re-emergence of the Civil Society in the country. 175
  • 174. Mega Trends of the Emerging Third Industrial Revolution in India Defining Civil Society One may argue that there is no universal definition of “civil society”. Most definitions hinge on western contexts. But such a definition borrowed from the west does not often work in the Indian context. Civil society has historically had a volatile existence, with an intermingling of vastly different entities. However, for the sake of our study, we need to put forth a tentative definition. While doing that, it is important to study some of the definitions that have been already proposed. Historically, there was little difference between society and the State. (The term was perhaps first used by the Roman philosopher, Marcus Cicero.) The social rules and the laws of the State were often (though not always) the same. And often, the term denoted a “good society”. The discourse on civil society became more poignant in the 17th century when it was realised that the political state is not completely an extension of the civil society. A mechanism had to be defined to protect the individual from the excesses of the State. Even so, the practical applications were not in place until the 18th century. The essentially European thought subsequently expressed itself in other parts of the world under European influence. The Indian renaissance, with its epicentre in Bengal, was largely a social movement to change social practices, and became a precursor of the political process. That civil society in itself has contradictions, owing to conflicts of interests, was highlighted by Hegel. He called it the “civilian society” and created a distinction from the political state. He considered the political state superior to the civilian society. In modern times, the definitions of civil society have been even more varied. According to the London School of Economics, “civil society refers to the arena of un-coerced collective action around shared interests, purposes and values.” In theory, its institutional forms are distinct from those of the State and the market, though in practice, the boundaries between the State, the civil society and the market are often complex, blurred and negotiated. Sociologist Neera Chandoke believes that civil society is “not an institution; it is rather, a process whereby the inhabitants of the sphere constantly monitor both the state and the monopoly of the power within itself”. In his book, The Civil Society-Governance Interface – an Indian Perspective, Rajesh Tandon says civil society is a “collection of individual and collective initiatives for the 'common public good'”. Another scholar, Vinay Lal, writes in his book, Gandhi, Citizenship and the Idea of a Good Civil Society “The phrase 'civil society' operates on a very wide register. NGOs think of themselves as synonymous with civil society, but this is the narrow end of the spectrum. By civil society I wish to designate predominantly non-state actors and institutions and the social and political agendas advanced by such actors.” The above definitions are not completely coherent. But it is interesting to note, despite their correlations, that the State or governance are not part of civil society. Hence, for the 176
  • 175. purpose of our study, we define civil society as nation minus governance/seat of power. Governance would typically include the executive/bureaucracy. We use the word “nation” and not “State”, because State may include legislature, judiciary, executive and the news media but not society, whereas “nation”, although abstract, is more holistic. Again, we cannot also say “nation minus State”, because the State structure has the legislature, the nominal representative of the people, and the news media that often counters the other wings. In fact, the word “State” in itself is vague, and “governance” is a more concrete term. Some social philosophers take the State as the pre-condition for civil society. Others differ. Daniel Boorstin, in The Decline of Radicalism, says: “Even in modern times, communities existed before governments were here to take care of public needs. There were many groups of people with a common sense of purpose and a feeling of duty to one another, before there were political institutions forcing them to perform their duties.” However, we acknowledge that civil society is not homogeneous or coherent in itself. It may range from ad hoc formations in the villages to larger well-organised mass movements on the national scale. Civil society is more a “process” than a static entity, and changes form in accordance with the need of the day. Anyone in civil society ceases to be its part when elected/promoted to/captures power in governance. Conversely, anyone displaced from governance, as and when in a position to garner a larger mass appeal, would automatically be a part of civil society. As noted earlier, political parties have often been preceded by civil formations that subsequently joined politics aiming to improve governance. The Congress, the Left, the BJP, the BSP – all started as civil formations. However, despite theoretically aggregating the diverse social interests, political parties now are in crisis. The “ascendance” of civil society, has to be seen in context of the inadequacies in the “system”. The issue is further highlighted as the entity gains legitimacy following the example of Europe, where civil society has proliferated. It has increasingly become a prominent economic force as well. The Present Context of Anna Hazare Phenomenon Since Independence from British rule in 1947, corruption in public life has been a recurrent issue. But hardly ever has a non-political entity challenged it. Earlier, political parties were formed to supposedly fulfil or carry forward a civil agenda to fight corruption. They constituted what we now call the opposition in Indian political lingo. But now a group of people, nonpartisan in nature, are challenging the federal government elected by hundreds of millions. The choice of their figurehead is interesting. Anna Hazare is a person straight out of the idealistic India, one who most people have come to revere even if not quite follow. The reverence requires a moral submission. He is “saintly” and professes the philosophy of 177
  • 176. Mega Trends of the Emerging Third Industrial Revolution in India another saint, Mahatma Gandhi. His way of life is what Indians are taught to revere. He is a minimalist with few material possessions (almost none, except a small room, some clothes and utensils). A vital link between the upper and the lower classes, the middle classes have stayed away from political ideology for long. They are not the voters politicians woo. Largely apathetic to the electoral process, the middle classes view all political parties with equal distrust and suspicion. Yet, the most innovative ideations are triggered by the middle classes. Getting them on his side and igniting their imagination has been Hazare's most significant achievement. Civil Society in The Context of Gandhi's ideas Gandhi defined economy using moral welfare and not material welfare as a criterion. According to Gandhi, consumption should be minimal and life self-reliant. Property should belong to the community rather than the individual. Just and equitable, such a society would take care of the prime needs of the weakest sections. Gandhi's economic construct was centred on decentralised policymaking empowering village communities. His Gram Swaraj was a need-based process that rejected surplus creation. Asking of society to be non-exploitative and non-authoritarian, he envisaged a flourishing “civil society”in which a network of non-governmental associations supplements the state. “A good society… needs both the State [acting through coercive power] and a vibrant civil society [acting through non-violent power],”Gandhi said. He wanted the economic processes to be performed through “trusteeship” with individuals expected to practice “non-possession”, or aparigraha. In essence, Gandhi thought of an economically active role for civil society. For Gandhi, this force above all underpinned the economic structure, aiming directly at both material and spiritual well-being, the two not being contradictory and material needs being minimal. Gandhi's thoughts were beyond the scope of modern macro-economic parameters. As such, his ideas have been debatable, especially in view of the complex relationship the Congress party – of which he was long the de facto leader – had with businessmen and industrialists. His stress on decentralisation is perhaps the biggest takeaway in modern times, when even industry struggles to find ways to expand profitably, down to the local and micro levels. Gandhi's concepts formed the basis of the later movements of Acharya Vinoba Bhave and Jayaprakash Narayan. The Sarvodaya (Awakening) movement they launched espoused rural self-sufficiency, entailing land redistribution (via Bhave's bhudaan, or land donation) 178
  • 177. and the promotion of cottage industries. Although aiming at economic self-sufficiency, Sarvodaya was also a critical challenge to social inequities in India, chronically manifest in caste-based discrimination as well as in the feudal serfdom of the zamindari (landlord) system. Sarvodaya aimed to change the value system at the grassroots level. The movements gained popularity in many parts of north India, and may be considered the most poignant movement in free India on the lines of Gandhi's teachings. However, both campaigns – particularly Jayaprakash Narayan's (the JP movement, as it is known) –became predominantly political. JP roused sentiments nationwide against Prime Minister Indira Gandhi, triggering a wide crackdown on political and ideological opponents and the imposition of the infamous Emergency in 1975, which severely curtailed civil liberties and posed the first genuine threat to India's nascent democracy. That Indians rejected Indira Gandhi's fascistic streak and ousted her from power less than two years later is a matter of historical record. To some extent, that history finds a parallel in Hazare's movement of 2011. Hazare too has become starkly against the ruling party. It has mass appeal as well, although it must be acknowledged that Jayaprakash Narayan's movement had far greater active participation of the people. Indeed, given that the information networks were less developed in the 1970s, Jayaprakash Narayan's success was all the more spectacular. Hazare's movement, on the contrary, has been catalysed by the news media, the internet and mobile telephony. This perhaps explains its mostly urban popularity, unlike Narayan's movement that spread deep into rural areas as well. Characteristically, Jayaprakash Narayan's movement worked at both the ideation and the practical levels, with practical changes being attempted at the grassroots on a large scale. Hazare's focus is narrower. His grassroots activities were limited within his experimental village, Ralegaon Siddhi. Having said that, both movements are Gandhian in nature, with a strong leaning toward non-violence. A Status Report of The Non Profit Organizations' In India There is still no clear picture of the spread or scope of the totality of civil society initiatives for promotion of public good. In the absence of any authentic data-base, most descriptions of the work of these types of organizations remain personalized and anecdotal. The civil society sector workforce is one of the largest employment sectors in India and growing by the day. Yet, India is still far behind in defining the scope and management of civil society initiatives. The reason being the definition of civil society still remains ambiguous in India. This brings us to the question: How large is the non-profit sector in India? How many nonprofit organizations (NPOs) are in India today? 179
  • 178. Mega Trends of the Emerging Third Industrial Revolution in India According to Central Statistical organisation, Government of India, 59% of NPOs are based in rural areas. Distribution of Societies by Location Urban 41% Rural 59% Source: Compilation of Accounts for NPIs in India in the framework of System of National Accounts, CSO, Government of India (2009) The distribution of registered Societies in India is highest in Maharashtra, Andhra Pradesh, Uttar Pradesh, Kerala and Karnataka as shown in the Figure below. Top 5 States by registration of socities 483552 460888 433007 326392 189744 Andhra Pradesh Kerala Maharashtra Uttar Pradesh Karnataka Source: Compilation of Accounts for NPIs in India in the framework of System of National Accounts, CSO, Government of India (2009) It is evident from the figure below that the civil society in India has seen a significant growth in the last two decades. Distribution of Societies registered in different periods 1200000 1000000 800000 600000 400000 200000 0 Upto 19701971-1980198 -19901991-2000 2001 Info Net Onwards Available Source: Compilation of Accounts for NPIs in India in the framework of System of National Accounts, CSO, Government of India (2009) 180
  • 179. The figure below indicates that out of the total registered societies in India, 1.3 mn (41%) are under Social Services activities, 0.6 mn (19%) under Education & Research, 0.37 mn (12%) under Culture & Recreation, 0.23 mn (7%) under Unions, 0.16 mn (5%) under Development & Housing, 0.15 mn (5%) under Religion, 59,507 (2%) under Health, with the remaining societies under Environment, 27,632 (1%) and Philanthropic intermediaries and voluntarism promotion, 18,395 (1%), Law, Advocacy & Politics 6347 (0.20%), International activities 3072 (0.1%) and others. Info is not available for 60874 societies. The top three categories account for 72% of the registered societies Percentage Distribution of Societies registered under various activities Law, Politics etc 0% Philantrop-, Volunt arism 1% International Activities 0% Religious 5% Business Association 7% Not elsewhere classified 5% Info Not Available 2% Devp & Housing 5% Health 2% Social Services 42% Culture & Recreation 12% Edu & Research 19% Source: Compilation of Accounts for NPIs in India in the framework of System of National Accounts, CSO, Government of India (2009) Unfortunately the lack of available data on NPOs in recent years in India is one of the major constraints that one faces while carrying out any analysis of economic significance. The pattern of distribution of receipts on the basis of John Hopkins University 2000 data illustrates that more than half of all receipts of NPOs in India are self generated (through fees, charges for services, etc.). Grants and donations taken together constitute two-fifth (41.9%) of total NPO receipts in India. Although the data is dated, it gives us a feel of where India stood a decade back. India scored OK in Sustainability, but lagged poorly in Capacity as well as Impact. The survey findings challenged several myths and raised many new questions. One of the urgent needs today is mapping of NPOs across all parameters including the economic significance of the sector in sync with common derived global definition of civil societies. 181
  • 180. Mega Trends of the Emerging Third Industrial Revolution in India Civil Society In The Context of The Third Industrial Revolution Politics in the nation-state era operates along two poles, market and government. European Union politics, by contrast, operate between three nodes-commerce, government, and civil society. The shift from two-sector to three-sector politics represents a radical progression in the evolution of political life, with profound import for how we human beings organise our future. If two-sector politics made the Enlightenment vision viable, three-sector politics makes the new European Dream realisable. -Jeremy Rifkin/The Third Industrial Revolution (Chapter: Romancing The Civil Society) Jeremy Rifkin's roadmap for an impending 'Third Industrial Revolution' (TIR) may serve as a guide to the future role of civil society in the world and specifically developing nations like India. Rifkin questions the sustainability of the first and second industrial revolutions because they have failed to fulfil the aspirations of a majority of the world population. He suggests that society must take precedence over the market. He says the EU is the forerunner in the Third Industrial Revolution with concrete goals in green energy development, and in involving the civil society to achieve its goals. The TIR will be more participative and distributed. Thus, "distributed capitalism" would be the norm of the day. Individuals/communities would be producers and would trade freely in the marketplace. Rifkin describes a "New era marked by collaborative behaviour, social networks and boutique professional and technical workforces." This would necessitate a lateral power structure and undermine the traditional top-down model. While technological innovation has flattened employment generation in the traditional centralized structure, distributed capitalism would help generate jobs. The traditional economic structure has made life mechanical. But the new economic structure would work on the principle of "play to live", a la Sartre. It would also necessitate participative learning, unlike in the top-down approach. According to Rifkin, developing economies will adapt faster to The Third Industrial Revolution, provided there is a willingness to change course, as they have less dependence on traditional industry and power sources; in fact, in many of these economies, a majority of the population does not even have access to power. In Rifkin's scheme of things, civil society will play an extremely important role. The EU Third Industrial Revolution agenda, while acknowledging that civil society is becoming important, still places it behind governance and the market. But Rifkin envisages a greater place and bigger role for it. "The struggle between the older hierarchical power interests of the Second Industrial Revolution and the nascent lateral power interests of the Third 182
  • 181. Industrial Revolution is giving rise to a new political dichotomy, reflective of the competing forces vying for dominance in the commercial arena," he writes. Their politics is less about right-versus-left and more about centralised and authoritarianversus-distributed and collaborative. The politics will be of sustainability, prompting the adoption of the distributive and collaborative approach. Hence, there is a foundational economic logic for this development. Prof Rifkin looks at the civil society as a huge employment generator in the non-profit sector in the future, citing present data in the EU, the United States and Japan. In India, the economic premise to the rise of the civil society appears to be maturing. The effects of liberalisation have not fully percolated to the lower strata of society, a fact acknowledged by the industry that is pitching for "inclusive growth". Through his model of village self-rule, Gandhi had long ago proposed a distributed economic structure, making his thought a part of India's philosophy. Interestingly, small enterprises have always been a part of India's sustenance mechanism. The educated middle class had, however, long sustained a more organised set-up. But with the advent of IT and other modern professions, many have sought to set up their own sustenance mechanism. The rise of information infrastructure and social networks are now making it easy for ideas to travel across the middle classes. The modern information infrastructure is helping bring the youth closer to ideas. In the case of the Lokpal Bill, TV and internet played a major role in spreading the fight against corruption. Lateral decision making has already made a mark in the growth of small economic entities such as microfinance communities and rural self-help groups. The brands of Amul, a clutch of dairy products owned by a unique cooperative of tens of thousands of milk producers in Gujarat, and Mahila Griha Udyog Lijjat Papad popularly known as Lizzat, have shown the sustenance capacity of co-operatives in forming enterprises. It is important to note that Rifkin maintains that economy is secondary to culture and society, as opposed to the fundamental materialist thought (both in capitalistic and Marxian approach) in which economy precedes culture. The Indian twist to the story is the economic underpinning to the rise of the civil society, which was reflected in the demand to assign quotas in government jobs and colleges for the backward castes, as the governmentappointed Mandal Commission recommended in the 1970s. The growth of employment has not been significant in the organised sector since Manmohan Singh, then India's finance minister, kicked off the era of economic liberalisation in 1991,ending a plethora of licensing restrictions on industrial and business activity, and throwing open India's economy to increasingly unconditional foreign investment. 183
  • 182. Mega Trends of the Emerging Third Industrial Revolution in India The rise of the information infrastructure and the social networks has made it easy for ideas to travel among the global middle class, enabling a class that habitually shuns elections to participate more actively in political ideations. There are many examples of the participative economy and distributed capitalism as evidenced by lateral decision making in the growth of small economic entities such as microfinance communities, rural self-help groups, etc. Ralegaon Siddhi, a village in his native Maharashtra state where Hazare spawned a social engineering and village community experiment, is one example. Business of Civil Society as Distributive Capitalism There are many examples of contemporary civil society ascendances and their resultant influence on polity, law and economic structure. The civil society led enterprises, often referred to as the cooperatives, have not achieved undisputed success in India. However, there have been several efforts to form enterprises with management participation from the civil society. More often than not these efforts have attempted to unite a specific social group with common economic and social goals. It would be difficult to say that the efforts across the country have been successful or have had similar levels of success even in those cases where they gained momentum. Yet, the efforts show a few very common trends. 1. Economic goals with social empowerment 2. Collective effort to make a way into the 'system' 3. Creating enterprises with eco- sensitivities 4. Using micro-finance for collective micro-changes 5. Amalgamation of 'Social Profit' in the 'Private Profit' However, it may be argued, even in these ventures the better managed have performed better. That is, a certain level of corporatization has been needed to make these ventures successful. This structuring of management highlights the necessity of a 'business-like' approach, rather than a forced socialist approach, as these ventures have to evolve according to the market-place. These enterprises have shown signs of local self-sustenance. These efforts, apart from their economic avatars, which point at a possible direction in the future, also show how the civil society may assert itself in the life of the nation. 184
  • 183. 1. Economic goals with social empowerment: It is interesting to note that most successful social ventures are located in states with a not so strong culture of entrepreneurship. Keeping the economic goal at the core, the initiatives have attempted to achieve social empowerment. The SEWA enterprise is a good example. SEWA is a membership based trade union registered in 1972. It is an organisation of poor, self-employed women workers who earn a living through their own labour or small businesses. It was founded in 1972 by the noted Gandhian and civil rights leader Dr Ela Bhatt. SEWA's main goals are to organise women workers for full employment and selfreliance in terms of financial and social empowerment. SEWA's approach includes a set of activities to simultaneously increase farmers' economic, human and social capital and enable them to overcome poverty and exclusion. The SEWA movement is enhanced by its being a sangam or confluence of three movements: the labour movement, the cooperative movement and the women's movement. But it is also a movement of self-employed workers, with women as the leaders. SEWA's organizational model brings women farmers out of isolation. Women are connected to a strong network of social relationships which reduces the risks associated with the change process. The women are organised which brings collective strength and helps in increasing their bargaining power. This brings an identity to the women as workers and gives them a voice and representation. 2. Collective effort to make a way in the 'system' Often these enterprises have attempted to create a mechanism that negotiates with the larger system of either local governance or the country' governance, on behalf of the group it comprises. We can learn from the example of Amul. Amul is based in Anand. The brand Amul is owned by the Gujarat Cooperative Milk Marketing Federation (GCMMF) and it was expected that the model would be replicated throughout the country. What is known as the Amul Pattern now, has established itself as a unique model for rural development. Amul is the largest food brand in India and the world's largest pouched milk brand with an annual turnover of US $2.2 billion (2010–11). Its daily milk procurement is approximately 12 million litres per day from 15,712 village milk cooperative societies, 17 member unions covering 24 districts, and 3 million milk producer members. Amul has its origins in the Kaira District Co-operative Milk Producers Union Ltd., which was initiated as a protest against milk cartels in 1946. The co-operative, began with just two village dairy co-operative societies and 247 litres of milk. Dr Verghese Kurien was entrusted the task of running the dairy from 1950. Now it has spread over the entire state. As mostly women have been involved in dairy activities, the initiative has hugely benefitted the rural women, both economically and socially. 185
  • 184. Mega Trends of the Emerging Third Industrial Revolution in India The Amul model is a three-tier cooperative structure consisting of a Dairy Cooperative Society at the village level affiliated to a Milk Union at the district level which in turn is further federated into a Milk Federation at the State level. The three-tier structure was set up to delegate the various functions; milk collection is done at the Village Dairy Society, Milk Procurement & Processing at the District Milk Union and Milk & Milk Products Marketing at the State Milk Federation. This helps in eliminating not only internal competition but also ensuring that economy of scale is achieved. This model brought about the White Revolution in the country because the country's milk production tripled between the years 1971 to 1996. Similarly, per capita milk consumption doubled from 111 gms per day in 1973 to 222 gms per day in 2000. These cooperatives have not just been instrumental in the economic development of rural India but in improving the health and nutritional requirements of society. 3. Using micro-finance for collective micro-changes The concept of micro-finance has gained momentum in many districts of the country. These enterprises are sometimes standalone or a part of a larger social/NGO platform, like the RASS (Rashtriya Sewa Samithi) in Andhra Pradesh and also of SAMMAN in the state of Bihar. Irfan Alam has started a unique grassroots initiative which streamlines the workings of rickshaw pullers in India by bringing them under the umbrella of his firm -- Sammaan (respect in Hindi). Launched in 2008, Sammaan currently has 10 million rickshaw pullers under its operations, across a swathe of Indian cities. The venture has helped modernize the cycle rickshaw sector which constitutes a sizeable 30 per cent of India's urban transportation. The design of rickshaws is integral to the company's success; hence, Sammaan has established a full-fledged R&D center in Patna, the capital of Bihar, to improve on the old rickshaw models and morph them into more operator-friendly and profitable vehicles. The center employs 19 people, including three engineers, who are involved in grassroots innovation for the rickshaws. Irfan Alam, is also the founder of Sammaan Womens Association, which aims to empower women from the lower strata of society by giving them education, training and livelihood opportunities. Sammaan's operations have spread from one city to 10 in four states. The company's client list too, has swelled to over a dozen and includes reputed national corporations like Punjab National Bank, Bharti, Hindustan Times and Bisleri. Their next goal is low cost housing for rickshaw operators, carbon trading opportunities and a public offer by 2012. The company is expecting a 400 per cent growth in 2012, which will increase its turnover manifold from the current Rs one million (USD 20,000). US President Barack Obama recently lavished praise on Irfan Alam, founder of 'Sammaan Foundation' for his efforts to create jobs for unskilled people. 186
  • 185. 4. Creating enterprises with eco- sensitivities Many enterprises have aimed at solving the problems that have long plagued the local societies. For them; being green is not about another certification, but a matter of creating a sustainable working environment. For example, the enterprise of CONSERVE is not just about the bottom line; but also about a strong trend of being eco-sensitive in these initiatives. In a unique entrepreneurial partnership, Conserve works with ragpickers in the city of Delhi, raising their income levels and offering them an alternative to the squalor and grime of garbage dumps. Together with the ragpicker community, Conserve is removing plastic from the waste stream and building a social venture that is profitable and sustainable. They have turned discarded plastic bags into a valuable resource. Conserve combines principles from enterprise and social service in a new venture that recycles plastic waste and provides employment for ragpickers, one of the most marginalized groups in urban India. Using a proprietary process, they transform discarded plastic bags into a variety of fashionable products that are sold in high-end retail outlets abroad. Conserve has created a lucrative business venture out of plastic waste. It hires poor women in the slums of east Delhi to collect, sort, weigh, and clean plastic bags from the waste generated daily by the city's 14 million residents. Conserve employs almost three hundred people and pays them approximately Rs 3,000 a month, significantly more than the women would earn selling plastic to the local waste dealer. It offers this poor and disenfranchised segment of society security, identity, and dignity, thereby paving the way for a better life. It involves them in all aspects of the business, allowing them to build equity and learn useful skills. Through a process she invented, Conserve's founder Anita converts discarded plastic bags into large sheets that she uses to make a range of commercially successful goods. The final products—handbags, file folders, coasters, and other household items—are marketed and sold in first-world luxury goods markets, creating the potential for a shift in both how ragpickers perceive their own skills, and in the public perception of ragpickers. Conserve is also a training ground for ragpickers, who are encouraged to find their own fabrication units for plastic sheets through an assured buyback arrangement. Today, Conserve's handbags are sold at several high-end retail shops in London, and in the European stores of such well-established brands as Benetton. Building on her international sales successes, Anita introduced her products to Indian markets, where, following international trends, Conserve's recycled plastic bags soon became a fashion statement. The company makes and sells four thousand handbags a month and expects to achieve record sales. 187
  • 186. Mega Trends of the Emerging Third Industrial Revolution in India 5. Amalgamation of 'Social Profit' and 'Private Profit' The attitude of entrepreneurship has to persist, but the aim of the business has to incorporate 'Social Profit' in the 'Private Profit'. Here we talk about social goals with capitalistic means. This brings the focus on the concept of distributed capitalism, as opposed to private profit and socialism. One good example is TISCO. Labour unions, within the scope of our definition, are an important part of civil society. However, considering the turmoil that started in the pre-independence era and reached a peak in the 1970s and 1980s, the role of unions has been severely questioned. They have often been seen as arms of the political parties to bargain with industries and often have been seen as a hindrance to industrial activities. Labor unions changed the economic map of the country in the late 1970s and 1980s by shifting the industrial base from Bengal and Bihar to Gujarat and Maharashtra and to what was then a relatively less industrialized north India. This changed the production paradigm giving other parts of the country more advantage than the east. Tata steel (formerly TISCO), however, narrates a different story. Even though it was located in Jamshedpur in Jharkhand, it has seen no labour strike since 1928. Closer association of employees with management at TISCO began in 1919 and was formalized in August 1956. The aim was to promote increased productivity by providing a clearer picture to employees regarding the company's activities and to make them aware of their role and importance. It also created a means of self-expression for the workers, and reduced the need for confrontation between workers and management. In effect, it has created a joint process of management in which the workers visibly have a stake. The method consists of a three-tiered system with Joint Department Councils (JDCs) formed at the departmental level. JDCs study operational results and production problems. It also advise on the steps that should be taken to enhance production and economize cost. It also looks at promoting welfare and safety and welcomes suggestions on the improvement of working conditions. Joint works councils (JWC) perform monthly review of JDCs' functioning and other committees that look after safety, the canteen etc. At the top is the joint consultative council of management (JCCM). It advises the management on enhancement of production and the welfare of workers. It also looks at matters referred by JDCs and JWCs . A proper education mechanism has been put in place to ensure effective utilization of the process by management and union representatives. From 1957 to the middle of 1972 JDSs have discussed a total of 14,104 suggestions of which more than 70 per cent have been implemented. These suggestions have covered a wide range of topics and issues, but the most important point to remember is that the councils have been successful in involving workers equally in the process of production. 188
  • 187. Civil Society Business as an Empowered Group TIR envisions the civil society as an empowered group that will hold the individual in high esteem. In the West European version of the social / market model, the individual's freedom is a fundamental tenet of society. Hence, the state has been envisioned as a fatherland, taking care of its people not just in the existential sense of the term but also in every aspect of their aspirations. The state or society is not generally expected to have any authoritarian role in the individual's life. Apart from minor instances, some of which have been in evidence in the post 9/11 era, this has been a major factor in the success of European socialism as opposed to East European socialism which gave the State tremendous authority. Civil society has grown with the fundamental principles of the participative approach in mind. In India, the superimposition of that definition may be difficult (as with secularism). The macro-structure of the civil society is not as evolved at the micro level (although it must be said it has functioned well in many cases of rural development). For example, the concept of the Panchayat (India's unique ancient system that was made into law in the early 1990s) was that it would institutionalise representative self-rule at the village level. Apart from political challenges, the Panchayat has given birth to tremendous social challenges as often seen in its institutions upholding "tradition", while trumping the rights of the individual. There are many examples where the community's principles have been equated with upholding tradition often at the expense of undermining the individual. Then, don't we have to consider the evolution of the civil society itself as a pre-condition to our proposition of ascendance? Then there is the most important and talked about but least questioned and implemented principle of sustainability. A sustainable economic model is a prerequisite for the ascendance of the civil society. But increasingly, we are entering an era of distributed capitalism, with elements of both socialism and capitalism. It may be argued that there would be a greater shift towards socio-economic networking as a process, than towards the ownership model. This would further necessitate the growth of "sustainable" technology in place of the "cutting edge" ones, fuelled by green energy. The use of new age technology, along with networking platforms, is increasingly playing a dominant role in these social formations. With examples from Israel, Europe and India, the following may be anticipated: movements against authoritarian ways and self-serving machinations of vested interests will consolidate; feudal set-ups and the big and powerful corporations will be challenged. 189
  • 188. Mega Trends of the Emerging Third Industrial Revolution in India The basic production model of capitalism may be retained and only modified. The growing Western "autonomy" model and the traditional Indian "community" model of management appear set to merge. This would give greater power to the people, far beyond the power to vote. This might somewhat reflect Mahatma Gandhi's aspirations from gram swaraj - village selfrule - and necessitate participative management, increasing individual accountability. Hence, civil society formations, taken together, could well become large-scale employers as well. Underperforming economies especially require fair play to boost economic growth. The future thus needs to be participative and distributed for all. Global Business of Democracy and Civil Society's Role In It "I know of no safe depository of the ultimate powers of the society but the people themselves; and if we think them not enlightened enough to exercise their control with a wholesome discretion, the remedy is not to take it from them, but inform their discretion." - Thomas Jefferson Anna Hazare's vocal protest against an elected government and declaration of campaigning against the Congress in the upcoming Assembly polls has sent mixed signals to both his followers and opponents. Can civil society have an anti-incumbency sentiment? Does electoral democracy equal civil society regardless of the end result? Can the antiincumbency sentiment of civil society be treated as a mark of its ascendance? Can we connect it with the faceless opposition of the Arab spring, alternative leadership thrown up in a vacuum, as also seen in the Occupy Wall Street? What is the crux of democracy in the new world order? Is it time to break down the over-simplistic definitions? Suddenly, ideologies don't matter; the basic idea of freedom does. The confusing outcomes of elections across the globe point to a minefield of contradictory conclusions. For instance, can it be argued, on the basis of the outcomes, that antiincumbency dominates free and fair elections? Do the electoral victories of Bush and Blair suggest that anti-incumbency is irrelevant in Western democracies? Does Sheikh Hasina's loss in Bangladesh in 2001 mean that other considerations could lead voters to overlook good performance? Local or global, which issues influence voters more? 190
  • 189. The first concerns the responses of civil societies resulting in varying electoral behaviour in democracies that are at different stages of maturity. Our hypothesis is that local factors tend to matter more in mature democracies while global and extraneous factors carry substantial influence in new democracies that are yet to mature. The second hypothesis draws from the first and is related to the Third World, where the vast regional, cultural, economic and other disparities make it difficult to predict electoral outcomes - or even analyse results - on the basis of civil society aggregate responses. Both hypotheses might be called politically incorrect because pundits prefer a one-dimensional approach to analysis on the basis of which they draw general conclusions that would be then acceptable as "theory", valid across time spans and geographical locations. The electoral outcomes across the functioning democracies around the globe would clearly support the first element of our hypothesis: that voters pay more attention to domestic, local and bread and butter issues during elections. What of the second element of the hypothesis that voters in new and immature democracies tend to do the opposite reflecting the ascendance of civil society? The problem is that many new democracies have not witnessed free and fair elections over a prolonged period of time to arrive at a definitive conclusion. Civil society's influence on electoral outcomes marks its ascendance as a means of checks and balances on governance. Sometimes this public sentiment is confused with the reelection of a certain ruling combination, which is incorrect. Countries with high levels of negative incumbency are mostly healthy or progressive democracies, while those with positive incumbency are mostly unstable or struggling. With negative socio-economic indicators, the latter category has been trying to self-correct. But to have negative socioeconomic indices with pro-incumbency sentiment is a recipe for democratic disaster. The "System" vs "Civil Society": Bridging The Gap The 2011 civil uprising in India was significant as it represented the voice of the country's youth even though the political parties tried to project a political motive in the movement. A somewhat similar situation happened in Europe where civil society formations were seen as the enemy, and could not be absorbed in parties. The on-going civil society movement is creating a debate over the nature of India's democracy and its failure to establish a corruption-proof sustainable system. The establishment has failed to check corruption; which eventually undermines the sustainability of MICRO-enterprises. The very fact that this corruption confirms sustainability of MACRO-enterprise makes the business look like "anti-people" at large. This is precisely the reason why the civil society has had to step in. 191
  • 190. Mega Trends of the Emerging Third Industrial Revolution in India The civil society is demanding a voice in the government. Government loses social capital when it mingles too much in the market-place and in that process the question of sustainability goes for a toss. India as a nation has been pro-sustainability. Even Gandhi' thoughts centred on sustainability. India's system has been primarily anti-entrepreneurial. Wealth is in the hands of the holders. Hence social networks, supported by the new communication platforms, would be needed to create social enterprises. Sustainability is not a movement but part of culture. Is it a cultural phenomenon then? Yes, it is. The sustainability itself has been considered a part mentioned in business frameworks but now it has become THE framework. We need to focus on sustainability and how you create sustainability within the Gandhian culture, the moral of the society movement. Though Gandhi was not able to see the first free elections of India in 1952 he gave a clear message that people of India should not vote for the party but for the person. Nehru said that he got the inspiration from Gandhi but when it comes to the point of ministering the government, he said we need to move on the profit of institutionalizing the country. For the wellbeing of the nation's citizens; the ascendance of civil society wants to generate trust, social capital, social awakening, social connections and solidarity. Without these a stable and sustainable economy is not possible. We are seeing the civil society as a new economic force. Social Capital: Going Digital Doesn't Mean Diluting Human Element: There is an interest towards being 'free from capital' by holding capital socially. By 2050, there is a possibility of civil society being a big employer. This will be facilitated by innovation in technology. More and more people may work in a low margin but high volume market-place. There is a possibility of break-down in the market of buyers and sellers. There is an implication that workers may be paid in the non-capital way. It certainly does not mean that we are going back to the days of the barter system? In the context of transitional societies like India, it simply means that it has to cover the basic necessities first to confront the abstract poverty and then move to LRRD (Linking Relief with Rehabilitation and Development). Hence, the economy would move towards a more sustainable growth. The current generation is all about access to social networks and not ownership. It is about equal opportunities. Today's youth says, "I must have equal opportunities, whether I choose to avail them or not." This will allow everybody to actualize themselves and substantially engage in social networks. 192
  • 191. This is akin to the Third Industrial Revolution, proposed by Rifkin, which rolls together the last stage of the great industrial saga and the first stage of the emerging collaborative era. It represents an interregnum between two periods of economic history - the first characterised by industrious behaviour and the second by collaborative behaviour. Social capital is the culture of the society. New technologies are taking over traditional knowledge. For example, in India's carpet-weaving industry, where the craft is inherited by the families, there has been a sustained campaign against the use of child labour due to which the industry has collapsed. How does one protect such traditional knowledge? The civil society views are in total contrast to the government's and industry's stand. Civil society is the bridge between traditional knowledge and the marketplace which also retains the cultural context of traditional knowledge. Civil societies are where diverse traditional knowledge is created and preserved in areas such as sports, recreation, environment issues, traditional healthcare, elderly care, etc. As market forces get technologically sophisticated, competition will get fierce. However, the human element cannot be ignored. This leads to creation of social entrepreneurs. Civil societies are more tensile than the market place. Hence when market forces collapse, civil societies take over. As the intelligent technology displaces the workforce, it is the civil societies that will retain the equilibrium. Sustainability is the key. Without social capital, markets will not work. So, is our business on the right side of table? Have we learned our lesson from massive people's movements against the takeover of agricultural land for industrial purposes in Singur, Raigarh and Nandigram in West Bengal and in other places? Is the Industry doing enough to build that social capital? Is it good enough for society? Is it good enough as philanthropy? What is expected out of corporate social responsibility (CSR)? Is there enough ground to say that we are shifting from a crony capitalist state to a real 'capitalist' state? If yes, would it create a "sustainable" economy? What is the future? Are we doing even the "basic" CSR, that is, to give a genuine product at a genuine price? Business has to learn to be on the same side of the table as civil society; if it has to be sustainable. The paper has been based on both secondary level researches, interviews with specialists and activists, and our primary findings of popular notions have been culled through ground-level surveys on different topics across India. 193
  • 192. Mega Trends of the Emerging Third Industrial Revolution in India Resistance as Civil Society Response Beginning in the 1980s, there have been several civil society peoples movements that challenged the government, often forcing change in public policy. Most such movements have had their genesis in laws, legislated since the early 1970s, seeking a balance between the needs of business and those of environment. Most critically, however, the looming threat of large-scale displacement by industrial projects triggered some of the biggest civil society movements across India, beginning with the Narmada Bachao Andolan, NBA (Save Narmada Campaign) in Madhya Pradesh (MP)that has now lasted more than two decades. A mass movement built solidly on political lines organising hundreds of thousands of people across thousands of square kilometres, the NBA proved to be a precursor to innumerable civil society campaigns across various states that sprung up in opposition to industrial projects seeking to displace the masses from their homesteads or farmlands. The NBA principally aimed to upend a massive project to build a clutch of big and small dams in the Narmada Valley in order to dramatically increase the supply of water to the parched terrains of M.P. and Gujarat. Notably, it can be said that the NBA failed to halt the construction as the Supreme Court in 2001 ruled in favour of the project. And yet, there is no doubt that the NBA and its longdrawn campaign provided immense ideological capital to similar campaigns that were to follow. Can it not be affirmed that seemingly anti-business movements that the NBA has spawned are unquestionably civil society efforts aimed at ensuring that the masses are invited to the table so that they can protect their interests during policy-making? The evidence certainly suggests so. Consider the on-going people's campaign in Orissa against the building of what would be the world's biggest steel plant, by South Korean industrial major, Posco. While the NBA, almost entirely a people's movement against the government; it's the government agencies that worked firmly against its demands. On the other hand, the people's movement against Posco has stunningly found support in the quarters of government, such as seen with the responses of India's then Environment Minister Jairam Ramesh, whose ministry raised questions about the way in which the state government of Orissa as well as the Central Government departments accorded permissions for the steel project. The civil society claimed a far bigger victory when the then Communist government of West Bengal was forced in 2007 to backtrack from building a Special Economic Zone in Nandigram, in the southern part of the state, for which the contract had been given to the Salim Group of Indonesia. In a bloody confrontation between villagers, led by armed Maoist insurgents, and the police, dozens died on both sides. Does this not, despite the attendant violence, qualify to be seen in the framework of a civil society response? 194
  • 193. While violence must not be condoned, it has been forcefully argued that it was the government's authoritarian style of decision-making, which excluded involvement of the local communities in deciding the fate of their lands, that forced the people to take the law into their hands. The impact of this movement and that of the 2008 movement against a car manufacturing project in the nearby Singur were the key reasons for the Left Front's massive defeat in the 2011 assembly elections after ruling of West Bengal for an unbroken 34 years. Indeed, both Singur and Nandigram conflicts saw massive media coverage unlike the media's attitude towards the NBA movement, which was covered by the media in a negative light. As a result, the West Bengal protests became known internationally. The Singur conflict is of special significance to our study since it potentially pitted the news media against India's most respected industrial house - the Tatas - who later moved the car project to Gujarat. It is important to note that while the media supported the people's movement against the forcible acquisition of land, they maintained a crucial balance in their reporting by clearly supporting the policy of industrialisation. The two movements also count for a maturing of the civil society responses and reactions, in that they received overwhelming civil society support from outside West Bengal, including artists, writers and activists as well as human rights groups. Even Nobel Laureate Amartya Sen supported the car project but opposed the forcible acquisition of land. In fact, this could well be India's first civil society movement on a business-related issue that forced a political party - the Trinamool Congress - to order cancellation of the land acquisition, as Mamta Banerjee did after she became chief minister. When the Tatas moved court against the cancellation, the Supreme Court stepped in to return the land to the villagers. By contrast, however, the deadly armed insurgency of the Maoists across central Indian forests against the land acquisition for industrial purposes has found little support in the news media and has even split the wider activist civil society on the issue because the Maoists use violence against security forces. The civil society has been equally critical of government violence against the tribal villagers. Sections of the news media, too, have been vocal against the government's want on use of violence, especially since its foot soldiers - who invariably are alien to the forested terrain end up as sitting ducks for the Maoists. At another level, the judiciary is showing a nuanced approach towards the conflict, finding fault with the government's strategy. In 2011, a landmark Supreme Court judgement ordered the government of Chhattisgarh to wind up the Salwa Judum, a highly controversial extra-constitutional militia it had set up in 2005 pitting the tribal people against each other, letting loose an orgy of febrile violence. 195
  • 194. Mega Trends of the Emerging Third Industrial Revolution in India The Supreme Court allowed bail to human rights activist Binayak Sen, noting that his interactions as a doctor with an alleged Maoist activist inside a jail did not amount to aiding and abetting the insurgency, for which Sen is being tried. The pressure on the Chhattisgarh government to walk away from the case against Sen mounted after a group of Nobel Prize winners across the world condemned his arrest and appealed for his release. The instances above clearly indicate that the civil society is now acquiring incontestable strength to challenge what had long been one-sided decisions from the State, which would justify industrialisation in the name of the greater good. In this coming of age, the civil society in India has been forcing its agenda on decision-making, creating a place for itself on the high table. Indeed, the Narmada, Singur, Nandigram and Orissa's anti-Posco movement are only a few of the many civil society responses and reactions to business and industrial policies of the government that are mushrooming across India. Recent years have seen large-scale campaigns against indiscriminate mining, such as in Rajasthan and in Karnataka. In 2012, the civil society is certain to intensify its battles against several proposed nuclear power plants. Such an agitation in Tamil Nadu has already forced the state's chief minister, J. Jayalalithaa, to seek intervention from Prime Minister Manmohan Singh. Another agitation in Jaitapur in Maharashtra also threatens the government's plans to set up what would be the world's largest nuclear power plant, as part of the deal that Singh signed with then U.S. President, George W. Bush, in 2005. The last 20 years stand in major contrast to the first two decades of Indian independence, wherein major industrial works were executed by the government and industry together without so much as a whimper from the civil society against the forcible acquisition of land and the displacement it brought. Enough data has been unearthed by researchers across India on how that displacement - from Punjab to Andhra Pradesh, from Jharkhand to Maharashtra; building dams, power plants, canals, and steel factories - fuelled homelessness and poverty that has turned chronic over the decades. Civil society has emerged as a balancing factor to ensure equity in the nation's economic progress. It cannot be denied that in the modern world, the shared economic well-being of a nation's citizenry is crucially dependent on rapid industrialisation. A stark example of the people's suffering on account of a failure to industrialise can be found in Uttar Pradesh, India's most populous state of more than 200 million people (2011 census), and neighbouring Bihar. Any socialist critique of these two states cannot fault their acute poverty on any industrial policy simply because none has been in evidence there. Poor agricultural technologies and economic policies have ensured continuation of rampant inefficiencies on the farm. Inexplicably, no civil society has emerged in either U.P. or Bihar to force the governments over decades to enact sound economic strategies for both agriculture and industry. Research on the forces that have kept the civil society from being active in UP and Bihar to challenge the established order and influence strategic planning would provide an interesting study. 196
  • 195. From that perspective, even the Maoists have not earned the nomenclature of civil society because they have failed to offer any alternative political solution except for a dogmatic call for revolutionary overthrow of the existing "bourgeois" order that they equate with the democratic process. Towards A Partnership Between Corporate India and Civil Society Corporate India can no longer afford to ignore the power and impact of civil society on future bottom-lines. The respected Tata group is a case in point. Its proposed steel plant in Orissa faces sustained protest and is yet to be operational. Its Nano car plant in Singur in Bengal faced sustained protests from civil society and the plant had to be abandoned. The momentum that Nano lost because of the relocation of the factory is obvious. We also need to understand that the civil society represents consumers . A civil society activist is not just an individual consumer, but also a decisive influence on other consumers who could be more passive in decision making. Corporate India must learn not to separate the two. India Inc. needs to understand and respect the power of social media tools that are being increasingly used both by consumers and civil society. One irate consumer can use multiple forms of communications to cause immense damage to a company's reputation, as many in India have realized. In fact, most companies have teams that trawl through social media to look out for negative posts. India Inc. must include civil society and citizens as stakeholders. In Gurgaon, one company has offered equity apart from cash compensation to farmers whose land it is acquiring. The opposition it faced in Gurgaon is drastically lower than what the same company faced in Raigarh district of Maharashtra. Corporate India must engage more directly with civil society instead of depending on the State to use coercive powers to reach its goals. The above illustrations are evidence in itself. It would be better for industry to engage with the civil society and have a direct dialogue with citizens so that their projects have a better chance of success, both in terms of business and social gain. Clearly there are lessons to learn and incorporate so that a better future can be created. Yashwant Deshmukh, Founder-Owner, YRD Media 197
  • 196. Mega Trends of the Emerging Third Industrial Revolution in India Acknowledgement I express my gratitude to Jeremy Rifkin for his help in formulating and concluding this study. The three sessions with him in Washington DC were extremely thought provoking and stimulating for me. I also want to thank my colleagues Ajit Sahi for his valuable inputs from his experience covering the Maoist Insurgency and the hotspots of Nandigram and Singur as editor of Tehelka; Prasenjit for helping my research in the "definition of civil society" and drafting the framework of this paper; Aditi and Sutanu for reading the drafts. Thanks to my wife Gaura and children, Suyash & Priyanvada, for being understanding even through this paper meant spoiling their Christmas and New Year vacation. Finally thanks to FICCI for giving me this opportunity and to Shobha Mishra Ghosh who made sure I kept myself "grounded" to the basic idea of this paper. Thanks also to Shobha’s colleagues K K Upadhayay, Sidharth Sonawat and Shilpa Sharma (FICCI) for providing key inputs and support. References: l Compilation of Accounts for NPIs in India in the framework of System of National Accounts, CSO, Government of India, 2009 lHopkins University 2000 data John l 'Invisible yet widespread', A study by Participatory Research in Asia (PRIA), 2002 198
  • 197. Mega Trend 6 Continental Markets and Continental Political Union
  • 198. Continental Markets and Continental Political Union Global Scenario Jeremy Rifkin The First and Second Industrial Revolution energies and communications media gave rise to national markets and nation-state governments. The Third Industrial Revolution, because it is distributed and collaborative by nature, scales laterally along contiguous landmasses, favors continental economies and networked continental governing models. "Continentalization" is the next stage of globalization. Distributed renewable energy likes to run uninhibited across national borders. When millions of people generate their own energy on or around their homes, factories and offices, sharing their energy neighborhood to neighborhood and region to region, everyone becomes a node in a vast green electricity network that is borderless and that scales laterally across entire continents. In the green powered Third Industrial Revolution, continents become the new playing field for economic life and continental political unions, like the EU, become the new governing model. The European Union is the first continental economy and political union to begin transitioning into a Third Industrial Revolution. Continental unions have recently been formed in Asia (The ASEAN Union), Africa (The African Union) and South America (The Union of South American Nations). In North America, the fledgling political associations forged between the northern states and Canadian provinces are a precursor to a potential continental union. While localities, regions, and national governments will not disappear in the coming century - they will actually be strengthened - continental unions provide an expansive political framework for overseeing and regulating integrated continental markets. Just as the Internet connected the human race in a single distributed and collaborative virtual space, the Third Industrial Revolution connects the human race in a parallel Pangean political space. What will this political space look like? Because The Third Industrial Revolution infrastructure, which is the centerpiece of continental markets and continental governance, scales laterally and is distributed, collaborative and networked, continental and global governance is likely to be as well. The idea of a centralized "world government" might have been a logical fit for the Second Industrial Revolution, whose infrastructure 201
  • 199. Mega Trends of the Emerging Third Industrial Revolution in India scaled vertically and whose organization was hierarchal and centralized, but is bizarrely out of place and out of sync in a world where the energy/communication infrastructure is nodal, interdependent and flat. Global networked communication, energy and commerce, invariably gives rise to network governance at both the continental and global levels. The European Union is the first continental economy and political union to begin transitioning into a Third Industrial Revolution. Continental unions have recently been formed in Asia (The ASEAN Union), Africa (The African Union) and South America (The Union of South American Nations). In North America, The North American Free Trade Agreement (NAFTA) is a precursor to a continental union. If not inevitable, it is at least highly likely that continental unions will become the new governing jurisdictions to regulate emerging continental markets around the world in the 21st Century. 202
  • 200. Rediscovering Connectivity in Continental Asia Rajiv Kumar and Sanjay Dawar Introduction The trend towards cross-border production networks and ever larger and more integrated markets that operate seamlessly across national borders was first noticed as early as the late sixties when the Treaty of Rome laid the foundations for the European Economic Area and the COMECON attempted to bring the East European economies within a tightly knit union. This trend has gathered strength and momentum over the last four decades and now seems like an inexorable movement that is likely to be one of the defining features of the twenty first century. Not that this has been a simple linear movement without any reverses or diversions. The breakup of the Soviet Union in the latter eighties and early nineties as well as the emergence of new nation states in East Europe and Africa were movements in the opposite direction. But to all observers of global economic geography it must be evident that even these 'reversals' were soon overturned by the desire of the citizens and governments of these 'new countries' to be integrated in to larger economic entities. This is witnessed in the case of a number of East European and Balkan countries striving successfully to join the European Union and the Euro Zone; the countries of Bylorussia, Russia and Kazakhstan coming together in the Eurasian union and a new resurgence to regional economic integration all across Africa. On the other hand, there were some very strong movements towards regional economic integration all across the globe. The last three decades, beginning with the eighties, have seen the emergence of a more economically integrated region that has laid the foundations of continental markets. These include but are not confined to the emergence of the Euro area; North American Free Trade Area (NAFTA); Association of South East Nations (ASEAN) and the associated South East Asian Free Trade Area; and several others which are at different stages of their union and are discussed in the next section. On the basis of these trends, it is safe to argue that in the coming years, the global economy will not be characterized by national markets but by larger more integrated economic regions that will permit a fuller play and exploitation of the other features of the Third Industrial Revolution. In the above context, in section 1 of this paper, we discuss the concept and emergence of Continental Union and Markets; In this context we also analyze in details the existing SupraNational Unions in Asia. in section 2, the concept of the Third Industrial Revolution (TIR) and how Asia's continentalization is acting as an enabling catalyst with particular reference to the role of India from a natural resource and policy perspective and in section 3 we arrive at certain conclusions. 203
  • 201. Mega Trends of the Emerging Third Industrial Revolution in India Continental Markets 1a. Continental Union and Continental Markets A continental union is an inter-governmental, supra-national or a federation of member states located in the same continent. Continental unions are a relatively new type of economic and political entity in the history of human development. Throughout most of human history, political organization has been at the level of the nation state and the national economy, confined by its natural and historically evolved border. The ever expanding scale of economies of production has spurred the need for larger markets and other technological advances have facilitated the emergence of continental markets. Better transportation, weapons and communications have for the first time created the ability for a union of member states to organize at the continental level. After the devastation of the first and second world wars in the last century Europe slowly evolved from its founding as the "coal and steel community" to become a political union covering much of the European Continent (27 member states as of 2009). Seeking to follow in the footsteps of the European Union, NAFTA sought to integrate the three economies of the USA, Canada and Mexico in to one massive economic area which had a combined GDP of nearly D 20 trillion in 2010. This was achieved in 1994 and has allowed firms and economic agents in the three countries unfettered access to the three markets. In 2002 and 2008 the African Union and Union of South American Nations set down similar blueprints for integration into political and economic unions at the continental level. Unlike the EU or NAFTA, these are still works in progress. Similar trends have also been in the making in Asia where several supra-national economic unions are in various stages of evolution. These are discussed below. The section ends with a description of the future vision of a economically united Asia that extends east from the Suez Canal to Japan and includes the Oceanic economies of Australia and New Zealand. 1b. Existing Supra-National Unions in Asia A quick glance at the different Asian unions reveals that sub Asian unions do exist already; for example, South Asian Association for Regional Cooperation (SAARC) and the associated South Asian Free Trade Area (SAFTA). We also have the Association of South East Asian Nations (ASEAN); the Central Asian Regional Economic Cooperation (CAREC); Gulf Cooperation Community (GCC); and the still evolving ASEAN +6 economic community which is co-terminus with the East Asian Economic Summit. ASEAN The Association of Southeast Asian Nations, ASEAN, was established on 8th August 1967 in 204
  • 202. Bangkok, Thailand with the signing of the ASEAN Declaration by the Founding Fathers of ASEAN, Indonesia, Malaysia, Philippines, Singapore and Thailand. Brunei Darussalam, Vietnam, Lao PDR, Myanmar and Cambodia later joined, increasing the total membership to ten. The aims and purpose of ASEAN can be briefly stated as a. To accelerate economic growth, social progress and cultural development in the region through joint cooperation, partnership and equality b. To promote regional peace and stability through abiding respect for justice and rule of law among the member countries. c. To promote active collaboration and mutual assistance on matters of common interest in the economic, social, cultural, technical, scientific and administrative fields d. To provide assistance to each other in the form of training and research facilities in the above mentioned fields e. To collaborate more effectively for the greater utilisation of their agriculture and industries, the expansion of their trade, including the study of the problems of international commodity trade, the improvement of their transportation and communications facilities and the raising of the living standards of their peoples f. To maintain close and beneficial cooperation with existing international and regional organisations with similar aims and purposes, and explore all avenues for even closer cooperation among themselves In matters of external relation, ASEAN shall develop friendly relations and mutually beneficial dialogue, cooperation and partnerships with countries and sub-regional, regional and international organisations and institutions. The ASEAN vision 2020, as adopted by the ASEAN leaders on the 30th anniversary of ASEAN, agreed on a shared vision of ASEAN as a concert of Southeast Asian nations, outward looking, living in peace, stability and prosperity, bonded together in partnership in dynamic development and in a community of caring societies. The 19th ASEAN Summit was recently held in Bali, Indonesia, in November 2011. SAARC The South Asian Association for Regional Cooperation (SAARC) is an organization of South Asian Nations founded in December 1985 by Ziaur Rahman for more economic, social, technological and cultural development. The seven founding members were India, Bangaldesh, Bhutan, Nepal, Pakistan, Maldives and Sri Lanka. Afghanistan later joined the organization in 2005. The total membership of SAARC now stands at eight. In April 2006, The USA and South Korea made formal requests to be granted an observer status. The basic objectives of SAARC are 205
  • 203. Mega Trends of the Emerging Third Industrial Revolution in India a. To promote the welfare of the peoples of SOUTH ASIA and to improve their quality of life b. to accelerate economic growth, social progress and cultural development in the region and to provide all individuals the opportunity to live in dignity and to realise their full potentials c. To promote and strengthen collective self-reliance among the countries of SOUTH ASIA and to contribute to mutual trust, understanding and appreciation of each other's problems d. To promote active collaboration and mutual assistance in the economic, social, cultural, technical and scientific fields e. To strengthen cooperation with other developing countries f. To strengthen cooperation among themselves in international forums on matters of common interests g. To cooperate with international and regional organizations with similar aims and purposes This apart, SAARC had intentionally laid more emphasis on overall core political issues rather than interfering with the internal issues of the member states and had laid greater cooperation between the member states to fight terrorism. One of the greatest achievements of SAARC was signing of the South Asian Free Trade Agreement (SAFTA) at the 12th SAARC summit at Islamabad. The agreement created a framework for the establishment of a free trade area covering 1.6 billion people bringing down their duties to 20% by 2009. SAARC also provides cooperation with inter-governmental organizations such as UNDP, UNCTAD, UNICEF, ITU, WHO, to name a few. In February 2011, India urged all member-states to ratify the SAARC Agreement on Trade in Services, terming it a "big step forward" for increasing trade within the region. While trade under the South Asia Free Trade Agreement (SAFTA), which came into force in 2006, crossed USD1.2 billion, the SAARC agreement has the potential to grow trade further. Regional cooperation between Asian countries, both bilateral and multilateral for trade, will greatly benefit India and the region. This cooperation is crucial to enabling peace and prosperity for countries in the region as well as the world at large. APEC Asia-Pacific Economic Cooperation (APEC) is an association of 21 Pacific Rim countries whose aim is to promote free trade and economic cooperation throughout Asia-Pacific. It was established in 1989 and is the only inter governmental grouping in the world operating on the basis of non-binding commitments, open dialogue and equal respect for the views of all participants. Unlike the WTO or other multilateral trade bodies, APEC has no treaty 206
  • 204. obligations required of its participants. Decisions made within APEC are reached by consensus and commitments are undertaken on a voluntary basis. APEC also works to create an environment for the safe and efficient movement of goods, services and people across borders in the region through policy alignment and economic and technical cooperation. APEC has been the most economically dynamic region in the world. Since its inception in 1989, its total trade has grown 395%, significantly outpacing the rest of the world. The three main pillars of APEC's activity can be summarized as a. Trade and Investment Liberalisation b. Business Facilitation c. Economic and Technical Cooperation Trade and Investment Liberalisation Some of the achievements of APEC in this regard can be stated as follows a. When APEC was established in 1989 average trade barriers in the region stood at 16.9%; by 2004 barriers had been reduced by approximately 70% to 5.5% b. As a consequence, intra-APEC merchandise trade (exports and imports) has grown from USD1.7 trillion in 1989 to USD 8.44 trillion in 2007 - an average increase of 8.5% per year c. Trade with the rest of the world has increased from USD 3 trillion in 1989 to USD 15 trillion in 2007, an average increase of 8.3% per year. Trade in the rest of the world has increased at 7.6% over the same period d. Over 30 bilateral free trade agreements (FTAs) have been concluded between APEC Member Economies e. It has acted as a catalyst in the advancement of World Trade Organisation multilateral trade negotiations over the past 20 years Business Facilitation a. As a result of APEC Trade Facilitation Action Plans, the cost of business transactions across the region was reduced by 5% between 2002 and 2006 b. The introduction of electronic/paperless systems by all member economies, covering the payment of duties, and customs and trade-related document processing c. The Single Window Strategic Plan, adopted in 2007, provides a framework for the development of Single Window systems which will allow importers and exporters 207
  • 205. Mega Trends of the Emerging Third Industrial Revolution in India to submit information to government once, instead of to multiple government agencies, through a single entry point d. Providing business with a concise one-stop repository of customs and trade facilitation related information for all APEC economies through the APEC Customs and Trade Facilitation Handbook e. In 2008, a groundbreaking Investment Facilitation Action Plan was endorsed; it aims to improve the investment environment in Member Economies f. The APEC Business Travel Card (ABTC) provides substantial time and cost savings to business people and facilitates their travel in the region, by allowing visa free travel and express lane transit at airports in participating economies Economic and Technical Cooperation a. APEC's Economic and Technical Cooperation (ECOTECH) activities are designed to build capacity and skills in APEC Member Economies at both the individual and institutional level, to enable them to participate more fully in the regional economy and the liberalisation process b. Since APEC first began to undertake capacity building work in 1993, more than 1200 projects have been initiated; and in 2008, APEC was implementing a total of 212 capacity building projects with a total value of USD13.5m c. APEC is also developing a Digital Prosperity Checklist that outlines specific steps economies can take to enable them to utilise ICT as catalysts for growth and development d. In 2000, APEC set a goal of tripling internet usage in the region and that goal has now been achieved, as recognised by the 2008 APEC Ministerial Meeting on the Telecommunications and Information Industry. APEC's new goal is to achieve universal access to broadband by 2015. This apart, APEC also works on food security, climate change, energy, human security and inclusive growth to name a few. APEC addresses food security by promoting productivity and growth in the agricultural sector, encouraging the development and adoption of new agricultural technologies and enabling regional food trade. As for climate change, the APEC leaders proposed a regional goal to reduce energy intensity by at least 25% by 2030. They have also been supporting the use of cleaner and more efficient energy technologies and have been collaborating with the International Energy Agency (IEA) to develop energy efficiency indicators. A similar kind of approach has been pledged by the leaders to reduce energy intensity. 208
  • 206. NARBO Integrated Water Resource Management (IWRM) is thought to be the groundwork for establishing good water governance and putting water resources on an effective use track. NARBO is the Network of Asian River Basin Organizations. Announced at the 3rd World Water Forum in March 2003, NARBO was officially established in February 2004 to promote integrated water resources management (IWRM) in monsoon areas of Asia. ADB, ADB Institute, and the Japan Water Agency supported NARBO's establishment in 2003, with the objectives stated below: a. Exchange of information and experience among river basin organizations (RBOs) in Asia b. Strengthen River Band Organizations' capacity and effectiveness in promoting IWRM and improving water governance Narbo initially had 43 members which, at present, stands at 76. SEAWUN The South East Asian Water Utilities Network (SEAWUN) was established in 2002 at a regional meeting sponsored by ADB. It is a regional network of water utilities from Indonesia, Laos, Malaysia, Philippines, Singapore, Thailand and Vietnam. In 2002, it had 12 utilities and today it has a membership base of 86 utilities providing water and sanitation services in 7 countries. In addition, the network has a small number of associating members which are water related consulting companies manufacturers and suppliers. It helps the members in developing their capacity and expanding their knowledge through training programs and exchange of information and experiences. However, one thing that is common in all the associations is the existing national unions of Asia are based on certain understandings and cooperation. For this purpose, the office of Regional Economic Integration (OREI) was established after the 1997-98 financial crisis. It was earlier known as Regional Economic Monitoring Unit (REMU), before it was renamed as OREI in April 2005. It helps ADB in promoting Regional Cooperation and Integration (RCI) throughout Asia and Pacific. It not only promotes Regional Economic Policy Dialogue and Support Capacity building and Institutional Strengthening but also conducts research and disseminates knowledge on RCI and acts as ADB's focal point for RCI. There are four pillars of Regional Economic Cooperation and Integration. a. Infrastructure and Software b. Trade and Investment c. Money and Finance d. Regional Public Goods 209
  • 207. Mega Trends of the Emerging Third Industrial Revolution in India Apart from the above mentioned regional cooperation, there are a few sub-regional associations formed due to the RCI initiatives. Greater Mekong Sub region (GMS), Brunei Darussalam-Indonesia-Malaysia-The Philippines East ASEAN Growth Area (BIMPEAGA),Central Asia Regional Economic Cooperation (CAREC) and South Asia Sub regional Economic Cooperation (SASEC) are to name a few. Central Asian Union This was proposed by Kazakhstan President Nursultan Nazarbayev on April 26, 2007, in order to create an economic and political union similar to that of the EU encompassing the five former Soviet Central Asian republics of Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan. So far the presidents of Kazakhstan and Kyrgyzstan have signed an agreement to create an 'International Supreme Council' between the two states. In addition, Kazakhstan, Uzbekistan and Kyrgyzstan have signed a Treaty of Eternal Friendship. Though the proposed union has the support of the presidents of Kazakhstan, Kyrgyzstan and Tajikistan, it was rejected by Uzbekistan president Islam Karimov. The Asian Union has tremendous potential not only in terms of market but also untapped energy sources which might transform the world and pave the way for a TIR. Third Industrial Revolution and Asia's Continentalization with Particular Reference to India To appreciate how meaningful Riskin's concept of TIR is to the way we organize economic life, we need to consider the profound changes that have taken place in the past 20 years with the introduction of the internet revolution. The democratization of information and communication has altered the very nature of global commerce and social relations as significantly as did the print revolution in the early modern era. Now, imagine the impact that the democratization of energy across all of society is likely to have when managed by internet technology. The TIR will have as significant an impact in the 21st Century as the First Industrial Revolution had in the 19th Century and the Second Industrial Revolution in the 20th Century. And, just as in the two former industrial revolutions, it will change every aspect of the way we work and live. It will be particularly beneficial and relevant to the poorer countries of the developing world as it is there that, even today, 40% of the human race still lives on less than two dollars a day. Africa, Asia and Latin America have barely begun to exploit their renewable energy potential. Energy analysts say that solar, wind, hydro, geothermal and biomass sources could more than supply the energy needs on these continents. 210
  • 208. In light of the above discussions, it is worth investigating the potential of India for setting the stage for such a TIR in motion. In particular, India along with China, Indonesia, Japan, Republic of Korea, Malaysia, and Thailand will propel Asia into dominating the world economy in the subsequent decades and TIR will accelerate this shift. In 2010, these seven economies had a combined total population of 3.1 billion (78 % of Asia) and a GDP of D14.2 trillion (87 % of Asia). By 2050, their share in population is expected to decline to 73 % of Asia, while their share of GDP will rise to 90%. These seven economies alone will account for 45 % of global GDP. Their average per capita income of USD45,800 (PPP) would be 25 % higher than the global average of USD 36,600. However more importantly, amongst SAARC nations, India will dominate the economic scenario; experts suggest that India can assist most of the other members in their development efforts by virtue of its diversified industrial base and relatively skilled manpower. On the downside, attempts to use SAARC as a platform to launch joint industrial or manufacturing ventures may be difficult to implement given that Pakistan has continued to restrict Indian trade because of strategic considerations, especially involving investments by private Indian firms on fears that such actions might displace Pakistani firms from lucrative markets or from emergent third markets in Central Asia. In spite of all this, today the prospects for regional progress in Asia are better than ever before. No longer viewed as merely low-cost production locations, Asian markets are becoming important sources of new consumer demand. The surge in Asian growth is being driven by the twin dynamics of a burgeoning middle class of consumers and rapid urbanization. According to the Asian Development Bank (ADB), consumer spending in developing Asia reached an estimated USD 4.3 trillion in annual expenditures in 2008nearly a third of private consumption in the OECD nations. Assuming consumption expenditures continue to grow at roughly the same rate as in the past 20 years they are likely to reach USD32 trillion and comprise about 43% of worldwide consumption by 2030, placing the region at the forefront of worldwide consumption. 2a. Emerging Asia and the Third Industrial Revolution- natural resource perspective Of all other countries in Asia, India with the second largest population, after China, and almost half of its population below 25 years of age and with an increasing middle class and the number of internet users, provides the perfect base when it comes to the spread of technology. This increasing middle class population will also act as an enabling factor for India to be at forefront of generating newer sources of renewable energy in the immediate future. Thus the stage is clearly set for unleashing a TIR in India (and of course Asia) using the abundance of natural resources at our disposal. To start with, here are some facts of middle class population in India. The share of middle class population in India increased sharply from 29% in 1993-94 to 38% in 2004-05 (refer 211
  • 209. Mega Trends of the Emerging Third Industrial Revolution in India table 1 below). Most of the increase within this middle class group was evident in the lower middle class with daily consumption of D2-D4. In 2004-05, the Indian middle class comprised 418 million people out of a total population of 1.1 billion. In the year 2005, only 5% of the population comprised of the middle class. This is estimated to increase to 41% in 2025. India is projected to be the 5th largest consumer market by 2025 with an estimated middle class annual income of Rs. 2-10 lakhs. The growing middle classes in India are likely to be an important factor in the generation of energy by each household. In terms of number, as per a report by NCAER, currently India has 31.4 million middle class households. It is expected that by 2025-26, the number of middle class households in India is likely to more than double from the 2015-16 levels to almost 114 million households or 547 million individuals. Table 1: Population Distribution (%) by Expenditure Per Person Per Day (2005 D PPP) in India Per Capita expenditure Class National Urban Rural 1993-94 2004-05 1993-94 2004-05 1993-94 2004-05 <1.25 46.5 36.3 34.0 26.0 51.0 40.5 D1.25 - D 2 23.6 23.2 20.8 17.7 24.5 25.4 D2-D4 18.0 22.3 22.1 23.6 16.5 21.8 D4-D10 8.7 12.3 15.2 19.6 6.4 9.4 D10-D20 2.1 3.5 5.0 7.4 1.1 1.9 >D20 1.1 2.4 2.9 5.8 0.5 1.0 Total 100 100 100 100 100 100 D2 - D20 28.8 38.1 42.2 50.6 24.0 33.1 Let us examine the reasons for this sudden rise in the middle class. The sustained and inclusive economic growth can be considered as one of the primary factors which lead to gradual poverty eradication and rise of the middle class with a simultaneous reduction in income inequality. Other factors that have led to the creation and sustenance of middle class are well-paid jobs and higher education. With higher education comes greater usage of the internet as the medium of not only communication but better connectivity. Internet usage is increasing at a rapid pace and it's already common in the field of business, economy, entertainment and social groups. We are now in a position to explore the linkages between TIR and Asia from a natural resource perspective. Global investments in renewable energy stood at USD 148 billion in 2007, a 60% increase from 2006. It is estimated to reach a whopping USD 325 billion by 2020 and USD 600 billion by 2030. At present, renewable energy manufacturing, operations, and maintenance provide approximately two million jobs worldwide. 212
  • 210. In an attempt to relate Riskin's five pillars of TIR within the Asian context reveals that Asia, as a whole, does possess the basic requirements of some of the five pillars. When it comes to shifting to renewable energy or transforming every household into micro-power plants to collect renewable energy or using internet technology to sell the surplus back to the grid, some parts of Asia seems to have already taken early steps. A quick overview of the Asian population and internet usage reveals the following statistics. At present, Asia constitutes 44% of the total internet users in the world (refer to exposition . Exposition 1: Internet Users in Asia in March 2011 44% 56% Asia Source: www.internetworldstats.com Rest of World Though internet penetration is much less as compared to the rest of the world, yet if we compare it with the world average, Asia does not seem to lagging significantly behind (refer to exposition 2). Exposition 2: Internet Penetration in Asia in March, 2011 38% Rest of World 30% World Average 24% Asia 0% 10% Asia 20% World Average 30% 40% 50% Rest of World Source: www.internetworldstats.com Furthermore, a break-up of top five internet user countries reveal that China and India alone account for more than 50% of the entire Asian internet users (refer to Exposition 3). Internet penetration in India stands at 24% as on March 2011 and is estimated to catch up with the world average soon. 213
  • 211. Mega Trends of the Emerging Third Industrial Revolution in India Exposition 3: Asia top Internet Countries (users in millions) China 477 India 100 Japan 99.2 Indonesia 39.6 South Korea 39.4 Philippines 29.7 Vietnam 27.9 Pakistan 20.4 Thailand 18.3 Malaysia 16.9 Source: www.internetworldstats.com Electricity production and consumption pattern over a period of nine years also shows that over the years production as well as consumption has increased all across Asia (refer to Table 2). In the period between 2005-08, the production of electricity has gone up by 25% in the East and North East Asian region followed by South & South West Asian region of 18%. A deeper look into the regions reveals that China and India are a major component in the East & North East Asian and South & South West Asian region respectively. This might help us to realize that most of the electricity production as well as household consumption are attributed to China and India. Table 2: Electricity production and household consumption in Asia Gross Electricity Production Million Kwh Household Electricity Consumption % change per annum KWh Per capita % change per annum 2000 2005 2008 2000-08 2000 2005 2008 2000-08 2758645 4053620 5050697 7.9 325 421 526 6.2 South East Asia 369488 502794 581349 5.8 180 231 265 4.9 South & South West Asia 901070 1171660 1381984 5.5 108 134 156 4.7 North & Centra Asial 1048110 1151329 1251257 2.2 803 672 691 -1.9 East & North East Asia Source: www.unescap.org/stat/data/syb2011/II-Environment/II.11-Electricity-production-household-consumption.pdf 214
  • 212. A shift in focus from internet and communication technology in Asia to the energy resource front also reveals some positive facts. Asia is rich in renewable sources of energy as it has strong sunlight in the desert regions, winds in the middle latitudes and abundant tidal power in the coastal regions, especially China. Also there is a considerable amount of geothermal and hydropower sources. Connecting these existing resources with power lines can create a highly efficient energy infrastructure not only for Pan-Asia but for the rest of the world as well. This might in turn lead to additional supply leading to supply security, enhance competition and also promote fuel switching. Let us now have a deeper look into the different renewable energy sources in Asia. Solar Energy Asia and Pacific is characterized by high economic growth, which is way above the world average, coupled with a high population growth. These two factors pose a challenge in ensuring adequate energy supplies at affordable prices in the Asian region. Keeping this ever growing demand in mind, the focus has now shifted to the use of solar energy and formulating national policies for solar energy applications since over the years there has been a rapid decline in solar energy generation costs. Fortunately, Asia is endowed with high levels of solar insolation and has the potential for both large-scale grid and off-grid applications. Interestingly, the Asian region has in fact witnessed the emergence of some of the largest solar promotion programs globally, such as Jawaharlal Nehru Nation Solar Mission in India, Golden Sun Program of the People's Republic of China, and Thailand's Small Power Producer scheme for renewable energy. Wind Power Asia leads the growth in global wind power. Wind power in Asia has a total generating capacity of more than 20,000 MW (refer table 3).. In this context, it is worth mentioning that China, at present, has the maximum wind power generating capacity followed by India, Japan, Taiwan, South Korea and Philippines (refer to Table 3). Table 3: Country-wise Wind power generating capacity Country Generating Capacity China 12210 MW India 9587 MW Japan 1394 MW Taiwan 188 MW South Korea 173 MW Philippines 25 MW Source: www.wikipedia.org 215
  • 213. Mega Trends of the Emerging Third Industrial Revolution in India Tidal Energy Tidal Energy has so far proved to take a backseat in comparison to other forms of renewable energy in Asia. Wind and solar energy have witnessed an enthusiastic growth since they had the government backing. The only exception has been South Korea. South Korea has a locational advantage since it is a peninsula with water on three sides. A number of tidal projects have been announced in South Korea with the backing of the government. Some tidal plants are already operational, such as the Jindo Uldolmok Tidal Plant, which began generating 1MW in 2009 and is planned to expand progressively to 90MW of capacity by 2013. The other Asian country to make some tidal-related announcements has been India. Singapore-registered Atlantis Resources is to start building a 50MW tidal farm by 2012 on the Gulf of Kutch, in the western Indian state of Gujarat. If it happens, this would be South Asia's first commercial-scale tidal power station. China, however, did not make much progress in this regard. According to an incomplete statistics, China has a tidal power reserve of 190 million kilowatts, 38.5 million kilowatts of which is available for development, giving an annual output of 87 billion kilowatt-hours of electricity. Citing the China Ocean Energy Resources Division, 424 tidal power stations can be built along the coastline, mainly in Maritime Provinces like Zhejiang and Fujian. Geothermal Energy Geothermal energy is thermal energy generated and stored in the Earth and originates from the original formation of the planet, from radioactive decay of minerals, from volcanic activity, and from solar energy absorbed at the surface. Geothermal energy is considered a renewable resource because the heat emanating from the interior of the Earth is limitless. This form of energy is estimated to be equivalent to 42 million megawatts of power, and is expected to remain so for billions of years to come, thus ensuring an inexhaustible supply of energy in the future. Nearly all current geothermal operations are located within volcanic areas of the Earth. It is believed that countries located in the Ring of Fire could obtain enough energy to fully meet the internal domestic demand. Indonesia, Philippines and Japan are the Asian countries that are located in the line of Ring of Fire. These countries have tremendous geothermal resources to be tapped. In fact, the Philippines and Indonesia rank 2nd and 3rd respectively, after the US, for installed geothermal electricity capacity with 1,902 megawatts (MW) and 1,196 MW respectively as per the 2010 figures. Asia's geothermal reservoirs are among the world's largest. Indonesia alone holds 40% of the world's total reserves, but less than 4% is being developed; hence there is further scope for growth and development. Governments of the Asia-Pacific countries have taken an extra initiative to increase their uptake of renewable energy mainly because they are trying hard not only to reduce their carbon emissions in light of the threat of climate change, but also to move away from the oil price and oil supply which seems to be very volatile in the present situation. 216
  • 214. Biopower Asia is home to several agro industries such as sugar, palm, rice and wood industries. Since these industries are the basis for biopower, it can be concluded that Asia, too, has immense potential for biopower. Among these, sugar industry has the maximum potential for power generation. In Asia, the development of sugar sector in power generation has been phenomenal in India. ASEAN, which consists of Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam, in general, have large agricultural resources and agro industries, resulting in large quantities of biomass generation. 2b. Emerging Asia and Third Industrial Revolution – trade flows and policy perspectives It is now widely acknowledged that Asia is well poised to shift gears and reap the fruits of TIR through its abundant natural resources. Equally important, is however that the increasing trade flows across Asia arising from regional trade integrations and growing middle class in India and China will play a significant role in the future of binding the Asia through the continental markets. Trade Flows in Asia Asia's growing share of world trade has resulted largely from increased regional trade integration. While trade flows in the rest of the world roughly tripled between 1990 and 2006, inter-regional trade involving emerging Asia rose by 5 times, and intra-regional trade within emerging Asia increased by 8½ times. As a result, trade between the economies in emerging Asia has risen steadily from about 30 % of total exports by the region in 1990 to more than 40 % in 2006. China, Hong Kong, Indonesia, Philippines and Thailand stand out as having inward FDI that is dominated by Asian investors. Merchandise trade of Asia has grown at a much faster rate as compared to the global scenario with a distinct intraregional bias since 1970s. Intra-Asia trade is expected to overtake the massive Asia-North America and Asia-Europe east-west trades in the near future. Exposition 4: Share of regional trade flows in each region's total merchandise exports (2009 figures) 17.5% 2.7% 51.6% 17.9% 4.6% North America Europe Africa Asia South & Central America CIS Middle East 1.6% 2.8% Source: www.wto.org/english/res_e/statis_e/its2010_e/its2010_e.pdf & FICCI research 217
  • 215. Mega Trends of the Emerging Third Industrial Revolution in India Intra-regional trade accounts for more than half of the trade in Asia leading us to conclude that the fast growing population is providing the base for a domestic Pan-Asia trade (refer to Exposition 4). Over the years, the share of the intra-regional trade is expected to increase on account of the growing middle class population in India and China Table 4: Intra and Extra ASEAN trade, 2009 Intra-ASEAN trade Share to Total Trade Value (million $) Brunei Darussalam Cambodia Extra-ASEAN trade Share to Total Trade Value (million $) Total Trade (million $) 9568.2 8886.7 2472.1 2097.9 25.8% 23.6% 7096.1 6788.8 74.2% 76.4% 52366.3 2478.2 72065.3 24.5% 83.7% 25.7% 160972.9 484 208156 75.5% 16.3% 74.3% 213339.2 2962.1 280221.4 Myanmar The Philippines Singapore 5262.4 17399.5 140694.1 51.6% 20.7% 7.3% 4928.9 66469.1 374923.1 48.4% 79.3% 72.7% 10191.3 83868.6 515617.1 Thailand Viet Nam ASEAN 59250.1 22121.5 376207.3 20.7% 17.6% 24.5% 227016.7 103800.4 1160635.9 79.3% 82.4% 75.5% 286266.8 125921.9 1536843.3 Indonesia Lao PDR Malaysia Source: www.asean.org/stat/Table18.pdf However, at a micro-level, the intra-trade figures for ASEAN is not as impressive as the overall picture (refer to Table 4). Among the ASEAN countries, Lao PDR's share in IntraASEAN trade is the maximum followed by Myanmar. On an overall basis, Intra-ASEAN trade accounts for a mere 25% as against 76% of Extra-ASEAN trade. Hence, it can be roughly concluded that China and India are the driving force behind Asia's rising intra-regional trade. The time has come for India to reclaim its place of eminence in the global business community. India needs to draw inspiration from the era of the silk route when it played a vital role in global trade, virtually by its position at the center of the route as well as its unique products such as spices, precious stones and hand-crafted goods. While advances in communications and transportation technologies have made geographic locations less important, India still has the opportunity to acquire competitive edge in supplying goods and services by capitalizing on its unique advantages of favorable demographics, large workforce and rich natural resources. During the silk route era, India had a reputation as a hub of learning and a treasure house of the scriptures. Today India is well respected in the international community for its intellect and some of the most respected voices in international business and academia have roots in India. 218
  • 216. The government and the private sector should join forces and make a concerted effort to unleash the real potential of India. India should take important steps for longer term progress and stability of the region by fostering links in investments, trade, tourism, labour movements and aid extensions. This will require coordinated action by various Asian economies. In addition, policy makers should make a determined effort in specific areas to sustain long term growth. There has been rapid growth in intraregional trade in Asia over the past decade. While global trade and Asia's trade with economies outside the region have doubled since 2000, intra-Asian trade has tripled. Regional trade involving emerging Asia, in particular, has increased even faster. Asian economies accounted for 35 % of world exports in 2009, compared with 25 % 10 years earlier. The share of intraregional exports rose to 55 % from 45 % over the same period. It is necessary to further strengthen this momentum toward openness in trade and investment flows. Resilience to global shocks will be enhanced if intraregional trade and financial flows are increased. Bilateral and regional trade agreements can play an important role in freeing up these flows. 2b.1. Coordinated policy actions Even as Asia will witness increasing integration in the coming decades or so, an enabling factor for such will clearly be co-ordinated policy actions and mutually beneficial relationships across countries to drive home the advantage of the mass markets. These could take the form of several actions. Managing inter-country inequality will be key to ensuring inclusive growth Despite the visible economic progress, income inequality and pervasive poverty remain a real threat to economic, social and political stability in many Asian economies. Home to 72 % of the world's poor (with 1.8 billion living on less than USD2 per day), Asia has a vested interest in promoting the regional development agenda as it faces considerable risk if some countries are allowed to lag behind while others enjoy the benefits of global and regional expansion. If India continues to grow rapidly, the ratio between its real income level and that of Bangladesh and Pakistan could widen from today's manageable 2.1 and 1.3, respectively, to 2.9 (India/Bangladesh) and 5.2 (India/Pakistan) by 2050. This makes it all the more important to link any strategies and policy measures - including those directed toward lowering global imbalances and mitigating their impact - to the ultimate goal of regional welfare improvement. Steps need to be taken to launch a meaningful intraregional development assistance program-on a bilateral or multilateral basis-consistent with Development Assistance Committee (DAC) guidelines. 219
  • 217. Mega Trends of the Emerging Third Industrial Revolution in India Financial co-operation Greater co-ordination and regular dialogues among the region's central banks is important for regional financial stability and development. In this way, monetary policy in each country would be informed by what others in the region are practicing and allow coordinated action. Possible areas of cooperation in financial stabilization such as currency swap arrangements should be discussed and advanced further, as they can help address the tight liquidity situation in times of crisis. Regional security It is important to develop the necessary mechanisms to mitigate regional conflicts and manage regional stability and order. At present, Asia's regional security order is in a state of flux. Asia is home to five nuclear powers that have tense relations with each other. Asian economies also need to take a coordinated approach towards climate change. Several of Asia's major rivers-the Indus, Ganges, Mekong, Yangtze, and Yellow-originate in the Himalayas. If the massive snow/ice sheet in the Himalayas continues to melt, it will dramatically reduce the water supply of much of Asia-and could lead to conflicts among neighbors for water resources. Invest in regional transport infrastructure Asian economies need to jointly work towards improving transport infrastructure. Transport will be the most influential factor in allowing better regional integration. Road, port, rail and air infrastructure in the region is weak which hinders intra-country supply chains. As far as India is concerned, it can take recourse to several policy measures to reap the advantages of continental markets. Some of these are follows. Build bridges with other Asian economies Cultivating ties with high-growth Asian economies will give India access to fast-expanding consumer markets. It will also pave the way for diversified economic growth and hedge against future volatility in the global economy. India's Look East Policy and the ASEAN-India Trade in Goods Agreement constitute steps in that direction. The country now has the opportunity to move further down the path to responsible leadership by pursuing deeper economic integration and leading efforts to improve coordination among regional partners in the South Asia Association for Regional Cooperation (SAARC). Assuming a stronger leadership role in SAARC could help the region and India realize the estimated 55% of intraregional trade that remains untapped in South Asia. India's technological advancements in areas such as solar power and construction present the region with new growth prospects and business opportunities to strengthen economic ties. For instance, Sri Lanka has already 220
  • 218. expressed interest in expanding Indian investment in its economy by USD 800 million over the next three years. India also has room to strengthen its voice on broader issues that impact regional economic development, such as water conservation in Bangladesh and maintaining open travel along sea lanes in the region. Such efforts could open up new trade routes for businesses across the region, giving their products a competitive edge over exports originating outside the region. India has signed agreements with Malaysia and Indonesia to increase trade to USD15 billion and USD25 billion, respectively, by 2015 Drive efficiencies in manufacturing India aims to double its exports over the next three years to reach an export level of USD450 billion by 2013-2014. To achieve this ambitious target, India will need to build up its manufacturing strength. India's manufacturing sector has grown in size and ranks among the top 10 in the world. However, in terms of the value of its manufactured output, the country's level of industrialization, expressed as manufacturing value added (MVA) per capita, is much lower compared to fast-growing emerging markets. The promise of the world's largest working-age population is undermined by low labor-productivity rates among fast-growing emerging markets. India may have some world-class clusters of excellence (such as automotives and pharmaceuticals), but more than 40 % of its industrial output is produced by small and medium enterprises. Around 84 % of India's manufacturing employment is estimated to be in firms with fewer than 50 workers. Small firms often get caught in a vicious cycle of insufficient access to capital, low productivity, old technologies, limited earnings and few growth prospects. Larger enterprises-those operating in the formal sector where productivity and wages tend to be relatively high-also face barriers to this huge market opportunity, including poor infrastructure and rigid labor laws. Develop mutually beneficial relationships Green-energy and universal access to electricity will play a pivotal role in creating the Asian middle class of the future. Indian government and industry are therefore presented with a unique opportunity to carve an image of India within the emerging Asian middle class, as a nation capable of driving the third industrial revolution conjoining internet communication technology and renewable energies. India will have to find ways of collaborating with other Asian economies such as China towards development and authentication of greentechnologies, preservation of rights over natural resources and their future use. At the same time, Indian government and industry needs to be prepared to outclass Chinese competition in developing new-to-the-market energy solutions. India can use these opportunities to facilitate collaboration of Indian entrepreneurs developing distributed green energy solutions with agencies and institutions across Asia, keen to assess the scalability and fitness of low-cost distributed green energy solutions. Also, India can work with other Asian countries to launch the Open Source Distributed Energy Solutions 221
  • 219. Mega Trends of the Emerging Third Industrial Revolution in India Network (OSDESoN) - a global platform for best minds to collaborate and develop low-cost scalable distributed green energy solutions relevant to the needs of the Asian continent. India's rural markets offer unprecedented opportunities for companies to experiment with new approaches and business models, which, if successful, can become replicable solutions to serve the rural markets of other emerging economies. From small sachets of branded shampoo to inexpensive eye contacts, Indian companies are experimenting with these low-cost innovations to gain a foothold in the nation's bottom-of-the-pyramid markets. The Tata Nano and the world's lowest-priced tablet computer are just two examples. Such breakthroughs have also offered Indian companies an opportunity to foster new types of collaborations to access rural communities and incorporate lowincome populations into their value chains. Conclusion Today the prospects for regional progress in Asia are better than ever before. No longer viewed as merely low-cost production locations, Asian markets are becoming important sources of new consumer demand. The surge in Asian growth is being driven by the twin dynamics of a burgeoning middle class of consumers and rapid urbanization. India is ideally positioned to help facilitate the establishment of a single integrated Asian continental market and accompanying political union. The creation of an Asian energy internet will allow hundreds of millions of people to produce their own green electricity and share surpluses with one another across the Asian continent. Coupling the Asian energy internet with a seamless broadband communication network and green transport grid will allow the Asian population to engage in sustainable commerce and trade in the largest internal market in the world. The Indian business community has an enormous opportunity to help shape the future of the Asian market, by spearheading the continental transition to a post-carbon Third Industrial Revolution economy. The groundwork for a green future has already started. The transition to a new renewable energy system is coming sooner than anyone had expected a few years ago. The cost of conventional energy sources are constantly increasing since they are getting depleted with constant usage. On the contrary, the costs of green sources of energy are decreasing due to new technological inventions and greater usage leading to economies of scale. This growing difference is in fact paving the way for the TIR to set in. India has immense potential in terms of renewable energy and the transfer of every dwelling into a mini power plant or even using internet communication technology to convert the electricity grid into an intelligent utility network so that billions of people can send excess electricity back to the grid. Though a lot still needs to be attained on the technological front to ensure that we are 222
  • 220. on the correct path and reduce our present consumption of fossil fuels so as not to deplete them, it is achievable. A quick glance at the five pillars and a study of the statistical figures of India's short but steady steps towards utilizing renewable sources of energy reveals that India and Asia, can pull the trigger for the TIR which might carry us to a sustainable postcarbon era. The shift in global power from Atlantic to Pacific has started in right earnest. As per the IMF report (Apr'2011 World Economic Outlook) emerging and developing economies are projected to have a 50% share of World GDP (on a purchasing power parity basis) by 2012 (vis-à-vis 37.5% for G7 countries). The TIR will make possible this shift and create a new distributed social vision in the 21st century for Asia. Asia has already laid the foundation of a strong TIR and as mentioned above, India with its abundant natural resources, burgeoning middle class and a huge rural market is well poised to take advantage of such a change. Dr Rajiv Kumar, Secretary General, FICCI Sanjay Dawar, Managing Director, Management Consulting, Accenture India 223
  • 221. Mega Trends of the Emerging Third Industrial Revolution in India Acknowledgement The authors gratefully acknowledge the inspiration provided by Jeremy Rifkin, the originator of the concept of the 3rd Industrial Revolution. No amount of thanks is adequate for Soumya Kanti Ghosh of Economics & Research Division at FICCI for his incisive inputs. We would also like to thank Nibedita Saha of Economics & Research division at FICCI as well as Raghav Narsalay and Mamta Kapur from the Accenture Institute for High Performance for painstaking efforts in the preparation of the White Paper. Thank you Mamta, Nibedita and Raghav. The support received from Shobha Mishra Ghosh is also gratefully acknowledged. References 1. The Third Industrial Revolution: How Lateral Power is Transforming Energy, the Economy and the World, Jeremy Rifkin, 2011, published by Palgrave Macmillan 2. Key Indicators for Asia and the Pacific 2011 published by Asian Development Bank 3. www.adb.org 4. www.asean.org 5. www.internetworldstats.com 6. www.itu.int 7. www.rcogenasia.com 8. www.wto.org 224